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Wee Willy

Yup, Hutton is at it again.

The Chancellor should take a closer look at the 1930s. The heart of Roosevelt\’s New Deal was not public works or programmes for the unemployed, significant though both of these were. It was the root-and-branch reconstruction of an American financial system that, like ours today, had run amok in a laissez-faire, deregulated free-for-all. The Federal Reserve was created, public banks were launched to lend to homeowners, refinance mortgages and lend to industry and investment banks and commercial banks were legally separated.

Sigh. The Federal Reserve was created in 1913. It was the SEC that was part of the new deal legislation. Fannie Mae was also, but the second such public bank, Freddie Mac, was launched in 1970, to break Fannie Mae\’s monopoly.

He\’s got a deep knowledge of economic history, don\’t he?

For social democrat politicians, as Gordon Brown and Darling still purport to be, this should be a golden opportunity. They should not hesitate and set out to reconstruct the British financial system around solid progressive values. Credit needs to flow again. We cannot live in a society where the flow of credit doubles then halves almost from year to year. What Obama can only propose in America is possible in Britain. And by doing this, the government would be relaunched. It would show purpose, expose the Conservatives as bankers\’ narks – and save the British middle class from a house price disaster. All that is required is what the government lacks – conviction.

You\’d never have guessed that Mrs. Hutton is a buy to let landlord, would you?

7 thoughts on “Wee Willy”

  1. “solid progressive values”

    Bzzzzt! NewLabourSpeak Word Alert!

    Be vigilant: High risk of imminent soaking of the population.

  2. “had run amok in a laissez-faire, deregulated free-for-all”
    What rubbish! US banks were limited in branch numbers and geographical location – that is why 6000+ failed. The solution was to create a government monopoly.

  3. As far as I can see, FDR did one good thing – he managed to stop the spread of banking collapse. That stopped the Depression getting worse, I should think. Almost everything else he did, however, made it last longer – on and on it wrolled, until Hitler and Hirohito arranged that much of the potential male labour force was in the services, so that measured unemployment was indeed down. I’d like to know why it didn’t return when the war was over. Any offers?

  4. Post war in the US, the government went from war socialism to the market as fast as it could. The technical knowledge accumulated was given away – see the Radar Labs and Los Alamos publications. The war had broken down a number of restrictive practises, both labour and management.

    The result was a coming together of technology, production methods and better management in a world hungry for products.

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