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?