One of the more entertaining aspects of the current global financial meltdown is watching Guido Fawkes, aka hedge funder Paul Staines, transform from arch-cynic about all things political to dewy-eyed innocent about all things financial. It isn’t that I’m a capitalist-hating trot who fervantly believes that this current crisis is going to lead to world socialism, but reading Guido you would think that the financiers have no culpability whatsoever.
At Lib Dem conference on Tuesday I moved an amendment in the debate on the Housing and Mortgage Crisis. I think it was the poorest speech I have delivered in years (if you want to add to my humiliation you can still watch me on iPlayer – I’m about 40 mins in), mainly due to the fact that even after my crash course in all things monetary the night before, I wasn’t at all sure of my subject.
But at the same time, it is a subject very close to my heart. I heard a lot of speeches from MPs this week about how money worries are giving some of their constituencies mental health problems. As someone who went from someone who diligently filed all his bank statements every month when I was younger to someone who gets panic attacks opening letters from banks and generally keeps bank statements, unopened, in a box under the bed, I think its fair to say first hand that I know how they feel. Having gone through the process where my bank (Halifax, natch) wouldn’t give me an affordable loan and instead left me with no alternative but to try and manage a mini-financial crisis with a credit card, there’s a reason why I have a habit of talking about economic issues in moral terms – it’s the only morality that really matters in my humble opinion.
I’d agreed to do propose the amendment on behalf of ALTER, whose own speaker couldn’t attend. And I have to admit that while the idea of the credit creation charge (specifically a tax on bank’s creation of credit) has some appeal, I’d want to look into it a lot more before deciding whether to support it or not. While Neale Upstone and I could have probably done a better job at prebutting the criticisms made by Vince Cable in his summation, an out of the blue amendment is frankly not the way to win the argument, or even particularly to create debate.
We certainly need some kind of mechanism for controlling cheap credit, and the CCC has the advantage of using it to raise revenue which can be doled out to the wider public in the form of tax cuts (and possibly a citizen’s income), but there may well be other mechanisms. This week Vince Cable seemed to at least acknowledge there was a problem which needed solving.