It’s a curious feature of the BBC that independent thought, creative, original, idiosyncratic reasoning and analysis is often crushed under the weight of the organisation with its overwhelming employment of people who think the same thoughts and cleave to the same values. Those of an independent frame of mind soon find it wise to keep their consensus breaking thoughts to themselves or find themselves marked out as a maverick, tolerated but closely watched and contained, any off message ideas or an attempt to encourage a bit of free association and joined up thinking is discouraged and colleagues of course ignore the inconvenient reports that jar with and contradict their own…and the one shining example that gives a tantalising glimpse of what the BBC could be is extinguished in a tidal wave of group think, group non-think.
For the last 3 or 4 years we have been force fed the idea that austerity is bad, not only bad but completely unnecessary, Ed Ball’s Plan B the credible alternative, the idea that stimulus is good, that the economy is suffering because of the Coalition’s economic policies, that it was ‘Casino Banks’ that destroyed the economy, that Capitalism has failed, that GDP growth should be so much higher, that high employment is a complete riddle…and that consumer spending will save us rather than exports.
None of that is true.
But those, if you have been listening to the BBC, are the messages that have been broadcast to us day in day out for years, variously subtle or blatant Labour press releases.
How do I know those things aren’t true? Ironically because the BBC told me.
Robert Peston and Stephanie Flanders both broke from the Party line and gave us a view of the dark underbelly of the Labour economic ‘miracle’.
What is most notable is that long before the banks went belly up Peston and Flanders knew Gordon Brown’s never ending boom was about to go ‘boom’.
In 2006 Peston, he tells us himself, was in a meeting with the head of the BBC’s Newsroom who asked him ‘So when would the great bust come?’
Peston says he replied, ‘Goodness only knows.’ and explains…‘ And because we could not put a time on it, there was no urgency to get it on the Ten O’clock News.
That was a mistake.’
The BBC knew there was going to be a ‘Great Bust’ but didn’t think it important to raise the matter.
Below are two examples, one from Peston in 2011 and one from Flanders in 2005, that give a more individual, incisive, true analysis of the economic situations of the times than we get from the ‘Institution’ of the BBC.
Peston telling us that the economy was reduced to a basket case and that there is no quick fix, no instant way of growing GDP, and that GDP will only grow slowly for many years…and that getting debt down is crucial….and so far, for all the talk of ‘austerity’ there has been in reality little reduction in spending.
Flanders predicts, in 2005, that Brown’s policies have put the economy into intensive care….caused by borrowing and high government spending…and that there is a high probability of a crash.
As stated such messages have been lost in the wholesale flannel and flattery pushed out to defend and promote Labour by ‘the Corporation‘, the BBC’s refusal to delve into 13 years of Labour’s mismanagement and the pushing of Labour’s latest policies…basically a continuation of Brown’s.
Ironically of course Flanders, though not Peston, has been at the forefront of these attempts to gull the Public, ignoring her own previous predictions and analysis.
Peston brought us The Party’s Over, broadcast on BBC Two at 1900 on 4 and 11 December 2011.
If excessive debt is the disease, what we’ve had since the end of 2008 is analgesic and sticking plaster, rather than cure.
We haven’t as yet found a way to get the debts down so that we can be confident that our economy’s foundations are solid and sound again.
What it means is that we must brace ourselves for many years of relatively low growth, perhaps 1% versus the 3% of the 16 boom years before the crash, because we no longer have the fuel of borrowing more and more every year.
Flanders brought us Testing the Miracle in 2005:
On running the rule over Gordon Brown’s economic record
‘These must be frustrating times for Gordon Brown. Now his foes have decided it is open season on the economy – which even a year ago had seemed beyond reproach.
When we look back, in a few years’ time, at Brown’s economy, will we still see an economic miracle? Or another old-fashioned spending binge that, sooner or later, had to run dry?
Saved by spending
The miracle, if there is one, is that we carried on growing. But looking around the country, you see it is a miracle built not on investing, or exporting, but on a miraculous capacity to spend.
The public spending prop
What is left of the miracle economy, if you strip out the cheap imports and the consumer spending? What is left is a lot of public spending. The only part of the economy that has grown faster than spending by all of us the past few years has been spending by the government.
In the north-east, one recent estimate puts the public sector of the economy at close to 60%.
STEPHANIE FLANDERS: Tony Blair claims Gordon Brown is the best chancellor we’ve ever had. The man who called an end to boom and bust.
GORDON BROWN: There will be no unsustainable dashes for growth, no out of control booms, no risk taking with inflation, no quick fixes.
FLANDERS: But now the critics say Gordon Brown’s luck is about to turn.
Geoff Ford, Chairman, Ford Component Manufacturing Ltd
FLANDERS: He [Ford] worries that high public spending is distorting the labour market, turning the old job for life culture of shipbuilding into the new job for life culture of the town hall. The local council has a workforce of more than 7,000.
FORD: Because the public sector and local government are able to offer such attractive packages, they are creaming off the best of the talent, and that therefore deprives the rest of the labour market, and I do believe that the significant growth in public sector employment actually stifles the entrepreneurial spirit because of it’s different focus, there’s no risk, there’s no real risk, and there is a disincentive to stick your neck out.
Peston used his 2011 article and research as the basis for his recent book ‘How Do We Fix This Mess?’ in which he looks at the causes of the crash and the possible fixes.
First here is Robert Peston’s cap doffing to his bosses in the book:
I would like to thank the BBC just for being the BBC: more than ever, it is a privilege to work for a news organisation which is sincerely and wholly committed to trying to understand and explain the world in an unbiased way.
However everything he writes here contradicts that statement for the BBC presented a very different perspective on the financial crisis and its causes to that which he recalls.
I’ll let you read and apply his analysis to events and the future…just ask yourself who is to blame, was it just the banks, or was it even the banks…and should we be getting the growth that Labour and the BBC insist we should, and would be having under the miraculous Plan B?:
How do we fix this mess? I don’t know. But don’t stop reading now. Perhaps if we have a clearer understanding of what went wrong, we’ll have a better idea of what needs to be done.
We will be right in the middle of the jungle, observing how bankers, regulators, politicians – and, oh yes, most of us – were by turns greedy, gullible lazy and short-sighted, and how we wilfully refused to see how our improving living standards were not being earned in a sustainable way.
We failed to rise to the challenge of globalisation.
We did not work harder and smarter.
Instead we borrowed.
And now as a nation, we have to pay back much of the debt, which inevitably makes us feel poorer, and will continue to do so for years to come.
The clean up will take years. And there is no quick fix.
We have allowed others, our governments and the so-called authorities, to take us from boom to bust.
I confess, during much of the journey, I had little idea we had taken a wrong turning….but as we headed for the swamp I succeeded in spotting the looming disaster and shouted out a warning: I was largely ignored and was even asked to shut up.
I am not going to pretend there is a road to Shangri-La, where we will suddenly find ourselves becoming richer and richer again.
We tried that road in the late 1990’s and early years of this century, and it was the road to ruin.
Boom and bust will be with us forever.
It was our foolish conviction that the smooth road to sunny uplands would go on forever which got us into such trouble.
The Future’s Overdrawn
Whether we own up to it or not, we can’t go on forever living on China’s credit.
What became clear in 2008 is that we will have to find a way of paying much of that debt back.
That will take at least a decade.
And when we repay debt, we’re spending less. Which means economic activity slows down, growth grinds to a halt.
It is reasonable to assume that growth will be as little as 1% in the coming 10 years….which wouldn’t look so bad after a contraction of 6.3% in output during the 2008-09 recession.
Cuts in public spending, including in benefits and tax credits, were almost certainly inevitable and have indeed followed.
Since 2008, the UK’s aggregate debt has been shuffled, not repaid.
The government kept spending to prevent recession turning into an extreme slump while tax revenues were shrinking.
When essential public services start to be financed through borrowing rather than tax, it is immensely difficult to cut the borrowing.
Peston also looks at Osborne’s cut in the tax rate for high earners…cynically raised as a last gasp piece of politicking by Gordon Brown…from 50p in the pound to 45p.
Peston tells us the cut was done at the instigation of business leaders who said they couldn’t recruit and retain talent because of competition from abroad.
In other words globalisation, the free movement of workers, has meant that tax rates have to be competitive globally….in a similar way that corporation tax is competitively ‘priced’ to attract businesses to invest in concerned countries.
Ironic really that’ open borders’ and the end of the nation state, that Nirvana for the Left, has led to the very things it claims to hate……an über rich highly mobile class, and businesses that can upsticks and move factories and jobs to anywhere in the world….dumping too expensive British workers onto the scrap heap….compounded by the mass immigration of cheap labour into Britain that pushed down wages and made life on benefits more attractive than working for a minimum wage.
Effectively not much of what Peston says in his article and expanded upon in the book is accepted by the BBC……Peston blames Labour as much as the banks, after all Canada, Gernmany and Australia all rode out the crash…becaue they didn’t spend, spend spend before it, and Peston tells us that growth will be slow and low for years…not what the BBC leads us to expect.
The BBC’s narrative is entirely differnet with Labour almost unmentioned, untouchable, whilst the banks take the full blame…the economy is dragging along the bottom with growth stagnating…if only we had a plan to stimulate the economy with massive government spending all would be well.
The truth is out there somewhere….just not on the BBC…unless you’re quick and spot the maverick free thinkers before they are ‘whipped’ into line again.
It’s almost as if the crash was deliberately engineered, and the BBC were in on it.
No it was a case of “spend, spend, spend” [via an election strategy based on the claim that it will not be you but somebody else who will pick up the tab – I think that the Newspeak name they give this “jam for yourself” strategy is “social justice”] until they eventually run out of other people’s money.
The function of the BBC in this is to anathematize anybody that draws attention to the bottomless greed of Guardian reading classes, while distributing propaganda and templates for correct thinking which (of course entirely coincidentally) serve the interests of those same parasites.
That is the entire justification of the BBC for them – and their greed is justified like the Medieval Church on the grounds of an appeal to the notion that they deserve their tithes because they know best, and that freedom of choice is a terrible thing, which of course it would be for them.
A couple of days ago – think it was on Today on R4 – they were discussing this very issue. Twice an invited commentator was unchallenged when he announced that it was not the government that caused the crash ….. It was the banks! We all know about the culpability of the banks (unfettered by Brown as they careered towards self destruction) but it was Brown that squandered the inflated wealth, buying the votes of state workers.
So the banks were not operating within Gordon Brown’s explicit instructions?
Funny how the left completely changed their tune on Gordon. Up until August 2007 Gordon was a master of economic detail, with an OCD approach to every area of the economy, especially banking, where he removed the oversight of banking from the Bank of England, so that he could impose his insightful authority via other quangos. He was loading the financial industry with loads and loads of regulation. Health and safety and politically correct HR legislation, as well as all sorts of rules and red tape which had to be complied with.
Yet whenever the FSA tried to restrain the banks, a CEO would call Gordon and he would slap the FSA down. So much for the regulation. Gordon was interfering and preventing suitable regulation from working.
Gordon promoted a banking system ran by unqualified retailers, and NONE of his increased regulation actually looked at anything involved with “sustainability” of the new financial instruments being created on his watch. None of the regulations looked at whether money was being lent in ways in which it was almost impossible to pay back, But Gordon Brown was still considered an economic wizard, for getting his hands dirty getting into the fine detail of the economy from taxes, to benefits, to banking and tirelessly altering and fine tuning the economy to swoosh along with the refinement of a Rolls Royce.
Then, Suddenly in 2008 a crash happened and all of a sudden, Labour supporters seemed to think that Gordon had actually spent 11 years doing absolutely nothing, but waiting for Thatcher’s reforms of the 1980s to collapse. He had not been the interfering and OCD like economic encyclopedia at all, but a lazy do-nothing who only had to wait for reforms from the 1980s to fail.
The left’s view of it all ONLY being the fault of the banks is simply unsustainable.
Gordon was dictating to the FSA on behalf of the banks the whole time. HE was the chancellor who did NOTHING to prevent the crash and everything to encourage the crash to happen. He never opposed a single banker’s bonus and instead, he knighted the most wreckless and least qualified bankers and encouraged them all the way over the cliff on his own watch!
Yes the banks share the blame, for doing what they are invented to do, which is make money by speculating on lending money, by various financial mechanisms. Banks will always push the limits, which is why Chancellors need to exploit the way banks can make money, whilst also restraining banks to keep their business sustainable.
I liken the situation to a circus. The banks are tigers and it is the chancelors job to be ringmaster and show the beasts off to their best advantage, whilst keeping the audience (the rest of us) safe. To provide a great show by encouraging the beasts to do what they naturally and instinctively do best. To be utterly feroscious, but to keep us safe from them.
Gordon created 10 layers of regulatory cages between the banks and the people, but left all the cage gates open so the tigers ate the audience.
Gordon was not exclusively to blame, but he does share the ringmaster’s share of the blame. It was his job to prevent the banks from putting themselves in the position where they were at serious risk of collapsing. He failed.
The lefties who only blame the banks are clearly delusional.
Excellent comment, Ken.
I’ve often thought of all this down the years but I find my brain shrinking away from it – the ins and outs seem so complex, it really does need a holistic approach to the whole subject because there are so many facets to it and you touch on a few with your mention of the seemingly unrelated H&S, HR rules and regs.
I still don’t know if where we are today is “mission accomplished” for Blair and Brown or if there was still more to come before they reached their ultimate aim with it but their plan was cut short because, despite coming over a period of over a decade, it was still too much, too soon for the general public to accept without question.
If there was more to come then the banking crash may have actually been a blessing in disguise because it made everyone realise that Brown’s economic plan was quite as bullet proof as he had led everyone to believe.
And this is where my brain starts to frazzle.
Did the banks deliberately accelerate the crash (by becoming unusually reckless with their borrowing) in order to expose the folly of such borrowing?
On the surface, everything seemed fine to Joe Public and many did well during the New Labour years, especially those who bought and sold their way from a tiny terraced house to a tidy detached within the space of a few years from salaries provided by the public sector but it was all based on money that wasn’t there.
It had to end somewhere – perhaps the banks just sped up the process independent of Brown or was Brown really the architect of his own downfall and, if so, to what purpose or motive?
Argh… there goes my last brain-cell. Time for a lie down.
Excellent post, all you say is true, plus so much more. Labour (and the Beeb) are still in denial and much of the public ignorant.
At the time, the favourite excuse of the then Government (and to this day) was to blame our banking crisis on the US banks collapse.
In part this was true, but what was continually left out of that US Banking crisis was the hand the “progressives” had in it (including ACORN). It was they who began to advance the lobbying to enable the generally low paid to increase the access to housing which they could not afford. This in turn led the Clinton administration to revive the Community reinvestment act which helped in turn to lower credit screening standards leading to what became known as “Liar Loans”, which led to a plethora of mortgage arrnagements that in the long term were totally unsustainable.
Well before Obama’s time, of course.
Oh no, think again:
‘Ironically, Barack Obama led the effort that caused the mess that needs cleaning up. Barack Obama was a pioneering contributor to the national subprime real estate bubble—the attack dog that terrorized banks to make mortgage loans that they did not want to make. According to research by TheDailyCaller, about half of the 186 African-American clients in President Obama’s landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices. As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide “booby trap” adjustable rate mortgages to poor African Americans.’
http://www.letfreedomringusa.com/news/read/2245
Nice one, Ken – well thought through and eloquently put.
Just to take you up on your point ‘Yes the banks share the blame, for doing what they are invented to do, which is make money by speculating on lending money, by various financial mechanisms. Banks will always push the limits…..’
But as you say earlier in your piece retailers, not bankers, ended up running most of the show, and this made a huge contribution to the banking disaster. Northern Rock and B and B were the early pacesetters, not only lending beyond the means of their balance sheets but also doing it in the most reckless fashion imaginable. The other main factor was supervision – had the B of E still been doing it, with its requirement of the banks to report monthly then in more detail quarterly with a breakdown of their deposits, lending and short-form balance sheets, which enabled the B of E to spot early risks through key ratios and over-lent sectors, none of it would have happened (assuming Brown couldn’t have overriden their concerns as he did with the FSA).
As a related aside it has become a trend, especially for the Left, to scapegoat the Baby Boom generation as ‘the greedy ones who’ve had it all’, a deliberate tactic to divert debate from the debt-laden Generation X who believed they could ‘have it all today’ by loading themselves with credit card and housing equity debt. Well, all I can remember was 3 x salary of the main wage-earner, max 95% mortgages (and they were rare) and a rule that you could only extend your mortgage on structural improvements (which didn’t even include kitchens and bathrooms!). How times changed and, as many of us could see as it was happening, very much for the worse.
Absolutely spot on. Brown’s creation of the FSA diluted the BoE’s oversight. Allowing the banks to import the sub-prime practices from the US. It may ‘have started in the US’, but Brown’s actions meant we were bound to follow them into the financial black hole.
In themid 80s my very first mortgage was with Northern Rock. 90% mortgage, three times my salary, bought me a half decent two bedroom terraced in a nice area ‘with potential’ as they say. Its the sort of house a first time buyer can only dream of after 13 years of Labour.
20 years later Northern Rock were offering 125% mortgages, self certified, i.e. no proof of income necessary. At the time I remember thinking, how can this be? Surely this can only end in tears? Turned out I knew more than the BBC, labour, Gordon Brown, the Bank of England, The treasury and the FSA all put together.
He was from the Guardian so he was just towing the Labour line to try and get out from under the blame . As soon as you hear the word Guardian you know you will be hearing a Labour Lie.
I think the BBC keeps Peston on board for the same reason they keep Andrew Neill and Jeremy Clarkson – to make it look as though they’re an impartial broadcaster so when people point out how left-leaning and biased it is they or their defenders can say “but they have Clarkson, he’s David Cameron’s best mate so therefore they’re balanced.” Peston’s obviously far too autonomous and too in control of his own mind and research to be a genuine part of the BBC hierarchy.
The banks still need regulating for me, they can’t keep being allowed to privatise profits while socialising debts. They need to be accountable for their failures. But yes, it’s entirely unfair and dishonest to suggest that Labour is faultless because it was a global recession. They bloated the migrant labour market for an influx of new votes knowing that they themselves were of affluent-enough lifestyles that they’d never have to encounter the negative repercussions. They sold most of our gold reserves – just about the only tangible, valuable asset we had left after Thatcher and Major similarly sold their way to short-term prosperity – at rock-bottom prices for a quick rise in a completely fiat currency that is now in the mire. And then they try to shove the blame elsewhere, backed up by the Beeb and the Guardian etc. who only ever acknowledge failure if it comes under a blue banner.
This is why Labour must NEVER be reelected as long as the same career politicians that presided over the mess they made last time continue to be at or near the top.
When there is cronyism and corruption at a Government level, quite often the BBC is nearby.
From The Telegraph’s Thomas Pascoe blog post “Revealed: why Gordon Brown sold Britain’s gold at a knock-down price”:
“Goldman Sachs, which is not understood to have been significantly short on gold itself, is rumoured to have approached the Treasury to explain the situation through its then head of commodities Gavyn Davies, later chairman of the BBC and married to Sue Nye who ran Brown’s private office.”
A Goldman Sachs adviser was one of the Labour peers created recently wasn’t he?
Come to that another Labour peer was once chairman of BP (as in “Iraq oil war”).
The BBC keeps Peston because he’s the City gossip, and has an extraordinary amount of insider contacts in business, finance, and government. That’s why he got the scoops he got. He doesn’t get very many government ones these days since his biography subject is no longer in power, but he does have more insider info than most. I don’t know why people in finance still give him the time of day, but people still seem to delight in feeding him info. Peston is also very good at explaining – in writing, not when speaking out loud – the mechanisms and tedious details of finance.
Equally important for the BBC, though, is that Peston is a fellow traveler when it comes to bashing bankers and blaming everything on their greed. He’s called the high salaries in the finance world “bonkers”, and ocassionaly opines that they shouldn’t be paid so much. He’s even strayed into Marxist valuation of labor on occasion on this matter. Perfect for the Occupy sympathizers at the BBC.
Still, at least he’s earned some good money from his biography celebrating the economic genius of Gordon Brown.
The quotations you give above from Peston bear no relation to his absent minded, ‘on message’, bumbling reports aired by the BBC.
The glimpse of his occasional rational appraisal regarding the collapse of the economy are given in hindsight and he certainly did not openly trumpet these when the moron Brown was destroying everything British under the guise of ‘prudence’.
Nor did Stephanie Flanders. She did however give us a BBC post telling us this in May 2011.
“Why the Greek bail-out has worked”
What did happen to Greece next?
I remember Peston whipping up the Northern Rock storm which could arguably be seen to be the first domino in the financial collapse of 2007…
His response?
Funny, because I am sure I remember him feverishly interviewing savers queuing outside the bank from the earliest stages of the crisis almost gleefully seeing the queues enlarge after each of his weird apocalyptic presentations – and one wonders what his “wider interest” was.
Just a pity Pesto didn’t deploy some of this gloomy skepticism back in 2010 when it actually mattered. As long as McDoom was in office the BBC was happy to push the line that he was a certified super genius. It was only after McDoom was McDitched that Beeboids suddenly started their economic death watch.
i would love to be a fly on the wall when peston and steph are voting in the general election, i bet there x would be in the box voting for the labour party,
Not if the SWP were fielding a TUSC candidate
I really hate Peston. The way he speaks really gets on my nerves and has me pressing the mute button as fast as I can. It’s so slow, and he sounds like he doesn’t give a toss. ‘WELLLLLL…..what’sss……………happennnnnnnnned is that theeeee…….CHANCELLOR George…………Osssborne has introduced a newwwwwww……………………………………………………………………………………………..TAX!’ And he has a smug face that I’d love to punch.
He’s probably report you to his controller at Common Purpose for that.
Don’t these antisemitic trolls ever notice that most BBC employees, bankers, hacks etc are gentiles? They’ll be blaming Jews for their erectile dysfunctions next…heh.