Saturday, 4 April 2009

Reflections on the G20..

I walked past the Bank of England on Friday morning. The cleaning crew from the City of London Corporation was hard at work removing the graffiti from the statues but the slogans on pavements and walls remained as did the makeshift noticeboard outside the Royal Exchange but the protesters who had still been there on Thursday evening had vanished after a chill London night.

G20 had come and gone but while life was returning to London, the media and blogsphere indicated that while there had been a meeting of leaders and people, there had been no meeting of minds.

The vox pops and written comments showed a massive gulf of understanding between those working in the City and those protesting. It's no more accurate to say every protestor was a middle-class sponger than it is to say everyone who works in the City is a banker.

As for the world leaders, their contribution has come under ferocious assault from the Right-wing media and bloggers. Had it been McCain and Cameron rather than Obama and Brown, I suspect the reaction from the Glenn Becks and Allister Heaths of this world would have been very different.

Like the old pioneers of the West, the champions of laissex-faire deregulation are pulling the wagons round in a desperate defence of a system perceived by many to have failed and to be responsible for the current recession yet there is scarcely a whiff of contrition let alone compromise. Short-sighted Home Counties Conservatives may think that "capitalism" is under threat but it isn't - only the model of deregulated free enterprise promulgated by the monetarists and taken on by the Thatcherites in the 1970s is now seen as having failed.

Capitalism will survive, adapt and be renewed. Those who cling to the outmoded models and values will be as obsolete as those continuing to praise the post-war Butskellite concensus were in the 1980s.

As for the Right, they may moan and whinge (something they are very good at when not telling us all how to live our lives) but the summit was about confidence. The huge loss of investor and public confidence in the gloval financial system has been at the heart of the recession. The rebound in the markets since early March has been astonishing - the Dow Jones has rallied well over 1,000 points from its "low".

Despite the doom-mongers of the Right, there is plenty of evidence that there is a deal of "confidence" out there. At Bluewater this afternoon, there were plenty of people eating, drinking and shopping. The housing market is seeing buyers return as prices have fallen and the deep discounting evident in other sectors suggests perhaps just how gouged consumers were in the good times.

It's not all good news of course - many jobs have been lost and many more will go - but even the most pessimistic analyst now accepts that armageddon has been averted and talk of depression has slipped off the news agenda.

That's not to say recovery won't be slow and faltering and Britain still faces a huge problem of dealing with massive Government borrowing which may mean painful spending cuts and possible tax rises.

And yet....I struggle with the enormous inequalities still out there and especially with the concept of tax havens and tax avoidance. It is grotesque that the extremely wealthy can avoid paying tax while the average earner cannot. More must be done to close down tax loopholes and ensure that wherever someone works or earns income, the appropriate level of tax is paid to the local country or Government.

This may be bad news for some places but there is an overarching benefit beyond sheer economics for me - in the 21st century, we need to create an economic culture which, while promoting self-improvement also recognises the value of contributing to the overall fabric of society. Those who seek to do this denigrate, in my view, the rest of us.

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