Friday, 9 May 2014

Democracy and the blame game

Andrew Fisher, author of a new book that argues politicians rather than bankers should take most of the blame for 2008 financial collapse, analyses recent polling data

There was some good news for the Labour Party yesterday as polling data showed 53.3% of the electorate blamed the bankers the most for the crash, while only 33.9% blamed the last Labour government. A further 12.8% blamed previous Conservative governments.
Who do Labour voters blame for the crash?

Among Labour voters the figures show an even stronger 63.8% blame the bankers and 26.7% blame previous Conservative governments, while just 9.5% blame the last Labour government.

Ed Balls' message, delivered at 2011 Labour Conference (one that can't be repeated often enough), seems to have got through
"It wasn't too many police officers or nurses or teachers here in Britain that bankrupted Lehman Brothers in New York"
But if Labour voters do blame the bankers (and Lib Dem voters do even more so at 77.0%), then the logical question is 'what should be done?' - and that brings us back to politicians.

If we just simply 'blame the bankers' then surely there is an onus on politicians to do something about it. As Neil Foster points out, "a separate poll for Class by YouGov in October 2013 found finding only 22% of voters believed ‘enough has been done to avoid another banking crash like 2008 happening in the future’.

Likewise if one quarter of Labour voters blame the previous Conservative governments (Thatcher and Major) - then that leads to the inevitable question of why didn't the last Labour government do something to reverse their actions in 13 years of government?

Labour supporters and today's Labour shadow cabinet have to have an answer to that too. 

The polling data there is the safe space for Labour today to have a proper analysis of the crash, what went wrong, and what needs to be done to put it right. That should involve some mea culpa, and some analysis of the failed policies of the Thatcher and Major governments.

So why do I - out of step with public opinion, and with Labour voters - argue that politicians rather than bankers should take most of the blame? 

Because ultimately if the bankers are deregulated and lauded as the masters of the economy I don't think it's surprising that they behave in a profit-maximising, yet socially reckless, selfish way. I blame politicians because - throughout the 80s, 90s, and 00s - they removed regulation after regulation on the finance sector, from high street credit, to building societies, banks and the markets. The whole economy was re-shaped in the interests of the finance sector - and politicians of successive governments did that.

My fear is that if we 'blame bankers' (and don't get me wrong they deserve their share of opprobrium) we disempower our democracy. We say 'the bankers did it', as if that's a sound analysis. But it's too easy then to overlook the fact that politicians created the space for them to do it. And, more importantly, that politicians could put it right too.

In The Failed Experiment I argue that blaming the bankers is not enough. But nor will partisan attacks on the failures of Conservative or Labour governments. Instead, the problem is the post-Thatcher political consensus which says the market knows best, and politicians should get out of the way.

I want politicians in the way, I want to praise them when they get things right, but I also want to hold them accountable when they fail. And the crash was not just a banking failure, but a political failure too - and one that is also yet to be resolved.

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