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Gordon Brown on fairness, stewardship and cooperation & the global economic crisis
Translations available in: English (original) | French | Spanish | Italian | German | Portuguese | Swedish | Russian | Dutch | Arabic

http://www.theage.com.au/world/old-values-will-help-us-survive-a-new-global-age-20081018-53n0.html?page=-1

Old values will help us survive a new global age

·         Gordon Brown

·         October 19, 2008

We must act to uphold fairness, stewardship and co-operation in dealing with the credit crisis, writes British PM Gordon Brown.

LIKE most of you, I have come from a family that values hard work and that brought me up to take responsibility and appreciate the importance of enterprise. For generations my father's family worked the land as farmers and many Browns still do. So it's hardly surprising that I believe in markets, competition and rewarding creativity and effort.

I admire the market's ability to release the dynamism and enterprise of people and so my Labour Government is pro-business and pro-markets and always will be.

But I also know that we do not live by markets alone. I have long understood that markets rely on values that they cannot generate themselves. Values as important as treating people fairly, acting responsibly, co-operating for the benefit of all. And these values that our economy and society need in order to flourish are not born in markets, nor in states.

These values - fairness, stewardship, co-operation - are learned in families, neighbourhoods and communities and developed in the relationships we enjoy as a society.

The first financial crisis of the global age has now laid bare the weaknesses of unbridled free markets. In the past few weeks trust, the most precious asset of financial institutions, has been eroded.

Families whose only speculation is buying a lottery ticket or a premium bond or a few shares rightly feel they are being unfairly endangered by storms they had no hand in creating. And what's happening around the world is raising fundamental questions for the new global age about the right relationships between markets and governments.

In this unique period of global change we are in uncharted waters. But we do have a compass by which to navigate. And while action is being taken to rectify the financial weaknesses of our banks and institutions, we must now also act decisively to uphold and apply the fundamental values which can shape a stronger economy and fair society of the future. This is not something that can be guaranteed by more and more intrusive regulation - it is about upholding three key ethics in public policy and across the public arena.

Markets work best when underpinned by an ethic of fairness. The institutions of the marketplace need to be founded on the ethic of stewardship. And this new interdependent global economy cannot work for the world's people without an ethic of co-operation.

Firstly, the ethic of fairness means we reward hard work, thrift, enterprise, effort and responsible risk-taking, but refuse to condone or reward irresponsible or excessive risk-taking. We celebrate those who profit from creativity and hard work but not those who make reckless gambles with other people's money. That's why, for example, a new Financial Services Authority code of conduct will make long-term success the basis for bonuses in the future.

Fairness means that in these tougher and difficult times where there is a risk of hard-working families being hit by unemployment originating in global forces well beyond our shores, we have a duty to act with urgency. So we are extending our new deal for jobs. Where there is a threat to enterprising small businesses - the lifeblood of our national prosperity - we must be there to help with new support in accessing credit. Where people make the effort to save for a home, we must do what we can to assist by getting the housing market moving again.

Secondly, the ethic of stewardship must restore to all financial institutions their public purpose. Boards need to proceed on the basis the best companies do already: that when people start a new business or save for a wedding or Christmas they are investing not just their cash in the bank but also their hopes and dreams. Quite simply: banks are unique because they are stewards of the people's money. That's why we have acted not just to stabilise the banking system, but to ensure that financing is passed on to small businesses and families who want to get on with ordinary life in these extraordinary times: banks doing what banks were built to do and the best banks have always done.

We are also finding that in an interdependent global economy the ethic of co-operation matters more than ever. We are in this together. Risk has been globalised, but the responsibilities to act when problems arise have not been. In the 1940s, visionaries took on the challenges of the day and built international institutions that have lasted for 60 years. But they were designed for an era of sheltered markets and national competition. Now we must build global institutions for an era of global markets and global competition. I have set out my proposals for a new global early warning system, for cross-border supervision for action to eliminate the conflicts of interest that have dragged our world economy down, and for fundamental reform of international institutions.

The smallness of political debate has all too often obscured the scale of these huge global challenges that we must address together in a united way as one country.

This is not just any time - not the time for politics or economics as usual. It is a defining moment for our emerging global society. And tough times test not just our institutions, but our beliefs. In this uncertain world the values of fairness, stewardship and co-operation that underpin markets at their best have come of age. These are the values that can unite the nation, will ensure we can pull together as one country - and we will come through the downturn stronger not weaker.

DAILY TELEGRAPH

 


October 20, 2008 | 6:36 AM Comments  0 comments



A comment on Mr Rudd and the economic crisis
Translations available in: English (original) | French | Spanish | Italian | German | Portuguese | Swedish | Russian | Dutch | Arabic

http://www.theage.com.au/opinion/goodbye-mr-kent-20081018-53mq.html?page=-1

Goodbye, Mr Kent

·         Paul Daley

·         October 19, 2008

IT'S amazing what a rush of Franklin D. Roosevelt can do to a prime minister's brain. One minute our PM Kevin Rudd is a super-cautious, process-obsessed, review-driven control freak. Then, after a few back-of-the-envelope sums with the man formerly known as The Least Confident Treasurer The World Has Ever Seen, he's blowing $10.4 billion of a budget surplus obsessively acquired over 12 years by The Least Relevant Former Treasurer The World Has Ever Seen.

Roosevelt, the inspirational Depression-era American president, liked to keep a lid on public expectations while at the same time taking drastic measures - overhauling the domestic economy, introducing the New Deal for the unemployed, enforcing price controls and reforming the banking system. He redefined American liberalism through radical government intervention.

Last week, Rudd had no qualms about channelling part of the Roosevelt strategy of invoking extreme economic measures while simultaneously talking down public expectations - even going so far as to borrow the president's famous quote that "we cannot ballyhoo ourselves back to prosperity".

While such artful appropriation of ballyhoo at a time of crisis has just given Kim "boondoggle" Beazley yet another reason to detest Rudd, our Prime Minister has also just gone from zero to hero when it comes to the politics of grand narrative.

One minute Rudd's critics and allies alike are pasting him for boring us senseless by failing to spin a so-called political narrative. The next thing you know he's banging on so assuredly about the threat of "extreme" capitalism, the implied venality of bank execs and the evils of avarice that you've got to wonder if the Booker Prize judges accidentally overlooked this particular morality tale by this particular loner who also happens to hold an Australian (though not an Indian) passport.

Seriously though, for some time Rudd has been trying to kickstart a debate about the obscene salaries and incentive payments trousered by some of the executives of Australia's retail and commercial banks. Fair enough - it's a worthy debate. But let's not confuse it with the current global economic and banking conflagration, triggered as it was by the subprime loans crisis that, in turn, stemmed from the genuinely immoral practices of some American lending institutions.

No. Compared to the odious banking practices in the under-regulated United States, where executive greed and apparent corporate malfeasance has undermined the financial viability of some institutions, all the Australian banks seem close to virtuous.

By all means let's try to lop a million or 10 off some bank chiefs' packages, but let us not confuse their pay with the solvency of the institutions they head. Naturally these guys and girls say they'd move overseas if their Australian packages were cut. That's not likely, you'd have to say, in this market.

Never deterred by Australia's place (island, down south) and influence (not much) in global politics, Rudd now wants the G20 nations to follow his lead on the banks.

No doubt some of our bankers are cursing the heavens at the injustice of it all. For how could such a shallow morality tale be brought to them by the wealthiest prime minister Australia has ever seen, and seconded, in a spirit of genuine bipartisanship, of course, by the wealthiest Liberal leader (and a former merchant banker, no less) known to this country?

It's all part of the New Kevin-ism, which is propelled and kept on compass by the ostensible modesty, parsimony, sobriety and consideration of its gestures.

This theme of low-key piety versus bellicose consumption has, from day one, been a critical part of Rudd's personal and political story. It's only now, with the image of an economic tsunami gathering off our coast, that it has begun to resonate.

Malcolm Turnbull has little choice. The timing of all this for him, having just assumed the leadership, is appalling. He can do little but feign bipartisanship while getting his shadow ministers to take niggling potshots from the side in the hope of scoring an inside page mention or two.

Offers of bipartisanship coupled with constant claims of "but we thought of it first" seem trite in the face of the current threat. But Turnbull is absolutely right to demand the economic data upon which the $10.4 billion bailout was based. In such threatening times, taxpayers could use the added assurance that the equations used to spend their money add up.

Times such as these are truly treacherous for opposition leaders. Kim Beazley might attest to that from his experience in 2001. Tacking to victory for most of that year, the hijacked planes of September 11 and the arrival of the Tampa changed the atmospherics dramatically.

Beazley's vacillation over the Tampa, in this febrile environment, was fatal.

Britain's Tory leader, David Cameron, meanwhile, is watching his hitherto extremely bright electoral prospects evaporate as Prime Minister Gordon Brown channels Winston Churchill … and FDR.

A few weeks ago, Brown's colleagues were plotting all sorts of strategies to replace their PM. Today, having effectively nationalised three of Britain's biggest banks before moving on to redesigning the global financial architecture, Brown has transformed himself from a ditherer to a doer. Brown was a confident and assured chancellor of the exchequer (equivalent to our treasurer) before he became a largely ineffectual, indecisive prime minister.

Which brings us back to Wayne Swan, formerly known as The Least Confident Treasurer The World Has Ever Seen. Suddenly he is channelling the pre-prime ministerial Brown.

Swan is operating with increasing assuredness as he administers the Australian inoculation program.

But he could make us feel better still as he sticks the needle in by showing us the sums.

What would FDR have done?

*Last week I incorrectly said new gun laws were introduced after the Port Arthur massacre in 1997. It was 1996.

Paul Daley is The Sunday Age's national political columnist.