Economies of Political Struggle [Article]

As the consortium of world powers meet once more in the hopes that their influence upon world banking will deter the crises of economic disaster, we must once more consider several questions, all of which are of crucial importance. First, we must consider who is to blame for this sudden shift in economics when, mere months ago, we were at an economic high. In the United Kingdom, it is stated that the regulations and rules of the 'economic genius' Gordon Brown are held to blame, considering the fact that it was during his period of rule that we were granted economic stardom, however, his shift from one position to the other has meant that guidelines which were once considered the framework of economic growth are now considered the foundation of our downfall. Others look towards the banks with high-risk investments and the attainment of power being to blame. According to some, the banks invested in some of the riskier loan agreements and mortgages which therefore influences the downfall of the world's economy. In truth, both responses are correct, however, we failed to point the finger at one other person to blame - ourselves.

One of the problems that we have is that we continue to desire short-term prospects and discard the long-term disadvantages. In fact, it is this statement which was our downfall. As the economic crises fell upon us, we deemed it appropriate to blame Gordon Brown when, in fact, we are to blame. We desired low-rate bank loans which resulted in inflation. As the cost of food rose, we found it appropriate to blame the banks because their refusal to raise interest rates meant that investments were not reaping the rewards. As the commercial cost of oil rose to its highest recorded figure, we could not help but blame the world. In fact, all these problems are rooted in our demands. We demanded low taxes and as a result, the concept of universal benefits was reconsidered. Investment in failing state responsibilities such as education and hospitals meant that the budget could not allow for interest increases. The cost of living rose because we have become a commercial society.

That being said, it is not the only question to ask. We must also ask what it means for us. The nationalisation of three banks in England has a huge impact in terms of our finances and the economic status of this country. It is quite frightening to learn that Lloyds TSB are purchasing HBOS - bank takeovers are not a promising sign for the economy. What we must understand is that we are all shareholders in the nationalised banks. Gordon Brown declared that he desired that banks to return to their '2007 state', which is the root of the problem. He desires to implement low-rate mortgages in order to protect the public and also increase the turnover of their investment in housing. As the property market crashed in the early months of 2008, Gordon Brown desires to see first-time buyers and investors making their voices heard in the property market.

In terms of the long term impact, there is little that can be said, except that our budget is now focused upon the ownership and control of the English banking system. We have invested approximately £20 billion into the economy, at the cost of other important industries. The Royal Mail, for example, continues to fail to meet its targets and is a nationalised corporation, although there has been talk of privatisation. The NHS, the English health-care system, is in billions of pounds of debt and yet the government has failed to invest the same amount of money which it has invested in the economy. Of course, the investment in the economy may delay the shift from recession to depression but there is clear evidence that this investment will cost us in the future. There will be the prospect of an increase in taxation, disproportionate budgeting and the concept of a 'one world bank' once more being raised and considered.

Having said that, the investment does have its advantages. Gordon Brown is now said to be improving in his character, due to being in his 'element' during the economic crises, which helps to promote national morale. Gordon Brown has also declared that the decrease in the cost of oil should be reflected in the commercial price. The investment is set to decrease the cost of living, however, the prospect of unsecured loans remains uncertain and the approach to banking and housing will never be same. Repossession and increased rates does seem a possibility but only time will tell.