Sunday 28 September 2008

Credit Crunch Latest

I am desperately busy in my constituency and with various initiatives in unions,on the Left and progressive campaigns so blogging time has been limited to non existent. Just to let people know what I have been saying over the last 24 hours on the latest events in the current crisis of capitalism, aka the credit crunch, I have posted the last two press releases I have put out on this weekend's developments.

Saturday 27th September

Labour MP John McDonnell Warns Brown Against US style Bail Out Plans and Calls for Urgent Cut in Rates.

Labour MP, John McDonnell has warned Gordon Brown against any plans to follow the American model of bailing out the bad debts of British banks and financial institutions.

John McDonnell is the chair of the Left Economic Advisory Panel, a group of economists established 5 years ago to provide economic analysis and advice to the Left.

John said ”People will be extremely angry if Gordon Brown tries to use taxpayers’ money to implement a US style bail out of the bad debts of Britain’s financial institutions. Every year we have witnessed obscene levels of bonuses doled out in the City. Ordinary people struggling with housing, food and fuel costs should not be forced to pay for the profligacy of these city’s speculators. Allowing the City to pass on its poor investments to the taxpayer whilst retaining the cream of the crop is simply not acceptable. Nationalisation of all the assets of an institution is the only fair way of balancing the risks to taxpayers. Given the current liquidity trap the Prime Minister needs to introduce an immediate and significant cut in rates if we are to avoid further institutional collapses.”

Sunday 28th September

John McDonnell MP Calls on Gordon Brown to End Bail Outs and Produce a Credit Crunch Strategy.

In response to the Government’s decision to nationalise the Bradford and Bingley, Labour MP, John McDonnell, Chair of the Left Economic Advisory Panel, has called upon Gordon Brown to end the one of bail outs of financial institutions and to produce a credit crunch strategy.

John said “The Government cannot continue just reacting to each collapse of a financial institution as we drift towards a potentially long and deep recession. The taxpayer shouldn’t be required to pick up the tab for the bad debts of the speculators. Ordinary people shouldn’t be forced to pay for a crisis not of their own making.”

“The Government needs to produce a coherent strategy for both the immediate threat of recession and for the long term housing market. To overcome the current liquidity trap we need an immediate and significant cut in rates to avoid deflation. This means if necessary overriding the Bank of England Advisory Committee.”

“At the same time we should use this opportunity to reconstitute the housing market as a provider of homes for families rather than as a tool for speculative gain. This entails bringing into public ownership and control all those financial institutions involved in home loans, controlling lending and converting mortgage defaults into social housing.”