‘Culpability’ Brown Deceives Britain And Himself

Gordon Brown is making great play with his theories about the world’s economic ills. He has written extensively and spoken publicly along with his European colleagues blaming the sub-prime mortgage crisis in the States on one clear-cut cause. That is a ‘lack of transparency’.

It now appears that whatever the sins committed by lack of transparency in the US mortgage market, these are more than equalled by a lack of ‘transparency’ in the handling of Euro lending to fuel property bubbles in Ireland, Spain, Greece and other European locations for over six years. The Euro interest rates offered to property buyers have been held down, ostensibly because inflation in the eurozone was thought/claimed by the ECB to be low. The published official figures for Euro inflation have been consistently around 2% p.a., since it was launched in 2002.

Anecdotal evidence, however which can be obtained by talking to anyone living in the eurozone is that inflation has been far higher than 2% over the last six years, possibly as high as 25%. Germans will tell you that when you go back to the original conversion rates, and compare, the value of the currency now is only worth about one third what it was. This is typical of all euro countries.

There seems to have been a certain lack of transparency going on, of a very fundamental nature, in Europe as well as in the US.

Gordon Brown felt obliged to mimick the methods used by the ECB to ‘measure’ inflation, and he created the CPI – the Consumer Price Index, to replace the RPI – the Retail Price Index. The RPI includes council tax and mortgage costs and gives a truer reflection of people’s cost of living than the CPI. But even the RPI does not really address the issues of inflating living costs.

The costs that matter are the costs of essentials – the things you have to buy and have no choice about – like food, petrol, utilities and of course council tax. It doesn’t matter much if televisions or kettles fall in price. You buy what you can afford at the time you buy, trading up or down to suit. You are not boxed in. The government though, does not produce an Index which only measures essentials (The RPI allows falling car and TV prices to offset rising taxation and food prices), and so the Barclays Capital Essentials Inflation Index (BCEII) is often used to get a truer impression of the compulsory cost of living, ignoring the optional.

And the figures make shocking reading.

From the Daily Telegraph two weeks ago comes this –

According to the traditional Retail Prices Index (RPI), which measures the price of a fixed basket of goods and services consumed by a household on average earnings, inflation is now (end of December 2007 figures) at 4.4 per cent.

The Consumer Price Index (CPI), the official measure used by the Bank of England’s Monetary Policy Committee when setting interest rates, has also risen, from 2.8 per cent to 2.97 per cent. It is now higher than at any time since December 1995. And a simple index of “essential inflation” calculated by Barclays Capital, the investment bank, consisting of food, council tax, utilities and petrol, jumped to 8 per cent in the year to December, compared with just 4 per cent a year ago.

All the pay deals for government employees are based not on ‘essential’ inflation but on the CPI, as are increases in pensions and so on. From the statistics, it appears that Gordon Brown’s chosen measure of inflation is now no less than 5% too low. Will Gordon come clean and admit his culpability?

People’s disposable income is being heavily squeezed, but you can rest assured he will not even say one word about it.

Let me leave you with Gordon Brown’s own words from his 1999 Labour Party conference speech, when he was more than willing to claim that all the good things that were happening were down to him. The words rang hollow to many peoples’ ears at the time. Now the wheels are falling off and everyone can the see the mess he’s created out of his arrogant fiddling of crucial data, he sounds nothing less than stark staring mad…

One year later in his 1999 party conference speech, Brown gleefully espoused on the achievements that his policies had already created.

And it is because we rejected not just the Tory policy but the flawed Tory values behind it – their short-termist, take-what-you-can, selfish irresponsibility – and it is because we put in their place Labour values of economic responsibility, planning for the long term, building stability from solid foundations – that we now in our country have mortgage rates around their lowest levels for twenty years, inflation at its lowest level in over thirty years, long term interest rates at their lowest levels in nearly 40 years

from GordonClown.com August archive 2006.

PICTURED – Capability Brown from happier times in British history

The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.

Leave a Reply

You must be logged in to post a comment.