The world is crashing around his ears, but Gordon Brown can barely wipe the smile off his face. He is relishing the crisis, says Andrew Rawnsley in The Observer. Just a few weeks ago, the PM was a “hunched, hunted” figure; now he is almost “swaggering”. Last week’s announcement of the £500bn bank rescue plan saw stockmarkets surge, and catapulted Brown from “zero to hero” on the international stage, says Rachel Sylvester in The Times. In France, he was praised as a “magician”; in Germany, pronounced a sage. The new Nobel economics laureate, Paul Krugman, wrote a piece in The New York Times headlined, Gordon Does Good. It opened, “Has Gordon Brown saved the world financial system?”
Britain may be “a junior partner” when it comes to global economic affairs, writes Krugman, but the Government has thought clearly and acted decisively to unlock the flows of capital and credit, showing the rest of the world “the way through this crisis”. Brown now hopes to rally European leaders behind the ‘second stage’ of a plan to stabilise the world economy and win wider support for a reform of the world’s “financial architecture”, says the FT.
“Heady stuff,” says The Guardian, but Brown should be “extremely wary of presuming too much too soon about the public mood”. Recent national opinion polls show an improvement, but Labour remains ten points behind the Tories. Brown has “won more time, recovered some respect and invested his premiership with a great sense of purpose”, says Rawnsley, but that does not mean the public will vote for him in 20 months’ time. Voters are furious that so much taxpayers’ money is being spent rescuing financiers from their own folly, particularly since not one of them has yet offered “a single word of public remorse”. And even if they credit Brown with firefighting, they are likely to hold him responsible for lighting the blaze.
As well they should, says Fraser Nelson in News of the World. “When a house of cards falls down, you blame the construction – not the gust of wind.” As Chancellor, Brown pumped the economy full of cheap debt. His bailout will cost an average of £18,800 per household, at a time when 1,500 jobs are being lost and 120 homes repossessed each day. Action needed to be taken, but Brown’s “bonanza of socialist indulgence” will result in our banks being used for political ends and mean tax rises for the rest of us, says Peter Oborne in the Daily Mail. The Government portfolio now includes the majority of our most famous banks, now “accountable not to shareholders but to politicians”. For a flavour of what is to come, look at the merger document between Lloyds and HBOS. Lloyds was forced to make a promise not to axe Scottish jobs to suit the political priorities of Labour. “Many more such decisions will follow.”
The Government’s willingness to take shares in banks doesn’t look like socialism to me, says Charles Moore in The Daily Telegraph. They are non-voting shares and the idea is to sell them later. This looks like a “huge effort to shore up capitalism, not to replace it”. Whatever it is, it wasn’t Brown’s idea, says Fergus Shanahan in The Sun. Mervyn King, Bank of England governor – with some help from the Financial Services Authority – came up with the idea; now Brown is strutting about Europe “posing as a financial genius for clearing up a mess he created”. Does anyone believe he’s gone in days from nail-gnawing ditherer to global colossus? “No, neither do I.”