RONALD REAGAN once said that the nine most terrifying words in the English language were: "I'm from the Government and I'm here to help". Reagan delivered a lot of humorous lines during his presidency but this one was heartfelt and underlined his view of the American Dream. People should be free to lift themselves up and, for those in need, people should give others a personal hand up, rather than a government handout.
There's been a lot of talk about the crisis of capitalism during this latest economic recession, lots of finger-pointing at bankers and their greed. Well, not all bankers are bad, indeed I would say few are, and many of the people that have made our banks bankrupt are not bankers at all but retailers (former HBOS chief executive Andy Hornby was from Asda) and accountants (Sir Fred Goodwin at RBS).
The job of a banker is specialised, with people that are conservative, prudent and taciturn better suited to the task than those that are liberal, spendthrift and flamboyant. Bankers and Ferraris don't go – such a choice in cars should be enough to set alarm bells ringing.
The most inappropriate people to be bankers are practising politicians, for they are in the market for votes – not the market for nurturing money. If money were water, bankers would ration it through careful control of its supply, using its price to ration it to customers.
Politicians just get the hosepipe out and try to soak as many people as possible, preferably in front of the cameras whilst uttering meaningless words like stability, long-term, boom and bust (the end of). There are lots of policy wonks with ideas for how politicians can shower us with our own money – geeks bearing gifts that we have paid for!
One American example of how politicians make bad bankers explains how we are all in this mess. Back in the Nineties, during the glorious reign of Bill Clinton, the president exerted a great deal of pressure on the government-subsidised mortgage providers Fannie Mae and Freddie Mac to provide easy loans to people who previously had been considered too high a risk. Clinton was in government and he was there to help. So, in 1999, the threshold was dropped and the sub-prime mortgage market expanded exponentially.
To cope with the greater demand, the US housebuilding industry expanded, borrowing more from the banks to finance the expansion.
Needless to say, people that bankers had previously thought too risky to lend to eventually showed why they had been categorised as sub-prime and started to default on their mortgages.
Foreclosures multiplied, the construction boom collapsed and a lot of "bankers" were left with egg on their faces. They had gone against all their own banking disciplines and the bailout of banks followed – organised by the very politicians who had caused the problem. Once again, they were there to help us.
Now President Obama has just passed a "stimulus package" that spends 553 billion and he's hosing down the American economy with politically correct subsidies that will do little to stimulate the economy but will do much to make big government bigger.
Not to be outdone, our own Government is here to help too and is drenching the banks not just with our money, but that of our children and our grandchildren, quenching the thirst of old soaks at Northern Rock, Bradford & Bingley, RBS, HBOS and its gullible new owner Lloyds TSB.
Winston Churchill once observed that "for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle". I believe the same goes for borrowing. You cannot solve a debt-fuelled crisis by borrowing more – but that's what Obama and Brown are trying to do.
Nor can we take solace from Alex Salmond – his solution is to drown us with kindness too. His hose is undoubtedly smaller than Gordon's – but size doesn't matter – and we shall be drowning in Alex Salmond's kindness.
The politicians should be turning their hoses off, letting the addicts dry out and lessening our burden so we can lift ourselves, and each other, up from this recession – from outside that bucket.
Sink the name shame
I'M pleased to see my old friend Ian Lutton is campaigning to retain the dignity of the old port of Leith. The sheer ignorance, audacity and arrogance of Forth Ports trying to use the title Edinburgh Harbour for a multi-million pound property development of nine "urban villages" is staggering.
It was understandable to have an Edinburgh Dock within the Port of Leith – but to have an "Edinburgh Harbour" dominating its skyline would be like building posh apartments on the Esplanade and calling them Leith Castle.
Balloon and bust
ONE of the reasons our economy is in the current mess is due to Gordon Brown changing the measurement of price inflation from the Retail Price Index (RPI) to the Consumer Price Index (CPI).
The big difference is CPI does not include mortgages and house values – so as the property market ballooned, the inflation rate never reflected it and interest rates were allowed to fall when they should have been climbing.