At least the past week has highlighted (before it was too late) the folly in assuming that a country the size of Iceland or Scotland would perform better in a downturn than a nation as big as Britain, the world’s fifth-largest economy.
It would be interesting to ask Salmond now if he believes small is beautiful but then again, this is probably not a good time. Perhaps the most surprising aspect, from a Scottish perspective, of the recent turmoil in the markets is how the SNP leader has been personally exposed.
For a former RBS economist, he has shown a poor grasp of the facts, miscalling the HBOS implosion by blaming spivs and short-sellers while all the experts identified the bank and its high-risk strategies as the real culprit.
Jenny Hjul in The Times.
I have argued before that Salmond's and the SNP's success in the last 15 months or so has been largely down to them fighting Westminster with a very tight black propaganda strategy and the fact that the Labour government has displayed its incompetence again and again on the same battlefield, albeit on ultimately inconsequential topics. Well, it looks like that overbearing arrogance, populist soundbites and smug grins can only take you so far, the minority administration have now faced their first real crisis and come out of not looking very clever in the ways of the economic world.
And "well done" to Scottish Unionist for his fine investigative work, via the Freedom of Information Act, on the continuing and deepening saga of those SNP links with the SIF.
More from The Times:
Alex Salmond agreed to hand over £215,000 for an Islamic festival in Scotland following a meeting with a former military commander of the Palestinian terrorist group Hamas.
Documents obtained by The Sunday Times reveal Salmond approved the grant following the meeting between culture minister Linda Fabiani and Mohammed Sawalha, who is alleged to have directed terror operations in the West Bank.
The meeting, in January, was also attended by Osama Saeed, founder of the Scottish Islamic Foundation (SIF) and an SNP activist who is expected to contest the Glasgow Central seat at the next Westminster election. Sawalha was invited to take part in the meeting to discuss the funding of IslamFest in Glasgow next year
5 comments:
Yes, and just like after Darien it looks like the English Taxpayer will be bailing out Scottish misadventures - the Bank of Scotland and the Royal Bank of Scotland (my bank as it happens).
And of course we also have a parcel of Scottish rogues acting as Prime Minister and Chancellor of the Exchequer to insist that a major prerequisite is the explicit safeguarding of Scottish jobs - not "British" jobs you will note, English jobs can obviously go hang.
Wildgoose - it may have escaped your attention but HBOS has branches all over the UK. Also RBS owns Natwest which is a major bank in England (with a negligable presence in Scotland).
O'Neill - Must have been a dodgey black beer. Generally black beer is good - particularly from the Sarajevo brewery.
Anyway I was on my travels when the crisis broke. The Croats seem to be blaming the US and the UK (from what I could gather) for allowing dodgey practices in their financial system for recking the world economy and hurting "innocent" economies like themselves.
The outcome of this might be that other countries will not trust the City and Wall Street for a long while with their money - this was alluded to by the German Finance Minister a few weeks ago who said that the crisis meant that Wall Street's (and though not mentioned the City's I guess) domination of the world financial system - and a hope that Frankfurt will benefit from this - this might be the long-term fall out of this crisis for the UK economy.
I have been quite amused by the way the UK media has been trying to sell it as if banks are going bust all over the world. Actually it is only in a handful of countries and that includes the UK.
Indeed the Canadians are smugly saying they are doing fine and a bailout is not even being considered. This despite the huge integration of its economy with the US. The Canadian finance minister even took a swipe at the US, UK, Iceland and Ireland for being irresponsible.
Part of the myth peddling of course at the moment is that Ireland's banks are going bust. None have unlike some places. This is an attempt to discredit the "Arc of Prosperity" argument.
Not to mention that Norway has had no runs on its banks.
Of course it could be put that if Scotland had been independent it would have had a different regulatory system (like Canada has from the US despite 85% of its trade being with its southern neigbhour) and therefore avoided this problem.
Certainly those crowing about the good fortune of the bailout are failing to mention that they created the laws and laxly enforced them that caused the problems in the first place.
Salmond's role in this is negligable. The Scottish authorities have no jurisdiction over financial affairs - Schedule 5 of the Scotland Act makes that clear. All he can do is persuade.
If a similar problem was to arise in Canada where one of the big banks - usually based in Ontario - went bust - then the problem would be a federal one and the Ontario government would have little control over the situation.
There is of course the accusation that the Scottish government would be out of its depth in such a situation even if it had some say over finances.
So I went on a cyber journey this morning to see how our fellow Brits in the Channel Islands and the Isle of Man were coping.
The Manx Treasury minister has been in the States visitng the World Bank and the IMF and getting praised apparently for their handling of the situation.
The Manx are presenly dealing with the involvency of the Manx end of the Friedlander Singer bank and have incresed depositers guarantee in line with the UK at £50,000.
On Jersey on the other hand the authorities there have - like ROI -have pledged 100% on deposits of island residents. No small undertaking considering the wealth of many people living there.
But not fair for their fellow Brits who are only guaranteed £50,000.
In contrast Guernsey has no deposit protection and does not forsee one in place this side of Christmas. So if you have money in Guernsey, be afraid.
Bit of a dog's breakfast amongst our fellow Brits wouldn't you agree?
Brown deserves praise (if this works) for his actions. However he helped create the crisis in the first place.
Part of the myth peddling of course at the moment is that Ireland's banks are going bust. None have unlike some places. This is an attempt to discredit the "Arc of Prosperity" argument.
ROI preempted a banking crisis by being one of the first to offer protection/guarantees for their banks and have you seen the budget presented by the ROI's govt yesterday, severe is not the word...Iceland's PM says they are working night and day to prevent, excuse the pun, meltdown. The actual problems faced by these countries are exaggerated due to the comparitively smaller economies and thus ability to withstand crisis. Norway is the sole exception in Salmond's "arc of prosperity" due to its prudence with dealing with its oil revenues.
Salmond's role in this is negligable.
And how about his reaction to when the crisis erupted? He has completely misread the situation and causes, whether the reason for that is malice or incompetence is to alrge extent immaterial, if I were a potential investor his performance over the last two weeks would not have filled me with confidence.
I think the problem for Salmond is that he does not want to annoy his banking friends. Also any criticism of the banks might have lead to criticism of him "undermining confidence" and "endangering jobs".
Will have a look at the ROI budget. However I think there will be a lot of belt tightening in this neck of the woods as well - looks like there are going to tax rises.
Aberdonian, it may have escaped your reading comprehension that I was specifically complaining that despite HBOS and RBS jobs being spread all over the UK, our (Scottish) Chancellor and (Scottish) Prime Minister insisted that as a prerequisite for UK Taxpayer aid that Scottish jobs were to be explicitly safeguarded.
In effect, Scotland has 2 Parliaments.
One at Holyrood and one at Westminster.
Only the English lack a forum for their views.
And please don't give me any guff about there being more MPs from English constituencies in Westminster, because those MPs are heavily whipped and crucially, they do not divide on national lines. Or rather, the English ones don't - the presence of the SNP, Plaid Cymru and the various Northern Irish parties shows that the rest of the "United" Kingdom is more than happy to take partisan national positions.
The moment that English MPs catch up with the non-English MPs and start to act directly in England's interest is the moment that the Union enters its End Game.
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