Who'll rescue the rescuers as credit crunch worsens

[TrueBlueTerrier]

Who’ll rescue the ‘rescuers’ as credit crunch tilts us towards disaster?

http://www.walesonline.co.uk/news/wales ... -22695763/" onclick="window.open(this.href);return false;

POLITICIANS of every hue in each of the world’s democracies are devising “rescue packages” to try and save their nation from economic pulverisation.

But beneath the calls for emergency nationalisation of banks and failing businesses a deeper debate is stirring which could shape the future of government as we know it.

What are governments for? What are MPs and other representatives actually elected to do?

What should the Government run? Which areas of life should it stay well away from?

Peter Mandelson is confronting sceptical MPs who oppose his part privatisation of Royal Mail. There is a certain irony that, at a time when the Government is buying giant stakes in banks, it is considering selling a share in one of the most iconic British institutions – how many American tourists go home each year with a miniature red postbox in their suitcase? This flashpoint illuminates the dilemma facing British politicians.

The Conservatives redefined the role of government in Britain by privatising electricity and water suppliers, energy producers, an airline and a telephone service.

Britain entered a new reality in which Government set the standards providers of essential services had to meet but there was no expectation that civil servants would try and run these major organisations. It was no longer considered nefarious for those in charge of vital bodies to seek to make a profit for shareholders. This was a transformation of what democratic accountability was all about.

Tony Blair’s scrapping of Clause Four freed the Labour party from a commitment to “common ownership of the means of production, distribution and exchange”.

In the past decade the private sector has played an ever greater role across the UK in building and maintaining schools and hospitals. The argument has been that commercial investors in a project bring cash that the Government would have to fund either through taxation or borrowing. The message was: privatisation is good for you, and the private sector brings hitherto unknown levels of efficiency and enterprise to an organisation; your rights will be protected by a galaxy of regulators.

But the efficacy of this mantra has been sorely tested by the apocalyptic effect of the credit crunch. Suddenly, the ability of the private sector to tap into a reservoir of credit and pump cash into infrastructure projects is mightily challenged. An even more agitating thought is entering the minds of people as they wait for privatised trains to arrive: do commercial operators actually deliver a better service?

Communism failed to usher in a utopia but the sacrificing of principle for profit in the sub-prime mortgage fiasco has tilted the world’s economy in the direction of disaster.

A reformation of government could be coming which may transform the political landscape in the months and years ahead.