Obama's stimulating speech in Virginia

"If we hope to end this crisis we must end the culture of anything goes that helped create it"

This was the message given in Virginia last night by Barack Obama who delivered a heartfelt flawless speech which has enormous implications for the whole world.

He promised change, and part of that change was a 1,000 bucks tax refund to "every tax payer". People need money in their pockets, he said, and this is true if governments want to help both them and the economy. Businesses need loan guarantees too, and there must be an end to the "greed" and of the "thumb on the economic scale" philosophy which got us here. Governments must stop wasting money on schemes which don't work and which they make for political gesture and it "must start in Washington" as economies around the world are looking for America to show a lead.

Obama talks sense. Complete sense, when he says if we don't take "immediate and decisive action then unemployment will be into double digits and recovery from this recession will take years for the American economy". "We can get through this" he said, "We've confronted bigger problems such as war and depression and fear itself as a nation by coming together in common purpose", as he began to launch his vision of mass public works "like no other". "This is not your normal public works programme and narrow party interests should be put to oneside". "They are separate to this recovery plan", he said.

He said regulation has to be in place so people know where their tax dollars are being spent. "Checking online", and that the cause of this was mans own creation. And as he stood there, he told the world that man could put right what we had done for it was "us who made the problem", but it would take time.

Now we move to what our own leaders are doing and we see no tax cuts, no change in the regulations, no self interest "thumb on the scale greed" being changed, and no mass public works. We see an interest rate reduction, a pointless wasteful VAT reduction, bailouts for the banks but nothing into "people's pockets" except an increase to the winter allowance for pensioners. A cynical political decision which is the opposite of what Obama was asking.

Gordon Brown is not taking a lead in engineering the essence of recovery because only through "money into people's pockets", and a rush of "immediate" public works, and a stop to "government waste", can sufficient confidence be restored in our economy to help to create demand and spending and borrowing again.

Roll on April for the G20 summit where Obama will again take the lead with his team of economic advisers, but by then we'll have lost another 600,000 jobs in the UK alone, and we'll be well into our recession and have to start a plan to get out of something we could possibly have avoided.

Incidentally, Gordon Brown is saying he intends to bring something forward "in a few weeks", to make banks lend again. Yet he's been saying this for a "few weeks".

When April comes and the G20 summit is over, watch for what Brown says then of "his plans", which I just know will be paraded as his own which have "saved the world". Obama's plan must be gotten on with "immediately", like he said, if things are going to change for the better.

Given the situation in reality, the days of government running the country on an economy based on personal debt are to a large extent already over. Ask most people and they’ll tell you that their intention for the future is not to have it. The banking industry hasn’t the ability to cover its losses, and heaping taxpayers money into them in an effort to create confidence in people in fear of job loss and debts up to their eyes already, isn’t going to work. Consumerism is the only way banks can continue in their present guise but meanwhile we will meet their bills through borrowing which doesn’t have a cats chance in hell of being repaid without a real economy based in manufacturing, smaller government and lower state spending on services. But instead Brown borrows and meets the interest rather like the minimum payment on a credit card and ‘hopes’ that the same system which placed us in this predicament will somehow miraculously get us out of it.

A National Bank could determine different levels of interest for commercial lending and make profits for the treasury. It could absorb the asset values of homes to stop their values declining and make a profit on those mortgages too. Thus helping to minimise taxes as the country itself would be making the profit rather than private investors and shareholders.
Private banking ( if viable ) could still operate but would not have as big an impact on our economy. They would in fact have shrunken to their real value whilst taxpayers stabilised their own economic recovery in their own interest rather than for the betterment of a few rich elite.

This of course would be a temporary arrangement until banks recover.