THE GUARDIAN: Only rarely is there a palpable public mood swing in Britain; the Winter of Discontent in 1978-9 was one; this is another
This was the week the world changed. It started with the US authorities trying to rescue Lehman Brothers. It ended with the US taxpayer preparing to pick up the tab for the mistakes of Wall Street's elite. It started with the prime minister sipping cocktails with financiers in Canary Wharf.
It ended with the government slapping a ban on short-selling and Gordon Brown pledging to clean up the City. Britain's biggest lender was rescued and the Chinese government lined up to take a 49% stake in Morgan Stanley, one of the last US investment banks left after a week of carnage. Ben Bernanke, the chairman of the Federal Reserve and Hank Paulson, the Goldman Sachs tycoon who became US Treasury secretary, have done more for socialism in the past seven days than anybody since Marx and Engels.
Over and above the extraordinary individual events, there was the capitulation of the prevailing economic model. History will show that the great experiment with financial deregulation lasted from the first post-war oil shock in 1973 to the third oil shock in 2008.
Between those years the constraints on capital that were imposed after the Great Depression were whittled away, leaving a world of easy credit, complex financial instruments, stratospheric salaries and supine regulators. Like a spoiled child, what big finance wanted big finance got. This week saw the arrival on the scene of Supernanny; big finance now faces a long spell on the naughty step.
The revenge of Middle Britain
The changed mood is evident from the media backlash against hedge funds and short-sellers. One headline this week screamed: "Don't let the spivs destroy Britain". It appeared not in the Socialist Worker but in the Daily Express. For Middle Britain, the traders who bragged about their £1,000 bottles of Krug have now become as loathed as the bolshie shop stewards of the 1970s. Only rarely is there a palpable public mood swing in Britain; the Winter of Discontent in 1978-9 was one; this is another. This Week's Financial Crisis Marks the End of an Epoch >>> By Larry Elliott, Economics Editor | September 19, 2008
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