Sunday, January 18, 2009

Its what he says that counts

Inspiration for this post is my inadvertently hitting the reject button on a couple of comments concerning Rhodri Morgan's appearance (dress sense that is) on today's Politics Show. I know that others have hit a spot of trouble by venturing into this subject in the past, and those of you who know anything about my dress sense will surely think 'what a bl**dy nerve'. The rejected comments thought it inappropriate that the First Minister decided to appear on such a prestigious programme wearing a track suit top. Though I agree that a suit should have been worn (with or without a tie) I thought Rhodri looked pretty good today. It was a smart top, he looked fit and his hair was particularly well groomed.

I want to comment on what he said. Most of it wasn't newsworthy at all, and is covered by the BBC here. What amazes me is that the one really memorable thing he said hasn't been covered at all. When he was answering a question about the failure of banks to lend money to businesses, and thus avert job losses, Rhodri's suggestion seemed to be that the interest rate Gordon Brown charges on the billions pumped into the banks should be cut from 12% to 2%. Seemed to me that the First Minister was making an really significant point, one that I'm not at all sure the Prime Minister would thank him for making. While the interest rate on Treasury money is so high, all the banks have wanted to do is repay it as quickly as possible - rather than lend it to anyone. What surprises me is that the Labour First Minister of the National Assembly says something as significant as this, and it doesn't feature in a report of the interview - which refers onlt to som ebland stuff that we already knew. Now it might have been so different if he'd worn a suit and tie.

5 comments:

J P Morgan said...

No one took notice of Rhodri's comment because they were distracted by the way he was dressed. He looked like the manager of a Welsh League team. In any case his opinion on economics is as relevant to the present crisis as the opinion of the Leader of a large English City council. What is more interesting is the series of articles on the Irish economy over the weekend. Given that the Nats always pointed to the Celtic Tiger as the way forward it would be interesting to see what they are thinking now. The decision of Dell to leave Limerick for Poland should send a shiver down the spine of anyone worried about the future of the Welsh economy. As the Assembly Government gears up for an irrelevant battle over the Welsh language LCO in the real world people are losing their jobs. It is clear that both Rhodri and Ieuan Wyn haven't got a clue. Thank goodness Wales isn't independent because like Ireland we would be effectively bust.I'm sure that workers in the public sector in Wales will look with interest as the Irish governmetn starts to impose 10% cuts on every public sector worker in the Republic. As for the referendum the real question now to be asked is whether or not it will happen in the life time of any existing AM.

Glyn Davies said...

J P M - Ireland's dificulties (and my son works in Cork in financial services) stems from memebership of the Euro, rather than its size. Spain, Portugal, Greece and perhaps Italy are reported to be in the same situation. There is no doubt that the economy will relegate all other issues to a position of reletive unimportance. My concerns about the First Minister is that he is in 'cruise' mode, strolling up to a retirement date that suits him. I've no time for this approach. Once a leader loses the hunger, its time to go.

J P Morgan said...

It is too simplistic to blame Ireland's problems on the Euro. The plummeting pound and the weakening dollar obviously hasn't helped Ireland when you consider that 25% of all Irish exports are to the UK.The real problem however is structural. Wage inflation has been running out of control for some time hence Dell's decision to move to Lodz where wage costs are two thirds lower than Ireland's. There is also a huge hole in public finances with the government trying to cut over 2 billion euros off the budget for next year. Recently the Irish Times compared the situation to a Titanic style ship wreck. Ironically without the Euro Ireland would be effectively bankrupt. If the Euro was the problem then perhaps you could explain why Iceland is desperately trying to join the Euro zone.

Glyn Davies said...

I agree that its simplistic to put the blame for Ireland's difficulties on one single issue - but joining the Euro has turned out as many economists predicted at the time. When Ireland joined, its growth rate was on fire, a position that warrented a high interest rate, but the Government did not have the freedom to act. Over the last two years, particularly since the huge devaluation of Sterling, Ireland needed very low interest rates, which didn't arrive until last week. I fully accept that the UK's decision not to enter the Euro has been a major problem for Ireland, and has contributed to their problems. The Irish Government can reasonably claim that the scarcely believable incompetence by the British Government, her biggest customer would happen, and deliver such a massive devaluation. I still do not believe Ireland's difficulties are the result of size - but of Irish Government policy.

Anonymous said...

good article in the telegrah today , mon, on the irish situation and the argument to leave the euro.....if they do, the dominoes will fall.