Why you can’t believe a word our leaders say

Politicans and business people are rarely known for their honesty. But recent attempts by Gordon Brown and others to boost confidence in our economy and financial system have really taken the biscuit, says Tom Bulford.

Three things have been said recently that have all really got on my wick. Since one of the benefits of being a writer is that it enables me to get things off my wick: here they are.

Along with our economy is resilient and the fundamentals strong,' Gordon Brown has been assuring us that his government will continue to take whatever action is necessary to maintain economic stability.' I see in my mind's eye a cartoon in which Brown is standing on the bridge of the Titanic, and as it sinks beneath the waves, he is saying I will do whatever is necessary to maintain the stability of this ship.'

If my knowledge of the English language is correct you can only maintain something in its existing condition. In other words to maintain the present state of the economy would mean a continuation of its steady decline. Otherwise Gordon Brown should have used a verb like achieve' or perhaps retrieve'. Of course the use of either of these would imply an admission that stability' does not accurately describe the state of the economy.

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Stability' is the latest buzz-word. Not so long ago it was change.'

Let the work of change begin!' said Gordon as he took office. I don't think that the sentence actually makes any sense at all. As the saying goes, change is constant.' You do not have to work to achieve change. You can work to try to ensure that inevitable change is change for the better. Perhaps that is what Gordon meant. When our political leaders cannot even use their native language correctly, I start to despair.

Flighty self-interest

Now on to business big-wig Sir Nigel Rudd, who in his capacity as chairman of BAA made the following case for a third runway at Heathrow.

We have to compete in the world. I mean, the nation has to decide whether we want to be a world class nation or a second class nation.' This particular example of competing in the world involves making it possible for even more people to pass through the already overcrowded south of England, just so that BAA and its Spanish owners can make lots more money.

My definition of a world-class nation would be rather different. It would include respect for science and the arts; it would be a nation in which children do what their teachers tell them to do; it would be nation where trains run on time; it would be a nation in which so-called celebrities set an example of sobriety, loyalty and selflessness. It would not be defined by putting the interests of the business lobby before those of the environment and of the residents of west London.

A fairytale in Woods

Finally I come to hedge fund manager Jonathan Wood, who has lost a packet of other people's money in a reckless gamble on Northern Rock. He described the nationalization of Northern Rock as a very sad day for the stock market, banking industry and the reputation of the UK as a financial centre.' I wonder exactly what he thinks is the reputation of the UK as a financial centre?

Is it of humble toilers serving the wider interests of the economy and the country? Is it of careful clerks safeguarding the pennies of widows and orphans? Is it of cautious long-term investment strategies designed to ensure that you and I can enjoy a comfortable retirement? Is Wood under the impression that there are still people who think that City workers are more interested in making money for their customers than making it for themselves?

Can there be anybody out there who is not revolted by the pay and bonuses that City staff cream off each year? Can there be anybody left who thinks that the City does a good job for the country? Does anybody seriously believe that the wheels of commerce and industry would not turn just as effectively without the attentions of hedge fund managers, and share and currency traders? Would the country not be better off if all the brilliant brains that dream up financial schemes of such complexity that no boss, regulator or customer can ever understand them were not engaged in something more useful?

Wizards and their monsters

It was not the nationalization of Northern Rock that had any impact upon the reputation of the UK as a financial centre. What has perhaps made a difference is the realization that it was the foolish greed of the UK's financial wizards that created the Northern Rock monster in the first place.

Wood might really believe that the fate of Northern Rock damaged the reputation of the UK as a financial centre. Nigel Rudd might really believe that the addition of a third runway at Heathrow will make the nation world class. Gordon Brown might believe that we have a stable economy.

Or these people might be talking a load of nonsense in the hope that the rest of the world will be stupid enough to believe them.

This article is taken from Tom Bulford's free daily email Penny Sleuth'.

Tom worked as a fund manager in the City of London and in Hong Kong for over 20 years. As a director with Schroder Investment Management International he was responsible for £2 billion of foreign clients' money, and launched what became Argentina's largest mutual fund. Now working from his home in Oxfordshire, Tom Bulford helps private investors with his premium tipping newsletter, Red Hot Biotech Alert.

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