"We will clean up the city" screamed the Labour Party this week. "We are taking decisive action," announced Chairman Brown. "We have found a cause we can use to try to save our skins," confirmed a Labour source.
Okay, so no one in the Labour Party actually said the last one, but they might just have well have said it. Friday saw the use (indeed overuse) of Labour's new favourite word "decisive". The decisive action in question was a ban by the FSA on short selling - in which brokers in effect bet on shares going down in value. They "borrow" shares from institutions, sell them in expectation of a price drop and then buy them up at the lower price to return them to the owners from whom they borrowed them. They pocket the difference. The original holder of the shares is, in turn, paid a fee. The claim was that this activity was driving down share prices unnecessarily.
This is of course a highly dubious claim. It has next to no effect on share price. Those engaging in short selling do not control share prices. The market conditions dictate the price. Short selling is like betting on a horse to lose a race. Just because someone has made the bet does not mean the horse is less likely to win as a result. There is no cause and effect.
What Labour have done however is to come up with a marginal answer that was painted as a great solution to the financial crisis. It could make them look "decisive".
What has made the stock markets bounce back however was the massive American government intervention in the financial markets. In effect, George Bush has nationalised all the banks' bad debts. The banks, encouraged by the likes of Bush and Brown, have lent money irresponsibly for a decade. US taxpayers are now having to carry the can for that irresponsible bahaviour. The big bankers have got off scot free to continue to be irresponsible and not have to pay the price for their own incompetence and stupidity.
And if the stock markets were not going to rise after the biggest hand out in the history of the world, then nothing would ever make them move.
So the action was pretty well decisive, but it was decisive action by the US government, not the British one. Labour now attempts to paint themselves as the scurge of City fat cats. This is of course after 11 years of their sucking up to the same people and protecting them from the full tax system that the rest of us are required to live under.
Gordon Brown however is now smiling all the way to the bank. The talk is of no leadership challange during the financial crisis. The talk now is of dumping him in June next year after the local and European elections. Previous talk of removing him included: May after the local election, then after the Crewe by-election, then after the Glasgow by-election in July, then before David Millipede went on holiday in August, then at the start of September before conference, then talk switched to challenging him at conference itself, then in November after the Glenrothes by-election, then by Christmas, and now the talk is of June next year. Labour opponents of Brown have changed their mind about dates to challenge him more often than Imelda Marcos has changed her shoes!
Completely unknown MPs can resign from undemanding ministerial positions as much as they like but I don't think they will count one iota as long as the Cabinet runs scared of telling Brown to resign and take up a job in the city (probably as a big banker).