The excellent PaulInLancs anticipated the Liberal Conservative coalition days ago, and also a capitalist-ruling class stitchup. After first telling us that “politicians and rightwing commentators have fallen over themselves in their eagerness to talk up a ‘crisis’ which does not in fact exist”.
Tomorrow morning, though, that ‘crisis’ will exist. The bond markets will plummet when trading opens, and city dealers will be wheeled out to say that ‘the market hates uncertainty’ over and over again, and that was is needed is a stable government able to reassure the markets that the deficit will not get out of hand. This follows on the initial establishment of this narrative at 1am on Friday. The stock market will follow, and the FTSE will plummet by around 15% by 10am. By mid-morning, Tories and LibDems will be out before the cameras saying that the crisis that they had foreseen is coming and it’s coming fast, and that they are now working against the clock to reassure the markets that they will bring stable government, and deal with the deficit. The deficit will be blamed on a failed Labour administration.
The point, ultimately, is that if investors were to stop buying government bonds tomorrow (not that they would), it would mean the state would effectively have to shut down … Doesn’t this mean Britain is being held to ransom? Well, in a sense, yes. But this is nothing new. Back in the 1930s the Government only started cutting spending after it was refused a loan by JP Morgan. Moreover, the bulk of investors who might refuse to buy UK bonds are actually domestic buyers – pension fund and asset managers looking after our own (mainly retirement) money. In the 1970s it was an exodus of British money, not foreign cash, which really triggered the need for an IMF bail-out.
Of course, readers of Dillow will know that the reaction was hardly record-breaking, and Will Hutton amongst others conceded the City has behaved surprisingly well. Will’s piece ends up on this sunny note:
The people spoke; they wanted fresh faces and a fresh approach. The result, curiously, may be what they willed. The people even gave the rainbow coalition, for which I had hopes, a chance of forming had its protagonists had any energy. As the Lib Dems found to their consternation, they did not: there were too many obstacles. It is democracy in action, and it is great to witness. The financial markets, this time round at least, have a clean pair of hands. The people have spoken. Not the bond market.
Ah, if only it were that simple. Conspiracies are stubborn things to uproot from the mind of the determined conspiracy theorist, and we have the internet. I have done some googling (just as I did with Nick Clegg) and have found some disturbing evidence that something sinister is happening. Tracking the popularity of search terms: