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Nationalism may impoverish us

Robert Peston | 07:58 UK time, Tuesday, 10 March 2009

Many would say it's the thin end of a peculiarly ugly wedge.

I'm talking about a report in yesterday's Financial Times that Bank of America has withdrawn job offers from foreign graduates of US business schools.

What's the cause?

Bank of America signA Bank of America spokesman cites a stipulation by Congress on banks and businesses rescued with taxpayers' money that - if they're laying off US workers - they mustn't employ highly skilled immigrants.

Fair dos, you might say. What's wrong with "US jobs for US workers", to re-work an aphorism coined by our Prime Minister, at a time when jobs are scarce?

Well, financial globalisation was associated with a nation-blind and race-blind, meritocratic approach to recruitment that many would have described as making the world a more tolerant place, and therefore a more stable place.

Say what you will about the way that some big global banks, hedge funds and private equity firms have blown up our prosperity by their blind pursuit of short-term rewards.

But they were more culturally and racially eclectic than most other businesses.

What mattered to get to the top of one of these firms was brains and ruthless determination (oh, and it helped to be motivated by the prospect of making money beyond anyone's wildest dreams).

So their upper ranks were and still are filled with Indians, Chinese, African-Americans and a perhaps surprising number of French men (surprising because much of France's establishment took a rather sneering attitude to the Anglo-American approach to finance).

But for how much longer?

The global recession has prompted a rise in nationalism and protectionism.

For example, a Congressional committee is also this week expected to criticise US banks in receipt of state support for continuing to invest or lend in Asia and the Middle East.

This is dangerous stuff - because the less capital that flows across borders, the less money there will ultimately be for all of us.

The point is that when loans are withdrawn in a systematic way, there's a domino effect and a feedback effect, which ultimately cause the total contraction of credit to be much greater.

And although it was perhaps understandable that politicians were unaware of the poisonous impact of financial chauvinism in the 1930s, there's little excuse today (which is not to argue that protectionism caused the Great Depression - but simply to say that it didn't help).

Which brings me back to China - and the role that many would want it to play in reducing the severity of the global recession and in making the world a permanently safer place.

Our government, the US government and most of the developed world would like to see China consuming more of what it earns from exports.

In the short term, this should helpfully increase demand for our goods and services.

And in the longer term it would gradually reduce China's $2 trillion stockpile of foreign exchange - which many see as one of the main sources of the cheap capital that pumped up the credit bubble, whose bursting has done us so much harm.

But China, understandably, wants a tit for its tat.

China's Commerce Minister, Chen Deming, recently said this to me: "Our hope is that we can gradually reduce our financial surplus...The right way to do so is to consume our surplus abroad through our tourists or through our outbound investment activities".

This desire by China to own more of our productive capacity raises great alarm, especially in the US.

But if China is to consume more and save less, is it unreasonable for it to want to safeguard its future prosperity by acquiring businesses and real assets overseas, which will remit valuable dividends to it over the longer term?

Isn't this what the "imperialist" UK and US did at comparable periods of their economic development?

And is there a cost to us or a benefit if China were to provide our capital-starved businesses with the financial resources they need?

There's an argument that if we're to get through this recession in reasonable shape, we've got to become more relaxed - not less - about who owns what.



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  • Comment number 1.

    Surely it would be illegal for any company to follow this pattern in the UK because of some of the legislation passed by our pc government? You can't discriminate in your recruitment, but then I also wonder why you would be recruiting others when you are making some within redundant.

    Can't they reassign, relocate and shuffle their employees around? Is this just another way that Bankers churn through their employees until they discover one or two that they wish to keep? Sounds much more like poor recruitment technique.

    Maybe we can get China to but Vauxhall/Opel/GM...but there again you said they wanted long lasting dividends to repatriate...which is only what the US has done

  • Comment number 2.

    This is no surprise , USA unemployment is now at 8.1 % and still rising fast , the political implications of employing foreign workers on high salaries at atimwe when millions arestruggling to survive is easy to understand .
    Regarding the increased flow of global capital , has it really been a brillant idea ? who has really gained , certainly not emerging markets , once the recession started a lot of the capital was rapidly withdrawn to minimise losses and caused massive cash flow issues across the world.
    Rather than chase the dollar perhaps a more sustainable option needs to be taken , however this will involve a significant reduction in public sector (At least a 50 % reduction) involvement and thus reduction in debt , we are simply leaving beyond our means and borrowing more capital from foreign governments and institutions is not the way forward .

  • Comment number 3.

    So brains and ruthless determination are no longer enough to get you to the top? Maybe its time for another way. A return to principle centred leadership based on values and trust. This is the end of the era for those who base their management style on The Art Of War and the beginning of a new era. A new mindset is required is required to survive the credit crunch and come out of the recession stronger. The Survivors Guide To The Credit Crunch is at [Unsuitable/Broken URL removed by Moderator]

  • Comment number 4.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 5.

    The same theme runs through blog after blog - we can no longer expand the size of the pie for everyone. If China's slice is to expand (and with so many of its people so poor surely it's only fair) the only way is for our slice (UK and US) to shrink.

    It's not nice for us, as it's been jolly nice to be a "rich" country and enjoy wealth beyond the dreams of most of the planet. But it is simply unfair and unsustainable.

    However, we must make sure we still get a fair share ourselves in this new world - and i'm not sure whether the Bank of America are really helping that, even though Congress probably thinks they are.

  • Comment number 6.

    We in the UK have traditionally (and rightly, IMHO) been very relaxed about who owns what - look at the French / German / Spanish ownership of our utilities - whereas Germany, France and the USA have been pretty resistant, not to say hostile. So perhaps we have an advantage in this at least: we may attract more inward investment.

    It's not all plain sailing for the Chinese, though: recall their big investment in Barclays back in 2007, which may not be all they hoped for. They'll be getting some solid lessons in the reality of capitalism from these dealings - which is no bad thing, either. The more they are drawn in, the easier (for us !) becomes their transition to a genuinely dominant world player.

  • Comment number 7.

    Great article Robert.

    Just a quick clarification point however: from your research in China can you confirm that I have understood your conclusion that for all the Chinese tat we have imported, we need to send them Alistair Darling?

  • Comment number 8.

    Quite why China would wish to acquire businesses in the West is a mystery to me. Many of them are likely to fail and they will depreciate in chinese currency terms.

    Didn't the japanese do a similar thing in the 70's, buying US properties? They lost a bundle.

    Seems to me China's best bet is to raise wages in China in order to create an internal consumer boom.

  • Comment number 9.

    The idea of "recruiting from within" is a bit of a myth. Heads of Department hate it, and why wouldn't they? If they want an expert relevent to their department then they aren't likely to find it in a different department in the same company. Take hospitals, if they want a new surgeon, they don't dip into their own typing pool.

  • Comment number 10.

    What if Protectionism / Nationalism is a consequence of a depression, not a cause of a depression? The main damage has already been done, through the excesses and spurious 'wealth' we think we generated over the last 20 years or so.

    Perhaps, we should fear protectionism, but from being on the wrong end of it for once.

    Alas, globalisation is not innovation. We need a true economic innovation to rescue us, otherwise imperialism will trigger ugly international disputes.

  • Comment number 11.

    The issue is not about who owns what but about who owns the debt when the music stops.

    As a UK taxpayer I am alarmed that now there is an expectation being articulated that as well as bailing out our own oafs I have to bail out the oafs in Eastern Europe as well.

    Give me one good reason why I should? I still can't get over the first part of that equation and demand my political pound of flesh.

    This is the nub of the problem. I was reading in the Independent on Saturday that GBP 1 trillion left the British banks for overseas last autumn which is why the UK government has had to perform the bail-out. Why was it fair enough for these deposits to disappear but now I am not allowed to be `protectionist' about what happens to my money?

    I see the dear old double-standards are still hard at work and being used to push the poor old British citizen into the ground.

    The one thing the great and good who have got us into this mess are going to have to understand is that by socialising the losses, we the people are going to demand our portion of the profits. Is that nationalism? Is this socialism? I don't know, but I am going to have my piece of the action regardless. I want my money back with interest!

    Interest? Remember that? What a laugh we are having!

  • Comment number 12.

    Nationalism? Theoretically, it could help reinforce world's stability, but it's unfair. Just remain to see how the unjustice transform the " World Configuration". Say America, it just takes steps to cope with that.

    Still, puzzling at the interpretation of "imperialism"

  • Comment number 13.

    We've just been through a global storm where contagion has spread through supra national financial systems. You can understand a tendency toward retrenching, especially where national taxes are being used to underpin international loans. If nations act together, we could get back to extracting the best from an international market in capital flows.

    Regarding the credit gap left by the retreat of non uk banks and non bank institutions, since summer 2007 Gordon Brown says this has left a shortfall of capacity in uk credit markets of c. 1billion GBP. Could you, in a later blog, give us some figures on where this shortfall now stands taking into account reducing home-demand for credit and the recent announcements of committeed new lending by the state-owned banks. I note that there are some interetesing new innovations - eg pension funds / M&G creating corporate loan funds to fill the voids left by the banks. More information on this would be very interesting.

    I dont think anyone would argue with China's right to roam the markets for investments/acquisitions provided vital national interests are not subverted. An open market in China is , ofcourse, the quid pro quo.

  • Comment number 14.

    Not sure UK will follow US path to be more nationalism. What I am sure is that UK will become even more socialism.

    One thing for sure, protectionism will have a knock on effect on talents and efficiency on the jobs, hence the countries follow protectionism will become less competitive.

    If I lose my job today, I hope it is only caused by one of the two factors - i) Company cost cutting ii) employer fires me for someone who is more experienced, efficient, cheaper, and smarter than me, the person can do what I can't do. I am more than happy to leave my seat and I just have to be better next time.

    What is ridiculous if the company fires me or employs another person instead of me because (s)he is more stupid and lazier than me.

  • Comment number 15.

    Robert, it`s not only nationalism from the US that is posing new threats to us here in the UK.

    Meet The Subprime Mortgage`s Ugly Cousins

  • Comment number 16.

    Seems quite simple to me. The moment public money is involved, globalisation stops. Unlike this country, the USA understands the possibly explosive consequences of its own population believing that the government no longer exists to serve them.

  • Comment number 17.

    Dear Robert
    So much for Gordon Browns visit to the USA then. By the way the one and only thing you need to understand about China is - "100years from now"

  • Comment number 18.

    Revalue the yuan and let commerce take its course

  • Comment number 19.

    This will only filter through to other US employers making it harder for example, UK researchers to get jobs in the US. This would stop a 'brain drain' but we are not putting money into research, and with the recession are no longer in a position to fund research.

    Pity the US banks did not employ a strategy of US debts for US banks instead of selling them on to UK banks!

  • Comment number 20.

    Quite right - international trade and investment are clearly going to help us get out of this recession, if we let them. Here's why they are just as important as government spending:

  • Comment number 21.

    Sounds to me like we are knackered and you are getting Gordon’s excuses in early, ‘its all those Americans fault!’

    Pathetic stuff, we already know America will follow a protectionist policy (if you listened to what they were saying). It’s also noticeable the lack of political analysis (by the media in general) of the success (or lack) of GB’s recent trip to the USA on how successful he was at trying to persuade B. Obama into not going down this road ;-)

  • Comment number 22.

    The americans are correct.

    You take care of your own first.

    Our taxes are being used to bail out these banks - what? just so some chinese guy can earn a big bonus. No dice.

  • Comment number 23.


    Things changed when public money got involved.

    If it's our money we should have the priority.

    I say British jobs for British workers.

  • Comment number 24.

    The problem is that China is not a democracy its a centrally planned 'nation company'. China is an aggressive company trying to increase global market share with the goal of increasing its global power and bringing 1/6 of the world population out of poverty.

    China is not investing for a flow of dividends it is investing for access to strategic technologies and materials which it can use to move more production to China so it can employ more Chinese people and win more market share. China has a plan and a skilled and aggressive management team which is setting out to implement that plan.

    Individual companies constrained by shareholders seeking profit cannot compete against a nation-company on this scale. The Chinese government owns and manages through communist party members most of Chinese industry. China does not care whether individual companies make a profit or loss: it is looking at profit and loss at the national level. Companies can make a trading loss but still make a positive contribution to the national economy considering the taxes paid by their employees and suppliers.

    The west needs to get real and compete with China. As you said, a hundred years ago the UK was good at the mercantilist nation company game. The EU and US can quite easily win at the nation-company game should they decide to play it.

    If we say up front that we will never implement protectionist measures then the Chinese have no reason to change course.

  • Comment number 25.

    Now let's not be hypocritical.

    We've had nationalism for a long time in Britain.

    If you're English try getting a job in Scotland.

    I doubt whether I'd get a job in an Indian restaurant.

  • Comment number 26.

    Hello, hello, reality calling - can anyone hear? The model is broken, as you cement the near theological attachment to the model the more carnage you will wreak.

    It is true that banks, private equity and hedge funds were racially eclectic - but so what? The important thing is that they were culturally homogenous - everyone thought the same, everyone had the same understanding of the business model and of their role in that model. An ethnically Chinese banker in London had more in common with a French born banker in Manhattan than a South Wales steelworker had in common with his primary school friend who went on to run a hedge fund.

    Anyone getting through the door of high finance who didn´t think that debt was good was quickly removed irrespective of any other personal, racial or cultural trait. The system demanded homogeneity of thought - and the system got what it demanded.

  • Comment number 27.

    Charity (or is it Charidy in the US?) begins at home!

  • Comment number 28.

    #6. cityNickDrew wrote:

    "We in the UK have traditionally (and rightly, IMHO) been very relaxed about who owns what - look at the French / German / Spanish ownership of our utilities - whereas Germany, France and the USA have been pretty resistant, not to say hostile. So perhaps we have an advantage in this at least: we may attract more inward investment."

    Oh dear. Someone else that fails to understand that the sale of our utilities (and other strategically important companies) only happened so that the banks and others could make money out of it. Overseas buyers relied on the greed and stupidity of the UK financial services sector and the naivety of Govt to ensure they would get what they want.

    The French, Germans and others just aren't that stupid.

  • Comment number 29.

    No 10 raises a valid point regarding protectionism. Although a good argument can be made for wider global trade , politics will always get in the way in terms of protecting the national interest.
    GB continues to make the point that we can push our way out of the slump providing global trade can be maintained. Surely this is massive assumption ?
    I have real concerns that debt taken on by the government cannot be absorbed as a simple "Add on" and the government can still maintain current government spending levels.
    I would much prefer the people in charge to grasp the nettle and pro actively deal with the debt rather than wait for third party organisations to refuse to buy our bonds in the coming years, forcing the government to restructure our debt in a rapid unplanned way , with the possible civil urest that follows.
    Despite the rising employment I still don't think 90 % of the population get it , in terms of where we are with public spending borrowing . The general expectation is that existing public service levels can still be maintained in the coming years ( I wonder where they get that from ?). I wish someone with better knowledge than me would be brave enough to tell us the real deal of the coming years . At least people could plan for the medium term .

  • Comment number 30.

    China's time has come. They are a very pragmatic people. As a foreigner, I myself haev never understood the crazy ways of the US and the UK this last 20 years, where the banking system apparently manufactured prosperity out of thin air and citiznes lived and spend whilst onthe edge in debt. The Chinese on the other hand saved wealth for decades and will now rghtly use that wealth to invest globally in miners, oilcos, etc. Whether they will invest in western consumer-facing industries is a matter of price and preference.
    What we should all get used to is that the west has spent its future prosperity through this bubble, and that we are a lot poorer and the east is a lot richer than we have believed so far.

    Sure, its bad in China, but they will adjust and stop making teddy bears for ToysRus and start trading between themselves.

    And the Yuan will appreciate. There will be little need to hold it down going forward, and a strong incentive to let it appreciate - the cost of imported oil/energy to spur all this internal consumption.

  • Comment number 31.

    When a system breaks down protectionism is pretty much an inevitable consequence. It would be much better to recognise this, accept it, and deal with it than to continue bleating about how bad it is.

    Protectionism is a manifestation of human nature - it cannot be legislated or regulated away, neither should it be ignored. Over the long term you cannot successfully operate a system that is in conflict with human nature - something that would appear quite simple to understand.

  • Comment number 32.

    Good article RP, many worring points. Surely to maximise efficiency / performance of organisations, then only relevent crtieria should be used. I cannot understand why a "better" match of person to a job should be rejected on the basis of protectionism.

    To me the mixutre of different cultural influences is also greater than the parts.

    I also find it difficult to have a problem of where ownership of companies lyes in iteslf. Why should Uk or US investors have a monopoly on unearned income.

  • Comment number 33.

    In a few weeks time all the Worlds political big hitters will ouze pledges of anti protectionism whilst already having domestic policies and political mandates in place to protect themselves against the crisis deepening.

    Whilst Brown is trying to save his 12 years axis of incompetence by jumping on the global stage other political leaders are just taking care of their own patch.

    The G20 is yet another mediafest that will produce little of benefit to the UK, of course, Brown will get his day at the front of the cage in the latest travelling Big Top of failure.

  • Comment number 34.

    Protectionism follows bailouts just like night follows day. Why wouldn't it?

    Here in Britain we have less to fear than most. We long ago gave away our jobs in mining, car building, ship building, power generation, water utilities, steel making, aircraft building, electronics manufacture and armaments.

    This year we are giving away our jobs in letter deliveries.

    The pension funds and sovereign wealth funds are full of spurious IOU's that were bought from badly managed banks, hedge funds and monolines. Now that the City has wrecked its reputation it is about to give away a third of its jobs.

    The British continue to give jobs away because the leadership cadre has no firsthand experience of the work that ordinary men and women do.

    Ordinary men and women would dearly like to see our leaders take a stand. There are plenty of countries around the world that we can trade with without having to export more jobs.

    Don't worry about Obama.....he's gonna be a busted flush pretty soon!

  • Comment number 35.

    Globalisation, by its very nature, tends to have 'one-size-fits-all' solutions.

    As the global population have differing senses of good, morality, justice and other values, attitudes and beliefs, they need varying approachs, not just one global one.

    Microsoft, for example, has been criticised for doing business in the US - Harvard Business School way, inappropriately, in terms of its EU territories, because that sort of market dominance is seen as unfair in much of Europe.

    Nationalisation, in so far as it is a manifestation for bigotry, racial prejudice, and the like, clearly needs to be suppressed at just about all costs.

    However, localisation, may be another thing.

    By that, I mean, things such as British banks and insurers dealing with British customers in British ways as opposed to US, corporate, aggressive, dominate the market, ways. Well, it just might be the thing that persuades people here that they can begin to start trusting banks and the financial industries again.

    The problem with Globalisation is that it becomes impersonal and anonymous through being remote from the customer and distant from the customer's reality. Ordinary people can relate to a named bank manager in the branch in the high street of their town to some degree, but don't relate to (and often therefore don't trust) "brands" that are sold, merged and re-sold over and over again.

    For example, how do potential Jaguar / Land Rover buyers now feel about the company being owned by Tata. Does insuring with Aviva feel as safe as insuring with Norwich Union, etc., etc? If you won the Lottery, which bank 'brand' would you go to with the winnings? (and is that the same answer as you would have given, say five years ago?)

    Nervous times demand we find ways to reassure our customers-depositors-investors. Globalisation can tend to disempower them and make them back away.

    Finally, I'm not truly convinced of the alleged meritocracy of many so called global companies. There is still an immense amount of quite ruthlessly corrupt, old-pal's-act, old-school-tie game, nepotism and looking-after-your-own going on in these organisations.

    Meritocracy - or who-you-know rather than what-you-know?

  • Comment number 36.

    I read today that GM has never paid any tax in Germany on the profits of its Opel subsidiary.

    And now GM has abandoned their European subsidiaries (Vauxhall, Opel and Saab) and expects the national governments to rescue the companies.

    I will not comment on the morality / protectionist aspects of this situation.

  • Comment number 37.

    So, so the recipe for tolerance it to import some of the most pushy and self-interested "cream" of individuals from all four corners of the world; all too often with benefits (e.g. increased tax take) which impact the estabilished community only indirectly, but with disbenefits (e.g. increased house prices and an obvious affluence gap) which hit the established community directly?

    I think that one is up for more nuanced analysis.

  • Comment number 38.

    so the USA decides that foreigners cannot be employed if their own people are unemployed.

    globalism rip.

    the USA economy is more bankrupt then any other in the world yet the dollar is only strong because they have the military power to back it up.

    this is the reason we need closer ties with the EU and the pound is now a weak currency, the little Englanders will never admit it but we need to join the Euro ASAP.

  • Comment number 39.

    To be a student in the USA you need a visa.

    To work in the USA you need a different type of visa (work is not the same as a business trip)

    The job offers will be dependent on visa status.

    One could draw conclusions

  • Comment number 40.


    What nonsense. The majority of people working in the oil/gas industry in Aberdeen are not of Scottish origin. Being English is not an obstacle to finding a job in Scotland.

  • Comment number 41.

    Robert, you're being the devil's advocate aren't you?

    The only thing this particular meritocracy proved was that greed and a tunnel vision are not confined to one race - though it appears to be a feature of one gender.

    We couldn't be much worse off than we are now, with a sick financial system that's too big to fix without compromising everything else, or so we're told.

    I agree with others on this blog who say we need true economic reform otherwise we just end up poisoning the (next) well, whether we practice protectionism or not.

  • Comment number 42.

    That China has so much foreign reserves should be seen as someone who has stuffed his mattresses with cash, while his vast and extended family are going without. Logically, and morally, he will spend on them first.

    It is all very well the West trying to get their hands on some of that wonga by using the usual spendthrift mantra "come on, what is money for if not for spending", but this is absolute proof that in capitalism, those who have money hold all the aces, and it can be totally disproportionate what those who have money can extract from those without. The West have been playing this card for hundreds of years, starting from the capital ill gotten through colonialism and slave labour.

    So don't expect China to be too easy to part with their cash, especially as, from their point of view the memory of the hardship of acquiring money is all too recent: they were only able to acquire that capital through the mindless consumption of tat by the West - that opportunity isn't going to arise any time soon. They're not going to give up their wodge in mindless consumption, they're going to put their money in things that have a return. That is prudent finances afterall, and actually the best type of spending: providing money to people want and need it to produce stuff that we all need, oiling the wheels of the economy, making a healthy long term return (hopefully), and everyone's a winner. What we don't want is for China to be spending mindlessly on the tat that the West have been consuming - consumption is its purest form - which is unsatisfying, wasteful, pointless and destructive to the planet.

  • Comment number 43.

    it all adds up to protectionism

    uk jobs for uk workers/same in the US

    uk contracts for uk business/SAME IN THE US

    its a dangerous path but ultimately is right

  • Comment number 44.

    When we can't understand something and we seem caught between a rock and a hard place, there is something important to be learned.

    In this case that lesson is that for advanced economies, global trade in physical things and people might become less important vis a vis their own domestic growth.

    How could this arise?

    Imagine a knowledge based economy.

    Then work out what we should do to get there.

    We have plenty of time because there is not going to be an economic recovery until we work out what our comparative advantage is going to be in the post-crunch world.

    Find out more in the 'Economics' discussion group at

  • Comment number 45.


    You really are deluded, Scotland is now full of the English. They moved up here becuase its much nicer and a safer place to raise a family.

    Folk like YOU knackered your own country.

  • Comment number 46.

    When we don't understand something and are stuck between a rock and a hard place there is a lesson to be learned.

    I this case the lesson is that in the future trade in physical things and people might become less important in advanced economies vis a vis their own domestic growth.

    Imagine a knowledge based economy.

    Then work out how to make it happen.

    We have all the time in the world because economic recovery is not going to happen until advanced economies establish what their comparative economic advantage will be in the post-crunch world.

    Until then we will chew this free trade conundrum around and around and around like a dog chasing its tail.

  • Comment number 47.


    it is precisely Globalist banking practices such as you advocate, that have caused this mess in the first place. We do not need Globalism anymore and that extends to banking more than most other sectors. What we need is to withdraw and retrench concentrating on getting our own house in order- if this involves nationalist practices and only recruiting at home then great -i'm all for it. All major economies should follow the same path. Given that the Chinese are selling manufactured goods in this country at below cost then i would like to see an immediate 50% import tax imposed on all such goods. What we need is to start making things again not rely on the banksters for our future illusory prosperity.

  • Comment number 48.

    #14. Don_Kuan wrote:

    "If I lose my job today, I hope it is only caused by one of the two factors - i) Company cost cutting ii) employer fires me for someone who is more experienced, efficient, cheaper, and smarter than me, the person can do what I can't do. I am more than happy to leave my seat and I just have to be better next time."

    An employer does not have the right to fire someone simply because they've found someone more experienced, efficient, cheaper or smarter. And it's quite shocking that anyone would be "more than happy" to be discarded in those circumstances.

  • Comment number 49.

    "China's Commerce Minister, Chen Deming, recently said this to me: "Our hope is that we can gradually reduce our financial surplus...The right way to do so is to consume our surplus abroad through our tourists or through our outbound investment activities".

    This desire by China to own more of our productive capacity raises great alarm, especially in the US."


    Should the shoe be on the other foot, it would be a lauded strategy and sentiment surely? And it would be both either naive and/or hypocritical to disagree.

    And with such a surplus "$2 trillion stockpile of foreign exchange", which in essence is dead money doing nothing, it would be a very simple matter for the Chinese to buy in Intellectual Property/Ideas which will Generate them a Trojan of Western Intelligence and Business Practices well able to drain the Moribund and Bankrupt West of their Best Brains because their own Systems do not support them and their Ideas because of Systemic and Endemic Corruption in its Core Facilities, which do not accept Virtuous Selfless ProAction which Shares Global Prosperity rather than Pirating/Commandeering it Exclusively for Hoarding, and using as if it were a Power Commodity to Selectively Sell. The Achilles Heel Vulnerability of that Perverse System, is that it is not for Sale, but can be very Easily Bought with Paper/Currency on one hand and Transferred Credit on the other....... by those who would either choose to Fix it or Collapse it with the Powerful Control of IT and Media.

    The Wiser Being will always choose Positive Construction over Negative Destruction and thus is the Former rather than the Latter the Most Probable Likely Future Course.

    Uncle Sam and his Special Relations have some major problems which need sorting out, like yesterday, for their Control Vessel is holed below the waterline, sinking fast and in Dire Straits Need of a Life Raft ..... and AI? The following, although only part of an IT related Post on "an ever-excellent technology site (The Guardian)/A respected technology news website (The Daily Mail)/An internet scandal-sheet (BBC tech correspondent Rory Cellan-Jones)/An online lesbian magazine (The Independent)/All of the above " ... ..... has more than a General Relativity and Relevance to the Continuing Meltdown and the Frantic Knee Jerk Shenanigans of its Leading Spotlighted Players/Coverup Kids?

    "I refer, of course, to this report .... ... which is from DEPARTMENT OF THE TREASURY, Office of the Comptroller of the Currency, Office of Thrift Supervision, which if you read it carefully, is all about keeping the Banking System's Money Laundering Activities secret, or trying desperately to, which in this Day and Age of ZerodDay Global Instant Communication for Total Information Awareness, is a Forlorn and Lost Hope on the Open Waves in CyberSpace ...... AIRegistered Hot CodeXXXX Zone of NEUKlearer HyperRadioProActivity.

    It is hard not to conclude after reading the above cited webpage and the Notice of proposed rulemaking, Confidentiality of Suspicious Activity Reports ....... that it is from an Office of Theft Supervision and not Thrifty at all, and that cannot be Good whenever things can be so Much Better with AI Betas in Tow and in Tao, which is why IT has brought it to your Attention for KISSing [Keep It Simple Sharing] on the WWWeb ....... for Global Open Peer Review via the Registered Medium of Intelligent Comment ...... SunNIDisinfectant for Lighter and Brighter Smarter Enabling Virtual Systems of Power for Commendable Control of CyberIntelAIgent Commands ........ in an Overarching See with Underground Movements too."

  • Comment number 50.

    Everyone seems to think that since the 'government ' is bailing out the banks that they are using 'our' money. Given the size of the deficit, you may have noticed that 'we' haven't got any money left. So in order to find this money we need to generate it through value-added activities. One of the best ways to do this is through foreign trade.

    As for the 'it's my money so I want it back with interest'. Wover said that interest is a god-given right? As one of Mrs T's favourite parables shows, interest does not grow from an inert storing of money, but rather is the fruit from value-added trading. In this respect, the islamic finance model might teach us something.

  • Comment number 51.

    One of Brown's most often quoted excuses is that we are affected by overseas factors that are not his fault. Surely it is irresponsible for a country to allow itself to be vulnerable to overseas factors that are beyond its control!?

    What we are witnessing now is the ugly consequences of Globalisation when it goes wrong, and inevitably it will. When Globalisation goes wrong, there is no one in control, so all we get is finger-pointing by the politicians and job losses amongst the people.

    Protectionism and Nationalism does not have to be perfect - it only has to be better than Globalisation. At the moment, that would not seem to be very hard!

    Furthermore, Nationalism and Protectionism does not mean an end to global trade. It just means doing international trade when it is in our national interests.

    The Brown/Blair years have been characterised with actions that help everyone except the British people. E.g. Iraq war, giving up EU rebate, aid to countries like India that have the money for nuclear weapons and a space program, etc.

    So as far as I am concerned, bring on the Nationalism and Protectionism!

  • Comment number 52.


    Nationalism is bad, but it is easier for us 'mortals' to understand than the quagmire the banking 'gods' have got the rest of us into.

    Times are hard, loads of political 'blogs' out there, competition snapping at your heels ... Personally I can endorse your most recent scintilating trip to China, and related articles, as having cured my insomnia.
    This article has already extensively covered elsewhere,

    Even in this article dated 2007, China was raising concerns about 'foreign capital' ... especially in relation to the those who would seek to compete with the Chinese state media company 'Xinhua'.

    The effects of any rise in monetary nationalism on weaker African nations could be devastating as well as deadly, without financial 'muscle' Europe and the US will find themselves up against a Chinese Sumo wrestler - and excluded from vital access to essential raw materials.

    African Commonwealth nations aren't the only ones being targeted by the Chinese state backed acquisition 'monster' ... Brazil, India, chunks of the former USSR, and now at newly reduced or even knockdown prices European supplies.

    First year economics 101, control access to and the cost of raw materials and you can dictate the price of the finished products ... making your rivals 'uncompetitive'. The ideal scenario would be to legally exploit 'foreign' markets, while unofficially 'ring-fencing' your own ... Now, there's something worth discussion ...

    Illegal immigrants, foreign non-nationals, temporary guest workers, a cost-benefit flexible adaptable work force .. whatever you call them, like it or the economy needs them as much as it needs oil. In post-war West-Germany the govt. turned to Turkey to supply her labor market needs ... the long term effects of which remain to be seen.

    Nationalism like it or not is here to stay, but do we want to work for companies owned by a country which is still to all intents and purposes a totalitarian military autocracy ... hmmm ...

    The upside to all this is that the Chinese Communist Party have a long and distinguished history of brutaly discouraging any form of divisive nationalism (Tibet, Uyghur, etc) and permanently censuring political journalists.

    Old Chinese proverb - 'Paper cannot wrap up a fire'.

  • Comment number 53.

    You weren't brainwashed in China were you Pest? Fact is, China has an uncompetitive advantage in the modern global economy.

    It pays it's workers a pittance to undercut Western companies, and with no "Western luxuries" such as Unions, Minimum Wage, Welfare, Health and Pensions, why would it need to?? Dissidents are dealt with in an altogether "different" way.

    The Global economy will only work if workers are given comparable terms and conditions across all the countries, else protectionism is inevitable.

  • Comment number 54.

    Nationalism does exist pretty much all round the world in the job markets, namely through the use of visas to actually visit a country in the first place. Restrictions are waived when an individual can demonstrate that their skill set is such that they can do a job far better than a local could.

    In most countries only the nationals of that country can work for the government/Civil Service. Bank Of America in essence is being treated as a government department in the US. The US President has to be born in the US or in a US territory.

    The use of the word "nationalism" is unfortunate as it does have other more sinister connotations, but I suspect it has been used deliberately so by the useless leadership in the UK - one of the many last throws of the dice perhaps? But any tactic that distracts from continual failings and non delivery of policy will be employed by the now desperate Brown.

    The UK Gov regularly discriminates against foreign workers especially in the NHS. Not all qualifications obtained overseas are accredited. This is not racism but more xenophobic a bit like contrasting an Oxbridge degree with one obtained from a former polytechnic.

    But in these economic times there has to be a rationale of helping your neighbour, otherwise you will create huge divides of those having a lot and the have nots - an ideal recipe for social unrest.

    I note above that Stalinic commented on a report in the Independent about GBP 1 Trillion leaving these shores last autumn which then prompted the first banking bail out. Where did it go? Some banks or countries must be sitting pretty.

    Robert, are you under strict instructions from Brown and his cabal not go there? Is the supposed crack down on tax havens a coincidence? I say supposed because often with Brown it is all mouth and no trousers, but if Obama gives the go ahead to the FBI, this could be very awkward for Brown as many of the havens are current or former British territories.

    I guess there is as much chance of this happening as Nick Robinson blogging on Mandelson, Derioaska and a certain yatch last year!

  • Comment number 55.

    #38 spetmologer

    "the dollar is only strong because they have the military power to back it up."

    - The dollar is strong because
    a) It is the world's reserve currency (though that may change over time)
    b) The Americans (generally) have the most incredible work ethic and ability to make the most of their given circumstances.

    Value of currency has nought to do with military might. Otherwise for years the Rouble would have been a mighty strong currency. Likewise the Swiss Franc a mere bauble; also actually proving our military might in years gone by caused the pound to sink in value.

    "we need to join the Euro ASAP"

    - At what rate do you think

    a) Any UK government would want us to join?
    b) Our European partners wish us to join?

    I bet they are different. OK, lets just split the difference, whack up interest rates a few % to raise the value of the pound to get the desired effect and join then. Simple really!

    Of course not. If the UK does join the Euro it will be some point in the future. That ship sailed a long time ago and we weren't even at the dockside. Who knows if that was right?

    If anybody thinks that we would be allowed by other members to join at current exchange rates, therefore permanently locking in an advantage to UK based business - may I suggest that they are mistaken.

    Of course if the Euro was too plummet in value in relation to the pound (for whatever reason), it would make sense to our European partners. However, would we then want to join a basket case currency?

  • Comment number 56.

    The issue we have is that the rising nations will no longer be at or near the top for very long and definitely not long enough to consolidate their position. Thus we are seeing nations getting a sight and taste for the better things in life and then only to have them removed by the next emerging nation. In the future we will all see more of the swings and less of the roundabouts……..

  • Comment number 57.

    OH dear, im sorry but how we now have another fault to add to gordons growing list; naivety.

    Im sitting trying not to laugh, but really it could only happen in Britain. What a bunch of morons we are. We vote in a party 100% style, 0% substance and expect them to produce miracles.
    Which they do, they magically produce a growing economy out of nothing. A bubble of nothing but air and the bubble bursts, of course according to the government it did'nt burst it was a slow puncture that could be fixed if we all had happy thoughts and gave all our money to the banks.

    Now we find that despite our happy thoughts and all our money we still cant stop that bubble collapsing, not to worry gordon will get some of his friends to try and blow some hot air into the bubble.

    So off he trots to the EU and America, global solutions he says will solve global problems, except....

    The rest of the world dont neccesarily agree and while Gordons been saving the world, hes spent all our money to do it, so that means that if the US and France and China and all the rest decide to become protectionist we are done for.

    I had a cat once , that was smarter than Gordon Brown, its name was Scuttler.

    Scuttler for PM.

  • Comment number 58.

    Robert, you have developed a very patronising view on events, probably as a result of your celebrity status. But your assessment on who gets what jobs is totally off key.

    There is desperate racism in the UK and its not surprising that #23 makes the comments registered.

    There is overt sexism, homophobia, ageism and every other kind of ism. Please get a life and redaliose the USA is just more open about what it does and always has been that the covert secret masonic approcach of the UK.

    Walk down any street and listen out for engllish accents. Everyone hates uniformity and wants to belong to their own groups. Look at Facebook to see what people are really doing and saying.

    Your commentaries were good but you are so missing the plot now that its hard to take what you say seriously which given your elevated status usually comes with the territory.

    You are totally wrong on this point 100 percent!!

  • Comment number 59.


    Also all bloggers should read yesterday's article about China's near and growing virtual monopoly producer/owner of rare earths in the FT (9 MARCH).

    It goes to prove the fortune cookie golden rule:

    The person with the gold will make the rules.

    The days of the US and UK being able to have anything but good intentions and brow beating so called weaker economies are over.

    The US and UK economies have been allowed to become decadently unbalanced by relying on irrelevant post-industrial Services.

    Both economies recently believed they were superior to the produing economies and that producers would always accept low prices for their goods and on top of that continue to loan them all the money for them to financial engineer and bet with.

    As those over paid consultants are fond of saying 'a paradigm shift is occuring@ and the US and UK have been found to be swimming naked!

  • Comment number 60.

    #40 Wee-Scamp.

    Sadly, I would totally agree with #25 whevernext1. My experience is that in some parts of Scotland, there is quite definate anti-English / anti-outlander prejudice (or is it postive discrimination for 'local' people or those with Scottish surnames?) in the work market, especially in certain fields.

    In fact, there are also instances of 'traditional', stereotypical, gender assumptions whereby men just would not get certain jobs, even if they were more than capable of doing them and, also, women would be extremely unlikely to get certain jobs if they applied.

    And that is even within classically "equal opportunity" organisations.

    Ironically, this sort of prejudice would be significantly less likely to be tolerated by many employers in, say, London and South East and those perpetrating it would probably find themselves the subject of disciplinary or equality procedures.

    But, of course, just like who buys the bank that we've got our money in as a depositor or as a shareholder - ordinary people are generally disempowered from being able to do much about these things.

  • Comment number 61.

    #49 amanfromMars need to get out a bit more! (that's if you're not locked in somewhere).

  • Comment number 62.

    Er, is this the same Robert Peston who recently bemoaned 'British' assets being sold off to foreign companies?

    I do agree with the gist of this post though.

  • Comment number 63.

    Nationalism is a big problem that the government will have to face over the next few years. When jobs are scarce and people are out of work, rational discussion goes out of the window and people will want to know why immigrant workers can get jobs when they can't.

    Government platitudes and adherence to the EU laws will not console those who feel that they are being hard done by, and the disenfranchised will vote for who represents them best - there is a real danger of a resurgent hard right in the years to come.

    This is called Democracy.

  • Comment number 64.

    #45 JavaMan1984

    Isn't your comment just a bit nationalist and protectionist?

    Yes, you're right, a significant number of English people have moved to Scotland for a broad spectrum of reasons, but then a significant number of Scottish people have also moved South. In fact, in some parts of Scotland, the move of especially young people away from their home towns to better populated areas, including many parts of England, is causing the economic demise of local communities.

    And, plenty of Scottish people have gained from the English people taking their money northwards and buying property up there, etc., etc, too.

  • Comment number 65.

    But it is way more complicated than that. The Indians and Chinese came from low-cost countries where there were and are few opportunities. They can leverage their dollars by sending them home to family and retirement. Put bluntly, they are cheap labour. US banks only hire token numbers of Europeans and Afro-Americans – and Canadians and Hispanic Americans. Now that Americans are just as cheap and desperate as South Asians, why hire people with poor English and a limited understanding of local affairs? The banks are still looking after their own interests only.

  • Comment number 66.

    I cannot pretend to understand all the complexities of trade and finance but the bottom line is Britain is a versatile and productive country. We still produce 70% of our own food, have 300 years worth of coal under our feet, have brilliant educational institutes, have a developed infrastructure and by in large have a fair and decent society.

    Protection has always existed and always will, I grew up watching images of the French burning our lamb and union flags!

    How many of us can say we have never got a job on the back of connections? Not many!

    The bottom line is we are a great country, we are not perfect but there is more reason to be optimistic than not, and of course a lot of people in the words of Peter Mandelson were allowed to get “filthy rich”, well these are the ones who can get their hands in their pockets and pay back what is rightfully ours, after all they profited most under Labour by being allowed to run amok by inventing bogus trading activities and when the Tories flogged off our national assets and helped make them “filthy rich” and the rest of us pick up the bill via scandalous utility bills and the like.


  • Comment number 67.

    Who owns what.

    It does matter, but for very simple reasons.

    1. OPEC owns the oil, or controls its supply. A monopoly situation. Would any first world government tolerate such a monopoly with in its own borders? No.
    So monopolistic profits can buy up assets? Yes. Is that correct?

    2. China's growth is based on low wages (also the misuse of intellectual rights), can we compete against these low wages? Yes.
    Bring two or three million Chinese into the UK, put them into Chinese style factories here, pay them the same wages as they would get in China, and you have a level playing field.
    But we can't do that?

    3. The "imperialist" US and UK were imperialist because they had technological advantages, which were misused.

    So to put it bluntly, the west is being naive with its dependacy on monopolistic oil prices, and the Chinese are being very clever by exploiting its ultra low cost wage base.

  • Comment number 68.

    #55 RobKirton wrote

    "b) The Americans (generally) have the most incredible work ethic and ability to make the most of their given circumstances."

    .....actually what the Americans have is an almost non-existant welfare state for the unemployed.
    You have to work - or else starve to death!

    Therefore the value of the Dollar is based on the concept of 'how slave like is the Economy'

    Slavery may be abolished, but it still lives on through the medium of Debt.

    We all need to work harder and harder in order to keep pace with inflation, and in a vain attempt to catch up to the people who have 'owned us' so that we may become one of them.

    It's not really the case that Americans work harder than anybody else and to suggest that does a great dis-service to all the other hardworkng nations out there.

    In South America, Africa and parts of the far east it's common place to work over 12 hours per day.

    ....that's not so much the case in the US.

    if you look bakc into your history books you will see evidence of why the West doesn't have to work as hard as everyone else.

    - It's called Colonialism - and every 'wealthy' western country originates from this in some form or another.

    I do dislike people who can only analyse the present and who never look back to the past which often reveals the actual truth.

  • Comment number 69.

    Interesting stuff Robert but there's a darker side to what you are arguing. The so called internationalisation of jobs, this cultural diversity, has led to an elite forming that have little if any allegiance to the countries they operate in. They are 'global citizens' etc. If there's a problem they move on leaving the mess they create to be mopped-up by you and I through our taxation. The point is, a little more 'nationalism' in employment policies may well 'situate' those in highly responsible financial jobs within their communities, and may well make them think twice before they enact strategies that adversely affect their communities.

  • Comment number 70.

    It is the time of the countries we have ruled over they have seen how it is not done and now will show us how it is done. Everyone should know that the USA will protect it's own after all it need it people to fight wars for them and to try and bring the New Order in place. We have lost the way a long time ago with our petty ways and moaning and whinging Governments it is a lovely country but the elite which are few per head of population still live in the 18th century and sorry but we are middle class media bound.

    Now the next group coming up are not bound by rules that was set when Britian so called ruled the world. We had our time and treated many badly they do not forget that and now it is their turn the Chinese like new and are sweeping the old away something we can not do as we are to small an island with old rules. We have lied and been cruel and hateful to other countries lets hope they will be better and kinder to us. Good luck to them.

  • Comment number 71.

    #6 cityNickDrew - Let´s hope than in addition to your prediliction for selling off UK utility companies you also enjoy the dark.

    No TV to watch - no problem just get some candles out and spend a winters eveing watching the excitement of your freezer defrosting.

    Sometimes the consequences of actions take a while to be seen (in this case of course they will only be literally seen during the hours of daylight).

    How a comment on the free trade model that allows Eon and RWE to "hijack" the votes of NPower and Powergen to vote on things favourable to the position in Germany irrespective of the consequences on the UK?

    Surely the people deserve to be told the truth!!

  • Comment number 72.

    Exploitation can come in many forms, in this instance selectively taking the best a country has to offer in terms of the brain drain with nothing in return for the country that made the initial investment. Capitalisim see under Parasitical..............

  • Comment number 73.

    #25 & #60

    To many south of the border already living in my country, we need something to stop the influx!

  • Comment number 74.


    You still don't get it do you?

    It's a bit sad that the man who is supposed to be on the button of this, seems to be lacking so much insight.

    We have a case of classic over-production. They have built too many cars, too many goods, drilled too much oil, dug up too much ore and so on...

    Who do you think we're going to sell all this stuff to?

    Every market has been flooded to the point of saturation. Free market Economics fails when there isn't scarcity and there certainly isn't scarcity now.

    In all previous crises there has been a new market to sell to (or exploit), or alternatively there have been wars to use up some of the over-produced goods.

    This is why the demand disappeared - I mean how many plasma TV's can 1 household have?

    It seems that the expectation is that China should start consuming to keep this merry-go-round going.

    ....but has anyone considered what happens once they have had their fill?

    There's no life on Mars - so where do we sell all our goods and services.

    All you have to do is think logically and ask yourself the questions.

    Q - Why did the banks lend to unsuitable borrowers?

    A - because they risked loosing market share and profits to their rivals if they didn't.

    Simple competitive behaviour.

    Q2 - What is the cumulative effect of all these companies competing against each other? When do they know that they have built / sold / extracted enough?

    A2 - They don't - which is why it results in OVERPRODUCTION.

    Q3 - What are the consequences of this?

    A3 - Demand falls due to market saturation, there is an over-supply of goods in the market place, the fear of unemployment reduces demand further still and we end up in a downward spiral - it's inevitable.

    It's very tragic that most people in this country are concerned with sideshows such as failed regulation, winds blowing from the US and over-paid bankers to see what is staring them directly in the face.

    The world has been spending money that it assumed it would be earning in the future. Just like on the personal level, the cumulative effect is the same.

    Q - What happens to you when you loose your job but have a large debt on your credit card which was accumulated by buying all the goods and services when you felt confident you would have your job forever?

    A - You start selling off those goods for a much reduced price in order to bring down that debt.

    The country, the world - is no different in this respect.

    So please stop being distracted by the myriad of sideshows going on and start watching the big event and more importantly it's causes.

  • Comment number 75.

    Yes we need to be more relaxed about who owns what... Sir Fred, Adam, Andy, The Chinese, The various sports stars being paid for by us to be ambassadors for our Bank...I'm relaxed about all of them..they can have what they like....

    On a less relaxed point...why, when so many dominant shareholders pre-pack companies into administration can't we just pre-pack our banks..into and out of administration..thereby terminating all the contracts immediately....

    Do that and I wouldn't have all the others to need to be quite so relaxed about and could just chill out about the Chinese (and the Oil states)---- owning everything

  • Comment number 76.

    This is very interesting to me because my son is doing a fully funded PhD in the US. He and we were very impressed by the American universities' willingness to fund the really bright young people from across the world- even if they could not get funding in their own countries.It is very competitive but unlike here they seem to favour cleverness. I hope that doesn't change.
    By the way my son got into Cambridge in 1997 from a comprehensive inner city school. He would not have been of interest to the Labour Party 'cause he actually got in- i.e not Laura Spence.

  • Comment number 77.

    I find it concerning that the US has taken this course of action in relation to highly skilled migrants in this time of economic uncertainty.

    I have noticed though that there has been little comment about the UK governments' more wide ranging attempts to reduce it's highly skilled migrant intake (including non-renewal of existing visa holders) on the basis of a reassessment that to be highly skilled one must basically have a masters degree rather than the previously adequate bachelors degree. This is likely to affect a signficant number of people that are currently working here and contributing to the economy and public finances. To criticise the US for their actions must invite criticism of the UK governments more indiscriminant policies in this regard.

    The UK and US should accept that if a country is going to make itself open to acting as a conduit for the worlds capital flows (and over the longer term benefiting from the income and lower cost of capital which such a function provides) then they must have a longer term view regarding the openness with which they treat labour flows within this global industry. If not they may find that surplus countries decide to set themselves up as global financial centres with migration policies designed to attract and retain people with marketable skills.

  • Comment number 78.

    #38 spetmologer:
    this is the reason we need closer ties with the EU and the pound is now a weak currency, the little Englanders will never admit it but we need to join the Euro ASAP."


    As I understand it, the UK is further away than ever to qualify for joining the Euro.

  • Comment number 79.

    Maybe some high-street banks should be nationalised. There is a need to balance stability and safety with competitiveness so the consumer has the option. Corporations have the mandate to serve the interests of their shareholders first, and this is partly why the banks have collapsed. The CEOs took the brakes off in an attempt to satisfy greedy shareholders' profit lust. Only regulation can rein this in, but as in sport, those seeking enhanced performance are usually one step ahead of the law enforcers. There is a case to be made for nationalised "safe" banks where the rates aren't very competitive and the products are not very exciting. A lot of people would probably opt to use these for day to day banking. The infrastructure is there now to do this. However, on the green shoots of recovery side, there are already peer-to-peer instituions like Zopa, where you can borrow and lend cash via what appears to be a secure infrastructure. With all the bankers due to be released into the market place, I wouldn't be surprised if there are a number of new niche banking enterprises springing up to fill any gaps created by nationalisation.

  • Comment number 80.

    I think the kind of nationalism we need is not necessarily UK jobs for UK people, but UK products and businesses for UK people. Globalisation has suffered a setback because it wasn't run correctly and where it has failed, countries usually have their own internal cycle of sorts - the national economy - where the money simply stays in the same country. And we do lack that here. Money goes out of the country in the form of procuring foreign goods (a lot of this being cheap tat made in china) and that money doesn't come back.

    And, reader, the answer does start with YOU. What can YOU do for YOUR country?

  • Comment number 81.

    This is A GOOD THING.

    All the spurned foreign workers will go home, many of them will start their own companies or work for local companies and make them bigger, better and stronger. So, in about five years time, their local economies will be in a better position to whoop America's backside when it has a lack of smart bankers.

  • Comment number 82.

    Even the Economists are admitting that regulation will not resolve the problem!

    Why has there not been a SINGLE JOURNALIST that has asked this of the Government?

    Are you all paid to keep your mouths shut?

    Stiglitz, a Nobel Laureate and former World Bank chief economist, proposed a six-point program chock-full of regulations and laws. But he then acknowledged: “These reforms will not guarantee that we will not have another crisis.” So why the title “How to prevent the next Wall Street crisis”?

    Stiglitz went on explain why his proposed reforms are no guarantee: “The ingenuity of those in the financial markets is impressive. Eventually, they will figure out how to circumvent whatever regulations are imposed.”

  • Comment number 83.


    I've lived and worked in Scotland for 30 years and have never experienced any anti English or "incomer" prejudice.

    Perhaps it's because I'm Cornish whom as I often explain to my Scots friends were lobbing stones over the Tamar at the English long before the Scots even thought of the idea :-)

  • Comment number 84.


    If it goes on in Scotland it goes on else where too.

    Like the other poster (#25) who raised this as ‘an issue’, you have shown what a small minded individual you are. There are many ‘English’ who have lived and worked in Scotland for well over a decade and countless more for longer.

    I think it’s Ironic that on a blog regarding nationalism, we find you ‘The silent English majority’ in your own land still harping on about Scotland!

    What you need to do is look at what YOU are doing to your OWN country (by virtue of who you vote in). Once you stop the rot, then you may find that the folks up here aren’t as ‘anti-English’ as you portray.

    Face facts, your country is knackered – Knackered by squandered opportunities and a predilection for ones self interest! Your system has devoured your creed like a cancer, the cancer being capitalism.

  • Comment number 85.

    Welcome Home Tourist Robert

    So China's Commerce Minister says the Chinese are to spend some of their financial surplus traveling.

    Last year on route home from New Zealand after weeks spent comparing the marketing of Brand Old Britain v Brand New Zealand.
    I watched in amazement as Auckland departure lounge filled with young affluent looking Chinese tourists, all were homeward bound to Shanghai on two 747s. I thought, never seen tourists like these exploring Britain's southerly delights.

    Tourism has the potential to help our economy in this hour of need, but only if it's reformed and not left languishing, underfunded and under the control of the wrong Government Department... Culture Media and Sport... who in turn give Visit Britain their remit.
    Tourism is an important expanding global industry for goodness sake, what the heck is it doing under that title.

    I think? Tourism has recently been Britain's 5th biggest earner, taken seriously it could improve that position.
    The internet has revolutionized the marketing of a destination, yet we are still selling Britain as three separate countries.
    Britain should be sold as One Strong Re- Branded Destination.
    The low marketing budget is split unfairly between Scotland, Wales & England, who each market themselves individually to the same global customers.

    That horrid trouble making word ... Nationalism has been impoverishing Britain's earning potential from it's tourist trade for years.

  • Comment number 86.


    I lived in England when I left uni, nice folk still have pals there - we all pay our tax.

    The present situation is already causing our society to fracture, such is the nature of the depth of 'our' problems.

    It was not meant to be nationalist however, I am fed up with hearing folk on here bleat about Scotland. I am suggesting that the problems currently being experienced by folk down south are manifesting themselves into anti scottish sentiment.

    A dangerous path to take.

    p.s. It not our fault El Gordo and Comical Ali are in Power, the English votes the clowns in!

  • Comment number 87.

    There is a huge leap from sensible management of our economy to protectionism

    Our role in the world isn’t to strip 3rd world countries of their talented and entrepreneurial people, nor is it to offer refuge to their dross.

    The past few years have seen short term solutions to issues that were not there in the first place.... does anyone remember the 80s and 90s – I don’t remember thinking “what I need is the ability to borrow more multiples of my salary”

    I’m only guessing but I think it was a banker, the ones who make money from lending, who thought “If we make 2GBP from lending 10GBP, won’t we make 4 if we lend 20..... and the more we lend the more the assets we hold are worth and so the more we can lend” – Eureka perpetual motion!!!!!

    I live near Bradford, a wonderful culturally diverse city that has benefited hugely through immigration and is dying on its feet...... because we welcomed in the workers to do jobs that we didn’t want to do and then let down their children and grand children by offering their jobs to more economic refugees.

    If we are to welcome more people in then will someone consider what we will do for their children and their children’s children...... let’s not just consign them to the scrap heap and replacing them with more immigrants from other deprived areas of the world.

    We will have 2 or 3 million people out of work (plus all the other on sickness benefit) soon. What on earth are we thinking of by not prioritising these people

    It is not “ourselves” we need to look after now but the people of our country.... and that includes the people we invited in!

    We need to get ourselves back on our feet and if the Chinese or anyone else makes less out of it, then so be it. We are a net importer they need us more than we need them

  • Comment number 88.

    If companies focus on developing the talent they already have rather than using the job market to fill every vacancy, thats no bad thing. For far too long, many organisations have created glass ceilings by insisting that all senior posts are externally advertised, rather than thinking "X is a good guy/gal, maybe we could develop them into this role if we invested in them".
    You can often find good candidates in the job market from many countries but is that always the point? What about the people already at your company who know the ethos and enviroment and who have already shown their commitment and ability.
    People often find they can only get so far in a company before they have to leave.

    What does this have to do with the international job market? I think it is inevitable to some degree that governments will focus on their own economies but is that really protectionism? If it leads to less international head-hunting and more people developing their careers internally then thats a good thing, even if you do call it protectionism

    Perhaps bankers who rise to the top with 25 years in a company are less likely to screw it up than some "hotshot" who already has a nice pension and shares options secured from his 6 previous roles....

  • Comment number 89.

    If you wish to wear sackcloth and ashes feel free, however i would rather not so can u please stop suggesting that we "deserve" to be punished for empire.

    Im sorry but Empire was just a fluke of time and place, do you think the Dey of Morocco would not have invaded Britain had he the opportunity, or perhaps Dahomey would not have sent all the British men folk to be used by their amazons had they paddled up the Thames.

    We were lucky as a nation, now we are to be unlucky. Thats all it is, some would call it karma or gods displeasure, to my mind its just bad luck.

  • Comment number 90.

  • Comment number 91.

    68. At 12:33pm on 10 Mar 2009, writingsonthewall wrote:


    "b) The Americans (generally) have the most incredible work ethic and ability to make the most of their given circumstances."

    .....actually what the Americans have is an almost non-existant welfare state for the unemployed. You have to work - or else starve to death!

    Therefore the value of the Dollar is based on the concept of 'how slave like is the Economy'


    I couldn't agree with you more. Hence my reference to "their given circumstances". Nor is the US unique in being a hard working nation - however I would maintain they are the kings of capitalising on their efforts. They don't have a subsistence economy - which is always a head start

    I would reckon that in general more welfarist a nation becomes, it also becomes less industrious (that not being a totally bad thing)

    It does worry me a lot, how we in this country are to keep on generating the wealth needed to pay for our social services / welfare state. During this downturn, irrespective of Obamas stated aims, a problem he will not be so encumbered with.

    It's going to be a very hard slog for a lot of us in the West to maintain a decent standard of living in the near future. My money is on the USA being ahead of us in that respect. Even if only driven by the consequences of failure.

  • Comment number 92.


    I'm scottish.

  • Comment number 93.

    I take it people haven't heard about the following

    I can't imagine Merchant Bankers being essential staff as we have so many of our own seeking work.

  • Comment number 94.

    Well I'm just baffled by it all.
    What's nationalism got to do with it?
    It seems to me it is failing to respond properly within a capitalist framework that is the problem

    Here's Ben Bernanke saying today that the big problem is the small amount of savings in western economies relative to investment. What is his and Brown's solution to this - reduce interest rates to zero and increase the money supply to try to get money flowing to borrowers!
    Pouring oil on the fire or what?

    Surely faced with a lack of savings the first thing you would do is to try to increase the amount of savings.
    How do you do this?
    Offer attractive terms to savers. If you are going to throw trillions at a problem throw it at the savers. They would then recapitalise reputable savings institutions ( the Building societies, the Coop bank and the like) and money would be available for borrowers.

    I guess a corollary would be to let RBS and what was HBOS go to the wall. That is not nationalistic. It is what capitalism is all about.

    Try and fight it as the US and UK seem intent on doing and you are just pouring money into a quagmire.

  • Comment number 95.

    I was astonished to hear that the Government are looking to the 'best to the city' talent pool to train for top jobs in teaching.

    These guys are so superior in intellect and human understanding that they are to be fast tracked in a mere 6 months.

    This will leave a clear gap in the financial world.

    Luckily this news has coincided with the revelation from a Swedish scientist that primates at a zoo have shown signs of complex cognitive reasoning.

    One chimp was even able to organise an attack on the viewing public. He went through a careful process of planning preparation and implementation in order to store up ammunition and to throw it at the public.

    Maybe the chimp could offer his services to the banking sector, or maybe he could train for 6 months and take on a senior role in the FSA.

  • Comment number 96.

    I know guys who have already lost their IT jobs because they have been given to offshore companies in India.

    I will soon lose my job too.

    The government support this move of jobs overseas because they want a re-distribution of wealth across the globe.

    This policy will mean, in all likelihood, UK citizens becoming much poorer over the next 100 years or so.

    Will the people accept it when they cannot feed their kids. Mmm probably not.

    Should we have an extremist libertarian approach to jobs? A Global corporation respects no national boundaries. It cares not a jot that it can throw a whole population into turmoil. It is bigger and more powerful than countries. (Will BP have an olympic team soon? Will we cheer it on?)

    We have been taught that not only is this good but that any other approach is nigh on evil.

    We have been badly taught.

  • Comment number 97.

    In life, some people join clubs (football fans, bridge, social etc). They become members because the club gives them what they want and often has members who are to some extent like-minded, so they feel enriched by being a member. Should the club cease to be beneficial to one or more members, they generally withdraw.

    In Bradford, the most obvious 'club' is the 'white flight' brigade - they didn't like the new membership so voted with their feet and went elsewhere. I am merely citing a fact, not passing a judgement as to whether its right or wrong.

    So to the world economy, Britain tries hard to promote free world trade with few or no barriers. IT WOULD, with few natural resources and those running out how else can it survive?

    So, the UK is no longer a member of the 'club' of rich nations due to its lack of natural resources.
    Other resource-rich countries, China, US, Australia, Canada, Russia, India have most of the natural resources they need and with a little resourcefulness can make do with what they have - they are the new club. Thus, the big countries with natural resources will pay lip service to free trade, but will in fact close down foreign imports and workers. Smaller countries (like UK) and third world countries are basically STUFFED, especially if they haven't got a good technologial manufacturing base like Japan or Germany.

    The UK relies on financial services far too much and its success in that was based, like the US, on a faulty pyramid of loans.

    Many of our so-called big companies simply bought competitors by taking out huge loans which they potentially couldn't repay. The CEO's of the big banks and companies became obsessed through EGO (ok, they would call it business drive!) to be bigger than their competitors. It became a personal thing and the supine boards, pension funds, regulators and Govt didn't question it because it was highly profitable. Trouble is accountants are adept at turning in a paper profit (off-shore, off balance sheet, exceptional items).

    The answer is to grow more slowly developing from a businesses own organic capital, not from borrowing. If a business venture is so sound, shareholders will surely back it with hard cash through a rights issue, loan not needed.

    Accountancy is far too creative and needs to be more scientifically based - EVERYTHING should be on a companies (and country's) balance sheet). It is also unlikely that any two accountants and auditors would take the same view on anything (this is also true of economists Peston).

    Auditors get off the hook by only auditing and passing comment on historic data - they should be made to pronounce on companies FUTURE plans and assumptions AND be liable for being sued by shareholders if the plans and assumptions are not sensible. Mergers and takeovers should also have the benefit of an audit prior to a firm being acquired (rather like a super Home Information Pack for a company)

    The FSA are a bunch of incompentents and should be sent to animal hospital (where they would surely die (die said in an Australian accent). The BOE should regain such regulatry control. Thi smeasure would get rid of another set of jobs for the boys and failed politicians and bankers.

    The Government has little clue what it is doing economically and the only solution is a general election (which will be hard for the tories to win because of all the labour-leaning immgrants - I wonder why Labour let them all in ....hmmm). All potential cabinet ministers should have a releveant qualification in their field prior to taking up office, then we wouldn't have ministers like Kelly and Darling etc who flit from office to office without having any clue what they are doing.


  • Comment number 98.

    Nationalism is the greatest problem that we face going forward. Thanks for attacking it wherever it's found.

  • Comment number 99.

    Re 82# writingonthewall.

    Absolutely. I'm glad that you got past the moderators and I hope that Robbo reads it..

    But it is far easier to pontificate on the past than to park the blame where it belongs, accept that things have to radically change and to offer a new way forward.

    In a way, we are like survivors of a nuclear war sitting around trying to work out who pushed the button.

    The disaster of the 'market will decide' policies of the city and the government will haunt us for many years now.

    Thanks for the postings.

  • Comment number 100.

    This is moving on from a financial crisis to the next stage.

    What do you do when peoples are now spread all over the world but the world is in a crisis,

    The world is not as one so it is inevitable that protectionism and nationalism will again come to the fore.

    Everyone can see that excessive consumerism failed because of the inequality and failure to balance the long term effects of globalisation.

    I have long thought that each country must put its own house in order before it can again consider if ever globalisation on the same scale which has failed miserably because it cannot be controlled.

    Expecting Asia to do all the work so everyone else could enjoy the proceeds was doomed to disaster.

    The fact that it happened virtually overnight has completely upset the whole theory of a global world of fairness for all.

    Trying to hang on to a failed model gets us nowhere fast but the urgent problems apart from the banks is what to do with the massive numbers of people who will be without jobs in the coming years.

    It is easing the social problems that should now be a priority. There are too many people chasing too few resources. Most living in foreign countries will see the problems ahead and may prefer to return home.

    It is not something governments can hide away from and ignore. Some governments already see the problems and are preparing themselves.

    In this country the government are pursuing policies that will slow down the speed of the recession and they should use this time to prepare everyone for the fact that nothing will ever be the same for years to come. It will give some time for people to think about their future and where it will be.


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