Reflecting on the global credit crunch

I've been thinking about the "credit crunch" that seems to be rolling around the world's financial markets creating all sorts of havoc.

For me this whole debacle highlights the critical flaws in a global financial system which appears to be essentially founded not on trust but on greed. Had the financial institutions that originally exposed themselves to the risks of the so-called sub-prime lending market acted responsibly and with due regard to their customers and other stakeholders, rather than being driven by naked greed, the financial markets would not be in the situation they now find themselves in. Greed has failed, and has exposed the fact that there is little or no trust between these financial institutions, so all the financial institutions are now unwilling to lend to their fellow institutions for fear of skeletons in the closet.

Instead it appears that it is down to the taxpayer to bail out these people, as governments in the UK and the US seem to be pouring public money in to create desperately needed liquidity in the markets.

Maybe I'm missing the point here, so please correct me, but it sort of feels like yet another market failure, and one right at the heart of the capitalist machine.

Has Balfe gone bonkers?

Today's Independent on Sunday reports that Cameron has recruited Labour defector Richard Balfe to woo the "trade union and co-operative movement". A quick heads-up to Messrs. Balfe and Cameron: this is not a single movement. The unions don't really understand co-operatives, and indeed are very wary of worker co-operatives, often perceiving them to undermine the role and power of the unions. And while there are undoubtedly plenty of unionistas within the Co-operative movement there are equally a good number of us that view the trade unions as not being up to speed on a whole range of issues, and as so focused on their own survival that they can't see the bigger picture on employee engagement, ownership and control.

While Cameron's tactics are undoubtedly interesting - and there are many people within the co-operative movement who are not natural Labour supporters, and who may view his approach as attractive, I really can't see it having any major impact, other than perhaps contributing to a polarisation within the co-operative movement.

The article goes on to report that Balfe said "...under David Cameron's leadership the Conservative Party has shown that it has the ideas and vision to harness the co-operative movement in a way that can really benefit society." Wow. That sort of language is certainly not going to get him too far. It is the co-operative movement that has the ideas and vision, not the Conservative Party. It is the co-operative movement that for at least the last twenty years has been making the running about how co-operative approaches can provide solutions to many of the socio-economic problems we seem to struggle with in the UK, and more widely. And as for the Tories "harnessing" the co-operative movement - how I laughed!

In general I welcome the trend towards an ongoing and constructive dialogue between the co-operative movement and all of the major parties. The old-school approach of being wedded to Labour is no longer relevant or helpful, and has held the co-operative movement back in the UK. In the US for example, co-operatives are far more apolitical in their nature (with some exceptions). But if Cameron and Balfe really want to engage with the co-operative movement, they need to listen to us, listen to what we have been saying for decades now about how to do things properly, and provide us with the resources to enable us to put our vision into practice. The notion of a parallel conservative co-operative movement run by the Tory party is daft, and simply won't deliver any significant outcomes quickly enough.