Can our politicians be statesmen?

‘Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning’

Winston Churchill had a fine turn of phrase, but I wonder how he would have tackled the biggest threat to our peacetime way of life since the war in which he uttered those words?
Churchill was a maverick, a chancer, a meddler, and someone well capable of insanely risky adventures.
But he was also a Big Man for a Big Occasion – the man who, even though he knew Britain was in a parlous state, drew a line in the sand and decided to fight.
Some may argue that the see-saw passage of a rescue package for the US banking system through their equivalent of Parliament shows the terrifying power of little men in a crisis.
Confronted by a choice between loss of votes in an election or the loss of confidence in an economic system, they initially chose to put their own skins first.
But the time it’s taken for George Bush to get his $700 billion bailout deal agreed by Congress has served one purpose: it’s helped both Wall Street and the rest of us wake up to the fact that, as gargantuan as this lifebelt is, it won’t still the stormy economic seas we’re all cast adrift in.
We are still in a situation where:
There may still be some significant financial failures
Banks remain unable to turn the lending tap back on
There is a recession that will lead to job losses
Government spending will be reined in for years to come
There is very little, now, that the banks themselves can do to remedy that. But what about the people who can?
So far, our own politicians have acted after individual crisis points have flared up – nationalising Northern Rock when there was a run on it, helping to engineer the sale of HBOS to Lloyds TSB after its share price began to collapse, nationalising Bradford and Bingley after a similar loss of Stock Market confidence, and tinkering with the odd regulation.
The major efforts to keep money flowing through the banking system and protect savers’ deposits have actually been taken by the Bank of England and the Financial Services Authority. They, too, have acted only when pinch-points in this continuing crunch have been reached.
The financial and emotional rollercoaster of the past two weeks makes it pretty clear we’ve now gone beyond the point where Governments can any longer wait for problems to crop up.
The politicians on this side of the Atlantic now have to take decisive action to put a floor underneath the banking system and restore some kind of confidence in it.
For you and me, that will probably mean guaranteeing the safety of all our savings so that we don’t pull them out of a bank at the first sign of its share price slipping (though the blunt truth is that this is largely unnecessary).
For the banks themselves it means a measure which – like the one the US Government has passed – neutralises the massive, property-related bad debts that have been eating away at their ability to operate like an aggressive cancer.
They have to find a way of enabling banks to start lending money again. To do that, the banks need to have better access to the kind of funds they would routinely access in international money markets (which is where banks themselves normally borrow from) at lower interest rates.
Without that, there is a danger that their reluctance to lend will start to damage what we call the real economy - the businesses that borrow money from banks for everything from routine cash flow through to funding expansion that creates jobs.
That would make a recession longer and more serious, and this is what Government must now fight to prevent.
Churchill made his ‘end of the beginning’ speech in late 1942, when Montgomery’s Desert Rats defeated Germany’s Rommel in the North African desert. The victory was proof that Hitler’s hitherto invincible army could be beaten, and Churchill rightly celebrated a success that ‘cheered all our hearts’.
Churchill knew that there would be many more battles – and setbacks – before the war would be won. His point was that though victory might still be some way off, people could be confident that there was now a means of achieving it.
We need to be confident that we, too, are at the end of the beginning. Over to the politicians, who now have to demonstrate that they have got what it takes to look beyond knee-jerk politicking and act like considered statesmen.