February 11, 2009 2:11 PM
- Text
Great Britain's Flash Gordon
(CBS)
By CBS News correspondent Mark Phillips in London.
The question came from a Swedish reporter in the back of the room. "Would you like to be called Flash Gordon Brown now, or just Gordon?"
"Just Gordon," said Brown.
This exchange took place as the British Prime Minister was taking questions from foreign reporters at a meeting in London a day after his government had poured $63 billion into buying bank shares and his partial-nationalization scheme was being credited with finally stopping the decline of world markets.
Brown, who just a week earlier had been fighting for his political life as he'd watched his poll numbers plummet for a year, is now having to adjust to his new status as The Man With The Answer. His template for addressing the worldwide market meltdown is now being adopted from Paris to Potsdam, Beijing to Brooklyn. "You have to act quickly and decisively," Brown says. And you can't just add liquidity to the banks. You have to inject enough money so that you instill confidence in the institution and have influence in how it behaves.
That, he says, means rooting out irresponsible risk-taking, which has been encouraged by the bonus culture that has ruled in the financial centers of the City of London. From now on, Brown says, bonuses should not be based on short-term transactions; they should be paid in stock so that executives are encouraged to work in the long-term interest of the banks. What he's trying to do is change the culture of The City where traders have grown to love the quick kill deal and the resulting instant Porsche.
In fact, Brown admits he's trying to change the culture of the entire world financial system from the one that has been in effect since the end of World War II. That, he says, was designed to set the rules of business between sovereign national economies. Those rules no longer work in a globalized world where capital can run freely from one place to another.
"What matters," Brown says, "Is what we do next."
The restructured system he is now arguing for will require international coordination of financial policy making - a lesson being learned now -- and will require transparency so that everybody knows what everybody else is doing.
That the major European economies have embraced Brown's bail-out-buy-out plan is a surprise in itself; both France and Germany are led by conservative governments. But that a Republican US administration is now also taking large stakes in American banks may have Karl Marx's body spinning in its north London grave.
There will be some differences, though, in what these policies are called. In Europe, the home of socialized national health care and transport systems, the term 'partial-nationalization' is widely understood. (In fact the UK stake in one of the banks, The Royal Bank of Scotland, amounts to 60%.) But such terms do not translate well to free-market America. Robert Reich, the American economist was on the radio here this morning. What's now being adopted in the US, he said, will look like, talk like and walk like - but never be called - socialism.
All of this is happening is because Gordon Brown came up with the comprehensive plan first and proved that, in the short term at least, it works. A life in politics, he said today, is full of ups and downs. You have to take them both with equanimity. And then Flash Gordon left the room. Quickly.
The question came from a Swedish reporter in the back of the room. "Would you like to be called Flash Gordon Brown now, or just Gordon?"
"Just Gordon," said Brown.
This exchange took place as the British Prime Minister was taking questions from foreign reporters at a meeting in London a day after his government had poured $63 billion into buying bank shares and his partial-nationalization scheme was being credited with finally stopping the decline of world markets.
Brown, who just a week earlier had been fighting for his political life as he'd watched his poll numbers plummet for a year, is now having to adjust to his new status as The Man With The Answer. His template for addressing the worldwide market meltdown is now being adopted from Paris to Potsdam, Beijing to Brooklyn. "You have to act quickly and decisively," Brown says. And you can't just add liquidity to the banks. You have to inject enough money so that you instill confidence in the institution and have influence in how it behaves.
That, he says, means rooting out irresponsible risk-taking, which has been encouraged by the bonus culture that has ruled in the financial centers of the City of London. From now on, Brown says, bonuses should not be based on short-term transactions; they should be paid in stock so that executives are encouraged to work in the long-term interest of the banks. What he's trying to do is change the culture of The City where traders have grown to love the quick kill deal and the resulting instant Porsche.
In fact, Brown admits he's trying to change the culture of the entire world financial system from the one that has been in effect since the end of World War II. That, he says, was designed to set the rules of business between sovereign national economies. Those rules no longer work in a globalized world where capital can run freely from one place to another.
"What matters," Brown says, "Is what we do next."
The restructured system he is now arguing for will require international coordination of financial policy making - a lesson being learned now -- and will require transparency so that everybody knows what everybody else is doing.
That the major European economies have embraced Brown's bail-out-buy-out plan is a surprise in itself; both France and Germany are led by conservative governments. But that a Republican US administration is now also taking large stakes in American banks may have Karl Marx's body spinning in its north London grave.
There will be some differences, though, in what these policies are called. In Europe, the home of socialized national health care and transport systems, the term 'partial-nationalization' is widely understood. (In fact the UK stake in one of the banks, The Royal Bank of Scotland, amounts to 60%.) But such terms do not translate well to free-market America. Robert Reich, the American economist was on the radio here this morning. What's now being adopted in the US, he said, will look like, talk like and walk like - but never be called - socialism.
All of this is happening is because Gordon Brown came up with the comprehensive plan first and proved that, in the short term at least, it works. A life in politics, he said today, is full of ups and downs. You have to take them both with equanimity. And then Flash Gordon left the room. Quickly.
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