The curse of actions past

3 November 2009

Examples in personal life might include flunking examinations, making the wrong career choice, choosing a gorgeous air head as a life partner and getting to feel homicidal about her stupid laughter, or buying a house that’s so terrible that we just know we’ll never be able to sell it on again.

And in our professional life there are decisions that we know from the moment that we make them that they’re going to come back to haunt us. There might be the dodgy senior executive we had the excuse to sack but chickened out, that mortgage book we shouldn’t have bought, or that diversification into non-conforming lending that looked so profitable at the time.

What’s worse, whether it’s a personal matter or something that’s happened in our professional life, the CAP syndrome becomes more apparent as we grow older.  

Put simply, the mistakes or choices we have made over time tend to fence us in.

Take Gordon Brown for example, he was chancellor for ten years and has been Prime Minister for two though the past two years seem far longer than the previous ten, possibly because his CAP cock-ups have been escalating and are having far reaching consequences for us all.

First of all he laid the foundations for the tripartite system of regulation that has served us so badly, then he robbed the pensions funds of billions of pounds and sold of a good part of the UK’s gold reserves at the bottom of the market, and finally, as chancellor he went on a huge public spending spree which in itself must have had an impact on asset prices and which left the state coffers bare when the economy turned bad.

Then under his watch as PM we’ve seen Northern Rock fail spectacularly, the mortgage arm of Bradford & Bingley had to be nationalised, and a number of building societies have run into serious difficulties.

RBS has had to be virtually nationalised and, most spectacularly of all, he played midwife to the HBOS – Lloyds TSB merger which, along with the RBS recovery programme, is now being deconstructed by Neelie Kroes, The Netherlands’ loveable bureaucrat who, as European competition commissioner, is in a position to dictate what Northern Rock, RBS and Lloyds Banking Group can and cannot do.

But here, as always, opportunity knocks. Ms Kroes, after all has approved the splitting of Northern Rock into good and bad banks, so the good bank, called BankCo, can be sold off to the private sector and no doubt Sir Richard Branson is getting excited about that prospect again.

In a similar vein, although the EC view is that the RBS rescue and the creation of Lloyds Banking Group were anti-competitive and raise big questions about the wisdom of the PM’s actions, the proposed sale of key parts of the two banks is being spun as a measure to create three new retail banks, so increasing competition in the market for the benefit of consumers.

The effrontery beggars belief. No wonder the Liberal Democrats say that “the government is struggling from one-short-term fix to the next”, but that’s what happens when we become fenced in by our past actions and decisions. Moreover, observing how the CAP syndrome works, it is evidence that Brown has been in the job too long.