Did the President snub Gordon Brown and does it matter?

[TheBigotBasher]

The hard right and their nasty front groups have been all over Daily Telegraph stories that President Obama snubbed Gordon Brown. Of course, the hard right in the US are trying to spin this as an insult to the greatest ally of the US.

The Telegraph is spinning the story, not to hurt Obama, who carries massive UK popular support, but to hurt Brown, who of course wants to use a his US trip to bolster his opinion poll position.

Some context. The UK is required to have a General Election by June of next year. Gordon Brown is 12 points behind the UK Conservative Party. Gordon Brown is also seen as the chancellor who helped put not just the UK, but also helped to put the US in this economic mess.

The UK partied as a result of "New Labour" playing to the billionaire crowd. New Labour became better friends of the billionaire set than the Conservative Party. Almost all of the World tax havens have links back to City of London. Directly as a result of playing to the billionaire set, $13 trillion of untaxed wealth sits within UK tax havens such as the Jersey Islands.

Global banking was not something even considered in 1997. By 2001 International banking was an accepted fact. The UK economy was a service economy and its wealth was the City. Every major International bank used the City to trade. A strong £ and the proximity to the UK Eurozone, allowed for even more gains to be made out of currency conversion. Something that would not have happened had the UK joined the Euro.

The transition to a "Service economy" was so complete that the collapse of the last remnants of the UKs remaining mass car industry, did not hurt Labour shortly before the 2005 General Election.

City bonuses led to hyper inflation in the property market. As a result an ex Council 3 bedroom house that was worth £47,000 in Outer London in 1997 hit £400,000 in 2007. In the centre of London flats were selling for more than £1 million and London overtook Hong Kong as the most expensive place to live.

Property prices had been removed from the inflation index. Wage rates were not keeping up with property. To get on the property ladder you had to lie about your earnings. The UK had a sweeter name than sub prime, "self declared mortgages", but they were sub prime. Mortgages were sold not on the value of your home, which of course was your new equity, but on how much you paid each month. The mortgage of 10% deposit and 3 times the value of your earnings was effectively dead. Cars, holidays, luxury goods were bought on the back of ever growing equity.

This was further exacerbated by "buy to let" mortgages. You were able to buy second, third houses, if you could simply prove that you could get a tenant to live in them. With relatively static stock markets and a big tax on pension funds, buy to lets became new pensions.

Government tax revenues were of course buoyed by this. Stamp Duty, a tax on home sales, that had previously only affected the rich, hit almost everyone. Especially in London. Irish Londoners returning to Ireland helped boost the property prices of Ireland.

Then the party stopped. There is no mortgage market now. Approvals are down 90% on last year. If banks return to 3 times lending, UK property prices have a long long way to fall still.

Gordon Brown, as Chancellor, and now as Prime Minister faces the political consequences of this. Blair managed to escape the consequences of a deeply unpopular war and the economy crashing. It is unlikely that Brown will manage that. His own Party may not even keep him in office beyond June.

In the UK Gordon Brown has been saying that all of this mess was caused by America. His message was not quite the same to the US Congress. When he went to see Bush in October, he went with a begging bowl for a quarter of the bank bail out funds. Brown also encouraged Bush to reshape the Paulson plan, from one that may have worked to one that has not. He arrived at Congress, after 12 years of benefiting from a deregulated City and called for International regulation. Where were those calls in 1997?

The UK has no money for any giant recovery programmes. The gains of the boom years were spent. The lines have been snorted and all that is left is the come down. All that has been offered to the UK is a 2.5% drop in sales tax (VAT). From 17.5% to 15%. Even that is temporary. As a result OECD says that the UK is going to be harder hit and face a much longer period on recession than any other Country. The banks have had their bail outs though. Guarantees and loans have been given totalling more than the whole value of the UK GDP. The UK bank bail out is bigger than that of the US.

British voters are not exactly happy. They place the blame for that firmly at the door of Number 10.

Exactly how should a US President, deal with a British PM who has been blaming America for its ills?

Had the President slapped Gordon Brown, his already high popularity in the UK would have been boosted. The Brown government is only marginally more popular than George Bush in the States.

The UK Labour Party is not the Party of Democratic Socialism it once was. Blair expunged that. It is the Party of the billionaire prawn cocktail circuit and the prawns have gone bad. The UK Conservatives are not the Republican Conservatives. Cameron is probably closer to Obama than any Republican. While the Parties, are different, the papers are the same. They largely have the same US / UK ownership. They drive their own agenda, and fill the white space with irrelevance.

The gifts are a side show. Yes Region 1 DVDs do play in the UK. You can buy multi region dvd players for £10 in Tesco. Kids will be happy with model helicopters, especially models of Marine one. I'm not exactly sure of when a President will find time to read a 17 volume book on Churchill, and a pencil sharpener is so welcome. Gift giving was never something big between UK and US dignitaries. They are tokens.

Both Gordon Brown and President Obama have better things to worry about.