Gordon Brown had the dubious honour of being an unelected Prime Minister. For years there were rumours that he backstabbed the previous Prime Minister, Tony Blair, because of a pact they had supposedly made back in the 90's (when both Brown and Blair) were considered rising stars in the Labour party, and Blair had reportedly taken the leadership ahead of Brown after John Smith's untimely death in 1994.

Brown was a great chancellor but he lacked the charisma of his predecessor, Tony Blair. He missed a great opportunity to get himself elected officially, when he almost called a General Election after Tony Blair quit, 10 years after being in office as P.M. Unfortuantely for Brown, he got scared by the resurgence of the Convservative Party under new leader, David Cameron.

What followed was a period of in fighting amongst the Labour party and the British media soon found out, and in turn fed this to the electorate. Still, the General Election in 2010 was by no means a clear victory for the Conversative Party. Indeed, the new coaliton Government suffered huge embarrassment with the riots that hit London, Manchester and other major cities in the UK, in 2011, whilst Prime Minister, David Cameron, was on holiday.

Cameron rushed back in the middle of the riots to provide his leadership but crime in the UK is still an issue. For more information about criminal law read here criminal law in the UK. The youths that took part in the riots, which made worldwide headlines, were condemned by the media but many are walking free today. Only a percentage of the youths were caught and many are still awaiting trial in the courts.

Several places in the article, there is 2011 where there should be 2012. See the last two leaders at the very least.

We're seeing political damage from the financial crisis, but left to wonder how to fit it all into the big picture. What happened?

We need a clear take-away narrative, or we won't learn from any of it. What are the lessons to be learned from the financial crisis?

Here's my list:

- Don't let fraudulent loans be issued, then packaged with market magic to turn them into AAA investments. Seriously, this is the root cause. Problem: it's still going on, and law enforcement seems to be helpless to see it, let alone bring it under criminal investigation.

- Don't bail out insolvent banks. The massive debts brought onto the backs of taxpayers, it turns out, can wreck the finances of nations, which imperils sovereign debt, which rebounds and inflicts more risk and losses on banks. Instead, seize insolvent banks and wind them down. Investors, not taxpayers, must bear the burden of private sector losses. It's better to amputate a limb than to let the whole damn patient die.

- Ban Credit Default Swaps. CDS is a dodge: it's insurance, but avoiding insurance regulations which require prudent risk-taking and the holding of reserves. It's destabilizing to financial systems.

- Separate investment banking (which is risky) from conventional banking. Wadding both up into giant institutions allows bad risks to contaminate conventional banking and makes the entire financial system unstable.

- Tax financial transactions. The financial system is speculation-crazy. Slapping a tranaction fee on every trade or transaction will tilt the system more towards holding assets for long-term value and dividends. We need that, badly.

- Balance government budgets. Debt financing is great in the short term for dealing with short-term economic problems or public needs. But as a permanent way of managing governments, debt financing can only lead - eventually - to disasters. In the US, especially, we're still foolishly racking up enormous deficits every year. It's got to stop.

- Watch the Fed and other central banks carefully. In Europe and the US, they're gushing the money supply outrageously and taking bad debts onto their books. The purpose of all of this gushing and quantitative easing - the latter is a term which obfuscates what it is, which is paying banks full value for worthless junk-grade investments - doesn't seem to be bolstering economic output. Why are they doing it? To keep zombie banks from going belly-up. i don't know how long they can do that without precipitating a crisis, and I don't want to find out. Reign them in. I'd rather see a tight-fisted money supply and higher interest rates, along with the economic slumping that will accompany it, than to see it all blow up sky-high in a catastrophic event.

- Put cops back on the financial beat. Unregulated markets and unenforced laws will lead to worse and worse outcomes.

- Push hard on research into energy alternatives to fossil fuels. Uncertainty in availability and pricing of fossil fuels and a generally high cost of energy is doing more damage to economies than anything currently going on in the financial sector. At least some of our grief is directly attributable to diminishing returns in fossil fuel extraction and distribution (it's taking more energy every year just to produce at a more or less constant rate, because we've already extracted the easy fuels, and what's left is harder, and less efficient, to get and use). We need cheap alternatives, and we need them as soon as we can get our hands on them. Solar is probably going to be near parity with fossil fuels by the end of the decade, even if we do nothing. We shouldn't do nothing; we need better than parity, we need cheap, clean energy and lots of it. We should put at least as much effort into researching this problem and solving it as we put into our foolish drug war.

I'm sure some readers will believe that minimum wages, retirement income, socialized medicine, food stamps, education, public infrastructure, and all of that is horrible socialism, and that horrible socialism is the reason certain European states are tottering on the brink of bankruptcy. That's a terrible oversimplification.

There's no question that debt financing is part of the problem. Budgets do need to be balanced. But the only way for governments to stop servicing the public's desire for social safety nets is for governments to cease being democratic. Authoritarianism is worse. Let's not go there.

Push hard on research into energy alternatives to fossil fuels. Uncertainty in availability and pricing of fossil fuels and a generally high cost of energy is doing more damage to economies than anything currently going on in the financial sector. At least some of our grief is directly attributable to diminishing returns in fossil fuel extraction and distribution (it's taking more energy every year just to produce at a more or less constant rate, because we've already extracted the easy fuels, and what's left is harder, and less efficient, to get and use). We need cheap alternatives, and we need them as soon as we can get our hands on them. Solar is probably going to be near parity with fossil fuels by the end of the decade, even if we do nothing. We shouldn't do nothing; we need better than parity, we need cheap, clean energy and lots of it. We should put at least as much effort into researching this problem and solving it as we put into our foolish drug war.
Structural Engineer Brisbane
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