Friday, April 15, 2011

Gordon Brown Seeking Posh New Job

Former UK PM interested in role as top international financier

When Gordon Brown was defeated as Prime Minister, then promptly replaced as leader of the Labour Party, many naturally wondered what would come next.

Now we seem to know. A year after moving out of No 10 Downing Street, Brown is poised to take on an advisory role at the World Economic Forum. Speculation holds that he intends to spin this into leadership of the International Monetary Fund.

At the WEM, Brown would be responsible for overseeing 72 Econcomic Councils. As former Prime Minister of Britain, he is uniquely prepared for such a responsibility.

But he should by no means considered a shoo-in for the job.

After all, some had pegged Tony Blair to be a favourite to assume the office of President of the European Union. Instead, backlash against Blair's involvement in the Iraq War held Blair back.

Brown could face some obstacles of his own. One of them is related to the Iraq War. The other is due to Gordon's handling of Britain's finances as Chancellor of the Exchequer. Brown has frequently been publicly savaged for his failure to manage the British public debt.

In fact, as it turned out Brown's government excelled at concealing its mounting public debt. Essentially, Brown's government, under Brown's fiscal leadership, ran up billions of Pounds Sterling in deferred debt by financing projects as Private Finance Initiatives.

This allowed the Labour government to spend today, committing each British government for the next 30 years to make fixed payments on these projects.

In essence, the Blair/Brown government uploaded billions of Pounds Sterling in debt to future generations of Britons. It enabled the Blair/Brown government to inflate its short-run political popularity at the long-run expense of the British citizenry.

They did what they wanted to do, and left the hard decisions to future British governments.

It isn't as if Labour only organized one or two projects under the PFI structure. It isn't as if they only organized five or six. They ran 630 projects under this structure. That's the cost of 630 projects spread out over a 30-year period.

It gets even worse when one considers the scope of the cost spread out over that period: 110 billion Pounds Sterling. In Canadian dollars, the PFI debt load added by Brown was $172 billion.

It's difficult to believe that a leader as casual about assuming debt on the behalf of future generations could become the managing director of the IMF. But Brown may have yet one more advantage at his disposal.

In the United States, the Barack Obama administration has shared Brown's irresponsible approach to public debt. Moreover, the Obama administration has some diplomatic bridges to mend with Britain, and may choose to mend them by helping Brown ascend the IMF mountain.

By all rights, Gordon Brown probably shouldn't become the director of the International Monetary Fund. But for good or ill -- very likely for ill -- he just may.

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