Euro MP becomes overnight internet sensation

These YouTube videos are essential viewing for anybody who has any doubt that it is complete and utter madness to think that the solution to a financial crisis caused by too much debt is to create vast amounts of more debt.

Daniel Hannan is an English member of the European Parliament who's short speech ridiculing Gordan Brown's failure as first chancellor of the exchequer (treasurer) of the UK and then prime minister was largely ignored by the mainstream media, but has since become an internet sensation.

This in a week when the United Kingdom for the first time in many years failed to find buyers for its bonds to finance its debt and the governor of the Bank of England admitted that the country had basically run out of money.

Brown's "solution" to this? Spend more money.

Hannan makes some telling points, points that you'd think would be accepted as simple economic common sense.

One, which our own prime minister should ponder the next time he tries to write philosophical treatises on so-called neo-liberalism, is that bankers are not "neo-liberal" free marketeers.

Like many in big business they are naturally inclined monopolists and corporatists who will never say no to the idea of governments handing large sacks of taxpayers' money to them and regulating the market in ways that suit them.

He tells an interesting story from New Zealand following the then government's decision to end agricultural subsidies.

As always, when the rare move is made to remove special interests from the government teat, the initial consequences were bad for those who had grown used to relying on the government to keep them in business.

Property prices fell and farmers found themselves in a situation of negative equity.

So the banks, who had outstanding loans to the farmers, ran to government and shouted loudly that there was a crisis and if the government didn't bail them out everything would collapse and there'd be a disaster.

Unusually, the then New Zealand government said no, it's your problem, you sort it out.

And guess what? They did. They all of a sudden found the wherewithal to extend flexible repayment regimes, offer interest only options and the like and, within three years, property prices had recovered and the farmers on a stable and more sustainable economic footing. And all without the large amounts of taxpayers' money that the banks wanted the government to give to them.

Which in my view just begs the question - why do we make the same mistakes over and over again?

Via the Instapundit