Today's Telegraph has an excellent article about the looming political crisis surrounding growing economic regulatory power in Brussels. The City of London, the heart of global finance risks being crushed under the weight of growing European bureaucracy. Gordon Brown, in spite of his overwhelming and unprecedented political weakness at home may yet have enough credibility in Brussels to put his foot down and stop the Europeanization of the British financial services industry.
The Brown conundrum no doubt has faced many political leaders in the twilight of their power: Do I do the right thing or do I give my country what it deserves for abandoning me?
Assuming this is indeed the calculation going through Brown's mind (admittedly he may be too myopic yet to see that Britain has abandoned him, so we mustn't take that for granted), then it shows how truly pathetic he is. If the CIty of London is lost, it will be a loss to the world, to free markets, and to economic prosperity. I care because I hate to see liberty and prosperity destroyed by the the growth of government, whether in my own country or in another. But, the loss will only be temporary though. The offshore financial centers will boom. The Cayman Islands, Hong Kong, Singapore, and Panama will be the beneficiaries of the crushing regulatory hand of the European Commission. Europe and Britain will be the primary losers.
The lesson Brussels will soon learn, as Washington is going to learn as well, is that you cannot demonize the people who produce the money that you take in taxation for too long or else those people will simply disappear. There are more than 180 countries in the world, and the world is a much different place than it was 60 years ago. People have options. The Internet and mass accessibility of air travel have made the world a smaller place.
Living in Santiago de Chile 60 years ago would not have been an option for me--it would not have provided even close to the quality of life that America would have provided for me. But the rest of the world has caught up. Twenty miles outside of Santiago, I have cable television (half of which is in English), broadband Internet, a cell phone with crystal clear reception, and access to top of the line health facilities in a merely 10 minute drive. The big countries with their mammoth bureaucracies will soon learn the lesson of David and Goliath.
Gordon Brown could rescue his legacy. Instead of going down as "The worst Prime Minister in modern history" he could go down as "The man who saved the City of London from the Eurocrats." Let's hope he makes the right decision.
[Any UK residents who want to give me their take on this issue, email me by clicking on my name to the right: Skinner Layne]
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