Ex-British Chief Brown Says Wall Street Protests Seek Fairness
Anti-Wall Street protests moving into their sixth week are driven by concerns over “what’s fair and what’s responsible,” said former British Prime Minister Gordon Brown.
“It’s not about the extremes in this debate,” Brown said in an interview airing this weekend on Bloomberg Television’s “Political Capital with Al Hunt.” Brown rejected both supporters of the status quo and rebels against capitalism in general.
“There are voices in the middle who say, ‘Look, we can build a better financial system that is more sustainable, that is based on a better and proportionate sense of what’s just and fair and where people don’t take reckless risks or, if they do, they’re penalized for doing so,’” Brown said.
The Occupy Wall Street demonstrations, which began in New York on Sept. 17 before spreading to cities in the U.S. and other countries, have ignited a debate about the balance between profits and ethics, Brown said.
“Markets do need morals,” he said. “Markets have got to be founded on a sense of fairness and responsibility.”
The reference is to the steadily widening gap between rich and poor. Between 1993 and 2008, the top 1 percent of American families captured 52 percent of total income gains, according to a 2010 analysis of Internal Revenue Service tax data by economist Emmanuel Saez of the University of California, Berkeley.
Trends in executive compensation suggest the financial system is “out of kilter,” Brown said.
“We’ve gone from a situation where the remuneration for the chief executives against the average employee in the biggest companies was something like 150 to 1 in the 1960s, ‘70s and ’80s. It then went up to 550 and 1,” he said.
Brown also warned against a premature embrace of austerity measures like those that brought the U.K. economy to a near stall. The U.K., which embarked upon an aggressive deficit- fighting campaign last year under a new government, expanded at an annual rate of 0.6 percent in the second quarter and will post a 0.5 percent mark in the third quarter, according to the median forecast of 12 economists surveyed by Bloomberg News.
“Deficit reduction is necessary, but if it imperils growth, then you’ve got to think very carefully about what you’re doing,” Brown said.
He backed calls for a U.S. infrastructure bank to fund an overhaul of the nation’s roads, bridges, airports and ports.
Brown also said the U.S. should reorient its economy toward a greater reliance upon exports. The Obama administration wants to double U.S. exports within five years.
“Growth is not going to come quickly or easily from consumer spending or from public investment, but it can come from securing big export markets, using American technology abroad,” Brown said.
The former Labor Party leader declined to take sides in the U.S. presidential campaign, while expressing “huge respect” for President Barack Obama and saying he isn’t acquainted with former Massachusetts Governor Mitt Romney, a Republican front- runner.
Brown balked at Romney’s call to get tough with China over its policy of artificially depressing the value of its currency.
“The best strategy in dealing with China is to ask them to increase their consumer demand,” Brown said. “That’s the direct way that they can import more from America and America can get some benefit from the increased living standards and increased consumption patterns of Chinese workers.”
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