The MT Diary

Gowers' progress; rescued by de Gaulle; Obama's 'monstruous' bills; bankers' disgrace.

by Howard Davies
Last Updated: 30 Sep 2010

There are many mysteries in this world. The most obvious is why anyone should have thought this was the year the Liberal Democrats would break through. I have lived through at least a dozen liberal revivals and I am not quite 60 yet. Another mystery is why anyone thinks England, with only one striker, has a prayer in the World Cup. But right up there in the list of weird phenomena, along with the Holy Trinity, and how steel ships float, is the remarkable career of Andrew Gowers.

Gowers, you may recall, resigned as editor of the Financial Times at the end of 2005 over 'strategic differences' with the board. The differences amounted to the fact that the board wanted the FT to be an authoritative and successful paper, whereas ... (it now is once more under Lionel Barber).

Gowers then became head of public relations for Lehman Brothers, required to spin his way through the world's biggest bankruptcy. Having failed in that task, he wrote a couple of distasteful 'kiss and tell' articles in the Sunday Times, which almost made one feel sorry for Dick Fuld. Then he moved on to pastures new and signed up as head of external relations for the new dean of London Business School, Robin Buchanan. Buchanan lasted six months, so Gowers was once again on the market.

You guessed it. He is now running public relations for BP. And it took him little time to work his particular brand of magic. He has become an impeccable leading indicator of disasters ahead. If he turns up next advising the Greek government, you will know what to do.

Volcanic ash and Greek riots all helped to keep our elections off the front pages of the world's newspapers, which was probably just as well.

The foreigner had some difficulty understanding where Clegg-San appeared from and trying to explain how our non-constitution works in the event of a hung parliament was like explaining the rules of cricket to Americans. Most people seem to think that in those circumstances HM the Q would take a look at the cut of the jibs of the three candidates and select the one she would most enjoy taking tea with each Wednesday.

But the oddest question I fielded came from a Swiss TV station, which asked me if I didn't think it was dangerous for the country to lose the indispensable expertise of Gordon Brown at a time of economic uncertainty. My French almost gave up at that point. I am short of a repertoire of French expletives suitable for pre-watershed broadcasting. I learnt my slang from lycee students 40 years ago and even Parisian taxi drivers are sometimes taken aback. Luckily I recalled an apposite quote from General de Gaulle, who said 'the cemetery is full of indispensable men'.

It is not surprising that New Yorkers have difficulty understanding what is going on in London. New York Times readers get their 'insights' into the UK from a reporter called Sarah Lyall, who wrote a toe-curlingly awful book on us a few years ago called The Anglo Files.

In his review, Jonathan Raban called it 'bewildering' and 'bizarre' and described it as the 'account of an imaginary country'. He did note, however, that her plonking observations about the US are as banal as her descriptions of Britain. She is, Raban says, 'an equal opportunities employer of cliches'.

Fortunately, the budget deficit which worries New Yorkers is that of New York state. And the political revival which interests them is Obama's.

On the back of the healthcare bill victory Obama has picked up new momentum. The Republicans' tactic of refusing to engage with any legislative proposals has backfired. The SEC's action against Goldman Sachs made it impossible for the Republicans in the Senate to refuse to discuss regulatory reform, even though it is arguable that none of the 1,300 pages of Senator Dodd's bill would have prevented Fabrice Tourre selling his 'monstruosities' to naive German bankers. It seems likely, therefore, that by the end of this year, Obama will be able to lay claim to two 'monstruous' pieces of legislation. Quite what the consequences of them will be is another question, but less important in political terms.

It is hard to know whether bankers are less popular in London or in New York. It is a close-run thing. Obama has not described Goldman Sachs as 'morally bankrupt' as Gordon Brown did. But our treasury committee's enquiries, under the late lamented John McFall, at least began with evidence and then moved on to conclusions, while the Financial Crisis Inquiry Commission in Washington and the Senate Investigations Committee do it the other way round. You can produce a report more quickly that way, of course.

When will the mood turn? Will the financial sector ever be rehabilitated? It will not happen, I think, at least until governments have disposed of their shares and for a handsome profit. For a while, it looked as though that happy outcome might not be far off, but the markets have become jittery again and the rating agencies have been looking at where all this dubious eurozone debt lies. So it will be a while yet before it is once again respectable to say your daughter is dating an investment banker. Best persuade her to stick to used car salesmen for the foreseeable future.

- Howard Davies is the director of the London School of Economics

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