The downgrade of
debt by Moody’s has been on the cards for a while now, so it is not a surprise
to many. How far the markets will twitch
we shall see. If they have been looking
at the figures it may already have been priced in. But we will see some action as the new game
plays develop. UK
The media is saying that the last time such a downgrade happened was 1978 which is a year of many memories. It was 1978 when
Ipswich won the FA Cup at Wembley, beating Arsenal 1-0,
the winning goal in a closely contested game of skill being scored by Roger
George Osborne, our present Chancellor would have been coming up to his seventh birthday and may not have had a keen interest in the result. I was there behind the goal but was quiet as it was the Arsenal spectators end. The ticket had been passed onto me by someone who couldn’t make it.
The year was one of three Popes, one, John Paul I, dying after only 33 days in the job. This year will be one of two Popes at least. The
finances are still open to question. In
the USA Jimmy Carter was President during a time of inflation, recession and an
energy crisis, in 1979 he bailed out the Chrysler Corporation.
Princess Margaret decided to have a divorce so the marital arrangements of the Royal Family were hitting the headlines. Because it was an age before our instant communication facilities quite what was happening on her trip to Mustique was never clear, which perhaps was just as well.
At the BBC the state broadcaster dictated who were to be the celebrities and pop stars of the day, along with ITV. Jimmy Savile was the Corporations figure head for both popular entertainment and as a guide to modern manners. His word was almost law.
The Liberal-Labour Coalition of sorts which had lasted since 1974 was under strain. The former Liberal Party leader, Jeremy Thorpe, was mired in court proceedings over unwise relationships and criminal allegations. The new Liberal leader, David Steel had given notice that the Coalition would end at the election due in 1979.
The Labour Prime Minister, Jim Callaghan, who had brought in the IMF was trying to tell us that the old days of assuming the money would always be there had gone. To deal with the effects of inflation, recession and the need to pay off the International Monetary Fund loans stringent measures were necessary.
But the Trade Unions were not having anything to do with an incomes policy nor with restraint in public spending. A good deal of pain was felt in local government as the expansion and growth in spending that had occurred in the reorganisation of 1973 to 1974 had to be cut back.
Their models for the future were the communist governments in the Soviet Union although
was taken as a shining example of how affairs should be managed for the benefit
of all. The communists did not need to
bribe our militants. If East Germany had created
associations such as Patrons and Friends of the Lubyanka and The Gulags, the
British left wing militants would have rushed to subscribe. Moscow
Amongst some of these were groups for whom extremism was good and terrorism often better. Along with these hard line elements of one sort were others, strangely often allied whose individualism and belief in personal free for alls were regardless of any traditional ideas of morality or indeed the related risks.
The Conservative Opposition were still carrying a lot of the baggage and many of the people who had messed up with Edward Heath and others. There were divided in a number of ways and now led by someone, Margaret Thatcher, who was regarded as not very good in terms of media relations or sorting out coherent policies.
Despite being as much to blame as the Coalition for the severe problems of 1978 they were managing to keep their vote and make some progress. The 1979 election was one to be lost rather than one and The Winter of Discontent of 1978 into 1979 did for the Labour Party because of its divisions and loss of support amongst its traditional voters.
But there was one faint hope for whoever won the next election. It was that
oil and gas might just help to turn the tide and buy a few decades of
prosperity. The new and local source of
energy would enable not a rebuilding but a period of real economic change and a
move away from the past.
How different it all seems, 1978 from 2013, or perhaps how much the same.