The rebirth of Gordon Brown?

Like I said before, never mind Krugman, let's see what Littlejohn has to say about all this before we go drawing any big conclusions.

I agree that Brown and darling have led the way in beating this crisis, but I fear everyone is overlooking who was in charhge of the nation's banking practices for the last eleven years. Let us not be lulled into handing out plaudits to the person who seems to have turned his back on the excesses of the City's moneymakers.

Nu-Labour thieve more and more
And they're lying like never before.
It's time to vote Blue
(What else can we do)
To show Nu-Labour the door?

Three words: forty-two days.

Peston puts some of this particularly well in his "Banks Should Be Boring" blog ... it's quite a punchy and well written piece (sorry Nick, not implying that yours isn't!).

'the prime minister himself feels more confident doing the job that at any time since he got it'
Doesn't it also show that he is an expert at taking the credit for a plan, the outline of which - at least of what was needed - has been clear for some weeks now.

He certainly has been quick to praise himself for what was, in fact, the work of a large number of people at the Bank of England, the clearing banks themselves and the Finance Ministries in other major countries, not to mention Alistair Darling.

It will be interesting to see how long before we see his other area of expertise (shifting any blame on to others) in action.

Don't use too many of your critical faculties in puffing him up any more than you really, really, have to - he can do that himself well enough...

Before we all get carried away in praising Gordon Brown for dreaming up the three point plan, may I remind you that Professor Nouriel Roubini was urging 'triage' on Bloomberg as long ago - yes, it does seem a long time ago now - as September 30.

The rebirth of Gordon Brown? Pleeeese! We all want our money back, but this is hardly the Second Coming?

Let's hope the HoL rejection of 42 days is the start of his re-death.

The Nobel prize winning economist and leaders throughout the world recognise that Gordon Brown has led the world through this present financial crisis, But poor old Nick (Robinson) cannot, even now, bring himself to make even a limited positive comment in his TV reports about Gordon Brown -- not to mention Alister Darling who, as Brown's successor, found himself dropped in the middle of arguably the worst financial crisis the modern world has seen. Instead old Nick toadys around with goo-goo comments about the "leader" of the Opposition, albiet quite inkeeping with his softly softly approach in interviews with him (in severe contrast to those with Brown). One's mind goes blank at the mere thought of what an absolute mess we would have been in if Cameron had been PM. When interviewed on Sunday his in-depth contribution was that "something BIG has to be done".

Perhaps Krugman would explain why the markets were in tailspin last week for two full days after the UK plan was published yet recovered substantially today after the eurozone biggies agreed a slightly more austere one.

Why shouldn't he be happy,in his previous existence he was one of the prime architects of the buy today, pay next year culture.He failed to notice any of the troubles that were plain to many.His lack of maths skills by not realising that 20% is 2X10% has still left nearly 500,000 of the lowest paid worse offwith no one caring if they will get a permanent solution because their cause isn't new or sexy enough.Finally he is being aclaimed as the greatest economist the world has ever known,a step up from just being our greatest ever chancellor,by a fawning political press
during these days of lending billions remember Brown's poor that much less than that would put right.

Am I going mad? Or are you? Did you really just call Gordon Brown 'the Master of the Universe' on R4 6 o'clock news? A shocking end to a shocking day of unashamed BBC promotion of Brown and today's despicable actions.

And now Nick even knows the innermost thoughts and feelings of Gordon Brown: "What can be stated with TOTAL CONFIDENCE (by me, old Nick) is that the prime minister himself feels more confident doing the job that at any time since he got it." Boy! Just to have THAT sort of insight and knowledge!!!

It is all very well, the noted economist praising the pilot.

The bald truth is - people will be in pain for many years to come, paying for the Brown decade.

It was Brown that got us into this during the "years of irresponibility".

It was Brown who created the weak touch regulation.

He is like the pub Landlord encouraging people to get boozed up all night and then expecting medals for using the shirt off of my back to bandage a boozer's consequent wounds.

He has by stealth communised the nation. No election, no vote - not flash, just Gordon.

Nick, you say "the prime minister himself feels more confident".

Unfortunately, many of us do not share this confidence. The world economic crisis is certainly not all Brown's fault, but even before these recent events, Brown has left our national finances weak and exposed.

He has taxed, borrowed and wasted. He also foolishly dumped a large part of our gold reserve at the wrong price when he should have been more prudent.

He wanted us to believe that he had personally ended 'boom and bust'. (You'll notice he doesn't mention that any more)

There are also serious doubts as to how all these rescue packages are to be financed. Presumably, as a last resort, he can telephone to Royal Mint to hit the printing presses. But if word gets out, this could lead to a devaluation of the pound.

No doubt, if devaluation comes, Gordon will reassure us that this will not affect the pound in our pockets....

Undoubtedly Gordon is in a win, win situation in the short term.

Once the dust settles - not so certain. When the causes of the conflagration are investigated, being the guy who called for the fire brigade might be of limited benefit if forensic evidence puts him at the scene of the fire's origin with petrol residue on his hands.

Possible charges? Sparking the blaze via encouraging - forcing ? - unsustainable levels of debt via his social exclusion agenda? Disabling the fire alarm by emasculating the Bank of England regulatory powers ? Leaving us unprotected by blowing the insurance fund on a public spending spree?

Supplementary question "Is winning the next election a good idea?""

re: 4

Three syllables: ID cards.

Let's not let the economy cloud Labour's myriad other sins. They deserve a painful and gruesome fate for their spying, warmongering, cultural and societal damage etc etc.

At the moment BBC Parliament is having a Human Rights Debate. Iraq War is being discussed, and genocide, amongst other issues. Yet, missing is any discussion of the destruction systematically taking place of Great Britain, its values, ethos and standards. The speakers are so busy declaring the rights of everyone else, that they have forgotten that charity begins at home. I dare not write anything else, since I'm sure the Moderator is fuming over this with a big blue pencil.

re: 10

One's mind goes blank at the mere thought of what an absolute mess we would have been in if Cameron had been PM.

We're in an absolute mess now.

re: 9

I think we'd need garlic, stakes, silver bullets, holy water and crucifixes galore for that. And to chop off his head just in case.

But the forces of good will prevail in the end, and the Dark Lord Gordonmort and his forked-tongued serpent Mandelssssnake will perish in the purifying flames of May 2010.

If you set fire to your local shop, and then find a way of putting it out. That foes make you a hero

Who's been in charge for 10 years (Blair couldn't count his pocket money)?

Once again Brown "basks in glory" while ignoring the reasons why he had to act; the failure of the FSA and 10 years of increasing private and public debt together with PFI encouraged by you know who. Ten years of "economic growth" 50% of which was funded by the very banks he now describes as irresponsible.

Hardly the Master of the Universe, more like the Master of Irresponsibility.

#3 power_to_the_ppl
"(What else can we do)"

Well, you could vote for a party that believes in electoral and constitutional reform to prevent any PM having near total power from the votes of less than a quarter of the electorate.

You might just wish you had if and when Cameron's reign ends in igmony like Brown's.

To use one of your own favourite words, Nick: extraordinary! It is indeed extraordinary that the BBC should laud Gordon Brown as a hero when in fact he has just presided over the most spectacular boom and bust in British economic history, nicking his get-out-of-jail card from Nouriel Roubini (nothing wrong with that) and then lecturing every other government and its dog on how to run an economy.

The guy's got chutzpah, if nothing else. Unlike the BBC however, the electorate has rumbled Gordon Brown's crushing incompetence and will march him out of Downing Street by his ear when the time comes.

Regrettably, the other lot are just as clueless.

We get the politicians we deserve I suppose.

Brown should make the most of his resurgence it won't last. People will remember in due course that he was part of the problem & he is putting the taxpayer further in debt, describing it as an answer to the collapse of the economy. It will mean many years of hardship before the country can recover.

You. are. joking.

We haven't missed the rest of the news whilst Brown has been conquering the known cosmos.

1.4m records have 'gone missing' from the MoD.

42 days faces a 3 digit defeat in the House of Lords

Brown has finally got the Conservative message on re-capitialisation and looked at the Swedish bank rescue c1997.

Even in Europe they called it the 'Sarkozy Plan'.

Incidentally, 1997, around about the time Brown messed up the reform to banking regulations which precipitated this crisis.

Now, the BBC et al can rattle it's pom-poms and cheer for Lazurus but the public are absolutely livid.

This comment was removed because the moderators found it broke the house rules. Explain.

Hyper inflation will be the outcome of this. We are in recession now - I don't believe the figures of 0% - and this will last for at least 18 months. He wants more lending to restart the property bubble. Is he mad? Or are you? Please no more one sided reporting - facts only now Nick - and we are in serious trouble!!

Nick's blog has a great sting in the tale viz "The Lib Dems too have warned of governmental hubris. What they both believe - and are surely right too - is that the politics of recession could be much less benign for Gordon Brown than the politics of the immediate crisis".

GB and Darling have done well but its like the Captain and Master of a ship sailing onto the reefs and just managing to get off holed and taking in water. Huraay for now but it all could have been avoided. They both took the parise for the voyage up to now and both must take the blame as well.

Brown is seizing the current crisis as his Falklands Moment.

The situation has pulled him and his cohorts back from the gate of the knackers’ yard.

Enjoy the bouquets, Gordon, because when the dust from the global economic fallout settles, you’ll be left with your lightweight government of chancers, spin men and opportunists.

Now Brown can get himself a share of the obscene profits the banks have been raking in on the back of the free for all lending he and his incompetence at the treasury was responsible for fostering. So far there has been no suggestion from him or his pet chancellor that they will tighten up the ease with which unsustainable credit can be obtained. This was what caused the runaway house prices in the first place, aided and abetted by the greed of builders , estate agents, and developers. No attempt was made to reign this in because the government had squandered so much of the country's wealth on useless and unsustainable social programmes that only the tax take from the housing boom and the financial sector was keeping the country's finances afloat. Now he swaggers around claiming to have saved the country from ruin. If he over the past ten years had displayed a bit more competence , the need to nationalise the banks would probably not have arisen and the nation may well have been in a better position to face the recession which is undoubtedly coming. As it is we now have a treasury with such a mountain of debt, that it is likely to have a disastrous effect, not on the political elite of this nation, but on the hard working taxpayers who for the last ten years, have, to echo a former labour chancellor " been squeezed till the pips squeaked "

I generally think most folks don't get how events flow along and how competing egos interact, and can't let go of the mountain of funk. Only a short while ago everyone was talking up how smart they were. Now, it's all doom and gloom. The world hasn't changed but their perspectives have.

The numbers suggest the global economy is teetering on the brink of a new renaissance but they're so caught up in the illusion of short-term pain the promise of what's just around the corner has been pushed from their mind. But, the bust is as deluded as the boom: both are only as real as people make them.

Nobody ever listens. They know better and the prospect of belt tightening chews them up inside, so they thrash and scream even more. Every time they do this they slide further down the well of misery. You'd think folks would get a clue and just let go, calm down, and be happy. But, they're clever and think they're smart. It can't be that easy.

Just another day in hell. Enjoy your stay. :-)

Thanks Nick. As a fully fledged died in the wool blue, I have to say that in my opinion Brown and Darling have conducted themselves very well over the last few days.

Whether it is enough to save the day remains to be seen but I must say that that a few things have ticked me off with the convervatives over the last week or so.

One, anyone with half a bean in their heads knows that we got where we are by a cross between both the Thatcher and Blair policies. Two, I don't think David Cameron really understands the hostility still felt by a significant portion of the population towards Maggie and as such I think it was unwise to mention her at the Tory conference and finally and for me most importantly, why when the country needs the political parties to be united do Cameron and Osborne say they support the action taken then appear to try and derail at every opportunity.

As one of your co-reporters commented this week Nick "this may be Gordon Browns Falklands War". I have a funny feeling they may have been right.

re: 24

Well yeah but Labour have to be destroyed first in order for such a party to get into power.

First things first: Nu-Lab have been stealing our dinner money for too long. The time is past for putting drawing-pins on their chairs, we must punch the head bully right on the nose, then the whole gang will scatter. Down with Brown!

If all the stuff Brown has put into place is so wonderful why have the markets fallen yet again? We had a mass bailout last week and it seems to have made no difference to anything, Lloyds-TSB/HBOS wee forced to merge a month ago and that has made little difference. In effect it seems as if Brown is going to have to nationalise the whole banking system of the UK.

After that and the markets continue to fall what then? Brown may get credit at the moment for 'sorting things out' but has he really? How much more tax payers money is going to be used to prop up the system? When public services are cut to make savings to prevent tax rises to fund everything then we will see how popular Brown is.

Of course unless Brown is hoping Cameron actually wins the next election and has to deal with the inevitable mess and unpopularity that causes. Lose in 2010 but win massively in 2015 - sounds like a decent plan.

#29

"We are in recession now - I don't believe the figure of 0%"

You're probably right - the 0% refers to Q2 'growth' (i.e. April-June 2008). It will get revised later on, when the ONS have access to more accurate statistics, but its the best estimate of Q2 growth we have at the moment.

Q3 (July-September) will likely show some negative quarterly 'growth', while maintaining year-on-year growth. Q4 probably the same - giving us a technical recession. Q1 2009 may (60-70% likely) show continued quarterly decline and year-on-year negative growth - giving us a 'proper' recession.

All right-wingers (and others) apportioning blame, the notoriously left-wing Evening Standard editorialises today:

"The rise in Brown's market value may be short-lived when electors remind themselves that the problems that brought us to this pass took place under his aegis and include his 'light-touch' regulatory regime.

But if blame is being apportioned, it must be attributed squarely where it belongs, with the chief executives of the institutions which strayed disasterously outside their remit and competence. The directors of the companies who signed off their accounts, who never asked the right questions, must also be named and shamed"

Left-wing New Labour spin, I tell you!

could it be he engineered this whole affair to take the pressure off his poor leadership and all the problems around his party?
no but its timing is perfect to help save his highly over paid job.
as for a rebirth well we can only hope its still born.
the people have suffered enough under both tony and gordon with there empty promises and media spin to be totaly lethargic to the political process,(as they wanted so they could drag us into europe via the back door, tax us beyond fairness,raise there expences and wages well beyond what other public sector worker gets, and sell our rights up the river.

Contrary to the BBC line, Gordon Brown is not the supreme being, he is simply a sociopathic idiot who has destroyed our country.

Of course unless Brown is hoping Cameron actually wins the next election and has to deal with the inevitable mess and unpopularity that causes. Lose in 2010 but win massively in 2015 - sounds like a decent plan.

My impression is that the Labour government has more going for it than anything the opposition have to offer, and don't see why they should give way just because a bunch of thugs are shaking the bars of the cage.

I like the government's general plan to develop innovation and employment for the long-term, and the asset stripping and wishful thinking of the opposition parties would just derail that.

I want the best government we can get, not some bunch of wiseguys who just want to claim their turn at the wheel by default, and the electorate wouldn't forgive Labour if they just 'took a dive'.

#38

In a word, no.

Saved the world?

Should it not be time for a reckoning Nick?

Remember these?

Gordon Brown's 1997 Budget Statement - "I will not allow house prices to get out of control and put at risk the sustainability of the recovery."

Pre-Budget Report, 9th November 1999 - "Under this Government, Britain will not return to the boom and bust of the past."

Budget Statement, 21 March 2000 - "Britain does not want a return to boom and bust."

Pre-Budget Report, 8 November 2000 - "So our approach is to reject the old vicious circle of the...the old boom and bust."

Budget Statement, 7 March 2001 - "Mr Deputy Speaker we will not return to boom and bust."

Budget Statement, 22 March 2006 - "As I have said before Mr Deputy Speaker: No return to boom and bust."

Budget Statement, 21 March 2007 - "And we will never return to the old boom and bust."

Why haven't the BBC reported on the fact that Brown said this morning during his speech that he wants lending to soar immediately back to the same unsustainable level that it was at the height of the debt-driven boom immediately before the bubble started to burst?

After re-capitalising the banks with tax payers' money, he wants to use that money to re-create exactly the same situation that drove them to the brink in the first place.

Why haven't they reported it? Oh, it's because the BBC and the Labour Government are, in fact, one and the same thing at the moment; it's now impossible to separate the Labour spin machine from the BBC.

The public are, as another poster put it, absolutely livid with Labour, and most people are also livid with the BBC for acting as a department of the Labour Government throughout the last 11 years.

Where's the balance? Where's the commentary that reports Brown is simply re-creating the whole mess all over again but this time using tax payer's money to fuel it to make the next crash even bigger?

Brown's long term plan is designed specifically to create another bubble as soon as possible; the next one that bursts will be fatal to the UK; we must stop this man before he succeeds in his attempts to drive us back to the stone age.

Yes it has seemed a distinct possible for a few weeks that Iron Man has little to fear but rust. What if Krugman's blurb for him is all hype? It's not bad going, all considered.

Politics, eh? Whaddya know?

The Rebirth of Gordon Brown? Nah, you can't judge the effects of action of this sort after a day. You can look at what has happened over the duration of Gordon Brown's chancellorship and premiership and see that this was inevitable. No one can be golden forever and he was bound to hit the wall at some point.

The only honourable thing for him to do now is resign and give someone else a chance.

My choice for replacement: Alan Johnson - people who are unassuming tend to be the people who just want to get the job done. Not that I want Labour in again. I think he would be the best candidate for Labour though and would make the competition tight.

-------------

There was a comment either in this thread or the previous one which discussed the fact that the govt now have access to all our personal details.

"Please may I have a loan?"

"Yes, which way are you going to vote?"

Very insidious.

Man, I'm really cheesed my post at #23 got referred to moderation. It was a work of art. I don't flinch at the Tory bile in here so that was a bit mean. But, I guess, the Tories must be scared of someone satirising their leader. They can dish it out but can't take it. That says something.

I remember how shrill Tories get when applauding Thatcher and all that desk banging when you mention the Falklands War. They're the first to polish that trophy but begrudge even an ounce of well earned success by Gordon Brown. He foresaw these problems and tried to stop them, and that's more than Thatcher ever did.

This blog is absolutely priceless.

The right wing entrenched dogma thinly disguised as considered objective commentary.

After all what would Krugman know about ecnomics compared to say Power to the People banging on about garlic and stakes (again).

It must be so galling to the usual suspects on here to read the comments of someone with no vested interest or prejudice heaping unequivical praise on "the Brown Plan"

How disappointing for you when anticipating bad news with so much glee and potential rejoicing.

Just be thankful for all our sakes that Cameron and Osbourne weren't in charge or should we ask Krugman for his views?

#46

That's the way of the world Charles. Sometime the voice of sanity is silenced. When the rest of us have posts removed of course, it is quite justifiable. The plebs must be made quiet.

Also Krugman reminded people of Browns almost loan voice for the past 10 years calling for global regulation.

But hey what does he know

LIBOR rate coming down tonight.

My God Brown nd Krugman are soooo stupid.

46 Charles_E_Hardwidge

"He foresaw these problems and tried to stop them, and that's more than Thatcher ever did"

I beg to differ; he was advised of these problems over many years and ignored those warnings, he created the problems in the first place with his lack of regulation and advice to tell everyone to borrow as much as humanly possible, and his solution is to re-create the same problems all over again.

I'm far from happy with the tories, and I wish I could have read what you said before the bbc regime knocked it off, but the main reason I'm unhappy with the tories is because they're actively backing Brown in everything he's doing even though Brown's long term plan is going to end up in complete economic annihilation about 5 years down the line.

with all the jobs on the boards of banks funded by the taxpayers.... perhaps our intrepid hero will have a "cash for honours" moment - placing donors in those positions?

this would solve labour's funding crisis...

I suppose this is what makes politics so fascinating ... for politicians.

I think the natives would prefer a much quieter life but no, many of us are the unwilling participants in this car-crash.

Politicians wield enormous power and sometimes it is not used very wisely.

I'm sure the pols meant well, fuelling the easy-street debt over the past decades or so, which made the people who owned homes feel 'wealthier' and consequently many started using it as their personal piggy-bank.

Especially the buy-to-let leeches boasting about their 'portfolios' (thanks for that Janice Turner of the Times).

'Light touch' regulation of the City has generated its own timebomb for our banks.

So this heady brew has now exploded and almost unbelieveably Gordon Brown is showered with praise as he sorts out the mess he partly created.

And by goodness, Brown will get away with it too.

When he's finally fingered for it, it'll be like fellow NL partner-in-crime Tony 'Ecclestone' Blair, having departed the scene before he can be truly collared.

What a glorious game politics is ... for the professionals.

"I like the government's general plan to develop innovation and employment for the long-term, and the asset stripping and wishful thinking of the opposition parties would just derail that."

Perhaps. My point was that just as Gerald Baker argued in The Times a few weeks ago that 2008 was the US Presidential Election to lose, I feel that the same comment is true of 2010 here.

Brown may have a plan and may be putting it into action. The question no-one is asking is how the tax payer is meant to fund everything. The Government have added mass sums to public borrowing to bail out the banks which has massively increased public debt. The 10 O'Clock news suggested that is now around a figure of 50%, something not seen since the 1970s. If this is true then we have two options -

1) The banks restore themselves to their financial footing post-August 2007 and the shares owned by the tax payer increase to cover the public debt (a gamble nonetheless.) However, there still remains a potential worry that the same problems experienced now will reappear when those shares are sold in say 10 years time to repay the 2008 funding. Therefore, will our banks need permanent public ownership to save people from themselves? If yes, then the loan for those shares will need repayment from elsewhere.

2) Pay the debt another way. The Government was already squeezed with public finances before it had to bail out the banks. It was widely accepted that there was no spare cash left and the mass investments by Labour in sectors such as education and the NHS would have to halt (if not be cut entirely.) The Olympic Games has also meant that funding has got to be diverted from elsewhere to pay for that. So, the Government either pay back the money by cutting services (unpopular but likely) or increasing taxation or introducing stealth taxes (unpopular)

Either way, we sort out a mess now at our peril for the future. Brown may be the master at 13/10/08 but will he take credit if the predicted rise in bank shares fails and he has to resort to option 2? Remember, many councils are worried about assets frozen in Icelandic banks - will that mean more money to bail out the system.

This plan looks great on paper but has serious flaws and is based on a hope that the market sorts itself out. Vince Cable, in the Commons today, warned the Government of hubris and of the impending dangers of recession.

The risk to the tax payer if this goes belly up is huge. That risk alone is enough to make Brown think carefully about winning in 2010.

#35 power_to_the_ppl

Under the creaking quasi-democratic plurality system which prevails for Westmidden I would certainly agree that in the general election the priority should be to get rid of NuLab by voting in any particular constituency for whichever candidate has the best chance of defeating them.

With the Tories in 2nd in 221 NuLab seats in '05 and the LibDems 2nd in 106, some kind of electoral pact in those places could devastate NuLab, aside from the damage the SNP & PC will likely do. The price would probably be at least a switch to majority voting like the London mayoral and French systems.

But until assymmetric devolution is addressed by some kind of federal solution, the likelihood is that Scotland will go it alone, closely followed by Wales, leaving Cameron as the last PM of the UK and first of England.

re: 49

If Brown thought it was that important he'd have implemented it here sooner.

Q: So why didn't he?
A: ka-ching!



There there... No more tears.

That's the way of the world Charles. Sometime the voice of sanity is silenced. When the rest of us have posts removed of course, it is quite justifiable. The plebs must be made quiet.

I only recently referred a wave of posts that seriously crossed the line in terms of disruption or personal attacks on folks in here. That's the worst of the worst not the routine rubbish, and I'll do it again if things got out of hand in a similar way. That's only proper and nothing near what you're insinuating.

Re-birth? the BBC have really lost plot now, i know no-one not even life long labour supporters, (and coming from East London, i am surrounded by them) that have a good word to say about brown and his government, and for most, they are adamant that they will not vote labour especially while brown is PM, most are equally adamant they wont vote Tory, most say they will vote green or liberal, a very small minority BNP, the handling of the credit crunch, hasn't swayed them either, fact is most are repulsed at browns smug arrogance,
i am a bit of a political junkie, so many of my conversation's turn to politics (sad i know) and i talk to a lot of people, markets, shops, pub's cafes, perhaps the BBC should try it without bias.
Oh and i wonder where the BBC banks the public fund it receives.

I beg to differ; he was advised of these problems over many years and ignored those warnings, he created the problems in the first place with his lack of regulation and advice to tell everyone to borrow as much as humanly possible, and his solution is to re-create the same problems all over again.

Gordon Brown had a plan for global financial governance that he floated before this crisis hit. Nobody wanted to know at the time. That's just a fact. Thatcher didn't even see but was warned of the Falklands issue ahead of time. She didn't even try to lift a finger. That's another fact.

The real issues are quite subtle, and both the risk averse CBI and the Tories opposing fair wages got in the way. Those factors alone pushed up the growth of credit as a fuel to the economy: it was needed to stimulate action and create liquidity in spite of opposition.

The CBI and Tories want more Thatcherism but the real key remains innovation and jobs for the long-term. This is where the CBI and Tories don't even get Adam Smith let alone Kenyes: they're depressing influences on growth while Labour is positive.

(I doubt any right-wing economist could challenge what I've just said in spite of the performance they put on.)

Especially the buy-to-let leeches boasting about their 'portfolios' (thanks for that Janice Turner of the Times).

I personally know a few people who are multi-millionaires through the buy-to-let scheme. I didn't like it before it took off and remember tearing a strip off one friend when he just talked about the idea in outline. I can't say I approve of some of the people who 'make money' this way especially when they start thinking they're some sort of 'wealth creator'. They're not and probably never will be.

56 pttp

And how do you implement global regulation in one country?

LOL

57. At 10:54pm on 13 Oct 2008, Charles_E_Hardwidge wrote:

I only recently referred a wave of posts that seriously crossed the line in terms of disruption or personal attacks on folks in here. That's the worst of the worst not the routine rubbish, and I'll do it again if things got out of hand in a similar way. That's only proper and nothing near what you're insinuating.

If we need a moderator, then we have those provided by the BBC. I ignore this blogger's comments, and think the best way to deal with him is to give him the proverbial cold shoulder. If any of my comments suddenly disappear now, I will know who has been malicious.

Robinson, this is what you should be writing about not fawning over this liar, thief and traitor to country Brown!

# Inflating enormous debt bubble
# Destroying pension schemes
# Massive PFI off-balance-sheet debts
# Massively increasing tax burden through fiscal drag
# Selling Gold reserves just before Gold tripled in value
# Creating the biggest trade defecit in 10 years
# Pricing hundreds of thousands of people out of owning their own home

The man is a disgrace and so is the BBC for allowing such nonsensical biased dross to enter it's pages!

re: 61

You can't, which is why I included the word 'here' to indicate that I was talking about regulation in this country rather than global regulation.

You know exactly what I meant, but clearly you prefer to dodge the issue. So you can't answer--- just as I expected.

If we need a moderator, then we have those provided by the BBC. I ignore this blogger's comments, and think the best way to deal with him is to give him the proverbial cold shoulder. If any of my comments suddenly disappear now, I will know who has been malicious.

The moderators upheld 90%+ of the handful I referred, and you're just some anonymous mouth with an agenda that appeared out of nowhere to troll and flame my hide, so don't pull the Mr Innocent in here, pal. You've either got me mixed up with someone else, or are a bit mixed up yourself. I suggest you fix it.

This comment was removed because the moderators found it broke the house rules. Explain.

16. DistantTraveller wrote:
"..........Presumably, as a last resort, he can telephone to Royal Mint to hit the printing presses. But if word gets out, this could lead to a devaluation of the pound."

Oh! It'll get out all right!
There will be yet another breathless "I have just been told...." by Peston & shares will tumble again.
I think Peston has helped Gordon nationalise the banks at a very cut price...

The losers are not just the the tax-payers, but anyone with a private pension and the bank shareholders..who are by no means all rich toffs

Gordon's Falklands moment eh?

Well, yes.

An unelected leader in economic trouble chucking his weight around.

Now we await the despatch of a taskforce.

Dear Nick, God threw the money men out of the temple
Gord threw them out of the banks,
Gord also wrecked the National pension schme by Taxing it, The masses will throw Gord out at the first chance, because he played with peoples lives, and their retirement for that there is no excuse.
Twelve years as Chancellor, and now as Primeminister, why did he not act twelve years ago?
God only Knows, and so does Gord, One thing is certain the money men are not going to like this one little bit.
I think Gord should visit Israel.

I see the T^ory's are out in force on this blog.

One fact remains....................

IF Mr Cameron had a clue about anything, worthy of being prime minister, he has time to say it. HE could have told the government (and as it happens the world) what to do.


But no...he did a Bush and waited for Gordon to come up with a decent sound solution.

As for all you Torys, harping on about the last 11 years.....may i remind, that no Tory government since the war has ever managed more than a few years decent growth with out a bust. 10 years even with a bust at the end is why all you will hear from a Tory is resentment and jealousy.

p.s. in the last 11 years of high employment and growth, i do hope you all put a little a side, for bad times. What?, you mean you Torys are relying on the state in bad times?

tut tut.

USA now announce intrduction of the "Brown Plan" to the American Banking system.

Excellent

Never done this before bur feel credit where due.

News.https://bbc.kongjiang.org/www.bbc.co.uk/blogs/nickrobinson/2008/10/banks_partnationalisation_good_or_bad.html

Today's newspapers are at last waking up to who caused the mess in the first place: fatcats, over-ambitious mortgages and the credit card bubble have been in the news for ten years. Add in the useless, Labour-created FSA, and the shine of GB's "mastery" is soon tarnished. But "don't blame me, guv".

64 PTTP

Must be much whailing and Gnashing of teeth in the PTTP household to see objective views such as Krugman's heaping praise on the "Brown Plan"

No don't tell me, its like the BBC all Labour spin and Bias?

Don't forget A is A.

Nick,

If my memory serves me correctly, Brown claimed that he had ended boom and bust. Was he lying or just delusional? If it was his judgement that was poor, then why do we feel the urge to accept what he says now?

He got himself tied up in the 10p tax rate issue. Hardly the sign of the great man that many now try to portray. He is implicated in the issue of the Ecclestone Affair. He is also the architect of the hugely complex tax regime that ties business in knots. Finally, he is the man who brought back Mandelson for the third time.

A man of great intellect? A man who sees the bigger picture?

I don't think so. I would be more likely to believe the guy with the Board on the street corner telling us the end is nigh.

All the best

"There are many lessons to be learned about what has happened over the last 10 years. There are many interrelated things that we have got to think about. I think at the macroeconomic level we probably allowed a boom to go on for too long, with too much rising house prices, rising share prices etcetera. There are issues that we need to think about about the whole macro-economy."

This is the opinion of Adair Turner, Chairman of the FSA. The very body charged by Brown to monitor bank lending, capitialisation and liquidity.

In terms of the Tories doing nothing or saying nothing. Cameron spoke on 28/03/08 on the issues of capital inadequacy and illiquidity AND international regulation. And quoted:

"In short, liquidity risk was all but ignored, credit risk was delegated, and market risk was backward looking. And we now know that not only did the regulators not know, but too often the banks themselves didn’t know, the full extent of the risks they were subjected to. But let me say again, any reforms at an international level will need care to ensure that in tackling the past problems they do not create the problems of the future. At the same time, we must all recognise that crises are inevitable, so a prudent Government, as we will be, that is committed to be, must improve our response to these crises when they appear."

George Osborne has been arguing for bank re-capitialisation since the NR debacle and in almost every single interview since then has spoken about capital adequacy and re-capitialisation as the remedy to these problems.

At no point have the Tories have argued for more regulation, just better regulation on a national and inter-national level.

The Tripartite arrangement simply does not work.

The BoE sets interest rates, incidentally on an inflation measure that Meryvn King has said is almost meaningless - CPI. King has argued that House Prices should have been included as with RPI. Brown changed the measure.

The FSA is supposed to monitor bank capitialisation and liquidity - which is has utterly failed to do. An arrangement set up by Brown as Chancellor.

The Government controls the money supply which has been ramped up to 10-15% year on year for the last 10 years - a massive inflation of the UK economy which has ramped up asset prices beyond any sense of their true value.

The Tories opposed this regulatory arrangement in 1997 and have argued ever since for better banking regulation. Peter Lilley in 1997 foresaw this very problem, a problem of Gordon Brown's own making.

Add to that a woeful sense of timing for selling Gold, PFI off-balance sheet (the very thing that got the banks got into trouble with derivatives) and spending every penny of tax revenue and borrowing up to it's eyeballs.

There's one nasty thing with credit - you have to pay it back. It won't be Brown that does that - it'll be someone else.

To quote an anonymous insider:

"Is this Brown's Falklands moment?"

"Yes, as Galtieri."

Quite.

Gordon Brown and Alistair Darling may well have expertly closed the stable door and bolted it securely. Unfortunately many of the horses could well still be inside suffering from a terminal illness. We won't know whether they have been successful at throwing our money at the problem until it feeds throught to the economy. Both are crowing 'Didn't we do well?' and basking in the glory of gushing praise. They conveniently forget that they were partly at least the architects of some of our current financial problems. To take a football analogy it's a bit like Rio Ferdinand scoring a spectacular own goal at Wembley and then weighing in with a fabulous equaliser in extra time. That leaves his reputation in status quo with those who support him strongly and those who oppose him vigorously holding similar views to what they had before.

70 'correctopinion', i think you will find that the Tory's along with Lib Dems and a lot of other experts professional or otherwise have been saying for along time that the financial sector was in dire trouble, and all of the proponents in this plan 'HAVE' been said before, but protection of the 'master' (brown) by media and labour itself, will 'NOT' recognise any one else, like i said before, brown as PM is the only one that 'CAN' put forward the plan and implement it, it does not mean that this plan will work i hope it does, but labour have a habit of taking a good idea, heralding it as it's own and then completely mismanage it.

#77

"I think that you will find that the Tory's (sic) along with Lib Dems and a lot of other experts professional or otherwise have been saying for along time that the financial sector was in dire trouble"

Well, ever since August 2007 and the beginnings of the credit crunch. Easy to predict something once its happened isn't it?

Cameron would have far more credibility if, before the current crisis he:

* Criticised the City for creating complicated financial instruments that hid risk in ways they did not understand

* Criticised massive City bonus payments and the incentives to short-run risk-taking that is at the root of these problems

* Noted that housing was over-valued and that this was at the root of affordability problems of first-time buyers

* Said that there needed to be massive re-regulation of the City and state intervention as the free-market didn't work

* etc

Unfortunately he said the opposite. Now he watches what Brown says, and repeats it parrot-like, or uses what he learns under Privy Council rules to claim Labour's economic ideas as his own.

All the hot air about 'dithering' shows his inexperience. He would have rushed into a poor solution.

Instead, by 'dithering', we have a well thought out plan that is far more likely to provide taxpayer value (e.g. I was reading in the Metro this morning that if shares in the banks the Government purchased returned to the levels of last year, the Government would have a £230 billion windfall).

@77

Your missing the point.

Leading the world to solve a world problem.

Gordon is succeeding, where all those who you talk of failed.

being correct, is no good if no one is listening.

ARE YOU LISTENING?

Lets stop the hype and blow the smoke out of our eyes and reflect for a few moments on the events of this last year.

We, the poor benighted tax payers, now own 4 banks, two outright, and two where we are majority shareholders.

Our ownership has not been the result of a carefully thought out plan for growth and profit, it has been a panic driven measure of last resort, after all other efforts to resolve the problem have failed.

Northern Rock became a basket case and by the time of state ownership ha dbeen allowed to deteriorate to the point where this was the least worse option. Much has been made of the point recently that the bank has repaid half of the initial investment, as if that is a great achievement. To me it seems that they have quietly sold off some assets and repaid the cash. It also means they still have over 20 billion of public funding. It would be nice to know the value of any remaining assets that are securing that figure. That would be a more interesting headline.

Bradford and Bingley were well signposted as a problem post NR. We seem to have the worst of all possible worlds there. Good assets sold off, liabilities sold off to a Spanish bank along with guarantees from the british taxpayer, and the net loss satisfyingly sitting in the public purse.

Then we have RBOS and Lloyds, currently. We have provided guarantees for the deposits, we have agreed to accept undervalued assets as collateral, and we have thrown short term deposits at them. Now we have a 60 percent stake in one and a 40 percent stake in the other. As ordinary shareholders the amount of money invested is completely at risk, and for what purpose?

All banks all over the world have been playing financial pass the parcel for some years now. There are bundles of assets tied up with various financial engineering tools (interest rate swaps, caps, credit default swaps) which are being handed from bank to bank. the more tools that are used, the greater the degree of obfuscation about what the risk is and where it lies, and I wouldn't rely on any fool of a politician to work out a valid answer.

However, we are now big players in this. Having taken the stakes on with a lot of politcal bruhaha, we now need to know what the strategy is.

Do we expect government institutions to behave as commercial banks have been doing for their entire history?

If not, what do we expect from them? An orderly disengagement from these activities? Will this put them at a disadvantage to other banks that are not state owned/supported?

If it does, and the state-owned banks lose market share and value, and become uncompetitive and loss making, how much do we have to lose before closing them down completely?

Since the global financial system itself is struggling, the likelihood of finding an eventual buyer of the state banks is getting smaller every day. And it doesn't just apply to UK banks, it applies to banks all over the world.

We've had the panic, we've had the initially ineffectual response, and now we've had the big hits. Some respite seems to be the order of the day now, but now we need to know what the big plan is.

UK government borrowing as a consequence of the latest actions is way over the guidelines, but the government will escape censorship because everybody else is in the same position. But it will take decades to sort this out. Don't lose sight of the fact that it is banks, international and in all their guises, who buy state debt and make a profit out of it. Will UK banks be able to find the money to buy UK government debt? Will French, German, Chinese and US banks be in a position to buy it? And whose going to buy those government's debts.

Don't praise Brown too highly yet, he's only raised the ante. He hasn't gone all in yet. Or has he?

Has it escaped your attention, Nick, that the founders of LTCM - the hedge fund that brought the world financial system to its knees ten years ago in 1998 were all Nobel prize winners too?

Doesn't mean anything except they got a Noble prize in economics.

Doesn't mean they now how to manage their way out of a paper bag.

So just to clarify.

Brown has been announcing massively rising tractor production stats every quarter for the past decade.

Despiste this, the country suddenly notices that there is a massive tractor shortage (none to be found) and noone can go about their business.

Brown, spends a massive amount of our money on an emergeny tractor production plant - with a promise that tractor production will continue on its upwards curve.

And, for this, he is hailed as a genius?

If we had the tractors that he claimed over the past decade then there would be no emergency, and no need for the emergency expense.

If however we have not had the tractors that he claimed then he is mearly *claiming* to have solved a problem that was entirely of his own creation - still at massive expense to us. And will his new claim be any more reliable that those of the past decade...

Like taking off a pair of ill fitting shoes at the end of a long walk -- don't mistake relief for pleasure -- you still have the wounds to dress.

#81

Ok, I admit it.

Robin - you are a better economist than Paul Krugman. Nobel, Shnobel.

I await your remedy to the current economic problems...

re: 73, Eatonrifle

A certainly is A, even when Labour try to alter the past.

68 Palacedim


Yeah the 'Falklands Moment' line that has been fed to the BBC reporters to regurgitate by the spin doctors is laughable isn't it?!


If there truly were a parallel to the Falklands, then Margaret Thatcher would have needed to have been governer of the Falklands for the 10 years prior to becoming PM. During this time she would have needed a 'light touch' approach to Argentina where she wiggled her bum and tried to attract them over, whilst ignoring any signs that things had got out of hand.

During this time she should have also lobbied to ensure that the armed forces were over stretched and under funded and also that there was not enough cash in the coffers to do anything other than hike taxes to an even more unacceptable limit to pay to defend the islands.

When the Argentinians invaded, she should also not have acted decisively and sent a task force almost immediately. Instead she should have dithered, Northern Rock style, until the US led the way and showed that it was OK for governments to try and intervene in some way.

Banks exist to make money out of money. That's all they do, and its what they've always done. Banking is, after all, the second oldest profession.

They use their own capital, and funds deposited with them, to leverage their capital and lend multiple amounts to various borrowers.

The trick is to lend to people who can repay, thus ensuring the quality of the assets, and to charge more in interest on loans than you're paying for deposits.

That marks a successful bank, who can make a profit and repay the shareholders. Periodically mistakes are made, and some assets don't get repaid. This makes a loss for the bank, who take the money out of the shareholders account.

Assuming the shareholders account (capital and reserves) contains more than the loss the bank can continue in business. However, since its capital has been eroded it needs to either sell off assets and repay depositors until it reaches a size that is sustainable for its reduced capital, or it has to raise new capital.

This is where the rules have been changed, and where we come in.

Since we, the public, have become equity shareholders in these banks, the acid test of liquidity will become diluted. If the value of assets continues to deteriorate (by being restated following the new market realsim about banking assets), then the capital will be depleted. Bank liabilities will still need to be repaid, particularly those that benefit from the state guarantee. If deposits are not repaid, then the market won't lend any money to a defaulting institution, so it will be forced into liquidation.

In order to plug the gap, more money will be required from the equity investors. Are we, in the shape of the government, going to be in any shape to say no?

Banking is a risky business. Always has been, and always will be. Taking risks is the only possible way to make money. Not all risk taking is successful, but then that's what makes it so attractive, isn't it?

How much of your future income, the value of your home, your personal savings and pension, do you personally want to risk on running a bank?

How many banks do you actually need?

Our new state banks do of course have operations in other countries, in the form of branches and subsidiaries. We now own stakes in them. Has anybody worked out the value of any cross guarantees with other lucky owners of banks in other states?

This will run and run.

83 Balhamu

I just had a look at Krugman - I liked this line - apparently Brown and Darling

"went straight to the heart of the problem ... with stunning speed."

I assume he knows nothing about Northern Rock which dripped on and on and on and on for months.

Brown and Darling only came up with a plan, after the US led the way and showed it was 'OK for governments to intervene'.

I suspect also - that Krugman is politically biased (against Bush) and will use any weapon to whack Bush over the head - at the moment that happens to be Gordon Brown.

So Gordon can now bask in a tiny bit of glory for a wee while. Wow!


Bush out. Brown out. Lets get some decent leaders over here and in the US.

I see that inflation is now 5.2% officially on the Governments preferred measuing tool.

How long before trhe next public letter of apology from the Governor of the BofE to Darling?

How long before this measuring tool gets discrdeited and replaced with something more in line with the governments fictional desire for 2 percent?

How long before the public service unions come looking for pay rise more in keeping with the real rise in their cost of living?

When they do, what reasonable excuse will the government give for not acceding to their reasonable requests?

Anybody want to buy some candles?

#85

Not wanting to keep the topic on the Falklands

BUT

Didn't Thatcher withdraw a lot of troops from the Falklands in the couple of years preceding the Argentinian invasion to 'save money'? Despite the political situation in Argentina, and the firm belief in many Argentinian's minds that 'Las Malvinas' belonged to them.

And isn't the reason Argentina saw an opportunity to invade because we withdrew said troops?

If we didn't withdraw troops, the opportunity to invade would never have been there. It was predictable that Argentina would be tempted - a populist move for a dictator to take and try and become a hero and the man who gave the islands back to their 'rightful owners'.

£37bn of our money to solve a problem he helped to create.

More disaster than master.

This comment was removed because the moderators found it broke the house rules. Explain.

A word of caution from the London School of Economics Professor. Brown and Darling may well in the long run have secured a good deal for the taxpayer but at the expense of The City. Because of overly severe new knee jerk regulations money will flow out of London to financial Institutions abroad and that in the long run will impact adversely on our whole economy. Interesting stuff!

So the all conquering Great Leader has saved the world from financial meltdown.

Can he now turn to alchemy to re-make our gold reserves that he gave away?

#83

I'm not better than anyone. But I am saying Nobel prize winners got us into an enormous financial mess before by buying Russian debt in 1998. Every single partner at LTCM was a Nobel prize winner so it makes no sense to argue that these people should either be followed slavishly or not questioned about their opinions.

They are mortal after all.

This solution, which mimics but does not replicate the Swedish solution of 92, has its dangers. These dangers have not been pointed out by the Nobel economists; they are that Sweden entered into a long and deep recession. 5. percent real contraction in GDP which lasted for three years.

This is what we could be looking at after the Gordon Brown grandstanding moment. What do you do for a follow up after spending 500 billion on a bail out? There is nothing left and that money has to come out of the economy; hence the likely sharp contraction in GDP.

We may have been saved in the short term but nobody will have any more money in their pocket as a result of this intervention. The leverage still has to be reduced in the banks.

The real reason behind the scale of the rescue is newlabour wants to bail out the home owners who would be reposessed after the eleven years of excess leverage sanctioned by Gordon Brown's age of irresponsibility.

It's a national disgrace. He's using our money to take control of the banks so he can bail himself out of an election liabiltiy in eighteen months time.

#87

Yes, Krugman was wrong, Jonathan. I was mistaken.

I will only listen to our in-house expert RobinJD now. He is the king of all economists. The best.

That's why the rest of the world aren't following the UK's lead in the design of their responses to the current financial crisis. That's why Cameron is suggesting a different plan. That's why every economic expert is saying how poorly thought out and ineffectual Brown's plan will be. Because Brown's plan is a load of rubbish.

What's that?

#95

Glad you finally worked it out.

Shame it took you so long.

#94

But what did the LTCM partners get their Nobel Prizes for?

Merton Scholes and Robert Merton (co-partners of LTCM) won their Nobel for a new model of pricing derivatives in financial markets.

Krugman won his Nobel for his insights into trade theory and globalisation. He, for example, predicted the problems that led to the 1997 Asian Crisis and also the problems that LTCM would run into.

A bit of a difference in their expertise maybe. Krugman won his for a broad approach to economic theory. Scholes/Merton for what was essentially a mathmatical model of narrow usage in the financial sector of the economy.

BTW You disagree with the rescue package that Brown (and the rest of the world economy) has launched? Just to check.
And if so, what's your answer? Let them go bust?

I know the cosy Westminster village and the NuLab client state would like things to go back to business as usual, but they can't - the tax'n'borrow'n'squander culture has lumbered the taxpayers (and the taxpayers' children) with high taxes for decades to come - AND WE ARE ANGRY ! Brown is the chief culprit, and will be swept away at the next election (roll on that blessed day!) - but the only solution to our systemic problem (of a population living beyond it means) is for root-and-branch reform (and shrinking) of the public sector.

89 Balhamu

I believe there were some cutbacks - but the UK forces were not so overstretched that they could not have responded.

Do you remember the news this summer. British warships have been patrolling without weapons loaded because of budget cuts. What?!

Given we are in two conflicts - Labour also showed appalling judgement by splitting the Defence Minister as a 'job share role' alongside responsibility for the Scottish office.

Defence does not seem to be a high priority for Labour, however, controlling the populace through use of ID Cards does seem of core interest to Labour.

Now here's a funny thing, with acknowledgements to Max Miller.

It seems, according to Peston, the man who knows, that RBS might escape full nationalisation, because its share price is above the governments offer price.

Market forces are in control, and share are trading outside the governments range, which begs the next question. That being so, how long is the government's offer to buy going to be on the table?

If the price continues to go up for, oh I don't know, but the next two weeks seems reasonable in this quick changing economic climate, a while then comes down again, will the government still be there?

I do think we need to know, and a detailed explanation needs to be given, at least to parliament. After all, it's OUR money that is being wagered here.

Seemingly HBOS, involving Halfax's mortgage book, isn't so popular, given that the UK housing market (and the Spanish market, to name but one) is in decline, with the possibility that asset values are actually below the total liabilities, isn't so popular in the market. We'll get this one, no problem.