Is the recession really Brown's fault?

Wookster

Rochdale_Pioneers wrote: »

But what has the Tories complaint been about it? is it that its lax and a failure and allowed banks to grow catastrophically big? No, its that Brown "the great regulator" was imposing too MUCH regulation, not too little.

I think you are mistaking regulation and red tape. Doing business has got immesurably more complicated in the UK - we have adopted a much more rule based approach vs a broad brush 'reasonable' approach. One just has to look at the US to see the impact of rule based approaches i.e. expensive lawyers who spend their lives trying to circumnavigate the gaps between the rules.

JayScottGreenspan

Rochdale_Pioneers wrote: »

hang on, thats not ehat I am saying at all. If anything its "Labour Bad, Tories Bad. Be clear, I think Brown has screwed things up badly. We know that the regulatory system he introduced in 1997 has failed in a catastrophic way.

Must have been this bit that threw me:

Rochdale_Pioneers wrote: »

No of course its not Brown's fault.

I agree that the Tories are as useless as a c*ck-flavoured lollipop.

Sir_Humphrey

Generali wrote: »

So you use deficit spending to prop up demand and prepare for the future: using it on increased pay for Government employees and on employing smoking cessation counsellors doesn't really do that.

I can assure you that is not case here. I have had below inflation pay rises for the last two years.

Rochdale_Pioneers

JayScottGreenspan wrote: »

Must have been this bit that threw me:

Of course its not Brown's fault.

And its not. Brown screwed up but did not personally create the implosion of global banking. Had he not screwed up and somehow managed to properly regulate the city AND survive the 10 years of abuse the Tories would have hurled at him, then we'd still be in a recession unable to borrow cash from the banks because everyone else would also still be in it.

Brown has liability sure - as do all of us, as do the bankers, as do the investor sharks who got mega rich off the system, as do the developers who built so many buy-to-let city apartments. Doesn't make it uniquely his fault though.

Generali

Sir_Humphrey wrote: »

I can assure you that is not case here. I have had below inflation pay rises for the last two years.

Sorry to hear that.

I believe that pay for 'front line' employees such as doctors, nurses and teachers has increased quite quickly since 1997. I have no way of knowing if this is really the case but it has been reported quite widely.

JayScottGreenspan

Rochdale_Pioneers wrote: »

And its not. Brown screwed up but did not personally create the implosion of global banking. Had he not screwed up and somehow managed to properly regulate the city AND survive the 10 years of abuse the Tories would have hurled at him, then we'd still be in a recession unable to borrow cash from the banks because everyone else would also still be in it.

Brown has liability sure - as do all of us, as do the bankers, as do the investor sharks who got mega rich off the system, as do the developers who built so many buy-to-let city apartments. Doesn't make it uniquely his fault though.

Fair dinkum, there is a subtlety at work there. I'm prepared to concede that the recession wasn't Brown's fault.

The subtlety is that it is the severity of the recession that is Brown's fault.

StevieJ

setmefree2 wrote: »

I'm not sure all the problems with pensions can be laid at the feet of GB. There are a number of analysts who are now questioning whether investing in equities can ever provide a good income in old age - even if you contribute for 30 years.

A huge research project carried out by the London Business School found that since 1900 that the stockmarket would only have averaged a return of 6% (US) 5% (UK) ONLY if all dividends were reinvested. Measured just by gains in their prices equities averaged only 1.7% per year. - on this basis they would have been beaten by bonds.

I'm no expert in this field but I have a feeling this could be the next endowment fiasco. I think the general public sense that something does not add up with pensions and they are being sold a B*m steer.

You forget the tax breaks, especially for higher earners, if it is only 6% it becomes nearer 10% return after tax relief :T

StevieJ

Rochdale_Pioneers wrote: »

And its not. Brown screwed up but did not personally create the implosion of global banking. Had he not screwed up and somehow managed to properly regulate the city AND survive the 10 years of abuse the Tories would have hurled at him, then we'd still be in a recession unable to borrow cash from the banks because everyone else would also still be in it.

Brown has liability sure - as do all of us, as do the bankers, as do the investor sharks who got mega rich off the system, as do the developers who built so many buy-to-let city apartments. Doesn't make it uniquely his fault though.

He would have had to instruct the banks not to buy any of those nasty CDO's when even the banks didn't know that they had any (nasty that is) :rotfl:

Generali

StevieJ wrote: »

He would have had to instruct the banks not to buy any of those nasty CDO's when even the banks didn't know that they had any (nasty that is) :rotfl:

But to do that you'd have to have regulators and politicians understanding what they regulate.

I believe that the FSA's policy was that staff could trade CFDs* but not shares without permission at one point.

They didn't understand a lot of what they were doing IMO.

*A CFD (Contract For Difference) is a derivative that means you can profit from the change in price of a share without holding the underlying stock. It is virtually exactly the same as owning the stock except it's easier to use leverage.

Rochdale_Pioneers

StevieJ wrote: »

He would have had to instruct the banks not to buy any of those nasty CDO's when even the banks didn't know that they had any (nasty that is) :rotfl:

And that raises a question - how do you regulate an industry which you don't understand? I listened to Fred the Shred and the other bankers on Tuesday telling us that they didn't understand what assets they were buying - they knew they were AAA rated and what a surprise it was when they turned out to be rubbish.

If the bankers don't understand it then how are politicians and regulators supposed to understand it? Its become clear that global regulation failed - is it any wonder why?

So how do we set up the new regulation system in the new world? Do we just ban such creations, and how do we stop clever/greedy bankers getting round the regulations to screw over the competition again?