Is the recession really Brown's fault?

bo_drinker

I don't think you can blame one person ? party. It is a global thing that is going on, as somone else said the Tories would not have handled it any better. They do seem clueless and when someone slips up they are in there to ridicule, nothing else of any strength to say yet. I think Cameron will go the same way as Hague and I D S. Brown has made some mistakes, no denying it and Blair got out just in time it seems but he is the person who is trying to sort it and as we know if he was to sort it tomorrow he would be a hero, if not he is a villain. Simple as....

Generali

Rochdale_Pioneers wrote: »

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?

My belief is that you have a retail banking system where the companies can offer a restricted number of pre-approved products with a very limited safety net.

You make it very clear that savers won't be bailed out over a few thousand quid and you limit severely restrict the size of banks - maximum asset value of GBP 5,000,000,000 or 10,000,000,000 so there can't be systemic risk really. Banks would go bust now and again and people would lose money. That's good as it reminds everyone there is risk in banking. Reserves to be held in cash or Gilts held at the Bank of England. Possibly only allow mutual ownership? Not sure if that's important or not, I suspect not.

Separately you have an investment banking system. Very lightly regulated. Only larger companies and the rich can use the system and it's caveat emptor. Retail banks couldn't invest in investment banks and investment banks wouldn't be allowed to own more than a few % of a retail bank.

reiselaender

Wookster wrote: »

Who's to blame... the question to vex us.

I lay blame at the door of

1. Bankers who lent too much
2. Individuals who borrowed to much
3. Estate agents who encouraged people to borrow too much and used sharp practise to squeeze people.
4. Credit rating agents for giving packages of MBS AAA+ ratings when they were more like BB-
5. Auditors for not reporting on banks over reliance on wholesale financial markets or the vulenrability of banking assets to a downturn.
6. Central bankers for not raising rates WHEN THEY KNEW THAT CRAZY RISKS WERE BEING TAKEN and that asset price bubbles were being formed.
7. World president's & Chancellor's (Crash included) for presiding over this lax regulatory framework
8. Crash for increasing the government deficit when it should have been maintained or reduced - had he done so he'd have more dry powder for this dark time.

I totally agree. Hope we all learned our lessons. Borrowing money which involves a big interest rate can be very bad not only to an individual, but as time goes by, even to a whole nation. This is also the reason why there is recession in other parts of the globe. It would be better if we just save up and refrain from borrowing, as much as we can help it.

StevieJ

I blame those guys who handed out the AAA's, have they been halled in to explain yet.

Generali

StevieJ wrote: »

I blame those guys who handed out the AAA's, have they been halled in to explain yet.

I don't know how they got away with the whole dot com thing.

S&P/Moodys should be disbanded. No credit rating agencies would be better than the current system.

JayScottGreenspan

bo_drinker wrote: »

I don't think you can blame one person ? party. It is a global thing that is going on, as somone else said the Tories would not have handled it any better. They do seem clueless and when someone slips up they are in there to ridicule, nothing else of any strength to say yet. I think Cameron will go the same way as Hague and I D S. Brown has made some mistakes, no denying it and Blair got out just in time it seems but he is the person who is trying to sort it and as we know if he was to sort it tomorrow he would be a hero, if not he is a villain. Simple as....

The recession was triggered by global events, but it is domestic mistakes that mean it will be particularly unpleasant in the UK. Do you not think the Chancellor and PM are responsible for this? Do you think Gordon Brown was correct to abandon the following two principles?

Gordon Brown, 1997 Budget speech:
“I will not allow house prices to get out of control and put at risk the sustainability of the recovery”.

Gordon Brown, 1998 Budget speech:
“Booms channel too many resources into speculative activities and not enough into others, hampering economic progress. The fleeting gains that such episodes bring are invariably far outweighed by the pain of the downturn that must follow.”

Snooze

:rolleyes:

4_pages-worth_of wrote:

"It's not Brown's fault"

So you'll all be voting Labour in the upcoming election then, seeing as Brown is so innocent in all this according to you?

Rob :rolleyes:

matthewcb

I'm no economist, but it seems to me boom and bust is the natural cycle of things. Greed overtakes fear, followed by the reversal of this in due course.
It's therefore incredibly arrogant surely to assume you've single handedly abolished this phenomenon surely?
Brown must certainly shoulder a large part of the responsibility then. Of course, he'll go to his grave denying it...

Rochdale_Pioneers

Snooze wrote: »

:rolleyes:



So you'll all be voting Labour in the upcoming election then, seeing as Brown is so innocent in all this according to you?

Rob :rolleyes:

I will be voting Labour, yes.

Snooze

Rochdale_Pioneers wrote: »

I will be voting Labour, yes.

Can I ask why? And please don't say 'because Conservative will be worse' as there are other parties to choose from.

Rob