Is the recession Gordon Brown's fault?

  HighTower 18:57 24 Jan 2009

I am neither Labour nor Tory, and generally have little interest in politics. Perhaps I should but I'm afraid I don't.

I heard David Cameron saying in an interview that the recession was Gordon Brown's fault, but surely the recession in Germany, Italy, Spain, Denmark, India and China can't be his fault.

It seems to me that it's a lack of the availability of credit that's caused this rather than a government policy, and blaming an individual for a worldwide economic downturn just seems odd! Would it have all been avoidable had the economy been run differently?

Can anyone who knows a bit about this sort of thing comment?

  Forum Editor 19:04 24 Jan 2009

would have happened whichever political party was in power, no matter who was Prime Minister.

The reaction to it may have been different, but that's something that can't possibly be tested. David Cameron will obviously blame the current problems on Gordon Brown - it's his job to do so.

Would the recession have been avoidable? I doubt it - there was a dynamic at work which originated beyond our shores, and although it might be argued that we should have seen the warning signs far sooner, that is also something that sounds good with the benefit of hindsight. The truth is, some people did foresee trouble, but they were largely ignored - everyone was far too busy lending and borrowing.

All that is largely meaningless now. What we must concentrate on is not what got us into this situation, but what we must do to get out of it.

  HighTower 19:21 24 Jan 2009

Personally I find the amount of schoolboy bickering between politicians on both sides quite nauseating, on many issues, not just the economy.

I do believe that important issues should be fiercely debated with passion, but I find it hard to take politicians seriously who take the opposite view not for the benefit of the country or for debate, but just for the sake of an argument and an attempt to continuously put the other side down.

I think that surely voters must see through this?

  rowdy 19:24 24 Jan 2009

it must also be said that Gordon Brown bears a great deal of responsibility for the severity of the impact on this country.

He was so busy boasting about abolishing Boom and Bust he failed to see that his ' ten years of prosperity ' was built on excessive borrowing.

The regulatory systems he set up for the banking sector were woefully inadequate.

He was also guilty of excessive government spending, requiring borrowing, in those prosperous years.

Add to these the damage he did to this country's pension schemes, the basis of much of the country's wealth and savings.

Whilst he remains in denial of all these factors he is not the man to restore confidence in the measures taken to restore stability.


  Al94 19:26 24 Jan 2009

click here
first Government to fall.

  Fruit Bat /\0/\ 19:26 24 Jan 2009

GBs fault No

its down to greed.

On average, a recession every 10 - 15 years, how bad each one is for us commoners depends on whether you keep your job or not.

This one seems to be worse than the last two but perhaps thats just me as I worked in nationalised industries then but now am in the private sector.

  ulrich 19:37 24 Jan 2009

Didn't help and I don't believe Mr Darling can be blamed for the £12 billion VAT waste of money.
The biggest problem, who can sort it out.

  perpetual motion 20:03 24 Jan 2009

IM with FE here its the truth it was in the Happening..

The only thing i am VERY worried about it Whats GOING TO COME!!


  @[email protected]!c 20:15 24 Jan 2009

whats got this country into a recession is the media..i still have the same spending power i had last year and then year before that ..the only people theis so called resession affects is people who have lost there jobs..the company i have worked for has now been taken over but i still have a job and a what gives?..i reckon its the media scaremongering(if thats a word) and people are scared into spending and investment...and another thing why is it the banks can play with our money YES our money and loose it ..then the goverment bail them out but if i waste my money i will be in court...

  newman35 20:22 24 Jan 2009

I think we should have been privy to all your carefully crafted paragraphs, to see your reasoning.
I suppose Gordo could have been personally responsible for all the sub-prime loans in the US, and the fact that recessions happen to Governments all the world over, on a fairly regular cycle. If he was responsible then he has international super-power - and we should retain him at all cost, surely!!
Are we hearing other world leaders blaming him personally for all their woes?
Get real!

  VNAM75 20:40 24 Jan 2009

The subprime loans crisis in the US exposed the problem in the financial sector but it was not the only cause/factor. Another set of consumers/area of the economy would have done so if that hadn't. So banks found themselves sitting on a load of bad debts.

Now the banks are not lending to each other at the required levels and neither are consumers borrowing or able to accesss credit. Businesses therefore are finding it hard to get finance for investment and there is not enough economic activity to justify it.

The bank of England have cut rates drastically in an attempt to boost the economy. True, interests rates are lower which also makes the pound more competitive as its value goes down. But, lower BOE rates have little effect or influence on the amounts bank lend to each other, plus the banks have not been passing on the rate cuts in full to the consumer, probably to protect their fragile margins in the current climate. Consumer's disposable income has not increased by any significant level because their mortgage payments have not been reduced by the full amount of the rate cuts.

The second major point about the rate cuts is that the UK manufacturing is not big enough to take advantage of the lower value of the pound, and other countries are holding back on spending too. So as more people become umeployed as a result of the recession, the govt are spending more on unemployment benefit.

But with a lower tax take due to higher unemployment, the govt are forced to increase borrowing. But as the value of the pound goes down, the value of govt debt increases which will lead to increased taxes in the future to pay off.

This is not helped by the govt bail outs; throwing good money after bad to save inefficient/badly run or even fraudulent companies. The UK and US is particularly affected by the downturn because of its reliance on it's strong but equally complex (and prone to fraudulent abuse) financial sector.

It seems like we're in a vicous circle, catch 22 situation. The way forward would be to endure what will inevitably be a sustained period of economic downturn and let the economy reset, allowing poorly run companies to go bankrupt. It would also be important for the govt to put in place regulation to monitor and legislate the financial sector to prevent irresponsible lending and unsustainable borrowing. The outcome would be an economy without the excess and indulgent nature which caused the economic problems. Policies should also encourage the UK's manufacturing sector to expand.

The above is based on a range of comments and analysis in the news recently. It would be interesting what other people think.

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