Was Gordon Brown right?

[Guest Numero Veinticinco]

we'd be better off not having had to buy the banks in the first place, placing the country in massive debt, rather than being in line for a speculative profit somewhere down the line.

 

Aye, but back in the real world where we did have a global crisis...

[richard1982]

my point was that it shouldn't be held up as a good idea that gordon brown should be given credit for. it was a nessessary evil that may turn out to benefit the country in the long run.

[Guest Numero Veinticinco]

my point was that it shouldn't be held up as a good idea that gordon brown should be given credit for.

 

I certainly think it should stem the tide of criticism of those actions, don't you?

[lifetime fan]

Probably by pointing out that had they been in charge, there wouldn't have been a crisis to bail out in the first place!

 

Brown's lack of charisma didn't bother me as much as his horribly authoritarian style of leadership. The stubbornness, the refusal to listen to reason, the regular reduction of junior staff members to tears - none of these things are remotely desirable in a Prime Minister.

 

Because the nasty left believe in less regulation of the banks than the good tories?

 

Give over.

[Strontium]

Aye, but back in the real world where we did have a global crisis...

 

 

Stop calling it a "global crisis", it was nothing of the sort. Australia, Japan, India, China, Russia, Latin America, the Middle East, the oil producers of Central Asia... none of these places went into recession.

 

Stop buying into this myth perpetuated by Labour that there was no way of avoiding the financial crisis, because many, many nations with better managed economies than ours did escape the effects.

 

Because the nasty left believe in less regulation of the banks than the good tories?

 

Give over.

 

 

Well, arguably not, but one suspects that they wouldn't have had the country balls deep into debt.

[lifetime fan]

Well, arguably not, but one suspects that they wouldn't have had the country balls deep into debt.

 

I agree the debt wouldn't have been as big. What would you have got though? A few more tax cuts for the most wealthy and we would still have a third world health system and children in schools riddled with asbestos.

[dennis tooth]

European crisis? Banking crisis?

 

What words would SD use to describe? Who cares?

[Guest Numero Veinticinco]

Stop calling it a "global crisis"

 

No, Stronts, I won't. I'll continue to call it what I believe does the situation justice. I use these terms because I believe they are accurate, and I'm more than willing to explain why. A request for an explanation is normally received better than an order to stop saying something - which you've demanded of me

 

it was nothing of the sort.

 

Right, let's put this one to bed. I'll detail why I call it a global crisis. If, after reviewing what I've got to say, you decide to refute it still, feel free to reply. If you don't reply, I'll assume that you no longer disagree with it.

 

I'll format it, if you'll permit me, in order to address the 'global' part of the statement; I assume you don't have a problem with the 'crisis' part, considering you used that term yourself? I'll do it by looking over each of the six continents that make up the land part of the 'globe'. Seem fair?

 

Australasia:

 

Australia:

The problem with naming Australia, at least in the way you chose to, is that you've glossed over many important problems they suffered as as an effect of the global crisis. Narrowly, and unexpectedly, they managed to miss out on recession (technically, as they only had one period of negative growth, rather than two concurrent periods) and that was due to their resource/mining sector which, thanks to India and China's demand for raw materials, managed to pick itself up with almost no financial input from Australian taxpayers.

 

They did, however, suffer badly in credit/banking, business, retail, imports, and unemployment. In fact, they were so close to recessions that the Reserve Bank Governor, Glenn Stevens, stated that ''Australia is in recession''. The government had to step in, rightly in my view, in order to stop mass job losses and, had it not been for their raw materials, they would have been firmly in recession. Australia needed massive financial stimulus (the third largest stimulus spending per capita, after the United States and South Korea) from the taxpayer. Kevin Rudd said that the stimulus was to guard the economy from the global economic slowdown.

 

If the argument was that Australia have managed to weather the storm of the global financial crisis better than other countries, then I wouldn't disagree too strongly, although there are reasons for it. If, as you seemed to do, you argue that it wasn't a global crisis and try to use Australia as a basis for that, then you have a much weaker argument in my view.

 

New Zealand:

Just like Australia, they couldn't escape the effects of the global crisis. Unfortunately New Zealand were less lucky than their Neighbours and slipped into recession. As you can see, this continent saw bad problems arising from the global crisis.

 

Overall - Either in recession or a ballbag away from it. Both had major problems and Australia needed big stimulus.

 

 

Asia:

 

Japan:

For some reason, you list this as a country that escaped recession. It didn't. However, even if it did, the effects stemming from the global problems were clear to see. Their exports dropped dramatically, to the point of the lowest drop ever recorded. Considering that's such a large part of their economy, it's hardly a shock that the world's second largest economy went into recession.

 

China:

Even they, with their incredible export numbers, needed a massive stimulus (half a trillion), in order to keep the effects of this gobalised problem from doing major damage. Their exports alone, which make up almost half of their GDP, shrank by over 25%. well over half a million small and medium business couldn't make it. Also suffered bad unemployment problems. So, no recession but a certainly slowdowns and problems elsewhere.

 

Hong Kong:

Entered recession in 2008. Property market crashed. Unemployment at record levels. Hang Seng down 50%+.

 

South Korea:

Just managed - with 0.1% growth - to avoid a technical recession. Massive, massive stimulus package managing to keep them out of it. 200k new jobs created to stem the riding unemployment. Again, like other countries, it just managed to stave off recession but did feel the effects.

 

India:

Did really well. I mean, not a country we need to aspire to be like, but due to export being a comparatively small part of their economy, they managed to do well in the midsts of the rest of the world and region having problems.

 

Overall - Either in recession or effected. Some escaped, but problems right over the continent.

 

 

Africa:

 

South Africa:

Hit by recession. A growth rate of -6% quarter-on-quarter. Inflation problems, business, housing, interest rates, unemployment... you name it.

 

Northern African Resort Countries:

Egypt, Morocco, and the sort, had few problems and that region probably faired better than most other regions of the globe.

 

Other Areas

I'm not an expert on smaller economies in Africa, but I do recall a good actionaid report about the effect developing countries. You can read it here. This is also very interesting listen about how bad the global crisis is effecting these countries.

 

Overall - The tourist rich countries have managed to make it through, but the rest has felt the force of both recession and the finance crisis.

 

 

Europe:

 

Do I really need to do this part? I think one or two countries in Europe might have narrowly managed to escape recession. I do want to pick you up on Russia, though. Like Japan, you said it didn't go into recession. This is wrong. Actually, it's not just wrong, it's fairly ludicrous. Suggesting Japan didn't go into recession is one thing, but to suggest Russia didn't go into recession when it was one of the hardest hit is really something else.

 

Overall: recession like a bitch.

 

N. America

 

Canada:

Those plucky buggers held out as long as they could, but even they couldn't hold out. Still, it was inevitable that the world's largest economy next door would have an effect. The point of my mentioning it as global crisis is to show that you don't need to be a contiguous state to suffer - or prosper - from the interconnectedness. Anyway, they couldn't avoid it and were hit by recession.

 

USA:

Fink day had trubble.

 

Mexico:

Was never going to escape. Massive unemployment and recession.

 

Overall: Ski-Bi dibby dib yo da dub dub, Yo dab dub dub, Ski-Bi dibby dib yo da dub dub, Yo dab dub dub. I'm the Scatman. Also... recession like a bitch.

 

S. America

 

Brazil

Last time I looked, this is a Latin country. So we can add this to the list containing Japan and Russia. It went into recession.

 

Chile

Last time I looked, etc, etc... getting bored of this, to be honest. So I'll keep it short; another one in recession

 

Colombia:

Nobody is actually reading this, are they. I could link to a load of porn and no fucker would notice. Anyway, more recession in yet another latin country.

 

Overall

As the map below shows, it's pretty clear that nearly all of Latin America was either in recession or at risk from it. That includes Argentina.

 

 

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

 

So, that's every continent on the globe effected by this - nothing of the sort - global crisis. Many, many in recession and much of the others either narrowly missing out by only having one quarter of negative growth, or at risk. From top to bottom and left to right on the globe, you can see that it's a global crisis. Here's a nice image to help anybody still in doubt; red for recession, orange for at risk (some, like Ukraine, that were orange, did actually suffer recession afterwards) and green for expanding.

 

 

 

Also, if you're still adamant that global crisis is the wrong term as it was 'nothing of the sort', here are some other people you might want to contact in order to request that they stop using that particular phrase:

 

The International Monetary Fund:

Advice, Money Help Combat Global Crisis The IMF is working on several fronts to help its members combat the worldwide economic and financial crisis.

That's just the first instance, but there are many others on their site.

 

Joseph Stiglitz:

“while this is a global crisis, it has a made in USA label on it.”

 

Vince Cable:

The trigger for the current global financial crisis was the US mortgage market

 

Nouriel Roubini:

This… is going to be the next issue in the global financial crisis

 

Nick Clegg:

It would be wrong to pretend that Britain is not suffering, in part, as a consequence of this global

recession.

 

 

Stop buying into this myth perpetuated by Labour that there was no way of avoiding the financial crisis, because many, many nations with better managed economies than ours did escape the effects.

 

I've never suggested or implied that there wasn't a way to avoid the financial crisis, much less bought into any myth. However, there were very few countries, if any, that did escape the effects. Naming a few countries (incorrectly in some cases) that didn't go into recession doesn't mean that it's not a global crisis.

 

Also, considering it's almost 1am, I hope you'll forgive me for not reading back through that for any typos or broken links.

[Carvalho Diablo]

 

Waiting for the William Hague money shot...

[Guest Numero Veinticinco]

Waiting for the William Hague money shot...

 

One invisible cock:

 

 

Some invisiballs:

 

 

Invisible tits:

 

 

Invisible Bird:

 

[Stu Monty]

NN doing his Enola Gay impression there.

 

Status report on NagaStronty: "Messy".

[Strontium]

Oh, I don't know, some huge swathes of green and orange there - the green, of course, including the two most populous countries on the planet, accounting for around 40% of the world's population alone.

[Red Phoenix]

It makes me cringe how anyone can stick up for cunts that are so obsessed with backhanders from 'defence' companies. You wanna bomb some countries? How much are you willing to pay? Fuck the lot of them. Will be interesting if the middle-east peace process is anything more than a sham. (and yes I'm looking at you, Obama.)

 

Do the banks make a lot of money from the people funding war, or not?

 

Fucking lol. If only Hunter S was still alive. (and I miss that man so much.)

 

Who runs the banks? If only we knew. Our problems go back to a very small group of utter twats. Twats with a ridiculous amount of power. Only a huge, huge army of pissed off people will ever stop them. In the future we need a lot of people with courage.

 

(and the way I see it? This shit will happen soon.)

Edited September 4, 2010 by Red Phoenix

[Red Phoenix]

These people have gone too far. And yeah, 'we' are famous for not giving a fuck and letting the world pass us by, etc, but am sure things will change over the next few years, for various reasons. (nothing mystical in those 'reasons' at all either, just look around you.)

[Red Phoenix]

Sorry : after checking my posts, can't put all this onto Obama. It's not all his fault.

[bigbak]

You need to offset this with the number of businesses that have gone to the wall because banks just aren't lending.

 

I think he left it too late and the criteria wasn't strict enough.

[Guest Numero Veinticinco]

Oh, I don't know, some huge swathes of green and orange there - the green, of course, including the two most populous countries on the planet, accounting for around 40% of the world's population alone.

 

The orange is a bad thing, SD. They clearly show the global effects. Whether they escaped technical recession or not, and only had to spend tens of billion to narrowly avoid it, isn't really the point. It's global because they've been effected. Even China was effected and had to put in 500b into the economy.

 

NN doing his Enola Gay impression there.

 

Status report on NagaStronty: "Messy".

 

They don't call me 'Numerosaki' for nothing. Okay, they don't call me Numerosaki at all. They call me Numero 'Little-Boy' Nueve. I can't get them to stop.

[Section_31]

Good post by NN there. It's also worth mentioning that the de-regulation of the city, and a general culture of 'market knows best' was unleashed under Thatcher's reign, Brown just perpetuated it. The Tories never raised any concerns about it while Labour were in power, and even now they embrace it - in all walks of life, from schools to entire swathes of state apparatus. The only person who did actually raise any fears about it was Vince Cable, hence his popularity. Unfortunately, he currently finds himself locked in a Condem broom cupboard.

[Stu Monty]

Oh, I don't know, some huge swathes of green and orange there - the green, of course, including the two most populous countries on the planet, accounting for around 40% of the world's population alone.

 

This is why taking you seriously is getting harder and harder.

[lifetime fan]

Good post by NN there. It's also worth mentioning that the de-regulation of the city, and a general culture of 'market knows best' was unleashed under Thatcher's reign, Brown just perpetuated it. The Tories never raised any concerns about it while Labour were in power, and even now they embrace it - in all walks of life, from schools to entire swathes of state apparatus. The only person who did actually raise any fears about it was Vince Cable, hence his popularity. Unfortunately, he currently finds himself locked in a Condem broom cupboard.

 

Excellent point.

[dennis tooth]

SD was always a comedy but the gloabl financial crisis messed up his economic values as he's always been a de regulator type and the secret Tory inside his has come to the fore with the coalition, he hasn't really changed spots but we spotted now what is a wolf that has taken off his sheepskins and gone 'au naturalle'.

[Ponz]

The fact that the government may make a "profit" on its equity investments is of little relevance to whether the bailout was justified. The purpose of saving the banks was to preserve their role as financial intermediaries in the economy(i.e. channelling its savings into investment). As indicated by the still anemic rates of money supply and credit growth, the interventions have not been successful on this objective. The rescued banks have either been hoarding cash to prepare for future write downs or making a risk-free profit financing the deficit (borrowing from the BOE at 0%, lending to the government at 3%)

 

Allowing zombie banks to limp their way back to solvency over a 5-10 year period is nice for shareholders but the broader economy would have been better served by administration/receivership. A simple debt for equity swap, for example, would have replaced the insolvent institution with a well capitalised bank better placed to lend to businesses and consumers.

 

One should also note that the current "profits" of Lloyds, RBS etc. depend significantly on the maintenance of ultra-low interest rates and the BOE's Special Liquidity Scheme (allowing banks to temporarily swap toxic mortgage assets for gilts). These policies impose their own costs on the tax payer in the form of future inflation risk and negligible return for savers.

 

As for the stimulus, the other three articles offer pretty flimsy justification. One cannot simultaneously credit Brown for a potential economic revival (article 1) while blaming Cameron if it doesn't happen (article 3). That's a classic non-falsifiable argument. And the sudden rise in consumer confidence (article 2) is more easily attributable to the announcement of a credible deficit reduction plan than any lingering effects of the stimulus.

 

And this "brilliant economist" left us the worst placed of any major developed country to combat the recession. Countercyclical fiscal policy doesn't mean racking up enormous deficits in the boom years.

Edited September 4, 2010 by Ponz

[dennis tooth]

And it goes like this do not make them fool you babylon come rule you, the biggest bandulu

[Jose Jones]

Good post by NN there. It's also worth mentioning that the de-regulation of the city, and a general culture of 'market knows best' was unleashed under Thatcher's reign, Brown just perpetuated it. The Tories never raised any concerns about it while Labour were in power, and even now they embrace it - in all walks of life, from schools to entire swathes of state apparatus. The only person who did actually raise any fears about it was Vince Cable, hence his popularity. Unfortunately, he currently finds himself locked in a Condem broom cupboard.

 

It's been a brilliant piece of PR by the financial sector that so many politicians of all walks have been scared off making the regulatory changes needed, despite the worst financial crisis the world has seen in 60 plus years.

 

One of the things Numero missed out in his rather excellent summary above, whilst correct in everything else about Australia, is that the country also has stricter banking regulation (brought in by Paul Keating in 1990) in which the 4 main banks are generally blocked from doing anything too stupid.

 

This is generally, and rather ironically, glossed over by those free market propandistas who try to use Australia as an example of how it was all governments fault.

Certainly government was complicit in the GFC, but mainly by the allowing the de-regulation and embracing the unfettered risk taking of the financial industry.

[Section_31]

The economy grew at its fastest rate in the last six months than at any time during the last 10 years, driven by building projects paid for by the public purse. This is obviously all now going to go to shit.

 

Economic growth built on construction lacks solid foundations | Business | The Guardian