How Do We Make Sure Brown Takes The Blame?

[Xil]

I'm getting increasingly concerned that Brown will attempt to blame America/Sub-Prime/Darling/China/Northern Rock/Al Qaeda* for the financial mess that is unfolding in the UK. (*Delete as appropriate)

It worried me hugely that he would call an election and get removed from office. So much so, that I was actually considering voting for him to make sure that he was around for a few years to receive the nation's anger.

When it all goes really wrong (and I genuinely sense a financial unwinding on the near horizon), how can we make sure that Brown gets due recognition for his 10 years of disasterous economic mis-management? The catastrophic ignorance that he has shown by smugly claiming success when all he done is allow people to "feel rich" as a result of selling houses to one another at inflating prices on the back of unrealistically cheap credit?

As others have already stated, falling house prices will be the least of our "worries". I see recession and economic stagnation that will blight the next generations for decades. Many who are currently waiting to buy a house, won't want to buy a house.

I want to see Brown accept that he has brought about the mess that we are about to endure.

Xil.

[stew]

I don't think he will get away with it - the more articulate press will be all over him like flies on sh1t. In the future he's Chancellorship will be a text book 'how not to run an economy'.

The red tops will follow, they love to build someone up and knock 'em down. I'm guessing it will be messy.

[Injin]

I don't think he will get away with it - the more articulate press will be all over him like flies on sh1t. In the future he's Chancellorship will be a text book 'how not to run an economy'.

The red tops will follow, they love to build someone up and knock 'em down. I'm guessing it will be messy.

Oh no!

Poor gordon might eventually lose his job after bankrupting the country!

Now that's what I call justice!

A big fat pension and the odd nasty remark in the newspapers, a huge amount of wedge for a biography. I can see why politican's are really careful with what they do with such terrible consequences for the massive misery they cause.

[laurejon]

I cannot see how he will get away with it, not in this day and age. The British Public are far too astute.

Its not like New Labour got away with lying about Iraq and causing the deaths of many many hard working Iraqi Women and Children is it ?

[talksalot81]

Is Gordon related to Nick Leeson at all?

[Guest DissipatedYouthIsValuable]

Assassination.

Comes with a secure long term free tenancy and meals laid on.

[Rain'ard]

Well he won't worry will he. He'll sell 50 million copies of his Student Handbook telling us bankruptees how to scam the system

[itsme]

http://uk.youtube.com/watch?v=P_pf1sACEkU

need I say more?...

[Wlad]

I'm getting increasingly concerned that Brown will attempt to blame America/Sub-Prime/Darling/China/Northern Rock/Al Qaeda* for the financial mess that is unfolding in the UK. (*Delete as appropriate)

Before blaming Brown it might be worth considering how much leeway he had and whether anyone else could have made things better.

Fed cuts rates to 1% - options:

* Cut IRs in the UK and inflate a housing bubble,

* keep IRs high, Sterling appreciates, exports (e.g. oil) fall in value, worsening balance of payments possibly more than the reduction in the cost of imports.

* Cut IRs but dampen down housing markets by massive hike in stamp duty, tax payer revolt, labour out of power, conservatives repeal tax, sudden HPI.

Or...

Fed doesn't cut rates:

* US economy tanks, world economy tanks with it.

Not a great choices, to be honest.

[detached]

I think the flaws in his personality will become increasingly clear in the next few weeks/months as the signs that the 'miracle' economy is running into trouble become apparent to everyone.

The man has had an incredibly lucky and easy time so far - a benign economic environment while he was chancellor combined with an increasingly unpopular and massively exposed Tony Blair taking all the flak.

However there simply are too many bad 'events' happening for him to keep his Houdini act going.

Personally, I think the inevitable unravelling the Northern Rock and the ensuing mass redundancies (they employ over 5,000 people !!), together with a fairly imminent big private equity corporate failure (my money is on Debenhams) will be major psycho-shocks.

The buck stops with him now and the strain is starting to show.

I thought he looked nervous being interviewed by Andrew Marr. Did you notice how he kept banging on about people wanting 'change'. FFS, where has been in the last 10 years?

I think he is desperately trying to re-invent himself, hardly mentioning his past 'achievements' as if he had just appeared on the political scene.

The man biggest flaw is his complete and utter inability to accept that he may be wrong. He will accept no criticism and take no blame.

His biographer, Tom Bower, ended up convinced that GB would never make to No.10 because of these flaws.

He got there because TB had become too unpopular to carry on.

Trust me, GB's reputation will soon lie in tatters, even though I'm sure he won't suffer financially himself.

[itsme]

Before blaming Brown it might be worth considering how much leeway he had and whether anyone else could have made things better.

Fed cuts rates to 1% - options:

* Cut IRs in the UK and inflate a housing bubble,

* keep IRs high, Sterling appreciates, exports (e.g. oil) fall in value, worsening balance of payments possibly more than the reduction in the cost of imports.

* Cut IRs but dampen down housing markets by massive hike in stamp duty, tax payer revolt, labour out of power, conservatives repeal tax, sudden HPI.

Or...

Fed doesn't cut rates:

* US economy tanks, world economy tanks with it.

Not a great choices, to be honest.

What about the theft from pensions that kick started the property boom, and subsequently the wasteful spending?

[bobthe~]

Someone (I can't remember who) was saying that as a country, when you are in the good times, you should pay back the debt you had borrowed in the bad times, so that you can borrow it again when the next bad times hit.

Sounded sensible to me, although I would say on a personal level, that in the good times you should build up a big pot of cash for the bad times, if your job is vulnerable to the economic cycle.

He has been so blinded by his "genius" that he actually believed there would be no bust, because in his eyes there was no boom, just sound economic performance.

So this allowed him to keep borrowing and borrowing and borrowing because there would be no bad times.

And we are now where we are, in the shit

[mfp123]

I'm getting increasingly concerned that Brown will attempt to blame America/Sub-Prime/Darling/China/Northern Rock/Al Qaeda* for the financial mess that is unfolding in the UK. (*Delete as appropriate)

It worried me hugely that he would call an election and get removed from office. So much so, that I was actually considering voting for him to make sure that he was around for a few years to receive the nation's anger.

When it all goes really wrong (and I genuinely sense a financial unwinding on the near horizon), how can we make sure that Brown gets due recognition for his 10 years of disasterous economic mis-management? The catastrophic ignorance that he has shown by smugly claiming success when all he done is allow people to "feel rich" as a result of selling houses to one another at inflating prices on the back of unrealistically cheap credit?

As others have already stated, falling house prices will be the least of our "worries". I see recession and economic stagnation that will blight the next generations for decades. Many who are currently waiting to buy a house, won't want to buy a house.

I want to see Brown accept that he has brought about the mess that we are about to endure.

Xil.

what record? you mean the 10 years of unprecedented growth, low unemployment, low inflation, low interest rates, high asset prices, strong stock market.

high house prices are a global issue. whether its the usa, ireland, uk, france, estonia, russia, autralia china, hong kong, whereever.

at the end of the day i do find it amusing that people on this site think that they have some secret knowledge that house prices are too high and are due to fall, which nobody else in the country knows about.

this is not big news. 90% of the country know that house prices are high, what person doesnt. everyone has been talking about it for the past 3 years. the majority of people buying accept that they are paying a high price for their asset, but thats their choice. whether its for investment purposes or as a home.

realisticaly nobody can predict the future with any great accuracy. if you know for definite what the economic outlook will be like beyond 6-12 months then you are an economic genius. you should open up spread bets and put all your money down on where you think the stock market/ economy/house prices will go, when they will go, for how long and how far. but you wont because you no-one actually knows.

[itsme]

high house prices are a global issue. whether its the usa, ireland, uk, france, estonia, russia, autralia china, hong kong, whereever.

Correct, but we are a finance based economy and GB should have been in a position to oversee the housing boom and not make the UK the leader of it

[mfp123]

Correct, but we are a finance based economy and GB should have been in a position to oversee the housing boom and not make the UK the leader of it

the priority is not the housing market, its the economy.

we lowered interest rates when the economy was faltering and escaped a recession which the rest of the world had at the time. weve also had the second fastest growing economy in the western world behind the US and have also overtook france in terms of our gdp several years ago.

its ridiculous when people say that we shouldnt lower interest rates to try help avoid a recession and should allow boom and bust to occur, yet they complain when they think a recession might happen. how does that work???

[Bloo Loo]

the priority is not the housing market, its the economy.

we lowered interest rates when the economy was faltering and escaped a recession which the rest of the world had at the time. weve also had the second fastest growing economy in the western world behind the US and have also overtook france in terms of our gdp several years ago.

its ridiculous when people say that we shouldnt lower interest rates to try help avoid a recession and should allow boom and bust to occur, yet they complain when they think a recession might happen. how does that work???

MARKET SAYS NO

[Lone_Twin]

what record? you mean the 10 years of unprecedented growth, low unemployment, low inflation, low interest rates, high asset prices, strong stock market.

At what price?

.

PPI/PFI - Borrowing

Personal Debt

National Debt

Gold sell off.

.

We could all create growth by stimulating consumer spending and bloating

the public sector but the truth is that it has to be paid back.

.

How would you propose that is achieved?

.

ST

[Lone_Twin]

MARKET SAYS NO

Sorry for being a double posting wh0re but:

.

Its just amazing how many people think you can stave off an ecomomic down turn

indefinately with cheap credit via lower interest rates.

.

Its like saying we went out and partied all night while france and germany stayed in

and did their home work. Look how much more FUN we had. Unfortunately we've all

got to be in work today and some people will be doing better than others.

.

Get drunk on debt, prepare for the hang-over.

.

ST

[laurejon]

what record? you mean the 10 years of unprecedented growth, low unemployment, low inflation, low interest rates, high asset prices, strong stock market.

high house prices are a global issue. whether its the usa, ireland, uk, france, estonia, russia, autralia china, hong kong, whereever.

at the end of the day i do find it amusing that people on this site think that they have some secret knowledge that house prices are too high and are due to fall, which nobody else in the country knows about.

this is not big news. 90% of the country know that house prices are high, what person doesnt. everyone has been talking about it for the past 3 years. the majority of people buying accept that they are paying a high price for their asset, but thats their choice. whether its for investment purposes or as a home.

realisticaly nobody can predict the future with any great accuracy. if you know for definite what the economic outlook will be like beyond 6-12 months then you are an economic genius. you should open up spread bets and put all your money down on where you think the stock market/ economy/house prices will go, when they will go, for how long and how far. but you wont because you no-one actually knows.

My next door neighbour like Gordon has created growth in his household. He has a lovely new swimming pool, a hot tub, a 300k boat, a 150k motorhome on the drive, the wife drives a Merc SLK brand new, and each of the three children have new cars. Ok, he has 2 million £££ of borrowing, but hey its growth !!!!

[mfp123]

Sorry for being a double posting wh0re but:

.

Its just amazing how many people think you can stave off an ecomomic down turn

indefinately with cheap credit via lower interest rates.

.

Its like saying we went out and partied all night while france and germany stayed in

and did their home work. Look how much more FUN we had. Unfortunately we've all

got to be in work today and some people will be doing better than others.

.

Get drunk on debt, prepare for the hang-over.

.

ST

interest rates are lower in europe than they are in the UK. rates are also lower in the US, and in Japan. in fact we pretty much have one of the highest interest rates in the developed world yet our economy is also stronger than everyone elses (apart from the US).

europe 4.00%

japan 0.5%

US 4.75%

sweden 3.75%

norway 5.00%

switzerland 2.75%

australia 6.50%

canada 4.5%

UK 5.75%

Edited October 8, 2007 by mfp123

[Lone_Twin]

interest rates are lower in europe than they are in the UK. rates are also lower in the US, and in Japan. in fact we pretty much have one of the highest interest rates in the developed world yet our economy is also stronger than everyone elses (apart from the US).

How are you measuring "strength" of the economy?

.

Consumer spending?

HPI "wealth"?

.

Record debts?

Public sector wage inflation?

.

We all feel great now, but at some point it has to be paid back.

I ask again, when / how do you propose we do that?

If the "good times" have swamped us with record debt, what do you think

a downturn will do to us?

.

You can take a while to think about it if you need it.

.

ST

[Wlad]

What about the theft from pensions that kick started the property boom, and subsequently the wasteful spending?

The dividend exemption was partially removed under the Major government. HPI has followed the increase in money supply. BTL as a form of pension only really went into overdrive after HPI was well established. I don't see a pensions cause-and-effect here.

[Wlad]

Someone (I can't remember who) was saying that as a country, when you are in the good times, you should pay back the debt you had borrowed in the bad times, so that you can borrow it again when the next bad times hit.

Keynes. Seen by some as slightly socialist and therefore a Bad Thing .

[Wlad]

high house prices are a global issue. whether its the usa, ireland, uk, france, estonia, russia, autralia china, hong kong, whereever.

One of the alleged causes for HPI is population growth, yet Russia has seen some quite explosive property price rises with a falling population...

[Lone_Twin]

europe 4.00%

japan 0.5%

US 4.75%

sweden 3.75%

norway 5.00%

switzerland 2.75%

australia 6.50%

canada 4.5%

UK 5.75%

Thank you for adding the figures.

.

Now I appreciate that interest rates are only part of the story, and I could be mildly chastised I suppose for not mentioning in my earlier post other factors such as lax lending criteria leading to subprime loans and high LTV and income multiples.

So what we are actualy talking about is easy/cheap access to credit of which low interest rates are one contributing factor.

Also we have to realise that lending rates are not the same as central bank rates, recent upwards fluctuations in the LIBOR have shown us one reason why.

.

But sticking with interest rates for the sake of simplicity and assumed pedantry.

For how long has the UK rate been, 5.75%?

What were the European rates over the last decade?

Do you think that the obscenely low UK/USA interest rates at the start of the decade might have had anything to do with kicking off and sustaining this ridiculous boom?

.

The Blair Brown Boom will go down in history as one of the greatest ecomomic follies ever undertaken.

.

There is an argument for lowering interest rates to allow companies to borrow to invest and increase production and genuine economic growth. We have not seen largescale comercial borrowing except in areas of real estate / building.

.

What we have seen is a massive increase in consumer borrowing and spending which is unsustainable froth which adds very little to the fundamentals of the ecomomy especialy as we are running a trade deficit.

.

Drop Mr Mises name all you like (I have just received Human Action in the post from amazon) but the fundamental is clear we have got to pay back what we have borrowed or individualy and as a nation go bankrupt. Its going to be one hell of a headache.

.

ST