The post you are reporting:
I could not disagree more.
There is a case for the sub-prime market. I have never done many mortgages and it is about 4 years since I did the last one, but I can assure you that sub-prime lending, done properly and with good advice, can work well and many people have been able to restore their credit ratings as a result and save their homes. This does not tie in neatly with the red-tops or anyone who thinks in black and white but it is a fact.
What is more you are attributing the wrong causes to the crisis and are mixing up the policies pursued by Clinton in opening up lending in the USA with the UK sub-prime market. British banks were exposed by the expansion into the USA to the American toxic debt. It was Brown who enabled and encouraged that exposure. We had a bit of a 'perfect storm' as a result of the UK domestic monetary policy also with a massive housing and debt bubble here. Some of what I describe above, of course, goes back to the credit crunch of 2008 rather than the present recessionary and sovereign debt problems though there are still hangovers of that in the present problems.
These current problems are governmental, holding back recovery. It relates to excessive borrowing and deficit spending by many Western governments (including ours) creating the sovereign debt crisis that threatens now the world economy. The Euro is seriously hamstringing the weaker European economies preventing a devaluation that would help make their economies more competitive and help spark a recovery. Such a recovery will help them finance their excessive debt burden of course, though they would still have to make serious spending cuts to bridge their structural deficits. Default in some countries would still be likely and is almost certain to happen simply because so far not enough has been done to deal with the root causes of the problem. Too much sticking plaster being administered just holding off the inevitable.
I am not a fan of the banks. I have seen too many examples of where people have been given poor advice and only too often I find myself trying to resolve these problems. That said they are convenient whipping boys for those who prefer not to acknowledge the role the Brown government played in the mess we are in. Personally I prefer to limit my criticism of the banks to those matters that are well deserved like poor financial advice, particularly investment advice and poor service delivery of basic banking.
Make no mistake, I do not let George Osborne off the hook either. I have often said that he is not cutting deeply or quickly enough. The best I can say is that he has done what is necessary to steady the markets. He has also, not yet, done enough to stimulate growth. We need some political courage from the government but the coalition style of governing does not facilitate that even if willing.
