Barrie Nicoll wrote:Well then Barry, trot out the 'this is the legacy we were left by the labour party....', I suppose it was their fault that there was a global recession. I have as much contempt for blair and brown as I do for cameron and osborne, mind you, gove is especially unpleasant, isn't he ?...but you surely can't keep saying this without sounding as if the only policy you have is to cut everything to the bone and blame the previous government. Having listened to several political types speaking on the subject, they repeat the same old mantra time after time, until it sounds as if they have all been back to a 1950s primary school learning multiplication tables parrot fashion. I think that most members of the general public don't actually believe the politicians any more, and I for one am sick of the posturing when we are so deep in the financial muck we should all be working together instead of having policies that fragment the nation.
Barrie - the economy works in cycles of growth and contraction. I am not a Keynseyan personally but Brown claimed to be but Brown ignored the inconvenient side of Keynes dictum in failing to balance the deficit built up during the recessionary phase of the economy. Instead, from 2000 after the election pledge to match Ken Clarke's spending plans expired he increased the deficit which, until then had been falling true to Keynes theories. By 2005 he developed a structural deficit, one that could not be closed without cuts and carried on building it even beyond when the slowdown started in 2007.
Because of that the UK economy was in an appalling state to weather the economic slowndown. The fact that many other western countries made the same mistake is no excuse. Those countries that were better managed fiscally did not suffer the downturn anywhere nearly as badly.
Brown's monetary policy errors also made the situation worse, perhaps I should refer to his brief to the Bank of England in 1997 when he ignored the levels of private debt as a factor in interest rate policy. That was a direct cause of the housing and debt bubble alongside the damage it did to UK savings with the reduction in tax free savings allowance and the changes to the tax treatment of pensions and ISAs,
I could go on about the regulatory changes he made in 1997 introducing the tri-partied system that undermined prudential regulation of banks leaving them free to take risks because of lax supervision and his encouragement of banks to do so in his Mansion House speech. This is what resulted in the banks being exposed to US toxic debt and the accumulation of some domestic toxic debt of our own - the direct cause of the banking side of the crisis.
Overall Brown's governance of the economy was a complete disaster that turned a cyclical recession into a full blown economic crisis. The worse Chancellor (and PM) in UK history with Balls and Milliminor as his right hand men.
He did do one thing right - he kept us out of the Euro. If he had done Blair's bidding we would be in the same state as Greece and Spain, perhaps worse under the Euro cosh.
Barrie - the only way to solve a spending and debt crisis is to cut back on spending. Full stop. Government spending is a weight holding back the whole economy. At one point it was 53% of GDP - in other words 47% of the economy was paying for 53%, unstable like a pyramid upside down. A well run economy, like the most successful during the crisis, has the equasion the other way around, in fact I would have public spending at no more than 30% as an average over the whole economic cycle.
Solutions to the economic crisis is bound to fragment opinion because vested interest will always complain about their area. At the end of the day what needs to be done has to be done.
We would be on a faster route to recovery if Osborne had been more aggressive over spending cuts, deeper and faster.
As for the rest - I like Gove. A nice bloke who is doing a lot to sort out the education mess created by left wing idealogues within the education establishment.
