Poll also shows 71% of people have taken Gordon Brown’s BS hook, line and sinker…..

Ooh, Tyler ‘s back. Still lying.

There was a global financial crisis which was (broadly) the fault of monetary policymakers and the banks.
So the balance of blame, as shown in the survey, on that score does not seem unreasonable.

However, Brown and co. bet the farm on the boom lasting forever (“no more boom and bust”).
So Labour should take most of the blame for the “cuts”.

Two things Tyler.

1. Most of the western world was badly hit in 2008 which suggests the cause was bigger than any single country.

2. If it has been caused by Labour’s reckless spending then it is worth noting that the exact same thing would have happened if the Tories were in power. After all they were pledged to match Labour’s spending until the recession hit.

Well the voters are of course right. When the UK Banks went bankrupt and their Ponzi Scheme burst they owed their billionaire creditors and City speculators £6.7 trillion that we know of. US banks owed $35 trillion. This is of course far more than there is wealth in the world. These are counterfeit claims on social wealth but the last government and now this one are paying out these claims having foolishly guaranteed them. The public finances are being destroyed and centuries of accumulated national wealth is being liquidated to keep this bail out going and now the monetarist heirs of Thatcher have appointed a printer as the next governor of the BofE who will take QE to a new level thereby completely debasing the currency on top of the other two sins. The US is printing $85 billion a month to give to the banks at virtually zero per cent to give to pay out their creditors and create another bubble on the stock exchanges just in time for xmas bonuses.

Who’d have guessed thirty years ago when Thatcher and Reagan handed responsibility for money supply to the private sector on the grounds that `enlightened self-interest’ would prevent them from allowing supply to outstrip demand that they would rob us all blind in the most criminal manner. Oh that’s right, anybody who had a brain in their head. The thirty year credit bubble may have kept a sclerotic, decadent and monopolised capitalist system going for another few decades but at the end of it all we have is a sclerotic, decadent, monopolised and bankrupt capitalist system along with a denuded environment and a host of stored up social problems. Marx said that no economic system disappears from history until it has completely exhuasted its potential. Folks we have reached that point. Capitalism is no longer capable of reproducing itself as a social system. Even zero growth exposes it as a zero sum game let alone recession and depression. All that class society offers now is the reversal of the film of globalisation which will in fact be a very unedifying spectacle leading to a new Dark Ages. The choice is clear as it was so prophetically predicted 150 years ago: socialism or barbarism.

The bankrupt banks should have been let go. Their estates, staff and deposits taken into administration and used to form a new people’s bank facilitating social investment and lending to small business at base rate with a monopoly of credit to prevent the private sector setting up a new Ponzi Scheme or indeed organising the Mexican drug cartels, sanction busting and interest rate fixing.

3. cjcj

Couldnt agree more. Gordon Brown was so obviously responsible for the financial meltdown in not only the UK but also:-
Greece,France,Italy,Iceland,Ireland,Spain,the US……………………..zzzzzzzzzzzzzzzzzzzzzzzzzzzzz

signed

Jamie Diamon

5 Peter Emms

‘The bankrupt banks should have been let go. Their estates, staff and deposits taken into administration and used to form a new people’s bank facilitating social investment and lending to small business at base rate with a monopoly of credit to prevent the private sector setting up a new Ponzi Scheme or indeed organising the Mexican drug cartels, sanction busting and interest rate fixing’

Nice try but who will clean up the $67trillion in liabilities currently in the shadow banking system?

@6 – thanks for, erm, not reading what I wrote.

Brown was not responsbile for the meltdown.
He was responsible for assuming the boom would continue forever.

Do you understand the difference?

8. cjcj

Except your post is entirely meaningless.

To separate out what Brown may or may not thought of the future is entirely irrelevant because he clearly wasn’t in charge of the financial state of the world. I think the idea of no more boom and bust was a domestic ideal .

I’d love to see your rationale for making Brown mostly responsible for the cuts. Maybe 5% world financial meltdown and Brown 95% would you say?

@ 1 Tyler

“Poll also shows 71% of people have taken Gordon Brown’s BS hook, line and sinker…”

That makes sense, because Brown was such a popular PM, and the darling of the media.

“To separate out what Brown may or may not thought of the future is entirely irrelevant because he clearly wasn’t in charge of the financial state of the world. I think the idea of no more boom and bust was a domestic ideal .”

I’m sorry if my post was meaningless, though I am struggling to understand what this means, or rather how this is a justification for anything.

A “domestic ideal”? Well, we did have our own domestic credit and house price boom, didn’t we?
And while Brown was clearly not in charge of the world (though he believes he saved it!) did he think the UK was somehow so immune from potential global shocks that he needn’t make any allowance for such a thing?

It was always the Tory plan to spend five years in power saying
its all Labours fault.

Christ, another thread that isn’t about an actual issue but about a poll concerning what prople think about the issue

That’s three out of the top five ‘news’ stories.

`Nice try but who will clean up the $67trillion in liabilities currently in the shadow banking system?’

Let the people who speculated on the bankers’ bonds pay the price of their foolishness. Lehaman Brothers bonds now fetch $0.05 cents on the dollar on the free market and they are not even worth that but the creditors of the banks that were bailed out are still getting £1 for £1 plus the extorionate interest promised on their Ponzi Bonds courtesy of nation, state and printing press. Most of these bonds are owned by billionaires and speculators so screw them.

Seems to be a rubbish poll to me.

Who do you blame most for causing the UK financial crash in 2008?

We are asked to believe that everyone answering the poll question only came up with three answers. It is much more likely that they were only given three options. So the poll is biased because the result is predetermined to one of three outcomes.

All the answers of course are incorrect unless we count the publicly-owned BoE as part of the banking system. They caused the 2008 UK financial crash by not doing their job properly and letting monetary policy hugely veer of course in 2007/8. The BoE is not usually what people mean when they say “the bankers caused the crash”.

Either the UK public are more perceptive than they are given credit for and meant the BoE in their answers. Or they do not have a clue what they are talking about and are just going on the latest drivel they have read in their newspapers. I know misleading headlines are a bit of a tradition on LC, but might I suggest the headline is changed to ” UK public blame Mervyn King for 2008 crash “.

2 “Ooh, Tyler ‘s back. Still lying”

Spot on. In the FT, Bob Diamond, head of Barclays Bank, is reported as saying in a BBC Today interview on 4 November 2011 that the Banks must accept responsibility for what went wrong. In the interview – which I listened to – he repeatedly said that banks must work towards a situation where banks could fail without taxpayer support and without causing systemic instability (pay wall):
http://www.ft.com/cms/s/0/292c4e48-0658-11e1-8a16-00144feabdc0.html#axzz1cmIopk8y

Some responsibility is due also to regulatory failings by the Financial Services Authority – see the Turner Review of the FSA (2009). Labour policy makers ignored warning signs of trouble ahead:

“CHARLES GOODHART, a former member of the Bank of England’s monetary policy committee, warned yesterday that the Bank is failing to take sufficient account of the house price boom in setting interest rates.” [Telegraph 2002]

But in 2007, general government expenditure in the UK, as a percentage of national GDP, was only marginally higher than in Germany and lower than in Denmark, Sweden, the Netherlands and France. The subsequent budget deficit as the result of the crisis in the financial services sector and the ensuing recession, after the economy peaked in spring 2008, was due to the collapse in government tax revenues.

It seems to me that for you and I to give a warranty against failure to people who were playing a casino is a tad beyond what I want a government to do on my behalf. They might as well guarantee every losing line at the bookies.

17 Dougla Clark: “It seems to me that for you and I to give a warranty against failure to people who were playing a casino is a tad beyond what I want a government to do on my behalf. They might as well guarantee every losing line at the bookies.”

The “moral hazard” generated by bailing out failing banks is well-recognised in an extensive professional literature. It was precisely that concern which led to Sir Mervyn King’s (BoE Governor) initial reluctance to bailout Northern Rock in the autumn of 2007.

The problem is that banks are not like bookmakers. A failing bank precipitates a run on the bank as its customers rush to get their money out before it closes its doors. That is highly likely to lead to contagious concerns about other banks – rightly or wrongly – resulting in a domino effect with, potentially, the possible systemic failure of the banking system.

That was the situation inherited by the Roosevelt administration on taking office in America in 1933. The administration came up with the Federal Deposit Insurance scheme (FDI) to protect bank deposits and thereby halt the systemic collapse of banking in America. The scheme worked but it does introduce a moral hazard with the consequence that bankers become inclined to engage in higher risk lending and investments in the pursuit of profits (and bonuses) knowing that depositors will be protected by insurance and taxpayer-funded bailouts of banks by governments.

The Saving and Loan Association failures in America in the 1980s and 1990s was a consequence of the FDI:

“The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of about 747 out of the 3,234 savings and loan associations in the United States. [It was] estimated that the total cost for resolving the 747 failed institutions was $87.9 billion. The remainder of the bailout was paid for by charges on saving and loan accounts—which contributed to the large budget deficits of the early 1990s.”
http://en.wikipedia.org/wiki/Savings_and_loan_crisis

Lessons should have been learned from that previous experience before the much greater financial crisis of 2008/09 but weren’t.

I first came across an analysis of this moral hazard relating to the S&L Association Crisis in Donald Campbell: Incentives (Cambridge UP, 1st ed. 1995). But that seems to have escaped the attention of many regulators and policy makers.