2015 Election - antidotes?

Many people, not just the government, were gripped by a certain madness and borrowing to the hilt to 'better themselves' (see other thread).

whitewave Gordon Brown tried to spend his way out of trouble. We have a huge deficit on our annual income/expenditure each year because he was spending more than taxation was bringing in and was borrowing money on the international markets to fund it. He wasn't alone. Most European and the US governments were doing exactly the same thing.

No matter what the political persuasion of the government elected in 2010 they would have been faced with having to cut the deficit. The only way to do that is by increasing taxation or decreasing expenditure.

To use the well-known, and now somewhat hackneyed quote from Dickens' Mr Micawber

Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

We are currently undergoing the misery. There isn't an alternative that does not involve further borrowing.

POGS

No we don' t have a treble A lost that a couple of years ago.

When you say the prolific spending by the Labour government I am not sure exactly what you are getting at and what figures you are using.

whitewave

We do have a AAA credit rating don't we.??

I remember the likes of Christine Lagarde apologising for the fact the IMF had assessed the UK's finances so widely off the mark. The left wing economists were made to look pretty stupid for a while.

Eloethan

Your comment re our grandchildren is realistic/happening/a cause for concern now because of the UK's debt/deficitdeficit, which was at the time of the banking crash known to be the worst in the EU and most other countries.

There are two halves to the story of the UK's debt/deficit levels at the time of the world banking crisis. One is the failure of governments to have a hold of any meaningful regulatory control of the banks , the other was the prolific spending the Labour government had undertaken.

As the Prime Minister Mr. Gordon Brown said 'There will be no more boom and bust'. Then the fool Liam Byrne confirmed what we all now know 'There was no money left' Nada, zilch even our gold reserve had been sold off.

I have NEVER suggested that the Labour government was entirely responsible for the crash worldwide.

I have said that the British government WITH most European governments and the USA are responsible for the crash because of a mixture of slovenly regulatory control and a willful refusal to take any notice of the warnings coming from market watchers on all sides, from financial and market experts to popular television programmes. All governments ignored the warnings, and were deaf and blind to all the signs and warnings.

EU governments knowingly allowed heavily indebted countries like Greece and Italy to rig their criteria to gain membership of the euro. Banks afford to service them and were likely to default. lent these countries money they must have known was unlikely to be repaid and these governments took out these loans to finance reckless social spending to gain votes and avoid making the cuts necessary for economic stability. The banks failed not just because of the mortgage 'products' but because they had loan books full of loans to countries like Greece and Italy who could not

I have very little confidence in the Labour Party as they do not represent a real alternative to this government which has bent over backwards to advance the interests of the rich and powerful, at the expense of everybody else.

However, I don't understand how anyone can on the one hand acknowledge that there was a worldwide banking crash but at the same time state that Labour bore responsibility for the ensuing financial crisis in this country. Aside from Germany, most of Europe and, of course, the US, were very seriously affected.

Like papaoscar, I sometimes feel tempted to say, what the hell - we and our children are doing OK, we won't be around for ever so why get worked up about it. But what about other people and their children - and what about everybody's grandchildren if this country (and indeed most of the world) continues to be run for the sole benefit of the rich and powerful? As the 6th richest country in the world, it appears that Britain is nevertheless unable to provide decent homes, a good education, proper healthcare and adequate food and heating to significant numbers of its population. There is surely something wrong somewhere.

I always associate Andy Burnham with his attempt to smear Shami Chakrabarti during his campaign to foist ID cards on us.

I wonder if he still supports such cards

flick yes you are correct about Thatcher and Regan, and subsequent governments that did not take cognizance of any warnings around at the time. But are you suggesting that the Labour government was entirely responsible for the crash worldwide?

I would argue rather that some of those responsible were the central banks, credit rating agencies, and also academics and financial economists, who gave AAA ratings to many banks which subsequently became junk. Yes of course governments would have relied on these judgements, and still do.
Even Gideon was keen to keep his AAA rating which as we all soon disappeared down the shoot.

Ye gods aren't we all different.

I hold a totally different view of Andy Burnham.

I just dont know where to go, very wary of Ed Balls, think Ed Milliband is well meaning but weak, but have high regard for the likes of Andy Burnham. Used to vote LibDem as the 'none of the above' party, but would rather take my own appendix out with a garden spade than vote for the Tories and their return to Victorian values such as the workhouse and unsecured jobs. Suspect I am not alone in this dilemma!

It was nothing to do with slovenly lack of financial control - the whole movement at the time was towards lesser banking control started as I said by Regan and Thatcher etc.

The 'whole movement' was started by a school of economics, taken up and exploited by polemical governments (Reagan and Thatcher). Every government that followed had a choice of either following in the steps of their predecessor or changing course. It was a deliberate POLITICAL course to continue to follow those policies.

^ The subsequent governments simply continued with the process as there was nothing that suggested that this was a wrong move and the world economy was buzzing if you remember with the odd blip.^

From around 2000 onwards commentators and pundits were warning of the dangers of the this policy of no regulation. Remember the crash, on both sides of the Atlantic, was based on reckless mortgage lending and bundling these mortgages and selling them on as financial 'products' that were traded and traded and traded. Most of these mortgages were 'self certified' mortgages where no evidence was asked for claimed income and at the extreme end there were dishonest brokers filling in forms for applicants and grossly exaggerated applicants income who then could not meet their payments right from the start and rapidly fell into debt. The level of foreclosures in the USA was horrific. In some neighbourhoods up to 50% of homes had foreclosure orders. There were responsible and knowledgeable financial journalists writing articles in all the main papers, including the tabloids about the dangers of reckless mortgage lending and the laxness of the banks in controlling personal debt. Do you remember all those television programs with presenters like Alvin Hall advising people with incomes of £15,000 a year and credit card debts of £30,000 and more? All the information was there for those who cared to look - and it is government responsibility to look and listen but there are none so blind as those who will not see or as deaf as those who will not listen - and governments throughout Europe and the USA refused to look or listen.

On the 1.00 news today minutes of a key Bank of England committee meeting the day before the crash published today showed that the Bank was smugly content that everything was hunky dory even though the crash was only hours away. A financial journalist or economist interviewed about the minutes said that it showed just how out of touch the Bank of England was. The warnings had been there, but they and the overnment had chosen to ignore them.

Banks of course were enthusiastic and gave governments every insurance that it was the correct course of action in order to ensure a vibrant and growing economy.

It is a sign of very poor government if it relies on bank, or, business leaders, or anyone assuring them all is well. It is government's job to have their regulators, advisors and civil servants making their own stringent inquiries and investigations to check everything is working well.

POGS when you say prolific spending do you mean the amount Labour put into the banks in order to save them?

Yes it was a worldwide banking crash, for goodness sake we all agree to that point.

What some people and the Labour Party who were in government at the time of the crash cannot admit to or don't seem to understand is the 'prolific spending' and lack of fiscal control which Labour undertook caused the UK to have the biggest debt/deficit in Europe and worse than most other countries. That's why we have had to endure austerity measures to try and rebalance the books.

We have had Liam Byrne leaving his pathetic little note informing us the country is broke, PFI agreements/contracts that only a madman would have signed. Yet no lessons have been learnt by some who still to this day think that status quo should have carried on or be repeated. Insanity.

Ed Balls and Miliband were at the helm with Blair and Brown and one can only assume that if the polls are right the majority of people do not trust them on the finances.

I try very hard to listen to all the policies from parties of all colours but when it comes to finance I don't have one happeth of faith that Balls and Miliband have learnt any lessons.

Not slovenly regulation but de-regulation. There was nothing slovenly about it, as that suggests it was done carelessly and without thought. But I would argue that there was indeed thought behind de-regulation mainly based on monetarist policies and an ideology carefully followed by mainly Tory and Republican governments.

www.theguardian.com/business/video/2014/nov/13/channel-4-news-economics-editor-paul-mason-banks-forex-rigging-video

We tend to think that the banking sector is now under control. I think there is a lot of evidence to suggest that it is not. The above link is to a very outspoken Paul Mason, Channel 4 economics editor, who is clearly hugely frustrated at the way in which the City continues to get away with criminal behaviour.

Labour was far too lax about banking regulations BUT at the time the Conservatives were criticising Labour for not allowing financial regulations to be relaxed even further. Of course, it is still the case the Conservative Party is by far the largest recipient of donations from the banking sector.

My understanding is also that the recommendation that the "gambling"/potentially "toxic" side of a bank's business should be completely separated out from conventional/safer banking practices have not, in the main, been followed.

Beg to respectfully differ, whitewave, it was entirely due to slovenly regulation. Since the days of the South Sea Bubble, spivs and con-men, ah-hem, sorry,speculators and entrepreneurs, have got rich on our basic greed, so we're probably all a little bit at fault. I just don't like being force-fed crap by rich hypocrites.

papa it was nothing to do with slovenly lack of financial control - the whole movement at the time was towards lesser banking control started as I said by Regan and Thatcher etc. The subsequent governments simply continued with the process as there was nothing that suggested that this was a wrong move and the world economy was buzzing if you remember with the odd blip.
Banks of course were enthusiastic and gave governments every insurance that it was the correct course of action in order to ensure a vibrant and growing economy. Evidence seemed to suggest that they were correct.

Of course retrospectively we can see that the banks behaved totally irresponsibly and hopefully they have now been brought back into control, with leverage at a manageable level.

The Tories reliance on supply side economics obviously does nothing to address the lack of growth in the economy - which has resulted in such a slow recovery over the past 5 years. What is needed is an injection of fiscal policy in order to for the government to take control over and encourage growth in the economy based on one which is not reliant on personal debt, something which is what evidence suggests to happening once again.

Just had a thought - bring back Spitting Image!

So what to do against the relentless tide of political spin and electioneering? Ignore it or put the boot in? Shout out when you feel like it, or turn the other cheek when you don't? Take up line-dancing? Reach out for the bottle and/or the sick bag, but keeping them well separate? At my age could I care less, except as regards my grandchildren's future and that of their peers. In my lifetime I've seen the prospects for ordinary, decent people improve but now start to recede again. Perhaps its all cyclical after all in which case I'd better pop out and buy myself a new bike!

You're so right, FB, when you write:

"The cause of the financial collapse was a slovenly lack of financial control by governments of all political persuasions in the USA, UK, and other European countries that enabled the greedy and unscrupulous in the banking industry to make billions at the expense of the rest of us."

I have little confidence in the Socialists to re-launch the UK sensibly, but I have no confidence at all in the Tories to do it - they get too much out of the status-quo to want to change it. Until we can devise a better system of government and fiscal control things will not change. In the old days a 'mixed economy' was in force but that is no longer the fashion, due to the dominance of unrestrained worldwide capitalism. In the meantime I'll rejoin my Muppet friends Waldorf and Statler on the balcony and pour scorn on the lot of 'em!

flick read my post above. You are wrong when you say that the last Labour government caused the collapse of the the British banks - who caused the collapse of other banks in the world?

The entire world zeitgeist at the time was to give the banks more and more freedom. This ideology was mainly started by Thatcher, Regan and cohorts. Are you saying that Labour were wrong in following Tory policy? No- one foresaw the disaster as can be seen from the Bank of England minutes, written the day before Northern Rock collapsed. The BofE has access to the best advisors so I am not sure where your "many economic experts" comes from. However undoubtedly our type of system is cyclical and downturns happen on a regular basis, absolutely nothing governments do will stop that.

Because of the relaxation of banking controls undoubtedly personal debt got out of control. But the banks decision to become highly leveraged was their decision and their decision alone. We are now paying the price.

Britains % of debt to GDP IN 2007 roughly 36% - compare this to the previous Tory government who at one stage has debt to GDP at 50%.
It was the Labour government's decision to save the British banking system by bailing the banks that caused the levels of debt we experienced immediately after the crash. Of course you could argue that they should not have done this, but it would need a brave person indeed to argue that.

papaoscar Gordon Brown and co contributed to the financial mess we got into by their refusal to set up proper financial controls on banks and building societies. The collapse of Northern Rock and several other Building Societies was an entirely UK disaster. The result of lax control by government established regulatory bodies. Many economic and financial experts and pundits were warning for several years about the dangers of excessive mortgage loans and the increase in personal debt. The government actively chose not to take any action.

Gordon Brown also chose to follow an economic policy that required heavy borrowing and a large current deficit, you know, the deficit and debt that are causing so much problem at the moment. He was gambling on the economy continuing to grow rapidly and paying the debt out of that growth.

Several countries, including Canada, where financial governance was under the control of the man who is now Governor of the bank of England, managed to not be devastated by the financial disaster.

The cause of the financial collapse was a slovenly lack of financial control by governments of all political persuasions in the USA, UK, and other European countries that enabled the greedy and unscrupulous in the banking industry to make billions at the expense of the rest of us.

Remember Peter Mandelson famously saying that he was ‘intensely relaxed about people getting filthy rich’? Well, we know how they were getting 'filthy rich'.

Don't drink too much, roses. You'll become a binge drinker.

Lawks a mercy! it's going to be a ghastly few months until May.I'm off now [with a large bottle] and may not be back for some time.

Fact check about the first posters to go up.

https://fullfact.org/factcheck/economy/campaign_posters_full_picture-37962