I believe that Gordon Brown was actually the best solution to the problem.

 

Sure, he and Darling bloody well created the mess [with some help from the previous tory government it must be said] but they were very quick to start clearing it up after. As unpopular as the banking sector bail-out has been it saved our economy from dying on it's arse.

 

Had HBOS and RBS been allowed to go under [we'll ignore the fact that it would wipe out Scotlands banking sector bar the Australian owned Clydesdale for a sec] all of the loans, credit cards, overdrafts and mortgages people have with them would have either had to be sold onto someone [or taken on by the government] or they'd have been recalled which would have lead to massive amounts of people going bankrupt and having their entire lives repossessed.

 

My big problem with the bail out is that the Government did it and then kinda went 'what should we do now'. They weren't quick enough to start restructuring the banks or to introduce legislation to prevent this from happening again. The reason the Australian banks didn't get affected by the world crash was because of the legislation that was put in place after their last recession to prevent the banks holding the country to ransom.

 

The VAT decrease was ridiculous, but the evidence does support it. There was little point of saving 1p on a tin of beans, but it certainly helped people like Curry's and other retailers who specialise in expensive items weather the storm. The scrapage scheme was genius [and copied around the world] it helped shore up the Motor Industry and prevent it from a complete collapse [First thing you don't do when the economy hits the $h!tter is buy a new car, the entire industry were victims of the recession and thanks to Gordon Brown and a couple of government bail outs in the US (GM, Ford etc) and France (Renault, who are part state owned anyway) it survived]

 

The measures he introduced got us through the bad bit without it being diabolical [it could have been so much worse, and will be this time] and really got us back on track. So what if we have a bit of debt, we keep paying our minimum payments and nobody is going to be downgrading us any time soon. The deficit would take a while to work off, but would have a large hole blown in it by getting the banks back up and running asap in a way that was more financially responsible.

 

As it currently stands, the banks are recovering and when we sell the Governments shares in the bank it'll take a very very very large number off the deficit total.

Oh, and Happy Birthday Grimly.

 

Agree with most of this. I really think Alistair Darling will eventually be remembered as one of the all-time great Chancellors - despite Brown boasting that he'd saved the world, many accounts say it was actually Darling who did most of the thinking and heavy lifting on the bank bail-out. And although it sounds cliched, they really did lead the world in it - remember this was when Bush was still in the White House, and he was on TV everytime a bank was in crisis literally, in effect, saying he didn't know what the hell to do. In retrospect, the bail-out obviously didn't contain anywhere near tough enough conditions in terms of bonuses - but, at the same time, given how the goverment needed to get it done so quickly, it's understandable that it just wasn't feasible to have big drawn-out arguments with the Bob Diamonds at that point. But they could've done more in the year and a half after, but were too timid (and too Mandelsonised) to do so.

 

I thought the VAT cut was a total gimmick at the time, but in retrospect, I think it was inspired. Its effects went wider than just the cut in prices it gave to goods - it was a powerful symbolic message that we needed to spend our way out of the recession, that we needed to support retailers to avoid a Depression - and it worked: the retail figures for Christmas 2008 were far stronger than anyone could've expected just two months earlier when the banks had crashed. I remember at the beginning of December '08, when Woolworths went under, all the experts thought loads of other big High Street chains would follow; the fact that didn't happen is a testament to the way the government successfully convinced people to 'Keep Calm And Carry On' with shopping, which the VAT cut played a big part in. I think they could've done even more to stimulate retail figures, actually, by also having a one-year increase in personal tax allowance or 1/2p cut in the basic rate of income tax, or maybe they could've done what I think Australia did and literally sent out cheques to everyone - it would've increased the deficit in the short term, but it would've more than paid off with a quick and strong recovery like Australia had.

 

Like you say, the car scrappage scheme was brilliant, and, maybe most importantly, they brought forward loads of construction projects, helping to prop up demand in the private sector where it otherwise would've fallen through the floor, and they finally started rebuilding the manufacturing base that had been destroyed by Thatcher (although the work they'd started to do on it has now been swiftly destroyed by the Coalition, as evidenced by Sheffield Forgemasters and, from a personal perspective, the Vauxhall plant in my town, whose future is in doubt thanks to the Coalition going soft on a project Labour had previously supported). While their measures might have got us into debt, unemployment would be sky-high right now without it.

 

And, while in most countries, the Opposition party were relatively bipartisan while the Government stepped in to stimulate the economy, all the Tories could do was sneer from the sidelines, and say we should learn from Ireland, who were the only country to cut spending in response to the recession - that sure worked out well. And the Lib Dems were strongly supporting the increase in government spending, and called for an additional cut in income tax, which would've added more to the deficit - which is why it's so intellectually dishonest for the likes of Clegg and Huhne to moan now about Labour's "spending binge" and "the mess we've inherited" (although I'm genuinely starting to think Clegg is so economically illiterate that he really didn't understand the machinations of what was going on then, or what's going on now; Huhne, on the other hand, is a trained economist and should know better).

In retrospect, the bail-out obviously didn't contain anywhere near tough enough conditions in terms of bonuses - but, at the same time, given how the goverment needed to get it done so quickly, it's understandable that it just wasn't feasible to have big drawn-out arguments with the Bob Diamonds at that point. But they could've done more in the year and a half after, but were too timid (and too Mandelsonised) to do so.

 

Naaah, he could've called their bluff, be an "Iron Chancellor" instead of a pussycat....

Naaah, he could've called their bluff, be an "Iron Chancellor" instead of a pussycat....

It would have been very difficult to do that when up against a strict deadline. Both sides indulged in brinksmanship and Darling probably struck as good a deal as could have been expected. However, he should have done more immediately afterwards as Danny said.

It would have been very difficult to do that when up against a strict deadline. Both sides indulged in brinksmanship and Darling probably struck as good a deal as could have been expected. However, he should have done more immediately afterwards as Danny said.

 

Strict deadline...? Why do I get the feeling that that's a bit disingenuous...? Like the banks and all the "economics experts" didn't see the signs AGES before the $h!t really hit the fan... seems to me like someone, somewhere deliberately held back information to further an agenda.... I still think there's a lot more yet to be revealed about how all this mess started in the first place, I dont really believe we've been told everything....

 

Strict deadline...? Why do I get the feeling that that's a bit disingenuous...? Like the banks and all the "economics experts" didn't see the signs AGES before the $h!t really hit the fan... seems to me like someone, somewhere deliberately held back information to further an agenda.... I still think there's a lot more yet to be revealed about how all this mess started in the first place, I dont really believe we've been told everything....

Because once things had reached crisis point it was clear that a deal had to be reached before the markets opened on the monday morning. Even if shares in the banks had been suspended, the rest of the market could have gone into meltdown.