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Bank cheif admits labour were not the cause of ressession Watch

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    As you are probably aware I'm no fan of the Tony Blair party but the myth that New Labour caused the 2008 crysis really pisses me off.

    http://www.mirror.co.uk/news/uk-news...on-not-4891142


    The myth that Labour created the recession was just used as an excuse to fuel the conservatives ideological mission of shrinking the state (of course maintaining the state when it protects them) and to reduce public spending on services and organizations that do not throw money at the wealthy but instead throw money at the lower classes.

    It's a textbook application of manipulation and propaganda, I'll give them that. The fake neoliberal ideology they supposedly follow (which they don't, they wouldn't have bailed out the banks if they did) created the mess, they then managed to use that mess to justify carrying out the same policies that created the mess but to an even greater extent. They also managed to use it to justify cutting the NHS and reorganizing it so the tax money spent on it goes to private business (who tend to have links with the government) rather than efficiently spending it with the soul purpose of running a good cost effective service (although I admit Labour were doing this before 2008, as I said, I'm not a fan of them either).

    Before someone strawmans me as a private property hating communist... I'm not advocating communism, socialism, anarchism, <insert bogey man of choice>. I'm just complaining about the complete croney capitalist nature of the whole thing, how it is rigged in the favor of those who own everything, how the career politicians just work as slimy managers for those who really run things. The financial sec and banks clearly do not operate in the way their neoliberal doctrine dictates, they are to big to fail, that completly undermines the premise of neoliberlism in that the banks are not exposed to market forces in the same way that a normal business is. So the establishments' economic theory of choice dictates how wrong the current set up is. But the only reason the wealthy have taken this economic ideology on board is because it justifies their own greed to horde even more money and not pay taxes. They have no qualms in throwing all the theory out the window when they need saving or in usurping the state to cushion themselves from market forces.

    What I propose is a variant of capitalism (yes capitalism, not communism) that is regulated in a rational way to ensure the system isn't rigged in anyone's favor, to ensure efficacy is maximized, to ensure everyone has access to the basic benefits of civilization (health care, food etc) and that the rich pay their share and acknowledge they wouldn't be rich if that wealth wasn't generated by other people who they ow a responsibility to look after.
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    One can't blame Labour for the recession. However one can blame them for the terrible state of the government finances in 2010. The Conservatives and Liberal Democrats have done a terrible job of improving the government finances though. We the voters are between a rock and a hard place. One thing is clear coalitions don't work and all attempts must undertake to limit the chance of such an arrangement taking place again. Only bad comes of coalitions, I fear the British state itself is under threat from the SNP. In any case I seek the British state to be maintain by all means.
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    The austerity measures by the Conservatives have nothing to do with bringing down the deficit and everything to do with their ideology of shrinking the state, making the rich richer and giving more unchecked power to vested interests.
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    Agree entirely.

    It's why I think the privatisation of public services such as transport and energy has on the whole failed to provide a cost effective service for the population. What we have at the moment isn't anywhere near true capitalism - our taxes are essentially subsidising the major firms running these services to ensure they make a profit which goes against the principle of privatisation.

    I won't say that I'm too crazy about the installation of a completely free market for these services being properly carried out. Equally, I'm not too sure renationalising them will do much to improve quality and reduce costs. But what I will say is that the system we are currently running is entirely unfit for purpose and has left the citizen propping up companies enabling them provide a substandard service while still maintaining a healthy profit for shareholders.
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    Of course labour never caused the recession. Just like thatcher never closed down any coal mines (she just refused to subsidise them:

    Where labour messed up was its continual unsustainable public spending.

    http://news.bbc.co.uk/1/hi/uk_politics/8688470.stm
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    Two points to make here..

    1) Those who argue Labour are to blame because of a lack of regulation have a case

    2) Those who blame Labour's spending as causing the recession are economically illiterate. What Labour did do though is add about 4% to the deficit we would have had In 2010, mostly because they ran a 3% deficit beforehand. Or to put it another way, Labour have added 2 years of austerity.
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    The deregulation had an effect. But that did contribute to the boom.

    Their spending was working, under the proviso that boom and bust had ended.
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    Blame Gordon for telling us all the ****ing time that he had somehow re-written the laws of Economics.
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    Power to the tories!
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    (Original post by meenu89)
    Blame Gordon for telling us all the ****ing time that he had somehow re-written the laws of a Economics.
    Lol. I loved Golden Gordon. That man was a trier if nothing else. At least he tried! He also gave the BoE more independence. That was cool.
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    it's recession* not ressession
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    (Original post by Rakas21)
    Two points to make here..

    1) Those who argue Labour are to blame because of a lack of regulation have a case
    I'm not convinced as to the strength of this case.

    What I am sure of, though, is that the Tory party has no place in trying to make this case.


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    (Original post by InnerTemple)
    I'm not convinced as to the strength of this case.

    What I am sure of, though, is that the Tory party has no place in trying to make this case.

    Posted from TSR Mobile
    The ultimate cause of the recession was an inflated household credit supply because of a belief in Hydraulic Keynesianism (that infinite growth in the credit supply would lead to infinite growth), the BOE was complicit for ignoring house price growth, the banks were complicit because they believed the market would be liquid forever (I.e. That they could always sell their CDO's and government was complicit both for encouraging the BOE to ignore house price growth and for not seeking to arrest the bubble via increasing the supply of houses further or arresting the growth in the credit supply. Many consumers were also to blame because they took out mortgages naively believing house prices would rise forever when basic research would have showed them otherwise. This was further amplified by allowing RBS to purchase the Dutch Bank without due diligence (though to be fair they'd already bought the American firm that contributed to their losses), not to mention poisoning Lloyds instead of taking over RBS themselves initially.

    That's a somewhat fair point however there are many people who are not.
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    It's amazing how many people on here can pinpoint the exact cause of the recession and what's even more amazing is their conclusion is never based on the agenda they are trying to pursue.
    But no, Labour caused the recession. The Daily Mail said so.
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    (Original post by meenu89)
    Blame Gordon for telling us all the ****ing time that he had somehow re-written the laws of Economics.
    The Tories were in favour of Brown's spending plan at the time.
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    (Original post by KingStannis)
    The Tories were in favour of Brown's spending plan at the time.
    Yes I know they were, and I thought they were wrong to do so. Labour kept to Tory spending plans in 1997 for two years after complaining about them for 18 years. Brown did keep on saying 'No more boom or bust.'
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    (Original post by Rakas21)
    Two points to make here..

    1) Those who argue Labour are to blame because of a lack of regulation have a case

    2) Those who blame Labour's spending as causing the recession are economically illiterate. What Labour did do though is add about 4% to the deficit we would have had In 2010, mostly because they ran a 3% deficit beforehand. Or to put it another way, Labour have added 2 years of austerity.
    Yes, that's pretty accurate. Brown actually kept spending reasonably under control for some years, but he really went for broke once he became PM and in his last year as Chancellor, before the main part of the financial crisis hit. However, I think the motive though may have been to create a softer landing, I suspect that the Treasury saw the writing on the wall around 2006/7 and started pumping money into the economy. Maybe that would have happened under either party. It's only supposition, because Brown would never admit that they knew it was on the way and the Tories prefer to continue spinning the nonsense about 'Labour's recession'.

    The roots of the financial crisis definitely lie in the Reagan/Thatcher consensus to deregulate and the Clinton/Blair era stripping away of remaining restraints on casino banking. These restraints have not subsequently been reinstalled, thus preparing the way for an even bigger crash in the not too distant future.
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    (Original post by meenu89)
    Yes I know they were, and I thought they were wrong to do so. Labour kept to Tory spending plans in 1997 after complaining about them for 18 years. Brown did keep on saying 'No more boom or bust.'
    Fair enough. It is food for thought though, that if the recession didn't happen, we could still be in a boom and both Parties would be in economic agreement, and Brown seen as a very economically competent. Such a state of affairs is contingent on factors not strictly in labour's control. It's an interesting thought imo.
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    Numerous factors played a part in the lead up to the recession. The way we currently do economics is wrong and it'll always be boom and bust until someone wakes up and realises that fact.
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    (Original post by Fullofsurprises)
    Yes, that's pretty accurate. Brown actually kept spending reasonably under control for some years, but he really went for broke once he became PM and in his last year as Chancellor, before the main part of the financial crisis hit. However, I think the motive though may have been to create a softer landing, I suspect that the Treasury saw the writing on the wall around 2006/7 and started pumping money into the economy. Maybe that would have happened under either party. It's only supposition, because Brown would never admit that they knew it was on the way and the Tories prefer to continue spinning the nonsense about 'Labour's recession'.

    The roots of the financial crisis definitely lie in the Reagan/Thatcher consensus to deregulate and the Clinton/Blair era stripping away of remaining restraints on casino banking. These restraints have not subsequently been reinstalled, thus preparing the way for an even bigger crash in the not too distant future.
    That's possible given that the first dominos fell after Katrina and I believe BNP Paribas was the first bank to report a loss due to defaults at some point in 06 (the poison was beginning to take effect) but it's equally likely to have been a pre-election giveaway given that its well known that Brown intended to call an election in 07.

    Those measures did allow greater liquidity (fuel for credit) but one could have equally increased fractional reserves or decreased leverage ratios.

    Yes. Help to Buy is actively inflating the household credit market and fueling another bubble. With that being said the BOE is being given the power to stop that and leverage ratios are being decreased, whether they will risk political repercussion in time is another matter though.
 
 
 
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