Mr Darling's explosive memoirs

 

               Mr Darling’s book is an important contribution to the UK debate. It confirms what was so strongly denied at the time – many in the Labour party thought Mr Brown was a disastrous Prime Minister. He argues that Mr Brown did operate through a small cabal, was extremely political in everything he did, and did try to sack Mr Darling at a crucial point in the Credit Crunch crisis.

               More importantly, it argues that Mr Brown did not understand the depth and magnitude of the economic crisis which engulfed the government he led. In 2007 and 2008 this site continuously pointed out that the UK authorities were making a banking crash inevitable. I urged them to  allow more liquidity in banking markets, to prevent runs on banks and to provide a substitute for the inter banking cash which had dried up. Instead we watched in horror as Northern Rock, Bradford and Bingley, HBOS and RBS got into severe difficulties and had to be rescued at much greater cost than if the authorities had lent more  short term money against security earlier.

            The government sought to ignore this view. When challenged over it, they claimed with the Bank of England  that the errors were all the banks, and they deserved what was coming to them. It was  a case of moral hazard. The regulators and the Bank had done no wrong. Later when I proposed cheaper ways of saving what needed saving from the ruined banks, I was told I wanted to take the whole system down by letting them go to the wall, by the very people who had presided over the wrecking of the system by their refusal to listen to good advice.

           In Mr Darling’s book we now learn that he came round to my view, that more liquidity had to be supplied. The account of the meeting with the head of RBS in the business pages of the Sunday Times makes interesting reading. Mr Darling blames the Governor of the Bank of England for refusing to accept that there was a liquidity crisis which the Bank could do something about and had a duty to do something about. Mr Darling was told he could not override or intervene.

            So far so good. I am pleased to learn that someone at the top did come to see the obvious truth, which a few of us were shouting from the sidelines. The other truth is, however, that the senior elected officials, the Chancellor and the Prime Minister, can always take aciton in such extreme circumstances if they need to. Mr Darling could have instructed the Bank to supply cash to the markets. If the Governor disagreed the Chancellor could have made the instruction public and I am sure the Bank would have done it.  If it needed legal changes, they could have been put through the Commons in a day. I do not think legal changes would have been needed. Later in the crisis the MPC was effectively told to lower interest rates – rightly so- as part of concerted international action to tackle the problem. They convened a special meeting and made the change, claiming it was something they wanted to do. Their independence, we were told, had not been damaged! Under politicial pressure, the Bank could prove flexible.

 

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49 Comments

  1. lifelogic
    Posted September 5, 2011 at 7:09 am | Permalink

    Indeed, “save the world” Gordon Brown made a complete hash of the rescue, far worse even than Major’s ERM fiasco. Liquidity, on suitable security, should clearly have been made available earlier. Gordon Brown’s main interest was to try to win the election which, thanks to a lack of vision and a green pro EU big government agenda, from Cameron he almost did.

    Just a few more seats and a LabLib coalition would perhaps be in power now. Would this be any worse though? Policies would be similar to Cameron’s anyway and at least we would have the prospect of, a proper Tory government in 2015 – perhaps. What is the vision post Cameron now?

    Even now business and developers are unable to borrow because their are too few sound banks with funds available and regulations restrict them. This combined with big government, high “green” energy prices and over regulation will, pointlessly, limit growth for years to come – until it is finally addressed.

  2. JimF
    Posted September 5, 2011 at 7:09 am | Permalink

    Three years after the event, one has to say there is something wrong with a system which allows to be put in place, and cannot expeditiously remove somebody like Brown. His own party couldn’t remove him, the electorate were given no chance. Really, in such a once- in-a-lifetime occurence as this, the monarchy should be in a position to step in, as a last resort and in the national interest, and demand that an immediate election be held. The monarchy would thereby retain its impartiality save for its personal denigration of such an obvious incompetent delusional clown as Brown.

    • lifelogic
      Posted September 5, 2011 at 7:23 am | Permalink

      We have had rather a lot of “incompetent delusional clowns” over the years. The nature of the job seems to attract them, rather like moths to a candle, and then even to refine and perfect these tendencies. I think some other mechanisms using MPs’s could perhaps be put in place to control this rather better than the Queen.

      • foundavoice
        Posted September 5, 2011 at 7:58 am | Permalink

        NB. It is within the Queen’s power to sack the Prime Minister.

        • davidb
          Posted September 6, 2011 at 8:38 pm | Permalink

          And it is within the power of a future elected Labour government to turn us into a republic. Mutually Assured Destruction i posit.

      • john east
        Posted September 5, 2011 at 9:56 am | Permalink

        Surely, a majority vote of no confidence in the Commons would have been sufficient to oust Brown. Perhaps our anger at this out of control malignant and dysfunctional personality should be redirected towards the more “normal” Labour MP’s who would have known what Brown was like, would have known he was wrecking the country, but to protect their careers decided to do nothing and watch the nation burn instead.

        Reply: Yes, of course, but as Labour had such a large overall majority that was never going to happen unless Labour had lost confidence in him, which in public they had not.

      • Nick
        Posted September 5, 2011 at 12:12 pm | Permalink

        This is why a law must be passed allowing – given a certain level of signatories, say 10,000; for any public servant, from the PM to the lowest town clerk to be removed by popular demand – yes, this includes the judiciary as well.

        The only way to control the state is to restrict it. That means controlling pay, pension and earnings after government as well as all expenses.

        We have seen that some politicians see public service as a way to get rich. Some quangos simple exist to pay telephone number salaries to incompetents. This practice must end, and it will only end when the public have the power to remove individuals from office.

        • uanime5
          Posted September 5, 2011 at 7:43 pm | Permalink

          The population of the UK is 62 million, so 10,000 people represent 0.016% of the population. Shouldn’t the majority of people have to oppose the elected official for them to be removed?

    • Tedgo
      Posted September 5, 2011 at 8:29 am | Permalink

      I admire the way the Icelandic President intervened on the side of the people in there banking crisis. There is something missing in our alleged democracy.

  3. Martin Cole
    Posted September 5, 2011 at 7:16 am | Permalink

    So why has this post then stopped at this early point in the crisis?

    It goes far deeper and further than that, as I explained in detail yesterday morning.

    The present crisis is continuing in the form of a sovereign debt crisis across the euro zone, with dominoe indebtedness imminently likely to take out the taxpayer rescued banks but also this time extending to Barclays and HSBC. Yet again we have a government, establishment and parliament closing their eyes and walking towards the precipice! Please consider the last sentence of my posting of yesterday morning, quoted here:

    Where in Parliament is there an MP who will get to his feet or face a national broadcaster and proclaim “Enough!”?

    I have looked and find little encouragement; perhaps that is why your blog is usually my first link of each morning!

    Reply: I have written a great deal about the Euro phase of the crisis, and the problems of intertwined sovereign and bank debts. I will write and say more.

  4. Mike Stallard
    Posted September 5, 2011 at 7:21 am | Permalink

    And do you know what? I could tell a few secrets if I wanted to. And I could write a book about some people who I have met in my life I can tell you! But I have more pride. Mr Darling ought to be ashamed of himself for publicly revealing things which he put up with in silence when he was Chancellor.

  5. Mr. Green
    Posted September 5, 2011 at 7:27 am | Permalink

    When Labour politicians keep saying ‘we saved the banks’ they never say, for obvious reasons, that they used the money / credit / borrowing of the British people in current and future generations to do it. We are still paying for it today, in depressed economic conditions and poor growth prospects, and will do so for generations to come.

    Twenty years ago I was amazed by the Japanese concept of a ‘three generation mortgage.’ That is, to buy a house you pay mortgage interest and capital all your life, as do your children and then your grandchildren. Gordon Brown has not-so subtly forced the UK economy into a many-generaiton mortgage.

    The blatant immorality of loading such massive debts on future generations is always soft-pedalled. It’s not as if we needed, for example, to pay for World War II.

    I’m not sure Gordon Brown should be accused of criminal acts, but the sheer deceptiveness and personal animosities that surrounded his premiership make depressing reading. And as John has pointed out, his poor grasp of economics and financial arrangements made the bank bail-outs far more expensive than need be.

  6. strapworld
    Posted September 5, 2011 at 7:50 am | Permalink

    Mr Redwood.

    If ordinary mortals realised that Brown was unfit to be Prime Minister. that he employed the worst kind of bully boys, that his personal health problems were being hushed up,that the likes of Balls and co were doing his dirty work. Do you not think that it beggars belief that the Conservative Party were not aware?

    That Brown was allowed to continue is a stain on the good name of this country. That he was ever allowed to be Prime Minister is a shame the Labour Party should never be allowed to forget, But the silence of the leadership of the Conservative Party during all this, even during the general election campaign, is a damned disgrace.

    Martin Cole, above, asks “Where in Parliament is there an MP who will get to his feet or face a national broadcaster and proclaim “Enough!”?

    Are you that man Mr Redwood? I know you would find that you would have great support. The Country needs such leadership.

    Reply: Many Conservatives were well aware of the unsuitability of Mr Brown to be PM. I often explained wny in the Commons and outside. Democratic politics is a process of trying to influence and move things in the right direction from whatever your vantage point happens to be. There is rarely one defining moment or gesture as you seem to think that any individual can do which will suddenly transform things.

    • Nick
      Posted September 5, 2011 at 12:18 pm | Permalink

      Mr Redwood, if I might ask, how many of your colleagues supported you? When you made those speeches and advised colleagues how many stood beside you in support?

      I have watched our political system for twenty years and seen weirdos and oddballs but what really sickens is the fraud, the corruption and the mis-use of public funds. I’d put money on most people turning a blind eye as long as the little brown envelopes still passed through their hands.

      That is what sickens, that is what angers. It is sad, because one or two might be bent but the rest get tarred, or, I’d imagine, silenced.

      Reply: No I did not get much support for my analysis of the impending banking crisis at the time – such is the power of government spin. I do not think MPs receive little brown envelopes with cash in.

  7. Richard1
    Posted September 5, 2011 at 8:16 am | Permalink

    Darling’s memoirs are interesting & do confirm (if confirmation were needed) that Gordon Brown was completely unfit to hold the position of Prime Minister. But we do also have to ask Mr Darling – and others who took ministerial office in the Blair and Brown governments – why they didn’t do anything to stop the disasters of those years. If need be they should have resigned. Thats the point of being a cabinet minister.

  8. Gary
    Posted September 5, 2011 at 8:19 am | Permalink

    Which is why we require decentralized govt down to the local level, the only role of central govt is the protection of life and property. Under such a system the destruction wrought by megalomaniacs and corporate lobbyists , is limited.

    • Nick
      Posted September 5, 2011 at 12:19 pm | Permalink

      Well, as the riots clearly showed the state cannot (often will not) protect our property for fear of not presenting the correct ‘media image’.

  9. Gary
    Posted September 5, 2011 at 8:24 am | Permalink

    More liquidity had to be supplied ?

    The fed injected $17 trillion after 2008 and we are now deeper in crisis. The insolvent banks should have been liquidated, and the retail depositors bailed out. Problem solved. Now we really have problems.

    Reply: yes, there needed to be follow up action after supplying enough liquidity, as I also explained at the time.

    • Gary
      Posted September 5, 2011 at 11:50 am | Permalink

      Yes you did, to your credit. But unfortunately this govt ignites you, and still will not do what needs to be done. They show every intention of looting the taxpayer on an ongoing basis. The latest ploy is to soak them through inflation. A bank bailout by subterfuge. They learned nothing. One can only conclude that those in the upper echelon of the party are doing the bidding of the bankers and the EU. We have no good options to elect. They are all useless, and don’t represent our interests. Even UKIP is a one trick pony.

      • Gary
        Posted September 5, 2011 at 1:50 pm | Permalink

        apologies for typos. My excuse is using predictive text on a mobile, but that is weak.

  10. Nick
    Posted September 5, 2011 at 8:50 am | Permalink

    Banking crisis is peanuts. 60-70 billion cost – mostly as a result of Brown buying shares with our money. Just like the Gold fiasco, he doesn’t get trading.

    The real crisis is coming. It’s government debt. All the stuff fraudulently hidden off the books so as people don’t realise. A legalised ponzi. However that doesn’t change the game. If you declare it legal, it still works like any other ponzi, and they always collapse.

    reply: In the UK the governmetn has now published figures for the off balance sheet items inherited from the past.

    • Nick
      Posted September 5, 2011 at 12:21 pm | Permalink

      £8 trillion or somesuch, if memory serves. More worrisome is that the deficit is increasing, not decreasing.

      We need start removing government departments. We cannot afford a trade and indsutry dept that seems to do nothing for trade and industry – except make it worse.

  11. Brian Tomkinson
    Posted September 5, 2011 at 8:59 am | Permalink

    The most shocking element of all this is that not one senior minister or civil servant was prepared to resign and disclose publicly Brown’s malfeasant behaviour. Instead they decided to keep their heads down, lie to the British people and draw their money whilst knowing that the country was being led by a (thoroughly unsuitable-ed) man.

    • APL
      Posted September 6, 2011 at 12:57 pm | Permalink

      Brian Tomkinson: “Instead they decided to keep their heads down, ”

      I don’t think so, they came out to give the wretch a standing ovation. THE CIVIL SERVICE.

  12. Iain Gill
    Posted September 5, 2011 at 9:19 am | Permalink

    Been ill all weekend, rang GP first thing this morning, earliest appointment they can give me is last thing Wednesday. I will have been (very) ill for at least 5 days before I get to see a doctor. This is the NHS people in this country try to defend? it is a joke.
    Sub 3rd world service that would not be tolerated in ANY other western nation.
    The British public sector costs so much but provides such poor service its outrageous.

    • Bob
      Posted September 6, 2011 at 11:31 am | Permalink

      But at least they don’t make a profit!
      Wouldn’t it be terrible if it were like Autoglass, who come around to your home with a few hours notice to repair your broken windscreen and recover the fee directly from your insurer without affecting your no claims bonus.
      And to add insult to injury they make a profit for their investors. How terrible!
      Why should pension funds receive an income from such activity?

  13. lojolondon
    Posted September 5, 2011 at 9:36 am | Permalink

    One thing I have realised, if Crash Gordon had fired Alistair Darling and made Ed Balls Chancellor, that could have made Ed far less influential in the Labour party now. I’m not sure it would have been a good thing as he is so bad for the Labour party, but I would have enjoyed seeing him directly tarred with the brush as he seems to be so good at dodging flak!!

  14. Caterpillar
    Posted September 5, 2011 at 9:41 am | Permalink

    Cynical thoughts:

    (1) More conspiracy to prime the UK for the continuing rather than withdrawing the QE/ZIRP policy?

    (2) Could Mr Darling be raising his political capital by belatedly criticizing the Govt of which he was member. Many Coalition/Tory supporters may run the risk of adding to this, so when the rhetoric of choking off recovery by not spending more is then spouted by the Opposition, it is given inappropriate weight. Politics eh? [ I do though note JR’s observation that the Chancellor could also have acted, a point to make then … but a point that remains now.]

  15. john east
    Posted September 5, 2011 at 9:43 am | Permalink

    John, we share a common distain for the disaster that was Brown’s premiership, but I disagree with your analysis that the banks were in a liquidity crisis, and therefore needed bailing out.
    In my view the banks were not in a liquidity crisis, but were, and still are, in a solvency crisis, and throwing more borrowed money at an insolvent institution can only delay the inevitable collapse.
    Time will tell, but with Greece on the verge of default and contagion via Italy and Spain threatening us again perhaps as little as six months down the road, I believe the bailouts will prove to have been exercises in can kicking, not solutions to the problem.
    You should drop the expression, “liquidity crisis” from your lexicon, because this false diagnosis, and its false remedy of more bailouts and more unsustainable sovereign debt, simply makes things worse further down the road. It also gives weak and spineless politicians an excuse to avoid tackling our fundamental problems, and continue with business as usual.
    The Icelanders got it right, and in ten years time when we will be at best languishing in a Japanese type stagnation, or at worse in the depths of the next great depression, they will probably be emerging from their travails and growing again.

    Reply: We disagree. Solvent banks faced a liquidity crisis in 2007 anbd 2008 thanks to the obstinacy of the authorities. Some banks also faced a solevncy problem, where I proposed different remedies and opposed nationalisation, the government’s chosen way of kicking the can into the taxpayers’ street.

  16. Acorn
    Posted September 5, 2011 at 10:13 am | Permalink

    JR, if you get the chance, could you ask Mr Clegg where my 1,450 RBS shares and 440 Lloyds shares are? I haven’t received them yet; I am anxious to take my profits as times is ‘ard.

    Mr Clegg said: “You are giving the Treasury an assurance that they will break even but you are not giving the Treasury the freedom to grab the windfall if there is one.”

    “If there is one”. You gotta laugh.

    • A different Simon
      Posted September 5, 2011 at 7:03 pm | Permalink

      I get a bit concerned about the noises from politicians about the taxpayer making a “profit” on the states stakes in these banks .

      Above a certain size the financial sector becomes a parasitic load on the real economy .

      Individual banks and the financial sector are an order of magnitude larger than they were 20 years ago and the parasitic load has become unbearable .

      There seems to be an incompatibility between the needs of the real economy for the financial sector to be shrunk and “selling the banks at a (nominal) profit for the taxpayer” .

      Parasites are not usually so stupid as to kill their hosts .

  17. oldtimer
    Posted September 5, 2011 at 10:51 am | Permalink

    The revealing, and worrying, aspect of these revelations is the extent of the power held by the Prime Minister of the day and his closest, trusted advisors (ie his cabal). It would appear that, even in extremis, members of Brown`s own party felt powerless to do anything to remove him from office. The same thing appears to have occurred over Blair`s decision to go to war in Iraq.

    Nor is the public at large well-served by the lobby correspondents. Their role appears to be that of useful idiots, useful for pedalling the PM`s line on pain of excommunication from the privileged access permitted to the lobby.

    Many years ago, Quintin Hogg coined the phrase “elective dictatorship” to describe the state of democracy in the UK. It seems even more appropriate today than it did when he first uttered the phrase. In fact it is far far worse, because so much UK sovereignty has been surrendered to the EU.

  18. Botzarelli
    Posted September 5, 2011 at 11:43 am | Permalink

    While it is reassuring that Darling had a good grasp of his job and the situation, it is depressing that he was unable to do much more than fight a rearguard battle within his own government on it.

    What is it about politics that makes even leading politicians (or perhaps, particularly leading ones) so unable to conquer their fear of being sidelined or demoted that they put up with being part of something that is so wrong? I can see how Darling might not have wanted to give in to Brown and Balls by letting them have what they wanted (his head on a plate and the ability to forge a completely wrong-headed approach to the economy without any resistance), but that seems a disastrous way to run things. He ought to have crossed the floor to make his point!

    • norman
      Posted September 5, 2011 at 3:36 pm | Permalink

      Not being a politician who knows but looking on from outside it seems politicians face almost insurmountable odds to climb the greasy ladder: being selected as a candidate, being placed in a winnable seat, winning the seat, facing the possibility of the sack every 5 years with little chance of making a comeback.

      Then they have to toe the line in Parliament and hope that their face fits to get a leg up into a position of power, that is if their Party is in power. To finally get to the summit and a position of influence it must be incredibly difficult to walk away from it knowing that your chances of return are small after making such a move.

      I imagine Darling would justify along the lines of ‘but for my restraining influence it would have been even worse’.

      • Bob
        Posted September 6, 2011 at 11:01 am | Permalink

        Sounds like the problem with our political system in a nutshell.
        And not just ours.

  19. David B
    Posted September 5, 2011 at 12:44 pm | Permalink

    The problem is “what does the shadow chancellor believe now?”

    Alistar Darling could not fix the problem due to his powerful neighbour and his advisors in number 10. If Mr Balls does not recognised the mistakes of the past he is unable to formulate policies to fix the problems thoses failures caused. The famous plan b can only be a reheat of failed policies.

  20. Steve Cox
    Posted September 5, 2011 at 1:43 pm | Permalink

    Blame the commercial banks for their arrant stupidity by all means, and few people feel that their management has been made to suffer for their greed and arrogance. Nonetheless, the ball of failure for this crisis lies firmly in the court of the Bank Of England. How has that failed institution been punished for its idiocy in keeping interest rates too low for too long? Why is the same academic incompetent still in charge of it? In what other profession can you be so highly paid and yet evidently be held so little to account for your miscalculations and lack of wisdom? Fix the BoE, and then we might start to see a recovery. Expecting the same people and organisation who caused this crisis to sort it out is naive in the extreme. Are you listening, Mr. Osborne?

    • Andrew Gately
      Posted September 5, 2011 at 8:24 pm | Permalink

      I agree that the person who had the ability to resolve the crisis was Mervyn King.

      His moral hazard stance would only make sense if it had been just one bank that had a problem but it was the entire banking system that was broken.

      Moral hazard could have been better achieved by charging a market rate of interest on loans from BOE to the various individual banks.

  21. javelin
    Posted September 5, 2011 at 2:49 pm | Permalink

    It was obvious to me the banks had a liquidity problem – you just had to look at the LIBOR.

    Same way I posted a year ago saying that Italy would be the real thorn to puncture the Euro. I also said that Belisconi wouldnt have any friends. The 10Yr Italian bonds are back up to 5.5% – the Italian bond auction looks like a damp squib – probably bought by Italians and the ECB. Now Italy is back peddling and not implementing the austerity measures the ECB is giving them a slap down by letting their bond rates rise. The Italians are waving their finger at the Germans and ECB in a game of chicken.

    The ECB find was supposed to be there to buy bonds and keep the rates down. It was supposed to be building up a fund to provide stablity. It looks like the ECB is now punishing Italy for not implementing their full austeiry measures. Berlisconi is losing friends and influence just as predicted. So much for political will and harmony across Europe !!!

  22. Tedgo
    Posted September 5, 2011 at 3:17 pm | Permalink

    Perhaps we need a new law. If a government leaves the country in a worse state than it was when it took office, then all the Ministers involved should either be banned from ever being a Minister again or better still, banned from standing for Parliament again.

    That would sharpen up Government and put pressure on collective responsibility.

  23. javelin
    Posted September 5, 2011 at 4:31 pm | Permalink

    There is a widespread rumor that the Italian Government is due a further downgrade. Moodys is most likely first – because it just works on a probablity basis.

    http://ftalphaville.ft.com/blog/2011/09/05/669321/about-the-italian-downgrade-rumours/

    I see the Italian bond sticking above the 6% rate for a little while, just below the critical 7% that they can’t afford. A combination of low growth (0.1%) vs their Government prediction (1.1%) – and poor deficit reduction E7bn short this year. Will squeeze the bond rates ever closer to 7%.

  24. Javelin
    Posted September 5, 2011 at 5:23 pm | Permalink

    The other day I said that it would be a revaluation that brings down banks. The CEO of Deutsche Bank (see below) has concurred – “It’s stating the obvious that many European banks would not survive having to revalue sovereign debt held on the banking book at market levels,”

    http://www.moneycontrol.com/news/world-news/deutsche-says-europe-crisis-could-kill-weak-banks_582798.html

    So the question is now – when will a bank be forced to mark to market? I’m not entirely up on accounting rules – but I would bet if this crisis carries on for much longer an accountant somewhere is going to be forced to pull the plug on their own bank to save the depositors funds.

    • sjb
      Posted September 5, 2011 at 10:17 pm | Permalink

      So Merkel (or her successor) has a choice: full-blown banking crisis or a measure along the lines of Eurobonds. The former would lead to hundreds of thousands of Germans being laid off in the coming months.

      External actors’ interests also have to be considered. The United States are strong promoters of European integration because they don’t want to shed more American blood on our continent. China does not want the dollar to be the main reserve currency, although the price for their support may be lifting the EU arms embargo.

  25. Matt
    Posted September 5, 2011 at 5:40 pm | Permalink

    I find Mr Darling unimpressive – sanitising himself as the bullied partner in the relationship.

    What about the other side of the coin?

    This was the guy that Mr Brown couldn’t sack – above all others – he should have been braver.

    Yet it was Mr Darling whining on about “Tory cuts versus Labour investment”

    (In Labour’s world investment = consumption)

    Remember Mr Darling announcing the borrowing of over £700bn in 5 years – basing it on a growth prediction of 3.5% in 2011 (Where’s that gone?)

    Mr Darling was a member of the government since 1997 from the start to the finish.

    We’re going to have to live with the damage that this Labour government inflicted for a long time to come.

  26. Electro-Kevin
    Posted September 5, 2011 at 5:52 pm | Permalink

    Thanks for your efforts on this, Mr Redwood.

    Instincts tell me that yours was the right course.

  27. A.Sedgwick
    Posted September 5, 2011 at 7:23 pm | Permalink

    Whilst people vote en masse for the three main parties, nothing of substance will change. For the record their membership is approximately as follows:

    Conservative 300,000
    Labour 175,000
    Libdems 75,000.

    They effectively run the country.

  28. Andrew Gately
    Posted September 5, 2011 at 8:18 pm | Permalink

    I have been arguing all along that this was a liquidity crisis and that the Bank of England needed to act to allow banks to shrink there balance sheets in an orderly fashion. (Still not happening to the extent that is required).

    I was often challenged on message boards to find one person who agreed with me and it was this search that led me to your site.

    I must admit to feeling rather smug by Alastair Darling’s admission that Brown and King were wrong and exasperated the crisis.

    I would like to thank you for your site and its intelligent contribution to thedebate on the financial crisis which probably helped me keep sane whilst the popular media chose to worship at the feet of Vince Cable. Who made huge political capital out of the crisis but did little to help resolve the problems that the crisis caused.

  29. sm
    Posted September 5, 2011 at 9:15 pm | Permalink

    I think the point is that GB and some others probably would not have been able to win an election as PM. (I think he knew that). Should the system be changed in anyway?
    Personally, i think so, i think misguided party loyalty (careerism EU and otherwise) is destroying our democracy and country.

  30. Bob
    Posted September 6, 2011 at 12:10 am | Permalink

    There was an interesting documentary on C4 called Britain’s Trillion Pound Horror Story. It appears to be aimed at explaining our predicament to non-financially savvy types, but I’m not sure it it was sufficiently dumbed down for it’s target audience.
    It certainly exposed the fact that some MPs didn’t even know the difference between the annual deficit and the national debt, which is disgraceful.
    The Tories didn’t do a good job in opposition.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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