Jeremy Corbyn is right to blame the banks, not Labour, for the financial crisis

[blacksunday]

Here’s a question for you. Consider the following statement: “We must live within our means, so cutting the deficit is the top priority.” Do you agree?

If you said yes, you are with the majority. If you said no and are a member of the Labour party, you are almost certainly planning to vote for Jeremy Corbyn to be its next leader.

The question was put as part of Labour’s inquest into why it lost in May and, according to Ed Miliband’s policy coordinator, Jon Cruddas, is evidence that the party’s austerity-lite message was not tough enough. He said in a blog post: “We can seek to change the views of the public, but it’s best not to ignore them.”

Fair enough, you might think. Labour lost because it wasn’t credible on the economy and the reason it wasn’t credible was because the electorate thought Miliband would borrow and spend too much. If this was a game of Cluedo, the solution would not be Colonel Mustard with the lead piping, but George Osborne with the budget deficit.

The conclusion, therefore, is simple. To avoid defeat in 2020, Labour needs to get back in tune with the electorate by showing that it too would balance the budget even if doing so means welfare cuts. The message from the party’s grandees is that the flirtation with Corbyn is all very well but it is now time to stop being silly. However, it appears the message is falling on deaf ears.

Why is that? Why are Labour supporters determined to resist the message from the 58% that say “we must live within our means, so cutting the deficit is the top priority”?

In part, it is because most Labour members have spent the past five years believing that there was no overspending or reckless borrowing in advance of the deep recession of 2008-09. Instead, they have always said the reason for the crisis was that the banks were too laxly regulated and in consequence were given licence to blow up the economy. They suspect that Andy Burnham, Yvette Cooper and Liz Kendall by and large agree, but have decided the line to take is that while Labour did not do anything wrong, political reality means they need to apologise anyway.

Corbyn is the only candidate sticking to the line that the banks were to blame and he is reaping the benefit. Not least because he is absolutely right.

Support for this argument has helpfully been provided by a recent House of Commons briefing paper from Matthew Keep. This looks at three separate measures of the public finances: the size of the budget deficit, the size of national debt as a proportion of the economy’s output (gross domestic product) and the percentage of GDP swallowed up by interest payments on the national debt.

Cont'd...

www.theguardian.com/business/2015/aug/09/jeremy-corbyn-labour-overspending-did-not-cause-financial-crisis

As quoted above:

Attendees at the conference in New Hampshire also heard Mr Brown point out that he wasn’t alone in making mistakes at the time: ‘I have got to accept my responsibility and I do, and I have been very open about saying we made mistakes on that.”

He accepts it was his fault.

No. What he humbly accepts is that mistakes were made in certain areas that could have been managed better.
Not that the entire recession was all his fault.

You, simply lie, select and distort facts. This is exactly what The People are sick of.

In actual fact The People don't give a blind man's fuck whether Gordon Brown single handedly caused the recession and burgled my house while he was at it.

What you need to do is stop blaming everyone around you including the previous Labour government for the massive mess you helped create by being part of the elite-apologists global support group.

Stop blaming GB, and attacking poor people with austerity, just help sort it out!!

JC is coming up with credible solutions, what have you come up with??

I agree that the recession was not Brown's fault. However he did ruin our pensions through the infamous raid on pension funds in his first budget and his overspending meant that the recession was longer and deeper than it would otherwise have been.

Interesting that people who are a long way from the political centre on both left and right keep telling us that "the people" agree with them despite all evidence to the contrary.

By the way, Brown only overspent because he did not raise sufficient tax income to cover his spending (or at least keep the deficit to a reasonable level for a time when the economy was growing). There is a perfectly respectable argument for high government spending funded by higher taxes. The evidence is that the electorate will not buy that argument but there is nothing wrong with a party promoting that view. Where Brown went wrong, in my view, is in leading the electorate to believe they could have high spending with low taxes and that it would all be ok because the economy was going to keep on growing forever.

GB Overspending did not cause the financial crash. For the millionth time.

GB overspending did not impact on the recession recovery. It would have made very little difference if they were running a surplus.

Tory Austerity has slowed recovery and destroyed actual lives in the process.

Can we please stop blaming GB?

"Despite all evidence to the contrary"

Have you not noticed Corbynmania or something?

GB Overspending did not cause the financial crash

I have repeatedly said that you are correct. Overspending did not cause the crash.

GB overspending did not impact on the recession recovery. It would have made very little difference if they were running a surplus.

On that point we will have to disagree. If the government had been running a surplus (or at least a smaller deficit) they would have been in a better position to afford the normal measures used to stimulate the economy after a recession. The evidence from the crash is clear. Those countries that were running a surplus or a small deficit recovered much quicker than those that were running a large deficit.

Have you not noticed Corbynmania or something?

Of course I have. The Labour party is not "the people". Corbynmania affects the electorate in the Labour party leadership election which is around 1.5% of those entitled to vote in a general election. The evidence available suggests it leaves most of the public cold. There is clear polling evidence that a Corbyn-led Labour party will be much less electable than the alternatives currently on offer (not that the general public finds any of them particularly inspiring).

"Here is a historical chart of the UK budget deficit from 1979-2012:"

www.theguardian.com/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data

"Note: Running a deficit is the norm."

The UK was on its knees in 1976, when the Labour government had to call in the IMF to financially bail the UK out, like some third world country, and was far worse by 1979 with trade unions taking on governments of both colours - so how ANYONE can call the decade after trying to correct the UK's problems/imbalances 'the norm', beats the feck outta me.

Squidzin …. Your posts are a mixture of complete financial ignorance and answering points that were never made, especially by me, so for a start please separate in your own mind the ‘global financial crash’ from the UK government policies from 1997 to 2008.

So let me answer your points one by one.

”GB Overspending did not cause the financial crash. For the millionth time.”

For the 2 millionth time, NO ONE has said he has, but his deregulation of UK repeat UK banks via his new/controlled FSA, created more of a UK economy debt/spending boom and more balance sheet problems for OUR banks – as once again, name another G7 country that had to nationalise its own banks around the same time to ‘save’ the rest of the world’?

”GB overspending did not impact on the recession recovery. It would have made very little difference if they were running a surplus.”

GB’s overspending had EVERYTHING to do with our recession recovery, as why didn’t the Labour government of a decade, putting various taxes up every year, then help small to medium sized business and citizens seeing real term falls in earnings from 2008 with tax cuts?

Our annual public spending rises that were far greater than anywhere else in Europe, up at least 50% in real terms from 2001 to 2008, ‘creating’ a fat government with new quangos and over 1 million new public sector employees and welfare/benefit/tax credit state - through the boom times - WAS the UK fiscal stimulus.

So come 2008/9 when the economy needed government financial help, it was already tapped out, sustaining the unsustainable – as the tax receipts from the City, the growth in Housing prices/consumption and everything else during this financial bubble, FELL AWAY.

If the UK would have had a balanced economy and/or just a annual surplus, from 2008 the government could have had the option of widespread tax cuts to help businesses through the recession, employ, and shield the masses from the recessionary effect of their salaries vs inflation.

”Tory Austerity has slowed recovery and destroyed actual lives in the process.”

Conservative coalition policies was to correct Labour’s financially and economically unbalanced state of the State, as WITHOUT THE TAX RECEIPTS TO FUND IT, Labour were sustaining the unsustainable.

Why do you have problems seeing that Labour INCREASED the size/cost of the State more than any other country in Europe prior to the financial crash, mostly funded by the tax proceeds of that unsustainable financial bubble – so when it was over, cutting back the £153 billion overspend is NOT AUSTERITY, its basic fecking good financial book keeping.

Labour HAD NO RECOVERY in 2010, as they had hardly made a dent in the near 7% of GDP they LOST between 2008 and 2009, and any GDP growth due to unsustainable annual government spending/welfare/benefits/tax credits far bigger than anywhere else in Europe, while the UK private sector/jobs funding the State remained on its knees, was a cross between ‘a dead cat bounce’ and economic feckwittery.

Only Labour can have a recessionary economic growth and national debt reduction plan, that has the ‘trickle down affect’ of a fat unsustainable State to the rest of the economy, that PAYS for it.

”Can we please stop blaming GB?”

So that would be a honking great NO then.

You are actually a liar... and an offensive one.

You stick to your own and I'll stick to mine.

Squidzin …. Next Corbynomics and annual budget deficits.

Frankly if I had my way no new MP should be allowed to sit in the Commons and make laws without understanding this basic economic shite, as how on Dave’s green earth can an MP vote on financial matters without understanding the ‘big picture’?

The fact Corbyn has nearly been around since John Wayne became a cowboy and STILL don’t understand it, frightens me more than his friends in dodgy regimes, including Hamas and Hezbollah, he’ll invite to meet the Queen when becomes P.M..

Corbynomics appears to make no mention of the Structural Deficit within our Budget Deficit – and why is this so important, I’ll let the BBC explain.

”UK debt and deficit: All you need to know”
www.bbc.co.uk/news/business-25944653

Structural deficit

”The structural deficit is basically the current budget deficit, adjusted to strip out the cyclical nature of the economy. You would expect, for example, the budget deficit to narrow when the economy grows after a sluggish period. The structural deficit attempts to exclude the effect of this recovery.”

”In other words, the structural deficit is the bit of the deficit that remains even when the economy is operating at full tilt. Or put another way, it's the underlying deficit that is not directly affected by economic performance.”

Now if you look at the BBC bar chart, around £75 billion of our 2010 Annual Budget Deficit under Labour, was ‘Structural’.

So even if in 2010 a new Labour government would have formed the equivalent of an economic miracle, getting a fat, inefficient, unwieldy State and benefit system to be the ‘engine’ of UK economic growth, unless that Structural Deficit would have been addressed, the UK would have become a debt basket case – thereby proving Corbynomics is complete and utter bollocks in its core belief that the UK could have spent its way to prosperity, without addressing the structure of a Labour built economy.

P.S. I'm not a "a liar", you are just too ideologically stunted to accept the truth, and the "offence" is that you need to call names rather than take my points on - which are really quite simple - Labour squandered the best decade in 100-years to make a difference to society, and not only blew it, they made things worse e.g. 5 million needing social homes by 2010.

P.P.S. Don't tell me, the UK housing crisis was only after the financial crash as well as Brown built shed loads before then. Guffaw.

Listen
Your problem is that you believe Tory "economics" to be fact in stone.
Everything you spout is subjectivity.

Economics is not a pure science it is subjective.

You happen to be in the privileged position that the Tories were not in Downing Street at the time of the crash.

You can interpret the past to your hearts content. The electorate need change. Marx actually made a strong case! You and your pro-capitalist agenda interpretation of events will not be running things forever.

Why in my mind would I separate two things which are intrinsically and consequentially linked.

Sorry, i will never do that. Why lie to yourself it is an insult to intellect.

sqiudzin

If Marx was so good, where are the countries espousing it and making life better for the poor?

Which country would you rather be poor in?

If Marx was so good

to be fair, from my memories of a long time ago, Marx's ideas required the whole world be communist (which was one of the mission statements for the USSR). Until the whole world is communist, we haven't seen Marxism. Proto-Marxism, Neo-Marxism, Crypto-Marxism yes. But pure Marxist ? No.

squidzin .... The UK's problems Labour left were not just a rumour, malicious Conservative gossip, they were real.

Basic economic are not subjective, any more than a household's income versus expenditure.

Look at the despair back in 2010, look at what has happened here and compare it to the rest of Europe, we have HAD change from the destructive direction we were still heading in, with Labour apparently stuck like a rabbit in headlights, as socialism can only survive spending everyone elses money - and as one of your ministers wrote back then 'the money had all gone'.

"Change" will not get rid of £1.6 trillion of still accumulating UK National Debt or service the £1.2 trillion of unfunded UK pension liabilities.

Another socialist governments that just 'fiddles' with wealth, like re arranging the deck chairs on the Titanic, clueless how to create a vibrant private sector to pay for the public services - is the last thing we need.

There really is more to an economy and society than worrying how a 2000's created unwieldy welfare/benefits/tax credit experiment, funded by the proceeds of a financial bubble we hope we'll never see again, can STILL be maintained - while not understanding how the private sector funding it, actually works.

'Nationalization' where the State increases the national debt to bring services back under State control, immediately caving in to trade union demands for more money, desperately needing modernization - all to be paid for by ever higher Labour taxes on the masses - was "change" 40-50 years ago, it needed the IMF to bail us out and accelerated our industrial decline. Marvellous.

nope

Utter
Typical
Carreer politician tory spin

The voice of the establishment in full flow.

The fact is those are the facts, and the fact you can't answer them is why you pathetically have to label them. Fact.

I don't need to label you to answer your bollocks of a tried and totally failed ideology that hasn't even worked in 'kin Russia for the masses despite their oil, who Corbyn clearly would suck up to - how 1970's Labour/trade union activist was that?

www.independent.co.uk/news/uk/politics/labour-leadership-jeremy-corbyn-hints-at-warmer-relations-with-russia-10449856.html

”In an interview with the state-run Russia Today TV station, which Mr Corbyn has made favourable remarks towards in the past, he suggested national security would be rethought if he was elected Prime Minister.”

”He told the channel: "What is security? Is security the ability to bomb, maim, kill, destroy, or is security the ability to get on with other people and have some kind of respectful existence with them?"

Corbyn, Russia, failed economics, its 1970's deja vu 'all over again'.

en.wikipedia.org/wiki/Sick_man_of_Europe

“Throughout the 1970s, the United Kingdom was sometimes called the "sick man of Europe" by critics of its government at home, because of industrial strife and poor economic performance compared to other European countries,[10] culminating with the Winter of Discontent of 1978–1979.”

en.wikipedia.org/wiki/Winter_of_Discontent

“Douglas Eden reveals the extraordinary penetration of the 1970s Labour movement by pro-Soviet trade unionists and the extent of Callaghan’s toleration of the hard Left.”
www.spectator.co.uk/features/3665728/we-came-close-to-losing-our-democracy-in-1979/

"Change", yeah right.

This is funny, how you lot keep going back to this "friend of Putin and Hamas" Smear as it really is all you have to go on.

"Get Corbyn" go ahead. Humiliate yourself!

A few Government publications (both Labour and Conservative administrations) highlighted the level of individuals' debt in the UK, but have proposed few policies to address this. Lots of policies seem to transfer economic risk from the private sector and state to individuals.

Most of the welfare bill is for pensioners' benefits, but few politicians propose to reduce those, eg stopping non means tested benefits for wealthy pensioners, because there are so many older voters.