can we please note how useless the Tories are being in this current crisis?

[morningpaper]

They have NO IDEAS

Even the Telegraph reported Cameron as giving one of his worst performances in the commons

ahh, and there's old Tony Benn in teh Telegraph today saying how he wnated to nationalise the finance indutry all along.

I loves ya, tony.

by the way, wonk killed this thread, not me.

SO bank lends too much money to borrower and the first people we blame is the govt. I wonder what we would have called the labour govt if they started interfering at company level by passing the regulator.

Has anyone given thought to the asymmetric response of central banks to boom vs bust. How come we never have emergency rate hikes when the Halifax index climbs by 50pc ?!!!! And why the BoE cut rates a few years ago at the first sign of house prices falling, giving the boom a second wind? Well I suspect if we analyse this (many papers written about this acroos the west) we will find a big part of the reason for where we are.

Also, after 15 years of above trend growth why we are so surprised about a sharp correction?

It really pisses me off how the banks - the Experts - are exonerated from blame by som epeople.

Their lack of accountibility and any shred of moral responsibility gets my goat

gdogger- much easier to blame the govt!

Their impatience at the govt not comeing up with a solution qwuickly REAlly irritates me.

Let's face it, many of us were part of the boom and we have to give some back now. I am very sorry if people lose their jobs and families. But some of the complaining ignores the tremendous fortune (compared to most of the rest of the world) that so many of us enjoy in the UK.

gdogger- well the govt came up with a solution that gives the public purse a nice stake in the upside shoukd any of the friendly banks need a capital injection. And we will see the US and other countries follow this model. Well done Gord.

And special mention to Darling for telling us how bad things were. I was one of those berating him not so long ago.

the govt should now be telling them what their pay scales should be. They should follow council pay scales.

gdogger- you made me smile. That will not happen, i assure you. But you are right, the govt having a seat in bank boardrooms will actually give another dimension to regulating banks. Can't wait to bump into Prescott in the lifts!

Oh, does anyone know where they are hiding the Adam Smith free market Tories?

If it gets much worse full-scale Nationalisation of the banks will be on the cards.

I'm starting to wobble. Quick, stockpile the tinned peaches.

Actually, you may be right on the banks. At that point we might be near the bottom of the crunch but then the consumer recession will be on the way. But atleast lending would have resumed, interest rates very low and Barrats will be flogging flats at half price. Hmmm.

Completely agree with the OP.

There are two interesting (and imo completely mendacious) arguments about the financial crisis beginning to appear in right-wing newspapers. Expect to see these being deployed by the Tory front-bench once the dust has settled a little.

Argument 1 - "It's all the left's fault" The argument here is that some Democrats and the Clinton administration promoted sub-prime lending for social reasons - that this distorted markets and is the underlying reason for the credit crunch. Like all good lies, it has a grain of truth in it. But to accept that it explains where we now are, you'd have to believe that Wall Street does exactly what the Feds want it to (as if); and ignore all the other problems (over-leveraging, CDS madness, stalled inter-bank markets, bonus culture) that have absolutely nothing to do with any Government - except in the sense that it failed to stop the overpaid morons responsible for these things. Which brings me to...

Argument 2 - "It's all to do with poor regulation". There certainly has been poor regulation. But to believe this alone explains the current situation is a bit like blaming rising crime on the police. Poor policing might explain it in part. But personally I'd blame the criminals - and the culture and ideology which sustains them - first.

Intersting Gustave - On Argument 1 -someone in the US told me that the middle class default rate and resultant loss is higher loss is higher amongst middle classes in the US in this credit crunch but I would like to check that again.

The Teleygraph seems to agree with the OP:

"[the tories] couldn?t bring themselves to attack the policies that exacerbated this mess because for the most part they supported them ? certainly on incontinent public spending. Now, they are not taking on the Government?s handling of this crisis because they haven?t a clue what they would do differently. It is not a very edifying or reassuring picture, and our democratic rights are being harmed by the Tories? inadequacy.

I have said before that George Osborne, the shadow chancellor, isn?t up to it. That becomes more apparent with each day that passes. At some stage he will have to offer more than simply copying Labour, but that requires him to have a plan, or at least a clue. Gordon Brown is already, undeservedly, moving up again in the polls. If the Tories don?t soon show they are grown-ups rather than spotty adolescents when it comes to the business of governing, they might not get into the business of governing after all. "

Tony Blair's legacy is Nick Clegg, dave Cameon and George Osbourne. Having said that I don't think that Osbourne and Cameron are that bad. I just don't like the narrowness of their party.

Agree TD - completely fail to understand why the Lib Dems went for another pretty face when they could have had a genuine statesman like Vince Cable as their leader. Had they done that they would have seemed like a real opposition force among all this turmoil.

I find it amazing that Gordon Brown has gained so much from this catastrophe he contributed to.

Cable has been wisest head in all of this but we are suckers for pretty faces. The Tories will win the next election, don't worry: when the dust settle the press will turn on Brown and blame him.

We should reflect on the fact that credit is the fundamental fuel to our market economy AND these events will recur every few decades. In each cycle, we learn but something will get us in the end. This time, we thought that we could leverage the banking system a few times over with new credit transfer instruments and that has blown us up. Something else will get us next time. It is part of the evolution of our market economy.

I don't give that much of the blame to Gordon Brown. I give more blame to the MPC and to fundamental flaw in the risk modelling of the market. Bankers convinced themselves and regulators that less regulatory/reserve capital was required because they could manage risk dynamically. And the data used was limited to recent history and did not factor in systemic failure. Now there was global consensus about this breakthrough in risk management and it started even before Brown's time. To give him central blame for this global fundamental flaw doesn't seem quite right, in my humble opinion.

Reason to be positive: Brown, Clegg or Cameron- all three are decent people 10 times better than Palin who could end being leader of the free world. So we shouldn't be too cynical about our politicians. God Bless our great british state :-)

Okay so I know it's just as easy to blame the media as blame the government, but I think you'll find the reasons that the Lib Dems didn't choose Vince Cable as their leader was that Ming Campbell (another good guy IMHO) was mercilessly hounded for daring to be over-60.

good point BShott

Cameron is probably an okay guy BUT the real problem for the Tories is that their political framework is centred around individualism, shrinking govt and an entirely free market at a time when the state has a BIG role to play. So they are in entirely the wrong political place for the public to trust them?