Did banks, or government cause the UK recession? Or both?
Discussion
They both need to take some blame, the banks took the risks - the government let them.
What I find disgusting though is that after a decade of healthy economy, the Labour party had spunked all of our money up the wall on diversity projects and had nothing in the bank to fight with. That is criminally irresponsible.
What I find disgusting though is that after a decade of healthy economy, the Labour party had spunked all of our money up the wall on diversity projects and had nothing in the bank to fight with. That is criminally irresponsible.
Puggit said:
What I find disgusting though is that after a decade of healthy economy, the Labour party had spunked all of our money up the wall on diversity projects and had nothing in the bank to fight with. That is criminally irresponsible.
And I hear a book's about to be published detailing how you can do it, too. 
Labour split regulation of the financial services sector into too many different bodies, it created an environment where it couldn't and didn't effectively monitor systematic risk
When Northern Rock was going down, it could have let it fail...but it was Northern and therefore in Labout voting territory, so it spryed money at the problem, instead of simply letting it fail and taking over the mortgage book, or passing it to a third party or selling it at pence in the pound.
Many many things were the fault of bankers, but the recession was NOT solely caused by them.
The governemnt allowed the money supply to increase far too much, it borrowed when it should have saved, and worst of all it WASTED the money it spent on ego projects - wars, IT systems that didn't deliver and huge pay rises for the non productive sectors of the economy
So in my view it was the governments fault, but the bankers behaved with incredible stupidity (and they might of got away with it if it wasn't for that pesky peston)
When Northern Rock was going down, it could have let it fail...but it was Northern and therefore in Labout voting territory, so it spryed money at the problem, instead of simply letting it fail and taking over the mortgage book, or passing it to a third party or selling it at pence in the pound.
Many many things were the fault of bankers, but the recession was NOT solely caused by them.
The governemnt allowed the money supply to increase far too much, it borrowed when it should have saved, and worst of all it WASTED the money it spent on ego projects - wars, IT systems that didn't deliver and huge pay rises for the non productive sectors of the economy
So in my view it was the governments fault, but the bankers behaved with incredible stupidity (and they might of got away with it if it wasn't for that pesky peston)
ShadownINja said:
We did.
correct re recession.The general public borrowing too much fueling excessive consumption and unrealistic asset appreciation.
Of course the retail banks directly and the investment banks indirectly provided the financial products to allow it and the government(s) encouraged it (or atleast didn't attempt to stop it) because of the perception of increased wealth and prosperity it created.
But the biggest disaster was not just joe bloggs excessive spending spree but was the government spending beyond their means and inflating the welfare state and public sector causing the structural deficit and massive governmnet debt that will ultimately delay and then dampen any recovery and have us repaying through taxation and spending cuts for years to come.
Edited by XTR2Turbo on Tuesday 26th October 20:48
The banks weren't operating in a vacuum. They were functioning in the regulatory environment set by the Government and catering to the appetites of the time. The Government sat back and let the bubble inflate, as it meant they could pull in more taxes and take all the credit (no pun intended), we bought into the whole thing and lived way, way beyond our means and nobody really had a "Plan B" just in case it all went tits up. The banks make a handy scapegoat, but they were simply feeding the addiction, not causing it. We all pigged out on junk food for a decade and are now dealing with the resultant heart attack. The junk food in isolation isn't to blame, it's our fault (people, banks, Government) for continuing to shovel it down our throats without considering it might come back and bite us on the arse at some stage.
Gargamel said:
(and they might of got away with it if it wasn't for that pesky peston)
Peston is an arse who believes in his own bloated ego and little else. For every story he now quotes of the told you so variety, there tends to be another he also told of pretty much the complete opposite variety, if you care to look for it.ShadownINja said:
We did.
Agree, though not by our spending habits, but by voting in the previous shower into power .. and more than once. If the Clown had used to some of the tax revenue (from companies & us) in the good years to pay down national debt then we wouldn't be in this precarious situation - some banks would still have lent too much & some companies/people would have borrowed too much - but some keynesian stimulation would be on hand.I would say the downturn is part of an economic cycle. The fact that it became a recession (2 successive quarters of GDP contraction) was probably caused by a mixture of consumer and business sentiment and a sharp contraction in the amount of credit available.
However, the fact that we are completely and utterly f
ked for the next 20 years while we pay down the debts run up by the Labour government spending the last 13 years pissing away good money after bad on all manner of stupid and destructive projects is the fault of the Labour government and the idiots who voted for them.
The fact that we are not now scything away at the public sector and running a budget surplus that will make a start on actually clearing this debt is the fault of the current Tory/Liberal government, and the people who voted for them.
However, the fact that we are completely and utterly f
ked for the next 20 years while we pay down the debts run up by the Labour government spending the last 13 years pissing away good money after bad on all manner of stupid and destructive projects is the fault of the Labour government and the idiots who voted for them.The fact that we are not now scything away at the public sector and running a budget surplus that will make a start on actually clearing this debt is the fault of the current Tory/Liberal government, and the people who voted for them.
XTR2Turbo said:
ShadownINja said:
We did.
correct re recession.The general public borrowing too much fueling excessive consumption and unrealistic asset appreciation.
Of course the retail banks directly and the investment banks indirectly provided the financial products to allow it and the government(s) encouraged it (or atleast didn't attempt to stop it) because of the perception of increased wealth and prosperity it created.
But the biggest disaster was not just joe bloggs excessive spending spree but was the government spending beyond their means and inflating the welfare state and public sector causing the structural deficit and massive governmnet debt that will ultimately delay and then dampen any recovery and have us repaying through taxation and spending cuts for years to come.
The Labour government didn't directly 'cause' the recession as such, just left us in a very deep hole which will take years, or even decades to climb out of.
Edited by JagLover on Wednesday 27th October 10:33
Guybrush said:
It was the borrowers and spenders who did it. Who were the borrowers and spenders? The Labour government and a section of the gullible public. The banks lent money according to instruction, that's all.
The Global recession was caused primarily by legislation brought in by Clit-on that forced banks to create NINJA mortgages and the like. There was then systemic failure on the part of regulators and other financial institutions to accurately factor in the risk of these mortgage products when they where packeaged up into Credit products that then were traded around the world (and primarily in the UK due to it's lax regulation).The UK recession was caused by banks believing their own hype and offering riskier and riskier products to consumers. 125% mortgages, self certs, BTLs all contributed to the bubble, whilst adding no real wealth to the economy. Of course Winky wanted all the credit for his abolishion of boom and bust, and was so blind to the amount of strain building in the economy. To compound matters, the kilted s
twit then went and pissed away a ridiculous amount of money (stolen from our pensions and pay packets) to piss up the wall on wars, climate change and a pack of other st, not least of all contributing to a growing underclass of immigrants and home grown professional scum who realised that it payed not to work. When the bow broke, the cradle fell, and we'd already mortgaged our nations soul to Ocean Finance.Well, that's how I sees it anyway...
Bing o said:
Guybrush said:
It was the borrowers and spenders who did it. Who were the borrowers and spenders? The Labour government and a section of the gullible public. The banks lent money according to instruction, that's all.
The Global recession was caused primarily by legislation brought in by Clit-on that forced banks to create NINJA mortgages and the like. There was then systemic failure on the part of regulators and other financial institutions to accurately factor in the risk of these mortgage products when they where packeaged up into Credit products that then were traded around the world (and primarily in the UK due to it's lax regulation).The UK recession was caused by banks believing their own hype and offering riskier and riskier products to consumers. 125% mortgages, self certs, BTLs all contributed to the bubble, whilst adding no real wealth to the economy. Of course Winky wanted all the credit for his abolishion of boom and bust, and was so blind to the amount of strain building in the economy. To compound matters, the kilted s
twit then went and pissed away a ridiculous amount of money (stolen from our pensions and pay packets) to piss up the wall on wars, climate change and a pack of other st, not least of all contributing to a growing underclass of immigrants and home grown professional scum who realised that it payed not to work. When the bow broke, the cradle fell, and we'd already mortgaged our nations soul to Ocean Finance.Well, that's how I sees it anyway...
ellroy said:
Gargamel said:
(and they might of got away with it if it wasn't for that pesky peston)
Peston is an arse who believes in his own bloated ego and little else. For every story he now quotes of the told you so variety, there tends to be another he also told of pretty much the complete opposite variety, if you care to look for it.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff