According to today's FT, the Noughties have provided the lowest economic growth since the Second World War.
I'm no economist but I don't need to be to understand that GDP rising by just 1.7% after inflation is A Very Bad Thing. At the same time, manufacturing output actually managed to fall by 1.2% (after inflation)every year on average (Source: Office for National Statistics, via FT).
At the same time the FTSE All Share averaged losses of 1.8% annually (Source: Morgan Stanley, via the FT).
So, for all those years that Gordon Brown was Chancellor, when he was telling us how well we were all doing, he clearly had his fingers crossed behind his back; he was lauded in the City for acheivements that were based on smoke & mirrors.
During the "good" years (and they felt pretty average to me; the boom pretty much passed me by, along with most people I know) any growth was based purely either on credit (look where that got us)or over-inflated property values, both actively encouraged by the Government. It was always going to end in tears.
I don't blame the Banks. They were just working within the rules. The National interest is the job of Government, not Banks.
This recession has been the worst I can remember. Today's revelations show the reason why.
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I (as most people I understand) blame the Government AND the Banks. It may have been the Governments rules but the Banks enjoyed the ride and ensured they took full advantage of it every moment they could.
ReplyDeleteThey knew what was happening and should have done something to stop it.
As per usual though everyone will get off scott free and I see they are already awarding ridiculous bonuses in the banks again, all the meantime we the tax payers are the ones who end up paying.
Thanks for the comment, Anonymous.
ReplyDeleteI know most people blame the Banks, but they were merely working within the rules. They exist to make a profit for their shareholders. Therefore it should be the shareholders that decide any punishment. Bonuses are a different discussion for another day.
Blaming the bankers is like blaming a fox for going through your bins.
The Banks did not force everyone to take on credit, one has to accept it. If someone is silly enough to take on more credit than they can afford to repay then it is down to them.
ReplyDeleteAs it is Government light touch regulation combined with encouraging people to have larger credit facilities as well as the hyping of the Property market for nigh on a decade... well, how could it not but end in disaster. At the heart of the whole mess is the government, their hand was on the tiller and they could have steered us away from the eye of this storm.
Exactly!
ReplyDelete