Will the rescue plan work?

Bocephus

Brown takes no responsibility for anything that's gone wrong. There you go.

PhilipDC

I guess we dont know the financial impact of the plan, but the political impact of the last few weeks is becoming clear.

(1) In the mind of the public Brown is no longer the ditherer they thought he was - that argument is lost to us and we have to adjust.

(2) We can no longer complain about debt. We are backing this plan (if I hear Osborne right this morning) it will dramatically increase government debt. We cannot back the plan and rail against government debt without looking foolish and 2-faced, so that argument is lost to us as well

(3) The money for tax cuts in the next few years is gone. We have to deal with it. So too is the money for spending committments - it will be a competence election and we have to adjust strategy dramatically.

(4) The next election will be about who can drive economic recovery. This is solid ground for the tories but its not been the thrust of our thinking so far and we have to adjust

(5) Crises of whatever sort work for labour and not the tories. We need more gravitas in the shadow cabinet to show a depth of experience.

richardj

So the ban on selling short the shares of banks and financial stocks worked!

What possible reason can be put forward for expecting Brown and Darling to create any positive solution out of this crisis when they have assisted in causing it and still do not realise that their actions and their lack of action has greatly contributed to the crisis. Markets do not beleive what they say or stand for and until there is a change of leadership will not be persuaded to take a positive view.

David C

What is the alternative if the plan does not bring stability?

Bocephus

So let's get this right. Brown is taking credit for the economic boom of the last 11 years, funded by irresponsible bank lending, but will take no blame for the fall out of said boom.

Stock market now lower than when Labour came to power. Pound dropping like a stone over the last week. Looks like we will need to start investing in Zimbabwe Dollars for security! Mind how you go.

NorthernJohn

I'm no fan of the government, but I've got to say well done for this. If I wanted to be really peevish, then I'd say this plan should've been prepared weeks or months ago, ready to roll out on demand, rather than being haggled over at 5am this morning.

Nevertheless, the fact remains that this was a necessary move and the government have done the right thing.

Mike. Brighton

PhilipDC:
I think your points are very good, but I'm not so sure about (1). Brown apparently lost his rag at this morning's press conference when Newsnight asked him to apologise for 48 hours of silence i.e. dithering.
Accusing Brown as a ditherer still has much mileage because it is observably true.
The run on RBS's share price was caused by a government briefing, subsequent vagueness and dithering. Arguably they brought one of the UKs largest banks to the brink because they were incompetent. Look that HSBC is named on the list of banks that will draw from the government funds. HSBC shares are now down 4.5%, they have issued a press release denying the government statement.
Incompetence like this has mileage for us.
(2) is partially true, we can't complain about the additional debt this will cause but we certainly can point out the eye-popping levels of debt we already have and ask where the money has been spent and why after 12 years of "boom" the cupboard is bare and our public debt it at Italian levels.
As for (4)&(5) these are absolutely right and we need to bring Ken Clarke into play. Yes he is a throwback to the 80's and 90's but he can mix it with Cable who seems to be dominating the opposition economic point of view slot. Osborne for all his undoubted political skills is too young and lacks the gravitas of an old stagers. I'd go as far as saying he looks a little out of his depth. That's a big issue for us.

Mike, Brighton

David C. Short of nationalisation only prayer!

This makes 1992's Black Wednesday look like a tea-party. Why is the MSM not pointing this out? The crisis in UK banking was not maufactured in the US. Labour has regulated the UKs banks for 12 years!

TGF UKIP

Was this really necessary? Two big fat smelly rats here, Gordon, obviously one and the other being his vehicle to the airwaves, the BBC's Peston.

A couple of week's ago it was the market unhinging via the premature leak of the Lloyds/HSBOS takeover leaked to try to make Gordon look the fixer and prime mover. Yesterday it was the leak that banks had asked for government capital resulting in the huge drops in bank share prices.

Both RBS and Barclays have issued specific denials that they had made any such requests, HSBC manifestly has no such need and nor has Lloyds having just completed its own market capital raising.

I urge all Coffee Housers to hasten over to Guido on this (order-order.com) and I trust that the Speccie, the Telegraph etc are going to scream long and loud for an inquiry into Peston's involvement in this.

As we found, though, from the Miles/Marr affair the London media always protects its own.

mac

Philip DC dispassionately calls it right, including his last sentence. Osborne wasn't convincing when interviewed by Humphries this morning. A blue imitation of New Labour is simply untenable now and the scale, if not the nature, of the rebuilding challenge resembles that faced by the Tories in 1979. Above all, resolute and determined leadership is essential. I'd plump for Hague in No 11.

Oor Willie

I haven't watched all of it, but has anyone actually asked B and D where the money is to come from?
Huge sums of money being produced as if they were sweeties.

Faceless Bureaucrat

PhilipDC [9.53am]

"The next election will be about who can drive economic recovery."

Quite possibly, but don't bet on it being in 2010 - As Darling kept emphasising, this is a "3 year plan", which takes us to 2011. What's the betting that sometime in the future, Brown calls for a Government of National Unity to avoid calling a GE in 2010 'in the interests of the Country', ensuring the Conservatives are denied the chance to go to the Electorate. That gives Labour a full 3 years to decimate the current Tory lead in the Polls and who knows, even ferment a leadership challenge in the Conservative Party to really guarantee a fourth term for Labour. As history teaches us, whenever the Conservative Party finds itself twiddling its thumbs on the sidelines, plotting is sure to follow...

mark c

PhillipDC .. agreed but surely the point that Brown must now be outline is how to deal with the debt .. and the oppostiion must drag out of him how to pull back public spending and pull back the guarantees and insurance he has given in a controlled way. Somewhere within all of this he and his team will loose sight of just how the wealth they have spent and borrowed against gets created. bloated public sector, struggling industry, limiting reward for the profitable and swinging tax hikes will only make the recovery crawl, there is real danger not just in the plan but in what follows it. And no one has yet given a hint about how that will unfold

Marcus Cotswell

£50bn?? I don't know wjy everyone's talking about £50bn - add it all up and it's more like £375bn (on top of the £100bn already made available).

seb

PhillipDC commented that ‘crises of whatever sort work for Labour and not the Tories’. This would seem to contradict the accepted wisdom of recent years. Labour, it’s widely agreed, won the 2001 and 2005 elections because of good economic news. Terrible economic news, of which there is going to be plenty, will surely persuade voters that it is time to oust Labour.
Nothing that Darling or Brown do over the next eighteen months will assist their Potemkin Economy to weather this storm and whether unemployment rises by one hundred or four hundred thousand, voters will surely notice. A vote for Labour in 2010 could mean eighteen years [1997 – 2015] of the Blair-Brown duumvirate. Divine intervention or, say, the unlikely and rapid departure of vast numbers of immigrants, might turn the tide in Brown’s favour. I’m off to the bookies to wager a fiver on divine intervention.

Angry of SE1

NorthernJohn - You are Dolly Draper or on of his blog rebuttal team and I claim my £5

John Miller

The world's governments are trying to keep a world-wide bubble inflated and it will not work.

If my son could not afford to buy a house before the crash, he will not be able to afford one after it if he is lumbered with £60,000 of debt by the government.

Brown talks of experience, but he is pure politician and Darling is an Edinburgh lawyer. They haven't a clue. Remember Darling saying earlier in the year that there was no further room for tax increases? Well, apparently there is now - £200 billion of em.

David C

Oor Willie:

It's being printed right now!

Andrew Forbes

PhilipDC is right. It's about narrative. Mandleson and Campbell were brilliant at this, and they've done it again.

"Narrative" is the way the media intend to play a story. The Tories had an opportunity to set the narrative running of Labour's economic floundering. They've blown that. Brown's "no time for a novice" has now set the narrative, and they've been largely forgiven for the dithering.

This has been a big opportunity lost. They might reflect on what Labour did to them in 1992; despite the Tories putting the economy right; Mandleson and Campbell had set the narrative of Tory economic incompetence.

The Laughing Cavalier

Darling went to Brussels not going to do anything until next week. He simply didn't understand the urgency or that the market could not wait. Why? Because, as John Miller observes, he is an Edinburgh lawyer. Like Brown he has never operated in a market or commercial environment. Quite simply, he and Brown don't understand them.

JONNY

Yes Ken Clarke.
What a good idea!
Saw him on telly last night. He looked more authoritative, heavier than Vince Cable. Still young looking for his age. And certainly up and ready for it.
Bull point: he aint no novice.
Only thing in the way would be the Cameron/Osborne axis.
I.e George must have his ego massaged by some other equally grand post.

Hysteria

Philip/Mike - I reckon you have it about right. As I mentioned elsewhere this financial mess changes everything and Brown/Socialism will benefit - I just couldn't articulate why.

On point 1 I don't think we can do too much - the popular myth will be that all this is due to the USA/Capitalism and big government (on both sides of the Atlantic) is the only solution.

We will print more money and reduce rates so everyone will get back to partying......

And we see no leaders who can articulate an alternative political or economic message...

Hysteria

ok - one glimmer of hope maybe - if the plan does not "work" (not sure that printing money is going to do much good in the long term) then maybe Team DC can go on the offensive with a "look - we tried to cooperate and still its screwed up and YOU SOCIALISTS are to blame" message...