The Brown Greenspan bond looks very different now
James Forsyth 6:25pm
Gordon Brown is very proud of his friendship with Alan Greenspan, he has hailed him as “the world’s greatest economist” and “the most successful” central banker in history. When Greenspan stepped down from his role as chairman of the Federal Reserve, Brown quickly appointed him as an economic advisor to the British government. As Prime Minister, Brown has had Greenspan to stay at Chequers.
It is easy to see why Brown was so drawn to Greenspan and why he thought the association was politically beneficial. But in the coming months it could turn into a political liability for Brown. Rather than being seen as a friendship between two economic titans, it might come to be seen as one between two of the men responsible for the age of irresponsibility.
In the list of those who played a part in creating the conditions in which the current crisis has caused such damage, Greenspan has to feature pretty prominently. As Chairman of the Fed he simply allowed an asset bubble to replace the dot-com stock bubble. (This piece in Foreign Policy, where I used to work, from 2005 shows that many of the flaws in Greenspan’s record were apparent long before this crisis took hold.)
On Greenspan’s retirement, Brown took to the pages of The Times to pay tribute to him, declaring that “his achievement is enduring, helping to equip us for the fast-changing global economy of the future.” In 2005, he said that “Greenspan has served not only America, but the whole world”. Today, another word beginning with s springs to mind.
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TrevorsDen
October 10th, 2008 7:08pm Report this commentThere is another name which seems to be keeping a low profile at the moment - one Ed Balls. This juvenile upstart and his poncy ideas had the ear of Brown and left us in the endogenous mess.
mitch
October 10th, 2008 7:14pm Report this commentTwo cheeks of the same arse! both men will be judged as monumentally stupid and short sighted.
Short the UK
October 10th, 2008 8:23pm Report this commentDeluded. Any sane person could see that Britain was in the grips of a property price bubble. For some weird reason (greed) the political and media class pumped it: with property porn, grants for key workers. As soon as prices started falling the professional class rose up and demanded action. So we got a stamp duty holiday. Still more is demanded. New Labour and the Tories are both at fault in the deluded belief that everyone should own a house.
Our biggest mistake was to cut interest rates in 2005. That reignited the house price inflation and the buy-to-let madness went into overdrive.
Will the MPC members who voted for that cut be held to account? Dr. King voted against.
Both Mr Brown and the MPC are at fault for this gigantic property bubble. nparticular Mr Brown for not giving the BOE oversight of the banking industry and setting a faulty inflation target that did not take into consideration house price inflation. The FSA have done an appalling job - I think they should be dismantled.
Mr Brown must have read the Great Crash of 1929. Yet, he was ignorant to the bubble. He must have a very poor judgement to have missed it.
The more I look at the man the more I see a man with the character of a sociopath. A successful sociopath but one who has brought his country close to its knees.
We can only pray that there is not a run on the pound. But for sure many Brits are going to experience penury in the coming years. There is even a strong chance our economy will go into a long deflationary slump - Japanification. The Financialisation of our economy has died with the Great Crash of 2008. We better get some serious brains to work out how we are going to get out of this death zone.
It is imperative that George Osborne deconstructs the Brown boom and its legacy of bust.
The future for Britain tonight is very dark and menacing. Just like Mr Brown's personality.
Rule Britannia - we love you!!!
adrian drummond
October 10th, 2008 8:29pm Report this commentBrown? Economic titan?
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