Yes, it’s true: Gordon Brown lacked supernatural powers

You all know the story. Gordon Brown wrecked the UK economy with his profligate spending.

It’s an excellent story. It gives the Tories an excellent answer every time they do something the electorate doesn’t like: “It’s Gordon Brown’s fault. He wrecked the economy.”

It’s not true. Even if you accept that the deficit is as big a problem as the UK right-wing press think it is, it’s profoundly ridiculous to blame it on one man.

Back in 2006/2007, none of the opposition parties were worried about the deficit. AFAIK the Lib Dems wanted to increase public spending, and the Tories were committed to matching Labour’s levels of spending. If they’d have acted in exactly the same way as Brown, why is he being blamed?

Also, very few economists/financial commentators were worried about the deficit before 2008/2009. The Chancellor isn’t going to be the best economist in the country, and they are going to rely on advice from economists. I was an occasional reader of the FT and the Economist at the time, and I don’t remember anyone being worried about the deficit.

How can Gordon Brown be expected to have seen what no one else saw? He’d have to have had quasi-supernatural powers! I’m surprised that so many people have fallen for this.

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8 thoughts on “Yes, it’s true: Gordon Brown lacked supernatural powers

  1. I don’t know anyone who thinks this. I think that the right just need Words To Say while enacting their policies, so they can pretend their policies aren’t evil. The alternative is that I just hang out with awesome people and this excuse really is working, which is just too horrible for words. :/

  2. I agree that none of the big three parties said much about the deficit until they couldn’t avoid it – and even managed to say almost nothing about it last election, which was pretty spectacular.

    But I don’t agree that nobody did. I was concerned, based on the stuff I was reading (FT, various econ/finance blogs) about the parlous state of public debt well before 2007. I was particularly and specifically concerned about the way Gordon Brown was fiddling his own books by (a) shifting debt ‘off balance sheet’, so it didn’t show up in the PSBR, but was debt really by any sensible measure (e.g. PFI, public sector pension commitments), and then (b) egregiously moving the goalposts on his ‘golden rule’ by redefining when the business cycle was – he promised to borrow only to invest, not to pay for recurrent spending, over the business cycle. I was certainly talking casually about the worsening fiscal position by 2005, if not before. I don’t think I was particularly perspicacious about this sort of thing – it was all commonplace stuff among budget geeks, it was just not getting any public traction because it was so wonkish.

    The deficit isn’t the problem. At least, it’s not the main problem. The problem is the huge, intractable, prolonged recession. If it weren’t for that, it’d be easy – like, really easy – to move from deficit to surplus and start making inroads in to the debt. We’d be back in “sharing the proceeds of growth” territory.

    I do think Gordon Brown ran up the debt in a way he shouldn’t have done – we should’ve been having surpluses, not deficits, during most of his tenure – because he believed his own silly story about ‘beyond boom and bust’.

    But that would’ve worked out Ok were it not for the recession. I think his policies made the global crisis hit substantially worse in the UK than it could’ve done – notably his actions towards the City.

    I do blame him for some of the situation we’re in, through his actions before the crash. (I don’t believe the other parties would’ve done profoundly differently, mind you, and they certainly weren’t arguing so publicly.) But he – and Alistair Darling – deserve some significant credit for pulling us back from a much worse situation that loomed large in 2007 with how they dealt with the banks at that point.

    After that immediate crisis, we failed to shut the stable door. It’s still open, and things are getting worse.

    • I expected that there were *some* people who were worried about the deficit before 2008, but I do think it was a minority position even among economists etc. I studied some economics (though my degree is in philosophy) at university, and I don’t remember them being worried about Brown running up debt – or at least if some were it wasn’t enough of a concern to say much about.

  3. I think the cutoff needs to be 2007 – debt was very very obviously an issue after that point, including corporate, consumer and public.

    I can’t speak for the economists you were in contact with, but the idea that the UK’s fiscal situation was not good and likely to get worse was pretty mainstream by 2005 if not before. The FT is paywalled (of course) but I found armfuls of evidence of criticism of Brown on these grounds with a quick scan of the Guardian. (I picked the Guardian because it has a half-decent search, not because it is legendary for the quality of its economics coverage – although it’s got better since 2007, as have we all.)

    Here’s a significant opposition figure with a reputation for economic smarts – a certain Vince Cable – talking in near-apocalyptic terms about personal debt and also attacking Gordon Brown’s fiscal behaviour: “We always argued however that this spending should be disciplined within honest, transparent, fiscal rules. Those rules are now being abused with a flippancy that might have shocked even the senior executives of Enron.”
    http://www.guardian.co.uk/politics/2005/sep/20/speeches.libdems2005?INTCMP=SRCH

    And I’d forgotten that the European Commission formally sanctioned the UK Government for running an excessive deficit, contrary to the Growth and Stability Pact, in 2006:
    http://www.guardian.co.uk/politics/2006/jan/11/economy.uk?INTCMP=SRCH
    ‘The Conservatives in the European parliament accused the chancellor of “reckless spending”. Timothy Kirkhope, the leader of Tory MEPs, said: “The British economy is actually running a bigger deficit than the government lets on because Gordon Brown’s accounts conceal massive PFI and Network Rail debts.”‘

    Sure, politicians weren’t treating it as the single most significant political issue there was at the time. But they are treating it as if it is now, and they’re wrong now too. (It’s the lack of growth.) But I reckon the redefinition of the business cycle – so that Brown wouldn’t be transparently in breach of his ‘golden rule’ – marks a point where most economists started to worry.

  4. http://www.economist.com/node/8382073 (may be paywalled, I don’t know as I have a subscription).

    “But Mr Brown’s greatest potential weakness is fiscal rather than political. Despite the economy’s generally good performance over the past few years, there has been an astonishing deterioration in the public finances ”

    “The chancellor, who once proclaimed his prudence, has taken an imprudent risk in assuming that his budgetary sums will add up if and when he becomes prime minister.”

    Dec 7th 2006.

    or this article,

    http://www.economist.com/node/3832770

    “The next four years will bring a painful reckoning. In Labour’s second term, the bill for its spending spree has largely been deferred. In the next parliament, it will be presented for payment. The reality check is in the post.”

    Apr 7th 2005

    or this article,

    http://www.economist.com/node/3955458

    “The first thing that either Mr Blair or Mr Brown must do is to put the country on a more stable fiscal footing. ”

    May 5th 2005

    or even back in 2003, http://www.economist.com/node/2101462

    “And with the public finances so heavily in the red, few people will doubt that there will be a post-dated tax demand coming their way.”

    and even 2002, http://www.economist.com/node/1465933

    “Mr Brown is too optimistic, The deterioration in the public finances is more than cyclical”

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