The Unlucky Gordon Brown

June 8th, 2009

Paul Krugman had an interesting column in The New York Times yesterday.  He very effectively made the point that Prime Minister Gordon Brown’s problem in dealing with the economic crisis includes the fact that his party was in power during the bubble and the subsequent crash.  That, plus the corruption scandal now rocking his government, may result in Brown losing his job.

Krugman made the point that the party in power, in Britain or the U.S., will inevitably take the blame for a recession, much less the near-depression we’re all experiencing right now.  The truth is, economies rise and fall largely independent of the governments in power at the moment.  Policies of the past, sometimes of the distant past under governments several times removed, play a part.  So do economic forces beyond the control of any government.

Krugman put it this way:

What would have happened if hanging chads and the Supreme Court hadn’t denied Al Gore the White House in 2000? Many things would clearly have been different over the next eight years.

But one thing would probably have been the same: There would have been a huge housing bubble and a financial crisis when the bubble burst. And if Democrats had been in power when the bad news arrived, they would have taken the blame, even though things would surely have been as bad or worse under Republican rule.

You now understand the essentials of the current political situation in Britain. …

In both countries, the conservatives who pushed through deregulation lost power in the 1990s. In each case, however, the new leaders were as infatuated with “innovative” finance as their predecessors were. Robert Rubin, in his years as the Treasury secretary, and Gordon Brown, in his years as the chancellor of the Exchequer, preached the same gospel.

But where America’s conservative movement — better organized and far more ruthless than its British counterpart — managed to claw its way back to power at the beginning of this decade, in Britain, the Labor Party continued to rule right through the bubble years. Mr. Brown eventually became prime minister. And so the Bush bust in America is the Brown bust here.

…if an election were held today, Mr. Brown and his party would lose badly. They were in power when the bad stuff happened, and the buck — or in this case, I guess, the quid — stops at No. 10 Downing Street.

It’s a sobering prospect. If I were a member of the Obama administration’s economic team — a team whose top members were as enthusiastic about the wonders of modern finance as their British counterparts — I’d be looking across the Atlantic and muttering, “There but for the disgrace of Bush v. Gore go I.”


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4 Responses to “The Unlucky Gordon Brown”



  1. Harvey |

    True enough Obama did inherit a mess as far as the economy is concerned but how can anyone deny that he is badly mismanaging it and making it worse?

    Yes, I know he’s new at the job and still learning — by the time he’s finished learning we may be so far behind we’ll never recover.


  2. Tom |

    You may be right that Obama is mismanaging the economy. We won’t know that until he’s had his chance to deal with it. Maybe in a few years we’ll look back on all this and conclude that he and his economic advisers were geniuses. Or maybe not. But one thing is certain — he’ll get the blame if things don’t improve, even though a lot of it is beyond his control.


  3. Brian Bagent |

    The whole idea that the government should “manage” the economy is as old as civilization itself and has proven disastrous. The idea that we should be and are free to conduct our economic affairs unencumbered is a relatively new concept.

    Any government with enough power to “manage” an economy is too powerful, and cronyism and nepotism will rule the day. It doesn’t matter if it’s an “R” or a “D” at the helm. If you want evidence, look at Alaska’s “bridge to nowhere” (done by a republican) and at the $30 million allocated to study wetlands in and around San Francisco (by Speaker of the House San Fran Nan Pelosi).

    It doesn’t even matter if the “for your own good” crowd is correct (which they almost never are), it is too much power and will absolutely, certainly, unquestionably be abused.


  4. Harvey |

    Brian,

    Agree whole-heartedly. There is a flaw in our system of government and it is named ‘greedy human nature’.

    Tom,

    I can’t believe that ANY of it is beyond his control because it is his control that is making it worse. Perhaps less control would be in order.

    To be fair, I must say that Jimmy Carter instituted the first massive bail out (Chrysler in 1979), that was painted as something that “had to be done” but I wonder! Then George Bush 43 did the AIG bailout — Has that worked? But Obama is taking things too far — he is not only bailing out the automakers and the banks and who can remember what else, he is taking control. Government is WAY overstepping its bounds under Obama.

    I sure hope he’s a fast learner!


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