Brown's problem: The downturn has become a reality

Unless I have misunderstood it badly, Monday marked an important moment - a change in the media narrative and (as this morning's Populus poll strongly suggests) public opinion away from Gordon Brown after months where he has done a little better.

Why did this happen? Surely if being a serious man for serious times worked for the Prime Minister last week, it would be working now.

Here's my theory - it's all about risk aversion.

The economist Daniel Kahneman conducted experiments to develop the prospect theory for which he later won the Nobel Prize. The results show that when people face the chance of losing gains they are risk averse. When they are in a loss position and hoping to make gains they are willing to take bigger risks.

Translated into politics this suggests that when a downturn is in prospect people will agree that it is no time for a novice.  But when it arrives they will be more receptive to change.

It may be that what happened on Monday is that the downturn which had merely been in prospect, began to become a reality. The figures showed people we were now in a terrible position. The disaster is no longer a prospect, it is a reality.

Comments

[Richard Goodwin]

It may be more simple than that Danny. I think it's an emperor's new clothes moment: with the truly horrific size of the hole we're in there's no more room for GB's bluster and pneumatic rhetoric in spinning the economy. People suddenly saw exactly how big a mess we're all in after 11 years.

[thomas arthur]

in my opinion,people thought tony blair was bad as priminister, but blair was no where as bad as gordon brown,who in my thoughts must be the most underhanded lying pm in britains history and cannot be trusted on anything he tells the public,

[Richard Young]

That's possible. Another reading would be that the PBR was just a little too weak to look like decisive action. I'm not saying it was dumb - but 2.5% off VAT doesn't help individuals, and it should never have been sold as a bold attempt to stimulate consumption. The same policy, sold as a means of businesses boosting the bottom line with an immediate cashflow benefit, would have played better as a way of helping save jobs.

Still, the alternatives to Gordon remain frightening weak...

[Jon Leigh (safely out of it in rural France)]

I still find it hard to believe that a third of the electorate are willing to vote for a man who has almost single-handedly destroyed the UK.

[Chris]

Possibly it is simply because the PBR on Monday showed that the government don't actually have magic bullet to make it all OK and people are starting to see through the rhetoric. Promising to put up taxes whilst trying to encourage people to spend can't have helped either.

[Whosoldthegold]

Its not risk aversion, its Brown aversion.

Face it.....he is despised by a majority of the population. It's not because he is Labour it's because he is who he is!

Despicable.

[Father Ignatius Brown]

It might also be that people have finally woken up to just how dangerous it is having a government prepared to "do anything" and "whatever it takes" to stay in office.

[Clive]

We have heard the words from Brown for many years and the credit he has taken for a world wide boom. So we have arrived at what is a very worrying mess. Whilst it is disapointing that the Torries are not speaking up with a coherent alternative policy, still the blame rests with Brown who after 10 years should not blame everyone else. No we all understand how bad things are and everyone with a salary of over 20,000 pounds will be paying more for less in the future. me - i am looking for jobs overseas.

[Tim (observing from Atlanta, GA)]

I think Mr. Brown will soon be belly to belly with an ugly reality - in it's 'old' pre-'New' form, Labour is unelectable as a government of the UK. Events since 1979 have proved that repeatedly, and Mr. Blair's ascendancy clinched it. In the fights between old tories and old labour, the tories usually won.

If he is the author of the boom, he owns the bust.

I'm not sure he's wearing the emperor's new clothes yet, but the tailor has an appointment in the near future.

[Jeff]

What happens when this Muppet govt fails to shift the huge amount of govt bonds it needs to issue to finance Gordon's black hole. The IMF will struggle to help - govt debt is going to be much more than they predict. When have this lot ever predicted anything accurately. I feel sorry for the Tories - i personally wouldn't take the job of rescuing the UK economy on. There are too many people on benefits of one kind or another. Tax Credits and unfunded public sector pensions are just the tip of the iceberg.

[adam]

So if your theory holds then we can expect Brown to be forecasting doom and gloom and saying the worst is yet to come, and Cameron saying that everything has stabilised? Can't see it somehow.

[Ian]

I think it is a bit more general than the current problems. For some time (until a few weeks ago) he was desperately unpopular and only just kept his job. Popularity will always fluctuate and tends to "overshoot" before re-stabilising. Gordon has the great advantage that Cameroon and Clegg are both worse than useless. What is happening now is that people began to question Cameroon/Cleg but the "blip" has returned to trend. Brown is his own worst enemy. He treats the electorate with contempt avoiding the issues everybody is aware of. When everybody knew that UK was suffering/to suffer worse than other countries Brown was still grinding on about it is affecting everybody and how well positioned the UK economy was - people are not deaf and stupid and he needs to start answering teh real questions. And maybe that is his problem in that he has no acceptable answers without admitting he is somewhat involved in "the cause" - and that would be a killer for him and Labour.

[ant]

Take a close look at his finger nails ?also the twitch in his right forearm when at the dispatch box?.. the chewing of the sweetie that isnt there?.....
Hardly inspires any confidence in his ability to think straight does it.

[M]

you see Gordon Brown was the best thing that could have happened to Tony Blair. He saw what a mess the world was heading for, palmed it all off on this blundering idiot who he knew was only going to make matters worse and then dissapeared off to be the most ironic peace envoy ever! Confident that we would all forget just who it was that stripped us of our rights, tied up our public services with red tape and bankrupted the country. The evil little swine is an absolute genius for getting himself out of trouble

[Steve Buckel]

Francis Herbert Bradley 1846-1924 was a British Idealist philosopher whose work, having become eclipsed by the positivists and the linguistic philosophers, is now increasingly becoming noticed again. His 'Appearance and Reality' draws the distinction between the world of ordinary experience and that of reality. Anyone who intends to read it should set plenty of time aside.

Under New Labour, appearance has invariably been presented as identical to reality. Fortunately for them, but not for us, it happened at a time when the problems set up by this woefully inadequate approach, could be politically swept under the carpet of an apparently remorseless increase in wealth.

When this state of wealth was found to be built on sand, or rather credit, and that credit ran out, then the reality started to become apparent through the evaporating smoke screen of the appearances, for which it had been mistaken for so long, by so many.

I agree with the thrust of your argument. I differ with you where you claim that the reality has somehow now changed. Reality has always stayed the same. In terms of your argument, disaster was always to be expected. Even Gordon Brown now admits he was wrong to talk of the end of boom and bust. Our perception of reality, and his, had simply become distorted by appearances. That situation could not persist indefinitely and now we all can see that it has not done so.

[david]

There is much more trouble ahead for our great leader.Hidden in the small print are reductions in the paymente to our "depedencies".[.Scotland and Wales]and an adjustment to the "Barnet Formula"Trouble ahead..bet the SNP benefit from these changes

[Robin paine]

Everything has its opposite -black, white; up, down; good, bad and so on.

In the 18th century we had Capability Brown. We now have Incapability Brown.

[grrl]

to the comment of ANT ( "Take a close look at his finger nails ?" etc.):

sorry,ANT, whatever subject will be discussed, I find references to physical traits as an indicativ of 'abilities' or, generally, character traits, very suspect - it reminds me of the Nazi method of using physical traits like 'aquiline nose' for 'rating' people's character.

[theerga]

Danny: Yes we need the RIGHT HAND MAN of Lamont - he of the 'famed, on the hour every hour cuckoo clock perfomance of Black Wednessday = like we need a collective 'hole on our brain' as Nation to put things right. Central office must be working overtime to unleash its cyber-toopers.

[Paul Hopkins]

Response to Thomas Arthur: Actually Blair was also the architect in that he showed no interest or understanding despite being "First Lord of the Treasury". He knew what Brown was like, but just left him to run the Treasury (and, in practice, other departments) whilst vainly preening himself on the world stage with his "ethical" foreign policy, "whiter-than-white" narcissicm, and aw-shucks genuine-as-a-£7-note "trust me" demeanour. All along his primary interest was sucking up to people with wealth and feathering his nest for the post-PM world. He kept the whole thing going for as long as possible to build his reputation (IIRC, he was also encouraging people to borrow more against the equity in their homes) then got out.

All that aside, he was a good bloke ...

[nig]

so the public want a government that does nothing? well they just might get one, low taxes equal poor public services, doing nothing always cost less, back to the future, best look after the rich as the poor dont vote.

[albert hall]

Brown is not a man fit for high office. Never was and never will be. That has been obvious or years. Just a dusty over-inflated, pen pusher with no real talent for management.

[tris]

Brown said he would fix it. Brown's PBS was going to be the answer to all our prayers.

There were, I suppose, people who thought that that was true.

Then the package was announced by his puppet and it was just rubbish.

The VAT reduction was/is a joke (and it will actually cost business money, as they pay the increased duty on fuel which they cannot reclaim, unlike the VAT that it replaces). Within 24 hours they were backtracking on whisky duty... they never thought about the consequences. Hello, aren't they supposed to think about consequences before they announce these things?

They proved once again to be hopeless. If this is Gordon saving the world's economy then may the Lord help us.

[Mike]

If the investments hadn't taken place over the last 10 years I'm afraid we would still be living comparably in the dark ages compared to where we are now. This is not a completely homespun problem and it never was. GB may have got rid of a british boom and bust, because as yet we haven't had one, we are in a global bust.

GB has not singlehandedly destroyed the U.K. and he is seeking to remedy this global problem through coordinated effort.

And the U.K. IS in a relatively good position because of our population structure.

The government is prepared to do what it takes to save the economy and for that I would keep them in office. Brown is right about the tories-- the do nothing party.

Too many people on benefits - don't make me laugh. One thing is for sure if- we had a tory government that'd be a lot higher.

[Richard Dow]

Aye its fine to say Brown is wrong , bad or even indifferent which have all been my opinion since he bottled the election call last Autumn. But what are the alternatives? Cable can come across as ok for the majority of the time then he implodes. As for Cameron & Osborne michty me they absolutely stink. Osbornes damaged goods doesn't matter how you play it. At any election they'll wheel out the fiasco on the boat, mention that most of the tory front bench are millionaires and it ~It'll take the hard pushed electorate 2 seconds to empathise with oor Gordon.

I know Daniel you want a tory back in power (well you had Blair ) I was switherin that way myself but they really haven't covered themselves in glory with this financial mess.
The nub of my point is your grasping at straws with your premonition of doom for Brown when Mrs T got in that was after a 3 day week etc and a bad winter for Labour
The actual disintegration didn't happen until after the election and then was exacerbated by tory spending policy.

This was when Britain was wiped oot as a manufacturing entity but anyway interesting piece

[Cate]

To me, the economic problems have an obvious solution.

Drop ID cards, stop passing new laws every time the papers start up some kneejerk reaction campaign and raise the tax rates by a percent or two for people earning over £150,000.

We'll still have a recession but it is a natural correction that we need because of our recent high house prices and recent reckless borrowing to finance reckless spending.

[The Uncivil Servant]

Hubris !! Brown has proposed for 10 years and the Market has disposed in 10 weeks. Why do the British People repeatedly fall for the line that you can spend more than you earn? Spend at 30% GDP = happiness, 40% + = disaster, there can only be one policy, substantial reductions in Govt. expenditure (30% ?)politics will be about either pretending this is not required or how to achieve them, start with 6 £Bn on unwanted ID cards. In conclusion, not really Brown`s fault after all he didnt elect himself - or did he? Neither was he appointed as Hedge Fund manager to gamble with my money on the Royal Bank of Scotland ! Maybe it is his fault then.

[Paul Freeman]

I think the middle earners suddenly realised that New Labour is dead and that Old Labour means a return to taxing to death said middle earners while simultaneously mortgaging their future. In other words the final collapse of the Blair con. Mandelson says New Labour hasn't changed, the times have changed. Spot on, Mandy, now think about what you just said!

[Tommy]

This duplicitous man (Brown) and his band of merry sycophants must go!! They are abusing their powers to levels never seen before. Labour, rather like the old communists, hate any opposition and will try their best to 'shut people up' with any means possible. This is why Brown brought the lying Mandelson back into office, to do his dirty work for him. Let's not forget that Mandelson resigned twice from the govt for partaking in proven fraudulent activities. This man should be in prison and not in the govt. This shows Brown's utter disdain for our laws and liberties.

[Uncle Vanya]

Mybe Mr Brown will have to be dragged from the Despatch Box, screaming -"I am the true ruler of Britian!" by the Men in White Coats before long. But I jest.

However there is an old saying - "Many a true word is spoken in jest!"

[jim]

It doesnt take a rocket scientist to know brown is a disaster.Do the maths non productive public sector worker earns X amount produces nothing hampers buisness costs taxpayers.1 million public sector jobs created.Immigration 1.2 million.1.2 million private sector jobs created.British public encouraged to sit home with tax credits.costs taxpayer.Give credit cards to anyone.People spend like no tomorrow buisnesses grow to big on fake money then have massive collapses.Boom and bust.Benefits gone to people who are enjoying the relaxing of drug laws look into how much benefits gets spent on drugs.Pensions robbed rob the rich hah he has robbed us all.Someone has to pay for all this (tax payers).There is so much more you could say about and one day someone will write a book about it.HOW THE VILLAGE IDIOT BECAME PRIME MINISTER.

[Alan]

What happened on Monday was not so much that the downturn began to be a reality, though it will over the next 18 months. It was the sudden realisation of the financial implications of the looming downturn that quite literally took away the breath of the nation. A doubling of national debt within 5 years to over £1 trillion (true figure is £ 2.4 trillion) with the budget not returning even to a neutral balance until 2016 - and that position reached only under the most optimistic assumptions for growth of both GDP and tax receipts. By now ordinary people are beginning to really understand debt positions.

And what do people get for this massive increase in indebtedness? Some temporary reliefs which are just not credible, some raw socialist meat thrown to the merchants of envy and a backdated plan to shaft anyone earning over £20,000 per year. This is not a deal that the electorate will agree to. In Sun newspaper headline terms, 'It's the debt wot done it'.

[John Portwood]

I wish people who say we have no manufacturing look at the export league tables.

The UK is STILL the 8th largest exporter in the world.

[nimrod]

The Post By GRLL regarding physical traits......Why do psychoanylists use these to determine the mindsets of individuals ?
ah well..anything is fair game in politics !

[Bill Giles]

Perhaps Gordon Brown's sudden return to unpopularity is something to do with the fact people have come to realise that he has borrowed over £9 for every single second he has been in office as Chancellor and now PM. And you and I will have to pay it back when GB is basking in some gold-plated job in the IMF or World Bank.

[eddie reader]

A very interesting article. Brown has been a fool and a waster, of that there is no doubt. However, the real problem goes back over 130 years when the UK began to lose its industrial position (and therefore economic prowess) to the young upstarts of Germany and the USA.
The UK economy is in no shape to meet either the aspirations of its population (modern health services, imported high value goods, etc.) or its governments (foreign wars, ID cards and Trident).
Debt lies at the heart of global woes but even more so for the UK. A large population squeezed by planning laws into small areas results in high house prices and large debt whenever there is any sign of economic progress.
Brown tried to solve a problem identified by Marx - what happens when productivity is such that large scale unemployment occurs? Brown thought adding large numbers to the public payroll was the answer; to be paid for by raiding private sector pension funds and large amounts of debt (government and personal). Doesn't seem to have worked.
Brown has no answers and I don't think anyone else has either.

[Andrew Fairhead]

The world has gone mad, and no one- reporters nor the wider electorate seem able to just stop and think for 2 minutes and ask some basic questions. If one adds up all that individual ministers are or have said, one can see there is no joined up government, and thats why the country is disintegrating before our eyes.
The state of our finances is the responsibility of -guess who? The Government! For AD to say that we will be out of this mess next year or soon afterwards, is quite amazing! If he/they can see that, then why didnt they see the problem looming? Anyone with an ounce of common sense saw it coming.If the world is involved, does AD also think the world will be out of this next year too? How conceited and deceitful are these people? I guess with AC and PM around, then there is no limit. However, lets go on- PM says we dont know how deep the recession will be and when we'll come out of it......see above and what AD said at the PBR. Then there's Ed Balls, and we all know what Michael Hestletine thought of his financial input when he was advising GB when Labour were in opposition-'BALLS'! Now we know why! EB thinks its all gonna be fine! They've done all thats necessary, now we just sit back and wait for magic to work. Ask them all about how this small matter of billions of £s is going to be repaid, and who is going to pay it? Actually PM has come closest when he talked about some re-adjustment or something. Some?! And! who was in charge when all this high finance was bellowing up before a year ago? Ops! GB..... ! Ah, yet he thought B&B had been banished,-i actually thought at the time, 'what a silly thing to say'- to make predictions like that to curry favour with the electorate, will always end in tears. It has, and we will yet be crying our worst as time progresses.
Thankfully, our security and happiness doesn't have to wrapped up in money or anything else.
Try going back to the Book that has been banished from our schools and thus depriving our children, and subsequent generations.....the fruit of this is also being seen.
The issues of our country go a lot deeper than financial, and yet this is where people are placing all their hopes and aspirations.
Stop and Think!Then act....do what is 'uncool' but right!

[Bee]

Mandelson said at the weekend, that Brown is like Moses leading us to the promised land. Well I would like to know more about this promised land, because all we have been promised is higher taxes, and gloom!!

[Derek Holmes]

Weasel words from a dinosaur thinker adequately covers any and all words from Mr Brown.

[R.W.]

It's time for incompetents like Brown and his gang to resign and allow some intelligent people in to take over. We need Ken Clarke, Vince Cable, George Osborne and others with brains to get to work on this mess Labour and mostly Brown himself have created. But you can guess Brown will cling to power until he is forced out of No.10 by the police. But perhaps the police will arrest him for receiving Govt leaks back in the 90's and publicising them, and relieve us of him NOW. As for Mandelson, what possessed the man to support an incompetent like Brown? I thought Mandelson had some intelligence. Gordon leading us to the Promised Land....? Ha ha. Mandelson surely was kidding when he came up with this idea. He knows we'll all laugh.

[G PICKLES]

Come out of Iraq, come out of Afgan, come out of Europe, sort out the scroungers, sort out the Civil Servants, problem solved, not too difficult. As long as the total number of labour voters made up of Immigrants, benefit scroungers, civil servants, the Scottish & Welsh voters equals more than Middle England what has GB got to worry about. Brown before party, party before England. GB has had more money at his disposal than any other Prime Minister, end result, impoverishment of the British nation.

[Watashi]

If Brown's self-declared financial acumin had ever been true, we'd be in for a much shorter, shallower recession than now seems inevtiable. If he'd really been a global leader on economic issues, the credit crunch could have been avoided entirely.

The facts are the same now as they were five years ago; Brown was not a good chancellor for the last ten years, and so he is not the right man to deal with the current financial chaos. A few weeks ago he was lauded as our saviour - only he didn't do enough and now we're all paying the cost.

The depressing thing is that I can't see how the current lot of Tories would have done any better if they were in charge. :(

[martin]

Here is a quote from David Blunkett, from his diary of July 2004, in Cabinet, talking about Gordon Brown:
“He painted a picture of what would happen from 2008 onwards, of 1.9% average growth, how dreadful things were going to be and how everybody needed to wind down what they wanted to do.”

So, we see that the brown stuff knew all along what was coming, when, and how severe it would be.
Yet he kept us in the dark.

If you had to place trust in your future, and had a choice, which would it be:
- as a bleeding seal-pup in a tank of starving sharks, or
- gordon brown and this institutionally corrupt nulabor cult ?

Looks like the sharks get lucky today !