Oh how times change - After snubbing Brown, now Henry Paulson copies him.

Remember a few weeks back,  in that other era when the ‘Westminster Village’ thought Brown was a dithering dud? Gordon Brown flew to the US to try attach some importance to himself (so the thinking went) as the government tried to force through a $700 billion bailout bill.

Over on our side of the pond, how the press and opposition mocked Brown. He had to beg for an audience with George Bush, and he couldn’t even get a meeting the architect of the US bailout, the US Treasury head Henry Paulson.

Fast forward to this week, and Gordon Brown has been hailed as a ’superhero’ and ‘Flash Gordon’ by the world media (’Just Gordon, I assure you’, was Brown’s response). The man who has just won the Nobel Economics Prize has said the British Government has been far ahead of any other in the Western World in dealing with the crisis, and when asked says everyone else should be copying what we’re doing, ‘The Brown Plan’ as it is being called.

And that’s just what’s happened across the EU. And now this week Henry Paulson, the man who snubbed Brown a few weeks ago much to the delight of Westminster hacks, has presented his own version of ‘The Brown Plan’, apeing the man he wouldn’t even meet in person a couple of weeks ago.

How times change.

Nobel Economics Prize winner lauds Brown as potential economic world saviour

Blimey, what a turn around for Brown, now being hailed as the leader of the government who came up with the best plan, now being adopted by Europe and possibly the USA, in dealing with the credit crisis.

As the Guardian live blog points out, Paul Krugman, the writer of above linked article, has just won the Nobel Economics Prize.

Similar headlines are popping up here and there - Andrew Grice of the Indy mentioned Britain’s legitimate claim to trail blazing at the moment, but we’ll have to see how it pans out.

Always worth remembering however, is the bottom line for Labour supporters:

18 months until an election.

15 points behind in the polls.

Cameron more popular than Brown.

Voters rarely vote a government back in during or immediately after a recession.

 

A fourth victory is still a long way away. Brown’s more enduring legacy may be rescuing the banking system, but it doesn’t necessarily follow that the voters will thank him for it.

The Tories can’t even copy the Government right.

Huh, turns out the rest of the world aren’t stupid. And when George Osbourne and David Cameron come out of a meeting with the Chancellor Alistair Darling, and suddenly do a U-Turn on their position over the economy and declare that state intervention is the only possible option for the government to take, the rest of the world notices this, sees it for what it is and realises the government must be planning a serious bail-out plan for our ailing banks.

Obviously they realise this means the economy is truly suffering and panic, selling lots of shares, creating more turmoil economically and shredding the value of our biggest banks in the process.

The Tories, after being chastised by Darling for offering a ‘running commentary’ have insisted they were not even partly to blame, as Ned Temko notes, but Jesus how stupid do you have to be to come out of a confidential meeting and take on what the government are secretly planning and claim it as your own plan to try look clever in front of the electorate?

Instead of coming up with their own ideas, are the Tories so clueless that they are just trying to second-guess the Government?

A rather odd scenario seems to be playing itself out at the moment. As more and more people wonder what the hell exactly would the Tories do if they were in government now, or what they would have done differently over the last eleven years, the Tories have made various comments trying to deflect criticism.

They’ve said they don’t back nationalisation but instead believed that Northern Rock should be sold to a private buyer. When it became clear that a) That’s exactly what the government had wanted to do and b) No one wanted to buy Northern Rock, they simply attacked the government for nationalising the bank and hoped that no one would notice their own vacuous policy.

Then, months afterwards the problem rears again, and this time they say that banks should be put into a Bank of England-led administration. The problem with this is that it means guaranteed job losses and the loss of savers deposits over £50k. No one thought it was a good enough idea to pay attention to so they had to come up with something else, as more people were backing the governments approach of nationalisation where necessary to try protect the bank, jobs and money and criticism of them was mounting.

Now, David Cameron is saying that it may be necessary for the government to take a temporary stake in banks, essentially part-nationalise the lot of them, for the stability of the system. It’s a complete volte-face since the events over Northern Rock where they blindly attacked the government over the ‘N’ word, gleefully hoping people would associate this government with the Labour governments of the 1970s and not notice their own position (or lack thereof).

He denied this was a U-turn instead stressing the need for political parties to work together, which isn’t really a proper answer but then what do you expect from such a vacuous man as David Cameron?

Comparisons between Brown’s fiscal rules and Osbourne’s Office of Responsibility.

Although various people in the media seem quite open to George Osbourne’s idea of a quango charged with overseeing the governments debt and making statements on it (but nothing else), I honestly can’t see past it’s obvious purpose. To convince the public the Conservatives can be trusted with their money and therefore that they’re worthy of government.

Then it struck me, what - really - was the purpose of Gordon Brown’s fiscal rules? The so-called ‘Golden Rule’; don’t borrow more than 40% of GDP and so on. In all honestly, it was a political tool to convince the public he could be trusted with their money and therefore that Labour were worthy of government.

In reality Brown could twist his own rules as much as he liked and it was an irrelevance. In reality the rules were nothing more than a stick for him to beat the opposition with but ended up as a stick for him to be beaten with by everyone else.

And isn’t that what this Office of Budgetary Responsibility will end up as?

Gordon saves HBOS (again)

Shares in HBOS have still been plummeting since the announced takeover by Lloyds, throwing into doubt the whole deal as the company would be worth far less than Lloyds were willing to pay for it.

Last night Gordon Brown stepped in (again) and announced that he was ‘very confident’ the deal would still go through, putting his reputation on the line in backing the deal.

Today people were looking at the markets for a sign that the share value of HBOS would rise with the backing. Nils Pratley (nice name) of the Guardian said that we’d need at least a 10% rise to get the deal back on track and calm the jitters.

Thankfully, on the back of Brown’s backing, they have risen, by 15%. At one point I believe they rose by over 30% before settling back down.

The deal is on, it will go through, and Brown’s been pivotal in making it happen.

Is George Osbourne stupid?

On a week that the European bank Fortis is partially nationalised by three countries, the USA passes the largest bank bailout in history (or will do later today) and Japan pumps £9 BILLION into their economy to stop it going into recession, George Osbourne has just been on BBC Breakfast News saying the problems in our own country can be summed up with one word, ‘debt’.

What planet is he on? Ireland is in recession and the USA is turning into a nationalised socialist utopia and he believes that our country is in the position it is in because of government borrowing? Does he even understand the term ‘globalisation’? If our debt, which the Tories claim is the worst in the western world, was the main reason we are skirting with recession, then why are the USA, Ireland, Spain, Japan and numerous other countries struggling, flirting with recession, nationalising banks and pumping liquidity into the economy? Osbourne seems to genuinely think people are so stupid that they don’t click on the section of BBC News saying ‘World’.

Then, when asked about hedge fund short sellers donating to the Tory party, he waffled an excuse saying they aren’t beholden to them like Labour are to the Unions. When pressed further on the issue, being told that it was surely a bit controversial that the Tories were taking donations from people who’s trading practises - short selling - had been banned, he then explained that they weren’t beholden to them like Labour are to the Unions.

What a tit.

The Tories plans for the economy - a list.

Martin Kettle has written a slightly pandering piece on the Tories and their plans for the economy.

He lists the things they’re planning on doing, many of which he admits they’ve already announced (funny how much they criticise Gordon Brown for re-announcing things when they so obviously do it themselves, far more often), but offers no critique of them.

So in the spirit of fairness I’ll take a shot myself:

Interesting…the Financial Stability Forum agree with Brown on global reform.

While trying to save his premiership Gordon Brown has been flying around the world for meetings, as much to try show the public back here in the UK that he is doing all he can, than to realistically achieve anything in terms of policy.

His ‘big idea’ is global reform to create an early warning system and regulation that extends worldwide to deal with the fact that our economies are now so inter-linked.

On paper that sounds fine but from what I’ve read most journalist economists have dismissed the idea, I’ve not really seen it taken seriously and my own personal opinion is that his main hope would be that the public see he’s trying his best to help them, rather than that he actually believes his idea could become a reality.

So it was interesting today to read that the Swiss-based Financial Stability Forum, supposedly the worlds leading group of financiers, central bankers and regulators, has come out and said pretty much the same thing that Gordon Brown has, that we need a global regulatory system.

This, as the Guardian says, is ‘in line’ with Brown’s thinking. In the current climate I don’t expect it to make much news, but it’s nice to read. The plausibility of it ever happening is another thing, but if opinion did come round to the need for a global regulatory system, and it could happen if more banks collapse like Washington Mutual has done, then Brown’s long term game could pay dividends.

You may have missed it - but retail sales are up (again).

Long story short - retail sales rose 1.2% from July-August and high street sales rose 0.8% in July.

Once again the so-called ‘experts’ were wrong, predicting a 0.4% drop.

It doesn’t single-handedly save the economy by any means, but it’s worth remembering when people insist on comparing the current situation to the 1920s and 30s.

Overall for the year retail sales are 3.3% up. Of course, the profit margins will be thinner due to an increase in discounts, but the bottom line is that sales are up.