Well, is it? The Tories are pointing out that Gordon Brown was Chancellor when it was all brewing; but he stresses it is a global phenomenon.
What is the truth in this political ding-dong?
There are three factors; the business cycle, house prices, and the financial markets.
The capitalist economy has a natural rhythm of expansion and contraction. Gordon unwisely said he had "abolished boom and bust"; clearly he was wrong. Maybe he thought he had avoided the extremes of the business cycle, but that shows he was ignorant of what was really going on.
He could not have been unaware of the growth of house prices, but he did nothing about it, despite the clear recent example of the house price crash of the 1990s. He left it to the market. Had he intervened, by, say, taxing the increase in the house prices, and capping the amount of commission the estate agents were getting (clearly one of the drivers of house price inflation), or requiring the buyer to have a certain amount of deposit to put on a house, and regulating the ratio of income to mortgage loan, or had he used any other such device that are in use in other European countries, he could have avoided the house price boom. He did not, so he is culpable, but we can be sure and certain that his Tory critics would have screamed blue murder if he had intervened in the precious free market. We can also be sure that the Tories would have done exactly the same thing.
Now. The financial markets. The basic position is that new money is created almost exclusively by private corporations making loans at compound interest for private profit. This is not a promising start, since the money system is predicated on debt, which is a power relationship between lender and borrower. Having made some ill-considered loans to people who did not have a good chance of paying them back, money lenders must have had an ely that they were at risk. In response, they bundled the loans up into packages, and sold them on to hedge funds, as a kind of insurance against the risk of default. Ironically, in doing so, they increased the risk to the system many times over. The unregulated hedge funds re-packaged them up into yet more complex bundles, and at each stage, the debt was multiplied, until we reached the point that the "value" of these instruments ballooned to ten times as much as the GDP of the whole world.
This is an irrational situation, psychotic in the sense that it is detached from reality. It arose from treating money, which is a social construct as if it were a commodity. Ann Pettifor has explained this very clearly. The unreality of the financial markets is even expressed in the language that commentators use, when they talk about the "real economy" - real work done by real people - as opposed to the "financial markets" - activity carried out by people who do Something in the City.
So is Gordon to blame? Yes, he is, along with every other politician and commentator who accepted as gospel that the economy must grow infinitely, despite the fact that we live on a finite planet, who accepted that it is OK to make money by buying and selling money as if it were a commodity, and who accept that Free Market Fundamentalism is Absolute Truth.
The Tories are right to blame Gordon Brown; but they would have done exactly the same. In making political capital out of their criticism, they are increasing their opinion poll standing. But Dave Cameron has been captured by the anti-Keynesians in his party, and is therefore foolishly prepared to repeat the mistakes of the 1930s, by trying to balance the books in the course of a recession. If the Tories get in, their policies will make the recession many times worse. Brown is bumbling about, throwing good money after bad, trying to pour money into the black hole of debt that is the financial system, rather than concentrating on putting it into the real economy in a Green New Deal, but at least he understands that the Government has to invest in the economy. Dave Cameron does not understand this, and therefore he must be kept out of office at all costs.
As things stand, the Tories are heading for a victory in the next General Election. There is one change that could keep them out, or at least make sure that they do not have an outright majority. We need Proportional Representation. We must create an alliance with the LibDems, Labour democrats, all Labour MPs who have enough political intelligence to know on which side their bread is buttered, we need all democratic and environmental NGOs to short sharp campaign to get the Government to get a PR bill in place before the next election.
There is unprecedented enthusiasm for this on the Policy email discussion list of the Green Party (3 in favour, one doubtful).
So that's agreed then. Let's go; Here's the campaign chant:
What do we want?
Proportional Representation, preferably AMS, but anything is better than FPTP!
When do we want it?
Before the next General Election if time can be found on the Parliamentary timetable!