If Brown had only gone missing for a couple of hours there wouldn't have been a problem, unfortunately during the past 11 years Brown has a habit of disappearing for days, if not weeks, when anything big, requiring a decision, is going on. The Prime Minister has always accepted the plaudits when things went well, but was quite happy for a junior minister to take the rap when they didn't. At least Blair was there, good or bad.

David Leslie, Perth, Scotland

This government doesn't understand finance or the mindset of the city and business. Until you have more MP's who have been in business themselves or at least worked in the private sector there will be an ever widening chasm between those in Parliament and the rest of us.

This includes the civil service. Only yesterday it was reported that not a single Permanenet Secretary (the people who are supposed to provide advice and guideance to ministers) has any form of accountany , financial or audit qualification. Not one - and these people are in charge of budgets that run into billions............... no wonder we're in trouble.

Please spend some of the billions taken from taxpayers on financial training for senior civil servants and politicians. Financial qualifications should be a requirement for the job when responsible for large budgets and if they dont have the right qualifications for the job they should be made redundant.

rob, London,

I agree that the decision to make the BoE 'independent' is a brilliant move, but a political one into making the electorate and economists like Mr Kaletsky thinking that it's not the government who decide the interest rate but indirectly it still does.The members of the MPC are either appointed by or recommended by the government. The government-appointed MPC is required to meet government-set targets using government-set figures. Need I say more?

CWW, Suffolk, UK,

I seem to remember a certain Mr Brown telling us that at the end of "the financial cycle" which seems to vary in length as he pleases, public finances would be in credit.
Perhaps he will tell us when that will now be, after having 100 billion of Northern Wreck added to his borrowing.

KW, Bognor Regis, England

nobody in the banking private sector wants to run Northern Rock. They are the experts. What makes anyone think the government can do a better job. There is an old City saying that goes "the first cut is the cheapest". Northern Rock should be closed down in an orderly fashion now. Or better still it should have been done in September 07.

b williams, cirencester,

Sorry, Mr. Kaletsky...

Did you say public opinion in this country was swinging to the LEFT?

You need to get out of the office more, Sir.

Joe, Sheffield, UK

sk,

"entry into the ERM was a 'decision' made by the Tories". Correct, but you fail to mention that it was also supported enthusiastically by the Labour Party. Funny how New Labour's spin doctors never mention that.

Michael, London,

The sooner Gordon Brown is consigned to history the better, get him out now!

Make yourselves a 'Brown Out!' poster and display it! get people to do the same, we mustn't take this lying down

Rob Lindsay, Wallasey,

Deborah Hoyle, Banchory, UK - never a truer word said! The idea that the monetary system can be considered to be a free open market is ludicrous.

Anatole: please ask yourself who controls interest rates and the printing presses, although bear in mind that if you follow the logical conclusions through then it will undermine your whole belief system in Keynes and active demand management.

Sam, London,

The handling of Northern Rock is a disgrace.

http://petitions.pm.gov.uk/NRMadness/

"Northern Rock appears to still be offering its infamous 125% loan-to-value mortgage as well as a variety of other risky or sub-prime mortgage products.
Given that these lending practices helped to bring the bank to its knees in the first place, that this kind of lending has contributed the dangerous credit bubble we are now in and that as UK tax payers we the undersigned have each been forced by the government to underwrite Northern Rock's loan book with several thousand pounds of our own money, we would like to petition Gordon Brown to return Northern Rock to a traditional low risk business model based on maximum mortgage lending of 3.5 times a person's salary or 3 times a couple's joint salary and a requirement for all mortgages to have at least a 20% deposit.
We the undersigned believe this is necessary in order to safeguard our money which has been used to support Northern Rock against our will."

Steve, Bristol,

A key difference is the political situation: Major had scraped a victory in the May election because electors feared a Kinnockite government. There never was any enthusiasm for Major, his party or his policies.

Of course there could be no halo for Major after Black Wednesday; the ensuing economic success was entirely due to the collapse of his government's destructive economic policy of high exchange rates which were throttling the UK economy.

So we survived the next four years asking "for heaven's sake man, go, we don't want you or your government!". We were waiting for 1997.

Sterling's collapse was inevitable. Had Kinnock got in, he would not have had the choice of reducing interest and exchange rates (too embarrassing, the Tories would have crucified him) and Labour would have got the blame for the collapse happening 5 months after they came to power, and it would have been bye-bye Labour for many years. In retrospect, it was a good election to lose!

Sam Centipedro, Shrewsbury, England

I've suspected for some time that Kaletsky is all hot air. Now that he talks about a shift in public opinion towards the left I know he is.

Adrian Gilbert, Tonbridge, Kent

New Labour Keynsian demand management in a period of growth from 2000 was always going to lead to problems.
The worst is yet to come as "Free Lunch Britain" has had its inefficiencies sheltered and its growth rate self induced. Hence the problems in controlling gov borrowing.

shay, Newark, UK

This is a devastating indictment of this government.

ahs benton, Tyneside,

The hard reality is Granite. Whatever teeth this Government has left will be broken on the Granite in Northern Rock. Disreputable companies faced with extinction seek to save their better assets.

Having spent £100m on consultants during the protracted period of reaction to the crisis, it is unlikely that Brown and his cronies were unaware of Granite's implication, and it is unlikely that attempts to exempt the matter from the Freedom of Information Act was unrelated to their knowledge that a smoking pistol is close by.

A weary public, accustomed to scandal and easily confused by complication, will be fooled again. But when they have to start paying.....

tim holden, exeter,

"the State can sometimes provide services efficiently"
Not while it embraces PFI it can't! State-operated services in-house with anorexically lean management might be efficient, but the state has shown itself to be entirely incompetent when it comes to purchasing outsourced services on our behalf. Putting the country in hock to glib highly-paid consultants is the way to get poor and inefficient services while losing more money than ever. Hire expert achievers, not consultants!

Ross, Bristol,

Mr kalesky criticism of brown decision of nationalisation of nortern rock on the grounds of giving up monetarist policy and restoraing keynesian instruments and comparing 1980 and 1992 experinces are not valid comparison or criticism.
there is no compaision to 1980 or 1992 to the present problem. the market share of US and Britain as a percentage of world GDP and exports appears to be falling apart from drainng of money for energy imports and war expenditures.the global financial markets though growing at a faster pace but control of US and UK over these financial streams are falling reflecting the chanding global composition of economy.
In the slowing growth of US and UK, stiffenibng global protective environment the course adopted by brown though against the free market principle still a good short term solution to minimise the damage to economy and soon after to advocate more for global financial sector and political reforms towards lassiez fare may do better to country

s.lakshma reddy, hyderabad, india

---er could someone help? Kaletsky wrote in The Times on 24/9/07 that -- "The rescue ot Northern Rock -- will probably be seen with hindsight as one of the more successful crises management excercises in the chequered history of modern central banking--- no depositor has lost money and a potentially catastrophic threat to the British banking sytem has been averted---"
Who made him change his mind?

Robert Perkins, Milton Keynes, England

totally corret; those arguig that the Rock will be sold off in a few years for a substantial profit should look at previous examples of stte intervention in this sector in Europe/

The Rock is already telling its own customers to go away as it is obliged to shrink its balance sheet. tthere's no chance of it having either thesame modelor the same size ever agin just like all the banks are having to retreat form their reckless expeansions of the last ten years on thinner and thinner margins and more and more dubious business models.

The idea that GB's downfall will be his mental inflexibility is spot on; he's clearly a very stubborn individual completley unsuited to the job. Mental agiliy he may possess but flexibility, no. the idea that the Tripartite system could possibly have been to blame is the most shining example of this when it patently is wholly to balme and Brown's own creation.

Robin, London,

Brown's Prudence and Economic Competence

I think what the Northern Rock affair should demonstrate even to non-critical thinkers is that Brown's self-stoked reputation is built on no more than weasel words.

The 40% sustainable investment rule - what did he do when spending plans threatened to breach this rule? Reduce the spending? Not a bit of it. What he did was to push it into PFI, which is no more than a hugely expensive way of calling public spending something else. Brown never had any intention of behaving responsibly over public investment, but he had to put in place a myth whereby he could claim that he did.

The independence of the Bank of England is another myth. The "freedom" to control monetary policy was handed to a committee whose composition was controlled by a certain G Brown. Sure, there's no direct responsibility line linking Brown to the decisions, but it takes a vivid imagination seriously to believe that this committee EVER acted independently of him.

Simon Stephenson, Windermere, UK

Black Wednesday, painful as it was, cost a paltry £3.5 billion. The nationalisation of NR may cost upward of £120 billion.
On this comparison we can look forward to at least 50 years of Labour in opposition.

Bill, Bristol,

Was anyone really surprised by this? Gordon the jinx has been sending the Country to the dogs for several years. His much vaunted time as Chancellor has been overrated for many years. Remember the gold sell-off, pension raiding.
It's time for a new SERVANT to serve this Country.

Roger, Surrey,

Kay Tie in York is clearly deluded. When State action is taken by competent politicians, it does work. Sorry but you are just wrong. It helped create the NHS, which worked for 50 years. It helped create the Post Office, which also functioned extremely well until recently. Public services all over Northern Europe function extremely well. It's only when we start confusing running them with managing a private company that they malfunction. It is a different discipline and should be treated as such. We need Grandes Ecoles, like in France, to recreate pride and operational competence in our public services.

Robert C, London, UK

because I .... am i camronite!

MAPA, Yorkshire, England

If Rock was a bargin, it would have been snapped up by another bank or private investors.

Since they refused to touch it without massive subsidy, the company is obviously worth less than £100billion, quite possibly worthless.

Dominic, Manchester, UK

"I look forward to the commentators eating their words when Northern Rock is sold off for enormous profits in a few years"

This will be about the same time as the porker flybys and when MPs vote themselves a reduction in pay and expences.

A Williams, Stockton-on-Tees,

Mr Kaletsky writes of the "pendulum of opinion" moving away from "market fundamentalism". Yet he must know that "market fundamentalism" is not a strategy, it is a fact of life, and that opinion on inexorable forces is irrelevant. Keynes would surely have disagreed with the way his thinking had been developed into wholesale distortions of the market that prevailed in the 1960s. Intervention should always realise that it should be solely to smooth out market forces that have unpleasant socal effects. The tendency is however, to not to build a temporary coffer dam against a surging torrent, but to think that the torrent can permanently be tamed. Brown had no *political* alternative but to nationalist Northern Rock, but the torrent will have its way in the end. NR will have to be managed down until what profitable bits remain can be sold off. This is in effect, receivership, regardless of government protestations to the contrary.

Richard Dell, Preston, UK

Black Wednesday has been renamed as White Wednesday and recognised as day one of our recent long period of economic growth.
The nationalisation of Northern Rock is not about economics, it is taken place in order to cover up the fact that the Government has shelled out tax-payers money without first securing AAA security. Northern Rock will not compete in this shrinking and more risk averse market and the only business model that will work is the sale of assets and rapid reduction in costs, which is normally the job of the Official Receiver. Difference being that the Official Receiver would have taken his fees from income.

Roger J Davies, Aberdovey,

Mr. Kaletsky you could not be more wrong. The Financial industry is not left to the unfettered market at all. If it was interest rates would be set by the banks instead of the Government and would have been much, much higher by now. The lying Government statistics have made us believe that inflation has been low when in truth we have had massive asset price inflation on an unprecedented scale fed by ridiculously low interest rates which have fed the recklessness of banks.
In addition the Government's policies encourage spending and speculation by borrowing instead of saving which has caused bank reserves to be run down and debt to be encouraged in all areas. Gordon punishes our savings through taxes and inflation .Then there is the problem that managers of private or public companies never personally face the consequences of running a company into the ground or creaming off huge riches from it. They still get their bonuses and salaries. This is not true capitalism or free markets.

Deborah Hoyle, Banchory, UK

Was Black Wednesday such a tragedy? Following Britain's escape from the European system we re-established our position very quickly on the back of the continued European problems. We were not the only ones to have problems with that system in fact Italy was taken to the edge. The whole problem could have been ameliorated had the German central bank given Britain the same sort of support that it gave to France, that was political manoeuvring to prevent France from having to devalue. With Northern Rock we are spending billions of pounds just to prove that the banking system imposed from Europe is workable. The gap between the FSA and the B of E Monetary Policy Committee is a false environment with areas that neither is monitoring or controlling. Add to this the 'openness' which is demanded on reporting financial matters and there is no way ameliorating the damage done before it comes to the public notice. Lawson was egotistical Brown is incompetent.

Malcolm Turner, Alsager, England

'that the State can sometimes provide services efficiently'. Mr Kaletsky what possible service can the State provide efficiently? healthcare? I don't think so billions wasted on NHS, have you watched the programme on channel 4 about the businessman trying to sort out the NHS? his verdict, not a hope in hell it wiill go bust. Education? private schools dominate the top of the league tables as education expenditure has rocketed, no difference there then. Kay Tie from York is right, most people want less State interferance, it is OUR lives not the States let US live them and make our own choices.

Tom, London, UK

Brown and Darling WILL be forced to pursue much more sensible economic policies now, as the choice now is probably between condemning Labour to opposition for ten years or for twenty years after the next election. The pound has fallen in value and there will be a rebalancing between imports and exports as a result, which will close our trade gap without having to sell all our top businesses off to foreigners. There is a huge appetite to cut public sector payrolls, especially those unaffordable pensions, and there is plenty of fat to cut - Iraq, Afghanistan, Scotland, pensions - you name it. Finally the banks have stopped lending so much, so people will save more - perhaps increasing VAT on goods to 20% but cutting all taxes on savings will encourage that.
Either way, Brown and Darling will never get the credit. I voted for Major in 1997 on his recent economic record - I wasn't wrong.

Dave, Slough,

jon livesey, Sunnyvale, CA/USA

"In the past few days, I have seen posting after posting, presumably from Labour supporters, exulting over the terrific "bargain" the taxpayer is getting in Northern Rock - and this when no capitalist will bid on it at all without a massive subsidy."

They aren't just Labour supporters, they are mostly Labour Party employees.

Ex-Pat, Alicante, Spain

I would like to add, over and above the above monetary disaster that MR Brown has brought down on us, we must not forget that in the City his nickname is Bottom Brown because he sold all our Gold reserves at bottom, less than one third of todays value against Bank of England advice. This cost this country a fortunes. Thought he let the bank make such decisions?
Since he has been chancellor he has sent £11billions a year for 13yrs to EU now the figure is £12billions a year. This amounts to £150billions 95% of wich is unnacounted for/ missing according to the EU Auditiors. No questions or discussion in Parliament about this theft of our money.
Then as soon as he signed that treaty which Mr Brown is trying to get ratified we owe the EU another £75billions.
As a consequence the NHS, Forces, Education, are short of money. We are trading at a huge deficit especially with the EU and they have skwed the figures to prove otherwise. Bottom Brown is well named the ship is sinking fast..

Jas, Alders, UK

Firstly, entry into the ERM was a 'decision' made by the Tories at a time they controlled interest rate via the Bank of England, with disastrous effects. Labour gave the Bank independence immediately on gaining power. Secondly, Northern Rock was an independent private sector bank - what would the opposition have said if the Government had tried to control its incompetent management - that should have been a job for the regulators? Thirdly, nobody says that National Savings and premium bonds are disastrously managed at arms length, so why should Northern Rock?

I look forward to the commentators eating their words when Northern Rock is sold off for enormous profits in a few years - hopefully it wont be the sneering toffs in the Tory Party who get the credit.

sk, East Sussex,

Gordon Brown & Co never suffer from of the effects of the mad brain schemes they dream up. It is always the long suffering taxpayers who carry the can for the folly of politicians and civil servants!

Mike O Connor, plymouth,

What would have happened if Norther Rock had been let go to the wall? Armageddon? US mortgage lenders have mismanaged their business and have gone under, yet Armageddon has not happened there. I think Brown's mistake is trying to tell us he can give us a stable economy by propping up failure at unlimited public expense. We've been down that road before.

Paul Flynn, Sai Kung, Hong Kong

"The pendulum of opinion is manifestly swinging away from market fundamentalism and towards a closer symbiosis between the private sector and the State."

Err, not in any other sphere it isn't. State interference in every aspect of our lives has proved a disaster, and public opinion is swinging away from the idea that the State is all powerful, that it owns even our bodies when we die, and that it can solve all our problems by bossing us around for our own good.

Kay Tie, York,

Great stuff, but it leaves me wondering why we have to have disasters of this magnitude in order to stand a chance of a change of Government. In the past few days, I have seen posting after posting, presumably from Labour supporters, exulting over the terrific "bargain" the taxpayer is getting in Northern Rock - and this when no capitalist will bid on it at all without a massive subsidy. What is it about British politics that causes ordinary people to persist in supporting lunatic policies, so long as they are the policies of the party that represents their tribe?

The great British voter seems to lack the intellectual awareness and integrity to evaluate policies before they become fatal. It is only when the sky really does fall, that they begin to doubt. Bismarck cracked that he liked to learn from other peoples' mistakes. The British voter seem incapable of learning from his own. We need to learn that parties don't matter; policies do.

jon livesey, Sunnyvale, CA/USA

Brown has already gone past the tipping point, there is nothing he can do to stem the tide.

The only problem being, who's next...... cuddly dave??

There is a general malaise in British politics, of which all parties are mired in, and there is a vacuum waiting for someone to step into, whoever that is I have no clue!!

john morey, Gloucester,