In what appears to be an endless stream of books by financial crisis policymakers, the UK’s Gordon Brown trots out his memoir. Each of these books has a central theme: how I saved the world from another Great Depression. Each of these books also has a section on how I would do it differently next time.
Mr. Brown’s book is no exception.
First, he takes credit for saving the world. Specifically, his effort to recapitalize the banks that was copied in the US.
Brown says he was unsure whether he would survive the key day, 8 October, when the bailout plan was announced.
“When I got up the next morning I told [Brown’s wife] Sarah that she would have to be ready to pack our things for a sudden move out of Downing Street. If what I was about to do failed, with markets collapsing further and confidence ebbing from Britain, I would have no choice but to resign.
“As I walked into the office, I didn’t know if I’d still be there at the end of the day.”
Then, he unveils what he would have done differently.
If bankers who act fraudulently are not put in jail with their bonuses returned, assets confiscated and banned from future practice, we will only give a green light to similar risk-laden behaviour in new forms.
I have often wondered what it is like to write a book in which you try to defend the indefensible. Does the author ever have a moment where they think to themselves, “man, did I screw up”?
Setting aside the fact it was Mr. Brown’s light touch regulation that allowed the banks to blow themselves up, it is far from clear bailing out the banks saved the world. It most certainly saved the bankers and their bonuses. However, did it really save the UK?
It isn’t too hard to connect the dots and show how the response to the crisis lead directly to the vote to leave the EU.
As for what he would have done differently, it is far too little, far too late. Consider for a moment he could have negotiated the return of all the banker bonuses paid over the prior half decade as a condition to injecting any government funds.
Like all of the books of this genre written by a financial crisis policymaker, it is only worth reading if you want to make yourself upset over how poorly the financial crisis was handled.