Why did it take the government so long to understand that their failure to act promptly a few months ago has actually made the recession worse.
Last April I predicted that the failure to cut interest rates was tying people in to long term fixed rate mortgages (and 80% of people are on fixed rate mortgages) so the government's sudden recent drops in interest rates are only benefiting 20% of mortgage holders, and is therefore having very little impact in providing a fiscal stimulus.
I repeated the point again in July, but still the government were oblivious.
Now we are in a situation where 80% of people are locked in to high mortgage rates for the next 3-5 years, thus making what might have been a short recession in to a long term depression.
And all these problems have been caused in the name of fighting inflation, which everyone knew would soon drop once the recession started. You only have to look at the precedent of the mini credit crunch Japan suffered a few years ago for a real example when inflation turned to deflation, yet our government was blind to this.
Whilst I cannot for one moment follow the Tory line that this worldwide recession is the fault of Gordon Brown, I am of the opinion that all the government action now is necessary in order to make up for their lack of action as the recession started.