Gordon’s Comeback

A week is a long time in politics, as one of Britain's previous Labour Party prime ministers, Harold Wilson, is said to have declared. Gordon Brown can only agree. The week before last, he had lower poll numbers than any prime minister in recent history, was smarting from defections in his own ranks and, in desperation, had just reshuffled his cabinet to bring back one of his oldest enemies, Peter Mandelson. By early last week, Brown was heaped with praise from around the world for a bold and decisive plan to rescue Britain's banks. The United States did a volte-face, announcing it too would partially nationalize leading banks, although like Britain it insisted on calling the process "recapitalization." Brown's plan was adopted in eurozone countries, and he was greeted as a hero in Brussels—all the more significant because Britain does not participate in the Continent's monetary union. New York Times columnist Paul Krugman, on the day he won the Nobel Prize for economics, lavished kudos. "Luckily for the world economy," he wrote, "Gordon Brown … may have shown us the way through this crisis." Le Monde likened him to Churchill.

Even his worst critics were at least momentarily gagged. ConservativeHome.com, an unofficial Tory Web site, quoted a strategist for Conservative leader David Cameron as saying, "Team Cameron readily concede that Brown has enjoyed a good few days." Polls showed Labour gaining some popularity against the Conservatives. Asked which leader they most trust to handle the financial crisis, 33 percent opted for Brown, 27 percent for Cameron.

In his success, Brown may have finally escaped the long shadow of his predecessor, Tony Blair. While Blair was called "Bush's poodle," the Bush administration followed Brown. And he seems reinvigorated, racing from one international conference to another, and giving more interviews and press conferences in a few days than he usually does in a month. "He's absolutely transformed," says Sunder Katwala, head of the Fabian Society, a Labour think tank.

Now Brown is pushing ahead to win converts to more wide-ranging proposals for a new financial order, including calling for a second Bretton Woods—after the 1944 confab that led to the International Monetary Fund and World Bank—and a mechanism for regulating currency exchange rates. European countries have already agreed to an emergency G8 summit, possibly as early as November, with U.S. President George W. Bush tentatively in favor as well, and many are taking up Brown's call for cross-border reform of banking and finance.

The lead is a dangerous position. Many critics have derided Brown's role in creating the U.K. regulatory bodies that failed to restrain risky lending. His earlier pledges of "no more boom and bust" are much quoted back at him now. And no one knows if the bank rescue will work; taxpayers saw their investments sinking in value as stock markets tumbled most of the week, with stocks of the part-nationalized banks particularly hard hit. "Brown will soon [be] seen to have saved the banks but not averted recession, and there aren't many votes in that," said ConservativeHome.com's strategist.

More trouble lurks. The economic news worsened last week as the unemployment rate rose to 5.7 percent, the highest since 1999. Another big challenge will be keeping Labour together. Brown's decision to bring back Mandelson was considered as stunning in British terms as John McCain's choice of Alaska Gov. Sarah Palin as his running mate—though for very different reasons. Mandelson was a brilliant political strategist for Blair, but was twice forced out of the cabinet after scandals. He and Brown are believed to despise one another. "Peter asked me for 10p to phone a friend the other day," Brown quipped years ago. "I said, 'Here, take 20p and ring them all'." In contrast to Mandelson, Brown has his roots in the left wing of the party, many of whose members would be cheered by his government's postsocialist intervention. Mandelson is trying hard to present a united front. Brown is "a big man and a big brain for the job," he says, but cautions party members from drawing "the wrong conclusion—that there's been a regulatory failure and that we should do away with markets." The lesson of the crisis, he says, is not that markets are dead, but that "there needs to be adequate supervision."

Some Brown enthusiasts now compare his role in the crisis to Margaret Thatcher's war over the Falklands in 1982. The patriotic fervor that adventure aroused boosted her public support and led to an unexpected victory in elections the next year. With recession all but inevitable, a more trenchant comparison might be Winston Churchill. He won his war, then lost re-election, to Labour, in 1945.