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Stanley
Local Historian & Old Fart


36804 Posts
Posted -  28/04/2011  :  07:37
Political comment is a high risk activity on the site these days so I thought I'd try again to give those who are interested in politics a safe haven!


Stanley Challenger Graham




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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 07/08/2011 : 04:51
Joseph Stiglitz has some interesting things to say, he should be heard more.

My mate Bob Bliss has been banging away for years saying that the South won the Civil War because the economic policies that have been in vogue since the 1960s are pure slave-owning aristocratic principles, fix the tax system for the rich and bugger the poor. (I paraphrase!) There is a new book out which reinforces everything he says on slavery and taxation, very well received.

Dave has interrupted his Tuscan Idyll to telephone President Sarcosy. So that's all right then.....


Stanley Challenger Graham




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Invernahaille
Regular Member


669 Posts
Posted - 09/08/2011 : 00:04
The USA is starting to realise that it cannot continue with its fiscal policies. Things are tight in europe at the moment a slow recovery from a recession, we all know the adage America sneezes and the world catches cold. If the states tightens its belt ad attempts to make savings etc , I wonder what effect this will have globally..


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 09/08/2011 : 04:19
Bad Robert, bad. My island of serenity at the moment is in the shed, are you keeping an eye on me?

I see our leaders have decided to cut holidays short.  Fairly obvious choice really. Funny thing is that what has triggered them is riots, not the root of the trouble. I don't think they really get it. Margaret Thatcher was badly advised and ditched manufacturing industry and policies directed at full employment for the quick buck of the financial service industry and dismissed the effects on society. New Labour followed the same track. In the process,education and social services were eroded, greed was rewarded and extolled and Godron declared the 'New Economy' had arrived, no more 'Boom and Bust'. The advertising industry stoked consumption throughout because conspicuous consumption was necessary to stoke 'growth' and profits. Obscene rewards became common and when the crunch came three years ago the perpetrators dashed with the cash and instead of being punished were rewarded with the biggest hand-out in history so they could carry on and do the same thing again.

Then, the greed of the markets focussed on the profits to be made by speculating against debt ridden countries which hadn't shewn signs of self-restraint and the global economy reels under the blow exacerbated by the inactivity and incompetence of the politicians.  Protest grew in the UK against the speed and severity of the cuts and the disaffected youth took the hint and went shopping. As one blogger said, quoted on World Service this morning, I the Arab Spring the younsters used modern communications to organise for political reform, our youth did the same thing but for I-Pods.

Manchester, Liverpool and Bristol are infected now. Ironically the favoured tool for communication is the Blackberry because of its security, all traffic goes through the company's secure servers and is guaranteed private. Exacly why it was the favoured tool of New Labour.

There is no quick fix. It took over twenty years to nurse this syndrome. If we started now it would take at least that long to ameliorate it. The next move by the police will be to become proactive. They will be thinking about curfews for kids on the street. Next step is early morning raids. Some of us have seen this before.

Meanwhile, the smart money flie into the US government bonds, the same ones rubbished by the rating agencies over the weekend. The world is going mad.


Stanley Challenger Graham




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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 10/08/2011 : 06:33
I know that it can get boring when I keep banging on about the economy going down the tube but we are allowed to be wise before the event. The main driver behind the market falls of late is the fact that all the evidence is that global activity and growth is falling. US has downgraded forecast and UK followed yesterday. Mervyn King added that there will probably be another downgrade later in the year and all this before the latest evidence. Manufacturing activity in UK has slowed and is static growth, exports are faltering as other economies slow down. One of the classic consequences of slow down is falling commodity prices which may slow domestic inflation a bit but this is a poor reward, all it shows is that there are too many goods and not enough money.

All these are the 'external events' which I have been banging on about for months. Ossie and the ConDem Coalition went for quick, deep cuts and relied on private sector expansion to raise domestic economic activity and reduce unemployment. Good in theory for deficit reduction but at too high a cost, what they forgot was that it is domestic consumption that is the main driver of the UK economy. The figures they did their calculations on are now shot to pieces and it is imperative they have a rethink.

In some respects the riots are a PR lifeline to the government. It's quite obvious that the first thing that has to be done is regain control of the streets. Tory Law and Order policies and DNA kick in and blank out the real external dangers. Note the calls for water cannon, baton rounds, gas and 'proactive policing'. (Some people are even calling for the Army to be brought in. Look up Tonypandy before you rubbish this as alarmist) What they are reaping is the breakdown of trust in society, Cameron himself was banging on about 'a broken society' six months ago. Now he has had it pushed into his face, the 'Big Society' wheeze evidently isn't working.

Go back and read the history of the Inter-War years. Exactly the same mistakes have been made as then and all the stats point to the same results. The result then was world recession and the stimulus that lifted us out of it was the dicontinuity of te Second Word War, we were forced into deficit-financed policies to survive and it worked. I'm not advocating another world war but our leaders should take note and start acting rationally instead of being driven by the dogma of Monetarism.

Meanwhile, in another part of the forest the US Fed promises to keep interest rates at near zero for two years. This means that we have to follow suit. This in turn means that one of the main tools for regulating the economy is denied to us. One thing we can safely ignore is the wild fluctuations in the markets driven by fear. They have nothing to do with the value of our assets, just the cost of them. The infrastructure and industries are not evaporating.

 (China is screaming shock, horror because their growth rate has fallen to 14%. Work that one out!)

Bottom line is that ConDem policies are shot to ribbons. Time for a rethink. Never mind accusations of U-Turns, do what is rational and necessary. Borrow money and inject it into the domestic economy. Can you remember me advocating spending at least half the bank bail-out money on investment in the infrastructure to inject money into the economy and society at the bottom and gain the advantage of the multipier effect? Instead it was thrown to the very people who buggered the economy.  That was a very costly mistake and we're paying for it now.


Stanley Challenger Graham




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Tardis
Regular Member


453 Posts
Posted - 10/08/2011 : 11:08
Bottom line is that ConDem policies are shot to ribbons. Time for a rethink. Never mind accusations of U-Turns, do what is rational and necessary. Borrow money and inject it into the domestic economy. Can you remember me advocating spending at least half the bank bail-out money on investment in the infrastructure to inject money into the economy and society at the bottom and gain the advantage of the multipier effect? Instead it was thrown to the very people who buggered the economy.  That was a very costly mistake and we're paying for it now.

Except, the ConDem fiscal policies have only been in effect since April 2011 and economic factors are usually lagging rather than instantaneous..

Before this, you had rampant unregulation of the banking and housing sector which falsely inflated asset prices.

Instead of allowing the banks to go bust and recover, Brown & Darling decided to bail out the banks, thereby hobbling them because effectively they are bust and the economy can not deflate those assets to actually rebalance the market economy because otherwise the banks would have to be liquidated. I have heard expectations of 0% real house price inflation for the next 10 years just to get this stuff out of the equation. I'm sure Brown and Darling didn't say anything about that choice when Brown saved the world.

Then  we had QE to prop up the banks (it has not flowed out into the wider economy) which made our exports cheaper, and imports more expensive which forgot the fact that the UK imports food and energy, and its manufacturing sector is very weak after a considerable period of being unable to compete through propping up the exchange rates at an unrealistic level.

Then all the excess money in the world system has flowed into commodity prices, and just before the present US crisis food prices had actually begun to fall which benefits everyone on the planet. Energy prices too, although our domestic prices are rising. The flow of capital "back" means that the economy is beginning to work again, although balance of payments would suggest that we are still merrily consuming from abroad.

Now the country is faced with an enormous bill, a financial world environment where money isn't being lent cheaply anymore, zombie banks restoring their capital base but dogged by over valued assets, and stagnant consumption because taxes were raised by both Osbourne and Darling and things in the shops are more expensive.

If we borrow more money to pay for fiscal stimulation how are you going to guarantee that it actually reaches those parts of the economy which stimulate your consumption growth (usually the top 10% of earners)? Then what taxes are you going to raise so that the country can pay back the money?

Is consumption actually what we should be measuring?

Another round of QE will simply increase our import costs again, but improve our export capacity without any flexibility in our manufacturing base. The red tape cutting is not coming fast enough to facilitate industrial expansion.


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Bruff
Regular Member


479 Posts
Posted - 10/08/2011 : 16:27
''Before this, you had rampant unregulation of the banking and housing sector which falsely inflated asset prices''

 
''The red tape cutting is not coming fast enough to facilitate industrial expansion.''

 
I'm struggling to square those two opinions, if I'm being honest.  Perhaps I'm making a link where none exists and actually the latter is an unrelated commentary on what seems the sole strategic driver for growth?  What red tape needs to go?  Out of interest - I'm a maker of red tape me, not in the main a user (that's the wife). 

 
I have to say I get terribly confused with the 'status' of economics as a discipline as it strikes me that everything is based on heroic assumptions, and so is effectively a guess.  Depending which 'school' you adhere to, dictates your argument and economic 'values' yet we are daily paraded the latest sage on screen and in print noting we need this, or we need that.  As an academic exercise in encouraging critical thought and training the mind, it's great of course.  But as proof of anything, which is how it is often portrayed?  I might as well consult a wise-woman.

 
I'm not quite sure what the consequences will be when the system goes down, or would have been if the banks had been left to fail.  I have about a month's worth of food (could push it to two, if needs be).  And at least for the time being a roof over my head.  But after that?  Well, I'm into musing on nonsense and as a civil servant trained as we all know, in worthless activity (which is linked to the former).  So my chances of surviving in a free-for-all are minimal to zero. 

 
Those street kids in Hackney would do alright though.  And the lads who tried to get the cash point out with a 'digger' here in Bootle last night.  They failed.  Last year they didn't, or the time a few months before that.  They need a better 'digger'.  Quite a few burnt out cars around and a semi-trashed Asda.  The former's a regular thing.  I saw someone torch a car from the train a few years back  So far we've not had any shots fired at the windows of the office, which is good as we've just replaced those hit the other month.  Usually this happens at night, but not always.  I hope folk weren't thinking burning, looting, robbing and thieving was something new.  The scale is.  But it goes on all the time, and generally, none of us give a stuff.

 
Richard Broughton


Edited by - Bruff on 10/08/2011 4:32:22 PM


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catgate
Senior Member


1764 Posts
Posted - 10/08/2011 : 22:34
Bottom line is that ConDem policies are shot to ribbons. Time for a rethink. Never mind accusations of U-Turns, do what is rational and necessary. Borrow money and inject it into the domestic economy. Can you remember me advocating spending at least half the bank bail-out money on investment in the infrastructure to inject money into the economy and society at the bottom and gain the advantage of the multipier effect? Instead it was thrown to the very people who buggered the economy.  That was a very costly mistake and we're paying for it now.

 

My attention was drawn by the following article, which certainly throws a more intelligent light light on the situation, and the reasons behind it, that do the howlings of the left wing supporteres.

My mother had a wonderful saying:- There are none so blind as those who will not see.

http://www.thecommentator.com/article/363/the_disastrous_death_of_common_sense


Every silver lining has a cloud.


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Invernahaille
Regular Member


669 Posts
Posted - 11/08/2011 : 02:20
Interesting news item on the news this side of the pond. The Americans are now blaming european fiscal policies for the stock market debacle.


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 11/08/2011 : 07:05
Richard, the problem with economists is that they can only react to the numbers so they always lag. Keynes admitted that if you put five economists in a room you'd get six opinions.

Catty, unintelligent and howling left wing? Is that directed at me? One of the salient features of UK politics over the last six months has been the silence of the Left, too sensitive about the New Labour share of the cock-up.

Ossie makes a statement on the House today.It will make or break him. Boris (up for election next year) breaks with ConDems over policing. He's on safe ground, there are a lot of people in all parties, including the Tories who will agree with him. Note that Cameron is now talking water cannon etc even though the police went public last week saying they didn't want them. Nature provided the water last night, biggest factor in reduction of lawless activity was heavy rain. Tory DNA is to keep the lower classes quiet and protect their position. The entirely legitimate effort to regain control of the streets from the rioters has given an opportunity for it to kick in again. Their natural instinct is to repress not to address the root causes.

Robert. Markets have gone red screen and in a way US blame on Europe is justified as it was the ineptitude of the Euro politicians that triggered this last round of shocks but this leaves aside the mistakes of the last fifty years which are common to all. The chickens are coming home to roost and it's hard to swallow that a universal economic model (monetarism) is fatally flawed as they have applied it. This is what needs adressing for long term change but when were politicians long-sighted? In the US they are looking at next year's elections.

On China, Martha (Wadsworth Professor of Economics  at Carleton) sent me this. (she is not rabid about anything either!)

 "The Chinese growth rate is overstated. They are running about 10% inflation according to my sources that do business there. That makes their real growth rate closer to 3-4 %.  It is not clear how long they can keep the lid on their people"s frustration with censorship."

What we are looking at is not a flash in the pan but the natural long-term consequences of allowing a 19th century laissez faire  system to regain control in 1960. The Tories are working straight out of Montague Norman's Boys Book of Economics from the 1920s. He was the eccentric governor of the Bank of England who believed in 'sound money', the 'Gold Standard' and a model of economics based on a cloakroom, "You can't take more umbrellas out than you put in".  The consequence then was world recession. Why should it be any different now? Have we got enough time to claw our way back from the abyss?


Stanley Challenger Graham




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catgate
Senior Member


1764 Posts
Posted - 11/08/2011 : 09:08
Catty, ? Is that directed at me? One of the salient features of UK politics over the last six months has been the silence of the Left, too sensitive about the New Labour share of the cock-up.

It is directed at the unintelligent and howling left wing.

Most of the unintelligent right wing do not howl, they just continue to try to rob the public purse by stealth, rather than claiming  tptally unrealistic "rights".


Every silver lining has a cloud.


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 11/08/2011 : 09:18
Good, so I shall assume I belong to neither group! Have a nice day Catty!


Stanley Challenger Graham




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Tizer
VIP Member


5150 Posts
Posted - 11/08/2011 : 10:18
quote:
Invernahaille wrote:
Interesting news item on the news this side of the pond. The Americans are now blaming european fiscal policies for the stock market debacle.
Well, UK politicians in 2007 blamed the US for the credit crunch (Godron intoning "It began in the US, it began...") so it's only fair they get their own back! There is a lot of this type of blame culture now and the folk concerned fail to distinguish between the long-term cause and the `final straw that broke the camel's back'. If you use cardboard to build your house don't blame the wind when it blows down.



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Tardis
Regular Member


453 Posts
Posted - 11/08/2011 : 11:03
Richard, there are many banks of economists, all with differing points of view. GDP is effectively consumption of goods which are manufactured either by primary or secondary producers. The Service sector effectively lives off the others productivity to enhance value

The view much in vogue at the moment is Keynesian, whereby you squirrel away in the good times and pay money out in the downturn.

It was supposed to be the bedrock of the 3rd way, to try to even out the business cycle which invariably rises and falls in a competitive market. As a civil servant I'm sure that you will understand the message of "efficiency" and "effective delivery" to actually justify your own position.

It is unfortunate therefore that Blair/Brown/Balls had an economic policy which borrowed during the good times, and put much of that off balance sheet so it wouldn't count (it was still debt), and then ran a policy which encouraged the inflation of house prices (unrestricted) because the main plank of the 3rd way was that when someone got older they could sell their property to fund the care that they required, thereby reducing the state intervention. Then they got cold feet with the "Death Tax" towards the end of the administration

On top of which a lot of "means testing" was introduced to ensure that more people actually fell into the position of having to sell their property, and more people fell into the tax brackets through not increasing allowances. Lots was covered up with tax credits, without the understanding that it was actually cheaper not to take money from people in the first place if you were then going to give it back.

The property price inflation, however, is not paid for by the current householders. It comes from the newer generations, so effectively the system transferred the debt to the future and is a form of Care Tax.

It was, therefore, even more unfortunate, that having pulled away a piece of regulation on cheaper credit to ensure that house price inflation could fulfil this need the banking system set about it with gusto and produced a massive bubble. By saving the banks, this bubble has not been allowed to deflate. It is also possible there was some illigality but that has never been investigated, and so far no new bank regulations have been introduced.

By Red Tape, I would simply ask you to look at the processes and proceedures that need to be gone through to actually move business premises, which doesn't include the disruption of the relocation, loss of sales, movement of specialist machinery etc.

Then I would point you at a simple Local Government issue in Barnoldswick. There are 181 litter bins on the streets and parks (I got the list on Monday under FoI). There is one full time street sweeper, and another p/t (to Barlick) bloke in a van who services the outlying ones. To get a full bin emptied depends upon where it is and who's department it is (parks, cleansing, operational services, Pendle, LCC). Imagine that magnified when you have a company with employees, rates, legals, planning permission etc. Most companies don't move until they physically have to because it is effecting the business.


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Bruff
Regular Member


479 Posts
Posted - 11/08/2011 : 15:42
Oooooh blimey, a civil servant concerned with efficiency and effectiveness?  Good grief, no.  If you want to make really, really serious efficiency savings you'd have to re-educate the public (or better still, clone them into one homogenous unit); neuter the media; and last and most importantly, impress upon Government Ministers that their career suicide is a price worth paying if they are serious about the intense effort needed to make real efficiences.  Because unfortunately, whatever the politicians may tell you about management costs or this 'bureaucracy' they're very fond of, almost all public service costs are in the front line i.e that which people use.  'Back office' etc costs are peanuts, a percentage you can count on one hand, missing a finger.

 
Now it is quite possible to make these savings.  But it necessarily involves being honest about lapses in standards (albeit temporary); honest about upfront costs; honest about delivery mechanisms (that is, the degree to which control is devolved) and the extent of that delivery (the size of the front line); honest about the trade-offs ('you can't have all of the cancer drugs, all of the time, for all of the people', or more generally, 'no, this is not a priority for us, no matter how much it might be for you'); and so on.  Personally, I'm up for that.  But the public ain't; the media ain't and the politicians certainly ain't.  So it's my suicide note I'd be signing.  And at this moment I'm not inclined towards a noble sacrifice.




Meanwhile in other news, Parliament is debating the recent 'events'.  As usual with these things it's a load of hot air punctuated by those idiots who misjudge the public mood completely and speak eminent good sense.  I wish these types would learn.  What is needed at times like these is not good sense, but knee-jerk reactions that make matters worse and 'sounding tough', as it is only that way we can ensure the 'events' recur, and the cycle of life continues.

 
Prize for the best 'sounding tough' ridiculousness in a strong field, goes to Mr Cameron's noting that the police will have powers to get folk to remove facemasks.  Well, good luck in getting 150 youths to do that.  And the police already have this power.  But once you get round the corner, they can't stop you putting it back on again.  Completely ridiculous, but it sounds tough eh?  The task force on gang culture sounds good too.  Here's how it will work.  It'll take 4 months to set up and establish the terms of reference.  It will then take evidence for 12 months and then spend 4 months writing a report for Ministers.  The report will contain recommendations.  The Government will take 3 months to draft its response to the recommendations, accepting them all.  On Recommendation 1, the Government will set up an Inter-Departmental Committee to evaluate the options for delivery.  This will take 4 months to set up and establish the Terms of Reference.  It will take evidence for 6 months and spend 3 months writing a report to Ministers which makes several recommendations..........On Recommendation 2, the Government will set up a Committee of Experts, to advise the relevant Department on the policy options.  This will take 6 months to set up and establish the Terms of Reference (as the desired Chair Professor Jones is on sabatical at Brown University until May)....... 

 
You know, why not at least try to offer these ne'er-do-wells some chance of a job, with some permancy, which pays a living wage, so they have at least a chance of their own home with a mortgage, or a tenancy with some protection, so they might have a chance of settling down, and starting a family, and raising a child, who society allows to be a rascal, as children are rascals, who should stand on corners, and should kick a ball on a wall, and should shreak and shout, and they should not be feared, so we don't blast high-frequency sounds at them....... 

 
I'm sorry for going on, but I've read some rubbish these past days on these riots (not on here).  There is one man who has conducted himself with some dignity in all of this, and that's the poor chap whose son was mowed down in Birmingham.  I have rarely seen a more dignified person.  I wish there were more like him.
Richard Broughton


Edited by - Bruff on 11/08/2011 3:43:40 PM


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 12/08/2011 : 05:53
Spot on Richard, particularly the man in Birmingham, the local police said his intervention was the major factor in stopping escalation of tension after that shocking incident. Helped of course by some rapid arrests. I also agree entirely about making sure youngsters have education, opportunity and role models.

Ossie blew it yesterday, he had the opportunity to embrace stimulation of the economy without damaging the long term effects of the cuts. The added value in the tax take would at least balance the interest on the money borrowed and invested.  Instead, he went into denial.

Cameron acted in the best traditions of his Tory DNA. With more than an accasional nod to the critics within his own party he ditched his objections to New Labour plethora of new kneejerk regulation and introduced at least six of his own, either new legislation or re-writing of existing law to make them more draconian. Note the number of police at a fairly low level, mostly Inspectors, who felt free enough to rubbish his promises of water cannon, gas, baton rounds etc. saying they don't meed them, all they want is freedom to police the streets without interference. He has forgaotten Northern Ireland where repression led to escalation and the moderates who advocated engagement and negotiation with recognition of past mistakes were rubbished. What brought about a change in the end? Work it out for yourself.

Meanwhile, the market's reaction to the lack of evidence of any global initiative to stimulate growth continues. For once they are the best judge, debt reduction may make a country more stable but at the cost of falling incomes, contraction of economies and lowering of living standards. This is the big hole not only in the ConDem policies  but worldwide as well. The bottom line as always is equitable distribution of wealth. If the bottom 85% can't spend growth ceases. That was why WW2 rescued us in the 1930s, the government were forcedborrow, invest and in the process raise employment and wages. This stinulation enabled us to fight the war. Of course there was an aftermath but this was not due to the wartime economic policies but the waste involved in pursuing victory. READ THE HISTORY AND LEARN!


Stanley Challenger Graham




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