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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 at barnoldswick.freeserve.co.uk
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Tardis
Regular Member


453 Posts
Posted - 22/09/2011 : 14:23
Not entirely swayed by the PFI arguement, a 3% premium seems pretty good value for long term debt.

I'm guessing the issues are around not being able to "not repair" facility that was available when the buildings were wholly owned by the NHS. Locking in the expenditure, does not allow for flexibility later when times require, but I'm sure all those people who wanted the buildings will take the hits in their salaries to prolong them. Wonder if this is why Burnley's facilites are being moved to Blackburn.

As to the NHS computer debacle, I can not believe that the tax payer had to pay the hospitals and GP's to standardise their IT. Patient records are another of the money making rackets built into the GP contract, and provides lucrative funding for people doing all these research papers. None of that money flows back into the NHS, except as the contrcator payments of tax on income.


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handlamp
Senior Member


1100 Posts
Posted - 22/09/2011 : 15:32
The next disaster after the PFI debacle will be QE - throughout my life I have always understood that printing money can only have one result -rampant inflation or worse. When Germany did it in the 30's they eventually finished up with A.H. and his lads for a decade. As I have frequently said in the past, base your decisions on HISTORY!!! 


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 23/09/2011 : 05:08
Michael, the elephant in the room in the IT debacle is the fact that the departments who were going to use the 'miracle systems' downsized the workforce before the technology was in place and proven to work. In order to catch up these same departments then had to hire temporary staff to manually process the backlog but never caught up. Remember the NI debacle ten years ago? Look at the state of HMRC now. Look at the justice system. All of them sacked clerks and the systems failed. What did all that cost?

Ted, I share your worries, not so much in terms of inflation, remember we sirvived 25% in the 60s. No, what puzzles me is that I always understood that diluting the money supply by printing money not backed by concrete assets is actually devaluation. That seems to be a dirty word these days. You are right about reading the history. I have been banging on for months about the similarities between now and the inter-war years and as you know I've been taken to task and told that history can't teach us about the modern world. Really? Heads out of sand time, have a look round you!

I don't know about you but I get the impression that the economic bob sleigh is now unstoppable and the drivers don't know how to control it. Somewhere, someone is making contingency plans for when we hit the bottom and the brakes don't work. History teaches us that this is when the real power holders take action to protect their position and the resulting actions have been extreme in the past. We live in interesting times. Fasten your safety belts!


Stanley Challenger Graham




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stanley at barnoldswick.freeserve.co.uk Go to Top of Page
Tardis
Regular Member


453 Posts
Posted - 23/09/2011 : 15:32
The IT debacle shows that when government gets involved then value for money goes out of the window.

As far as I'm aware the NHS has always had enough clerks to manage the system, the issues with delivery were all around massaging the hurt feelings of GP practices and Hospitals who had to put their medical records on computers thereby ensuring that doctors had to have IT skills and not dodgy hand writing. All courses were provided free. The hurt was absolved by the GP contrcat that gave them more money and suddenly implementation "happened".

Not really sure about the other departments that you mention, but probably again it was poorly handled, and some people thought that computer records meant fewer jobs, but greater skills so wanted more money to do exactly the same job.


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Tardis
Regular Member


453 Posts
Posted - 23/09/2011 : 15:47
On Banking, I understand you might gain more understanding if you read "Masters of Nothing". I haven't read it so can't promise much.

In strict definition terms goods coming from overseas will always increase in value if you have QE, and all exports will become cheaper. That is the whole purpose. By making more money available you are ensuring that it doesn't get tied up in the financial lock of the banking crisis that still persists.

It is much more valid to look at the much larger economic picture: in that China is artificially holding down the value of it's own currency to make the goods that it produces cheaper. In an economic sense this is not "playing cricket" as the field is not level. It will mean that China will eventually have to change and will feel an enormous impact when it does so.

Consequently, QE in this country will have the effect that we need. Which is to raise the price of imports from China, and thus reduce demand for their products, thereby stabilising the balance of payments and shoring up our own currency. It will also reduce the amount of debt the UK has to pay back.

This country has endured a long period of over valued currency, and as I keep saying, it is no good paying the worker in the UK the minimum wage if the only things that he can buy with that money is provided by companies in other countries where it can be made and shipped here for less than the cost of producing the same in this country.

The economy needs to be rebalanced, and there needs to be some real value placed on people, resources, and the need to consume.

Post war UK has lost the value of the Commonwealth and revenue streams, even merchant shipping is now off shored. Along with the huge debts of WWII pushed onto the UK by an American decision after the 1945 election result, and the creation of the Welfare state that pushed a ponzi scheme onto UK tax payers that politicians said offered the earth have all been busted by the banking crisis. Now it is the next generation that will have to pay for the mistakes of the previous.

In economic terms the pain should be sooner, so that it can be deeper, and more quickly solved. The Euro Crisis simply prolongs the agonising 'death' which is imminent.


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 24/09/2011 : 06:36
"In economic terms the pain should be sooner, so that it can be deeper, and more quickly solved.". And forget about the deaths amongst the poor it will cause. Great solution! I don't need to read the book, QE = devaluation.

The EU finance ministers are going to have a meeting in Cannes in November to address the problems of the Euro. Interesting that they chose a nice venue. Problem is that this is the equivalent of the master of the Titanic calling a meeting two months hence to discuss the problem of the iceberg. I would have thought a smoky back room in a grotty government building tomorrow would have fitted the bill better. Oh, and lock them in with no food or drink until they reach agreement!

The immediate casualties at the moment are the poor unfortunate people who have a market based pension maturing this week. The calculation of their  annual payout and anything they take as a lump sum is going to be hit and is final. My small private pension was forcibly matured against my will in 2000 by the government, I played hell at the time but with hindsight they may have done me a favour, since then the FTSE 100 has fallen by 35%.

The politicians and the Lords of the Financial Universe have proved that they are incompetent and powerless. If we were dealing with normal people we could perhaps assume that the upside of all this could be that lessons would be learned. Unfortunately, nothing will change, as soon as things get better they will repeat the same scenario. The basic problems are greed, incompetence and a complete lack of an ethical and moral base and these factors will not change. Sorry Kids, I can't see an upside.


Stanley Challenger Graham




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Tardis
Regular Member


453 Posts
Posted - 24/09/2011 : 10:52
yes, QE = devaluation

but increased prices by there very nature will only apply to imports, as I have previously explained. The reading of the book might actually change the perspective you hold on the ways world financial markets work, and the lead times involved in actually setting up new and viable businesses. You don't strike me as someone not open to new ideas and evidence.

The country has been on a huge debt binge, and that is what is currently locking up the financial system. Heaping more regulation on banks just struggling to stop from going over the brink will inevitably reduce even further capital available for investment. As I have also said, none of the regulations will stop a bad bank again.

So if you want to buy that telly made in China, why shouldn't you have to pay more?

Want to buy a telly made in the UK (no manufacturer?) where the workers and company will pay UK taxes and help pay down the deficit? So how much devaluation do we need to do to get those off shored businesses back?

If "we are all in this together" why do the previous generation get "protection" whilst my children will have to work until they are 70 to get less benefits. If there is no money then we should take the pain now.

Lord Myners:

There is nothing progressive about a government that consistently spends more than it can raise in taxation and certainly nothing progressive that endows generations to come with the liabilities incurred with respect to the current generation...

I have heard that the OAP's discussing the free bus pass are willing to pay up to about 50p per trip for the service, well I think the country should accept that. By getting this generation to actively use the buses you are not only ensuring that the service is there for those who need it, but also shoring up the finances of the bus companies to make sure that they continue to provide the routes. Small stimulation, big effect.

Even the beeboids last night seem to be suggesting that the future holds lower wages, less jobs and higher taxation rates. We aren't yet as a country at the point of the PIIGS who are having to decide which services to keep.

All the debate centres around debt, we are 3 years since Gordon Brown announced that "he had saved the world" but like much of his budget speeches he did not spell out the cost. Darling said the period would be about 10 years of low growth, but had not foreseen the Euro or US debt issues.

As I have also already stated, Mr Brown well and truely f***ed my private pension (worth half) and endowment investments (worth 40%). I feel sorry for those having to retire now, but the whole point of the 3rd way was to only let the state cater for those who didn't have their own assets. So if they are in a big house with more than the rooms needed for themselves the policy was to ensure that the value of the asset was realised, i.e. force people to down size. Then force more people onto means tested benefits because there was no option to "save".


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 25/09/2011 : 06:29
I listened to Christine Lagarde's press conference after the meeting of finance ministers. She is a smart cookie and I like her style. On the surface she gives the simple message but if you listen carefully there is a lot of coded information. A great deal of thought goes into these communiques!

Reading between the lines the IMF are trying to get the message across that the current focus of attention, the EU and the stability of the Euro, is being used by some countries to divert attention from their own structural weaknesses. Her message is that contries like the US ought to be doing more to address their own problems and that simple expenditure cutting to regain fiscal balance, while essential in the long run, is damaging growth in the short term and at the moment this is the major global structural problem.

One of the less obvious consequences of this line of thought is the danger of the gross imbalances built up over hundreds of years of colonisation and exploitation of emerging nations. As the Western economies gained economic traction due to rapid industrialisation this trend worsened and the gap between rich and poor nations increased. On a smaller scale this effect was felt in individual economies, look at the income gap in the UK over the last twenty years, it has widened. One of the hidden messages about the present global economic crisis (and the trend towards regime change in the Middle East)  is that in the long term this gap has to be actively reduced. In the short term it will be seen as recession and deprivation by the electors of the richest countries but in the final analysis, if not dealt with, will have serious mid and long term effects. This is perhaps the main global structural problem and is an old story but nonetheless important.

Deep stuff, but she is talking common sense.  She reinforces my belief which I have stuck to for years that redistribution of income is not just a UK problem but a global one as well. Problem is that in political terms this is not good news, is very long term and requires real statesmanship to manage. The current problem is that these attributes are very thin on the ground and not popular. Perhaps a degree of retrenchment and even recession in the major economies is  necessary in the long run. Looked at this way, the current EU problems are a symptom, not the disease. We live in interesting times!


Stanley Challenger Graham




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Tizer
VIP Member


5150 Posts
Posted - 25/09/2011 : 11:07
Lagarde does choose her words very carefully and is one of the few worth listening too - most of the others are just parroting the usual `Something must be done'.

Your sentences "Perhaps a degree of retrenchment and even recession in the major economies is necessary in the long run. Looked at this way, the current EU problems are a symptom, not the disease" chime closely with an article by Matthew Parris in The Times yesterday. He argues that we will have to get used to being about 25% worse off in the future; that it's time to stop blaming `the economy' and accept that we lived beyond our means for the last 15 years and now we are experiencing the `correction' that will force us back into the real world. One thing he didn't mention is that this is the case for the West, whereas countries like China and India are doing well. So, not only do we have to go backwards but the gap will be even bigger compared with those Eastern nations.We have become dependent on them for many (most?) of our goods and we will now have less money to pay for those goods at a time when the Chinese and Indians are becoming wealthier and want higher wages, which means they will charge more for the goods than they do now. I think I detect a problem on the horizon for the Western nations.


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catgate
Senior Member


1764 Posts
Posted - 25/09/2011 : 21:35


quote:
Stanley wrote:

..........  She reinforces my belief which I have stuck to for years that redistribution of income is not just a UK problem but a global one as well.

The problem is not one of redistribution of income. It is one of redistribution of meaningful work that actually results in  the creation of value (i.e. negotiable tokens for actual energy expended in work with a meaningful purpose).

My other piece of advice, Copperfield, said Mr. Micawber, you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and, in short, you are for ever floored. As I am! 

This wonderful piece of advice is applicable to every human being and and every human endevour....no matter what  the financial experts,  conjurers and political con men say.


Every silver lining has a cloud.


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 26/09/2011 : 06:07
Peter, I read the Parris article. His last paragraph chimes exactly with my thinking at the moment. Like him, (but perhaps earlier), I have abandoned the 'experts' and started thinking for myself. My track record is better than theirs.

I haven't got up to speed with the statement from the IMF which seems to be that they are getting a couple of trillions of Euros together to throw at the EU problem to save the financial institutions. If I've understood this aright, it's a sticking plaster and a mistake.

What struck me yesterday was the way that our UK political parties are reducing the crisis to  a political infight instead of realising that it is time for stupid and erroneous statements about blame to be abandoned and a cross party policy agreed and stuck to. This is how you fight a war and they haven't yet grasped the fact that this is a world economic conflict. Capitalism always tends to promote wars, they call it competition and unfortunately, fespite the PR, it's every man for himself!


Stanley Challenger Graham




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stanley at barnoldswick.freeserve.co.uk Go to Top of Page
Tardis
Regular Member


453 Posts
Posted - 26/09/2011 : 10:49
Very pertinent advice from Dickens Catgate, when you are in hock to the markets then you must do the bidding of the market. All this government debt is obviously also soaking up all that liquidity that could be going towards promoting economic growth.

I am deeply impressed by the vault face of Mr Balls with regard to his economic policy, although he still states that he will borrow more, and thus cost the country more, and probably bring about some of the negative consequences he mentions as the price of the debt will increasingly rise. Quite rightly he stated on Today that he couldn't spell out the detail, but at least he could have offered independant stuff from the IFS or similar for the soundness of the policy.

With regard to Ms Lagarde change of stance having joining the IMF:

I had thought that the IMF was there to bail out sovereign states. The Euro is a group of countries all tied to the mast of one currency. In economic and political terms these countries are at fault because they did not adopt a universal fiscal strategy to ensure full protection of the currency upon which their curriences are based.

Why then should the IMF be involved?

Germany and France have done particularly well out of the Euro because it has kept down the price of their exports to others. Now that there is some kind of issue they appear to be wanting to dump those that have caused the problem despite the fact that they lacked the political will to solve the issue in the first place.

With regard to redistribution of wealth:

Gordon Brown ensured that the gap between rich and poor rose. A person at the bottom of the income scale can expect to pay an extra 76p in tax for every extra £1 earned, whilst those at the top can pay 20p. Where is the "fairness"? Why do we have a system that takes away money only to give it back? If we cut out the middleman and let people keep more of their money wouldn't that be cheaper? Why does the UK HMRC have more people employed per head of population that any other top economic country like the US or Japan?

Far better to say that a worker in China should be paid the equivalent of the UK minimum wage, unless of course people believe that it is right to discriminate against certain people because of their ethinic origin. Then ensure that everyone involved in moving that product to the UK is at least paid the UK minimum wage equivalent. I am sure that some of those imports/exports would dry up over night.

I agree with Matthew Parris, the time has come to pay the bill for the previous generation's decisions. The economy needs to be rebalanced, and all the country's resources need to be fully employed in ensuring that the overhang of that debt is paid off as quickley as possible and not left for the future.

In other news I see that the £ is taking a pounding on the markets because of the QE statements. The BoE is not supporting the £ and appearently letting it fall because it achieves the same policy.


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 27/09/2011 : 05:48
Like the rest of the world I am now totally confused. The banks heard the magic €2trillion figure from the IMF and immediately cheered up a bit. Then the IMF pointed out that this was policy and not in place yet. Then the EU let slip that the 'rescue package' agreed for Greece in July is not yet ratified or available. Then Obama says that Greece is 'scaring the world'. Great, the bottom line is that since June there has been a lot of talking but no action. Greece and the EU are symptoms, not the disease and I'm sure that the ploticians and economists at the highest level have realised this but the real problem of global imbalance carries consequences that are so unpalatable that nobody dare mention it. Matt Parris' 25% poorer syndrome.The gravy train has hit the buffers.

Meanwhile, the elephant in the room as far as any aid from the IMF to Greece is never mentioned. Read 'Shock Doctrine' and note the examples like Chile where IMF intervention 'saves the economy'. They do this by insisting that state enterprises such as transport etc. are privatised. The only people with enough money to do buy these assets, even at knock-down prices, are the large global corporations and sovereign funds. Suppose Greece got the package tomorrow, how long would it take to put it in place? How much internal resistance would there be to mortgaging the country?

This raises another matter. One man's financial disaster is another's opportunity. Look at the role of wealthy and well connected corporations like Halliburton in a crisis like Iraq. Nobody has accounted for the billions of dollars that went missing in that conflict.  Add to this the bottom feeders in the markets, the speculators who have enough clout to attack currencies and anyone else who can see an advantage in chaos. There are people and organisations out there who are doing very nicely thank you out of the situation and one thing is sure and certain, they are not advertising what they are doing. These are the dirty secrets of international trade and this is not a conspiracy theory, it is a fact that Naomi Klein researched brilliantly.

It can get even darker, guess who engineered the coup in Chile which got rid of the 'communist' Allende and installed the 'sound' Pinochet in his place from where he immediately facilitated the monetarist exploitation of Chile which was good news for the speculators. Give up? It was the CIA. Not a theory, a proven fact that everyone keeps very quiet about.

Which brings us down to the lowest and darkest level. Nobody mentions the number of deaths that will ensue from this 'market crisis'. In Chile this included the 'disappeared' but the death toll from povery and deprivation caused by the crisis was far higher. This present global economic crisis will also have a human cost and I haven't heard anyone saying anything about these casualties. On the lowest scale, ask yourself if inflation in fuel prices and devaluation of the currency which is in effect money vanishing from your pocket, will have any influence on deaths from Hypothermia among the old and poor if next winter is severe. This is a pin-prick in global terms but no less a consequence.

Meanwhile in Liverpool I heard someone saying that Milliband reminded him of John Smith! I don't think so!  What Labour ought to be doing is agitating for a national government, an end to ploitical infighting and a united effort to transform the UK  to a sensible balanced ecomomy which has really progressive taxation at a higher level and protects the weakest in society. In other words, really 'sharing the pain' which I am afraid is inevitable. Could it happen? I doubt it, too many entrenched attitudes and interest groups. To paraphrase Ted Heath, 'The unacceptable face of capitalism'. Nowt wrong with Capitalism as long as it is modified by sensible controls. Back to history again, the best exposition of this idea is Harold Macmillan's 'Middle Way'. Sorry kids but we are watching the biggest train wreck in history in slow motion.


Stanley Challenger Graham




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Tizer
VIP Member


5150 Posts
Posted - 27/09/2011 : 10:08
And just as nobody acted in the 15 or so years that we slid into economic crisis, we are now so focused on this and so unwilling to change our extravagant lifestyles that we are driving the global climate dangerously out of balance. Add that to the money troubles and you've got what the trendies like to call a `perfect storm'. Amazing to think I used to scoff at those men with the sandwich boards saying "The End is Nigh".


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catgate
Senior Member


1764 Posts
Posted - 27/09/2011 : 10:20


quote:
Tizer wrote:
 Amazing to think I used to scoff at those men with the sandwich boards saying "The End is Nigh".

I think they were referring to Bevan!


Every silver lining has a cloud.


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