³ÉÈË¿ìÊÖ

Ms Flanders - the ONE ³ÉÈË¿ìÊÖ reporter who CAN see through the drivel of Brown and PM Mandy. Well done. We all know this country is broke - Labour would keep on printing money, chucking it away, and doing nothing.
The Tories, like any sane, sensible person ,who is overdrawn, will make sacrifices to redress the balance, and if that involves pain then too bad. Roll on 2010.

Well at least Vince said something coherent that can be understood, its funny how the guy(Vince Cable) saying the most sensible thing has no chance of becoming PM with his party , its all about Labour Losing and the Conservatives getting in, what a funny system we have or maybe they dont have as many spin doctors of business in their pockets.

Apart from one answer where someone told me it was because they dragged us into WW1 why is it that the Lib Dems are not being seen as the possible Government at the next election lets face it the other two mobs have had a fair crack of the whip for the past 80 years.

btw I'm not a liberal Dems voter

"…when she raised taxes in the middle of a recession in 1981. And look how that turned out."

Indeed Thatcher was a disaster, just think, it was the era of rampant M&As, banking and financial service deregulation, Chicago School economics, privatisation of Utilities (now foreign owned), and the dismantling of UK manufacturing industry. But at the time she had all that North Sea Oil to pay for unemployment benefits.

The growth of Quangos, consultants, advisors, agencies, departments, and regulators is probably impossible to quell. Cut the money supply to every single one and make them beg for their next payment and make them justify it, if they cant, close it and sack the advisors, and overpaid "consultants" No one would notice they have gone.

We need to cut 50% of TOTAL government spending and then build back (if we find we need to) from there. The waste is of epic proportions and it seems there are more on the gravy government funded train than actually doing productive work to pay for it all

Cameron and Osborne havnt a clue either so the train will roll on and on with the odd pound saved here and there but other quango,s appearing faster.
And Osborne has the sheer audacity to make comments that the taxpayer will have to share the pain ! They have endured the pain for twelve years ALONE.
Britain is Politically and financially bankrupt.

Significant cuts in public expenditure both capital and revenue will not only prolong or even deepen the recession they will generally impact mainly on the poor and sick. The extraordinary borrowing has mainly gone to keeping the banking system from being wrecked and now we are facing a continuing recession in the real economy. Thus any 'cuts' in current expenditure should fund additional spending on programmes to get people off benefits and into boosting demand for goods and services. As far as our exports are concerned sales of the 10 pound DVD player to the Chinese seem to be a bit sluggish!

OK, raising taxes in 1981; How did it turn out?

I guess that's the point you're making though

For the last 6 months G.Brown has been telling us thet Labour will NOT cut but increase spending (not always in real trems but always INCREASE spedning) each year over the next parliment!

This was dispite his own budget and pre budget report saying otherwise!

NOW because his been found out, he has changed his spots, and now they will be making cuts but not ones that any one will notice!

"Osborne was very clear today on the theoretical argument for cutting borrowing as soon as possible. On the political details - there was no clarity at all."

I can't say I'm surprised. It will be very difficult to make such cuts. My expectation based on past form is that the Conservative's "cuts" will actually be in the form of replacing public sector service provision with complusary private health insurance, compulsary private pensions etc - which if you think about it just increase the taxpayers' burden rather than reducing it. Nice little earner for their friends in the City though.

If you are looking for major savings, I could suggest getting rid of all tax exemptions on private pension contributions. That would save quite a bit.

Or a completely different alternative - find a cheaper way of servicing Government debt. If the Government said that in future it was only going to guarantee savings in banks it owned (NS&I, NR etc) then that would bring money flowing in for very little interest.

You claim only the Lib Dems have stated where they would cut costs but there idea to scrap the ID cards and NHS comuter system have already been stated by the tories - same with the cutting education bureaucracy and quangos.

If the money was there I would stick with trident replacement but in the current climate I would delay it for at least a further 5 years - making sure that Brown's economic mess was the reason our defences had to be weakened.

Both Osborne and Cable are are failing to grasp the nettle. The way we govern, the nature of government, who it employs and what it does now consumes more than it delivers. We need front line services, but not the vast quango laden, agency driven, regulator controlled juggernaut that grinds along behind. There has to be a quantum shift of output from all these activities, which add nothing to wealth and useful production, to employment in industry, technology and eco sciences which will both make our economy profitable and our future more secure. It may be painful but it has to be done or we shall bump along the bottom from one crisis to the next.

The timing set out in spending plans is likely to be crucial for market confidence. However, the timing of the outcome of a public expenditure change - cut or increase - is pretty unpredictable; and the markets know that.

The issue right now is how much extra precision in the timing of the plans is good for market confidence. Too much precision, which later has to be retreated from, can hurt confidence. And plans that have not been properly worked through are likely to have to be retreated from.

Hasn't Vince Cable got the balance about right? Start the working through now with a sensible list of possible cuts, and at the same time sustain confidence in the markets with a reasonably firm medium term framework?

@romeplebian
I am not at all sure about Cable as PM; but he looks like by far the best candidate for Chancellor in at least the last 50 years.

Stepanie Falnders wrote

"Margaret Thatcher had 364 economists come out against her - in a letter to The Times - when she raised taxes in the middle of a recession in 1981. And look how that turned out."

Do you not recall what Mrs T did to these economists - she cut off their grants and made them get proper jobs!

It is quite reasonable to argue that Mrs T legacy real legacy was and is a dysfunctional society. (She of course denied that 'society' existed - well it did before she destroyed it!)

Many of the dogmatic Thatcherite changes to job security, in particular, may have resulted in a more flexible employment market but at the cost of more flexible social structure in our society (that is more unstable family structures.) She must have, or should have, understood that and therefore wanted to create this situation. She also created the consequences of this in terms of the increase of household creation outstripping the rate of population increase as well as ensuring that housing standards were lowered and this in turn gave us the housing boom and such excesses as the buy-to-let boom in tiny boxes masquerading as homes where the rooms are so tiny it is hardly possible to open the door.

She is, I believe, the most destructive and damaging leader we have had in recent times. She may have humiliated the Unions but at what cost to the structure of society! We are still picking up the cost of the economic destruction that directly flowed from her policies.

I can also, I think, put a convincing case forward that it was her attitude to academic economists that has given rise to the destruction of economics as a valuable discipline. It was her 'not one of us' attitude to experts that created the conditions in education that took previously reasoned and developed economic theory and made all economics education subservient to her political and social dogma (with the help of Milton Friedman etc. etc. and Balliol and Harvard etc etc.)

In short: her philosophy led directly to our present destruction. ( and the destruction of economics.)

In my 70 years of active involvement in politics at all sorts of levels I have become accustomed to reading economics editors of all sorts. I find them tendentious and boring and this one is pretty standard. Smart and shallow. This one is not any different but she doesn't win favours by the icy look

The money to bail out the banks, we assume, maybe wrongly, will be paid back. Is there any schedule for repayment and if so where does that factor in (we already know that this will be after bonus')? The economies are all entangled so the startup of one country is unlikely, unless it is a very big country, without the startup of trading partners. The bureaucrats have been pushing papers around for about a year and the planners have been sitting around in rooms discussing what districts should get this project or that project funded by the stimulus. May actually see things being done by Spring. When these projects begin it will appear to be a recovery and the politians and economist will all stand up and cheer. As niether party did anything to prevent the financial crisis it seems odd that either would be instructive on how it should end. Soon they will be taxing the air, which apparently the governments own, and a new revenue stream will be established. What the financial crisis have proven is that neither the government nor the financial industry has adequate brain power or consultants to prevent financial catastrophes, or that they are so corrupt that neither should be trusted with any public or personal funds. Very little will change no matter what happens in the next election as the public will be betting on two dead horses.

As someone who will be voting at a General Election for the first time next year (I'm 20), I have to echo romeplebian's points (post 2). The Chancellor will be more important than the Prime Minister for at least the next parliament and, while Osborne is an intelligent man, I believe that only Cable would be able to command the public support necessary when taking a meat cleaver to the public sector. (Plus, I think the irony would be great, given the Lib Dem's historical position.)

Having read through Cable's report (you can access it from Reform's page following the "Related Links" option from the article Stephanie linked to) I think that there's still course for concern, particularly when it comes to Asset Sales. Selling off parts of the Highways Agency to me implies tolls on Motorways, and the motorist being at the mercy of the private sector - "No thank you, I'll take income tax rises please!"

Also, Darling suggested selling off Dartford Crossing last week, along with British Waterways etc. I'd like to point out that we were promised the toll would go when the bill for the crossing was paid off (in 2002 according to New Civil Engineer magazine). Instead we have queues of 40 minutes while people search their wallets for 1 pound 50 in loose change (still), and there's talk of a second crossing being required. Here's a case where surely there is more to be earned by scrapping the charges (in terms of a better transport system) than keeping them or, Heaven forbid, a private sector monopoly on it forever - which would also no doubt remove chances of a new crossing alternative.

I am also worried about quango-culling. Their jobs surely still have to be done?

Politicians needs to approach this like a student approches an essay - go through the budget with a fine-toothed-comb, then go through it again, then again, then again, and again... and again as many times as necessary until we're back in the black.

This is a fantastic opportunity to create an extremely efficient public service, and I'm glad there are talks of cutting sooner rather than later because interest on debt is the biggest inefficiency of all.

All we have to do now is buy back all those PFIs and we're done!

Let's be honest - for a moment at least. Osbourne was today delivering a political speech. He was not delivering an economic rationale for a declared policy. Therefore his comments must be viewed in that light.

Let's take the economic arguments first. Forget what Goldman Sachs have to say. Their evidence is massively tainted as they are part of the industry that caused the debacle in the first place!

Cuts in public spending are merely going to reduce (slightly - when was the last time 'savings' ever achieved a major portion of their target?) the budget debt. Cuts will not fix our broken economy. They are not going to do anything positive to engender any form of national or global stimulous. Cuts are not even going to influence the exchange rates or bring down the cost of borrowing for the average householder. Their immediate effects are more likely to be negative - even higher unemployment and a drop in both spending and confidence.

There are far far bigger economic issues to be addressed. The whole shape and structure of international trade and finance demands urgent attention. Without a complete and thorough change of philosophy and systems this mess will re-appear in even more dramatic fashion.

From a political standpoint, GB will feal rather more relaxed this evening. He now has pleanty of time to play the service cuts card against an opponent who has to be very circumspect in their statements. Cable will prove an attractive stalking horse for him. The spectre of Thatcherite 'savagery' will be played for all its worth. Osbourne now has to defend even what he has not said!

Stephanie reminds us that Margaret Thatcher had 364 economists come out against her - in a letter to The Times - when she raised taxes in the middle of a recession in 1981 ... and they all turned out to be wrong.

Yet again, just recently, all the conventional economic models also failed to predict the credit crunch.

So is it surprising that spotlight is now shining on the branch known as behavioural economics.

Seem to me that it is currently easier to predict the weather than how humans will behave 'in the market'.

Frankly this debate is facile. The arguments between both parties are really ones of style not substance. All three parties are in complete denial over the state of the nation's finances, but then given the situation is replecated in the US should we be surprised?

Brown argues that we should spend now and cut later. The problem with this argument - worthy as it appears on the surface, aimed at maintaining jobs, keeping people in their homes etc. - is it is entirely bogus. The reason we are in this mess is because his inane policies - echoed throughout the western world - delegated power to the financiers who merely conjured up phoney wealth through all sorts of financial wizardry and as a result created bogus businesses, jobs, and lifestyles. His argument would be right if we had any money, which we would have done if he would held true to the Biblical imperative of building up reserves during the years of plenty in preparation of the inevitable years of famine.

What Brown is now trying to do is to belatedly compensate for his arrogance and complaceny by propping up this mickey mouse economy in the forlorn hope that things will soon pick up of their own accord. This is preposterous. The only reason the world economy hasn't as yet collapsed is because it is being propped up with even more phoney money from our dear governments. Unfortunately, when the QE stops - as it will have to - then everything will tank. It is not so much a matter of if, but when.

What will force his - and Cameron's hand for that matter, is the fact that the Government is effectively bankrupt. The QE trick can only last so long before everyone realises we have all been had. It would have hapened under the Tories and Lib Dems too because they would have followed the self-same policies, unwilling to deny the consumer his or her fix.

The unions can kick and scream as much as they like, but the fact remains that the Government will be forced to slash spending, including salaries, pensions and jobs. Unemployment will snowball and property prices will inevitably collapse, not least because their entire rise was attributed to the availability of credit, which facilitated the greed of Buy-to-Let and forced out first-time buyers. Also as unemployment climbs millions will default on their mortgages (especially those dreaded Buy-to-Lets) and in the process lose their properties, thereby flooding the market with them.

The fact of the matter is that the system will collapse and no amount of tinkering will make the slightest bit of difference. But then maybe this is a blessing in disguise, since it will take something significant to wake us up from our inertia and only then will we realise that a society built on greed, selfishness and arrogance can end in nothing but failure and ecological chaos.

While everyone agrees that New Labour is presiding over an economic disaster, it has to be said that Shadow Chancellor George Osborne comes over too much like a hectoring public school prefect to strike a resonant chord with many of the voters.

Ah, the political detail.

You are probably wondering when the rot really set in.

I can tell you, as I was reminded by an item on schools on R4 this afternoon.

The Rab Butler 1944 Education Act introduced a tripartite secondary system, name grammar, technical secondary and secondary.

Our selfish politicians ensured during the 1950's that the technical secondary was not really established, such that by the mid-1960's, we had two, yes, two technical secondary schools.

By comparision, the West Germans, who ironically had to do what we told them without question, had twelve thousand technical secondary schools by the mid-1960's.

I happen to know this because I was incredibly lucky to have an ambitious mother who got me into one of those two technical schools in England.

The failure of the politicians to establish the technical education stream, is I believe, a far worse decision, affecting many more people, than the other more well known decision to scrap many Grammar schools, which both Labour and the Tories subscribed to.

Yes, there is plenty of blame to go around these Labour and Tory politicians, they have bought our England to this point with their wretched political dogma.

That is the political detail that very few people seem to know.

Isn't it strange that 'nobody knows for sure' and 'more likely' but not 'this is what should happen' and not 'extremely likely' are what comes from those who really know and understand the situation. The real experts eem to sit at home and write on this blog.

My favoured election result would be no Tory majority with LibDems doing very well. Cameron could do the 'sincere, we care' bit and Vince Cable could run the economy. It might mean a referendum for PR, but that might just shake the LabTories who are failing to producethe leaders or new policies needed to release the UK from its gloom.

"Margaret Thatcher had 364 economists come out against her - in a letter to The Times - when she raised taxes in the middle of a recession in 1981. And look how that turned out."

And your point is? Are you suggesting that the 364 economists were wrong because of the short-term boom that followed in the 1980s? Or that they were right because of the way that boom led to the subsequent bust?

Or even that the policies Thatcher implemented in the 1980s (deregulation of banks, destruction of the manufacturing sector, over-reliance on the financial sector) paved the way for the mess we're in now?

A very cryptic comment!

No 5 "As far as our exports are concerned sales of the 10 pound DVD player to the Chinese seem to be a bit sluggish!"

WOW !! You mean there's actually someone making £10 DVD players here ?? Even the Chinese can't manage that !! What's it made of - recycled baked bean tins ??

No 11 "I am not at all sure about Cable as PM; but he looks like by far the best candidate for Chancellor in at least the last 50 years."

I think I agree with your sentiment here !! At the very least, he can't be worse than the last 4 and certainly more up-front than the last one who cut the 10% tax band and dropped the mess onto his successor's lap !!

JohnConstable (#17) "So is it surprising that spotlight is now shining on the branch known as behavioural economics."

Alas, it's shining on the cognitivist rendition of Behavioural Economics as a distraction, i.e that which was made popular by Kahneman and friends. In reality, Behavioural Economics eschews cognitivism as it's mentalistic, and because it reduces cognitive diversity to mean statistical 'bias' effects and their effect sizes.

There has, in fact, been mass censure of Radical Behaviourism (aka Behaviour Analysis, aka The Experimental Analysis of Behaviour) for a few decades now, along with censure of intelligence research. This is because this is all anathema to predatory free-market libertarianism. It's anathema because Behavioural Economics proper (see Herrnstein et al.) highlights the true risks of hyperbolic discounting, melioration, etc along with the genetics of diversity. This in turn casts a spotlight on immigration, demographic changes and group hegemony as a function of mean differences in IQ (and possibly prevalence of Personality Disorders etc).

One can see the effects of this censure/propaganda by the frequent hissy-fits displayed in this blog and elsewhere when these drivers are aired.

No 15 "All we have to do now is buy back all those PFIs and we're done!"

Lovely thought "" About on par with the mice saying, "All we have to do is to tie a bell round the cat's neck so we can hear it coming !! Any volunteers ?? Any.....?? Where's everyone gone ??" :-)

10th Feb., 2009 project to cost £12 billion -

15th Sep., 2009 project to cost £13 billion -

It's marvelous how the project's cost can go up by £1 billion in 7 months without a single brick being laid !!

Now here's a spending cut worthy of note !! £1 billion will keep a lot of people in jobs elsewhere !!

And if the academy is so badly needed, then it *MUST* mean that the armed forces have been very badly mistreated by this government over the last decade !! Which is it then ?? Over to you, G. Brown, esq. !!

excellent speech by brown,99.9999% certain that labour will be wiped out in the next election. great!!! brownwatch 257 days(max)

#25

Now now JJ!

The real reason that people have looked to see if Behavioural Economics can provide any insights into the present dilema is that the 2 schools of standard macro-economic theory do not seem to fit. The reason why they have examened he Cognative approach is that Behavioural Analysis etc. is NOT an economic study at heart.

#20 JohnConstble,

Not really sure how the Butler Act fits this thread but.......

It wasn't just the Technical stream that was not properly implemented but also the Secondary Modern.

The Secondary Modern schools were supposed to have an ethos based upon the building of vocational skills supported by a national standard of the 3 'r's. This never happened because of fiance and the Secondary Schools Schools degenerated into 'sink holes'.

My cousin attended Toxteth technical College.

Making up new schools, or revisiting old schools, of economics is simply giving the oracle a new name. Soothsayers do best when vague. This is the new hook for economist to assure stipends at banking conferences. If they took an honest look at what caused the crisis they would find that financial and banking interest buying influence with the governmental regulatory process and unethical banking practices caused the matter. No new economic theory will change either. This is just another case of those involved saying they really don't know much but for today the idea is....How about consideration from the Behaviorist group.....when you betray the public trust and allow bankers to diminish the personal wealth of a nation and run off with millions upon millions with no consequences or recourse for those who had their retirement accounts stolen, that the people might get a little depressed and need some time to recover. Somewhat amazing that neither the governments nor the banks can grasp that people aren't terribly interested in doing business with either at this time. After burning down your house they stand next to you and ask if they can borrow a match.

Stphanie

You say that "even economists understand that theory and practice are rather different things"

Theory is when you understand everything but nothing works

Practice is when things work but you don't know why

Economics combines theory and practice: nothing works and no-one knows why not

foredeckdave (#29) I repeat, the reason for this (extensive) subterfuge (and it is one which has many careers) is that if more people grasped what Behavioural Economics research really highlights (and the laws prevail across many species), it would have devastating consequences politically throughout the liberal-democracies. Look back to the storm created by 'The Bell Curve' in 1994 and earlier work by Herrnstein in the 70s 9and Jensen in 1969) not to mention 'Beyond Freedom and Dignity' and 'Walden II' by Skinner. It's why Keynes wrote that the best place for his system would have been......Germany in the 1930s. Then read the ETS Perfect Storm report.......

And please stop trying to be clever...

erratum (#33) "(and it is one which has cost many careers)"

#33

Now you are becoming very irritating!

You know very well that Hernsteins work has never been accepted in academic circles and the Bell Curve is one of the most hotly attacked publications. As for Keynes, he may have been a brilliant economist but some of his other published 'thoughts' leave a lot to be desired.

If, correcting you (yet again) is being clever then so be it.

"Has George Osborne been reading Stephanomics?"

Maybe, maybe not. What he really should be reading is Austrian economics; however, like all statists in all three of the major political parties (and most of the other smaller ones as well!) he wouldn't know a good economic theory if it came and bit him on his backside.

There's not a penny's worth of difference between Osborne, Darling and whoever the Lib Dem treasury spokesperson is when it comes to economic thought. They're all either Keynesians or Friedmanites or a ghastly mixture of both. David Cameron and Gordon Brown? If you stand them next to each other, you wouldn't get a sodding fag paper between them when it comes to statist ideology - or spending cuts for that matter!

I have read that banks will face debt maturities, sovereign liquidity and guarantee withdrawals over the period to 2013. They will need to cover their funding gaps and increase their levels of capital to absorb losses and meet new regulations. This will continue to skewer QE and nominal demand. I have seen figures for public sector pensions estimated to September last year at a debt of 1261 billion sterling. This is not accounted for in national accounts, I understand. This excludes basic state and additional pensions and pensions credit.The proportion of the population over the age of 55 is, I read, somewhere near 35% rising to 50% by 2050.Bigger liabilities borne by fewer workers.I dont deal with the costs of bank bailouts 1-5.

I think the budget debate should be broadened in the election away from the theoretical ! That goes for all the political parties and the ³ÉÈË¿ìÊÖ.

foredeckdave (#35) "...that Hernsteins work has never been accepted in academic circles"

Reeeeeeeeeeeeeeeeeeeeeellllly???

He () was professor of psychology at Harvard (where he was Skinner's successor), at a time when being professor at Harvard meant being the world's leading psychologist!

The Bell Curve was very unpopular with .....guess which group? Like the rest of his work, he described the empirical facts.

There's a word for people like you...You wouldn't like it.

38 JadedJean

Yes Reeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeelllllllllllly!!!

You only have to look at the discussions and rejections of his work and conclusions. It is exactly the same situation with Quine.

If you believe that the BEST rises to the top in major institutions like Harvrad then you are very nieve and know very little about academic politics.

So to answer your final statement. There is also a word to describe people like you and I have used it above.

JadedJean is the best I have read on the internet so far....even after watching the "money as debt" videos....she just explains everything with such empirical clarity....but that's probably because my first degree is in a numerate subject.

I love you JadedJean!....keep postin'

BTW....has anyone else listened to this...the music does get better in a recession/depression!

.....oh go on admit it....you hang on her every word!

WOTW and JJ's posts are pretty cool...dont'cha think?

This site's pretty cool as well!


....and yes!....I've had some wacky backy tonite!

PS....who are Lehmans?

This comment was removed because the moderators found it broke the house rules. Explain.

Hugh Hendry is a hero on Newsnight tonight!

It's fine Vince saying to cut excessive public sector bosses' pay while not hurting the little guys. But it never works like that. Turkeys don't vote for christmas. So when the bosses are told they have less money, they just find a way to take it from us at the bottom.
I saw a document at our hospital that was all about how to down grade people from band 2 pay scale (tiny fraction above minimum wage)to band 1 (minimum wage).

I suspect that not only are they not talking about what the cuts will be and when but (because they fear leaks about these cuts) there is very little real planning actually going on.

I hope not, but it seems as if there is a langour and inertia at the very top and an almost pitiful reliance on spin and news management techniques but no real managing direction.

The pathetic 'sunday deniable leak' this week about possible taxes on bikes... typifies the malaise. Rubbishy, unjoined up thinking....while things continue to slide and slip away.

The way the bankers slip back into their bonuses despite the ineffectual hand wringing of politicians is another symptom of the pervading atmosphere of directionless drift.

Really it isn't more 'ideas' we need ..there seems to be three new ideas and half a dozen initiatives, plans, analyses every day...it's just a sensible, sober implementation of idea...

Dr Rowan Williams just described Tony Blair as a non-capitalsit.


the bloke is totally deluded!

foredeckdave (#39) "you are very nieve and know very little about academic politics."

I am very

Maybe you're fantasizing about your ? I'm more akin to a Stalinist who'd have the likes of you resettled in a STALAG/GULAG or Madagascar/Birobidzhan for rest and 'rehabilitation', except as I don't believe that ever works with your types, you'd probably get to stay there for good. ;-)

DebtJuggler (#47) "the bloke is totally deluded!"

It's taken you till tonight?!!

foredeckdave

You see where "good" socialist (statist) intentions finally end up...

"...the likes of you resettled in a STALAG/GULAG or Madagascar/Birobidzhan for rest and 'rehabilitation'..."

Dave

C'mon...cross the floor to liberty.

Kurt

If any of you saw Newsnight on Tuesday evening, with eminent thinkers from a wide range of professions all agreeing that the world has changed and that we now have to understand the consequences of the global power shifts and of the decisive breakdown of old economic dogmas, then you will hope that an intelligent debate about sustainable economies can now take place and that not too much time is lost in being intimidated by the occasional bullying and scaremongering of some of the high priests of the old oligarchy.
You can always watch Newsnight on ³ÉÈË¿ìÊÖ iPlayer to catch up.
Watch it yourself, don't trust some quotes taken out of context.

#50

Thanks Kurt. But would you really deny me the pleasure of seeing JJ rot in such a STALAG/GULAG serving no useful purpose whatsoever whilst I would still retain the courage of my convictions?

Even if my beliefs were wrong I would still win because I would be assured that JJ could no longer waste time and space here!! :)

POWER TO THE PEOPLE - BUT ONLY THOSE WHO VALUE COGNATIVE THOUGHT!

@foredeckdave

Whilst I don't know anything of Behavioural Economics, if indeed it is the relevant authors do occupy the same position as Quine then I can only assume you mean generally accepted as the leading thinkers in the last 50 years. Otherwise I would suggest you don't know much about how Quine is viewed these days.

It's useful to recall that the nanny state European economies were in trouble before the financial crisis broke. For example, when Sarkozy was elected, he said the French government was broke. Was he lying? Yet this unaffordable nanny state mentality still is very much part of the political thinking and expectations of these societies. On World Focus, the new policy of allowing up to one year off from work which can be shared by both parents when a couple has a baby in Britain was spotlighted. How can a business operate when every time one of its employees becomes a parent, that employee can disappear for up to a year (9 months with pay) if it is to prosper? How do you run an economy when so many other costs which are the result of lifestyle decisions must be paid for by society at large? Look at who you compete against in world markets and what they do and you can see the inevitable result. People who call themselves social progressive call this an enlightened policy, I call it economic suicide.

No 36 "There's not a penny's worth of difference between Osborne, Darling and whoever the Lib Dem treasury spokesperson is when it comes to economic thought."

I may be wrong but I believe it's that chap Cable, Vince Cable, Doctor to you and I !! :-)

No 48 "I am very clenched fist?"

Doesn't it rather depends on what you clench your fist on ?? Just thought I'd ask !!

No 54 "People who call themselves social progressive call this an enlightened policy..."

Oh, but it *IS* "enlightened" because it enlightens the collective wallet !! Now where should I stash my pitiful gains before it's "enlightened" again ?? :-)

NOT LOVERS OF LIGHT

LibertarianKurt (#50) "You see where "good" socialist (statist) intentions finally end up..."

Yes that's correct. You should mark those words instead of recruiting the same types LibertarianKurt (or should one call you ;-)

In 'evil' states of old, where law and order once prevailed, those who committed fraud and exploited the vulnerable via deception used to be treated as criminals rather than role models blessed as 'good for the economy'.

In the 1930s, Germany and the USSR either tried to encourage such people to leave the country or stuck them in
Stalags/Gulags in order to protect their economy/people. There is a very

Nowadays, when our Libertarian governments are not agonizing over they actually try to entice 'oligarchs' here to escape the clutches of 'evil-dooers' abroad!

Whilst this is revealing to some, clearly to others it's not (see title). In fact, some think that youth today is .

invisiblehandadvisor (#51) Newsnight was reasonably good last night - an ever more rare event these days, sadly.

ishkandar (#56) "Doesn't it rather depends on what you clench your fist on ?? Just thought I'd ask !!"

You need to learn some anatomy and physiology amongst other things. In the meantime, have a look at the SI link and put that VT100 to productive use.

Given the unreliability of economic predicitions in matters that affect so dramatically the "man/woman in the street", will someone please explain to me just what the "value added" is of these ecomonists and their ilk ?

Perhaps if 95% of these financial / economic advisors were to become odd-job-people repairing playgrounds, helping pensioners with their shopping, lollipop-people etc., the world would be a better place.

Ishakandar and JJ - given the discussion seems to be focussing on clunched fists, it may (or may not) be of interest for you to know that "nieve" is pronounced "nive" in the doric dialect spoken in North-East of Scotland (doric is probably best described as sub-dialect of the Scots dialect)and is still commonly used. Indeed, my mother often says in relation to one of my sons "that's some set of nieves he has" (he has big hands.

Co-incidentally, you may (or agian may not) be interested to know that in the same dialect, Quine is the word for girl.

I suppose it must be miserable being an economist and forced to wade in the murky waters of British politics.

I still maintain that the government can do little to change anything, and it doesn't matter which party gets into power.

What DOES matter in the world of politics is this:


They want to alter the way Japan holds US debt and decouple from exports to US. Last I heard they wanted to abandon dollar dominated T-Bonds. That's pretty radical stuff.

The public spending cuts have already happened. These were enforced by the Banks in favour of the banks. There was a net transfer of capital out of the public purse into the private purse. It was marketed as a "bail out". Not very prudent at all: bailing out a failed business with public money. Although, most economists do see the "bailing" as laudable. What they fail to discuss is that the "bail out" constitutes a net investment. Investors are entitled to a return.

The notion that further cuts should be made to support the huge existing cuts - equivalent to about £40,000 per head - is not sound economics. The effects of these cuts are evident in the form of massive welfare benefits subsidy - which gives an ongoing character to the rebranded cuts that have already taken place.

Yes, public services might have inefficiencies - but the Banking system was so inefficient that it failed. The fact of bailing it out with the full consent of many Economists suggests that some amount of inefficiency might well be a good thing. Indeed, the development of Public Services over time - like any other Business - will include new efficiencies. Having made huge cuts by providing Corporate Welfare to the Banks, the prudent manager would stop, reflect and plan how to make the best of the existing cuts.

The return on investment from the Public purse into the Private is one place where the prudent Private Equity investor would be looking for returns. That is where the cuts should be taking place. The Banks realised this long ago and began their negotiations - like any competent departmental manager in any private firm. What is at issue is not the need for cuts but the location. The whole banking system is part of that determination because it took investment from the public purse. The Banks, not other Public Services, should be the location of those cuts.

The only debate should be how those cuts should be effected.

#40

LOL!

invisiblehandadviser @ 51

You hope that intelligent debate about sustainable economies can now take place.

I think that is the first time I have heard anybody mention 'sustainable economies' but certainly do not think it will be the last.

Intuititively, we think that it is impossible in a world of finite resources for economies to continue to expand ad infinitum.

Rather than be slaves to some defunct economist and their schools, we should think about what a sustainable economy, in a modern developed country might look like.

I'm doing my bit by continuing to use my motorcycle, which I bought nearly new twenty years ago now, rather than consuming resources by, say, purchasing a new model every few years.

But as my local motorcycle dealer points out, if all our customers were like you, we'd go out of business.

In that microcosm lies the rub.

#53 Mandricard,

Quine as one of the "leading thinkers of the last 50 years"? If that were so then, as I have oftern pointed out to JJ, then tell me why there is not one unit dedicated to Quine in any of the leading Philosophy faculties?

Therefore please advise me as to exactly who is viewing his work with so much esteeme? It certainly does not appear to be by empiricist philosophers who argue that Quine was not empirircist enough and it most certainly is not by the cognatists.

The fact that his work was academically interesting does not make it right. The same can be said for the ideas of Hernstein.

JadedJean # 58

Unsurprisingly, as an advocate of "rehabilitation camps" and such like, you seem to always confuse libertarian with liberal-democratic; there's a whole world of difference. Here, let me help you out...



JJ, you and your ilk have more in common with liberal-democracies than you can imagine!

;)

Although the instruments to create the current worldwide economic crisis were extremely complex for a variety of reasons mostly related to duping investors including some pretty sophisticated ones and circumventing government regulations (governments don't typically pay the kinds of salaries to regulators to attact those clever enough to see through the best laid scams and schemes) the underlying principles are very simple. Large quantities of very easy credit made available to buy a class of assets which is the only collateral for it creates a bubble market and great demand for that asset class which in turn results in creation of increasingly more of that asset until one day the bubble bursts and all of the assets are sharply reduced in value. Then a lot of the credit goes into default taking down the entire financial underpinnings of the economy with it. This happened in the 1920s with stocks, in the 1990s and 2000s with houses. Old news now but no matter how the regulators try to dance around it, they ware as blind and paralyzed as deer on a railroad track mesmerized by the headlight of the oncoming train. Even as recenly as 18 months ago, they assured the world there would not be a recession.

The principle of the only real way out is equally clear even if those mechanisms are also necessarily convoluted. History taught that inflation to write down old debt with cheap new currency is the only method that works. Bad news for foolish creditors whose interest rates were not tied to inflations or currency devaluation and for people on fixed incomes in the same boat. It took until the mid 1950s for the world's economy to recover in absolute currency terms to where it had been in the 1920s but it wasn't until the mid 1960s when adjusted for inflation that the same level of wealth was reached. World Wars do not create wealth. World War II did not get the world out of the depression. Wars divert resources to non productive assets which are used once until they are destroyed or obsolete creating no new wealth. It was the injection of money the government didn't have and the printing of it later to pay back the war bonds that brought the economy back. This is the substance of inflation.

Timing really is everything and in this case, if small economies act independently too soon to devalue their own currency they are only asking for more trouble. They have to wait until the big enchilada goes first. That is already in the works. With a ten trillion dollar debt and a deficit in the current budget of over a trillion, the US will not have any choice except to inflate and devalue its currency against all that debt. If it tries to tax its way out of debt, it will only create further misery killing off what little real evidence there is of a recovery. Once the US acts, it will be safe for everyone else to do the same. In fact if they don't, they will price themselves out of the market for their exports as their currency will become too strong for their own economies to compete in foreign markets.

Last autumn, Gordon Brown was views among economists as a genius....until his schemes fell apart and revealed him as having been merly bold...and wrong. Even one of the world's most respected economists of the recent past, Alan Greenspan testified before Congress; "There is something about markets I don't understand." And they say the British have a knack for understatement.

PURSUIT OF TRUTH AND OTHER MATTERS

nedafo (#61) "Co-incidentally, you may (or agian may not) be interested to know that in the same dialect, Quine is the word for girl."

It's a Manx name.

Do you want to have a shot at Gavagai? ;-)

Until some of the 'real world thinkers' in our midst wise up to what they don't know, and what others do, I fear we don't have much of a future, do you?

Mandricard (#53) "Whilst I don't know anything of Behavioural Economics, if indeed it is the relevant authors do occupy the same position as Quine.."

Listen , last on page. It's worth the time....

No 60 "Perhaps if 95% of these financial / economic advisors were to become odd-job-people repairing playgrounds, helping pensioners with their shopping, lollipop-people etc., the world would be a better place."

God forbid !! You actually expect them to work with their hands ??

No 61 Interesting !! But as a Londoner, the one dialect that I'm quite familiar with is Cockney, now "upgraded" to "Esturian" !! :-)

No 62 Frank - "But he said he wanted a relationship in which Japan "can act more proactively and tell them our opinions frankly", adding that his party's position on reviewing deals relating to the US troop presence had not changed."

In other words, he doesn't want Japan to be a lackey anymore. Japan already has a space-going capacity (as yet untried) and a potential for nuclear capacity. It also has a fairly strong industrial economy. And it certainly doesn't need lots of foreign troops on Japanese soil !!

He also wants to do what almost all British politicians are terrified of - take a massive hatchet to their bloated bureaucracy !! Now, that's a savings cut that might do a lot of good !! If only Our Glorious Leader will take heed !!

ishkandar (#72) "He also wants to do what almost all British politicians are terrified of - take a massive hatchet to their bloated bureaucracy !! Now, that's a savings cut that might do a lot of good !! If only Our Glorious Leader will take heed !!"

That would be a very strange thing for him to do. The Japanese electorate has just thrown those people out. Do you see the PRC doing this? Isn't what you suggest precisely what's caused these problems across the Liberal-Democracies, i.e anti-statism? Anarchism? Are you sure that VT100 isn't shorting?

Why is no one mentioning the Windfall Tax on Bankers incomes? Surely that will recover sufficient money, especially if applied over a couple of years, to help fund the recovery and share out responsibility fairly. A Windfall Tax was applied by the PM on Pensions. That affected a lot of people. He could apply a focused Windfall Tax and hit those generally held responsible. I hope he will announce this soon and be able to postpone many of the cuts that he has mentioned

Ooops! Your acceptance that "even economists understand that theory and practice are rather different things" is far more troublesome than it seems: if theory cannot guide practice, then you have not theory, only speculation, a previous step to any rigorous development of theory.
Now I am scared! Have we been following the advise of a discipline that can only speculate about what would happen in practice? Luckly, civil engineers do have a supporting theory!

The amount of our deficit is getting out of hand someone needs to seriously deal with the mess this countrys now in. If George wants a go.. I'm all for that..

Matt