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UK moved a slight notch closer to bust

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Paul Mason | 11:43 UK time, Thursday, 21 May 2009

The ratings agency S&P has downgraded the UK's sovereign debt rating to "negative". It's still triple-A, but with the distinct possibility that it will not be so forever.

That's because, basically, the people who will buy that debt - the bond traders on the global financial markets - are not convinced by the numbers Alistair Darling produced in the Budget. Then, April's public finance figures were immediately worse than expected, heightening the gap between prediction and reality.

What does it mean? Well Iceland and Ireland have also had their sovereign debt put on negative. So the UK is now technically in the same league. All those jokes about Canary Wharf becoming Rekyavik-on-Thames now look a bit unfunny.

It is still very very unlikely that the UK would default on its debt: but it will now cost the government more to borrow it. As far as I can make out from my current vantage point of a hotel in Inner Mongolia (where I am working on a report on the Chinese economy) Britain is the first major country to have its AAA rating called into question. It's likely it will not be the last - but what that says about the record of the UK government in managing the public finances is best left for the politicians to slug out on Newsnight, if there are any of them left standing after the seismic events of "Snoutgate".

Incidentally - while it is a massive reputational hit for the Labour government - it is not great news for David Cameron either. S&P's note on the downgrade implies they are not convinced any post election government will be tough enough on public spending (or on raising taxes) to get the public finances back to their gold-plated former status. As I write the pound has taken a hammering.

More on Newsnight tonight - but not from me. By the time the programme goes on air it will be 5am here and I am 800 miles from the nearest TV studio.

Comments

  • Comment number 1.

    Nothing at all on the BBC website re Ruth Kelly and her expenses claim rather than claim on her insurance.

    This one may well be the real McCoy if she subsequently didn't disclose the loss and costs when the policy renewed.

  • Comment number 2.

    You are probably better off out of it in Mongolia. The stench from "snoutgate" here grows stronger by the day and we are slowly sinking under the debt mountain. By the time you return we will be in it up to our necks!

  • Comment number 3.

    Pual,

    You're wasting your talents out there...you need to get back here fast. Peston's well out of his depth.

    It's small wonder that the price of gold is going through the roof. Gold jewellery may not be selling well on the high street but they can't find enough new gold to keep up with demand!

    Has any one else noticed the ads for old gold jewellery in the local papers?

    I understand that China's demand for gold is on the up. Let's face it... a lump of gold must be far more satisfying to have in your hand rather than a crummy government's IOU on a scrappy piece of paper...don'tcha agree?

  • Comment number 4.

    Are 'tough on spending' or 'raising taxes' the only opotions?

    How about clawing back the cash from those that have taken it?

    How about clawing back bailout money from banks that have not utilised it in the ways for which it was lent ( that is the bulk of the debt)

    How about nationalising the banks, as Leo Panitch and a lot of others argue.

    Recently the final remark of a Labour politician in a Newsnight interview was 'Gordon Brown has done all he could to maintain capitalism'. (A remark that went totally over Paxman's head)

    But it shows just how narrow the options have been, as well as what the priorities have been, to this stage.

    We can open out to something more hopeful. So why are you running in such a narrow rut, Mr so called Leftie?



  • Comment number 5.

    Paul,

    Your comments are slightly inaccurate. Both Iceland and Ireland have actually had their credit ratings cut: Ireland to AA+ with negative outlook, and Iceland to BBB+ with negative outlook. So the UK is still more highly rated than either. In fact, comparing any "respectable" country with Iceland is just ridiculous. Many have made errors, but no government other than Iceland's allowed its country to be turned into a de facto sovreign private equity fund.

    Negative outlooks only result in actual downgrades in about one-third of cases, so the likelihood of the UK losing its AAA status remains unlikely. The reason why the outlook has been downgraded to negative is very understandable. Neither of the main political parties is willing to produce detailed plans to bring the public finances back into balance with only 12 months to an election. Doing so would simply allow the other one to run claims of "NHS closure" or "Taxing us till the pips squeak" during the election campaign. However, we can be pretty certain that within 30 days of the next election, the new government will have published very detailed plans for the next 5-10 years. Those plans will include very deep expenditure cuts, as well as locking in the recent tax hikes imposed by Ally D. At that point the credit agencies will reaffirm UK's AAA/stable rating, and everyone will realise the cost necessary to keep it.

  • Comment number 6.

    You're probably better off there Paul. My wife who is a doctor in a district hospital here in Scotland has just called me at the office to say she has learned of plans being cooked up to close her complete unit with unseemly haste. There's an air of panic amongst the NHS management class (here anyway) as it presumably starts to feel the practical impact of a country heading rapidly for insolvency.

    The truth is that when you add in all the contingent liabilities and off-balance sheet debt that Gordon Brown has loaded on to the public sector (his usual masterclass in economic deceit), we're as good as bankrupt. The impact will be felt soon enough: for my family, possibly sooner than we would like, when my doctor wife is fired. No doubt this Labour Government would argue desparate times need desparate measures.

    It's just a pity that our own incompetent political scum led us to where we are today; themselves led by that mother of all confidence tricksters, one Gordon Brown MP.

  • Comment number 7.

    For once Paul is more concerned than Robert Peston! But I am not sure that this is really much of an issue...the UK still has its AAA rating and is unlikely to lose it unless the next government is really irresponsible. I do think there's a serious economic question here though: will this and the next government invest its deficits in improving productivity or just sustaining consumption?

    I wonder if Vince Cable will have the answer...

    http://www.knowingandmaking.com/2009/05/private-productivity-and-public-debt.html

  • Comment number 8.

    And I was a tad concerned by the tone in the headline...

    because, basically, the people who will buy that debt - the bond traders on the global financial markets - are not convinced by the numbers Alistair Darling produced

    Folk are not minded to buy what's on offer because they don't trust the salesperson. Nifty.

  • Comment number 9.

    Pound hammered ? down 0.15 percent against dollar as of 16.12 BST - hope you didn't rush in and trade all yours for mongolian yak poo or whatever they use as currency there !

  • Comment number 10.

    Fair points on the pound, it came back as I thought it would but the initial graph looked like a cliff. Fair points also on AAA downgrades - I am away from any reliable internet source (lots of stuff still wierdly censored here). I will be back the middle of next week. I am not sorry I am missing this political meltdown because, frankly, the fate of 1.3bn people is also quite important.

  • Comment number 11.

    No.7. inoncom

    When many governments around the world have large fiscal deficits, they will compete against each other to attract investors to buy their national treasury bonds.

    This competition will push up UK interest rates, as our government's borrowing is being used to pay for the bad debts of the British banking sector. Therefore, British deficits will not be funding internal investment, but will instead be used to pay for our past over-consumption. Not a healthy situation to be in.

    In other words, Britain spent tomorrow's earnings on over-consumption, now we must borrow to pay for today's necessities. Therefore, there won't be any money left over to fund investment to improve Britain's competitive productive capacity.

  • Comment number 12.

    The pound still has a long way to go before it gets back to 1.47 against the euro, which was its stable rate for many years.

    The pound is gaining on the dollar, because the USA's economy is in a lot of trouble, just like Britain's.....

  • Comment number 13.

    I appreciate that there might be agendas at work whichever medium one chooses to gain insight from, but in the spirit of trying to arrive at a more informed view, I found this of interest and so share:

    http://blogs.telegraph.co.uk/edmund_conway/blog/2009/05/21/the_rating_crisis_treasurys_deluded_response

    Just imagine 1.3B x £142.50. Now that would be unique funding!

  • Comment number 14.

    My nom de plume was prescient?

    Bloody hope not

  • Comment number 15.

    I never quite understand why ratings agencies are needed for Sovereign Debt. Paul says:
    "That's because, basically, the people who will buy that debt - the bond traders on the global financial markets - are not convinced by the numbers Alistair Darling produced in the Budget"
    So, if the Bond Traders know, why the need for ratings agencies? I can see the need for firms, where info may be harder to come by, and possibly for developing countries, but for a western nation, aren't the agencies catching up with what everybody already knows? It's not as if S&P know anything nobody else does, is it?

  • Comment number 16.

    Hi Paul,

    What's Inner Mongolia looking like as a new domicile. I'm thinking of emmigrating. I've just read Chaz Bean's speech to the Master Cutler and honourable spoons in Sheffield ( you coudnt make this up, could you). Chaz is Mervyn's deputy.He was the BoE chief economist tracking the debt bubble in 2004.He thought then that cos debt was being used to finance assets, not consumption, and cos assets matched liabilities he couldnt see an obvious problem macroeconomically. If house prices got too high it wasnt the BoE job to engineer big corrections but to gently control this over time. What the 'ell 'appened?

    Now he says ' But although we
    subsequently fretted about the vulnerabilities building up within the global financial
    system as a result of the relaxed attitude to risk and the easy availability of credit, we
    never imagined quite how extreme the unwinding would prove, particularly after the
    bankruptcy of Lehman's last September triggered a near collapse of the financial
    system and a world-wide plunge in business and consumer confidence.'

    Never fear though, Chaz is now the prime QEeaser extolling its virtues in guess what - raising asset prices and easing credit with funny money. Problem is that the Chief Cutler and honourable spoons are telling him that the banksters aint lending the dosh he's creating.........hey ho! Banksters are keeping low and letting Snoutgate steal the headlines.

  • Comment number 17.

    We are in the Indian summer of the recession, the rating agency announcement is simply the weather forcasters doing their job for once and implying that recovery in 2010 as now seems to be the fashionable view may not be so simple.

    I just can't see the appetite for bonds continuing until the next election without extensive cuts being planned and in part already being in place, something labour is not prepared to do.

    The £8.65 billion deficiet in April is truely shocking, even more so if you consider redundancies are starting to increase dramatically now (curiously that does not seem to have got much coverage). The deficiet figure is only likely to go up, I would not be surprised if we are looking at 10 Billion plus month on month in the coming months.

    Any politician fancy telling the British people that the standard of living is going to take a massive hit in the next few years?

    Is that the real reason you are in Mongolia Paul?

    You are in preparatort austerity training arn't you!



    Was it not ever so, the banks started this, they are in a kind of recovery now but the bow wave has moved on to the real economy and is causing havoc there, at some point that will feed back to the banks and the bond markets and the system will say 'you cant afford this' and there will be huge cuts in services and living standards.

    All the while we all know what the answer is (start to take some of the hard medicine now rather thn when the system forces us to). But does anyone do that?

    No.

    Why?

    Because they are more interested in saving their party as best they can rather than doing what is in the best interests of the nation.


    It is so simple, but nobody reports it that way and nobody does anything about it.

    We live in a 'democracy' at the moment that is extremely proficient in giving the illusion of a choice for the people, it does not feel like that from where I am sat.

    I got my poastal ballot papers today for the MEP elections, 12 candidates (BNP at the top of the ballot) and I did not really feel like any one of them could offer what I wanted. The major but 'institutionalised' parties, parties you have never heard of and others you wish you had not (BNP).

    I ended up voting lim dem on the strength of Vince Cables showing and Nicks passion in taking on GB about the Ghurkhas on the basis it appeared the least worst option...hardly a a basis for a healthy democracy.


    Jericoa.




  • Comment number 18.

    16. At 09:55am on 22 May 2009, shireblogger wrote:
    "Problem is that the Chief Cutler and honourable spoons are telling him that the banksters aint lending the dosh he's creating......"

    That's a disgrace. How can anyone sensibly live beyond their means in this country, if we can't borrow?

    I demand to spend more than I earn; it's my right!!!!

    Why should I be forced to save up my earnings to pay for big ticket purchases? It's completely disgraceful!!!!

    I demand to be indulged!!!!

    I want it now!!!!

    I need to take the waiting out of wanting!!!!

  • Comment number 19.

    'UK moved a slight notch closer to bust'

    don't make me laugh Paul, the UK is bust already but the raters and banksters can't acknowledge this fact or they would be in bigger trouble than they already are.

    #17 Jericoa.

    Doh! wrong election. Voting Lib/Dem because of how VC and NC conduct themselves in the UK Parliament is no reason to vote for them in the Euros. The Lib/Dems only see the EP as a career path step to becoming party leader (ask Nick). This was actually on the Lib/Dem website.

    You don't know whether your current MEP has been at the trough as this info is not yet in the public domain. Your best option would have been to cast your vote for someone who wanted transparency and whos party was not in any way associated with the trough in the past.

  • Comment number 20.

    Gordon has been praised by the IMF for his prompt action to save the economy. QE is a temporary measure to tide us over until the recovery begins by Christmas. Strong growth will follow, with rising house prices by this time next year. The markets are rising in expectation of this, don't be folled by all the doomsters out there, particularly on peston's blog. Sure unemployment will rise about three million, but its a price well worth paying.

  • Comment number 21.

    No.20. LordGreenShoots

    I agree.
    I think all the indicators are there for a full recovery to start at the end of this year. We are lucky to have such a well run economy.
    Unemployment will quickly reduce in 2010, as the government creates real wealth and jobs in the run up to the general election.

    QE will create real GDP. It's been done before, during the industrial revolution. It wasn't the empire that brought Britain its great wealth but quantitative easing.

  • Comment number 22.

    #20

    Gordon did what he had to do to avoid the whole thing crashing about his ears, he did it by getting this country in more debt than ever before and printing money, the downside of which has yet to be seen.

    I dont disagree with that actually as a short term catastrophe avoiding measure.

    I do disagree with the word 'praise' being associated with those actions and Gordon brown in the same sentence.

    Praise for the man who set up the regulation system in this country, oversaw it and stood up infront of the city of London and Gushed 'thank yous' upon them, stood up in front of parliament and hubristicly announced he had abolished boom and bust.

    The emergency measures he had to do as would anybody else in his position. I would be more impressed if he now took up the challenge of what also needs doing now, which is to start to plan to instigate the required cuts in Gov spending to balance the books and pay off the gargantuan debt he has built up despite record treasury receipts during his tenure.

    Ask the soon to be 3M unemployed if they think it is a price worth paying for Gordons folly as described above. I suspect they may be a tad angry with you.

    wdyathink?

    I also rather suspect the recovery you are predicting may stall somewhat when the government has to start making those cuts and paying the interest on those debts while being saddled with 3M unemployed.

    You have got to be a labour stooge Lord Greenshoots.

    Jericoa











  • Comment number 23.

    Apparently, the Gurkhas are setting up their own political party, and will contest the next general election.

    With public opinion as it is in this country, there's every chance the Gurkhas will get elected, and form the next British government with a landslide....

  • Comment number 24.

    re Recession Training. In Western China, where I've been for 10 days, there is no recession. There is a worrying growth dip but the restaurants are full and the further west you get, the more people go HuH? when you say global crisis. I can only write what I see.

  • Comment number 25.

    No.24. paulmason-newsnight wrote:
    "In Western China, where I've been for 10 days, there is no recession."

    Have you found any evidence of the Chinese buying British exports, and if so what?

  • Comment number 26.

    # 22 - Moi, Labour stooge, surely not, clearly you haven't checked-out the contributions of my alter-ego, The New Ponzi. Anyway, what's all this about paying back interest? Inflation will take care of all that troublesome nonsense! What do you think QE is REALLY all about!!

    And don't mention AAA, ha, nothing a little arm-twisting by the US treasury won't sort out. Do you think the same agencies that gave sub-prime CDOs AAA have integrity - get real! A few billion dollars here, a few billion there and hey pesto! - no downgrade for the UK (or the US).

  • Comment number 27.

    #26

    Crikey and I thought I was a cynic!

    Such a devious mind to think of all those conspiracies does not entirely convince me that you are not a Labour man though:)

    #25

    They have been buying into the biggest British export for years..its called colonialism, except they figured out they could do it with cash now instead of guns and god.

    #24 ''I can only write what I see'' That's the trouble with journalism, you are in the best position to have an opinion on something but you are not allowed to! Trouble is ther only seems to be slight variations of the same opinion to report on nowadays i.e. capitalism broadly in its current form. Journalism (broadly) is busy reporting on the various esteeemed opinions on the colour of the wallpaper in the economic room while a herd of elephants is having a party there!



  • Comment number 28.

    Question for Paul,
    Please can you give your view on why economic forecasts and predictions vary so much.
    Why do some analysts see green shoots and others only dead roots?
    Surely forecasters have access to broadly the same data.

    (PS I would like to use your response for an article I am preparing)
    Many thanks

  • Comment number 29.

    surprised bbc isn't banned. how do you get to post and read the blog? is it via a different route?

  • Comment number 30.

    I took the chance today while in a meeting about the company performance / our team performance with my team of 8 very well educated but young engineers to explain a bit about the economy.
    It went something like this:

    It may seem like it is getting better but actually it only appears that way because the government is borrowing way beyond its means at the moment and printing money to stabilise the system. (blank looks).

    Just like any loan we will have to pay it back sometime and we will have to pay interest on all that money. The credit rating agencies are starting to get nervous about that and have indicated they may give us a poorer rating, which means we will need to pay even more interest.

    What this means is that sometime in the not too distant future there will have to be massive cuts in government spending and tax increases, that means that the standard of living for the majority will get a lot lot worse in the comming years to pay for all the government borrowing (more blank looks).

    By my guestimate the affects of this will start to become apparent around the second quarter next year. Its just my opinion but you should prepare for that if you can and realise that it is going to be tough for a long time and make decisions acccordingly.

    The really worrying thing was they understood what I was saying on an intellectual level but they had no personal frame of reference to value it, to feel any emotion about it, to experience the significance of it. It was just like absorbing another page of news off the net for them.

    We shall see.

  • Comment number 31.

    No.30. Jericoa

    Aahh, what it is to be young and believing in the theory of a never ending cornucopia delivered by liberal consumerism.

    Now they will find out how theories differ from reality......

  • Comment number 32.

    No.30. Jericoa

    Always read your comments with interest - keep them coming.

    "that means that the standard of living for the majority will get a lot lot worse - the affects of this will start to become apparent around the second quarter next year - you should prepare for that if you can"

    Prepare how? How does the average, employed person prepare for Government spending cuts, increased taxes and a lower standard of living? If the answer is to repay debt, cut back spending and save more - then surely that's counter-productive to economic recovery. That's the road to long-term recession.

  • Comment number 33.

    No.32. bluemorbius

    Once your debts are paid off, you will have no more loan repayments.
    The money that would have been spent on loan repayments will then be available for you to spend on whatever you wish, and you could even choose to invest the money.

    As an example, if you borrow GBP 100,000 for 25 years on a repayment mortgage at 5% interest, you will pay a total of GBP 77,000 in interest.
    The quicker you repay the loan, the less interest you pay. If you pay the loan off in only 12 years, you will save yourself GBP 42,000 in interest.

    It is true that repaying loans with money generated through cutting back on spending will cause the economy to contract. This is why the government should never have allowed the level of debt to get so high. The debts are so high that many people will not be able to pay them off, and it will result in bad debts for the lenders, and falling asset prices due to distress sales.

  • Comment number 34.

    #32 and #33

    You are both right in my opinion. We have as a borrowing nation badly overstretched ourselves and the underlying principal to this is 'we can not borrow ourselves out of debt'. The pain has to be taken sometime for our excesses, it is simply a question of whe and will it be a drmatic correction of something spread over along tiome period.

    The government fearful of some kind of collapse has chosen to scrape the bottom of the barrel in terms of borrowing on a massive scale and printing money as well.

    You are right, people paying off debt and spending less will not help the economy in the short term but when and how do we take the pain?

    The best we can hope for is that those who do have substantial savings do start to spend them, those who are indebted pay off debts. The trouble is that rarely happens, despite monetary policy to encourage that, human nature kicks in again to scupper it. Those with savings are the very people who are most likely to be more cautious in difficult times, despite low interest rates.

    I would like the politicians to be honest with the nation (ha) and tell us straight what is going to happen so we can, at least mentally prepare for it, accept it as a nation and pull together.

    They choose not to do that, they choose to default (as usual) to 'party power interests' over ' what is best for the nation' decisions are made based on what they think will get them into power. At this time that is not the same thing (in my view) as what is in the best interests of the nation.

    The govenment has not dealt with those issues it has simply (at worst) delayed a dramtic collapse or at best suceeded in spreading it out a bit so living standards will drop gradually, giving people time to adjust and avoiding some kind of meltdown (lets call it New Labours gift to the Conservatives!).

    I just find it impossible to see it any other way, the only thing that could avoid the above scenario is if UK plc suddenly discovers some amazing product to sell to the world at a high profit margin to keep us all in the way we are accustomed to living and pay off our debts. For 20 years that 'mother lode of UK gold' was 'the City of London and North sea Oil'.

    There is nothing else like that on the horizon that i can see..so how exactly are we going to avoid a drop in living standards in this country that only makes 40% of our food needs and is now a net importer of energy and who is getting more and more in debt on a monthly basis.

    I dont wish to be gloomy about it, i just wish we were told the truth and such points of view were presented by the media to the mainstream but they are not. We may have just enough cudos in the world and credit worthyness to embark upon a brave new 'project UK' which involves massive investment in renewable energy and self sufficiency in general. But nobody is talking radical change in a sensible pragmatic, reasoned out way.

    For me the best way for the UK (and the world) to go is simple;

    1) Invest in nations being self sufficient in basic needs ( energy and food)
    2) Control population
    3) Once self sufficient and with population under control we can look to be creative in inventing and trading non essential goods in a true capitalist sense, the most imaginative and innovative and creative being rewarded as such.

    Its just so dissapointing that on a small scale the UK is govened not by what is best for the nation, but what is in the power interests of the 'institutionalised' and way too stale 'political parties'

    On an international scale the smae thing applies in terms of how nations and cultures behave. It can not go on this way or at some point there will be some kind of catastrophic correction to the imbalances of the current system.

    We have the technology and connectivity globally such that we can build the infrastructure required to provide for everyones needs in a sustainable way ( providing population is controlled)and in so foing provide jobs for millions.

    We choose not to do that, with our technology and industry we choose to buy mountains of useless plastic tat and other gimmiks, non of which makes us happy, just so the current global system can continue on the basis of perpetual growth.

    It is in fact...madness.

    Jericoa

  • Comment number 35.

    34

    Why the obsession with controlling population. If the state of affairs is as you relentlessly insist truely unsustainable, then sureley populations will adapt ?

    If you are serious about controlling populations then are you going to empower a government with powers to oversee human fertility and reproduction ? What sanctions do you propose for those who transgress the rules - forced abortion ?

    If you advocate all this I suggest you move to China, remember in this part of the world we have choices.

  • Comment number 36.

    No.34. Jericoa

    I agree.

    In short, Britain has got itself into debt, and has already spent tomorrow's earnings......

    We spent and over-indulged ourselves, instead of investing for a better future.

    Debt is only useful if it directly leads to an increase in productivity.
    Productivity gains cause a better standard of living, and the debts are easily repaid through the additional profits. All great leaps in the British standard of living have come from productivity gains, and not from the actions of politicians or social scientists. Having said that, it is important to note the role of politicians and social scientists is to 'enable' the economy by managing and helping it, like managers control a company. The public sector should support the private sector.

    If the present government had looked long term, and actually tried to manage the economy properly, we would now be at the stage where we could all work 3 days a week and still enjoy a good standard of living. We would have been able to rely on technology to provide cheap and efficient transport, energy, food, etc.

    However, instead of this long term sustainable approach, the government sat back and did nothing. Households and businesses became over-indebted and must now keep working at full tilt just to afford the interest payments, loan repayments and the increased taxes to come. Our energy situation looks a complete mess. Having increased our reliance on computer and digital technology, we don't seem to have invested much time thinking about how we will generate all the electricity required to power all our electrical devices. Given that we live on an island, why have we not invested in tidal power? The waters around the Channel Islands alone could generate electricity equivalent to 25 nuclear power stations. And speaking of nuclear power, the government has only now got round to commissioning the building of some new nuclear power stations...

    It is productivity gains through technological improvement which cause economic expansion and a better standard of living. Given the finite nature of the world's resources, we need to find new ways to make our resources stretch further; so that more of the world's population can enjoy a good standard of living.

    In conclusion, I forsee for Britain:

    (i) Permanent high unemployment, of 2.5m or more
    (Bearing in mind unemployment ran at 1.5m during the recent 'boom' years);

    (ii) Britain will give up some of its wealth to rising countries such as China, India, Brazil;

    (iii) High taxation of British workers and British businesses, to pay for the huge excesses and over-indulgences of 2001 to 2007;

    (iv) Large fiscal deficits, meaning the government has to cut back on public spending in order to afford the loan repayments and interest costs;

    (v) Weak pound, caused by lack of exports and over-dependence on imports, which in turn pushes up the cost of our imports;

    (vi) On the positive side, we will develop new technologies in fields such as Robotics, Biotech, Nanotech, Stem Cell research, Nutraceuticals, Renewable Energies, Cybernetics, Forest Farming. However, these will take some years to develop to fruition.

    It will take many years to work through our economic problems, and we may never fully 'recover'. And yet still we are being told the worst of the recession is behind us.......

  • Comment number 37.

    Paul,

    As a casual observer of the current crisis it still baffles me why there isn't a full and frank autopsy of the "perpetual growth" mindset, peddled by orthodox economists and lapped up by spineless spiv politicians.

    The views of one particular person are continuously ignored:

    http://www.whirledbank.org/ourwords/daly.html

    Herman Daly has to be one of the few people who can both represent the planet's environment and ecology, whilst playing Economists at their own game (and giving them a jolly good thrashing too, from time to time!).

  • Comment number 38.

    #35

    I think you put a lot of unsaid words into my mouth in your post which are nowhere near the mark.

    Population is the most dificult thing to try to deal with, but that does not mean it should not be debated. It ties into complicated religious issues, issues of personal choice (although it is arguable if that is the case if religion is involved)...see what I mean....off to a tricky start already!

    For the record i find the idea of forced abortions or any such similar thing utterly abhorrent as i do anybody associating those opinions with me. The key lies in education, nothing else in my opinion.

    But equally to not debate and think about how we may, as the human race, look at ways to manage the population such that nature does not have to manage it for us is madness.

    Would you rather that the traditional population control mechanism governed, they are often

    a) mass starvation.
    b) war due to conflict over limited resources.

    I really think you missed both the point and the spirit of my post entirely. I dont think I am obsessed with population but i think it is an important factor that should be debated more than it is despite all the dilemmas it raises. Ignore it and it will come back to bite us anyway.

    Jericoa

  • Comment number 39.

    #36 and 37

    Its a bit dull to be agreeing all the time but I agree!

    This stuff is just way too important to be sidelined.

    #36 puts the case eloquently and thoroughly, it is, in fact very difficult to pick these arguments apart rationally. Those skilled in rhetoric will use smoke and mirrors and pander to human greed in order to divert attension away from the argumants for their own interests, they should not be allowed to do so by the media.

    We need people like Herman Daly, but much much more importantly than that, we need organisations like the BBC to give people like Herman Daly substantial mainstream coverage in direct proportion to the strength of their arguments, not the strength of their influencial friends or mainstream incumbent popularity.

    At the moment the BBC seems to work on the principle that the more popular you are the more coverage you get!! Therefore labour and the conservatives get 70% of the debate time, with the rest fighting over the scraps.

    Therefore the BBC in so doing is complicit in smothering 'new thinking' new thinking that is now so desperately needed.

    Here is an idea.

    Instead of giving air time based on popularity, how about giving air time based on the consensus among journalists of who is closest to the truth? Surely that would not go against the BBC charter and would, in fact, be a great service to the nation.

    C'mon Newsnight, if you guys don't do this who will?

    We live in a time of upheaval,these alternate ideas and opinions have the potential to have a positive influence on the world and make a real difference, or at least they would if they were given air time proportional to their value. The BBC's model for providing coverage merely stiffles inovation.

    Time for a re-think.


    Jericoa



  • Comment number 40.

    39 - "how about giving air time based on the consensus among journalists of who is closest to the truth? "

    And how do you know who is closest to the truth without already knowing the truth ?

    Likewise how do you know you have reached the limits of growth until you have exceeded them ?

    Do tell

  • Comment number 41.

    Regarding "truth and justice" in the media.

    The media is a business enterprise.

    In business there are two options to improve profitability - grow sales/margins or cut overheads.

    It is generally harder to increase sales than it is to cut overheads.

    Deregulation causes increased competition, as more businesses are allowed to enter the market.

    For the existing organisations (the BBC or the Times newspaper, for example) increased competition leads to reduced audiences/sales.

    To restore profitability, overheads must be cut, and money spent on "star performers" (Jeremy Paxman or Jonathan Ross, for example) who attempt to win audience market share through their unique selling points.

    So, we have big salaries for stars, but all other overheads are cut back to the bone.

    All mediums are competing for audiences in a harsh competitive environment.

    What hope is there for serious journalism in such a climate. Its unit cost of production is too high, relative to the size of the audience it will attract........

    More channels and more newspapers = reduced quality.
    The media is forced to work in a very financially risk averse environment. It won't spend money where the audience figures cannot easily be estimated in advance.

    The result is a mass market, high volume, low margin, low cost product.
    To attract the high volume audience at rock bottom cost, the media tends to concentrate on more talking opinion (gossip) and more popularist sensationalism (celebrity culture, sexing up, extreme lifestyles). "Magazines" take the place of real in-depth news programmes.

    Now for the news "where you are".
    (That will be the local news, then).

  • Comment number 42.

    41

    Notwithstanding the fact that BBC is funded by taxpayers, or the power that popular organ of low rent celebrity gossip The Daily Telegraph has wielded of late, I fail to see what any of this has to do with truth or justice ?

    A case of cogito interruptus perhaps ?


  • Comment number 43.

    No.42. superiorsnapshot

    Here's something about funding shortages at the BBC, from the Daily Mail online, back in November 2007.

    Sensationalism is not used.

    http://www.dailymail.co.uk/news/article-491956/Would-care-leave-BBC-asks-staff-volunteer-redundancies.html

  • Comment number 44.

    #40

    And how do you know who is closest to the truth without already knowing the truth ?

    Jericoa response

    Nobody knows the absolute truth because like everything else it is relative. You miss the point and spirit of the post and choose to settle on precision of the wording instead(again). I am interested in finding ways to break the current monopoly on debat, which appears largely within the narrow confines of the current unsustainable global economic model which requires perpetual growth to feed itself. There is something else in nature with similar chrateristics which medical science spends billions trying to eradicate the suffering it causes.

    Likewise how do you know you have reached the limits of growth until you have exceeded them ?

    Jericoa response.

    How do you know you have exceeded them? Answer that and I suspect you answer your own question.


    Jericoa

  • Comment number 45.

    44

    If there is no truth and only consensus, why should journalists opinion be privileged?

    In the same vain would the limits of growth be met when we all behave in a way comensurable to a no growth economy ? or will there be some privileged group to tell us ?

  • Comment number 46.

    Paul,

    I'm worried about you!

    Just saw you tonight on Newsnight and noticed that the cuffs of your shirt were protruding a full 3 inches from the cuffs of your suit!!!

    It looked very odd.

    I know it normally looks good to show a bit of cuff, but did you lose a lot of weight in China?...or did your suit shrink badly in the wash?

  • Comment number 47.

    #44

    Point 1.

    Hey at least its a change of scene letting journalists choose for a change, providing coverage based on 'incumbent popularity', as seems to be the case now, just reinforces the incumbents view to the exclusion of alternatives.

    That seems less sensible to me and leads ever down the road to stagnation. There are no perfect answers to this I am not suggesting there is, what i am suggesting is that what we are doing now does not seem to be serving the general public very well so we should shake it up a bit and try something else.

    Point 2

    Hmmm, I like your second question more.. thanks for that..it prompted a chain of thought thus:

    Telling everyone they can all have a dream of living in a suburban house with a nice garden, own 2 cars and have so much food they can throw 30% of it away if it is not to their taste on a given day panders to human nature (call it hoarding instinct at its root if you like)and is, not unsurprisingly popular because of that.

    The popular stuff (the way the system works now) gets you into power via democracy (interestingly except in china maybe wrt global powers!)

    Unfortunately in the emerging mechanised and ever efficient world with limited resources it puts you on the path to well..trashing the planet! The root to breaking this cycle is, by virtue of human nature itself 'unpopular' and will therefore not gain power, on that basis it is ineviatable we end up trashing the planet!!

    This is the really scary part...

    By extension of that argument we are saying either:

    a) Human nature needs to change so we dont have the desire to hoard and accumulate. How on earth do we do that?

    b) We need to get rid of democracy because it will, by virtue of human nature in the context of an ever mechanised and efficient way lead to disaster!!


    I dont have the answers by the way and i am nor part of any organisation or movement with any specific goal. I am just interested in the questions and want them out in the open and debated. At the moment debate seems to be limited within a very narrow field, the recognised 'experts' are all busily debating the colour of the wall paper oblivious to the herd of elephants in pink Tutus having a party in the same room.

    Thats what it seems like to me anyway.

    Jericoa

  • Comment number 48.

    Hi Paul,

    Even Stephanie is questioning QEesing now - MPC deciding again tomorrow.

 

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