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Gotcha

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Stephanie Flanders | 13:06 UK time, Wednesday, 16 September 2009

Gotcha. That's the one word summary of George Osborne's interview on the Today programme this morning.

At one level, the leaked Treasury figures confirm something we already knew: that the government plans to cut spending in real terms if re-elected. The Institute for Fiscal Studies teased that much out of the chancellor's budget numbers hours after they were published in April. Only the Treasury expects to have to squeeze even more than the IFS thought, by 9.3% rather than 7%.

The prime minister was then criticised in the summer for seeming to deny something implicit in his government's own numbers - when he contrasted Labour's plans to invest in public services with Tory plans to cut spending by 10%.

But the leaked figures show that officials have known since April that Labour's plans imply a similar-sized cut. It was not simply implicit - it was explicit, in the Treasury's own internal tables.

George Osborne


Mr Osborne said the PM had misled Parliament in contrasting Labour plans to invest with Tory plans to cut spending by 10%. I've looked back at the exact quote, and - as ever - Gordon Brown has a get-out. What he actually said, in a BBC interview, on 1 July was "I have always told the truth and I've always told people as it is". He was also quoted by the Tories as saying "we don't want to have the 10% cuts the Conservatives are talking about."

I guess he can always say (truthfully) that he doesn't want cuts. Even if he - and all at the Treasury - expect them. Or, of course, he can say that he doesn't want the same 10% cuts the Conservatives are talking about - he wants the 9.3% cut that Labour is (not) talking about.

Then again, if you need this many get-out clauses, perhaps you need to reassess the bit about "telling people as it is"...

So much for the politics. As I mentioned on Today, the most interesting thing about the leaked numbers from an economic standpoint is just how pessimistic the Treasury is being about the rise in social costs over the next few years and, especially, the rise in the cost of servicing government debt. The table in question shows debt interest payment rising from £27 billion this year to nearly £64 billion pounds in 2013-14. The IFS thought it was being fairly conservative in forecasting debt payments would rise to £52bn.

I had also wondered whether the IFS was being a bit gloomy about the growth in social security payments during that period, despite what you would assume to be a fall in unemployment after 2010. But it turns out that the Treasury is at least as gloomy, if not more so. The Treasury numbers show social security costs rising in real terms by 2.1%, as late as 2013-14.

Another part of the leaked memo actually shows the Treasury boasting about how conservative its forecasts are. It points out that almost all of the improvements in the structural deficit between now and 2013-14 is driven by policy. Government decisions in the Budget and pre-Budget report of 2008 will reduce the deficit by £56bn, it says. And even in 2013-14, revenues from the housing and financial sectors are expected to be "only 1% of GDP higher than in 2007/8", despite the announced rise in tax rates.

You might think this sits rather awkwardly against the economic forecasts built into the same Budget. The GDP forecast for 2009 and, especially, after 2010, has been widely criticised as over-optimistic. if they were being so cautious, why not expect growth to be lower as well?

The answer, I suspect, is that the two are related. Officials were put under immense political pressure to raise their growth forecasts. As a consequence - or in anticipation - Treasury officials made sure they were not expecting growth to do much of the work of cleaning up the public finances.

This tallies with what Treasury officials have told me privately, even if the linkage was never quite this explicit. They may have lost the battle on the growth forecasts, but they were going to make darn sure the budget numbers still added up. And in fact, I would say they largely succeeded. A number of independent commentators have suggested that the Treasury might be being too gloomy about the size of the structural hole in the public finances - ie the bit that won't go away, even with economic recovery.

If I were George Osborne, I'd have another reason to be pleased by this memo. As well as allowing an easy goal against the government - it might mean that, if the Tories are elected, being chancellor for the next few years might be slightly less awful than we previously thought.

Comments

Page 1 of 3

  • Comment number 1.

    This is a squabble in Whitehall village. What difference does the argument over numbers make to the real economy? As such, none. It's merely making sure the debate stays on a subject the Conservatives are happy discussing, that is, who can get rid of the debt quicker. The real issues we ought to talking about are what shape we want to be in as the recession unwinds, and how can we achieve it? The size of the public debt is one part of that, but not necessarily the most important.

    If we were talking about issues that matter, we'd be asking questions such as 'Do we want to continue giving top priority to the comparative advantage of the City of London? What are the consequences if we do? What if we don't?' I'd rather hear your view on that than on the latest trivial point-scoring from the Opposition.

  • Comment number 2.

    Simple equation: less tax dollars coming in to the governments so they can either make cuts or print more money. Higher taxes on banks and financial services are in order. Call it a punishment tax or a deterent tax, something that might enter the conversation when they are sitting in board rooms making up new schemes to defraud investors. Most governmental budgets have built-in non-allocated funds, they are allocated on paper to look necessary but in reality no positions or projects are actually intended. Money used to make friends and influence politicians. But when cuts are proposed the departments cry like the very life blood is being taken away and they tend to propose cutting those services that citizens favor most to create some public outrage over the cuts. 7% to 10% could be accomplished without a lot of pain but the bureaucrats will make this as difficult as possible. I would suggest they start with consulting contracts to economist and other such bone throwers.

  • Comment number 3.

    The problem with this is that it looks like 'point-scoring' between two political parties with us, the English voters as a by-product of their game.

    The game needs to change radically such that the voters in England really are driving the political scene and forcing these politicians to stop playing stupid games.

    That is, stop being adversarial and start co-operating, but no, they are too selfish for that to happen, unless a world war is brewing of course.

  • Comment number 4.

    Never mind what Gordon Brown said in a BBC interview, the point is whether he misled Parliament. I seem to remember that he stated in Parliament that there would be no cuts, which, if I remember that correctly, is now proven to be a lie.

    No doubt with all the journalistic resources at your disposal you could check what he said in Parliament?

    PS Perhaps you could tell Nick Robinson about this story. It would be interesting to read something about it on his blog, but so far it seems to have passed him by.

  • Comment number 5.

    Only a fool would believe Clown Brown was telling the truth about "his" investing while getting cuts from the Tories.
    Much of the debt is his doing. He said no more Boom and Bust.
    Brown's new system: Borrow and Bust.

  • Comment number 6.

    Gotcha indeed. The Prime Minister is a liar. He cannot be trusted. He should resign. But then we did know that.

  • Comment number 7.

    If George Osborne wants to be taken seriously he's got to stop acting in the same disingenuous way as his holiday companion Mandelson, playing stupid schoolboy games over meaningless bits of paper, spinning over old leaks and indulging in cheap points scoring.
    It's high time he turned his attention to telling the electorate in DETAIL what the Conservatives will do about public spending cuts if they get elected instead of fudging issues with nonsense like this. And if he can't or won't, David Cameron should. Caledonian Comment

  • Comment number 8.

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

  • Comment number 9.

    There is of course another matter and that is the role of the unelected part of Government - in this case treasury civil servants.

    I would just like to restate the blindingly obvious just in case anyone forgets - these civil servants (with or without leaks) are the very same civil servants who got the management of the economy so disastrously wrong in the bubble years. They are the same self selected set of complacent permanent unelected jobsworths educated in the failed economics (educated in this case at Balliol) that led to the crash. They(he) are(is) still incapable of understanding (and to quote the Archbishop of Canterbury 'repenting for') their(his) own culpability.

    Th Nation is also to be punished further for having created an economic atmosphere where only tory policies are acceptable to the electorate, and the red-top press, so that we have two tory parties one called the Conservative Party and the other the Labour Party - the latter has been forced to lock away everything that was good about socialism for the duration of its time in office. (I blame the owners of The Sun and The Daily Mail for this!)

    The central problem is that neither party admits that no matter what they do we are in deep do do, and the next decade (or more) will be uncomfortable. Neither party is willing to tackle any form of policies that work towards the redressing of the in-balances in society so in consequence both parties are pursuing the status quo ante and therefore actually seeking to re-inflate the busted bubble and unless and until there is considerably more openness these problems cannot be tackled.

    - Borrowing both corporate and personal must fall.

    - Saving both corporate and personal must rise.

    - The gulf between rich and poor must reduce.

    All three of these are essential to a recovery as they have all got out of hand, but nobody wants to talk about them!!!!

  • Comment number 10.

    Assuming Brown has already identified the waste in Government which he says he will cut - then why has he not aready taken any steps to eliminate it ?

    As nick robinson quotes in referring to the Union Conference
    'The prime minister has said the "C" word - cuts - and done so referring not just to cutting costs and inefficiencies but also to "unnecessary budgets"...

    Perhaps the answer is that Brown enjoys (and even 'drools' to use the NewLab descriptives) in managing inefficencies and unnecessary budgets.
    Which of course does nothing in reducing the debt or in promoting regeneration of productive industry.

    His inability to recognise a need for action and his refusal to implement change, does of course continue to pile on huge future costs for current and future generations. Which appears to be something that most people recognise and are keen to see something done about it ...other than Brown and his hangers-on.

    He is neither a Leader nor a Visionary and consequently is simply unfit for purpose as PM in today's world.

    It is like having the Economy managed by a deceased sheep.

  • Comment number 11.

    All this talk of "cuts". The BBC seems to be actively pushing this line of debate, Why?

    If cuts do mean making large numbers of public sector workers redundant and then having to support them on social security instead, how is that going to help?

    If cuts mean charging for public services (perhaps forcing people to take compulsary private insurance instead of providing free public services), again how is that going to help? It's just taxation by another name.

    If cuts means more "off-balance" sheet nonsense like PFI, how does that help? More smoke-and-mirrors, pretending public spending is less without really changing anything.

    As #9 says, we can't get out of this mess without getting corporate and personal borrowing to fall and reducing the gulf between rich and poor. How is that going to be done? That's the really important question. And most likely these "cuts" will push things in precisely the wrong direction.

  • Comment number 12.

    Hi Stephanie,

    In the growth projection by the Treasury did they assume that the QE boost from Asset purchases transmits striaight into nominal demand projection / growth over the next two years?

  • Comment number 13.

    #9 John_from_Hendon. You can blame the owners of the Sun and the Daily Mail if you want, but that does not mean that it is not your fault, and the fault of millions of your fellow citizens.

    If you want change you have to fight for it - that has been proven true all through history. If you won´t fight then you will get crushed. All the owners of the Sun and Daily Mail are doing are laughing at your self induced feebleness.

    Remember the words of Shelley

    "Rise like Lions after slumber
    In unvanquishable number,
    Shake your chains to earth like dew
    Which in sleep had fallen on you -
    Ye are many - they are few"

  • Comment number 14.

    John_from_Hendon (#9) "There is of course another matter and that is the role of the unelected part of Government - in this case treasury civil servants.....these civil servants (with or without leaks) are the very same civil servants who got the management of the economy so disastrously wrong in the bubble years. "

    The role of the Civil Service is not what you think. What's the role of 'unelected' police, fire-'persons', teachers, doctors, military, social-workers, prison officers etc?

    Ultimately, Civil-Servants/Public Servants have to do what the government of the day instructs them to do. That's what the Civil (and military) Service is there for. Senior Civil Servants advise Ministers, but they will be, and usually are, instructed what to do by Ministers. They have to do what they are told, it's in their conditions of service. Over the last three decades, the Civil Service has consistently been told to contract work out and make thus make itself ever more ineffective. That's Liberal-Democracy (anarchism) at work. Liberal-Democracy eschews Big Government as that's considered Stalinist - statist. See GOSPLAN/GOSBANK. (It's also very Old Labour).

  • Comment number 15.

    #9 John_from_Hendon,

    I agree with you 3 major points. However, they relate solely to the UK position and must also be associated with regional and global changes.

  • Comment number 16.

    Brown and Labour need to look further than their egos for once.

  • Comment number 17.

    #14 JadedJean,

    Whilst the Civil Service are supposed to do what their political masters instruct them to do, they have a long history of adapting, amending and delaying any policies that 'they' do not like.

    One of the tactics Thatcher initiated to overcome Civil Service inertia was the creation of Quangos. Another, more actively persued by Labour, was the setting of targets.

    Whilst the majority of Civil Servants are neither lazy, cosetted or over-paid the same cannot be said for the hierachy. However, I fear that it is the rank and file that will bear the brunt - along with the rest of us!

  • Comment number 18.

    #13. armagediontimes wrote:

    "f you want change you have to fight for it" -I try to do what I can which is more than some of the neigh-sayers on this blog advocate!

    But I agree with you.

    #15. foredeckdave wrote:

    Quite true, but I was really responding the the George Osborne position.

  • Comment number 19.

    One of the problems with politics in the media age is that we become bogged down on details which are relevant to the political stage at Westminster but entirely irrelevant to the welfare of the country. The fact is there will have to be major spending cuts whoever is in power and what Brown said or knew weeks back is of no account. Everyone outside Westminster knows that words spoken by politicians are like icebergs. Most of their meaning is hidden beneath the surface.

  • Comment number 20.

    Stephanie

    Small correction. The £27 billion national debt interest figure mentioned was actually for last (fiscal) year. This year interest is projected to be £36 billion, same as whole of defence budget, and £42 billion next year. Its really annoying listening to Brown giving figures for the government's committment to increasing public spending when he includes what are obviously "bad" increases like these rising debt interest payments. By that logic he should look forward to purchasers of UK bonds demanding higher yields.

  • Comment number 21.

    No 20 "By that logic...."

    You want logic for a politician ?? Oh WOW !!

  • Comment number 22.

    What round comes round for our Gordon. Anyone remember Gordon rushing off to the press with his leaked treasury documents, prior to the 1997 election, with a big smirk all over his face claiming he had got the tories by the preverbials. Well Gordon its not so funny now is it? Poor Yevette was the one put up to "deny" no, that`s a bit strong - talk about the leaked documents. Gordon and Mandy, the latter never one to shy away from the cameras lately, have both gone walkabout about leaving the distinct impression that the leaked documents are genuine. Hey ho - another day, another lie from this government. One wonders when the party elders will say enough is enough and send the men in grey suits to speak to Gordon. No one believes in him anymore. Time to go.

  • Comment number 23.

    What really concerns me about Mr Brown's new stance, is that there is no urgency in his intentions. We'll start considering how to cut back in a year or two.

    Meantime the UK will have lost its 3 star economic status, and we'll be heading pell-mell down the financial drain.

    Trust me, I'm a retired drainage engineer !

  • Comment number 24.

    So Brown has expressed his anger at his honesty being questioned. Can't think why, he is and always has been dishonest with the electorate, now he seems to have been caught being dishonest with the House of Commons. Hardly surprising, I fear he has not only lost the will and know how to run the country, I suspect he is also well on the way to losing his sanity if he has not already done so. He, however, it appears is no longer in charge of the government or it's policies, this seems to be the province of the dark one Count Mandellson , when he's not out fine dining with his society friends.

  • Comment number 25.

    How is it that BBC editors have missed Wednesday's flaw? That morning, the boy Cameron made two absurd claims. That the VAT cut hasn't worked because retailers couldn't measure it. And that government offers to support people who needed mortgage relief and businesses needing loan support just hadn't been applied for. Clear evidence, he whined, that these schemes were failures.
    On the VAT claim, the OECD understands exactly why it has worked and is working: because it did hold up overall spending by slipping millions of small dollops of cash into consumers pockets so that they spent it. Which shows up clearly in the retail sales figures since last November. Turning to the low take-up of government emergency assistance, the terms were set to appeal only to those who couldn't get funding from normal commercial sources. Which they have done. So the fact that the take-up has been negligible is very good news about the true state of our economy and financial markets. They're in better health than advertised.
    The real cash stretching times might come as business growth accelerates and there's a need for lots of cash to fund rapid expansion of inventories and new hiring. But that'll be good news too.

    How come you've not spotted all this?

  • Comment number 26.

    #25

    It's still tinkering round the edges. Until John_from_Hendon's 3 points in #9 are achieved there can be no recovery.

  • Comment number 27.

    DENIAL AND DELUSION

    John_from_Hendon (#9) "but nobody wants to talk about them!!!!"

    That's because, as with #8, if one airs issues which people know are major problems but which they don't know what to do about, airing them highlights culpability and incompetence, and getting upset about it is a means of censoring/censuring the problems.

    Sadly, this doesn't do anything about the problems. Hence decades of accumulating debt and other delusions.

    This is, as I have pointed out, how people like yourself (and SF?) keep problems going.

  • Comment number 28.

    #3 JohnConstable

    "The game needs to change radically such that the voters in England really are driving the political scene and forcing these politicians to stop playing stupid games.

    That is stop being adversarial and start co-operating, but no, they are too selfish for that to happen"


    I don't suppose many people would support politicians being adversarial just for the sake of it, but there are real and fundamental differences between the parties and their approach to the economy.

    The only people who think Labour and Conservative are really the same are disaffected Clause 4 supporting Socialists.

    Labour traditionally believes in Big Government, and that they should spend-spend-spend other people's money, whereas the Tories, also by tradition, believe in Small Government and letting people spend their own money how they wish.

    Unfortunately, I don't see there is much room for co-operation between these two diametrically opposed philosophies.

    It's difficult to know if Brown is genuinely following a plan (albeit misguided) or whether this is actually a 'scorched earth' policy, as he knows it will be someone else's problem to pick up the pieces.

    Stephanie writes "A number of independent commentators have suggested that the Treasury might be being too gloomy about the size of the structural hole in the public finances" I do hope they are right! But from where I'm sitting, it still looks pretty gloomy for the foreseeable future. The job of the opposition is not to co-operate with or collude in Brown's 'Spendaholism', but to oppose him at every step until such time that an election comes.

  • Comment number 29.

    Aren't you ashamed of yourself madam? Osborne has got hold of a leaked report it seems. Has anyone checked that it is a genuine document? Has anyone checked whether it is a final document, an interim version of a policy document or merely a discussion paper. Or anything else that would confirm that this is just further examples of the sixth form common room politics that Osborne seems to thrive on.

    Rather than reporting on leaked documents, you ought to be reporting to the police that Osborne is acting contrary to the public good by condoning the theft and illicit publication of documents he believes are confidential.

    I have seen what was represented as the document only on my television screen in the middle of a news bulletin and even I saw an error that suggests it might be anything other than genuine. Anyone else spot that error? Doesn't look like it or if you did, you have chosen to turn a blind eye to it. I'd love to see the whole document in full.

    Just about every BBC reporter working in the area of business, politics and economics seems at the moment to be working for the Tory Party.

    I hold no candle for any political party but if I were a member of the Labour Party I would feel aggrieved and consider closing down the BBC "news" department until 31st December 2010.

    I wonder how low political and economic reporting can go before we have to close down blogs like these?

    Duncan

  • Comment number 30.

    #29 duncanwil

    They've had all day to deny the document was real. If it were a fake, they're certainly taking their time to tell us.

    If the document is telling the truth, then why is 'contrary to the public good' for it to be revealed? Do you think the public good is better served by keeping the electorate in the dark, and allowing Brown to continue saying things that are at variance with the facts?

    As for the 'illicit publication' to which you refer, who do you think was the past master at waving 'leaked' documents? Check here for the answer!!!!

  • Comment number 31.

    #25 leftilkley - Most people have not spotted the points you raise because they are not delusional - which is indeed good news and gives some hope for the future.

    #28 DistantTraveller. Why don´t you stop repeating someone elses second rate rhetoric and tell us what the "funadamental differences between the parties" are?

  • Comment number 32.

    Post 30

    My comments were really rhetorical: the whole episode is a red herring and a pantomime. What we are seeing is a Tory campaign run on fumes and not petrol.

    Of course it's against the public good to see leaked documents being put into the public domain as if they were real. There is no way on earth anyone from the government could come out and say they were real or not. The document has been got illicitly and rather than sharing it with the world and his wife, Osborne should be shopping the nark who gave it to him.

    I don't need to click through to find past masters at anything, sorry. Not that you are wrong to point it out but it will merely serve to bolster Osborne's argument for publishing this rubbish.

    If the document is true? Excuse me but this document is not a matter of fact is it, even if it is genuine? It's a budget or forecast or proposal or position paper or discussion paper ... call it what you will.

    What do you mean by keeping us in the dark? Are you advocating anarchy such that anyone in the Treasury, or any other Ministry for that, should be free to steal and hand over anything they like?

    What is the motivation of the person who stole that document from the Treasury?

    Duncan

  • Comment number 33.

    No 30 "As for the 'illicit publication' to which you refer, who do you think was the past master at waving 'leaked' documents? Check here for the answer!!!!"

    There is one difference !! When the Tory documents were leaked, they didn't invade the sanctity of Parliament !! Now that Jacqui Smith is gone, who will be tasked with doing it this time ?? Will we see Osborne being carted off in handcuffs ?? Will they be setting up gulags in the Outer Hebrides ??

    Answers on a postage stamp, please !!

  • Comment number 34.

    No 32 "Are you advocating anarchy such that anyone in the Treasury, or any other Ministry for that, should be free to steal and hand over anything they like?"

    Can you define "steal" for us, please, so that we can be clear we are talking about the same subject ?? I have noticed that Ms. Stephanie Flanders have carefully used the words "leak" and "leaked" !!

    Theft is a crime and Her Majesty's Finest can go charging in like Gangbusters to arrest the perpetrator !! "Leaking", on the other hand, is not a crime unless it contravenes the Official Secrets Act !!

  • Comment number 35.

    "Robert Chote, director of the Institute for Fiscal Studies, said the leaked document showed the impact of figures published in the Budget on public spending. "That is a tougher squeeze than we have seen at any time since we were negotiating spending plans with the IMF back in the late 1970s," he told the BBC."

    http://news.bbc.co.uk/1/hi/uk_politics/8258320.stm

    Perhaps this is the real point that seemed to have been missed. Is it possible that this government is preparing the ground for yet another IMF loan with its attendant stringent fiscal demands ?? Shades of Dennis Healey and the Three-day week !!

  • Comment number 36.

    No 31 "...tell us what the "funadamental differences between the parties" are...."

    Well, one lot sits on the left and the other sits on the right of the Speaker's chair !! Not much else, really !! :-)

    Perhaps we should have a new party with a new slogan - "Mr. Macawber for Chancellor" !!

  • Comment number 37.

    Having read the latest posts this evening I think I'll join armagediontimes party!

    We are facing the worse economic crisis that we have ever seen and all you can do is try and score political points from each other!!!

    This debacle wasn't caused solely by Labour. It wasn't even started by Thatcher. It's the culmination of a series of administrations that have wedded themselves to both slavish devotion to the City and the concept of Globalisation.

    Now none of the political parties are presenting anything like a clear policy as to how we are to firstly survive the continuing dpresion or to rectify the flaws in our economic base. Therefore I ask you why YOU are not forwarding ideas?

    If you want to continue political squableing then find a political blog on which to do so. Some of us are at least earnest in our attempts to develop economic answers to economic problems.

  • Comment number 38.

    #32 duncanwil

    If it turns out that Brown has been misleading the House and the public (as he has been accused by others) then I suspect many would disagree with you when you say "it's against the public good to see leaked documents being put into the public domain". Many would say that the public good is better served when politicians tell the truth.

    If the document is 'rubbish' as you suggest, why is the government so far remaining silent?

    In the BBC clip from 1985 (that you don't want to watch!) Brown is asked how leaked information in his possession was obtained. He says "I was given them by a civil servant who was as concerned as I was about a government that has misled people"

    I am afraid Brown has been well and truly hoist by his own petard!

    Just to be clear, Brown has been saying Tory cuts, versus Labour 'investment' - which now turns out to be false.

    Even without the leaked document, Brown's statement yesterday shows a 180 degree turnaround. The point about the leaked document is that there is now an implication that he knew what he was previously saying was factually wrong. For that reason, it is in the public interest that we know whether we can trust the man or not.

    You ask, "what is the motivation of the person who stole that document from the Treasury?"

    Have a look at the Government's own website Directgov and read about Protection of Whistleblowers

    It says "Whistleblowers are protected for public interest, to encourage people to speak out if they find malpractice in an organisation or workplace"

    Interestingly, not all disclosures are 'qualified', eg where covered by the official secrets act. In other words, the government encourages 'public interest' whistleblowing in other organisations, but not against itself!

    As for the motivation of the person blowing the whistle, no doubt it was the same as Brown himself gave in 1985. "I was given them by a civil servant who was as concerned as I was about a government that has misled people"

  • Comment number 39.

    #31 armagediontimes

    You say "Why don´t you stop repeating someone elses second rate rhetoric and tell us what the "fundamental differences between the parties" are?"

    I'm not sure whose 'second rate rhetoric' you think I am repeating!

    As for the differences between the parties, at #28 I wrote "Labour traditionally believes in Big Government, and that they should spend-spend-spend other people's money, whereas the Tories, also by tradition, believe in Small Government and letting people spend their own money how they wish."

    I'm sorry if you find that second rate. It's the best I can do at 1:57 in the morning, but I do assure you they are my own words!


  • Comment number 40.

    This is all cobblers.

    Meanwhile in the real world the Japanese get a new government after 50years of Americo-centrism. And the Chinese go to Venezuela for oil

    http://news.bbc.co.uk/2/hi/americas/8260200.stm

    Any talk of recovery ignores the fact that it has to be accompanied by a sudden drop in the USD, as the main thing propping that up at the moment is demand for cash, liquidity and inability or unwillingness to extend credit. If the dollar drops then that will accelerate Jap/Chinese moves away from the the USD, and the evolution of the Asean+N bloc forming their now. THESE are the important issues.

    Where the UK fits in I don't know, as the UK is neither America nor EU at the moment.

  • Comment number 41.

    Why does the BBC continue on the strange oommercial process 'branding' it's employees: Stephonomics ? Is this a new school of economics?along side Smith; Ricardo; Marshall; Keynes;Friedman (how come he never mentioned? We know that economics is not a 'science'along with all social 'sciences' and especially management and banking 'sciences' because of their NON - PREDICTIVE CAPACITY; BECAUSE OF TOO MANY 'COUNTER FACTUALS )(see Alisdair MacIntyres After Virtue A Study in Moral Theory )-maybe Stephanomics should become part of showbiz, like her dad ! The Steph Flanders Show, A Night With Steph 'Swanning' Around With Steph! with guest 'Bobby' Peston; singing a duet- on a song based on the great American film director William Goldman's book-'Adventures in the Screen Trade'-subtitled NOBODY KNOWS ANYTHING -
    NOW THAT'S MORE LIKE THE ECONOMICS I TEACH.
    To be a little more er, well 'profound' two questions that Steph and Bobby never ask or our er, management. bankers etc
    At each interview, every interview:
    1 What is the size of your wedge -(scouse for pay)
    2 Why have you still got your job ?
    Maybe Steph and Bobby should start by asking themselves that ? then someone should start with Mervyn King-like Merv, how come you got it wrong ? Then question 1 then question 2. Easy.
    have you read Gillian Tett's (the Tett offensive)Fool's Gold? brilliant !
    Also did Steph see the brillant MORE 4 programme Shock Doctrine by Naomi Klien linking Regan; Thatcher; Friedman (how no one metions him anymore)"neo-liberal" economics; Pinochet;Yelstin; Putin; why can't the BBC do economic programmes like that ? Too Oxbridge I quess. Copy to Mark Thomas

  • Comment number 42.

    PS I am not a knew member !1

  • Comment number 43.

    If the hole in public finances is so large, our economy lagging behind Europe and the rest of the world, why are our contributions to the EU Superstate not being reassessed? Should we not be a nett receiver?

    Or put another way if we are subhumed into the Euro Project (without any democratic say btw) is the European Central Bank strong and big enough to support our basket case economy alongside our debt ridden banks?

    The figures that were released also contain a bounce back recovery implying revenue streams picking up very quickly, which makes the deficit figures optimistically lower than reality. The falls in electricity consumption in the industrial sector are staggering pointing to economic inactivity. The last time there was a fall in consumption was WW2

  • Comment number 44.

    IT'S THE DEMOGRAPHICS AND FAN CHARTS...?

    FrankSz (#40) "This is all cobblers."

    Yes.

    Is it (behavioural) economics or is it entertainment?

    That's a question which SF should be asking every day, The problem is, the more the facts of Behavioural Economics sink in (e.g. London's projected growth compared to S. Asian countries like Bangladesh and Pakistan which tripled in population to 150 million each whilst the UK grew by just 10 million, much via Commonwealth immigration), the more SF is likely to have to self-censor or risk being editorially censured because of the RRAA obligation on public bodies.

    The blog is supposedly 'for discussion of the UK economy, how it relates to the rest of the world, and how it affects us all.

    So, silly people are reduced to splitting hairs over exactly how much Public Sector cuts are going to be, when Brown has already said (frequently) that his government and Civil Servants discuss all sorts of scenarios, i.e they plan in terms of fan-charts - i.e. ranges. That's what one has to do, the spread gets widers the further one looks ahead because that's the nature of statistical modelling in dynamical (chaotic/non-linear) i.e uncertain systems (it's a probabilitic notion) like the economy....

    So why the nonsense over precision SF, don't you read the blog? Natural Language is not truth functional, and conventional economics is a 'busted flush'.

    Gotcha ;

  • Comment number 45.

    Away from the arguments over who's done what to whom -

    there appears to be a new "official" world's tallest man according to the Guinness Book of Records.

    http://news.bbc.co.uk/1/hi/world/8259728.stm

    However, there is one that is supposed to be even taller but not verified by them - Leonid Stadnyk from Ukraine

    http://www.telegraph.co.uk/news/newstopics/howaboutthat/6199737/Factfile-the-worlds-tallest-people.html

    And then there is this guy in China - Zhao Liang - who might rival the current "official tallest man -

    http://news.bbc.co.uk/1/hi/world/asia-pacific/8004338.stm

    At first glance, the last guy seems more "naturally" proportioned than the current guy - Sultan Kosen, from Turkey - or the previous guy, Bao Xishun from China. These two look more like stick insects !! The Ukrainian also looks more "natural", too !!

    Perhaps all this about "cuts" and "investments" are more of "MY budget claim is taller than YOUR budget claim" !! Perhaps, if we are lucky, we *might* hear from someone about the date, time and amount and the where and when the axe should fall !! And, perhaps, if we are very, very lucky, ALL out leaders(??) will cease their endless chest-beating and get on with doing something constructive !!

  • Comment number 46.

    'If I were George Osborne, I'd have another reason to be pleased by this memo.'

    If I were George Osbourne I might be a little more circumspect regarding the numbers in this memo.

    It is possible that the numbers have been generated on the presumption that 10% cuts are instigated, if they are then it would generate a surplus after 3 or 4 years of 0.7% which would give a nice war chest in the run up to another election.

    George, those projections are based on Tory policy and GB has been running the numbers to see how to fight the next imminent election.


  • Comment number 47.

    Anyone who reads this blog on a regular basis know that plans have been made for a 10% cut for 2010/2011 as far back as 6 months ago. Its obvious to all that future growth is going to be very slow in the next 12 months, so the treasuries predictions on the budget deficit will be wrong by April 2010. I still believe a 20% cut across all services will be required to off set the ever increasing welfare bill,we will be up to 3,000,000 by April 2010.

    To Jaded(Flawed)Jean-The blog is about the deceit of GB and the inability of the treasury to tell the truth, they make the bankers look like honest john's.

  • Comment number 48.

    Jadedjean at #8 and #27

    "That's because, as with #8, if one airs issues which people know are major problems but which they don't know what to do about, airing them highlights culpability and incompetence, and getting upset about it is a means of censoring/censuring the problems."

    No, your comment at 8 was racist. I complained about it, and the moderators removed it. Nothing to so with your messianic pretensions.

  • Comment number 49.

    #44. JadedJean wrote:

    "So why the nonsense over precision SF, don't you read the blog? Natural Language is not truth functional, and conventional economics is a 'busted flush'."

    Talk about the pot calling the kettle black! You are the one of the biggest culprits in diverting the blog away from economics even though you criticise others because they divert from "for discussion of the UK economy, how it relates to the rest of the World, and how it affects us all".

    I have never yet seen any evidence that you understand numbers or running a business, - and I argue that economics, if it is about anything (which in its present form, I have good logical reasons to doubt!) it is about the numerical measures of everything and their interrelationship - instead you always get back to you two main issues Behavioural Economics, which is just a wish washy load of stuff from innumerate people who think that hand waving and empathising contributes to economics, and your other issue, which is to promote a genetic centric view of economics which I find inseparable from down right racism and is, from a moral and ethical standpoint, abhorrent. Your obsession with a hatred of immigration is racist and nothing more. Immigrants are the lifeblood of an economy.

  • Comment number 50.

    If two imaginary (non normal, but super springy legged) families had mean heights of 85cm and 100cm respectively, the standard deviation for each was 15cm, and the first family comprised about 15% of the overall population - if both families were to compete in a 'national' high-jump, what do you think would happen (all other things being equal, as the bar was raised from 100cm to 115cm and finally to 130cm?

  • Comment number 51.

    hughesz (#47) "To Jaded(Flawed)Jean-The blog is about the deceit of GB and the inability of the treasury to tell the truth, they make the bankers look like honest john's."

    And if you pay attention you might learn why they are unable to tell the truth. But you are not paying attention are you? Grasping why Natural Language is not truth-functional is a good place to start.

    verymuchso (#48) "No, your comment at 8 was racist. I complained about it, and the moderators removed it. Nothing to so with your messianic pretensions."

    In your view....Are you going to explain why you think it was so, and have you looked at all into why it was not? Have you looked into what race-realism as epidemiology is, and why it's so central to Behavioural Economics? (see the misunderstanding of 'The Bell Curve (1994)', the ETS (feb 2007) report, and the Leitch Review from the Treasury in 2006) which is all essentially about 'class' (SES) not race per se. Sadly one can not easily distinguish the two as they are linked as a function of what's known as multicollinearity in statistics - which cleverly played by anarchists politically - se our schools' CVA logistic regression model.

    My prediction:- If you, and others keep inducing public bodies to censor this important material and what follows from it, you will persist in contributing towards even more people not seeing what's driven recent economic events and thereby contribute towards perpetuating them.

    That's how this pernicious game has been played using the unwitting who mean well. It's played against the majority, who are the victims. My advice:- don't be too sure of your beliefs. That's how bigots operate. Look at the ETS report (the video makes good start) and think. These data trends are what's driving the Liberal-Democratic economic problems. The US administration knows this. Watch the video and you will see why I say that.

    John_from_Hendon - Sadly, you still haven't got much of a clue. What you don't know is just what you don't know. You should be trying to learn, not reporting your states of ignorance as if that justified moee ignorance. You are just responding to your own mental states, not to what is posted. It's a very common problem in our solipsistic/narcissistic and dysgenic times.

    Try to take your clues/cues from solid empirical evidence, not from your conditioned intensional/affective states.

  • Comment number 52.

    IMHO titles such as "Gotcha' suggest that most UK citizens are simply viewers of a game ... where politicians, just like wrestlers, pretend to throw each other around and provide news stories for the media, without anything really happening/changing, and with the 'winners' in the 'bout' getting the VIP tickets for the few lifeboats on the sinking ship ... unless people want to sink whilst these people have fun (at our expense), more people need to stand up and be counted ... say enough is enough, boot this 'side-show' off the boat (without the lifeboats) and rapidly fix the hole in the boat ... then we might get somewhere ... without all the current rats/leeches.

  • Comment number 53.

    John_from_Hendon (#49) "instead you always get back to you two main issues Behavioural Economics, which is just a wish washy load of stuff from innumerate people who think that hand waving and empathising contributes to economics"

    Is it at all possible that you do not know what you are talking about?

    Might I be illustrating something rather important here?

  • Comment number 54.

    What are the current rules and punishments for misleading parliment?

    Harsard clealry shows that week on week in May and June G.Brown told parliment that come the election the votes would have the choice between Tory Cuts and Labour increased investment.

    This document shows that the goverment is (and was at the time) planning the largest spending cut in a generation.

    So He mislead parlimenr and Darling failed to issue a written correction to Browns statements. My belief is that one or other of them intentionally mislead parliment.

  • Comment number 55.

    This leaked document is truely shocking

    1/3 of all goverment spending in 3 years time will be on welfare and interest payments!

    And this is a GOVERMENT forecast by a goverment that ALWAYS under estimates spending and over estimates growth and tax receipts!

  • Comment number 56.

    #51 JadedJean

    To jump in here - your comment at #8 was racist because it stated in no uncertain terms that differential levels of attainment among ethnic minorities in the UK was based almost exclusively on genetics.

    If you are suggesting that certain ethnic minorities are inherently inferior, (measured by the extremely narrow, biased and imperfect method of Key Stage tests?) that is overt racism.

    Cultural and environmental factors are far more important in determining educational outcomes in such UK tests than the very minor differences in genes between ethnic groups, which tend to have more of a physical manifestation (skin colour etc) than any of mental capacity, which is what you insinuated.

    Please do not post such abhorrent and erroneous tosh here.

  • Comment number 57.

    jadedjean #47:
    "In your view....Are you going to explain why you think it was so, and have you looked at all into why it was not?".

    Notwithstanding your belligerent tone, I'm happy to explain why your comment was racist. The clear and direct implication of your argument was not only that ability is genetically determined but also that, for that reason, some ethnic groups are genetically inferior to others. That's racist, which means it's seriously offensive to many people, including but not restricted to members of the ethnic groups concerned. It's also bad science. It wouldn't be accepted by any reputable academic journal, because it's wrong.

    For the rest of what you write, your references to 'behavioural economics' make it sound like a modern equivalent of the Victorian science of phrenology, and it has about the same reliability. It doesn't contain the secret of the universe, and not everybody who disagrees with you about that is stupid, bigoted or malevolent. You're entitled to write it if you insist, and it's not that that gets your comments removed. It's the racism that is unacceptable, and even if it weren't against the law I hope people would still have the courage to complain about it.

  • Comment number 58.

    BASE RATE NEGLECT

    Here are some data for the numerate to work on and to ponder a little about.

    Bear in mind 2% of the USA population when you follow this through, and consider observed-expected in contingency tables.

    Now, what are the possible explanations for this remarkable departure form the expected? Here's a clue.

    What have you noticed #5, if anything?

    Finally, and just a little ironically, where are Richard Hernstein's and Howard Rachlin's names?

  • Comment number 59.

    #58

    Er... what exactly is your point? Can we have what you are trying to say explicitly stated?

  • Comment number 60.

    BIAS VS RATIONAL ANALYSIS AND DISCUSSION

    Those who read this blog carefully, and who follow the changing demographics of the USA (it will be about 50% White American by 2050 according to the US Census Bureau), and wh understand the basis of human diversity, will know that SF's blog 'What US Healthcare Means...' is at root about who's going to pay for the differential, dysgenic fertility which is now changing both the USA and ever more so, Europe (cf. London and the SE especially) as a function of anarchistic liberal-democracy and the absence of, or limited efficacy of socialist Central Planning.

    When John_from_Hendon asserts that "Immigrants are the lifeblood of an economy." one has to ask, looking numerically at their GDPs and health-care doctor:patient ratios, is this (with a little rewkring in terms of local TFRs) also true for California, Mexico, Pakistan, Bangladesh and Sub-Saharan African countries?

    My point is that people can assert what they like, cling to what they truly believe etc, but is what they like true and is what they don't like false? Might an affect bias, i.e social desirability (narcissism) be at work here at the expense of rational analysis and planning, and might that be self-destructive demographically and economically? To me, this is an empirical fact. I think more people should become aware of it, not less.

  • Comment number 61.

    #53. JadedJean wrote: innumerate rubbish as per usual

    Just because people sprinkle numbers throughout their works does not make them numerate - take for example the use of number in economics where far too often the use of precise numerical values without any idea that there is any error in the make up of the figures is used to give these figures a pretence of authority and accuracy. This misuse of number by the essentially innumerate is just one of the problems with the social, psychological and economic - so called - sciences.

    Another major problem is that they attach the word 'science' to give their studies a false sense of authority when if they truly understood the numbers they use most of the time, the inherent errors in the data make their certainties just conjecture. The best that can be said about these attempts to make these subject of any value tends to be in the qualitative understandings that they develop - much of the numerical 'conclusions' they draw are not worth the paper they are written on. Many of the 'certainties' that you claim are nothing at all and the very best that can be said about their producers' is that it keeps them off of the street. Re-purposing (and misquoting) Henry Ford "Behavioural Economics is (largely) bunk"!

  • Comment number 62.

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

  • Comment number 63.

    #60. JadedJean wrote:

    On immigration - where would the USA have been without immigration?

    Your bigotry is appalling and totally without any merit. (As well as being morally and ethically unacceptable.)

  • Comment number 64.

    "So much for the politics. As I mentioned on Today, the most interesting thing about the leaked numbers from an economic standpoint is just how pessimistic the Treasury is being about the rise in social costs over the next few years and, especially, the rise in the cost of servicing government debt" quote SF.

    Why was this not expressed in the budget release 9 months ago!! I think the treasury was bounced by GB in issuing an optimistic scenario on which GB could argue his stance on continued public expenditure. The gamble has not paid off, growth is still none existent (Less than 1% in Q3) and welfare bills are growing considerably month by month, add in a collapse in tax receipts in 2008/2009 and 2009/2010 and treasury figures look weak.

    A lot of people above state that they are only following orders ,well I disagree,the mandarins in the treasury are culpable and should be sacked for gross misconduct(Without pensions). Any idiot can show a fan chart with probabilities across the spectrum, they are paid high salaries to provide advise and get the forecast's right within a small tolerance. They are there to provide the government with independent, reliable advise, not play footsie with GB.

    It raises the point if we really need a bloated treasury, perhaps we can just use an average across independent forecasts and save some money.

  • Comment number 65.

    The Prime Minister was blattantly lying about cuts. It may be he was even in denial within himself.

    This is not a trivial, partisan politics issue. It is a matter of character.

    No country can trust a leader such as this who has his finger on the nuclear button.

  • Comment number 66.

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

  • Comment number 67.

    #57 verymuchso. Like you I am not particularly well disposed to the idea of going around searching for differences between people - differences that will ultimately be described as "good" and "bad" and then used as a basis to discriminate against one or other group.

    However if you think people have the courage to complain then you are surely having a laugh. No courage whatsoever is required to contribute to a BBC blog. Those things that would take courage to complain about remain for the most part unseen, by people who refuse to open their eyes to see.

    Are you aware that the headline of this piece "Gotcha" is in exact replication of a headline in the Sun designed to celebrate the sinking of an Argentian warship with a considerable loss of life. Did you complain about that, and are you complaining now.

    Do you know that your government is directly responsible for a slaughter of epic scale in Iraq. Are you complaining about that?

    Where are spending cuts going to come from? Will they or they not include the scrapping of a Trident nuclear replacement. Who knows, we can but guess, but we do know that we are prepared to consider war in order to prevent Iran from gaining what we already have. Are you complaining about that.

    Those kind of things, and there are many, many more would take courage to effectivelty complain about.

    So racism is wrong - who could argue. Is not stealing from the unborn also wrong? (which is effectively the core of current economic policy) Who is complaining about that?

  • Comment number 68.

    On the other hand Churchill was a drunken soak. He was also an emotional man who knew what he was sending young men out to do. Strangely, they all loved The Old Man as they called him. He was also the product of aristocratic breeding and socialisation at Harrow. I was fascinated to discover that he was of a small stature.

    Anyway JJ, do I take it then that Houston Stewart Chamberlain was right?

  • Comment number 69.

    Some time back I happened to find myself in Beirut. Someone had shelled a cemetary. Walking around looking at the damage an old Lebanese guy came up and informed me with some sadness that in Lebanon there now existed people who wished to make war on the dead.

    In the UK today today the debt splurge, the sophistry, and the dissembling all sums to the simple policy of making financial war on infants and the unborn.

    Makes you think. But I suspect that in many cases it does not make people think - which is itself instructive

  • Comment number 70.

    Your leak's bigger than my leak - sounds like an argument at a Welsh village fete.
    Has anyone in politics got the intellect, vision and leadership to move the debate on from cuts, which we all know are coming?
    With the social security bill as high (and as SF indicates, structural) as predicted, may I suggest this be the first place to tackle government expenditure.
    Then may I suggest we reduce BBC costs by ending daytime TV so that people have to do something else with their unemployed time.
    Lastly, at the risk of being controversially Keynsian, we bury welfare checks at the bottom of coal mines so our unemployed don't feel like they're victims or their pride is hurt by claiming something for nothing.
    Any better suggestions, such as direction of investment to the few industries where we may have a competitive advantage, should crowd out the spending on wasteful enterprises like heating prisons.
    We've all got to get off our backsides to get through this but let's start where the featherbedding is at its worst.
    Vince Cable's list, whilst admirably candid, to me doesn't start to tackle the rot in our economy or society.

  • Comment number 71.

    John_from_hendon (#63) "On immigration - where would the USA have been without immigration?"

    In far better shape than it is today and will be in the future?

    What you have to envisage is how a hostile group/nation might go about trying to desroy another group/nation without risking nuclear anhilation or attack back in response. Use that as a 'what-if' to get you thinking along the right lines. Then look at the legislation in the 1920s in the USA and what's slowly happened since. Finally, look across the world and ask youself, if we made countries more like country B demographically what would happen, other things being equal. It's basically that simple. Genes make bodies, and bodies behave. Voices of self-righteous dissent are largely uninformed, i.e. empirically groundless. Some are up to no good, most mean well I suspect. However, they all cause far more harm than good.

    Censorship and self-deception won't change the facts - they just make them harder to deal with.

  • Comment number 72.

    John_from_Hendon (#61) "Just because people sprinkle numbers throughout their works"

    You clearly don't know anything about any of this work. The Behavioural Economics I am referring to is lab based work on how behaviour is allocated as function of schedules of reinforcement, i.e how 'choices' are made. It records what happens. The models fit the physical data. It is an area renowned for it's empirical austerity. For example, the VI in VIVIVI stands for Variable Interval and VR in VRVRVR for Variable Ratio. These are contingencies, or schedules, of reinforcement.

    Most people will not explain things like this to you and foredeckdave etc because they will find you painfully, i.e offensively ignorant. Your response to being corrected is abuse.

    How rational is that? I'm happy to use your behaviour and that of others like you to show others why we are in this socio-economic mess. I hope some people are learning rather than complaining.

  • Comment number 73.

    cosmicayeaye (#59) "Er... what exactly is your point? Can we have what you are trying to say explicitly stated?"

    Consider it an exercise in thinking for intelligent people. If you need it spelled out, you don't need to know.

  • Comment number 74.

    armagediontimes (#67) "Like you I am not particularly well disposed to the idea of going around searching for differences between people"

    Which is why so many people, including economists, do not know what the truth is from research in behavioural and medical genetics. You should therefore ask youself whether that may be harmful in itself given that people differ genetically, and groups of peple do too and prevalence rates for disorders differ, which means one has to adjust base-rates accordingly or risk making erros of service provision. This means that health-care must differ as a function of group membership. It will also have implications for insurance risk/premiums. Who will pay and for what?

    Say you encouraged migration of groups which are known to have much higher prevalence rates for diabetes etc. Say some out of area (international) supermarket chain sets up to sell lots of pizza, sweet drinks etc to these latter groups. Who pays for the consequences when in their 40s hordes of them find their feet start giving them major problems, their eyes start deteriorating through obesity induced insulin resitance etc. What if other groups move out of the neighbourhood because their taxes go up and resent forking out for these groups who for other reasons can't contribute to the local economy except by feeding the profits of the internationally based supermarket?

    There are no differences between people genetically, they say. It's racist to assert there is....We are appalled by this fascist assertion. People are free too choose. This is a liberal-democracy. keeps saying that and we will complain to higher powers and have you stopped. You are bad for our business....

  • Comment number 75.

    No 38

    Whistleblowing? I don't think so. I have very little time for these tree hugging whistleblowers. You seem to be trying to suggest that I am sympathetic to Brown by trotting out a case where he brandished some leaked documentation. No! I don 't care who it is, leaks and theft are not whistleblowing.

    A true whistle blower will not have got the audience that Osborne has rustled up for himself. If I were concerned that something dark had happened then Osborne and his ilk is the last of the avenues I would go down.

    I have been in the position of whistle blower in the past and it is a very serious business and the process I followed was a far cry from shouting from the roof tops. After all, even I appreciated that I might, in the end, be in a minority of one.

    I am going through a campaign at the moment in relation to unprofessional and improper behaviour by A Level and GCSE examiners and their boards of examiners. I have been able to get journalists to write articles I have had MPs involved ... nothing has changed. However, at no stage did I try to get anything in the news in such a dramatic fashion as the latest charade.

    No 34: stealing means to take without consent, deprive someone of something they own ... The mere fact that you work might in a department in an organisation does not mean that you have the right to take and use the information to which you have access. Going through a proper process of revealing a crime or irreglularity is not the same as leaking, in my opinion.

    I might be in a minority in believe that this current story is all hogwash but I just cannot accept the way these civil servants feel they have the right simply to walk off with information and hand it over for political gain to a showman like Osborne.

    Duncan

    I like to think the difference between my actions and the current pantomime is one of integrity.

  • Comment number 76.

    #73 JadedJean

    "if you need it spelled out, you don't need to know"

    Perhaps if you did spell it out, it wouldn't get past the moderators.

    If you can't say something explicitly and intelligibly, don't say it.

  • Comment number 77.

    No 44 JadedJean ... EXACTLY! How come not everyone can see that?

    No 54 Merely drawing up a table of data or scenario does NOT mean that it is a plan that is to be implemented. In the real world, people prepare various budgets and plans. I don't know any normal organisation that does not prepare a variety of scenarios based on a wide range of inputs before settling on its final budget. Moreover, these self same organisations might even prepare their budgets and then change their minds when, for example, banks start collapsing left, right and centre.

    Gotcha is a pathetic entrance to a very serious issue and this charade ought to end up with serious apologies being made and that person in HM Treasury owning up and defending themselves. In addition, that civil servant has to be prepared to be dismissed.

    Duncan

  • Comment number 78.

    stanilic (#68) "Anyway JJ, do I take it then that Houston Stewart Chamberlain was right?"

    About what exactly?

    Stick to what I am posting.

  • Comment number 79.

    #72 jadedjean,

    "The Behavioural Economics I am referring to is lab based work on how behaviour is allocated as function of schedules of reinforcement, i.e how 'choices' are made."

    When it comes to defining economic behaviour (choice if you will) it is about as much use a knowing how many beans it takes to produce a fart! You would get far more benefit from reading Blackwell, Miniard and Engel's Consumer Behaviour if you really wanted to learn about behavioural choice.

    Now, you can take my comments as a personal attack if you so wish. However, they are presented as unemotional correction of the validity of your claim.

  • Comment number 80.

    Armageddiontimes #67
    "So racism is wrong - who could argue. Is not stealing from the unborn also wrong? (which is effectively the core of current economic policy) Who is complaining about that?"

    The notion of 'stealing from the unborn' is very strange. Those who are not yet born have no identity as individuals, and therefore no identity as a group. Rights adhere to individuals; a hypothetical individual who doesn't actually exist doesn't have rights. We may feel a sense of obligation to pass on to our descendents a world they can live in, but that is not the same as attributing rights to 'them'. If they existed, any such rights would by definition be limitless and unidentifiable, like the right-holders themselves.

    You then leap from that questionable assumption to the notion that all public debt is theft from future generations (who don't own anything because they don't exist). If we really believed that, we would be unable to take any action to protect our own interests for fear of adversely affecting a potential undefinable future right, which indeed such an action must do. There may be good reasons for constraining public debt, but that it's 'stealing from the unborn' isn't one of them.

  • Comment number 81.

    JadedJean

    I have been trying to follow your line of arguement.

    I know the US government and Federal Reserve provided the money for banks to lend to “risky” (would you say Immigrants?) people in order for them to get a mortgage. The banks, under normal free market conditions would not have done such a thing since the people with the risky mortgages could never pay back the loan anyway.

    However, the banks provided these loans because they were backed by Fannie Mae and Freddie Mac and the Federal Reserve. Organisations like Acorn and the SEIU were no doubt heavily involved with pushing for the legislation that made this possible since their work involves housing.

  • Comment number 82.

    I have a couple of points:

    JadedJean/John from Hendon In many ways all economics is about behavior Take the simple example of the effect of price on the demand/supply curve producer in all "Noddy guide to economics" It is essentially based on the fact that the behavior of people, if you assume they are rational, is predictable (ie price goes up fewer people buy) and because it is predictable it is also capable of being teste. The interesting thing is that when you look at populations on mass their behavior is remarkably consistent irrespective of whether they are black, white, rich, poor, Christain, Muslim etc. Of course there are differences, usually deep routed cultural differences that can muddy detail (for example some good sell very well in the UK but bomb completely in US) but these tend to at the small detail level not at macro-economic levels.

    I do get very annoyed when people try to use behavioural economics to justify type casting the poor or non-white people (and I am both white and not poor).

    Back to the real debate.

    Great all political parties agree public spending needs to be cut. There is even a broad consensus around the £100 billion level (Libs slightly more, Labour a bit less) i am starting to believe that this figure is a bit low but maybe once inflation is factored in over say 5 years that brings back to balanced budget. So lets ignore the numbers what I want to know is what is going to be cut. None of this phony "effeciency savings" - how many public sector jobs, what areas of govt will be closed down completely that sort of thing, real detail so I can judge whether any of the parties have a clue.

    So far I have seen Ian Duncan Smith making very sensibe proposals about social security - which to be fair could have been written 10 years ago by Frank Field for Lab. Libs/Con agreeing to axe ID cards, some proposals to scrap trident - all good, scrapping aircraft carriers (daft) but this is tinkering around the edges.

    Lets get to some bigger numbers:

    1. Public sector pensions schemes should be closed to new entrants with the aim, when economy recovers to close them to existing members to.

    2. Defence ministry staff reduced by 75% (not the armed forces just the civil servants particularly in public procurement). In fact I would reduce all central govt ministries (not the front line staff but the civl servants in Whitehall) by at least 40%, I bet most people would not notice the difference

    3. Time limit for benefits for people who are able to work (works in US). So for example if no job after 1 year your benefits are cut - subject to extended time limits for parents with children under 6.

  • Comment number 83.

    #80 verymuchso. I don´t see how the notion of stealing from the unborn is strange - although I do see it and its apologists as repugnant.

    All debt is borrowing from the future - it can be nothing else. Committing to a level of debt that is known at the time of the committment to be unrepayable is theft. It is very simple, that is how the English language works. Try it on an indivudual basis and you will quickly find that that is also how the law works.

    I guess your way of thinking about the future is fairly common and I guess that explains the ongoing ecological destruction of the planet.

    Days of sadness



  • Comment number 84.

    cosmicayeaye (#76) "If you can't say something explicitly and intelligibly, don't say it."

    If you can't grasp the obvious, perhaps you should show some humility? As it is, you reveal your poor grasp of biology through your ignorance and arrogant sense of 'entitlement'. You clearly don't understand what racism is. It is not racist to tell the difference between races. It is not racist to say that blond hair and blue eyes is more common amongst Europeans or that the risk of breast cancer is 4x higher (through BRCA1 and BRAC2 mutations, i.e over 60% are at risk) amongst the Ashkenazi compared to other Europeans. Or that the risk of prostate cancer is much higher (through genetic risk) for Black males.

    The rest of what I have had to say follows.

  • Comment number 85.

    #74 Jadedjean You describe pretty accurately the main reasons I am not well disposed to go around searching for differences between people.

    Once identified the differences are merely used to discriminate against certain groups. Information of the sort you seek will never ever be used to develop policy reposnses helpful to the population as a whole.

    In a perverse way I find the manufactured outrage to your wilder postings amusing. All of the morally disgusted most likely being perfectly happy to continue dealing with companies who are undertaking the same kind of research you are talking about, and who are undertaking it purely to exclude certain classes of people from access to medical insurance or life assurance, or from certain careers.

    You are in fact very good for business - it is just important that the people never ever understand this, otherwise they might start questioning the business.

    Idealism meets reality, and idealism gets crushed - so what is new?

  • Comment number 86.

    #82 Justin150 Great idea to reduce unemployment benefits - as you say it works in the US. That must be why 1 in 50 children in the US are homeless and 1 in 10 Americans qualify for foodstamps. Still it keeps them in low paid work though - well all apart from the 16.9% of them who are unemployed according to the U6 measure of unemployment.

    Maybe you are volunteering to become homeless just so the rest of us can admire all those new aircraft carriers you are so keen on.

  • Comment number 87.

  • Comment number 88.

    No 70 "Your leak's bigger than my leak - sounds like an argument at a Welsh village fete."

    Either that or a pub loo near closing time !! :-)

  • Comment number 89.

    foredeckdave (#79) "When it comes to defining economic behaviour (choice if you will) it is about as much use a knowing how many beans it takes to produce a fart!...Now, you can take my comments as a personal attack if you so wish. However, they are presented as unemotional correction of the validity of your claim."

    You clearly don't know how to accurately describe your own behaviour.

    You are demonstrably (publicly) very prone to inaccuracy. That's putting it nicely.

    WhiteEnglishProud (#81) Whilst the Community Redevelopment Act in the USA and changes to regulation in 1999 are linked (I've covered this at length long ago, here and in NN blogs), it is not a matter of race per se, but the distribution of lower cognitive ability (numeracy and literacy limited by gene-barriers), prevalences and birth rates. There were lots of White NINJA ARMs and other predatory loans too - and it thrived on exploitation of something which has been highlighted by research in Behavioural Economics - namely melioration and hyperbolic discounting. The point to grasp is that those who did this knew which groups to target, and they knew how this works. Making out that there are no group differences made it much easier for them to get away with this as it made caveat emptor easier to sell in pursuit of deregulation.

    I am essentially trying to protect vulnerable people by pointing out how predation works. Those who attack what I am saying (or demanding it is censored) as 'racist' are in fact aiding and abetting predators. Whether they realise it or not.

  • Comment number 90.

    OEDIPUS LUSTED AFTER JOCASTA BUT NOT HIS MOTHER?

    duncanwil (#77) "No 44 JadedJean ... EXACTLY! How come not everyone can see that?"

    Might it because too many people keep trying to censor (complain about) or censure it? Even in these blogs we see a decadent status quo sustained through too many people defending it whilst also demanding change! These people have little or no grasp of the domain of the intensional and its logical problems, nor can they be educated. And so, it continues to sprial down..and down and down...:-(

    Please note BlogDog.

  • Comment number 91.

    No 82 "2. Defence ministry staff reduced by 75% (not the armed forces just the civil servants particularly in public procurement)."

    The term, sometimes used, for such persons is "chairborne warriors" !! When they out-number front-line troops, that country's armed forces are in trouble, as witness the current problems with equipping of the front-line troops in Afghanistan !!

    One of the most effective but most politically impossible cuts is to knock off the top 5 ranks of civil servants. The savings there will save many more jobs nearer the front-line !! And, as mentioned above, cutting gold-plated pensions would also be effective !! The question is "Who will wield this axe ??"

  • Comment number 92.

    78 JJ

    I am

  • Comment number 93.

    FrankSz (#87) The molecular mechanism, from gene to behaviour could be spelled out step-by-step and there would still be those who would clamour to have the reports censored because they wanted it to be otherwise or had a vested interest in it not being so. What I find so disturbing is that despite all the evidence, the BBC moderators will sometimes uphold complaints from ignorant people, who, through their actions, prevent others from becoming better informed. That is a) in breach of the BBC remit to educate and inform, and b) it helps reinforce problems that we are already enduring through years of such people having their egregious way at others' expense. Sometimes this is political.

    I hope the moderators give some careful thought to this.

  • Comment number 94.

    #89 jaded

    Careful, your narcisistic personality disorder is showing again! You are wrong but just too frightened of the consequences of admitting it.

    You can continue to propogandise you flawed philosophy, and demand that those who oppose you are part of the problem. However, all the noise will not make that philosophy right.

    In the modern venacular: END OF

  • Comment number 95.

    #82. Justin150 wrote:

    "I do get very annoyed when people try to use behavioural economics to justify type casting the poor or non-white people (and I am both white and not poor)." absolument! That is the unacceptable racist point of view whic I abhor and has no place in economics!

    #94 I concur.

    Back to the real debate.

    Yes

    The real debate is about numbers. The gigantic derivative market that has collapsed valued at trillions of dollars the costs of the collapse of which have yet to crystallise. The moral issues of getting the poor to bail out the rich and the economic consequences of such action (let alone the moral ones!)

    The way these huge number are still being hidden is crass. They exist and ignoring them is just stupid. Hyperinflation could reduce historic debt to nothing but again what are the consequences in terms of wealth transfer and stability?

    .
    .
    .

    Must go and change for dinner tonight...

  • Comment number 96.

    #89. JadedJean wrote:

    "those who attack what I am saying (or demanding it is censored) as 'racist'"

    two questions-

    1. How do you know your deleted submission were deleted as they were found to be racist?

    2. Do you feel guilty and are you ashamed of your racism?

  • Comment number 97.

    stanilic (#92) "78 JJ I am"

    Look back at your post. What you have said above is false.

    foredeckdave (#94) You most definitely "are part of the problem". You demonstrably have a very weak grasp of/respect for, reality.

    I hope some more people can now see why I say this. I hope they can also see the consequences of such behaviour elsewhere in our society.

  • Comment number 98.

    #93

    I should imagine the moderators are a group of people working 24hr a day, or several groups spread across timezones, using some internally developed software for rating contributors in terms of likelihood of being censored and also automatically highlighting some of the content. Perhaps some are trainee editors. I would imagine that most of what they are doing is going over the content in a cursory semi-automated way, occassionally looking more deeply into things when something is highlighted by a contributor. Then they will probably follow some other process that involves erring on the side of safety.

  • Comment number 99.

    John_from_Hendon (#95) "#82. Justin150 wrote:

    "I do get very annoyed when people try to use behavioural economics to justify type casting the poor or non-white people (and I am both white and not poor)." absolument! That is the unacceptable racist point of view whic I abhor and has no place in economics!"


    You are both demonstrably incapable of reading what is written without translating it in your heads into some mish-mash which was never written. This appears to be how you have been educated as creative writers - i.e fantasists who go beyond the information given and who cannot analyse logically in a disciplined manner. All you are doing is misreading wbat has been written and then complaining about your own shoddy reading ability plus muddled comprehension. Note - your own!

    As to #96, read #48.

    You clearly have absolutely no grasp of what you are talking about or what I am talking about. You don't even understand what racism is. This should be clear to anyone with any intelligence reading these blogs. There are mean differences in IQ between racial groups. This is not controversial any more. Excluding this finding from economic thinking and planning is at the cost of sound economics and planning as conventional economics wringly assumes equality or randomness and that environmental input can change educability. We have no evidence for that. Gene barriers prevent gene flow. Assortive mating limits gene flow as like tend sto mate with like. Do you understand the implications? To repeat, you are both projecting your own muddled thinking, and misattributing. Try taking what is actually written, quote it verbatim, follow the links, and see how silly your posts actually are given the abundance of evidence. There are also important sex difference in IQ. There are twice the number of males at IQ=120 as females. This has major implications for sex representation in some jobs. If that is not heeded, it will lead to dangerous incompetencies through affirmative action. The sort of consequences which may destroy an economy if not put lives at risk. One of the only reasons things are not far worse as a consequence of modrn daft thinking is that so much is no automated/computerised!

    You are both examples of the shoddy/dangerous analysis/thinking and writing which is slowly destroying this country and that of the USA.

  • Comment number 100.

    Capitalism is in crisis.

    Human needs are not being met, yet vast numbers of people are out of work.

    Capitalism won't put them to work unless they return a profit.

    Who is trying to understand how it is that we can have such a crazy situation and what the way out of it is?

 

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