Stimulating the global economy
NEW YORK: Gordon Brown has signalled that he regards help for people on low incomes as the most efficient way to stimulate the economy.
Speaking in New York, the prime minister said there was a huge debate about what works, and suggested that government faced a choice between cutting taxes, boosting infrastructure spending and helping people on low incomes. He noted that around half of the money spent by the Bush administration on tax cuts had been saved rather than spent and that it was hard to speed up infrastructure spending.
However, he pointed out, people on low incomes were inclined to spend. Stand by for increases in tax credits. Asked about Britain's borrowing problem, the prime minister said we can afford to do this, even though current borrowing is high. That's an acknowledgement he's rarely made before.
He went on to tell the tale of how he'd found a copy of Keynes's book in the library of the Treasury. A book the economist had donated in 1929. Inside, the permanent secretary of the day had written "inflation, extravagance, bankruptcy". The prime minister hopes that that's not what people will accuse him of, although I think he knows that they may well.
There was one other interesting note - a shot across the bells of the incoming administration of Barack Obama - when he warned that protectionism was a road to ruin. In a country where they're discussing bailing out the car industry, the prime minister must have known exactly what he was saying.
I'm 
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That's a really fantastic idea, Gordon. Let's give the lower paid people, who you say are inclined to spend more, increases in their tax credits so they can go out on the High Street and spend it all on a new plasma TV., car, or holiday abroad.
Just what planet are you living on, Mr Brown?
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Nick,
when will he ever learn.
He is now giving the clearest signal yet that we can now expect a Spring election.
It will be announced that the tax credit system is the best way to get people to spend, your analysis is correct on that, because they will spend.
However, the credits will not be paid immediately, it will be in your April paypacket. After the election then the situation will have deteriorated and the taxpayer will then be hit, it is impossible for there not to be tax increases.
I am not being represented by Brown or his government, I do not want my children and grandchildren to be saddled with debt. Disgraceful.
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CEH
It is a wise man who recognises his failings.
You are forgiven provided you don't stray back into your irritating repetitive pseudo-intellectual blathering ways.
Confucius say "Pigs might fly"
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There are some of us out here who have been saying that the lower paid have been over-taxed for a very, very long time. So why hasn't Mr. Brown been listening?
Now the fat is in the fire and his job is on the line, he comes out and justifies reducing taxes on the lower paid.
Anybody with any experience in infrastructure development knows that there is a substantial time lag between inception and the actual project. So rather than his ministers moaning about the Olympics I have become a convert to the idea as it will create needed jobs.
I also note that Mr Brown has taken it upon himself to bully Mr Obama. Mr Obama, however, has a mandate.
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"Gordon Brown has signalled that he regards help for people on low incomes as the most efficient way to stimulate the economy. "
Hm, so doubling their taxes was not a productive move then.
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No doubt many of the postings currently awaiting moderation make the same point, but "a shot across the bells"?
Er, pardon?
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I'm tired of listening to Brown repeatedly telling the public that he wants tax cuts and that he wants to help businesses.
I have just received my tax bill from my accountant and although my business turnover has remained static, and gross profit remained static, my tax has increased by over 10%. Small business tax rates, which for small companies with 5 employees like ours, are defacto personal tax rates because I receive most of my income as and when as a dividend. My taxes will rise again next year, in total and for this tax alone, by some 15%, from a rate of 19 to 22%. In addition my rates, both commercial and domestic have risen.
When Greedy Gordon came to power he promised a regime of non-spin. We had 12 moths of reality and most people realised that GG was simply not up to the job, the only area he could claim some credibility was his handling of the economy. This has turned badly south, any and every indicator points to a very bad performance. And yet we have endless spin about how good GG is. GG is now spinning like mad, assisted unfortunately by the BBC, and is portraying himself as a tax cutter - he is simply NOT. He is either deliberately lying, or deluded.
Spinning is lying, as the aim is to mislead and misrepresent, which is a fib.
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Stimulating the poor is all very worthy but it's not going to get an economy going again. They will enjoy having a bit more cash in their pockets no doubt but it is business that needs to get us out of this, nothing else can. So what about making it easier for business to do business - cut some red tape for big and small business. Or offer to take some of the red tape burden into government.
Having said all that, I thought they were going to let it rip on big projects? Surely this is a reversal of policy?? Please advise
This is how out of touch and Old Labour Brown is. He's certainly no saviour if this is all he can propose
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Ah I see, the "tax cuts" that have been mooted aren't really going to be tax cuts are they?
Despite the doubling of taxes in the last 11 years he still hasn't "re-distributed" enough has he? Never mind that he's turned the welfare state into the benefit state he's incapable of learning.
So we can look forward to some more bribes to the client state to keep their vote and wipe out the 10p sour taste.
Meanwhile we'll keep recruiting obscenely paid "elf n safety co-ordinators" and social service directors that tick boxes into the public sector.
I don't suppose he cares who's going to pay for it all - he'll retire with millions no doubt (and a knighthood for his "public service")
The sooner this idiot is kicked out the better.
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Condemning protectionism is certainly the right message to send. But is this not at odd with "British jobs for British workers"?
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No consideration for helping people on low incomes keep their job then? After all, now the crunch has hit Main street they're the ones who'll be feeling the brunt.
And instead of using the labyrinthine and expensive tax credits system, how about temporarily raising the levels taxation starts at, thus making everyone feel that bit wealthier?
And given the crash of sterling will be having an inflationary pressure on prices (imports get more expensive), which further borrowing will only exacerbate, this may be too little, too late.
And is anyone else stunned at how brazenly Brown tried to pass himself off as Mr Problem Solver? His incessant lies over the levels of borrowing, love of regulation and source of the British economic problems beggars belief.
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"... the prime minister said there was a huge debate about what works, and suggested that government faced a choice between cutting taxes, boosting infrastructure spending and helping people on low incomes."
face a choice between cutting taxes and helping people on low incomes?
how do you cut taxes and NOT help people on low incomes?
is he going to reinstate the 10p "long term" tax band?
why not give help to everyone regardless?
gordon brown has taken a full time job, broke it into two part time jobs ("creating more jobs") and subsidised both part time jobs with taxpayers money! (tax credit system) "helping people on low incomes"
it may produce good soundbites to point at when faced with an awkward question, but in the real world, its a ludicrous way to run the UK!
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It has to be in one of 8 to 14 'awaiting moderation' already, but I have to add that a shot across the bells sounds pretty serious to me, mano a mano.
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How can we be expected to believe a Man who couldnt predict this mess and budget for it happening ,is the right man to now take decisions to burden us all with massive debts for many many years to come.....
The sooner there is an election the better because while people see his face daily they will be reminded of the disaster he has caused....
The only thing that they can do, is change the way figures are calculated like was done with inflation,but he is in la la land if he thinks he can get away with that......
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why does gordon brown think it is good practice to give money to individuals to "stimulate the economy" yet when he could have given us all some help with mortgages (which would have stimulated or helped the housing market) he cut us all out and gave the money directly to the banks?
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"Shot across the bells"? - obviously a typo
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9 edgarbug
Don't be surprised about a "shot across the bells". Nick didn't know the difference between prostate and prostrate when he presented the Today programme on radio 4 in the summer.
So much for an Oxford degree!!!
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12 graemepirie
Couple of "elf n safety" stupidities in the Western Daily Press today.
Children at a Bristol school, who bake cakes at school as part of their edukshun were told by the head-mistress that they couldn't be sold (as they have been for years for Children in Need) on heath and safety grounds.
And an elderly lady was told she couldn't travel on a bus as her "wheely bag" was a safety hazzard.
Madness.
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It looks to me that Brown's trips around the world are mostly posturing to cover up his own very costly mistakes leading up to this crisis.
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Is there no limit to this ludicrous Gordon Brown for what he will do or say?
Gordon Brown know thinks it prudent to slag off the man (Bush) who has the clout to push through any changes in the financial system.
People have said that Brown is a strategic genuis - personally i think he is someone who wants to get credit from other peoples misery and make party political points out of murdered babies.
Gordon Brown is a monster, he is also complete unfit for office. The party political point scoring freak needs removing from office before he does any further damage to this country.
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Aww the little Eichmann's referred posts to the mods again. Poor baby... no more tears.
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Nick
Increase Tax Credits? Here's a fully funded plan
1.Write off the £x billion owed to the Treasury by reason of overpaid tax credits.
2. Increase tax credits at a cost of £x billion.
3.Transfer the resultant additonal payments direct to the Treasury to - er - replenish the amount writen off under 1.
nb New Brown strategy. Having got into a unholy mess by over-spending, running up huge levels of Government and Personal debt and achieving record low levels of saving we will:
a) encourage personal spending and discourage saving
b) do some really serious extra Government spending and borrowing.
Breaking news. Monster Raving Loony Party goes mainstream.
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I read this blog often.
Does it always consist of recycled Labour propaganda ?
It certainly appears so..
As for Gordon's ideas..
1. the banks are deleveraging
2. It is not finished yet,.
3. Consumer confidence is shot
4. House prices have another 50% to fall to be affordable again .. and mortgageable under new lending rules.
So the recession is going to last another 12 -36 months..
and spending money by Governments will make NO - repeat none - difference.
Except increase taxes in the long run..
So Gordon's policy is to increase taxes long term?
Well surprise..
And I would expect any semi competent political journalist to see that...
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Nick
Just heard your latest bulletin from USA on BBC TV 6 o'clock news. The most blatant pro - Brown propoganda I 've ever heard; a disgrace and you should be ashamed. Even the toenails have now disappeared.
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9:
Too true. That should of course read 'shot across the bows'. No doubt Nick will blame his proof reader.
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re: 7, stanilic
Brown tried to bully Obama
Cos he lacks his charisma and glamour,
And you're spot on to state
That he has no mandate,
That Brown should be thrown in the slammer!
(The reason that Brown is a bully
Is that his thoughts are all woolly,
Incoherent with spin
And with nothing within,
Nu-Lab can do nothing but sully).
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I love the way that small businesses complain about their level of taxation and want support when some of them relied on cheap credit to keep them going and enabling them to take too much out of the business.
I love the way that people with mortgages want help, when they took unrealistic mortgages on.
I could go on, but the point isn't that all small business owners and mortgage holders have made poor decisions. Most of them have be very sensible and dare I say prudent. The point is that support for these groups must be carefully planned so that there is not excessive support for those who do not deserve it. Inefficient businesses should not be supported by tax payers' money and excessive life styles funded by impossible mortgages should result in belt tightening or down sizing.
However putting money into people's pockets probably won't do much good as our manufacturing base is non-existent so the money will go out of the country.
I just can't work out what is best.
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Nick,
Your PM the economic genius having messed up our economy here has gone to New York to give us here the impression it has all to do with the world and not due to him. He wants to appear as a statesman, a global economist to boost his fortune at home. It is not new to him, in 2000 on he went around Europe preaching them to adopt his economic model at home. Look where it had led to.
Will this egocentric deluded person ever learn.
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I just wonder whether the typo is that the "e" should have been an "a".
An eye watering thought ...
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I am old enough to remember a Chancellor of the Exchequer called Anthony Barber. He also thought that he could defy economic reality by spending money when the coffers were empty.
Fortunately, the banks adopted sensible policies way back in 1969 and the effects of Barber's budget were catastrophic.
Gordon Brown's "prudence" whilst he was Chancellor was a myth. He and Blair just accelerated Britain's progress towards third world status by fifty years and his latest madcap schemes will only increase the rate of acceleration.
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Great idea!!!! Tax reductions so people can go out and buy....... imported goods, thereby stimulating the.... er... Chinese economy.
Right.
I must have missed something. Probably the bit where this money would have stayed in the UK economy to our long term benefit.
The man is an idiot or a scoundrel. Take your pick. I reckon maybe both.
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@4, shellingout, but you're children and grandchildren are already saddled with debt.
Brown, and before him blair, thatcher, all of them have squandered this countries assets and resources while we have looked on in disbelief.
I am seriously thinking of stopping paying my tax bill for this year, [35k] because it is being spent by people without a clue on finances and are treasonous to boot. May I humbly suggest we all do the same.
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Ok, lets be honest here, which political leader is every prime minister following here. Even the President of the EU was complaining that Brown was getting all the limelight about the current crisis.
The Governor of the Bank of England has suggest his support for a fiscal stimulus, and most economists would agree also.
To cut back on spending on a time such as this, would be madness. Yes currently there is debt higher than would be liked within the treasury, every other major economy is the same as clearly the treasury doesnt have 37 billion pounds kicking around just waiting for the banking sector to fail. But injecting money into peoples pockets will massively increase individual spending, and stop the spiraling fall in inflation.
Yes borrowing will go up, sure the level of this borrowing is up for debate, but GOVERNMENT debt is (or was before the bail-out plan) lower than firstly before 1997, and also lower than almost all the big EU players. Borrowing more is a necessary evil that will have to exist until the economy settles down once more.
So far as tax cuts for lower incomes, this is completely the right thing to do, not least because lower incomes will be the hardest hit, but also as said, they have the highest spending rates. The comment about people buying plasmas and such, is a joke, is this not a time where we want people spending money on luxury goods and for inflation to rise and the economy regenerate?!?
Anyone who says this problem is a result of the governments policy should look at the graphs of global shares and compare it with the FTSE, Britain is part of a global economy, sure it was possible for America to isolate itself in the 1920s, but it is completely obsurd to say that Britain can insulate itself against global markets in the 21st century.
I thank Gordon Brown for the action he is taking, sure he is making poltically un-popular decisions, but when you look around the world and see the state that some countries are in, and then you look at our NHS and educational system and historically low taxes compared with other countries which have an NHS, i thank Gordon Brown and i pay tribute to him when he loses popularity.
People should remember the last DOMESTIC recession, and compare it with this GLOBAL one, and realise how much things have improved.
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That's a great topic and a good end to the week, Nick. Thanks!
I'm really pleased the Prime Minister has identified the issues with saving and the already rich, and the corporate welfare and protectionism issues. That should answer a lot of concerns I've seen from finance experts in the media and regular folk.
Getting everyone on board helps stop individuals cheating, and investing in the bottom keeps the roots of the economic tree watered. The Guardian carries an article on this which adds other detail that fleshes out more potential behind the 'Brown plan'.
(And just in case folks missed it: someone spoofed my identity earlier in this topic. It's not the first time it's happened, and not worth commenting on more than that.)
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Charles,
You promised. I'm really disappointed in you.
(Can't wait to see what you said, though).
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gthebounceranddavincimaster wrote:
Stimulating the poor is all very worthy but it's not going to get an economy going again. They will enjoy having a bit more cash in their pockets no doubt but it is business that needs to get us out of this, nothing else can. So what about making it easier for business to do business - cut some red tape for big and small business. Or offer to take some of the red tape burden into government
Its no good just helping business if no one can afford to buy anything. The consumer spending money is the only way to kick start the economy. Stimulating the poor seems the logical way forward.
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How patronising can Brown get, " give money to the poor and they'll spend it "; what on Gordon , beer and fags? He is obsessed with tax credits, why cant he just cut taxes like every other government? Now he's off to the US to save the world, the man has completely lost the place. He destroyed the British economy and the rest of the world is aware of this fact, does he honestly think they'll take advice from him. Perhaps he should join gamblers anonomous, they'll teach him that tossing good money after bad doesn't recoup your
losses, it just adds to them. Resignation, and an admission that he can't cope with the job would however be his best course of action, before the economy is completely ruined.
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I feel so safe with Gordon in charge and the fact that he is such an honest politician. No double talk, no spin, no unvalidated claims about the countries financial history over the last 11 years.
How come that non of the money lost in this crisis ( I forgot to say global!) belonged to public service pension funds? Odd that.
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Nick writes: "Gordon Brown has signalled that he regards help for people on low incomes as the most efficient way to stimulate the economy."
So that explains why he doubled the rate of tax on the UK's lowest paid.
An obviously good and clearly forward-thinking Chancellor!
That was a totally unnecessary, badly thought through bit of national economics. Funny that, despite all the clamour at its stupidity, Brown couldn't bring himself to change his mind.
And the short term, GBP2.7BILLION quick fix was only to cover a single year... So next year there has to be another injection, or else people will still be worse off.
What's the betting that GB and little Darling "offer" 2 or 3 Billion as "special support for the poor" in the upcoming pre-budget statement. It won't be new. It wll be "catch-up" money, because Brown stole it and may feel an intsy bit ashamed. So he should be.
The idiot didn't realise that even an Iron Chancellor could bend. (Just look what you can get metal to do...)
You don't need to have medical qualifications to be a Minister for Health.
Nor to have fought a war before becoming Defence Secretary.
You don't need to be an economist to be Chancellor.
But you have to be a bit of a prat if you allow your acolyte to insert the phrase "post neo-classical endogenous growth theory" into ANY speech.
Goodness help us all. That acolyte is now in charge of Education...
Let's just lie back and enjoy the "post neo-classical endogenous learning theory". Don't want kids to get their memories all clogged up with transient stuff like facts...
And hope that, when the politicians sit down to talk about "how to save the world", they all have to complete a form with the questions:
1 "Just when did you recognise your country had a problem?"
2 "When were you first told that your own management of your economy could lead to problems?"
3 "Why did it take you so long to straddle that gap?"
4 "Where were you when it all went wrong?"
Then:
14 "Just how much does your country have in its bank account?"
15 "How deep is your recession likely to be?"
16 "How much clean (or even dirty) energy production have you invested in, to make sure your country will become fairly self-sufficient in the light of global fossil fuel shortages?"
And (for a bonus 10 points):
67 "Have you worked out what you're going to do (i.e. do you have an exit strategy like good old Tony Blair), when the electorate kicks you out?" Please explain. Please don't include being given a job by a Bank...
Bit sad really.
I'm one of those folk who didn't like the whole spinning thing, but (after years of a government hanging by a thread) hoped that a new approach would bring some explosion of potential.
Illusions closed down with Ecclestone. Shattered by the real impact of "Education, Education, Education".
Cheated out of money that has been frittered away.
Just hope all those folk at the meeting (which has no real authority anyway) pick up the Brown myth and chuck it away. Then start to talk some sense.
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That was a seriously good post. I enjoyed reading it as it nailed all the issues and was very readable.
I remember how bad things were during the Tory years and never want to live through that again.
Labour is more clearly beginning to deliver policy on a sound economy and kind society, and I like what I see.
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Nick, I would have thought that by now, you would have gathered that the vast majority of your readers hold markedly different political views from you. It must give you considerable satisfaction, and indeed pleasure, as you produce reams and reams of Labour propoganda that they pay your wages!
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Brown is doing what all politicians do when they have messed up at home.... leave the country and start lecturing others in how to do things.
In this case having buried the UK in a mountain of debt, he conveniently forgets he was Chancellor who got us to this parlous position, and now seeks to stake a claim to be the 'International Chancellor' believing can now tell all the other countries to follow his disastrous lead, sure in the knowledge, his masters voice, the BBC, will lap it up and sycophantically make it their business tell us how lucky we are to have such a brilliant Chancellor and Prime Minister.
Fortunately not all the world is made up of New Labour toadies, and in the world of the currency markets, that have taken stock, found they don't like what they see with the UK economy, and so flogged off sterling to record lows.
No vote of confidence for the ‘Dear Leader’ there Nick is there?
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@28..
Who's Nicks proof reader?
Campbell..Mandelson..CEH?
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Over a year ago, on this blog, I lamented the arrogance of the City and a greedy society and said Britain was heading towards third world status. People preferred not to hear that and let house prices rip. Now the pigeons have come home to roost the same people are looking for someone to blame.
Some of the smart folks in the city and around the country have accepted they've made mistakes. To some extent, I think, a lot of people have to follow that lead and accept their own mistakes and reality. When that hurt passes they'll stop lashing out and start feeling better about themselves.
Gordon Brown has a plan to deliver a way out of this situation. These things can take a while to understand but when people see what it can deliver and feel comfortable with that the general mood should improve. Heck, in a couple of years some of you will probably be laughing at how worried you were at the time.
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By the way,Nick...which particular Keynes book did your Lord and Master pick up from the Treasury..and when?
If it was "Essays in Persuasion",then I would guess he only got it for a bit of light reading on the plane to the U.S yesterday.. otherwise,if he had read it about 11 years ago, we wouldn't be in the mess that we now find ourselves in due to his mishandling of the Economy.
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I think Brown's first consideration is how he looks during the UK recession. These trips are about spin and presentation, getting across an impression that Brown is busy solving the world's problems, along with a few soundbites for the six o'clock news.
While this ridiculous media circus is going on, the UK sinks deeper into debt. With each day people are losing their jobs, and their homes. All of this made worse by Brown's own irresponsible policies.
I'm getting a little tired of seeing Brown off on his jolly trips abroad. Some of us will be lucky to manage a day trip to Skegness in the next couple of years.
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#35 tomireland
Sorry - I was being facetious.
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In 1986, the famous American motorcycle company Harley-Davidson came within 20 minutes of going bust as they had run out of cash whilst developing a new 'evolution' engine.
A private company stepped in to provide enough capital to keep the company going.
And President Ronald Regan slapped onerous tariffs on Harleys Japanese competitors.
Protectionism.
Harley-Davidson pulled through and actually went on to become the most successful American company of the past two decades and the tariffs on the Japanese competitors were eventually lifted.
So, we need to be careful not to assume that all protectionism is bad.
Unfortunately, nothing the G20 can do now will stop the rot ... business confidence is very low and in my humble opinion will not show a significant improvement until some time in 2010.
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some great reading on this blog, cant wait to see whats being said 3 months from now
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Does Brown give you lines to take/ Give Brown Credit check list?
When will the Worm (You) turn and say what you really think about the dire straights Brown has left this country get into?
What is it like being sent to interview and report on a monster who will use the death of a child for political point scoring?
Surely you must be getting to the end of the road in reporting Brown's agenda.
I think Nick, You must be as sick of Brown as the rest of the population. How such a monster could have got into No.10 is beyond me.
Why?
For those who say he is well intentioned - I say Hitler was well intentioned but look what he did to his country.
I am reminded today why Tony Blair was so good as a brief clip showed Tony Blair doing something for Children in need. Obviously Gordon Brown will not do anything unless he thinks he can get some credit from it.
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#48Charles_E_Hardwidge wrote:
"Over a year ago, on this blog, I lamented the arrogance of the City and a greedy society and said Britain was heading towards third world status. People preferred not to hear that and let house prices rip. Now the pigeons have come home to roost the same people are looking for someone to blame."
Just a year ago, Charles?
Most of us recognised a huge problem a decade ago. Where were you then?
The City was allowed to get out of control.
Thatcher did some things I really felt were overdue. Some bits that I worried about.
But the Big Bang changes came with fairly strict regulations.
Your big buddy GB relaxed as much as he could, putting in place regulators who just did not do a job, in order to be seen as a "leader of choice in economic interests".
Now he's a world leading manager of a global economy?
For goodness sake, the guy drove our own into the ground.
Get real.
Oh. Forgot. You're in computer gaming. Just how real is that?
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How about reducing the waste of employing all these management consultants?
They are billed to the government at well over £1000 a day plus expenses, and yes they even get paid to put in a competitive quote for a job whether they get it or not.
By such profligate spending are hard working families taxes spent. A friend, working for one of the big 3 says they cannot believe it - and he's a taxpayer as well.
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This is off topic but so what because this is more important than the Worlds economy going down the tubes.
I challenge you to spend a bit of time tonight watching the BBC's Children in Need programme and if you do not end up putting your hand in your pocket then you must have a heart of stone.
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To be fair to gordon brown I doubt the Conservatives would have done any better if they had been in power.
I suspect though that they would not have claimed to have abolished the economic cycle , no more boom and bust or wasted so much money.
I used to cut costs in a previous living. With all due modesty I was good at it.
This Government saves money where it shoudl spend and spends where it should save..
As for the econpmy looking different in three month's time ... of course it will.
It will be MUCH worse.
And only the economically illiterate can't see it...
(which means the BBC, and most MPs)
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Last month we lost £4bn in trade, physical and intangible combined.
And the month before that was £4bn as well.
And the month before that.
And indeed for months and months before them.
In fact, it's spookily reliable; as a country we make a trading loss of £4bn a month.
It's called "going broke".
But never fear, let's borrow a shedload to give it to people so they can break that trend, maybe get it up to £6bn or more.
Isn't Britain wonderfully placed to withstand this "downturn"?!!
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It would be really helpful if Nick were to leave his mandate published on a link at the top of his blog.
Viewed from an objectivity that is my transient priviledge as a new Nick blogger and also a new blogger of any blog, it seems that he throws up a bunch of pretty disconnected provocative sentences and a pack of little terriers and lap-dogs snap and bark at them as they tumble down into their psyche's. Squeals of delight and pain alternate until the next batch of manna descends from Nick's pen.
Is anything achieved? How do you answer that question if there is no concensus on the purpose of the blog? Like so many news sponsored blogs it seems to be just a fishing exercise. In this case Bebe, Nick puts out some bait... the fish gather, they nibble and bite, express their view on its tastiness and wait for the next feed.
Everyone claps when a view from the blog appears to have penetrated the hallowed corridors. So you all should! You have performed well. Nick too.
The job of politics is to create and apply the policies which keep individuals ordered in society such that business can be productively pursued and wealth created. (see the 1800-1840 debates around Factories, Police and Poor Law Acts). So politicians are just doing what they do so business can prosper and order is kept.
Blog's are a god-send! Everyone who might otherwise actually do something disruptive gets to blow off steam, opinions are easily monitored and fed back into the ordering process.
By the way, if Nick or any of you want to remain confused about the guiding principles that cause such inconsistency of political pronouncements and actions over any period of time (and so perpetuate this and other blogs) then do not read Naom Chomsky's "What the USA Really Wants". Additionally, definitely do not consider the socio-economic mechanics of dynastic preservation through history. If you did you might realise that our political masters' masters now derive as much of their wealth from the offshore manufacturing of what we consume as they do from the financial and technical services that we provide to those offshore resource extraction and manufacturing concerns. It is our job to consume and not manufacture. The historically tight-knit light engineering and minor product, manufacturing capacity that remains has always been pretty inpregnable to big business families... so don't expect anything more than consumption stimulus, and blind-siding of small entrepreurs. Big money wants big business opportunities... it is the Global Green Industry that is going to provide that (look at the numbers). That will need lots of technical education, lots of private inventiveness and lots of big development budgets... So expect lots of school building and upgrading, lots of technology grants to small business, lots of small green tech companies being eaten up by big companies receiving lots of government help to exploit the world market for the resulting technology services (don't worry about building it... "we" have offshore factories to do that) and lots of innovative, experimental green projects dotted across the country. Don't worry they don't have to be economic to run right now... we just need them as reference sites when selling our first to market, green tech services to the rest of the world.
Labour, Conservative, SPD - it makes no difference, you are just rubbing the same dry stick whatever rhythm you are using.
Wouldn't you rather be moving off the old treadmill through your "debates" instead of just re-covering the treads?
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So Brown is planning to bribe the poor to ensure they continue to vote for him, while telling the middle classes that its in their best interest - hows that for spin.
I expect we'll be seeing the pensioners getting their little extra winter bribe again this year too (not that pensioners don't deserve it) as they did a couple of elections ago.
All Brown has to do now is make sure that things remain painful until the election so he can point at the tories and keep mentioning black wednesday.
of course he'll be using the words global, investment, novice, and listening as if they're the only words in the language.
Makes me sick.
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Perhaps Nick was born within the sound of Bow Bells, and that explains his confusion.
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This is already true. A self employed person earning say £30k pa buys a van for £20k. This does the following:
Increases tax credit by £20,000 at 39% in 2008/09, worth £7,800
Does the same for 2009/10, another £7,800 (this is how tax credits work)
100% capital allowances save tax and national insurance at 28%, £5,600.
Result, cost of van £20,000, tax saving/credits £21,200. An effective rate of 106%. Pays for the road fund licence and insurance as well as the van. And we trust these people to run the economy??
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cyfa @ 61
god babe, that was boring ...
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cyfaHead @ 61
The somewhat doleful evidence of these blogs does point towards your theory of a useful 'safety' valve for the proles.
Likewise, those popular satirical shows such as Bird and Fortune.
However, I view these blogs mainly as a opportunity to impart ideas.
An idea can be a very powerful thing.
I suspect you may be correct with "our political masters' masters" comment.
We proles, worthy or otherwise, just have to get on with it as best we can.
In the long run maybe we'll get a more equitable world.
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People on low incomes aren't going to save our economy let's face it. They're going to pay off their debts and save for Christmas and annual holidays. They're not going to go out and spend what is effectively our money if they've got any common sense. What about middle earners who in this present climate have a great deal more to lose. They're also the voters who won't forget the fact that they have been cast aside in a scramble to save Gordon Brown's bacon.
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Nick,
surely people can see what is going wrong.
A simple question to which I do not expect a reply.
Exactly how much do you 'earn'?
Same with the consultants, the heads of Quangoes, the police, the firemen, the hospital consultants, the doctors, the nurses, the employees of the state the pensioners, the young, without the state there would be nothing.
How much are the employees of the busted flush known as Lehmans getting, you seriously could not make it up!
How many Turkeys are actually going to vote for Christmas, this is a banana republic, and still the soldiers die, or are injured and for what, oh yes Gordon did tell us at the labour party conference, the Dictatorship of Oil.
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If a tax cut of any useful size was given out, I think I'd use it to pay off my debt and buy plane tickets for me and my family to emigrate.
The only real way to stimulate the economy would be to raise the threshold at which anyone starts paying tax, and that would help the poor more than anyone else proportionally speaking.
"Targeting" it is a nice idea in theory but in practice it just doesn't work and takes too long and most people who it's supposed to be targeted at don't claim/get it anyway.
I wonder if his "tax cut to help the low paid" will be the same as his "help" when he doubled the lowest tax rate, or will it be the same as his "help" when he said that you get loft insulation vouchers as long as you're over 104 years old and it's below minus 10 degrees every day for 6 weeks?
Ah, the wonders of Gordon Brown and his "help". I could do without his help. The most useful thing he could do as far as I'm concerned would be to walk off a cliff.
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#48
No Charles.
You're guaranteeing we're having a great laugh right now. Thanks for that.
(So glad it was a spoof, I'd have missed you lots.)
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I'd just like to correct my own comment at 66 which should read 'an opportunity for an interchange of ideas'.
Ideas, good or bad, are not exclusive to me.
I'd hate people to think that I am on any sort of ego trip, although you do need a minimum amount of confidence to be a blogger, even those who are aliased.
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#61
Are you and Charles related? Clearly you'd be from the inteligent side of the family.
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Why aren't the press pointing out that Gordon Brown was the Chancellor during the buildup to this whole mess and that he is responsible. He is responsible. The buck stops there. The BBC reporting looks like the government's press releases at the moment. We need change that we can believe in in UK politics, and that change gets rid of Gordon Brown.
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"I remember how bad things were during the Tory years and never want to live through that again." Charles_E-H is definitely a Labour spin doctor - obviously part of Dolly Derek Draper's so called online rebuttal clowns....
I too remember the Tory years and the Labour ones before them and I'd take the Tory years anytime! Funny how Charlie Boy never remembers the winters of discontent and the disgraceful way the unions ruined lives and businesses....funny how Charlie Boy never remembers that Tony Blair AND Gordon Brown have tried to grab some of Mrs Thatcher's lustre by inviting her to Downing Street etc! Even the Chief o the Treasury said in 1997 that the Labour Government inherited a thriving economy and fortunately decided to carry on exactly the same policies! And if Charlie Boy wants to thrown in Black Wednesday perhaps he could explain why the short selling of the nation's gold actually cost about 200 million more than the total lost on Black Wednesday? Brown has lost /wasted/ given away to the idle and feckless is ten times what was lost on Black Wednesday!
Charlie Boy - buffoon and ignorant of the reality of those years he whinges about. did he REALLY live during the Tory years or is he another spotty Labour oink in their HQ ? I think we should be told!
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"Proof is the pudding"
If Brown keeps banging on about our strong fundementals why has sterling been in freefall recently? Maybe the rest of the world knows something that Brown does not.
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I have never,and will not,disclose my occupation..other than it is on the board of a major multinational organisation.
Have any of you sycophantic Brown supporters ever met him?..ever negotiated with him..either as Chancellor or Prime Minister?
I doubt it.
If you had..I guarantee you would not have such supportive and confident views about him.
The man is an utter control freak, who listens to nobody...he simply tells others what to do..in accordance to his perverse views.
If you don't agree..he will bully you into submission.
This is what this Country has to deal with..a man with incredible insecurity (ever seen the fingernails bitten down to the quicks?)
for whom "failure is not an option".
Sorry..perhaps I shouldn't have said all this..but there are limits to ones patience.
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JohnConstable @ #66/#71
Please don't attribute the 'safety valve' theory to me!
Give Machievelli and George Orwell their due.... not much under the sun is novel.
Although for our friend, at #72, Mr o'Ban GoBang's sake I won't be writing another one of those in this arena!
It is the competitive games of personal power and influence of "our political masters' masters" that are holding back all us proles on the planet from steady progress and development.
Most contributors to this blog seem to think it is the other political party's policies, or luminaries, that are at fault. Most politicians think so too. It is only when they have experienced senior cabinet level 'power' they realise where the real power lies... especially after their first "evaluation & appraisal" at Davos.
I would lay odds that many an idealistic junior Minister never made it to senior levels through their inability to adopt a suitable level of 'realism' when faced with the puppet masters demands and expectations of them.
I agree that this useful forum for the interchange of ideas, in the virtual halls of The Establishment, is often the best we mere proles can do. Certainly better than ranting on some fringe website. Perhaps that's why we have so many 'ranters' here.
I am refreshed by your "In the long run maybe we'll get a more equitable world.". So many here seem to be completely UK-centric when considering what would be good policy or not, and what would be fair and equitable.
Almost no direction aimed at fairness and equity amongst the population of the UK would have anything but a continuing negative impact upon the majority of the other 99% of the world's population. Unless it was through setting an example..
But I say no more... for fear of boring Sagamix @ #65 with real issues. He might lose some sleep.
Suffice to leave one more thought... and then to bed.
Ideal market economy models rely on "perfect" conditions brought on by a complete absence of concentrations of market power. The less this is true the more volatile and strong will be its movements away from steady states and the less equitable will be its distribution and exchange of resources.
Globalisation of commercial concerns, expansion of political boundaries, co-ordination and integration of financial markets all sound wonderful and sensible goals for GB and DC to aim for... because we have been told they are. But ECON01 already teaches us that they are ultimately a recipe for ever increasing economic instability, therefore unhappiness and therefore missing the whole point of human co-operation at an economic level.
The more energy you push into any closed system the more violent and unpredictable will be its movements.
Wonderful! If you are big enough to stand outside it and reap the "wave power".
Pretty Sad! If you are a prole in a rowing boat with one oar and no compass.
I'll add my oar, can this blog become a compass?
Maybe we can pick up a few swimmers before they too become part of the body count...
[John: my alias can be de-cyfa'd]
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Dont..grieve[sic] @ #77
My heart goes out to you. It's tough at the top. Now you have seen the man's human foibles and weaknesses... deal with him with compassion! And firmness... Like all of us, he is a child inside looking for appreciation. Once he was an ideallist too. He dreamed of helping ordinary people to have good lives. Now he finds he, like you I expect, has to dance to a different tune..
Unlike you, most of his team don't know the plot. And he must deliver to two masters. Autocracy is the natural management style for technocrats... and does make negotiation and compromise tricky!
Look on the bright side... large corporations and industrial nations... the success of neither has actually done much in terms of absolute numbers of human lives left rotting in the limbo of cash-based societies without industry, or meaningful access to subsistence. Rather use your undoubted skills to benefit a wider constituency :-)
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# 76 dontneedthegrief
Fascinating read.
Good to get objectivity to balance the rantings!
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I beg your forgiveness! I had not guessed from reading the entries in this blog, and Nick's article, that we are actually discussing "Stimulating the Global Economy".
I though it was a discussion about whose going to pay for bailing out a few firms in the UK economy and who should shoulder the blame while minimising the pain in each of our pockets. How silly of me not too see the bigger picture behind your inconsequential partisan prattle.
Shape up guys! Believe it or not the industrial games played on behalf of 25% of the gobal population is not the global economy. At least not for the other 75%. Forget about Keynesian trickle downs and Adam Smith "Invisible Hand". The trickles are pretty invisible however incontinent you might like to believe our system to be.
If the economy we talk about is really global then it must be defined by individual human lives, not by measurements of only measurable contributors to GDP.
30 countries a globe do not make...
So how are you going to stimulate the other 200 or so into providing a decent level of existence to their people? Have you worked out yet why our system seems so difficult to extend into their realms? Do you think that once we get back on track that we will be better able to fulfill our destiny of uplifting them?
Try living in some of those places and you will realise that people are people where ever they are. They all just try to get some joy out of the process of staying alive and building the next generation. If life is short and mean they adjust with a verve and intensity of experience that transcends our inability to really help them, if it is long, comfortable and boring they spend their time blogging about the drama of a 10p tax, or lack of educational perfection for their kids, in the process wasting energy and passion that could be really be making a difference to the stimulation of a truly global economy of persons.
Stop playing amongst yourselves and start thinking about creating something meaningful... to the globe.
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Bully, nanny, fear, terrorists threat, oil comming to an end, ban steal, hire crooks, Ban, war, ruin, disaster, traitor.
Now the good things about Labour,
(thinking)
(still thinking)
I got one, they have to have an election soon.
Please God, make it soon.
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'He noted that around half of the money spent by the Bush administration on tax cuts had been saved rather than spent and that it was hard to speed up infrastructure spending.
However, he pointed out, people on low incomes were inclined to spend.'
This all leaves me scratching my poor balding head in puzzlement!
Isn't it good when people save money, and build a bit of secure wealth for themselves?
People on low incomes are inclined to spend, indeed, because often they are just trying to keep shoes on the children and food on the table. In addition, there are those(certainly not all!!)who never learned how to save/spend/live with any discipline, and end up in financial trouble. Again, certainly not all, and not intending to sound hard-hearted toward those who struggle to live with dignity in this day.
But, isn't it a bit cynical of any government (on either side of the pond--I live on the western side, by the way) to say 'The way to get out of all this mess is to make sure those poor slobs at the bottom have a few extra bucks to go spread around at the shopping mall. While we're at it, let's make it easier for them to float loans for over-priced autos, which will depreciate at a dizzying rate whilst the poor schlubs are working like mad to pay them because they are totally upside-down in a bad loan, and need the car to outlast the life of the loan. Whatever they do, they must spend, spend, spend, not save, save, save!'
Doesn't this strike anyone out there as an ethically suspect approach to economics?
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#9 Perhaps he is trying to avoid spelling it with the first vowel !!
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#13 No, it is not. It follows the ancient and honoured dictum of - Don't do what I do; do what I tell you to do !!
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I agree with Gordon on one thing: this has indeed been the age of irresponsibility.
Almost everyone agrees that the Banks have irresponsibility traded instruments they were unable to value, and lent beyond their ability to fund in the long-term.
Yet it was Gordon that encouraged this age of irresponsibility:
- Gordon who changed the banking regulatory system such that it was not fit for purpose
- Gordon who built his reputation on an artificial boom based on a mountain of public and private debt
- Gordon who increased taxes on hard-working families to pay for benefit dependency
- Gordon who took £5 billion per year from pension funds to discourage long-term saving and encourage a short-term spending spree
- Gordon who increased public sector borrowing before the credit crunch.
Gordon's solution to the age of irresponsibility?
- more long-term borrowing to fund short-term spending on imported good from China and elsewhere
- resoration of bank lending to 2007 levels
- help for banks and debtors and penalties for savers
- devalue sterling
- a bigger boom followed by an even bigger bust.
Gordon loves to swagger as a global expert, but there should be a rebalancing of the global economy that sees spending rise in Asia and in developing countries, and saving rates rise in the US and Europe. Gordon's policies have the opposite effect.
There is an inherent contradiction between Gordon's analysis (the age of irresponsibility) and his solution (encourage more irresponsibility)
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CyfaHead
Some good comments especially about masters' masters and also the Global green Industry - their lies a god deal for the future!
Also from #77 "[John: my alias can be de-cyfa'd]"...clearly in that case you're just a Head :-)
I refrain from comment on both Brown and Nick as it is early yet and I feel a good day coming on so wish to avoid rage...
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# 80 cyfaHead
Well said, and a breath of fresh air in this world of the self-absorbed.
In your last paragraph though, perhaps using the word 'with' rather than 'amongst' would have better reflected their current behaviour.
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Makese sense - GB has spent and spent so we have no reserves left; the only way out of our hole is to borrow...borrow and borrow which will drive sterling down (this is all happening).
Only way back? An export led recovery.
Export's rely on other countries Importing our Exports; so, if other countries implement their protectionism measures like they are saying they will then where will that leave us?
Very high interest rates.
When will this happen? end 2009? In time for the conservatives to take over.
GB doesn't care - he knows he's lost this term and is on the way out of office, he's thinking a few years ahead - not at the next election (that for labour is lost), but the one after that.
Cynical? May be, will see in a couple of years time if I unfortunetly right.
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Brown would do well to introduce a bit of protectionism. For instance how about a tax, equivalent to the basic rate of unemployment benefit for each job " outsourced " abroad. In the present economic climate there is no excuse for the British taxpayer subsidising jobs in India or anywhere else outside the UK. It looks like Obama will apply a like scheme in the USA, quite rightly, any head of state's first committment must be to his own people.
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Along with this business of tax cuts we hear that taxpayers will have to pay for it later.
Let's hope that the poorer people who receive these extra tax credits are the ones made to repay.
I do not want to subsidise the poor even more than I do now. I'm not exactly poor but I have no money to spend. If these low income people are given money to spend and I can't join the spree, I DO NOT WANT TO PAY FOR THEM LATER.
Quite aside from the fact that anyone, rich or poor, with any sense will save rather than spend. I really can't see a trick like this "stimulating the economy" enough to drag us out of depression.
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Nick - can you please tell us why no-one at the BBC in terms of you, Mr Peston et al. seems to want to discuss the elephant in the room - namely, that if sterling is on the brink of collapse (or indeed if it has already) - are we now going to be in a position where Brown will take us into the euro?
It certainly seems that that's the way things are heading - and of course as we're all rabidly anti-EU in this country thanks to the red-top and Murdoch press and their ilk - we're far too immature to be given the facts and to have a rational debate.
What is strange though is that despite all of these articles on the BBC website about the pound's "taking a pounding" and politicians prophesying that we're all doomed, no-one wants to discuss that particular question.
Is this all some machiavellian plot to get us in with the least fuss or what??
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So, the Tories answer is to have George Osborne trying to wriggle his way out of his recent fall from grace by talking down sterling..........pathetic.
Bill McFadden
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Has Mr Brown explained he has gone to the Arab Countries and China to ask for money for HIS problem?
Has it been reported that more Sharia law is now operating in this country?
Mr Brown selling out Britain and our way of life faster that Mr Blair did!
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Brown is proposing utter barking madness.
From a man that took a tax band from the poor, so he plans to work out how much of their own money they can have back - tax credits.
Here's an idea, abolish tax credits, while we are at it, slash the number of quangos and non-jobs. 60 BILLION POUNDS is spent every year that way.
I reckon 20bn could be found easily.
In the meantime, have a bonfire of red tape, get off the back of small businesses with pointless regulation and also give them a tax cut.
Re-instate the 10p tax band and lift the 10p threshold up to something meaningful like £8000. Lift the 23p threshold likewise.
In one foul swoop, government spending cut, 100,000s taken out of the tax system and a 'fiscal stimulus' created.
No. We won't get it. Why?
Because cutting the 'client state' of quangos and non-jobs is a vote loser.
Because passing on a tax cut to everyone isn't focussing a bribe to Brown's core vote.
Because the State is so much more efficient at spending money than the private sector.
Because Brown essentially doesn't trust the British people to spend their own money wisely - he has to take it from us and spend it for us.
This is going to end in tears, scorched earth for a decade and the day of reckoning will be all the more painful.
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# 92
I agree with you Bill.
The conviction that the Tories - or any other party come to that - will prioritise the needs of those not already wealthy is a triumph of hope over experience.
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Also, do you want to know what was the one thing that turns the stock market crash of 1929 into the 1933 Great Depression.
It wasn't just tight monetary policy.
It was trade tariffs between countries. PROTECTIONISM.
It took a global war to shake the world out of it. Incidentally Germany suffered most from this depression and we know what happened there.
The UK is a 'value add' economy, we take something, improve it, sell it on. Be it invisibles or tangibles. So we rely on foreign capital flows.
Just how is setting up trade barriers going to get us out of recession?
Jesus wept.
To encourage the world out of recession quickly, the Doha talks need to liberalise more world trade, not less.
Nice to see Labour voters have about as much of a clue about the global economy as their leader.
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Before I move on to Brown,an urgent message to Cameron!
Sack George Osborne immediately if your party is to have any credibility on fiscal matters.
His comments using the term "scored earth" are frankly disgusting and not in keeping with the position he holds.
His assertion re the pound is political suicide as well as economic suicide and its not as if you dont have 2 capable potential replacements in Clarke and Davis-OK Clarke is to near the centre for you and agrees with much of what Brown is proposing to do-but he would politically be a very very astute replacement for someone totally out of his depth.
With regard to Brown,he is clearly seeking a mandate to espouse Keynsian thinking,in a crisis you need a leader,and he is leading from the front,whether he is right or wrong only time will tell,but crucially,there are no progressive or imaginary solutions coming from elsewhere,hence the need in my opinion for the Tories to bring in an economic heavyweight.
If I were Chancellor - what would I do...
1) Target the low paid with the following
-increased energy allowance - but I would force all energy companies to IMMEDIATELY put all OAP's with an income of less than £40,000 joint pa,on to the lowest available tariff.I would then pay their bills direct from 1 December to 1 May by means of a voucher redeemable only to their credit supplier - this would target the money directy on the need.
2) I would reduce immediately by 20% for a period of 6 months - the fuel duty tax on unleaded petrol,diesel and domestic heating oil - from 1 May 2009 - I would reduce the reduction to 10%
3) I would instruct the Courts - based on the fact Courts evict homeowners NOT Mortgage Companies - to postpone reposession proceedings on ANY mortgage debtor who maintained 80% of normal monthly payment for a period of 6 months - you cannot simply ban reposession-this is a licence to allow people to cease mortgage payments indefinately and would be catastrophic- but you can say OK pay 80% or more of your normal payment for 6 months consecutively and we will stop reposession.
4) I would immediately instigate a "union jack sticker programme" - enforcing all retail outlets to identify ANY item grown,produced or manufactured in the UK, all Union Jack sticker produce would have an immediate 9if applicable VAT reduction of 5%,and in addition I would offer a tax break to the retailer pro-rata for the amount of UK sticker produce required.
5) Finally I would immediately commence a public works programme to bring in to line and available within a period of 6 months any UK property Council owned of any description,a to boost employment within the trades and building and b to provide cheap affordable housing options to all.
By no means exhaustive I believe these are quick relatively cheap options to stimulate spending and generate some growth at home.
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Gordon Brown seems to be reading my blog entries! (I have been banging on about these exact policies fro weeks.) Oh dear we are really for it now!
Anyway, the only thing that has actually been done is to dramatically lower interest rates, not on the fiscal stimuli have yet been implemented.
So I am still left wondering:
What have they put in place to prevent the cheap money (lower interest rate) from just tuning into inflated asset prices (house prices) - as was one of the main contributors to the bubble economy we are supposed to be recovering from!
Answer: Nothing! - Unless anybody has seen, (or knows of) anything to the contrary.
I am left despairing of the logic of the 'good and the great' - it seems they want the economy to recover by inflating house prices once again and thereby recovering the equity release element boost to GDP - this is insane!
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What a pleasure to read some sanity in some of the above entries to this newslog. I think a lot of this current financial slow down is caused by perceptions and there is no point in exaggerating the problems or putting the blame on one single cause as it skews the perceptions. And in a world of instant communications may deplete the resources of worthy causes in favour of unworthy ones.
At the risk of repeating myself, the beginning of these problems in my view began with the Enron "bubble". It began from there and continued with such things as obscure "property investments" which were sold in a rising market, but had no proper basis. Once such non-investments become part of "subsidiaries" the actual basis for the capital becomes more obscure. Now bring in the Hedge Fund factor, where there may be a good reason for the perception there is no actual capital in such "property investments" or "subsidiaries" and the shares in such companies may be "borrowed" and sold at a profit in large quantities. This may result in a complete collapse of said "property investment" and "subsidiaries". It also yields big profits for Hedge Funds on something which probably had no substance in the first place.
The above is "betting shop" economics based on perceptions and odds. Allowed to continue it could ruin the many in favour of a few super rich.
If my theory is right and part of the cause of the current recession is down to perceptions, then any prognostications, "sound bites" or "warnings" issued in the UK on the current situation – which are likely to be well aired by our ever vigilant media – will exacerbate our situation and could even damage it further.
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Nick,
I listened to the criticism of George Osborne when he dared to utter a truth, the collapse of Sterling, and we were told that he is talking down the economy. Unbelievable, has nobody noticed what has happened to the pound, getting closer to parity with the Euro every day. Why did we not go in a couple of years ago when we could have gone in at 1.50 to the pound rather than 1.00 .
Look at the numbers, pensioner on £10,000 would have got 15,000 Euros, if we had gone in at 1.50 but at 1.00 the same pensioner will get only 10,000 at 1.00.
However, look at government debt, just add a few zeroes to the numbers and you will see the advantage of going into the Euro with a huge debt. That I think has been the plan all along, run up the debt, then win on the conversion. Surely the former chancellor never did have a cunning plan, we will soon be told it will be to our advantage to now enter the Euro, the five criteria have been met, we are so, gullible! well not all of us.
Imagine Gordon's legacy, the man will be even more famous than Edward Heath.
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#96 PFF
Well put.
It's always good to see that, no matter how much we may disagree in other areas, it is possible to find some common ground.
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Number 50 is entirely right. The Global Summit is all about appearances.
The advantages of the incumbent are enormous. Brown takes on the poise of a Tribal Elder at G20. Cameron's piece comes from some Town Hall out in the sticks. The BBC can't but help to make Brown look good with these images. (Crystal Tips and Alistair are entirely aware of this.)
While the Global solutions are entirely necessary to prevent individual nations acting irresponsibly, there will be no consensus, because in a time of crisis it will be every man for himself.
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#92
Talk down sterling?
Mmmm - it's already gone from 1.99 to 1.47 in only a couple of months.
This is what Osborne is relating to - if your comments where made when it was 1.99 I'd agree with you.
GB duce is certainly the lubricant in the pound's slide - not osborne.
Osborne is quite right bringing it to peoples attention while something (unless its too late) can be done.
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"If there is hope it lies in the proles" - Eric Blair (1984)
"Co-operation amongst individuals must fail under sufficient pressure". Niven & Purnelle - the Mote in God's eye
It is inevitable that there will be increasing demands for protectionism and isolationism in the current climate - sauve qui peut.
We have already seen the rise of nationalism in the UK e.g. the BNP taking a recent election for a council seat - and this will appear ever more prominent in the future - similar increases in nationalistic popularity happened in the depression including the rise of National Socialism in Germany.
Starting off by saying "British jobs for British workers" shows how one person was preparing to start the bandwagon.
Comment have already been made about the trade inbalance - how £4 billion leaves the country every month leaving the country poorer. In the 80s the figures were regualrly published - and analysed, this seems not to be the case.
So, As part of my campaign for Nationalism - I would urge Buy British - you know it makes sense in the long run - even if it's more expensive. The job you save may be your own!
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If all the other world leaders take any advice from Brown then I can safely say that we are all finished and it will be back to the 1930's
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# 92 Bill McFadden
"So, the Tories answer is to have George Osborne trying to wriggle his way out of his recent fall from grace by talking down sterling..........pathetic."
Bill you really are writing the most amazing rubbish. I would suggest that the person who is talking down Sterling is Gordon Brown. It is he who is suggesting an unfunded stimulus to the economy and he who is twisting the arm of the Governor of the BofE to reduce interest rates. What Osborne is asking is who is going to buy the debt denominated in Sterling?
Sterling is falling because people are removing their assets from the UK.
Read the link I provided yesterday to Willem Buiter's blog
http://blogs.ft.com/maverecon/2008/11/how-likely-is-a-sterling-crisis-or-is-london-really-reykjavik-on-thames/#more-359
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Now, I know that the BBC are under the control of BROWN and his cronies.
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Sorry!
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Do the tories want to be in power?
if so, Cameron needs to gag Osbourne now, or better still sack him today.
The stupid comments he has made about sterling can cost us all money. We have to realise that this is a global problem and the world leaders are seeking a global solution, which is right.
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What Osborne said today is spot-on.
You cannot fool the global economy, the Pound is under pressure because of three things.
1. We will linger in recession longer than our competitors.
2. Growth will be limited by the sheer weight of government borrowing.
3. The economic recovery plan touted by our government is not good enough.
This means that UK interest rates are not sufficient to make the UK a place to invest in.
If Brown is foolish enough to think that unfunded tax cuts are the answer - heed the state of Sterling.
More government borrowing for a reckless act will trigger a run on the Pound.
It is only countered by hiking up interest rates.
Believe me, anyone thinking that this time round, borrowing more is the answer is sorely mistaken.
Global economies are not fooled by fudged government borrowing figures either and they are about to call time on Brown's overdraft.
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# 104
Bandwagons can have their uses, but I want to make sure that any I board are not driven by a guy wearing a black shirt.
To borrow a phrase, patriotism is the last refuge of a scoundrel.
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# 110 PFF
Folk are not necessarily saying that Osborne was stating an untruth.
Just that he displayed his immaturity and unsuitability for the role of Shadow Chancellor in stoking the fires of despair.
Unlike so many people on this blog with similar views Osborne's, unfortunately, get broadcast.
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I enjoyed George Osborne's comment - he seems great at stating the obvious, especially whan it's already happened.
As for the idea that increasing tax credits will help the economy - well, I suspect it will help some people actually cover their essential expenses, but I seriously doubt this will "stimulate" anyone.
We only have to look back over this last year to recognise that this goverment has kept its pressure on increasing taxation on the lower paid - only to admit it's error at the twelfth hour. We must all recall that the Treasury was "thinking very carefully" about it's next tax increase on petrol just a year ago.
I'm not only accusing the goverment of losing touch with the lower paid, I would level the same criticism at the conservatives. I only hear the Lib Dems daring to say that the most well off in society could perhaps cough up a little more tax in order to help redistribution of wealth.
I do feel that Gordo has become a great "teller of others what to do" while he himself fails to listen to the country.
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# 113
I agree with most of what you say, but fear that any attempt at re-distributing wealth by any government will be severely constrained by the extent to which it impacts big business.
He who pays the piper calls the tune.
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For those of you who doubt that Osborne's comments today on sterling are primarily about his career rather than the good of the economy, could it really be a coincidence that he made them on the same day there is a gushing 2 page interview with the (not so great) man in the Times?
I doubt it. In fact I am certain it is not.......
Bill McFadden
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An election before the bills land on No.10's mat!
Quell surprise !!
...I blame all this economist's talk of ''aggregate demand''.
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#112.
It's the job of Opposition to oppose.
The Tories oppose unfunded tax cuts. Brown did for over a decade until this crisis.
Hypocrite.
He also slaughtered Lamont for doing just that in 1992.
Next, let's look at the borrowing figures...
Government borrowing is NOT 37%, including all the other borrowing (NR, PFI, Banks, Network Rail) it is more like 70-80%.
Way beyond Brown's own 40% rule.
You cannot fool the market. If Brown seeks to borrow more money, he will have to make it attractive for others to hand over their cash.
So, hike up interest rates? Can't.
Erm, sell gold. What gold? He sold it.
Erm, sell Sterling... Ah, sell Sterling.
Problem is, you sell Sterling.. you flood the market, the £ collapses.
Osborne breaking an 'unwritten' rule? Is that somehow worse than Brown collapsing Sterling, causing economic pain for decades and also higher taxes and lower growth for a generation?
Brown says we can afford this, I think the money men will say otherwise.
And not even Mandy can spin that.
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The sad part of this is that there isn't actually a way out, not within 5-10 years anyway.
If you dig yourself in a deep, deep hole as we have for about 20 years then it obviously takes a while to get out.
The biggest error will be if we refuse to take the pain, because that will only deepen the problem and delay turnaround.
A few decent ideas have been posted on here; i want to submit one more; if we want a vibrant manufacturing industry then we want investment. If businesses are successful without investment then great, they can pay a bit more to fund the direction we want;
Put Corporation tax up to 30%
Increase 1st year Capital Allowances on plant & machinery to 125% and on buildings to 75%.
This will stimulate the capital-building industry overnight and encourage our manufacturers to invest in best kit and become truly competitive. This is the only way we're going to become able to pay our way in the World. Remember, we lose £4bn a month to the World in total trading, that's what's killing us.
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It is about time the Government told the truth and the media told the truth .
I am sick of listening to mealy mouthed sycophancy from the BBC and press.
The economy is a dead parrot . killed by the combined forces of Brown ,Blair and Darling.
The pound is nearly the same value as the euro, it is down against the dollar.
What more do you need to know before you admit that we are up sh*t creek and the captain , the GREAT GORDO , took us there?
From what I have gathered the rest of Europe and the Ozzies think we started this!
But what do we get from the media?
Polls asking loaded questions about whose best in this crisis, a push to canonise Gordon Brown and the Labour Party, as much anti stuff as you can spin about the Tory Party, the Liberal Party and the Scottish National Party and all those in between don't even get a mention.
The BNP seems to have done well in certain parts of England yet NEVER gets to take part in awful programmes like Question Time , never gets a chance to air its views everyone just has to accept what the BBC says is true , BNP = BAD.
I think the English will give the whole lot of you something to think about come the next, or indeed any ,election.
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# 117 PFF
There really is no point re-living the past, especially from such a partisan perspective.
I can look back on administrations of both parties going back as far as the 50's.
Frankly, the most effective Chancellor that I recall is Ken Clarke mainly because, as a very laid back guy, he didn't actually do much. The best Chancellors are those you don't notice.
Unless a really brave Chancellor is prepared to tackle the tax-avoiding excesses of big business, it's best they do as little as possible.
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This is what Osborne is really worried about:
http://thestupidtimes.blogspot.com/2008/11/osborne-fears-donations-collapse.html
Davis would be a much better choice for SC, as he isn't damaged goods.
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This month - before Osborne had uttered a word of his speech - the pound already had hit a six year low against the dollar and an all time low against the Euro.
This could have been the market anticipating the remarks of Osborne - flying pig alert - or it just might the judgment of the market based on its view on the prospects of the UK economy. Unhelpful statements (aka reality checks) from the EU, IMF and British Chamber of Commerce seem to point in the same direction. In fact, the whole world army is out of step, except Gordon.
Osborne's comments will have as much negative impact on the value of the pound as Brown's "We are the best placed economy" comment have had positive - ie zero in each case.
Of course, the words of politicians are never disengenous and are always spoken with the interests of the country, rather than the party at heart. But, and who knows why, people and markets sometimes discount - or even ignore them. It is a funny old world.
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# 119
To paraphrase a Tory Election mantra from bygone days - if the BNP is the answer, it must have been a b****y stupid question.
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#120.
I disagree. If there was more partisanship holding government to account, there is more of a chance that the right decision gets made by government.
Borrowing money to fund tax cuts is not the right thing to do. Borrowing is too high already and it's only going to get worse as jobs turn to dole.
Mmm, interesting how every Labour Government leaves more on the dole than when they were first elected.
What a dreadful epitaph.
Incidentally, the best Chancellor's are the ones that guide an economy not force an economy. Clarke was one but Howe was the real master.
And he put taxes up in a recession - work that out!
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That's pretty much the case.
The smart money was moving out of the UK a few years ago. There's a few indicators which suggests the British economy is useless and the people are a pain in the ass. This blog shows it every day.
The average British performance isn't great, but a few arrogant business leaders and irresponsible people game the system and manipulate the tone. This taints the whole and drags everything down even further.
I've just looked at the BBC News page and can't believe Osborne is making the lurid and negative claims he is. As surely as this blog emptied of more reasonable people, so the Tories risk investor flight.
Some people want to "win" so much that they forget proper form and attitude. No lie is too big. No punch is too low. Osborne and Cameron's position over the pound and Baby P is a shocking abuse of their status.
Floella Benjamin comments in a Guardian interview on children's television, cost cutting, and globalisation; and the values she was taught by her parents of consideration, contentment, and confidence.
My view is that the "Brown Plan" addresses the issues Floella Benjamin raises in a positive way while Osborne and Cameron continue to traitor themselves and do damage to real peoples lives.
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#121
Thank you. I had been wondering.
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Interesting Cassius Article on the sterling crisis and it's political implications:
http://cassiuswrites.blogspot.com/2008/11/what-markets-are-trying-to-tell-us-if.html
If Brown is being honest with the public, perhaps he should call an election?
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The pound will soon be dead, in its place, we will have the euro. Don't believe me? Look at the coins in your pocket. The 1p is starting to resemble a 1 euro cent; the £1 coin, 1 euro coin. Notes, slowly changing size to the size of the Euro.
Personally, I love the pound, I love being separate from the Europe continent, I like my little island, sure it's cold and wet most of the time but it's HOME.
We need a change in leadership and I'm not saying vote Cons or BNP or whatever, we need a leadership made from the top people in their professions, and not just a bunch of people who have "studied" real life in some posh, private school where they know NOTHING about REAL LIFE.
A public vote on INDIVIDUAL issues, and policies that are LONG TERM. It would also be nice if these policies were legally binding. Did you know that politicians are NOT BOUND BY LAW TO KEEP THE PROMISES THEY MAKE IN ELECTION CAMPAIGNS?! How wrong is that!!!
I am at a loss why the British people put up with the way that Labour have treated us, more of late then anything. People in other countries laugh at us, we (the UK) OWN NOTHING anymore, we are BROKE and have nothing left to sell. We manufacture NOTHING and out-source EVERYTHING.
Perhaps the reason we don't fight against this tyranny is not because we have no spine, maybe it's because it has been BROKEN?
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Nick...surely you can afford a better motor if you are being salaried by both the BBC and the Labour party?
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Very good analysis at #36.
For those who disagree with Brown's approach what do they suggest as an alternative?
Stimulus through "trickle down" economics?Perhaps a change to inheritence tax to masively benefit the very wealthiest part of the population. Or perhaps do nothing and witness, as our economy contracts, literally millions of people lose their jobs?
We are fortunate to have Brown leading Great Britain at this critical time in our history.
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Your mouth is running ahead of your brain if you want to throw a sick punch like that, but it contains some truth. I'd take a look at the arrogant CBI who oppose sound governance and their Tory pals who oppose fair wages. Both play up as if the Labour government is just an accident while they wait for their rightful place at the helm.
The financial chaos and house price insanity can be laid at their door, and the way they SCREAM when they're held to account is an Oscar winning performance. But, they've been found out. Labour are developing more confidence and not just calming the situation but reshaping things so these barons and spivs can't do it again.
People like Boris Johnson and other trolls will try and suck everyone into a fight and make issues of substance and intent into dumbed down issues of personality. They want chaos and fear: it makes their policy free zone and greed easier to sneak under people's radar. The Tories haven't changed and you'll never get the keys to the executive lavatory.
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Osborne is an idiot but at least he isn't in power. However, if this is his latest offering, stating the bloody obvious, then I hope he never gets into power.
He is reportedly taking four months off to spend more time with the economy. I wonder whether we will hear any sense from him in that time; then he can go back to posturing and posing for the Tories and forget their needs because David needs him for a spin doctor.
He should be permanently put on notice - as should Cameron - that if any more flops like their Tuesday "tax increase" plan occur, then they should both carry the can. Cameron only announced it because Osborne was damaged goods, and damaged his credibility with the big City organisations alongside it by talking for two days about a revolutionary new plan and then offering a pile of pants.
I'm afraid the Opposition is just not up to much any more, so Gordon has open goals for all this mumbo-jumbo. The Tories no doubt claim they are saving their best stuff for nearer the election, but I think this is just beginning to look to me like they are saying "manana, manana" - while Brown is getting away with economic murder today.
Who will rid us of these turbulent priests?
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There comes a point at which the markets decide it is no longer worth investing in a country. Iceland appears to have reached that point. Other countries have had serious problems and have ramped up their interest rates in order to support their currencies.
Brown is taking the UK down that road with alarming haste. Already massively indebted, he proposes the UK should borrow more, then goes gallivanting off around the world suggesting others do the same simply to provide a fig-leaf for his own reckless policies.
Hopefully, Sarkozy will continue to lead the world out of this crisis. Brown would just lead us all to disaster. Thankfully, Brown's ideas are seen as ridiculous by most people - both here and overseas.
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The low paid will benefit from extra money in their pockets, it will help them pay their gas and electicity bills giving the energy companies some much needed extra profit ! Brown is an idiot, it's official. Unfortunately Nick and the whole of the BBC have been totally conned by our deluded PM. Even Sky News bias their opinions towards barmy Brown. The country will be bankrupt soon (if it isn't already).
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This is a bit off topic but when I was thinking about the new compact camera I'd bought the other day, I was wondering why its sensor, brain, and other stuff couldn't be upgraded or swapped out.
Yeah, I know a compact camera is a toy. I'm using it to get used to stuff before getting an SLR and camcorder but forced obsolescence niggles me. Another annoyance is bring in a new range with a few "must have" features and dropping functionality, so you're forced to level up to the "premium" range.
Anyway, I just discovered RED movie cameras. You can swap the guts in and out to tailor for the job or available finance. I think, that's an interesting comment on growth versus development, and raises questions about British industry and markets.
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#125...
Thank you for so summarily writing off the country I live in.
Don't be so dismissive of British private enterprise.
No bosses, no firms. No firm, no jobs. No jobs, no taxes.
No taxes, no government spending.
Government does not have a divine right to money that we, the taxpayer, sweat for.
That's real arrogance.
As for the UK's broken society, Labour broke it. The increase in violent crime? Just one indicator. How about declining social mobility? Or their failure to reduce child poverty?
Still keep them poor, on welfare and give them poverty of aspiration and you have a Labour voter for life.
What a pitiful political doctrine.
I suggest you look at the Centre for Social Justice because only one political party gives a monkeys.
As this week's events with that poor baby shows, Labour don't care at all.
Why don't you go and play with your new toy and give the people that really give a damn a chance to debate the situation of Brown's own making?
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Why I think Gordon Brown is going to the country in the spring of 2009:
I have noticed a few political and non political movements and can say I think it highly likely that Gordon Brown is going to Cut and Run and call an early General Election. Brown has avoided outright media speculation but the point has now come where Gordon Brown will have to face questions and either call an election or rule one out for the spring of 2009.
Brown is obviously clearing the decks by the considerable legislative U-turns of late and shelving into the long grass like post office closure. The cynical Brown/Mandelson reasoning is to leave the hard choices and unpopularity for the next post GE Government.
Brown has scrapped the 50 Labour party achievements list since 1997 and has even removed the 2005 Labour Manifesto from the Labour party website. Maybe the references to ‘No more Boom and Bust’ were just too much for Brown. Other interesting Labour party movements are advertising for election personnel on fixed term contracts and the Labour party now calling itself *Britain’s Democratic Socialist party lead by Gordon Brown*.
The coming Pre-Budget report is also likely to increase tax credits in a cynical pre-election bribe to enable Gordon Brown to make party politics about a Tory Government taking them away. Gordon Brown seems to go out of his way to make party political points out of the hardship he has created. Gordon Brown is a ruthless party political politician – He knows no shame when it comes to taking political credit.
Brown knows that unemployment is a lagging economic indicator and that to leave a general election any longer, means the dole queues will be huge and this is the only thing Brown does not want the credit for! The 10p Tax deception and its political fix also expire at the end of fiscal year 2008-2009. Be in no doubt that Brown will calculate that he can pull Darling’s strings to extend this and call an election as late as June, then if he won have a mini budget and remove these measures.
The Cynical Gordon Brown will also have calculated that Britain takes up the chairmanship of the G20 in the first quarter of 2009. Brown thinks that this will be a strong card for him - international statesman and all that. However, there could well be a problem in that it makes Brown look domestically remote, more interested in taking the credit internationally for something than dealing with the hard decisions back home as he has deferred these post General Election.
The last reason I think Brown is going to call an early 2009 general election is potentially the most cynical of all but equally damning to the most repugnant British politician in the post war period. Brown will calculate that a major terrorist atrocity could well hit the United States, Britain or an ally in the transitional period or early part of Obama’s term. Brown will hope to get a bounce like Blair did after 9/11, so that he can use the Credit in an election campaign
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#137.
Mmm. I doubt Brown will go at all in 2009.
As Scotty said "You canna break the Laws of Physics Jim."
Brown can't break the laws of macro-economics.
This recession is going to be vicious, it's going to go straight into the Labour heartlands of moderate to low skill jobs. Brown isn't at all popular with the core vote, read LabourHome and you can see they really don't like the guy.
He's tolerated because they know if there was any kind of Thatcherite putsch; they face a generation out of office.
As Osborne rightly points out today, excessive borrowing will cause on run on Sterling, interest rates and taxes will have to rise. Brown might bluster but the City does not lie. The verdict on Brown's handling of the economy is being played out.
Harold Wilson presided over a 15% devaluation, the UK in the last 8 weeks has suffered a 25% devaluation against dollar and euro.
Elections change everything and the opposition is dying for a good fight, Labour knows damn well that 1 or 2 good policies will do for them; just like last year.
Also, the overall opinion polls don't matter, it's the marginals and there, the Tories have big leads.
Just as Brown cannot break the laws of macro-economics, neither can the Tories. However, they can go places Brown is mortally unable to.
The key battleground will be cutting government spending. Mark my words. Not more spending, less. That is the real elephant in the room.
As private jobs go and households see council taxes rise to keep more non-jobs in work - patience will run out.
No-one ever got elected under-estimating the sophistication of the electorate.
The public are very concerned about the level of borrowing, they can relate that to their own finances, when times are tough, you don't borrow more, you spend less and you hunker down.
Labour are proposing the opposite, great for their core vote, rubbish for the poor souls that have to pay for it.
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CEH your comment @ 135 makes a point I was going to make on this subject.
Most of us are still working and earning in spite of the economic downturn. We are also spending what we earn.
Mostly on necessities, but like CEH I have recently bought a new digital camera having been looking to upgrade my present one for a long time. Are we bucking the trend? Or is it nearer the truth that consumerism is still the main driver of the UK economy, but not quite as buoyant as it was?
My point? Most of us are still earning and spending. Of course... we have to.
We are unlikely to spend on shares in dodgey property companies, subsidiaries or Hedge Funds.
But those rich enough to play the lottery on the latter and persuade fund holders to do likewise are precicely the reason for banks holding on to capital and being reluctant to lend. In effect these are the "suspects" for exacerbating the economic downturn.
The previous rise in property prices in this country was caused by easy borrowing and there being too few homes for the number of borrowers hoping to buy.
Prices for such things as homes, fine art and antiques are largely fixed by demand and ability to buy. But at least if you are fortunate enough to own these things you can still realise something for them at the market rate or hang on to them as a capital asset.
Media headlines talk of a property "slump". This, in my view, is as ridiculous as some bloggers blaming the Government for the present situation.
Property prices are becoming more realistic because banks are reluctant to lend and the demand is not as high as it was.
I know I've made all these points many times before on this and other blogs, but my contributions mostly seem to fall on deaf ears... or in the case of the blog "deaf eyes".
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"Gordon Brown has signalled [sic] that he regards help for people on low incomes as the most efficient way to stimulate the economy."
I'm going to send up two cheers for the government for giving the Post Office the card account business. For once I do agree with them and that this action will be appreciated by all those who frequently use their local post offices. Perhaps this will stop the rot in demolishing a perfectly good network, save jobs and help pensioners who would otherwise have the expense of traveling to more distant places for the same service. This will actually help people who are often on low income.
I will, however, be very interested to see who actually benefits from the above quote. His message is to world leaders, it does not mean he's actually going to do anything about it here in Britain.
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#137
"Why I think Gordon Brown is going to the country in the spring of 2009:"
I can tell you exactly why he will not go to the country in the spring of 2009 - he'll lose - and he's enjoying himself too much telling everyone else what to do.
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Money is already leaving The UK in the wake of our finanial situation leading to a really worrying run on sterling. If you then squeeze the pips of the better off by raising their taxes substantially they will also follow Lewis Hamilton and take their earnings and employment resources out of the country. It happened before with the famous brain drain when highly qualified well paid professionals and entrepreneurs emigrated to places where they were more highly valued and respected. We need these people to provide taxes for The Treasury. Without them we really are doomed.
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Gordon Brown should go ahead with his proposed plans to borrow in the bad times and invest in new green technologies that in future will leave us less at risk from the dependence on foreign oil. Oil that we had to see us for a generation but was sold by Thatcher to make a cheap buck.
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With regards to the comment today by George Osbourne, anybody who thinks that his comments will not make the pound fall further is living in a dream world.
Gone are the days of fixed exchange rates, we have a market that decides the value of a currency. CLEARLY if one half of the government keep talking about the governments borrowing (regardless of whether this is larger than other counties, which indecently it isn't) then clearly the pound will become less popular.
This is why it is an unwritten convention that leaders of opposition do not, and should not run down a currency publicly. Anybody who thanks George Osbourne for pointing this out should ask themselves, why could he not have talks with Gordon Brown in private, and air his concerns.
Clearly the only logically answer for this is that he wanted media attention, not for the benefit of the economy, as said, the opposite will happen. He in fact makes it for his own ailing popularity, and also that of his party.
If people cannot agree that a fiscal stimulus is needed, they can at least agree that George Osbourne's actions are disgraceful.
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I posted something at about 12:50am.
It didn't contain swearing or abuse.
It was a genuine, considered post.
I was even polite in my request to Nick.
Where is it ???
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Using Keynesian methods requires sound judgement and accurate timing. In other words it needs COMPETENCE which is a quality alien to Gordon Brown.
I think that George Osborne is right to point out the pitfalls .... but many of us had all ready worked it out for ourselves.
Unfortunately, dim weaklings will see Gordon Brown's short-termism as an easy and painless fix and are likely to support him rather than George Osborne.
Gordon Brown could sink the lot of us through his incompetent bungling.
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I'm glad that Brown has now admitted to Nick Robinson that UK has high levels of debt.
If you want to stimulate the economy by fiscal means to get people spending, surely the best tax to cut would be VAT, by however much you can afford.
UK however has a more fundamental problem, putting more money in people's pockets is only going to mean they go out and buy foreign made goods, albeit providing a welcome boost for retail businesses.
UK's financial services industry will never get back to its 2006 highs (some may say thank goodness), what is going to replace it ?
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Dear Nick,
I will try again.
We would like to be informed on what is really happening.
"New World Order".
Our Prime Minister is talking about this again during our current financial situation.
Please enlighten us, or more people will become paranoid & turn to conspiracy theories.
Please post this, it is a reasonable post by an honset, ordinary licence payer.
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The old system of global financial governance was falling apart. It's just a new system: Bretton Woods II. Nothing to be alarmed about.
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It's not gone without notice that those who tend to slate George Osborne can't even spell his name properly! If he disagrees with Brown then he would be stupid to sit on his hands and say nothing. If he does so in private who the heck would be aware of what he was thinking?
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Given we have such a problem with our Prime Minister, why does his economic approval rating eclipse that of the Tories, and how will that affect any election between now and 2010?
Osborne's silly comments about "scorched earth" suggest the Tories are still not understanding that their bubble has, unfortunately, burst, and radical measures are needed to reverse the general trend.
Regardless of Brown's character or lack thereof I worry when the only alternative is Cameron and Osborne.
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gordon brown hasn,t a clue, i voted labour all my life but not now, i didn,t vote for brown, he got in the back door like a dictator,he,s ruined this economy. Bribing the people of lower taxes, thats not going to help the economy, what about the people being made redundant.Everyone will be saving there money instead of spending it.
Why wern,t the alarm bells ringing when Northern Rock failed, GB and AD are last minute dot com clown outfit.
The 10 pence tax fiasco, it was the rebels in his party that forced him to back down.
He blames america when mess he got us into lies with him. And he takes action he didn,t have a clue how to handle the baby p affair.
I must agree with osbourne although i don,t like him its browns way of getting us into the euro. Where was my vote on the lisbon treaty, Europe is just a dictatorship.
The quicker the clown has gone the better
Labour is finished, don,t believe the hype about the brown bounce, dummy,s dont bounce .
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gordon brown , your fixed roof has been blown away, call an election so we can get you out as you got in the back door you loser
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Listening to to Brown and Darling's press conference, it was a little tiring to hear constantly of globalisation just as it is coming to an end and localisation is now the survival mechanism.
Global crude oil production passed its peak in 2006 (according to BP's Statistical Review 2008) signalling the running down of world transport and with it rapidly increasing cost of imports.
Communities from Totnes to Brixton. from Lampeter to Waiheke Island are localising their energy and food supplies and services. Perhaps the rescue of the Post Offices will herald a recognition that charity begins at home.
It's re-localisation now - globalisation is just for concepts passed on!
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Charles_E_H..... @37 wrote:
"(And just in case folks missed it: someone spoofed my identity earlier in this topic. It's not the first time it's happened, and not worth commenting on more than that.)"
Quite right: You are beyond parody.
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Charles_E_H... @43 wrote:
"I remember how bad things were during the Tory years and never want to live through that again."
According to what you wrote about your medical condition in a previous thread, there's a good chance you won't have to.
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MS @ 156:
I was about to make a rather more cruel remark than that but yours will do fine.
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We will have an election in the Spring next year (before the full impact of the Depression hits. It will be pulled together with a referendum on joining the EMS.
In this new world order, we need to understand GREAT Britain disappeared quite soon after WW11 and we are in the second division in the world hierarchy and only protected in that position by support from Washington.
The diminishing calibre of our politicians is a direct result of the diminishing leadership of Britain in the World. A top team attracts the top managers. George or Alistair, David or George are just bit players that would find it hard to hear themselves heard in a council chamber
We are at the point where Britains influence in world affairs has no impact and no creditability and with lack of great leadership our ability to transform Europe and lead within Europe disappears as well
Where are our future great leaders ? Are we to become a faceless annexe of Europe or a leader of Europe?
Alas, Sterling maybe showing us the way
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I see the Beeb has gone full headline this morning with "Osborne faces pressure over pound".
There then follows an article in which the "pressure" is from Gordon & Scapegoat complaining that it's in the interests of the country that George Osborne doesn't bring out his gargantuan influence and wipe the pound out in one fell quote.
Tucked away later is Ken Clark mentioning that (a) Osborne is right, and (b) there's no such convention as they claim.
An interesting headline might be "Brown fails to gag Osborne over sterling collapse" or "Clark rubbishes Brown unity claims".
Any bets whether we'll see something like this soon Nick?
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So it's irresponsible and partisan of George Osborne to suggest that sterling might be about to burst (which it obviously is) and that it's Gordon Brown's fault (which it obviously is). But it's responsible and bipartisan of Brown and Darling to respond to the financial collapse by borrowing massive amounts to fund a Ceausescu-style public works programme and cut taxes to bribe people to vote Labour. And it's doubly responsible and bipartisan of Brown to accuse the Conservatives of undermining the national interest by not supporting his absurd, catastrophic and hubristic scheme.
I see.
The Brown bubble, unfortunately, is an addictive disease, a kind of social alcoholism (and the metaphor is not entirely drawn from Saturday night in any English high street). And Brown has, correctly, acknowledged that the country has this disease.
Why should Osborne, while agreeing with this analysis, NOT object to Brown's decision to treat the disease by prescribing a bottle of vodka a day?
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# 157 re #156
How pathetic is that? Resorting to wishing a contributor dead rather than engaging in rational debate to refute their arguments.
There are times when I am heartily ashamed of my fellow-countrymen.
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The economic commentators in the USA are les s than thrilled by the outcome of the G20 summit. See Mish Shedlock's piece "G20 Summit blames buyers of poisoned apples" http://globaleconomicanalysis.blogspot.com/2008/11/g-20-summit-blames-buyers-of-poison.html
and Dani Rodrik's http://rodrik.typepad.com/dani_rodriks_weblog/
amongst others. They all say the same - this was just posturing and nothing of substance was agreed
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Quoting: 151 - Crowperson.
"Regardless of Brown's character or lack thereof I worry when the only alternative is Cameron and Osborne".
That depressing sentence sums up the apathy & short-sightedness of the British public.
What about Vince Cable (Oh my G*d, I forgot, he's in the "liberal party").
If sufficient numbers voted for candidates not representing the "main parties" that would really upset their "our turn/your turn" vicious circle.
This a(pathetc) nation gets the politicians/government it deserves.
Drat, I've just missed X Factor :(
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Brown’s offer of twisted logic to hide his mishandling of the economy is typical. Despite his rhetoric, he has not reached a firm consensus in Washington for tax cuts globally, only a draft plan, which may or may not be implemented. It has been a 'talking shop' and photo opportunity that makes him appear competent for domestic consumption.
He is also trying to blame Osborne for talking down our currency. Again, a smoke screen to distract from his own abysmal mismanagement. The BBC have been warning about currency weakness every time they broadcast financial reports.The Pound has been in serious decline for the past 4 months (down 25-30% against a basket of currencies) and thus oil prices will have to rise. Brown is trying to head this unpopular consequence 'off at the pass' by blaming Osborne. The electorate can see through his duplicity.
Brown has virtually emptied the Treasury and now needs to borrow to fund more dodgy tax cuts. That fact alone undermines our currency with Brown postponing reality. Britain is in the worst possible condition to weather this financial tsunami.
For years, Osborne has been calling for financial rectitude ahead of Brown's false beneficence. It is Osborn's job to challenge the Government and he is succeeding in exposing Brown's fiscal mistakes. Why else are Brown and Darling trying to undermine him? Is it because he speaks the truth?
Convention, or no convention, is just another Labour Government mythical invention. There has never been a convention. Our currency is weak because the money markets assessment of massive Government borrowing and overspending. To borrow more will exacerbate the situation. It is now worse than the devaluations the Pound experienced under former Labour PMs Callaghan or Wilson. They cannot blame George Osborne for their utter failures. Osborne offers fiscal competence whereas Brown offers more fiscal incontinence.
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Standard Labour tax bribe isn't it?
Give money to those you have made dependant on you, ensuring that they know that they won't be picking up the bill.
Won't boost the economy, but it will ensure a few extra votes at the next general election.
If brown wasn't such a ditherer (anouncements about talks about talks about anounoucments...) he would already have lined up rapid cuts to help 'protect' christmas spending...
I think they should just ditch the telly tax.
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ps.
Oh and how about mandleson? he is doing the rounds regarding the g20 stuff, Nick, will you ask him about Oleg?
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Labour may have loads of trolls on blogs winding up those who don't trust brown...
But they have nothing like the conservatives secret weapon - CEH.
What a masterful spoof - creating a character that can support brown and appear plausible - amazing!
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vor_tecks @161,
If you knew the target of my barbs, then you'd also know that he "doesn't do debate".
Besides, I'm only advising him to follow his own tenets and 'let go'.
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"a shot across the bells" Have you read anythiing at all - ever. Get a grip and get a book.
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So - we are going to get tax cuts for the poor and an army of civil servants to (try and) make sure that we dont give them too much.
Not that I disagree wityh giving extra dosh to the less well off, after all, there is no point in giving people money to spend on consumer goods that only get imported. Thats just a dead end as far as the UK economy is concerned.
No old chap - Free trade arguments dont work anymore - Chinese factory workers don't buy ANYTHING that is made in England.
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Man dleson told Charlie on the BBC this morning that he'd like to be asked to take part in Strictly Come Dancing.
Give me strength.
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At you next Labour briefing (when you get your spin/instructions) why don't you just ask Gordon "why do you think excessive spending of money you do not have will work?". Then after the waffle, which you should ignore, ask "and what if it does not work ?". This will prove he has no plan (never did) and that he has no contingency. Then again this would require an independant BBC which is not happening up to now.
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Bob Crow was right to start the econamy fight back build council houses for rent not for sale it will get people back to work and help solve the shortage of houses ,this gives the young hope of some where to live. until they can aford to buy.
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# 171
Man dleson told Charlie on the BBC this morning that he'd like to be asked to take part in Strictly Come Dancing.
Give me strength.
Yeah, would look good in a ballgown on Brendan Cole's arm!
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#174 yellowbelly1959
Yeah, would look good in a ballgown on Brendan Cole's arm! ........... poor Brendon Cole.
I read somewhere that Matt Lucas and David Walliams asked Mandleson to make a guest appearance in Little Britain USA because their ratings were poor.
Can't see how Mandleson could improve that, can you? The thought of him in regency dress.....UGH! What the americans would make of that is anyone's guess.
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Steve @ #170:
"Free trade arguments dont work anymore - Chinese factory workers don't buy ANYTHING that is made in England"
This statement sums up the root of the real issue like nothing else in this entire blog.
Unfortunately, its a shot right over the head of the blathering amateur politicians making up the majority on this blog!
Someday they may wake up to the fact that while they argued over how to make money for themselves out of helping others to build up robust economies they have totally compromised our own long term, self-sufficiency...
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""
163. At 3:25pm on 16 Nov 2008, but-i-trusted-them wrote:
Quoting: 151 - Crowperson.
"Regardless of Brown's character or lack thereof I worry when the only alternative is Cameron and Osborne".
That depressing sentence sums up the apathy & short-sightedness of the British public.
""
But you are all so parochial! Here we are with aglobal problem that is staring you in the face.
It is telling you that there is a problem that is endemic to the entire ediface that we have built up over the past 60 years (at the very least).
It is telling you that we have an axiomatic crisis here, something seminal.. something very very basic in the assumptions that underlie what we have built.
Is any one looking at this? Are they H..!!
Do yourself a favour.. all of you. Do a literature survey across academia seeking recent papers that consider they contradictions between what we say we are trying to achieve for one another and how we actually go about achieving those goals.
You will all be greatly comforted to know that it is not really exercising the great brains of the world either.. Sleep on.
They are more interested in finding ways of making others to be like us than teaching them to learn from our mistakes.
Research is always so much easier than thinking.. don't you think? :-)
China is not slumbering any longer, they deliver a good part of the energy to your door...
and India has already bought the West's steel production capacity and is vertically integrating into Japan's vehicle dominance.
I suspect that Mr Sarkozy ( and maybe some LibDem's ) have read the signs.. and realise the game is up.
Fear not... George and David will put their chips on Green Industry to perpetuate demand for our skills for the next 20 years.. then hopefully their will capital projects going begging for Terra Formers on the Moon and Mars.
Should be a snip for a nation that has just transformed old Gia!
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Why does every Tory action have a detailed critique whilst Labour propoganda is just parroted out?
Biased Biased Corporation.
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Gordon Brown to stimulate the economy by lowering taxes for the lower paid ?.Was he thinking of the lower paid wnen he, 1.Robbed all our pension schemes, 2.Lost all our banking and other details.3.The 10p tax debacle, 4.No prison places so criminals can kill and rob us with impunity,5.Take us into Iraq costing lives, terrorism and a hell of alot of money,6,Oh and lets not forget the dithering over wether to have an election or not.Then theres PMs question time.Dear old Gordon trying not to answer questions especially not using a yes or no.As he tries to convince us how he is going get us through these tough times, I look behind him at Harriet Harman,Jack Straw,Odd Ball and wife,the sleeping postman and Jacqui Smith.What a team.What a disgrace.
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Gordon Brown to stimulate the economy by lowering taxes for the lower paid ?.Was he thinking of the lower paid wnen he, 1.Robbed all our pension schemes, 2.Lost all our banking and other details.3.The 10p tax debacle, 4.No prison places so criminals can kill and rob us with impunity,5.Take us into Iraq costing lives, terrorism and a hell of alot of money,6,Oh and lets not forget the dithering over wether to have an election or not.Then theres PMs question time.Dear old Gordon trying not to answer questions especially not using a yes or no.As he tries to convince us how he is going get us through these tough times, I look behind him at Harriet Harman,Jack Straw,Odd Ball and wife,the sleeping postman and Jacqui Smith.What a team.What a disgrace.Oh I forgot about Immigration.Phew, theres so many Cock-ups
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Having had everything its own way since P.M. Brown arrived, the first Tory signs of alarm have become apparant now that the nation is becoming aware of a P.M. who is dealing with the current crisis as well as anybody. It is hard to ignore the recent unease on the opposition benches about the often needlessly aggressive way some of them question the Government at the risk of being accused of playing politics at the expense of the country, such as Mrs. Thatchers words about the danger of helping to "undersell the Pound... Not only show the polls increasingly more support for the P.M. , who is heading a much improved team, but also the occasional welcome support by mature , highly qualified and respected experts like Vincent Cable (why oh why dont they make him leader of the Lib-Dems??) The opposition would need a far more patient and sophisticated approach than those rather boring, predictable and hollow attacks (probably media friendly ?) by the likes of the hitherto almost forgotten Kenneth Clarke and young Osborne, bringing back memories of the old "nasty" Party....: tactics that might no longer work in an age of global Centre politics with people better informed and .... aware of the " other" world i.e. at the of the Tunnel!
The Conservative Party has reached an extremely important stage . It could easily lead to isolation in every sense of the word unless it starts using its head and stops underestimating the P.M.
Paulus
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Not a single politician, not one commentator or presenter and certainly not a single 'expert' in the news has correctly identified the two interlinked problems the world is facing today:
1. The little financial difficulty: True, it started with sub-prime mortgages, BUT it is far deeper than that. After all the total of sub-prime mortgages is reported as being some $1.5 trillion, whereas Governments have so far pump close to $10 trillion into the banks. If the problem was just sub-prime mortgages, or 'banks not lending to each other', this $10 trillion cash injection would have solved in one go.
No, the problem is 'derivatives'. These dents and bets are worth some $500 trillion. Compare that to the GDP of the whole planet of just $50 trillion and you get some idea why this fantastic burden of debt can NEVER be repaid.
The only solutions are
a) hyperinflation to degrade the whole of that debt (following Zimbabwe)or
b) legal cancellation of all derivative contracts (!!) or
c) collapse of the whole financial system incl just about all banks, and starting all over again.
We need to choose one and go for it. The future is bleak whatever Gordon does, but pumping borrowed money into the economy in the utterly vain hope of recovery is just about the worst possible strategy.
2. The little problem of Energy and Growth.
Next year the world production of crude oil will, for the first time in history, decline for geological, not political or economic, reasons. Peak Gas will follow some 10 years later.
2008 is the end of the Era of Growth (as growth is predicated on the availability of cheap energy) and the start of the Era of Decline.
No matter what investment is made in oil or gas fields, the total production from 2009 onwards will decline every single year by perhaps 4%, thus our energy sources will halve every 20 years or so. This has already happened in 60 oil producing countries around the world, incl USA (1972) and UK(1999) and now, in 2009, global production will begin to decline.
The 1930s depression was bad enough, but this decline will be on a massively larger scale. To start with, it will be at least 40 years long. 40 years will take us to about 25% of current energy usage, which is what we can expect from all renewable sources combined. So at that stage, provided Governments have been wise enough to have invested massively in renewable energy, renewables may be able to take over from fossil fuels and perhaps stabilise the world economy.
So, the budget should
a) embrace the Green New Deal (£50 billion per year invested in renewables)
b) forget about tax cuts or other increases in current spending
c) choose a strategy for the self inflicted financial crisis - and follow through
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The worrying thing about this "Credit Crunch" it has highlighted that Britain no longer has an economic foundation to support a first world economy, we are not much better than Africa. The contributing factors are that we no longer have a sustainable manufacturing industry to underpin a skilled workforce that can create wealth through export and the like of quality goods. A vast majority of our industry, utilities and municipal function are in foreign hands, meaning that too much money is leaving the country. This “Credit Crunch will leave Britain at the edge of an abyss.
The Tory’s have some need to talk, because it was their party lead by Margaret Thatcher that left us in this predicament., through the rape of British industry .
To draw a horticultural analogy; the good gardener prunes to stimulate new growth, and clears away areas of dead wood and plants that of gone to seed, to plant afresh.
The Tories did none of this they pruned industry, but left it to whither, and when they cleared away old dying industry they left vast areas to go to waste.
We need to start again, we are now in a similar position to Germany after the second world war, which is sad.
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In my opinion the current financial crisis is the fault of the banks and the way they handled there bussiness. Everyone knows, some politicians come on tv and radio telling the people, "you shouldn't have taken out such a large mortgage." i remember the day i went into the bank and told the manger i had a great idea, "Give me a 100% morage so i can buy a house that is about 10 times my yearly wage and do it on a deal and you can give me aother deal in two years to keep the payments down", oh yes, what a good idea it was. The goverment now want us to go out and spend ,spend what? The answer to this isnt by spending money on the high streets. It is the housing market and small bussinesses that need help. Where i come from, the bulk of the town relys on the housing market, there currently are no houses selling so theres no work for the trades men, which means there's a knock on effect on the whole town. The local shops, restuants, pubs, taxi firms and estate agents are all being forced to close. Solicters are paying off staff. Where is it going to end eveyone s experiencing the effects of it. So it is here where it the problem started and here where the goverment need to start fixing it .
S Lundy
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It is quite astonishing that anyone can believe that a 2.5% cut in VAT will get passed on to the customer. Retail pricing is all about price points and no retailer is going to change prices from say 19.99 to 19.59 just as no customer is going to be influenced by such a small drop. All that will happen is retailers will absorb the extra margin. A colossal mistake and a missed opportunity.
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181 cyberpaulus
I take it you must be paid by Labour to write your blog. From all the polls I see the Tories are increasing their lead. All I hear are people getting more and more fed up with James (the world saver) Brown. More are loosing their jobs and houses.
The opposition may as you say be aggressive with their question but that is because they like the public can see this Government is just a joke and we are being laughed at by the world.
Nobody is underestimating James Brown we all know he is screwing us.
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