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An embarrassment of cuts

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Stephanie Flanders | 22:48 UK time, Monday, 5 October 2009

For months, the two major parties have kept quiet on the subject of what, exactly they would cut. Now you can barely shut them up.

The chancellor announced late Monday that he was recommending a pay freeze for top civil servants next year, and a strict 0-1% rise for 700,000 others. Barely two hours later, the Conservatives let it be known that they planned to raise the state retirement age to 66 for men much earlier than previously planned - for some, possibly as soon as 2016.

It's not quite the five stages of grief, but we seem to be past denial - to the stage where each side tries to claim ownership of the handful of less controversial options.

Whomever wins the next election, it has long been obvious that the next government would go for tighter public sector pay control - and a faster timetable for raising the state retirement age. In the most challenging fiscal environment that anyone can remember, each offered potentially large savings, at relatively little cost compared to the alternatives. They were too unterrible to pass up.

It's a solid rule of political economy that if it becomes clear that something will have to happen - it won't be long before politicians try to make it their own. And so it has proved.

On the substance of the two proposals - let me just make a few brief observations.

The first is that the Conservative proposal would save far more money over the long-term - though clearly it would not save much money between now and 2016 (or whenever they decide the new retirement age would kick in).

Tory sources say the change would save £13bn a year from the deficit, or a little under 1% of GDP. There's room to quibble with that number - for example, we don't yet know whether the change will apply to women, and if so, when. On current plans, the shift to 65 for women won't be finished until 2020.

The Conservatives say that the impact on women is "up for review" - in which case it's hard to see how they came up with the £13bn number. But getting people to work longer could clearly deliver this order of saving, albeit over a number of years.

In a paper I discussed back in May, the National Institute for Economic Social Research said that adding one year to our effective working lives would reduce public borrowing by 1% of GDP after 10 years, and reduce the national debt by 20% of GDP over 30 years.

For many in their late 50s, retirement is now firmly in their sights. It's not nothing to be asked to work another six years rather than five - especially if you've been a manual labourer all your life. But the pain will be concentrated among relatively few - and even many 58 or 59-year-olds will have been planning to work beyond 65 of their own accord.

This is a very tight timetable for a change that would normally be decades in the preparing. But it raises tax revenues and cuts pension spending in one stroke. It's not hard to see why the Conservatives decided to go first - before Labour claimed the policy as their own.

You could say the same of Labour's prospective pay "freeze" in the public sector, but that would suggest the two proposals were comparable - which I'm not sure they are.

One could eventually save at least £10bn a year. We don't know what the chancellor's latest pay proposals would save the government, but you can bet it will be in the low hundreds of millions a year. And that's if there is no "catch-up" growth in the pay bill later on.

Why so little? Because the vast majority of public sector workers won't be affected. The Treasury says that 40,000 senior workers will be affected by the pay freeze - and another 700,000 will see their pay rise next year limited to zero to 1%.

That sounds like a lot of people, until you remember that there are more than six million public sector workers in Britain - more than 2.5 million of them working directly for central government (including the NHS). And remember those 700,000 are being limited to a 0-1% pay rise, in a year when the government's own forecast is for inflation of just 1%.

Something tells me that George Osborne isn't going to let things rest there.

Comments

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  • Comment number 1.

    All of the above is rubbish!

    Please read all of JadedJean's comments, on all BBC blogs, for a true and complete analysis of the psuedo-politics served up in our hypocritical, media manipulated, so called western anarchistic liberal democracies.

    We're all being fed BS on TV!

  • Comment number 2.

    #1 BSR,

    I think, strangely, that you may be right.


  • Comment number 3.

    This recession is a heaven-sent opportunity for all the powers that be to cut back without experiencing criticism. Banks call all their debts "toxic" and foist them on taxpayers, while denying these same taxpayers credit. Employers use the crisis as an excuse to cut labour and freeze pay - and now politicians are falling over themselves to try and show which of them is the biggest enemy of public spending. They're all hypocrites and their eagerness to blame US for THEIR errors is beneath contempt. Caledonian Comment

  • Comment number 4.

    [quote]It's not nothing to be asked to work another 6 years rather than 5 - especially if you've been a manual labourer all your life. But the pain will be concentrated among relatively few - and even many 58 or 59 year olds will have been planning to work beyond 65 of theirown accord. [/quote]

    woah that is a sweeping statement, so are you planning working past 65 ?

  • Comment number 5.

    #1

    Yes and Yes. We are being fed BS on TV AND we are being fed BS by JJ.

  • Comment number 6.

    #5

    It is a possibility but now JJ has started to post in a language that mere mortals can read, the rationale behind the argument may become clearer.

  • Comment number 7.

    #6

    The language has changed very little. The lies, distrotions and propoganda reamin the same - unfortunately.

    However, you must come to your own conclusion. Many others have and found JJ to be sadly lacking.

  • Comment number 8.

    They won't be cutting back on contributions for subsidies the EU will give to failed French farmers or for building roads and bridges in Hungary. The EU/Lisbon/Constitution is a done deal. If anything...it will increase. Taxation without representation...what an irony of history. All of history's chickens coming home to roost at the same time.

  • Comment number 9.

    Hmmm, now I wonder what would have happened if an employer had come up with this idea? The fact is we have more women living longer than men and yet men are forced to work longer than women! Why don't we just make men work until they drop dead, and every woman can then retire at 50. Would we notice any difference I just heard someone say at the back?

  • Comment number 10.

    & can we expect the public sector to be subject to the same retirement ages?

    The economic burden of public sector pensions is crippling, especially in relation to council tax (25% has been quoted in some cases). Much of this is due to inept public sector accounting and treasury "guidance".
    Why have funds not been set aside to cover such costs when the liability is being incurred?
    Its yet another case of concealing costs and passing the burden of paying them on to the next generation; a travesty that is unlikely to be addressed as it would prevent current voters taking from future ones.

    Although emotive and a political hot potato, the question of retirement ages is simple - especially if you remove the inherent discrimination in the current system.
    What level of taxation is acceptable and workable to fund pensions?
    What is considered a reasonable level for the state pension?

    Based on underlying (non bubble) revenue projections and demographic projections, set an age that achieves a balanced position. Perhaps setting this into a formulae to be recalculated every few years.

    Of course that would mean having a breakdown of what each element of our tax is used to finance, but then such transparency would make people more aware of the personal cost of things, disrupting the "something for nothing" illusion.

  • Comment number 11.

    As a public sector worker I am a bit sick of comments that my pension is paid for by the taxpayer. Strange as it might seem, i have been paying taxes all my life...and when I retire I will still be paying taxes, so I will be part funding my own retirement.

    However, it seems odd that we have politicians arguing that men (why men?) have to work longer before receiving a pension...and we also have politicians that specifically discriminated against older people by allowing employers to be able to sack them when they reach 65!

    It is probable that hundreds of thousands of people have been forced to retire before they wanted to in recent years.....removing this discrimination would take very little time and immediately start helping with the public finances!

  • Comment number 12.

    Its all about trying to realise the vast amounts of fictitious capital.

    It may possibly enable the Ponzi scheme to run a little longer, but ordinary people know they are being exploited and so-called democracy is a sham.

  • Comment number 13.

    Stephanie, you say the Tory decision would save £10 billion a year 'in perpetuity'. But the pension age was already due to go up in 2026 by this one year (ie 65 to 66). So to me it seems that the decision would save £10 billion a year for ten years, as compared to the existing projections for (very) long-term public debt. Ten years is a long time, but not 'perpetuity'.

    And on what basis do you conclude that an impact on all 49-59 year old men (assuming even that women will not be affected) affects 'relatively few' people? I googled the national statistics and it shows there are about 300-350,000 men a year in this age group - or 3 to 3.5 million men affected by the decision in total. If all women in the age group are affected too, that doubles the number.

    If the Tories also wanted to bring forward the NEXT increase in the pension age by 10 years (ie the age would go from 66 to 67 in 2026, not 2036), that would save even more money, albeit in the longer term (though again, not in 'perpetuity'), for there are many more people in this age cohort.

    But if I have made an accounting error, do let us know.

  • Comment number 14.

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

  • Comment number 15.

    No 10 "Based on underlying (non bubble) revenue projections and demographic projections, set an age that achieves a balanced position. Perhaps setting this into a formulae to be recalculated every few years.

    Of course that would mean having a breakdown of what each element of our tax is used to finance, but then such transparency would make people more aware of the personal cost of things, disrupting the "something for nothing" illusion."

    Knowing the rate of work of the Civil Service, they will achieve this laudable effort somewhere around the turn of the next century !! By which time, all the numbers will be obsolete and they will have to start again. How's that for a perpetual motion machine ??

  • Comment number 16.

    Ms Flanders. I have just tuned out your appearance on the Today programme. My aplogies but exhaustion from my own embarrassment of recent cuts.
    But Evan Davis referred to this thread and I thought I would visit as a sort of apology. I have just had a wonderful laugh at a following item on Today - the late composer Ennio Morricone's soundscape. Brilliant and laughed at the news that a heart felt - alleged life story whine in the newspaper wasn't so unintended in its timing. Girls Allowed new soundscrape out yesterday. I have made a note not to buy it. lol
    But as It Never Rains plays on my computer - no matter what the dire straits - rudeness should not be excused - so Good Morning.
    Subject: it would cost to educate their children in state schools
    Anagram: Historic reconstitutions closeted - HAL clouted - thawed
    A supermarket chain did rather well this AM. Other Supermarts are available.

  • Comment number 17.

    Why are pensions discussions so often in money terms? It has no intrinsic value. If we are tending to live longer we are likely to be consuming more. So we shall need to produce more. All other things equal, that will mean we will have to work longer. Shuffling money just affects how we share out the real output...we will be better off only to the extent we produce more (collectively/on average). If we all worked to 66 we would all get one year less in pension. We would not be worse off. If we alll have less money we are not worse off. Money is just debt we owe to ourselves (and it says so, on paper versions).

  • Comment number 18.

    An alternative to working longer is to consume less. There are many sensible ways we might save (in real terms). Less silly stilletto heeled shoes, less Chelsea tractors, less pay for footballers to squander, less (no) fashion industry, less senseless stick on guitar picks on womens' fingers...the list goes on.

  • Comment number 19.

    Politicians are all now hell bent on working this country to death to pay off the mistakes of a few bankers.
    Why not go the whole way and have less MP"s to tell us off for spending money? We could save loads of cash without their expenses, travel, wages and pensions.
    Is it me or am I the only one tired of hearing that I am responsible for all of this mess?

  • Comment number 20.

    "But getting people to work longer could clearly deliver this order of saving, albeit over a number of years."

    Clearly?

    Err. Hang on a minute. Where are all these extra jobs going to come from? If you delay the retirement age without creating new jobs then you don't save anything and you don't gain any extra tax revenues - you just push the same (or maybe different) people on to unemployment benefit instead.

    What matters is creating new jobs. Until and unless we return to low levels of unemployment, measures such as raising the retirement age are an utter irrelevance.

  • Comment number 21.

    The recent history of doctors' pay is a good example of mismanagement by the current government. The government negotiated a massively over-generous new contract for doctors, then immediately realised they had paid over the odds. They are now having to claw the money back, because otherwise the salaries and pensions are embedded in the system for decades. It was entirely predictable and a classic example of 'boom and bust' in the public sector.

  • Comment number 22.

    That's it no vote for Tories or Labour. Was always undecided about Cameron and definitely don't think much about his sidekick. Listen closely and says spots a lot of words but says nothing. Just got rid of the unwanted over the expenses then with his obvious backtracking on Europe and now this.

    Why we should work longer, harder to pay for the bankers and pay more tax in the meantime. Get rid we need a new system.

  • Comment number 23.

    Oh dear, change of plan; won't be voting Conservative now ...

  • Comment number 24.

    random_thought at #20 makes a good point, to a point.

    We tend to think of "having a job" as being on a payroll, getting paid. To each individual it is the paycheque that counts. But in real terms a job means producing something valuable. It is extra output that counts. People who are paid more than the value of their output harm others. We can create jobs by subsidies; it is a short term problem solution at best. Reducing waste (please see above, and add reducing mindless waste on expansion of so called "higher education" to 50% of pop.)is a better long term solution (for those who expect to live long enough for it to matter).

  • Comment number 25.

    Just to elaborate as to why I feel so strongly. I lost a business in the 90's I've been made redundant in 2 recessions and now in my 50's can't find work. I'm working day and night to set up a small business again and I have some multi-millionaire politician telling me to work longer when anyone with a little brain-matter could see this coming. And can see it coming again with the establishment's attitude of "Isn't it so lovely house prices are going up again......". Get rid of Trident. Get rid of the clip board army. Government gets more than enough money. USE IT WISELY.

  • Comment number 26.

    #11: You do not say whether you work in central govt or local govt.

    If local govt then your authority has a pension fund (just like private sector) and the chances are it is massively in deficit (also just like most private sector final salary schemes). Is so, why should you be in different situation to the private sector where employers have changed terms, closed schemes to new entrants then closed schemes completely - or are you expecting us, in the private sector to not only pay for our pension shortfall but also, through higher taxes, pay for yours as well.

    If you work in central govt then all your pension is state guaranteed, there is no fund, we are all paying through taxes for it - why should this be more generous than the private sector (please do not get me started on MPs pensions, it makes civil service scheme look petty).

    Personally I would change all public sector schemes into standard money purchase arrangements (much like the private sector) but, particularly for lower paid civil servants, very generous contributions from your employer. Eventually this would create a GB sovereign fund of considerable size which could be invested and create wealth. Only problem is that it would cost govt a lot of revenue in the short-medium long term (say for first 20 years) before becoming revenue positive compared to current arrangements.

    The gob smacking stat in the blog is the number of people employed by central govt. How many of those are "managers" and not front line. If we cut say 500,000 central govt jobs at the manager level would anyone notice the effect on service?

  • Comment number 27.

    In politics, the fear of being first to state the blindingly obvious can be seen as a conspiracy, or is it just ignorant incompetence? (see #5 above). Conspiracy requires that our 'esteemed' leaders are competent and I think the evidence is strongly against this. After all stupid and incompetent fits their recent (i.e. decade or so) performance quite well doesn't it?

    Yesterday's announcements are sadly not really (or even slightly) though through:-

    1. Raising the pension age: from a political point of view all 58 and lower aged men and a similar batch of women are not going to like this one bit! Now, as the older people get the more likely they are to vote (in general) it does seem particularly perverse for the Tories, who presumably want people to vote for them, to propose this. From an economic point of view, (if we assume that there is no net change in the number of jobs) those at the other end of the job market will not get jobs and progression up the job market will be stalled and the cost of unemployment benefit and other social benefits may well prove greater that the pension saving (?) Also pensioners also tend to get lump sums and if theses are to be delayed then there will be no economic benefit from the spending of these either. etc. etc. etc.

    2. Cut top peoples pay: politically as most people are not top people then Labour should benefit (unless of course that these people demand early retirement etc. etc..) Economically: meaningless as the sums involved are tiny.

    As I see it there are no easy choices. Take, for example an across the board pay cut for everyone - in both public and private sector (of say 10 percent). This might be sufficient to start repaying the gigantic quantitative easing and other economically insane schemes (incl. zero interest rates) - but the political will to commit political suicide is absent from the political arena without a National Government.

    Mervyn King (and others lacking in competence in the government and civil service) have destroyed the national economy and we will have to pay the price. To get through any of the economic changes that are required we will need cross party agreement and frankly I see no other option by a National Government otherwise the people will vote with the selfish pocketbooks and prevent any effective action, which will make matters worse. Indeed it is my opinion that it would have been better to get the pain over last year and let the banks go bankrupt than to continue to prop up these incompetents with more and more public money. In other words, the hole has got deeper because we are still digging, (quantitative easing and zero interest rates should stop now and be reversed!)

  • Comment number 28.

    This is just the beginning and unfortunately the REALITY of the situation will panic the nation.

    For a start the £175 billion forecast is going to be light, it will be nearer £200 billion and despite Labour's planned tax rises, will be higher next year.When you consider the NHS costs circ £100 billion a year the magnitude of the situation becomes clear.

    Labour in particular (Not helped by the BBC passive reporting who are in fact a indirect tax themselves) have been disingenuous in pretending everything is OK, Labour has been spending, spending, spending and know we have to cutback to an affordable level, increasing taxes just won't work.

    Instead of drip feeding cuts we need a grown up debate on a realistic solution ,Labour are incapable of doing this as their ideology gets in the way of common sense. If Labour get in again I am convinced the UK will be bust within 12 months, no foreign investors would buy our debt because of the risk of default/ collapse in the value of the pound.

    For the sake of the nation we need a general election now,to avoid 12 months of anxiety and likely retraction in growth ie Double dip...




  • Comment number 29.

    Hmm, even if it does not save vast amounts, freezing top pay would at least BEGIN to do one thing that is desperately needed: narrow the gap between top and bottom incomes. If only for that reason it would be a good idea. And why are the unions protesting? Don't tell me they are trying to get in bed with the Tories now. Have they forgotten Thatcher?

  • Comment number 30.

    As a 59 year-old I don't care about the party politics, nor do I think that anyone (including the government) owes me a living. I have a personal pension that will pay me very little once I retire. Therefore, being healthy and lucky enough to enjoy my job, I have long expected to work on until I'm 70. However, what chance is there that I will be allowed to do so?
    Most of us in this age group justifiably fear being off-loaded by our employers. No-one employs the over 55s, ever, at all - don't kid yourself about anti-ageist laws. If I lose my job now then my chance of earning enough to retire at 70 goes out the window. There's the rub, my friends.

  • Comment number 31.

    Another day, another convert. Robert Fisk is now confirming the inevitability of the death of the US$ and consequent meltdown. Let me think, who might know more about how the world works, and who might be more willing to tell the truth - the BBC or Robert Fisk? Tough question.

  • Comment number 32.

    You obviously do not listen to the station that employs you, Steph, no party leader has so far committed themselves to cuts, all we have so far is a request from one party to a body to consider not raising salaries in the public sector, and request for parties to come together in concensus on the retirement age from another party. If Labour is ignored by the body that controls public sector wages, it will say, we tried but they didn't listen, and if the polls start going against the Tories, they will drop the retirement age thing, saying they couldn't get consensus. It's all smoke and mirrors again, abetted by journalists trying to earn their living.

  • Comment number 33.

    AN INFANTILE/ADOLESCENT DISORDER - THE ME ME ME PANDEMIC

    foredeckdave (#7) "However, you must come to your own conclusion.

    With a little help from you and your bruised friends no doubt? ;-)

    "Many others have and found JJ to be sadly lacking."

    Sadly lacking in patience and tolerance of incorrigible narcissism and its associated behaviours maybe. But that's just my way of flagging up behaviours to which are dangerous to others. Think of me like an anonymous monkey emitting an alarm to the unwary when camouflaged predators are about - the latter have to make a living you know ;-)

    What do these critics have in common? Might it be lack of perspicacity, a poverty of empathy (an inability to see alternative points of view as revealed in accounts of what they read from others and confusion of their own understanding of the world with what is true of the world - solipsism) plus a marked sense of entitlement and grandiosity, with a 'gift' of mendacity?

    Such people have done very well in liberal-democratic economies of late, invariably at the expense of others who need protection from such types, yet they strive to be leaders/celebrities - see Party Conferences etc.

    You and your friends will no doubt carry on arguing, abusing and throwing tantrums/hissy-fits as that's all you can do when you don't get your own way. neither you, nor your friends, have ever accurately summarised what I have been explaining, you misrepresent and abuse instead. You don't what what I say to have air-time as that risks others seeing through the Great/Nobel (Neocon) Lie.

    You're sure to find others to help you sustain the status quo too, but, hopefully just a few others will wake up to how all that mendacity and subterfuge (unwitting much of the time no doubt) is at root premised on impulsive, short-term self-interest at the expense of perspicacity.

    People don't change. :-(

    Hint, 2003 - Treasury Select Committee. Be sure to follow the Monty Slater link.

  • Comment number 34.

    Stephanie - I'd like to know if the Tories' forecast on savings from increasing the retirement age to 66 facator in the increase in the disability benefit bill? A few people have commented on the differential on retirement age between men and women and, on a related point, I suspect there is a higher proportion of men in the more physically demanding jobs and many of those simply wiull not be able to work to 66. There are only so many vacancies for pensioners to behind checkouts in supermarkets!

    #11 - the reality is that final salary schemes whether in the private and public sector are unaffordable. Our economy does not generate enough wealth to pay generous final salary pensions. The big picture is that as an economy we cannot be competitive with these costs. W

  • Comment number 35.

    All this rubbish about it's the bankers fault is laughable...

    The UK has been borrowing like mad for the last decade, the "Crash" was just a correction to this .Our public expenditure is to high compared to our GDP and needs to be aligned to our affordability.

    If we do ever get to a point where we have a surplus , money should be put a side for days like these. After 12 years of growth its outrageous that nothing , absolutely nothing was set aside ,it was all spent. We need to get rid of career politicians and lap dog mandarins they have no knowledge or experience.However this government was democratically elected so we have only ourselves to blame for the mess we are in.

    Choose wiser next time, or at least challenge their arguments.

    PS The BBC could have a position to play ,but are currently unable to flag up likely future issues. The reporting on the potential outcomes due to the GDP deficit issue has been truly shocking.The GDP deficit issue is the biggest story for the last 50 years but there is 100 times more air time on Strictly,a naff show for losers...



  • Comment number 36.

    The only thing that can be taken away from JadedJean's comments really is that (s)he's capable of saying a lot without actually saying anything.

    Other than that the only thing that's obvious is that (s)he has a distaste for liberal democracies and has a hint of fascism behind his/her point of view.

    But then you look at the first comment, that of BankSlickerminustheR and click his name and see he's posted in the same threads as JadedJean and only the same threads, but also has a clearly fascist point of view in his posts also blended with a similar bit of conspiracy paranoia and something becomes more obvious. Of course more telling is that both accounts use exactly the same posting style at times, a posting style that is extremely obscure and unique enough to suggest identical people behind it.

    JadedJean/BankSlickerminustheR are clearly the same people or at best, people colluding to try and manipulate people's opinion using similar tactics to Scientologists- using multiple puppets to put across the same opinion so that people feel the need to agree so that they're not isolated.

    The moral of the story? Just ignore JadedJean/BankSlickerminustheR and any similar accounts in agreement with them, because they're just one fringe person. When someone feels the need to resort to such tactics to try and push their point across it tells us one thing without question - the point just isn't worth listening to in the first place and as there seems to be a strong hint of fascism to their posting, that seems to be very much the case here.

  • Comment number 37.

    SELF-DECEPTION, GROUPS AND POLITICS

    John_from_Hendon (#27) "In politics, the fear of being first to state the blindingly obvious can be seen as a conspiracy, or is it just ignorant incompetence? (see #5 above). Conspiracy requires that our 'esteemed' leaders are competent and I think the evidence is strongly against this. After all stupid and incompetent fits their recent (i.e. decade or so) performance quite well doesn't it? "

    Analysis of behaviour does not use intensional idioms of propositional attitude in explanatory positions. I have explained why this is the case given that intensional are so named because they fail tests of extensionality, the sine qua non for deductive inference = rational (computational essentialy) analysis. It is not necessary (or helpful) to talk of ants, bees or humans, conspiring (leaving Hollywood CGI aside) to explain group behaviour, yet every time this has been explained to you, you dismiss it and become abusive. I suspect this is because you have no grasp of the language and methods of Behaviour Analysis. Do not take the judgement of foredeckdave anod others on the merits of Quine, Skinner, Herrnstein etc too seriously. I suggest you look up some of Trivers' work (and how he has been treated by Dershowitz).

    A conspiracy, is a legal term. Group behaviour can be described in strategic terms, as groups or parties do have policies, but they are best judged not in terms of their aspirations/rhetoric (verbal behaviour) alone, but their outcomes, i.e overall behaviour as behaviour is controlled by its consequences. I have given a Behaviour Analysis of what's been going on (focusing on political anarchism as erosion of the state/regulation in favour of market forces and business). Sound Behaviour Analysis is a prerequisite for effective Behaviour Management. That's a simple, but important, empirical fact based on sound research.

    You have something to learn. Alas, you would have readers of this blog believe otherwise. Why?

  • Comment number 38.

    #36 iwinter. Much (but not all) that Jadedjean has to write is arrant rubbish, but is it Fascist?

    Mussolini defined Fascism in the following terms: "Fascism should rightly be called Corporatism, as it is the merger of corporate and government power."

    Now he should know a thing or two about Fascism should he not?

    Now take a look at the society you are living in and try to spot the meaningful gaps between government and corporate power.

    Look at the subject article of these blogs - they about mainstream political parties lining up for a massive assault against the poor. They need to assault the poor in order to raise money that has been expropriated from the state to hand over to kleptocratic financial oligarchs.

    What you are witnessing is fascism in action. Why does that not offend you to the same degree as the writings of a likely eccentric?

    Just in case you are thinking of smearing me - let me make it clear I am a radical free thinker who believes in free speech (not least because a number of my forebears died to ensure free speech) and colludes with no-one at all.

  • Comment number 39.

    No 31 "Another day, another convert. Robert Fisk is now confirming the inevitability of the death of the US$ and consequent meltdown."

    It's a tough life being a Cassandra but someone has to do it !! It's even tougher still when the prophesies of doom come to pass !! Various Cassandras have been prophesying this fall of the USD empire for ages now.

    Historically, the populi of Pompeii and Herculaneum were eating, drinking and making merry until Vesuvius blew up and smothered them in tons of ash and other volcanic products. I wonder how long with the populus of Britannia eat, drink and make merry until they are smothered by the toxic "assets" and national debts ??

  • Comment number 40.

    hughesz (#35) "All this rubbish about it's the bankers fault is laughable..."

    Ironically, appropriating credit/blame when events occur is a technical problem of learning known as 'The Credit Assignment Problem'. It highlights that there is a problem with the popular notion of 'learning' itself. Behaviour Analysis does not make use of it.. It explicates what this is by showing what controls behaviour.

    iwinter (#36) "The only thing that can be taken away from JadedJean comments really is that (s)he's capable of saying a lot without actually saying anything."

    Or it shows that you can read a lot and understand very little. How do you know which is true?

    The rest of your post is in fact false, which is consistent with the assertion made in my first sentence.

    The question you need to ask is how one goes about ascertaining what's true from what's false, i.e what are one's criteria for truth-functionality. This is not as simple a question as it might seem.

  • Comment number 41.

    33###

    So what should we do now , thou wonderful JJ.A list of actions would ne nice..

    You write such a lot, but say so little.

  • Comment number 42.

    armagendiontimes (#38) You may be right, but I suspect not. Have a look at by the Austrian School economist George Reisman and bear in mind how the libertarian effort to vilify Fascism and Natonal Socialism is really just a post WWII, Liberal-Democratic Cold War theme. What National Socialism, Fascism and Socialism in One Country (Stalinism) seemed to agree upon was that The Socialist International (today the SI) or Comintern at the time was a grave threat to the state and to regulation (note how business and the Comintern paradoxically get lumped together?). Fascism, like Stalinism, actually sought to control The Means of Production, Exchange etc, just as the PRC does today. So did Roosevelt in the New Deal via the NRA (was it unconstitutional? See the Lisbon Treaty today. as I suspect this too will effectively make such steps unconstitutional).

    It helps to look at the PRC as the Chinese come down very heavily on abuse in their state run industries, even their SEZs are carefuly controlled. One has to look at it all from inside their system to get a fair appraisal I sugest. Look at the outcomes. Von Mises and Reisman are right to describe National Socialism, Fascisim, and Stalinism as essentially the same - i.e statism (like old Labour), but not to spin it as the way they do. remember, Hakek was one of this crowd too. The Conservatives are anarchists. State wreckers. PR blinds people, and most of these politicians are PR people.

  • Comment number 43.

    BIOLOGICAL UNFITNESS

    postscript (#36) "Other than that the only thing that's obvious is that (s)he has a distaste for liberal democracies and has a hint of fascism behind his/her point of view."

    Please spend an hour or so examining the TFRs of ALL of the Liberal-Democracies, East and West, and then come back and tell us what you notice they have in common. You may then better appreciate why I have 'a distaste for liberal democracies'.

  • Comment number 44.

    #31 armagediontimes

    Thanks for pointing that out!

    http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

    It's nice for me personally to know that I've been on the right track the last couple of years too. I really do think that the Obama crowd are the "peaceful" alternative to the neocons - they want a smooth transition off the dollar, they don't want dollar hegemony, they want oil independence and they want to see a move away from petrol and gas to take place slowly and steadily as China / MidEast and central banks slowly migrate away from dollar holdings.

    This is really what the G20 should be aiming for - a slow deleveraging, a slow move off oil, and a slow move away from the dollar (which together all amount to the same task) towards something like the bancor of Keynes.

    If you scroll to the top of the page - what is written in the third box on the right column.

  • Comment number 45.

    It just adds to it all.....my honest opinion is that Brown and the EU will be engineering an EU led "rescue" of the UK, along with assistance with moving off the dollar for oil purchases, in exchange for better UK integration into the EU and a guaranteed Lisbon ratification!

  • Comment number 46.

    The Retail Price Index is closer to the real world than the Consumer Price Index. This is why most wage increases are negotiated around the RPI and compared against the RPI.

    A 0% wage increase for public sector workers is a real increase when the RPI is negative 1.5%. So it is NOT a wage freeze at all but a real terms increase.

    Trying to implement a negative wage increase would be difficult, so the Government should introduce longer working hours and stop recruiting replacements to allow the total public sector workforce to contract - thus reducing its cost.

  • Comment number 47.

  • Comment number 48.

    #36 iwniter

    I only wish I had JJ's language skills let alone intelligence!

    Alas I'm just a mere engineer with very inferior language skills compared to most posters on these blogs.

    I don't know much about genetics either but I do understand the significance of statistical means and standard variations within groups etc.

    Also much of JJ's theroy relating to the anarcho free market ideology does seem to fit/expalin an awful lot that has happened/is happening around the world (...depressingly I might add).

    Thanks all the same though!

    Bring on the revolution!

  • Comment number 49.

    #37. JadedJean gibberish!

    Look, how can I put this simply enough for you to understand. The psychobable that gushes from your pen is rubbish. It does not relate to the way that economic actors react nor to politicians and politics. It is how can I put this kindly, 'Wrong'.

    In economic relations people act for what they perceive as their own best interests, given their own limited knowledge. The opposition and governing parties will always present policies that they think (intend)will gain wide approval - however quite often they are wrong vis poll tax, the 10 percent tax band stupidity, and all of yesterday's announcement. They just get it wrong, although they intend not to (given that political suicide only occurs when the party wishes not to win the next election - which given the present economic condition is I probably remote possibility for both parties.)

    Everyone acts to further what they perceive as their own best interests. Your theory requires a knowing and perfectly informed conspiracy - Where is your evidence that any 'real' human society acts like this? It requires too much cooperation and too much altruism. Your often cited psychobable academic 'fools' can create artificial experiments to 'prove' this but they then make the fundamental error of extrapolating their results to economics, society and everyone.

  • Comment number 50.

    So, we are all in this together!
    A bit like the passengers on the TITANIC; Luckily for GO and his pals there are plenty of lifebaoats for them.

  • Comment number 51.

    #42 Jadedjean. There were noted opponents of Fascism prior even to WW11. Examples include George Orwell, Welsh coal miners and others who comprised the International Brigade. For the most part these people were no fans of the USSR either.

    It is true that in the 1930´s much of the British "ruling classes" were favourably disposed to Fascism - and that should tell you quite a lot.

    This is a blog primarily concerned about economics - but Foreign Policy also has strong Fascist tendencies. The media and state education is completely controlled - you have all kinds of people coming on these blogs writing in self rightous tones. It is a racing certainty that these people have not got out of their arm chairs and taken a look for themselves at some of the carnage their government is wreaking around the world.

    Sadly it is a full spectrum dominance philosophy.

  • Comment number 52.

    33##

    As I thought JJ you have no solutions or practical ideas....you are just an empty vessel.

    I find it hard to believe ,other posts agree with your rants..

  • Comment number 53.

    HugheSz (#41) "So what should we do now , thou wonderful JJ.A list of actions would be nice..You write such a lot, but say so little."

    I've already answered that one.

    I suggested that those interested a) read the PRC constitution and its origin in the 1930s Stalinist constitution; b) look up the 1945 Labour Party manifesto and who drafted it c) read the chapter on policy recommendations in The Bell Curve bearing Herrnstein's 1973 book in mind and teh author of b). All of this has been linked and explicated many times. So, why are you asking the same questions? Are you perhaps not taking much in? herrnstein and colleagues basically founded Behavioural Economics. Kahneman and friends just 'cognitivised' it in teh 70s and 80s. It's what they do.

    I suggest that, if you really do want to 'learn', being abusive to and about me will not help that process. It makes the process much harder..

  • Comment number 54.

    #44 & #45 FrankSz You are way too optimistic. US power is founded on the twin pillars of the $ and the military. There is no possible chance that they are going to allow this to take place. They have 12 operational carrier battlegroups, ask why?

    What has changed in the US? Obama is pursuing substantially the same policies in all key aspects as those bequethed by Bush.

    The real problem is that the Chinese understand the likely reaction and yet still they press ahead unblinkingly.

    The EU is hardly likely to "rescue" Britain. The Baltic states are imploding, and the big shoe still to fall is Spain. The Germans are not about to risk their economic integrity by over extending themselves in the hopeless task of trying to save an unlimited number of basket cases.

    Meltdown is coming.

  • Comment number 55.

    Hm. I think #20 has spotted a flaw in these figures.

    You say, Stephanie, the precise figure of £13bn saving is debatable, but the order of magnitude seems about right. But doesn't that assume that we have a situation of effectively full employment, so that if someone who would have retired at 65 continues working until 66, then all that happens is that they pay taxes for an extra year and claim their pension for one year less, without any other consequences?

    At the moment, we don't have full employment, nor are we likely to have within the next few years. Therefore, if someone who would have retired at 65 carries on until they are 66, there is one less job available that a younger person might have done. If we have to pay jobseeker's allowance to that younger person for an extra year before they can take the job vacated by the retiree, what does that do to the calculations? Of course that's also a simplistic analysis to assume that there's one less job available, but I suspect it's closer to the truth than the assumption that no fewer jobs are available.

  • Comment number 56.

    #37

    Oh it is so nice to be recognised as one of the posters who can shed some reality on he nonesense that is posted by JJ.

    As usual JJ userps the term behavioural analysis. For him, he needs a lab based study a la Skinner to try and define micro-elements of what you , me and unfortunately JJ do in our everyday lives. Hence the statement "Analysis of behaviour does not use intensional idioms of propositional attitude in explanatory positions" That should identify for you just how far removed from reality these studies actually are.

    So you may ask, why does JJ go on and on and on. Well maybe the answer lies in the later statement "Sound Behaviour Analysis is a prerequisite for effective Behaviour Management. That's a simple, but important, empirical fact based on sound research." There you have the credo of the totalitarian. YOU cannot be allowed to decide upon your behaviour, it has to be 'effectively' managed - and you can guess who would want to be in charge of the management.

    So is all behavioural Analysis pointless? Well - NO. There has been some very ineteresting work done with Autistic boys. But is behavioural anaysis (as propounded by JJ) a practical tool for the understanding of complex human behaviours - NO.

    JJ really should learn that there is a mile of difference from the empiricism of research and practical application. But I suppose it does hold a fascination for those with a perchant for fantasy

  • Comment number 57.

    armagediontimes (#51) #42 Jadedjean. There were noted opponents of Fascism prior even to WW11. Examples include George Orwell, Welsh coal miners and others who comprised the International Brigade."

    Yes, Orwell was an anarchist/Trotskyite. That is why his books attack the state. Other anarchists included Emma Goldman (Goldstein in 1984)

    Anarchism is the American way, or at least, it became so in the C20th. The same mass migration from Eastern/Central Europe which brought it about, and the 1917 Russian revolution, passed through London on its way to NYC. Anarchists promote individualism and deregulation, freedom of the markets. See SPIKED (madeover Marxist Today) for a glossy version. Fascism etc tries to make corporations serve the interests of the local people, not just internationalists/shareholders. Thatcher/Joseph did the opposite and duped Britons into believing that being share-holders was the same as owning the means of production etc (they already owned this!). The same scam was used in Russia in the 1990s, and much of the rest of Eastern Europe. It's what ruined Germany before teh 1930s. Look what happened. Next time you go into a WallMart/ASDA supermarket and they ask you if you want cash-back on a credit card think of the clientelle, and have a look at the range of financial products behind the counter..

    Where's the fascism? Where's the National Socialism in all the slash and burn of the Public Sector (and I'm not just talking about the current plans, it's been going on for years in terms of Quangos, Market Testing, SLAs etc etc). This has dominated the Civil Service since the 80s. It's all been relentless erosion, and part of that has been done by staffing it with people 'not fit for purpose'. Anarchism in Britain has led to a rise in the crime rate, it' been rising since the end of WWII. The Conservatives and New Labour made a big deal legislatively (cosmetically) over crime because their anarchism increases it.

    This is not conjecture :-(

  • Comment number 58.

    #54

    Well, time will tell. I hear many little, some seemingly irrelevant, things that add up to support my opinion of a general direction - the Nissan electric car, Obama's public spending on energy infrastructure, Obama's stated aim of becoming independent from unstable states for energy, the need for China and Saudi Arabia to *slowly* diversify from US holdings (yes - 12 carriers are nothing commpared to the threat of a Democractic party of Japan or People's Republic of China sell off of T-Bonds), the build up of SWF holdings of non-US non-dollar assets, the Obama administration's enagagement with Iran, the G20's recognition that a new global financial system needs to be instituted etc etc....

    I think the general direction is clear and it is away from the petrodollar. That means less petrol, less dollars. More gold, more euros, more electricity.

  • Comment number 59.

    Go on JJ - you must be a superstar by now - tell us your real identity. I suspect you are an American just by phraseology.

  • Comment number 60.

    #33:

    "neither you, nor your friends, have ever accurately summarised what I have been explaining"

    Er, at the risk of sounding a little rude, JJ, I'm not sure even you have done that.

    I see you have quite a following here, and would genuinely like to read your point of view with an open mind, but I must confess I've struggled to get through one of your posts without rather losing the thread before getting to the end. Would you be good enough to humour me and post a brief summary of the point you are trying to make that even a dimwit like me will be able to follow?

  • Comment number 61.

    #51 armagediontimes,

    "you have all kinds of people coming on these blogs writing in self rightous tones. "


    Now go on tell me that you do not consider yourself to be one those people as well?

  • Comment number 62.

    I cant understand why all the headlines refering to salary cuts tend to focus on health workers. Surely the bulk of public salary cuts should be aimed at the numerous, often pointless and often totally unaccountable Government quangos that appear totally under the radar. Abolishing expensive quangos and then freezing public sector pay is the way forward. Trouble is, people and the media forget that quangos exist and how much they spend. Abolishing the Potato Council is unlikely to hit the headlines...

  • Comment number 63.

    John_from_Hendon (#49) "Look, how can I put this simply enough for you to understand. The psychobable that gushes from your pen is rubbish. It does not relate to the way that economic actors react nor to politicians and politics. It is how can I put this kindly, 'Wrong'.

    In economic relations people act for what they perceive as their own best interests, given their own limited knowledge."


    This is false and that it is false (the rational man assumption) is why both Herbert Simon, and later Daniel Kahneman got their Nobel Prizes in economics. Yet sadly, neither of them fully understood the basis of Behavioural Economics. Herrnstein did. I say this because I know it to be true.

    You have had an opportunity to learn something here and you have been, and still are, squandering it. ;-)

  • Comment number 64.

    If the Unions want inflation related pay awards, presumably they are happy for their members to take a pay cut this year in line with the negative inflation we currently have....if you believe the statistics produced by those same civil servants!!

  • Comment number 65.

    #61 foredeckdave - Ah the man that does not answer questions, but sees no dichotomy in posing semi inane questions of his own.

    No: I do not consider that I write in self rightous tones. - Happy?

    Now your turn: Do you or do you not think that JP Morgan having a balance sheet of $89 trillion (i.e. larger than the global economy) is beneficial for either stability or democracy?

    Do you recall any media story carrying pronouncements that governments or their officials have acted or are acting to rein in the excesses of banks? Given that the balance sheet of JP Morgan has expanded by around $8 trillion so far this year - do you think these stories can be true?

    Do you think that the balance sheet of JP Morgan may eventually come to cause more harm to you and your lifestyle than someone who you implicity allege to write in self rightous tones?



  • Comment number 66.

    DisgustedOfMitcham2 (#60) "Er, at the risk of sounding a little rude, JJ, I'm not sure even you have done that.

    Would you be good enough to humour me and post a brief summary of the point you are trying to make that even a dimwit like me will be able to follow?"


    See see my earlier response to Hughesz and look through the archive (click on username). Not only have I summarised, but MrTweedy did too, ergo, it can be grasped. If this was simple many able people would not have been so easily misled. For orientation, listen to each of the audios at the SEAB site. There used to be one 'On Having A Poem', sadly it's no longer available.

  • Comment number 67.

    #58 FrankSz. GM patented an electric car some years ago. They sold the patent to Texaco.

    Energy is a problem, in that there is no real substitution for oil. If you get more electric cars you need more electricity. Wind and solar only work at the margins of any integrated system plus they act to lever up aggregate prices. Given that 1 in 50 US children are homeless and 1 in 10 Americans qualify for food stamps how is this cost going to be met?

    Bio fuels cause all kinds of consequential problems, because they take land away from food production which in turn raises the price of food. Look at the tortilla riots in Mexico and look at the growing civil order problems in Mexico - you will find a trace back to bio fuels.

    For the most part gas comes from the same places as oil. That leaves coal and nuclear - both of which have public perception problems.

    Look at the UK - It will definitely run out of power by around 2017 - but who cares? Who is doing anything about it? No-one is the answer.

    T bill sales versus 12 carrier battlegroups promises to be "The Clash of the Titans" - If anything is left afterwards maybe someone can make a film about it.

  • Comment number 68.

    FrankSz (#59) "Go on JJ - you must be a superstar by now - tell us your real identity."

    I'm nobody special.

    Who I am really is not relevant. What is posted is what's important. Hopefully, I'm making an objective point about credit assignment, narcissism, celebritism, and how we trade in what we value.

    NB. 'Minimal Rationality' can be seen in terms of the distribution of 'g'.

    Don't let some people average away what matters. See Cronbach on The Two Disciplines of Scientific Psychology.

  • Comment number 69.

    Here's another thought armagediontimes: Obama+Russia+Iran are now talking about nuclear disarmament quite loudly. I wonder: apparently the world produces about 400GW of electricity from nuclear reactors at a consumption of about 60000tonnes of U per year.

    However, this is at 3% enrichment. Nuclear weapons are much more highly enriched (20% to 90% depending on where I look on the net). There are tens of thousands of warheads (not all active). Each warhead with tens or hundreds of kilos of U or Plutonium.

    http://www.world-nuclear.org/info/inf13.html

    Using weapons as fuel could make a real cost saving.

  • Comment number 70.

    foredeckdave (#56) "JJ really should learn that there is a mile of difference from the empiricism of research and practical application."

    With the cost of data collection and analysis dramatically falling in recent times through cheap computing, much that I've been reporting is no longer open to rational debate, as it's based on population level data. That is descriptive statistics not inferential statistcs.

    That this will not keep you quiet is why I am so critical of your (and some others') posts. None of the vociferous critics appear to have understood the scale and scope of any of this work. They are just abusive. They never address the facts of the matter.

  • Comment number 71.

    No 54 "The EU is hardly likely to "rescue" Britain. The Baltic states are imploding, and the big shoe still to fall is Spain. The Germans are not about to risk their economic integrity by over extending themselves in the hopeless task of trying to save an unlimited number of basket cases."

    Then there is Greece. Also Il Duce, in Rome, is having his fun and games with various young ladies so he must be alright !! The Hungarians are having a nice little spat with Slovakia over language and Romania has a flood of returnees to deal with. Fun and games all round !!

    "There is no possible chance that they are going to allow this to take place. They have 12 operational carrier battlegroups, ask why?

    The real problem is that the Chinese understand the likely reaction and yet still they press ahead unblinkingly. "

    Carrier battlegroups look very nice and pretty floating around the world giving lots of custom to the local "professional ladies" but they wouldn't last long against someone who can lob saturation bombardments at them. The Gatling machine-cannons and chain-guns can be saturated and the British successor, the Goalkeeper, can also be saturated. Once holed, those ships tend to go glug, glug, glug !! Without their carriers, their aircraft will either also go glug, glug, glug or go into ground-breaking mode - ploughing into the ground at mach 2.5 unless there's friendly AND safe territory within range !!

    Furthermore a 10 kg crowbar falling from 100km high will go through an aircraft carrier like a hot knife through butter while converting much of its kinetic energy into a massive ball of heat and light. It's much easier to drag a bunch of 10 kg crowbars into low Earth orbit than dragging a space station into high Earth orbit !! I believe Robert Heinlein postulated kinetic energy weapons in his science fiction books some 40 years ago. Something about dropping rocks from the moon !!

    Military threats will only go so far, these days. The days of gunboat diplomacy have come and gone. Now, as Churchill said," It's better to jaw, jaw than war, war !!"

    So back to the USD and its perceived value in the midst of an Obama administration round of cuts !!

    Meanwhile, back in Blighty, we still haven't a clear idea of exactly what each of the main parties are going to cut/freeze/suspend/eliminate despite sufficient hot air to power London for a year !!

  • Comment number 72.

    Phewwww. I've read all the comments and I've decided to retire..... to the study with a bottle of red wine. They say a bottle a day keeps reality at bay. Maybe you all ought to do the same!

  • Comment number 73.

    No 62 "Abolishing the Potato Council is unlikely to hit the headlines..."

    Don't forget the Highly-qualified Study Group to determine the effect of politeness on pets !! :-)

  • Comment number 74.

    #70 Jaded jean

    many thanks for proving my point for me. What you are actually trying to say is that, at some time in the future, we may be able to analyse patterns of behaviour. Rather like advertising agencies still can't claim that sales increases are as a direct reponse to their promotional campaigns. BTW their sample surveys also produce population data!

    So no you won't keep people quiet when you keep misusing research to make quack claims!

  • Comment number 75.

    #71 Ishkandar. People tend to follow actions and policies that have successfully worked for them in the past. Since 1945 the US/UK have overthrown well over 50 functioning governments around the world.

    This ranges from Guatemala who were preceived as a threat to the United Fruit Company through to Iraq who were preceived as a threat to both oil prices and the US$.

    You should have no doubt at all that attempts will be made to preserve the role of the $ through force. It does not seem that the Chinese have any such doubts.

    We are entering the end game.

  • Comment number 76.

    #65 armagediontimes

    Strange, your pontifications sound very self-righteous!

    As for JP Morgan, I do not have their figures in front of me. However, what you are describing is most probably that they have $89 trillion under management. That is very different from saying that they have the same amount of their own money - now that would be worrying!

    Given the volatility of the global markets and the almost sanctified reputation of JP Morgan then it is not surprising that they have expanded their babalance sheet by $8 trillion. After all, many of their competitirs are either no longer in existence or have severe problems of their own.

    Is it good that one organisation should hold so much sway? I am in no position to decide and neither are you. Neither of us have all the facts and therefore we cannot evaluate the pros and cons. It would probably be better if there were more of a balance between investment organisations but then, historically, such mamouth organisations have tended to be US based anyway so what's the difference?

    As for the general media you, are right when you say that little comment has been made- probably because most people are struggling to understand exactly what this depression is going to mean for them in terms that they understand. However for those who wish to investigate there is more a more information and analysis available than ever before. therefore if you believe that Obamam is just performing chin music when he talks about bank regulation then you can arm yourself with facts to expose his 'lies'.

    Going back to JP Morgan. I have, at the back of my mind, the thought that sooner or later the world is going to wake up to the fact that wealth has divorced itself from reality. That the power associated with mega zeros on a statement may be just a bluff. It's a version of The Kings New Clothes only his time the Buffett's of this world suddenly find that the zeros on the statement are in fact just that - zeros!

  • Comment number 77.

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

  • Comment number 78.

    #76 foredeckdave. Let me be clear, I am saying that the US Comptroller of the currency is reporting that JP Morgan has an $89 trillion balance sheet.

    Given that global GDP is around $60 trillion no one could possibly imagine that this $89 trillion comprises either funds under management or their own money - since either is a demonstrable impossibility.

    It is true that the absolute number of banks has declined in the last 12 months or so. However it is also true that the aggregate exposure to derivatives by remaining banks has risen (by around $40 trillion I think). There is then no basis to conclude that the JP Morgan balance sheet has increased as a consequence of the decline in the number of banks.

    Why are neither of us in a position to express a view as to the merits of the concentration of power. Do you not believe in either democracy or free speech? That would be the only basis on which you could seek to deny either yourself or others a view.

    It is the case that we do not have all of the facts. This is in large part a consequence of semi secret changes in the law that served to allow banks to hide from all forms of scrutiny the quality of assets held on their balance sheet. Do you think it would be a good idea for your neighbour to store anthrax and then have the law changed to prevent anyone knowing how much anthrax he had, or whether he bothered storing it or just threw it out of the window?

    Why was the law changed to enable the fostering of opacity of banks balance sheets? Was it to protect criminals - because you live in a criminal state? Or was it to foster stability of the financial system? If it was the latter then how do you explain this:

    http://www.caseyresearch.com/displayCdd.php?id=240

    This depression is going to see a lot of people die and most of the rest coming face to foot with the iron heel of repression (and that is the optimistic scenario). The only possible hope is if people get off their knees and start demanding sensible answers to sensible questions, and expose criminals whenever and wherever they may be found.

  • Comment number 79.

    DAMAGE BY OMISSION?

    The offending blog probably quoted too much from Cronbach's paper. I suggets that those interested take a look at the section entitled 'CHARACTERIZATION OF THE DISCIPLINES', as something very odd has happened over the last few decades. The work which looks at individual differences, so central to applied psychology (testing) for decades, has effectively been rendered politically (and in some cases, legally), incorrect! Sometimes it's as if an entire area had been airbrushed. Some of the consequences are this and this, and this, which led, in my view to the mountain of debt which we now have on our hands.

  • Comment number 80.

    #75
    Armagediontimes

    I am pretty convinced that was the Iraq invasion. You must be aware that THEY were aware of the crisis a long time before the Iraq invasion. Saddam's decision to trade oil in Euros was about as good an explanation of the invasion as I can think of.

    I think the main reason why people aren't dumping their dollar holdings isn't because of military lunacy around the corner, but because everyone has too much invested in the USA.

    The Chinese want to unhook, have been unhooking for quite some time, and I think Obama wants them to unhook too.

    This is where the G20 can come together and do things without a military freak-out. They can work out how to decouple, how to unwind this collossal trade imbalance at the root of the problem, by selecting a new path as a group and working towards it carefully.

    Meltdown yes, but the result will be world government, not radioactive dust.



  • Comment number 81.

    As for the derivatives meltdown - yes, that may come - but a world government will be in place by then I hope.

    What happens if the USD evaporates? Something will just take its place. New institutions must be established quickly; everyone has a stake in their formation - otherwise some other single nation will replace the USA and their interests will be the only interests.

  • Comment number 82.

    #80 FrankSz - Just think about it. The US has launched 2 significant wars in support of their hegemonic interests. They have over 1,000 foreign military bases and account for around 25% of global "defence" spending.

    They are not about to stand by and watch the $ evaporate. Maybe your problem is that you approach things from a rational and sane perspective. Surely you have enough evidence to disprove any notion that those who control the levers of power are sane.

  • Comment number 83.

    i take it ishkander worked for the civil service to know so much about both its inefficiency and overmanning. Or as more is likely was both incapable intellectually and morally to obtain a job.

  • Comment number 84.

    Since it is such an easy stress free well paid life working in the public sector why don't the "hard working underpaid moral saints" in the private sector take up such easy work.

  • Comment number 85.

    No 75 "You should have no doubt at all that attempts will be made to preserve the role of the $ through force. It does not seem that the Chinese have any such doubts.

    We are entering the end game."

    What you say may be true but the endgame need not be a nuclear holocaust !! Since America had been acting as a school bully for the last 50 years, it had gathered a lot of adverse political feelings about it. This will lead to many countries who will be only too glad to help in hastening its demise.

    In a conventional war endgame, America will lose most if not all its carrier battlegroups through saturation attacks by one or more countries. Don't forget that their battlegroups are 30 year old technology !! And time and technology waits for no man !!

    In a nuclear war endgame, much of the American population will be wiped out. Nuclear weapons, contrary to Hollywood doomsday movies, do not devastate continents !! However, it *WILL* destroy cities !! Since much more of Americans are urbanised that the Chinese or the Russians, they will suffer proportionally more !!

    In either of these scenarios, America's dependence on imported oil can be used to choke it to death !!

    Anyway, it may be endgame for America but it need not be endgame for other countries.

  • Comment number 86.

    No 83 "i take it ishkander worked for the civil service to know so much about both its inefficiency and overmanning. Or as more is likely was both incapable intellectually and morally to obtain a job."

    FYI, YES I have worked for the civil service and was horrified by the inefficiencies I saw everywhere. And NO I don't *NEED* a job because I am in a comfortable position to employ others !! Sorry to deflate you sarcasm !!

    No 84 "Since it is such an easy stress free well paid life working in the public sector why don't the "hard working underpaid moral saints" in the private sector take up such easy work."

    Well, it's a dirty job but some of us have to earn the real wealth to keep others in their "easy stress free well paid life working in the public sector" !! If everyone was in the public sector, who will earn the foreign exchange to pay for the very computer you are typing these comments with ??

    Perhaps you are "both incapable intellectually and morally" of understanding basic economics and feel the need launch personal attacks on others to assuage that incapability !!

  • Comment number 87.

    I think my friend ishkandar you may prove to be a bit delusional about the strength and technology of America. And i for one hope you are. the end game as you call it may be the deathbed of the many countries you hope attack America

  • Comment number 88.

    #78 armagediontimes


    Even if global GDP is in the region of $60 trillion, that would not stop JP Morgan from having $86 trillion on their books. You are not looking at the same thing!

    The inability to make comment has nothing to do with democracy or free speech. If you re-read what I said, I clarified that I did not have sufficient information with which to evaluate the pros and cons of JP Morgan's position. That is totally different from democractic freedoms!

    There is much that I would like information upon that is presently restricted. Banks and their balance sheets is only one element. That much is hidden under the general catchphrase of 'commercial confidentiality' is totally true. To characterise that as 'anthrax' is however a tad silly.

    I truly hope that this depression (see we at least agree on the proper name for this event) does not end in armed conflict. It still is possible for new structures to be developed to avoid the military catastrophy.

  • Comment number 89.

    #85 ishkandar

    If it comes down to nations lobbing nuclear weapons around the globe then nobody wins - not even the Chinese. It won't be a case of proportionate suffering!

    So whilst China tries to saturate US battlegroups, one relatively small nuclear submarine positions itself to wipe out Shanghai and Beijing. Whilst China looks for the battlegoups it gets saturated by US ICBMs!!

    Nobody wins and that's the tragedy.

    But it doesn't have to be like this. It is still possible to build a new world economic machine it only takes the will.

  • Comment number 90.

    I take it from that bile you are now sprouting that you had a very high paid high powered job in the civil service. This allowed you in the short time that you were employed in the public sector before you decided to leave/let go (because of course no one is sacked in your fantasy world in the public sector) to travel all over the country and analyse/audit EVERY civil service/public sector job to decide they were overmanned and inefficient before your deficiencies both morally to your common man and workwise were exposed. Filing is not the be all and end all to jobs.

  • Comment number 91.

    by the way what job do you do to earn the wealth to pay for this wonderful computer that i am using that my other public sector brothers, uncles,cousins, grandads and dad paid for both with their bodies and health in the pit and army so that you can sit and spout off rubbish

  • Comment number 92.

    http://news.bbc.co.uk/1/hi/business/8292011.stm

    The next nail in the coffin of the USD ?? This report is denied by both Saudi and Kuwait. We shall see what we shall see !!

  • Comment number 93.

    No 89 "But it doesn't have to be like this. It is still possible to build a new world economic machine it only takes the will."

    Exactly my point !! The endgame need not be nuclear of conventional war !! I was just replying to armagediontimes' scenarios. It is very possible that the endgame will be of an economic nature instead.

  • Comment number 94.

    #88 foredeckdave. The opacity of the JP Morgan (and others) balance sheets has nothing to do with commercial confidentiality and everything to do with a US/UK orchestrated semi secret change in accounting rules. These amendments serve to mean that no-one can evaluate the true financial position of these behmoths. Who does that benefit?

    Were these changes made to stabilise the financial system, or were they made to protect criminal enterprises? The demise of Georgian Bank may provide a clue as to the amount of stability provided.

    You are correct it is still possible to avoid catastrophe - but only if people act. They show no signs of doing so.

  • Comment number 95.

    No 90 "I take it from that bile you are now sprouting that you had a very high paid high powered job in the civil service"

    On the contrary, I was in middle management. I left to work in more efficient organisations in the private sector.

    "This allowed you in the short time that you were employed in the public sector before you decided to leave/let go (because of course no one is sacked in your fantasy world in the public sector) to travel all over the country and analyse/audit EVERY civil service/public sector job to decide they were overmanned and inefficient before your deficiencies both morally to your common man and workwise were exposed. Filing is not the be all and end all to jobs."

    Strange how you accuse me of bile when you are virtually spitting venom in all directions !! You accuse of moral and work deficiencies despite never having met me or know anything about me. Can you provide proof or are you just into belittling others for personal gratification ??

  • Comment number 96.

    why do you hate the uUS so much Iskandar?

    What have they done to you? Personally?

  • Comment number 97.

    No 91 "by the way what job do you do to earn the wealth to pay for this wonderful computer that i am using that my other public sector brothers, uncles,cousins, grandads and dad paid for both with their bodies and health in the pit and army so that you can sit and spout off rubbish"

    An extremely confused statement !! How did public sector get confused with the pits or the army ??

  • Comment number 98.

    #92 Ishkandar. Robert Fisk, who broke this story, quotes a Chinese source as saying "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate"

    Via their Saudi and Kuwait clients the denials start - exactly as predicted. Strange how the BBC does not acknowledge that Fisk is predicting their news stories in this regard.

  • Comment number 99.

    #85 Ishkandar - You pretty much served to remove the last vestiges of hope. Fantasising as to who could win a full blown nuclear confrontation.

    No doubt somewhere there are well paid and notionally well educated analysts looking at this very issue.

    It defies rational comprehension.

  • Comment number 100.

    No 97 you are obviously a moron. the pits were put into government ownership in 1948 and the workforce were therefore public servants employed by the state with a state pension. Unfortuntately due to emphasemia, accidents and other coal related diseases not many have reached retirement age. I can perhaps ignore your ignorance of the mining workforce being public servants but not knowing that the army is owned by government is unforgivable. Private ownership of armed forces in the Uk has been outlawed for over 200 years. No wonder you left your executive/junior position in the civil service due to your ignorance of what a public servant is.

    I will give you a clue:

    Policeman/woman, fireman/woman, nurse, doctor, binman, streetcleaner,taxman/woman, custom officer, etc

    You accuse me of spitting bile when i ask you how you justify your inaccurate and vindicative spiel about inefficiency in the civil service partment when you have spent days/weeks in one department

 

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