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A large sucking sound

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Stephanie Flanders | 13:15 UK time, Wednesday, 29 July 2009

If it's not keeping global policy makers awake at night, it should be. Around the world, governments have fallen over themselves to support the global economy in the past year.

That may well have prevented another great depression. But what if they all turn off the taps at the same time?

Whether it was interest rate cuts or ballooning budget deficits, the world has never received so much emergency medicine in so short a time. And if the likes of the IMF are right, the treatment is starting to work (see my recent post, Decoupling Redux?).

Global output may already be growing again, and it looks as though we will see positive growth in most economies next year.

Investor looking at stock price, China

Understandably, the debate is now turning to "exit strategies": not just for central banks but also - and especially - finance ministries.

Here in the UK, the government's own budget plans involve a sharp fiscal tightening from the middle of next year. The NIESR reckons the public sector could subtract well over 1.5% of GDP from economic growth in 2011 alone.

As we are already seeing, political debate up to - and beyond - the general election is likely to centre around how that tightening will be achieved - and whether it's enough.

With no general election next year, the debate is less heated in the US, but fretting over the scale of the budget deficit is crippling President Obama's efforts to reform the health care system.

Six months ago, polls showed that voters were much more concerned about the health system than the deficit. Now the opposite is true.

In Germany, the budget deficit will be about half the size of America or Britain's next year -around 6% of GDP, but many Germans consider it downright unconstitutional (in fact, if a proposed constitutional amendment gets passed, it could be.)

In the run-up to this autumn's election, senior finance officials are already talking about cutting borrowing as soon as possible.

None of this is surprising - or unwelcome, if viewed solely from a national standpoint. Here in the UK, budget deficits of more than 10% of GDP are clearly not sustainable for very long.

Yes, as the prime minister keeps reminding us, we came into this with a relatively low level of public debt as a share of GDP. But with a falling denominator (GDP) and fast-rising numerator (the stock of debt) - you'll be amazed how quickly we can catch up.

But - and this is where the PM did have a point in the lead-up to the G20 Summit in April - there is a global collective action problem in all this. What makes sense for each every individual economy may spell trouble with the world as a whole.

This is especially true when it comes to fiscal stimulus plans, because the country that implements such policies will pay all of the cost but reap only part of the benefit. Some of the extra demand generated will be spent on imports and flow overseas.

New research by economists James Feyrer and Jay Shambaugh (NBER Working Paper 15113 - The Transmission of Identified Fiscal Shocks [270KB PDF]) shows how great these spillovers can be, particularly for a large open economy like the US. Other things equal, they find that half of the impact of a change in US fiscal policy will flow overseas.

This issue was much talked about by the likes of Gordon Brown and President Obama's advisor, Larry Summers, in the immediate response to the crisis. But at least when the economy is going downhill, it's in a nation's self-interest to stimulate, even if they know some of that will leak abroad.

When the economy is starting to recover, the incentive goes the other way. It pays to tighten first, while you can still enjoy the benefits of loose policies elsewhere.

The risk is that everyone will rush to tighten in 2011 - indeed, that is what many countries already plan to do. And the great sucking sound that you hear will be the draining away of global demand.

Does this mean that governments can or should prop up global demand indefinitely? Clearly not. But the next few years will require some careful policy coordination - domestically as well as internationally.

On the domestic front, there's no reason why monetary policy has to tighten at the same time as fiscal. In fact, it would be highly beneficial if it didn't.

As I have mentioned before, the collective action problem, for monetary policy, works in reverse: the countries that raise interest rates (or halt quantitative easing) first could well find their currencies get pushed up, which would hurt the economy by cutting demand for domestically made goods. That would be particularly unwelcome in the UK, which needs to export a lot more in the coming years and import less.

It would also be better for the economy if long-term interest rates could stay low to "crowd in" private investment and demand. Other things equal, the faster that public borrowing goes down, the longer the Bank can hold off tightening, and the less likely it is that long-term interest rates (government bond yields) will rise to choke off private demand. So, properly managed, tighter fiscal policy could be neutral from the standpoint of overall demand.

But all of this assumes that our exporters have someone to sell to, and that globally, the reverse of all those fiscal stimulus packages coincides with the return of private sector demand.

As the Economist argues in a somewhat downbeat leader in the latest issue, right now that's a pretty hopeful assumption. There's little evidence yet that the private sector will be able to pick up the baton of global demand - especially while countries like Germany and China still seem attached to importing private sector demand, through exports, rather than generating it for themselves. (If you'll forgive me for raising this issue yet again).

If we all run for the same exit - at the same time - the global economy is in for a bumpy ride.

Comments

Page 1 of 3

  • Comment number 1.

    And I thought the large sucking sound was that of bankers of all kinds using sharpened straws to extract the last juices from the corpse of the current economic system before the majority of the world realise that it is dead.

    Silly me!



  • Comment number 2.

    Sorry to say the private sector is too endebted and we have become far too reliant on state spending generally for employment and capital projects in this country in particular. When government is forced to turn off the taps does anybody seriously see something on the horizon to plug the gap in the uk in particular..manufacturing maybe...finacial services perhaps...north sea oil...cutting edge renewable energy or nuclear technology? Perhaps we could export champions of street football, diversity consultants and graduates in medievil history by the ton?

    It has bought time, it has not bought a solution, in the meantime those crafty investment bankers are stoking a bit of interest in stocks again. Someone called me about 1/2 an hour ago to explain to me how I need to jump on the stock exchange now...why settle for 2% when you can get 20% at the moment was his pitch.

    Does this sound familiar anyone?

    Joe public is being lined up yet again to line the pockets of the banks, this time though the bankers have really got it made because the same people they will be manipulating for aprofit will be underwriting any loss as tax payers.

    Brilliant!

    They all deserve their knighthoods for such a service to the public, if you think that is not the case we are trying to put together an un-biased manifesto by public contributions and debate on lobbygroup.org







    I really don't see

  • Comment number 3.

    Surely getting trampled in the rush (or Not) for the exits, is what this whole sorry mess is about?
    Goldman Sachs and Barclays and a few of the hedge funds make lots of money.
    The slow and infirm get hospitalised or killed!
    Financial wars here we come!

  • Comment number 4.

    (i) British over-indebtedness must be paid off or written off, and
    (ii) Britain must find something to sell to the rest of the world or learn to become self sufficient.

    I'm buying a few stocks and shares, and maybe some commodities, as a hedge against asset price inflation. Unemployment will keep a lid on house prices.

  • Comment number 5.

    Points to an L shaped [rec/depr]ession - and a series of tough policy choices. Raising the tax take will be extremely difficult without choking off private demand/recovery so Government should maybe fix this variable for a given period and manage the deficit via controlling spending. Reducing public + private waste will help. We really need to keep as much of the benefit of the government stimulus onshore rather than exported, but that implies protectionism. US and China have tried to foster this with their ill concealed "Buy American"/"Buy Chinese" bias. Long term we have to change the UK consumption function to build in a lower propensity to import - accepted not easy given we import so much of our energy needs(e.g. oil etc). Decline of the GBP will help. Buying less rubbish from China for instant material gratification will also help. There is no "silver bullet" on making cuts in government spending that will make an immediate difference. No politicians have shown any appetite for explaining what the tough choices really are (Turkeys don't vote for Christmas, after all) or any transparency. We badly need some leadership and it ain't Gordon or Dave.

  • Comment number 6.

    Where's the economic model to understand what is going on?

    Is it possible to understand markets without looking at the productive relations that underpin them?

    For a given time period humanity has to:
    1. Labour to produce the means of subsistence for workers
    2. Labour to replenish the means of production used up (new machinery, raw materials, energy)

    There is also labour to produce means of subsistence (and luxury goods) for non-workers, e.g. bankers, economists, politicians, etc.

    A non-market society could calculate these 'values' in terms of hours worked.

    A market economy cannot know if the labour has been worthwhile until the commodities are brought to market, (labour can be wasted on a product that doesn't sell, or sells at a lost).
    In the long-run prices should equate with the underlying values.

    So a simple model would be:

    World Output = labour spent on providing the means of subsistence of workers (v) + labour spent on replenishing the means of production (+ any new investment) (c) + labour spent providing the means of subsistence (and luxury goods) to non-workers (s)

    i.e. variable capital (v) + constant capital (c) + surplus value (s)

    The problem is the fiat monetary regime allows the printing of money, most importantly by the USA - distorting market prices from values.
    This flood of dollars, particularly in Asian and oil producing countries banks, has been recycled through the financial centres, allowing the banks and all the other multinationals to report fictitious profits, i.e. profits based upon rising asset prices (house prices, energy prices, food prices), rather than profits on genuine production.

    This rise in asset prices has hidden the true fall in the rate of profit.
    But now that asset prices, particularly house prices, have fallen, surprise, surprise, we have a recession, i.e. a fall in production because the system only produces for a profit.

    Printing more money, e.g. quantative easing, is an attempt to yet again hide the fact that the true rate of profit has fallen.

    The game plan, conscious or not, is to provide more fictitious capital to buy more time to reduce wages, (and pensions).
    This will only work if the number of hours required to produce the means of subsistence falls, i.e. productivity gains.
    But with the days of cheap energy gone, if anything the productivity gains previously won look like unwinding, hurting the underlying rate of profit even more.

    Capitalism will struggle to find a way out of this mess (even if it temporary fools the markets).

  • Comment number 7.

    Unemployment is rising remorselessly and is likely to remain high. There can be no return to the high-debt high-demand culture of pre-2008. Securitization cannot return soon, despite the increasingly fervent (desperate) prayers of bankers.

    Like a junkie needing to be weaned-off smack, western economies are in for a very bumpy ride as their governments try to rein-back on subsidies to the financial sector. I'm not confident that such basic 'cold-turkey' treatment is even possible.

    There will be no 'recovery' of the ordinary v-shaped variety, only a long drawn-out, grim, crawl out of the mire.

  • Comment number 8.

    Shouldn't the questions below be the ones really "keeping policy makers awake at night", as by asking (and then answering) these types of questions we would actually find proper 'sustainable solutions' ... but are 'sustainable solutions' what the 'current policy makers' are looking for? ... well that's the obvious next question ...


    Question: Does the Size of ..... Matter?" For example ...

    * The size of our debt
    * The size of the trade/budget deficits
    * The size of the future pensions crisis
    * The size of our untapped talent (unemployment, part-time, temporary working)
    * The size of the innovation gap
    * The size of the population stressed and insecure about their jobs/future
    * The size of the waste (between 40%-90%) and frustration systematically created by out of date 'leadership' and 'management' practices
    * The gap between what current 'leaders' are 'telling you' and what is actually 'true'
    * The size of the gap between the 'leadership' we currently have and the 'leadership' we really need
    * The size of the cover ups we now see
    * The size of the greed/incompetence current leaders show
    * The size of the culpability, current leaders will bear
    * The size of the anger that is yet to rise from the people
    * The size of the problem that will be eventually occur before most people decide to do something about it
    * The size of the failure that will result from people not taking responsibility, or being accountable for what they do (and don't do)
    * The size of the hypocrisy we now see
    * The size of the gap between the behaviours we now see and the ethical behaviours (trust, honor, responsibility, respect - Leanomics) we now need
    * The size of the 'backlash' likely to occur when most people realise what 'leaders' have been doing
    * The size of the wealth being generated for just a few, and the expense of the many
    * The size of the self interest/greed which will cause certain nations to collapse
    * The size of the collusion that exist to stop progress/improvements being made
    * The size of conspiracies that exist, to benefit the few and not the many
    * The size of the group who 'manipulate wealth' rather than 'add value' and 'create wealth'
    * The size of the arrogance of those in Power
    * The size of the failure in 'leadership' we now see
    * The size and number of scams we now see
    * The size of failure and the lack of democracy people actually have (one of the biggest scams/spin of all)
    * The size of the failure by mainstream education, and the impact this will have on us too
    * The size of the failure created (and the lack of wisdom shown) by 'traditional establishments', and their failure to see this too
    * The size and misuse of power, from all those in 'power' (Poweromics*)
    * The size of the group who do not understand this (an example of Ignoromics Type 1*)
    * The size of the apathy from people at large (an example of Ignoromics Type 2*)
    * The size of the collapse the nation is still yet to see
    * The size of power hard-working people currently have but have not yet realised
    * The size of change we have to come
    * The size of the crisis will get before we see the changes we now need
    * The size of our irrelevance in the world of the future
    * The size of gap that will continue to grow, until people become more curious and take more responsibility for doing things differently
    * The size of the gap between what current 'leaders' & 'management' do and what 21st century "leadership" & "management" is (e.g. take a look at the book Lean World)
    * The size of the holes in the Government plan (or any other party's plan of action) for doing anything about it
    ....
    ....
    ....

    Unless you think differently ... (which Stephanie appears to do, given the initial blog statement here). What would you add to this list ... and/or suggest should be "keeping policy makers awake" ...?


    David Clift, A Future 500 Leader

    * go to https://poweromics.blogspot.com/2009/07/does-size-matter.html for definitions and more information.


  • Comment number 9.

    How well I wonderare our exports of ten pound DVD players to China are doing? Where will the demand come from - it will have to be largely domestic and fiscal tightening will choke off a significant element. The only way to reconcile the fiscal demands and recovery is for the government to raise benefits significantly and the taxes of the high income earners and accelerate public works there by generating employment. The alternative is to allow the economy to sink further which adds to additional borrowing anyway. Resorting to the IMF may be unavoidable whatever we do!

  • Comment number 10.

    The following essay was posted recently by the Prime Minister of Australia:

    https://www.smh.com.au/national/pain-on-the-road-to-recovery-20090724-dw6q.html?page=-1

    This quote is interesting:

    "This crisis has shown we have reached the limits of a purely debt-fuelled global growth strategy. Not only will the neo-liberal model of the past not provide growth for the future, its after-effects will make recovery more difficult. Mountains of global public and private debt, global imbalances, and a weakened global financial system will drag on global growth for a long time. As the renowned financial columnist Martin Wolf has written: Those who expect a swift return to the business-as-usual of 2006 are fantasists. A slow and difficult recovery, dominated by de-leveraging and deflationary risks, is the most likely prospect."


    This should put to bed any hopes of a recovery:
    https://www.debtdeflation.com/blogs/2009/07/04/debtwatch-36-july-2009-its-the-deleveraging-stupid/

  • Comment number 11.

    #7 TheNewPonzi

    Bingo.

  • Comment number 12.

    11 FrankSz

    That why this has to be seen as the new environment. Whatever anybody does has to work in it or they have got problems. Its all a bit Tokyo Yoyo. The fact remains long term debt has to be repaid short term so all will be poorer. Unprecedented input of money should have some uplifting effects but the massive debt problem still remains. It still has to be dealt with.

    9 watriler

    Where is the money to come from for this beanfest of benefits and public works you mention. You are due to see the multiplier effect in reverse if anything as cuts are made. Coffers empty. Thats the basis of the attempted clawback looming. Heamoraging big buisiness has had a blood transfusion from the public leaving the public sickly. As soon as any uplift occurs another wave will hit. Look at the banks, any money around is grabbed as higher costs, charges, interest rates. Governments will move to the same behaviour to balance books as much as possible. Same problem, same solution. Where can we get money and rebuild the bottom line. Only one place.



  • Comment number 13.

    In typical Keynesian fashion, Ms Flanders thinks that the "economy" is some abstract nebulous entity that sits outside the lives of the millions of individuals and hundreds of thousands of businesses that engage in voluntary exchanges every day.

    A little bit (or a massive amount, depending on your view) of fiscal stimulus here and some loose monetary policy there and hey presto, the "economy" will be on the road to recovery in no time!

    Such thinking is foolish and illusory.

    It is also worth noting the inference that a large public sector actually contributes to economic progress! Strewth, the back of the hand is definitely called for here!

  • Comment number 14.

    The debt should be written off. I said it about 1000 posts ago, and say it again.

  • Comment number 15.

    More fantasy brought to you from the BBC.

    There has been very little attempt to "support the global economy" but a vast deployment of resources to shore up insolvent banks. Look at bank bonus payments and contrast with unemployment rates and the decline in international trade.

    Ah a return to growth next year - but by 2011 the public sector will make a negative contribution of 1.5%. Sounds good.

    Meanwhile the UK needs to step up its exports. No mention of what those exports might consist of, and that in any event they need to go up substantially to offset the decline of North Sea oil and gas. Or maybe the decline of the North Sea is also unforeseen.

    Meanwhile the Germans and the Chinese need to leave the pitch so that the British get a free shot at goal. Sounds highly plausible.





  • Comment number 16.

    FrankSz # 14

    I would agree with you Frank; repudiate public debt!

  • Comment number 17.

    No.2. Jericoa

    Here is what Niall Ferguson has to say about Populism (the people versus the elites).

    https://www.niallferguson.com/site/FERG/Templates/ArticleItem.aspx?pageid=207

  • Comment number 18.

    REPUDIATE PUBLIC DEBT

    Well! It's an option but before we even consider it further we would have to define what we mean by Pulic Debt. After that, how much of it - all or a portion. Where, nationally or internationally. When, on a given date?

    All of this has to be considered AND we haven't got a clue as to what the consequences of doing it would be! (You can be sure that the objectives of he action would be missed by unexpected consequences).

    If we are in a "told you so" mood, I suggested this MIGHT happen eventually over a 18 months ago on Peston's blog ad got 'virtually' slaughtered for doing so!

    Kurt, my Dad told me "never raise your hands to a lady" :)

  • Comment number 19.

    Another thoughtful piece from Stephanie.

    We are, I think, hinting at the need for some coordinated demand management here - and not before time. The Wahington consensus / supply side stuff is demonstably wrong but apparently still a popular theme with the right. If it was just an academic debate it wouldn't matter but these people are probably destined for government and appear to advocate policies that, in living memory, led to mass unemployment and war.

    There are real dangers ahead, not to Finaance but to working people.

    If anyone is naive enough to be persuaded that cuts in National Debt are imperative (actually they aren't - we can fund much much more than this if we ignore the false prophets)then don't forget the likely global consequences.

    Then again, judging from some of the fiscal axe grinders' comments here, perhaps they think mass unemployment a price worth paying to avoid inflation. Better, they think, to put the lower classes back in their place rather than risk the disaster of a reduction in the purchasing power of their capital.

  • Comment number 20.

    With the high interest rates that banks and other financial institutions are currently charging borrowers despite the low base rate, it's arguable that de facto monetary policy is already countering future inflation and negating quantitative easing.
    Caledonian Comment


  • Comment number 21.

    foredeckdave # 18

    https://en.wikipedia.org/wiki/Public_debt

    I suppose as good a definition as you're going to get.

    "All of this has to be considered AND we haven't got a clue as to what the consequences of doing it would be!"

    One consequence and a beneficial too; no-one is going to lend the government any more money, are they?

    ;)

  • Comment number 22.

    #19 Garthking,

    It would appear that "working people" are no longer in the economic equation as they have lost all of their power to influence events. Instead, we now have an economic mass of consumers.

  • Comment number 23.

    FrankSz (#10) "This quote is interesting"

    Whilst I know it's unlikely that you think it's interesting because the PM of Australia says someone he thinks important said that, such thinking is probably at least part of the problem we have laned ourselves with. Given 65 quarters of growth average 2.5% a year based on toxic dumping/spreading risk abroad (in pursuit of domestic 'social justice' in the wake of increased dysgenesis?), how could anyone really expect anything else..........?

  • Comment number 24.

    Garthking # 19

    "...we can fund much much more than this if we ignore the false prophets."

    Ah yes, the "there is nothing wrong with public debt because we owe it to ourselves" argument courtesy of Professor Abba Lerner. But are you astute enough to realise that it makes an enormous amount of difference whether - slicing through the obfuscatory rhetoric - one is a member of the "we" (the burden taxpayer) or of the "ourselves" (those living off the proceeds of taxation)?

    Presumably, you would agree with what Dick Cheney said, that is: "Deficits don't matter."



  • Comment number 25.

    Blimey Steph!

    The titles of some of your blogs seem rather suggestive lately!

    S'pose we need something to take our minds off the eek-oh-no-me!

  • Comment number 26.

    19 Garthking

    ''Better, they think, to put the lower classes back in their place rather than risk the disaster of a reduction in the purchasing power of their capital.''

    Sorry but could you run that by me again. Total UK direct and indirect tax take has been running between 43 and 46p in the pound, up at the 46 end for sometime. That was on the back of a booming economy. The figure is roughly the same across all developed western european economies. It is judged as needed to provide the developed social and healthcare and welfare services demanded by those societies.

    So the economy has dropped in size. What is the likelihood of the bubble size returning. Zero it would seem. So public sector cuts will have to be made, or the UK will end up uncompetitive against other countries if they stick to a 46 percent ceiling and we don't.

    It is not a question of paying for the national debt, there is no choice. It is the problem that expenditure cannot expand relative to a reduced economy so something has to give. Tell me GarthKing have you ever been unemployed, I have. I do not suggest anything to do with unemployment lightly.

    The problem is that Browns bubble public sector jobs should not have occurred because they where based on a transient, almost certainly unsustainable. Alongside that expectations have been raised on public services and they will be difficult to reduce. The economy in the future can be seen as returning somewhere to the position it should have been but for financial hankypanky and bubbleconomics.

    With the NHS the demographic says that standing still is a task, let alone cutting anything.

    So please tell me how you are going to raise the money you imply you are happy to see spent, because that is the problem. Nothing to do with some class warfare.

  • Comment number 27.

    foredeckdave

    Youre in for quite a shock when you get back.

  • Comment number 28.

    #17 Mr Tweedy

    Thanks for that link, that resonated very strongly with the current situation. it was the kind of credible well researched thing I would like to write if I could, as oppose to my rather raw bottom up view of things.

    It is somewhat of a relief for me to know that there are key figures amongst the academic elite at least (reletively unleveraged) whom are awake, can see it looming large and are prepared to put an opinion out there.

    Thanks Niall Fergussen, perhaps I am not going insane after all.

  • Comment number 29.

    #6 duvinrouge wrote: Where's the economic model to understand what is going on? - It's Called NEFS Net Export Financial Simulation
    and asks : Is it possible to understand markets without looking at the productive relations that underpin them? - Yes
    Then says :
    For a given time period humanity has to:
    1. Labour to produce the means of subsistence for workers - We don't need labour we have machines to do work now - mechanical slaves.
    2. Labour to replenish the means of production used up (new machinery, raw materials, energy) - Machines build machines as well - labour is so very 15th Century.

    A non-market society could calculate these 'values' in terms of hours worked - no way it's way too complex a matrix calculation - remember the famous question from the Russian : Who controls London's Bread ?' - it was because no-one did that we have always had bread whereas it was because there was a controller of bread in Moscow that
    they were always stuck in bread queues - I design databases and financial models for a good living and I couldn't even begin to model London's bread market - never mind the whole economy at such a minutia level !
    then moans about : ... fictitious profits, i.e. profits based upon rising asset prices (house prices), rather than profits on genuine production - good point and this is what NEFS fixes without resorting to a 'controlled' economy.
    And finally wraps up with : Capitalism will struggle to find a way out of this mess (even if it temporary fools the markets) - it's not Capitalism that is the problem - it's the financial system we use that was invented pre-machine age and is based on : If you don't work you don't eat. This was broadly a reality back then but now it's totally out of date and forces a massive amount of waste employment - which is a massive amount of waste. Have a look at NEFS

  • Comment number 30.

    #17 MrTweedy

    Great link!

    I didn't rate Ferguson's programme 'The Ascent of Money' aired during the arse end of last year...but his article in the link was worth reading.

  • Comment number 31.

    #2 "Someone called me about 1/2 an hour ago to explain to me how I need to jump on the stock exchange now...why settle for 2% when you can get 20% at the moment was his pitch.

    Does this sound familiar anyone?"

    His name doesn't happen to be Madoff Jr., does it ??

  • Comment number 32.

    #25 "The titles of some of your blogs seem rather suggestive lately!"

    I'm waiting with bated breath for the next title that has "slurping" in it !! :-)

  • Comment number 33.

    #19 Garthking - Are you an advisor to Robert Mugabwe? Better by far to destroy the entire country than be under the yoke of the long departed colonial masters. Better by far to destroy the UK than to risk any contamination of the purity of class warfare.

    #26 glanafon So "expectations have been raised on public services." You must have staggeringly low expectations.

    I periodically visit British hospitals because I have (or had) ageing relatives who are shuffling off this mortal coil. We all die, but the way they keep the dieing would make a strong man weep.

    I tried to catch a bus. Man in the pub tells me that it is exact fare only and the fare is GBP 1.60. I get the money, but it is in fact GBP 1.70 all I have is 1.60 or GBP 2.00. Sorry you cannot get on this bus. I´ll pay 2.00 - No go away. I walk about 3 miles closer to where I am going, find a shop and get more change. Get on bus - fare is now 3.40. How can this be? We only only sell return fares from this stop. I don´t want to return. I don´t care whether you return or not, but you still have to buy a return ticket.

    In other places where they clearly struggle for the basics no-one would dream of treating people in such a manner.

    Basically there are no public services - just public diktats.

  • Comment number 34.

    #26 "So the economy has dropped in size. What is the likelihood of the bubble size returning. Zero it would seem. So public sector cuts will have to be made, or the UK will end up uncompetitive against other countries if they stick to a 46 percent ceiling and we don't."

    If the size of the economy drops and the out-goings remain the same,then the tax take *Has* to increase or the public debt *HAS* to balloon !!

  • Comment number 35.

    #27 "foredeckdave

    Youre in for quite a shock when you get back."

    You betcha !! I had a shock when I got back and that was 4 years ago. Even then, the writing was on the wall.

  • Comment number 36.

    Post 17 - a great link and one pointing to some of the real risks ahead (thanks for sharing it). IMHO I believe we have to watch for those creating 'wars' - as the future 'battle' is not one 'between nations', or between 'religions' etc, ... but it's a 'battle of values' that 'transcends all nations' * (and one 'powered' in a completely different way, given the advent of the internet**) ...

    David Clift, a Future 500 Leader

    * take a look at https://poweromics.blogspot.com/2009/07/battle-that-transcends-nations.html for instance.
    ** as I have mentioned previously, the internet will change everything, including politics and economics).

  • Comment number 37.

    #31

    Not madoff no, just some random spiv with my work telephone number which I foolishly included in my subscription to the Economist (no idea why I did that ..I never do usually). No doubt they have been selling it to all and sundry.

    He was quite insistant that 'people in the know' had been getting 20% returns recently. He seemed a little upset that when I suggested i did not doubt his figures but just because it had risen 20% recently was no guide that a further 20% rise would occur. He was selling the past as the future.

    He only gave up when I fessed up that I dont have any money.

    Middle classes who made a few £'s during the property boom beware!!!

    They want you guys too!!!!


  • Comment number 38.

    33 arm n leg times

    I didnt say I had expectations I said or implied others had expectations. great expectations at times it would seem.

    You were rather traumatised by the bus saga. You have said about it a couple of time. Still enjoyable in a Johnathan Swift or Philip K Dick sort of way. Living in the UK is what maiden aunts used to call character building, except in the kingdom of the one eyed man it apparently has to go on after puberty.

  • Comment number 39.

    Stephanie,

    This blog has far too simplistic a view to be creditable !!

    "And if the likes of the IMF are right, the treatment is starting to work"

    "Global output may already be growing again, and it looks as though we will see positive growth in most economies next year."

    These statements are made without reference to any parameters so how can they be totally accurate ??

    The IMF had said that recovery will happen is *SOME* economies, *NOT most or all economies. In particular, it specifically *DID NOT* say that the Western economies will show growth any time soon !!

    The Global economy *IS* growing again but it's three steps forward for the BRIC countries and two steps back for the developed economies !! When look at individually, most developed economies are still struggling to stop shrinking, let alone start growing !!

    And the global growth has happened in spite of and not because of Western economies. It has happened because some or many of the developing economies have made their stimulus and that has helped global growth. It has also happened despite shrinking imports by shrinking Western economies !! Therefore, the Western economies cannot take any credit for that growth.

    "Understandably, the debate is now turning to "exit strategies": not just for central banks but also - and especially - finance ministries."

    For Western economies to "debate exit strategies" is like saying "our house is still burning but the neighbours are building a new extension, so can we discuss building ours too" !! Until the fire is put out, there shouldn't be any discussion of new extensions unless these people live in Wonderland !!

    For the last 10 years or so, the better developing economies (e.g the BRIC countries) and the more far sighted developed economies (e.g. Japan, South Korea and Singapore) have been diversifying their economic focus from the Western economies to the less developed economies. For there to be growth despite ever shrinking imports by the Western economies , it shows clearly that their strategies ae working and that their dependence on Western economies have been significantly reduced.

    Where once the Western economies could demand that the exporting economies accept their debts in payment for their imports,the boot is now on the other foot. With greatly lessened dependence on the Western economies, they have less pressure to accept Western debts !! Hence, these "urgent and important" US-China talks going on. The Chinese are unhappy with the US "queasing" (quantitative easing) and are demanding a guarantee of the value of their US debts. Failure of those talks will result in massive dumping of US debts - Do unto others before they do unto you - before the US devalues the greenback to Zimbabwean proportions !!

    Five trillion USD of debt is, not so much the sword and more like the elephant, of Damocles !! If it falls, it will crush everything under it !! Therefore, the US *CANNOT* plan any exit strategy until that has been sorted out !! If the US cannot exit, what hope is there for good old *little* Blighty to exit ??

    Finally, in order to grow, there has to be something of worth that is in demand by other economies. What is there that Britain can sell that is greatly in demand by others; aside from Harry Potter, etc. ?? And, more importantly, will that be sufficient, not only counteract the demands for imports, but to surpass them in order to create a surplus ??

    We need answers to these questions before we can even contemplate any recovery, let alone growth !!

  • Comment number 40.

    34 ishkander

    Why is the idea so difficult that if you start with a quart pot and then have a pint pot you can't expect to get a quart refill out of a pint pot. Sorry for showing the imperial past. Imperial measurements that is.

  • Comment number 41.

    37. Jericoa

    'my subscription to the Economist'

    You like fantasy and fiction then.

    Has it done you any good or has it sent you to the funny farm yet.

  • Comment number 42.

    #34 "Basically there are no public services - just public diktats."

    As a famous saying goes - The Civil Servants have become the Civil Masters !! :-)

  • Comment number 43.

    #37 "He was quite insistant that 'people in the know' had been getting 20% returns recently."

    Thus, probably, sayeth the Great Madoff, in his heyday !! :-)

    Perhaps he learnt his trade watching Trotter International in action in "Only Fools and Horses" !!

  • Comment number 44.

    #38 glanafon Yeah I keep meeting people in the pub who say I am repetitive. Sorry about that. Yeah I keep meeting people in the pub who say I am repetitive. Sorry about that. Yeah I keep...

    #39 Ishkander. You are wasting your time. The BBC is all about simplicity and nothing about credibility.

    I think a long time ago the BBC told everyone that they could survive a nuclear strike by hiding under a table. Nothing has changed.

  • Comment number 45.

    ishkandar # 43

    "Perhaps he learnt his trade watching Trotter International in action in "Only Fools and Horses" !!"

    No, Madoff learned his trade by observing how the US government forcibly scams its own citizens into "coughing up" Social Security (UK equivalent is NICs) payments.

    However, Madoff's problem was he ran out of investors when everything went belly up. No such problem for governments because the alternative for their "investors" is getting a stripy suntan in a six by six cell!

  • Comment number 46.

    #40 "Why is the idea so difficult that if you start with a quart pot and then have a pint pot you can't expect to get a quart refill out of a pint pot. Sorry for showing the imperial past. Imperial measurements that is."

    The problem isn't so much trying to get a quart refill out of a pint pot but trying to get gallons more out of that same pint pot !! Just to add to the fun and games, that pint pot has a hole in it and is leaking like crazy !! :-)

  • Comment number 47.

    #27 glanafon

    Well in just over 6 weeks we will find out -sob!!

    Mayhem on the High Street, indusrial units empty, etc. Sounds very much like 1979/80 to me. Trouble is the Old Tart with the handbag started off both the biggest sell-off the World has ever seen and laid the foundations of a debt laden society as her way out of the mess. Plus this time there are no public utilities to rape.

    To use your metaphor - so we now only have a pint instead a quart pot. Well OK so now we have a choice. We either invest that pint in identifying and supporting potential winners OR we carry on supporting those junkies in the Financial Services Industry as they act out their addiction in the casino that is the international financial markets. Remember, when making your choice, those 'brightest and best' have already lost the other 3 pints!

    As you know, my option is to join our remaining pint with the litres and demi-litres of the EU, pull up the drawbridge as far as possible and re-build internally.

    So I suppose I'll have to give up the Soca and start practising 'Ghost Town' to whistle as I get off the plane.

  • Comment number 48.

    47 fdd

    There is no comparison to 1980. The rain is worse also.

  • Comment number 49.

    Someone turned the illusion machine off.

  • Comment number 50.

    #41

    Actually i am a fan of pathos, the economist keeps me heartily amused, it is also useful to know the mind of the opposition no matter how convoluted it has become.

    Even the economist has been struggling a bit with free market economics recently I noted, bit of an internal identity / credibility crisis going on I get the feeling amongst the editorial staff.

  • Comment number 51.

    glanafon - Mighty oaks from little acorns grew !!

    One man and his vision - https://news.bbc.co.uk/1/hi/world/europe/8172917.stm

    Will Britain have something simple but ever popular like this ?? Perhaps this could be *AN* answer to recession and growth !!

  • Comment number 52.

    Post 37, following up on post 41 - Have you tried the Renegade Economist instead (https://renegadeeconomist.com/blog%29 of the Economist (and/or the BBC), because there seems to be quite a few very insightful articles/interviews there ... e.g. they are asking 'big questions' there too (which I personally like - e.g. take a look at post 8 earlier as well as https://poweromics.blogspot.com/2009/07/big-questions-too-hot-to-handle.html ... IMHO they appear to be another group asking more fundamental questions, rather than skirting around and/or deliberately avoiding the big issues ...

    David Clift, a Future 500 Leader

  • Comment number 53.

    50 jericoa

    Pathos, isnt he one of the three musketeers, oh no that was Porthos.

    51 ishkander

    No, knives are no longer PC. It looks like one of the first gadgets for boys to me. Have you ever met anybody who actually uses one regularly. How many need a tool to get stones out of horses hooves these days. Sadly times have changed. Scouting for Boys or Scouting for Girls have to be used carefully as phrases. The world seems to have been much simpler then.

  • Comment number 54.

    I am afraid governments do not do exit strategies (Iraq, Afghanistan?) that is the problem, no long term thinking just short term "i will do whatever is necessary to stay in power"... We have a government whose idea of running a country owes more to the "knee jerk" school than rational thought...a PM who has never run anything, a Chancellor who is a prime example of the peter principle ("In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence.") a foreign secretary barely out of short trousers who has less experience of foreign affairs than my mother, a home secretary who admits he "hasn't a clue", a defence secretary who ranks below the secretary of transport whilst the country is at war, a Business secretary, who is unelected and has less business experience than my 16 year old grand daughter, and a parliament that believes a £700 flat screen television is wholly, exclusively and necessarily for parliamentary duties....need I go on?

    The only idea appears to be lets get the economy back to where it was....that means another boom followed by guess what? doesn't it seem somewhat ludicrous that we are spending tax revenues (and future tax revenue) now, with the sole intention of providing ourselves and our children with more expensive houses! Winston Churchill wrote "The British people can face peril or misfortune with fortitude and buoyancy, but they bitterly resent being deceived or finding that those responsible for their affairs are themselves dwelling in a fool's paradise".....

  • Comment number 55.

    50 jericoa

    '...the economist has been struggling a bit with free market economics recently..'

    ''I am but mad north-north-west: when the wind is southerly I know a hawk from a handsaw.'' William Shakespeare

    So which way is the wind blowing for the economist.

  • Comment number 56.

    This idea of economic recovery, at least as far as the UK is concerned, is purely wishful thinking.

    The fact is that we prospered for the last few years on the back of N Sea Oil and funny money created out of nothing during the housing boom.

    However, while the general public were supposedly getting rich on this imaginary money the financiers were getting rich on real money in the form of bonuses. That is where all the money has gone.

    Now the banks are insolvent and it is the general public footing the bill, while the bankers hang on to what they have got and even try to enrich themselves further on the back of the fiscal stimuli.

    The fundamentals of our economy are such that we really do not produce anything we or the rest of the world need at anything like a competitive price. However we have a huge public sector which provides most of the jobs and demand for goods.

    So far the massive shortfall in the money needed to pay for the public sector and to fund the banks has come through printing money (QE). This can only go on so long (maybe just about up until the next general election) before the government are simply unable to borrow/print any further.

    Frankly I am amazed at so many economists fail to see this. I can understand politicians lying through their teeth, but surely economics professionals cannot fall for this rubbish.

    Time and again on this and Peston's blog we have seen unqualified members of the public telling things as they really are, while those who control the media telling a completely different story.

  • Comment number 57.

    Post 54 - I couldn't agree more - well put ... and it's interesting to hear some wise words from Winston Churchill entering here too ... not that any of the current 'leaders' in power will listen, or care, or take the time to understand about history ...
    e.g. take a look at https://poweromics.blogspot.com/2009/06/for-evil-to-flourish.html and https://poweromics.blogspot.com/2009/07/history-tells-story-and-it-will.html for instance ...

  • Comment number 58.

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

  • Comment number 59.

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

  • Comment number 60.

    #56 Wykhamist

    Indeed. Property speculation, or any debt-funded asset speculation, constitues a giant Ponzi scheme: It's only a matter of time before the tide of sentiment turns and the whole thing crashes. Goodbye the West.

  • Comment number 61.

    "We simply have too many people doing business with each other and not the outside world". Voser - new head of Shell on a drastic reorganisation underway. Could apply elsewhere as a comment I think. Voser is not planning on any uplift.

  • Comment number 62.

    54 jolo13

    ''...need I go on? ''

    Please do, I was enjoying it.

  • Comment number 63.

    37 Jericoa

    I have had them cold-calling at home. They even tried it on the missus who in her broad Cockney told them to go forth. I am now even ruder.

    I have recently had letters from all sorts of organisations including banks asking to look after my money. I have never had a lot of the stuff but have always tried to stay in cash. Now it seems they are after that as well.

    In my simple view the world is running out of money to pay the mortgage on the future.

    The question raised by Stephanie Flanders above is quite valid; what will happen when the the governments of the world disconnect from supporting their banks and stimulating their economies?

    I will ask some other questions: are there enough savings in the world to fund all these bust banks and stimulate all these economies? How many more generations are to be put into penury to keep the current system afloat? Are we reverting to a system of debt-slavery? From turbo-capitalism to neo-feudalism in three generations?

    Something has to give as the prevailing options are too absurd.

  • Comment number 64.

    No.61. glanafon

    I wish I had bought Shell B at 14.40 in early July.
    Today it's trading at 15.83
    That's a 10% upswing.

    Shows the need to hedge against the stealth bull market.

    If banks can't make money by lending, they will make money from speculating on shares, currencies and commodities. The fundamentals are bad, but prices keep rising. See how BT has risen today. Personally, I am hedging against the risk of price inflation, by buying while some prices are still low.....

  • Comment number 65.

    People talk about 'stimulating an economy', but this is just thinking inside the [closing] box. Economy == society.

    Stimulate society to do what?

    This is where questions of direction and leadership come in.

    "Stimulating the economy" in its current sense means stimulating a stable self-regulating self-organising system, where the system involves working people buying things that other working people make, in a nice happy merry-go-round of placate society...

    This is dead. It no longer functions. There is nothing to stimulate.

    The discussion should therefore be about either "reviving the dead economy to how it was a decade ago", which nobody really wants anymore, or "looking for fundamentally different alternatives".

    Anyone talking about stimulating the economy can go hang out with Elvis.

  • Comment number 66.

    #57 leanomist. if you are so interested in words by Churchill try these:

    "I am strongly in favour of using poisoned gas against uncivilized tribes"

    I believe he was arguing in favour of a gas attack on Iraqis.

  • Comment number 67.

    #56 wykhamist. There are plenty of economists and commentators that understand the gravity of the situation. They are simply ignored or ridiculed.

  • Comment number 68.

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

  • Comment number 69.

    There is an interesting technical point underlying the recovery from the (disastrous) printing of money (Zero interest rates and QE). The question is:- why stop?

    As almost every commentators thinks it should stop - does that not itself imply that they were biting their lips at the time it started as they knew that the steps that have been taken were wrong at the time and would have to be reversed.

    A good and valid analogy for the whole process is I think described by considering putting out a fire by throwing petrol on it. Daft!

    (Would the Zimbabwe solution of abandoning the pound be a sensible idea? Let us all start using a more solid currency - say the Euro, now before the pound becomes worthless!)

    It was economically insane to run an economy of equity release from every increasing house prices as we did in the last decade - It was absolutely sure to end in disaster - but somehow those who call themselves (and were expensively educated by us) economists did not see this - 'collective lack of imagination'.

    House prices are still at least twice as high as they should be and yet the idiots (economists) are desperately encouraging prices to rise again and calling it a recovery - they want prices up so that equity release can again restart and drive a recovery - insane. There people need locking up in Broadmoor!

    On a global scale, nobody has been as insane as us so we will have to look at exports for our recovery - our workers will have to accept that they will have to live on Chinese labour rates of pay for that to work! (Fat chance!)

    All in all I just don't see any rapid recovery in the UK -it may be fiddled, but doing so will be a disaster far far worse than the present one in very short order. We must get interest rates up to five percent ASAP so that a rational financial market can recover. Everyone knows this but no one will accept the consequences - hence the desperation in economic circles.

  • Comment number 70.

    Surely the so called 'Boom' era was a time when everyone pretended to be rich? Other than those earning huge bonuses, basically everyone was living like they earned £10k a year more by simply remorgaging and taking out loans. Perhaps a limit on how much people can borrow compared to their earnings. This means that the banks cannot lend irresponsibly, the bankers will be unable to earn huge bonuses based on the irresponsible lending, will then not need a bailout when everything goes t**s up and the government will not have to make cuts to such an extent that every single public sector worker is unemployed through efficiency savings.
    I also think a simplification and tightening of the regulations must occur. At the moment there are too many loopholes that allow people to make money on the backs of other peoples money and at the same time walk away without penalty if they lose it all.
    Finally, a cap on bonuses paid out on those gambling our money away. Yes a performance related bonus is needed, but unless there is a penalty for losing (which there doesn't seem to be - bankers are still earning their bonuses) nothing will change. I estimate the next recession in 2027. You heard it here first.

  • Comment number 71.

    Fixed the bit that caused my last post to be blocked, probably was quite insulting; bit of letter substitution concerning a profession heavily involved in our financial institutions. We'll leave it there.

    Surely the so called 'Boom' era was a time when everyone pretended to be rich? Other than those earning huge bonuses, basically everyone was living like they earned £10k a year more by simply remorgaging and taking out loans. Perhaps a limit on how much people can borrow compared to their earnings. This means that the banks cannot lend irresponsibly, the bankers will be unable to earn huge bonuses based on the irresponsible lending, will then not need a bailout when everything goes t**s up and the government will not have to make cuts to such an extent that every single public sector worker is unemployed through efficiency savings.
    I also think a simplification and tightening of the regulations must occur. At the moment there are too many loopholes that allow people to make money on the backs of other peoples money and at the same time walk away without penalty if they lose it all.
    Finally, a cap on bonuses paid out on those gambling our money away. Yes a performance related bonus is needed, but unless there is a penalty for losing (which there doesn't seem to be - bankers are still earning their bonuses) nothing will change. I estimate the next recession in 2027. You heard it here first.

  • Comment number 72.

    #64

    Me too. I bought 150 tins of sardines, 500 bottles of still water, 20kg of lentils and 40kg of flour. That should keep us going for a wee while when the banks lose everything on asset bubble.

  • Comment number 73.

    Stephanie wrote,

    "...That may well have prevented another great depression...."

    This is wishful thinking - in reality the jury is still out. No matter how many times the (mis-educated) economists try to convince the World of this 'fact' is this not also an aspect of collective blindness! In twenty years time we may be able to look back and make such an expression of certainly, but not today!

  • Comment number 74.

    62. At 1:13pm on 30 Jul 2009, glanafon wrote:

    54 jolo13

    ''...need I go on? ''

    Please do, I was enjoying it......

    Well i tried glanafon but unfortunately the mods decided to refer me, not sure which rule i transgressed but thats life... to ensure i stay on topic I should mention that QE shows no sign of working as M4 has actually gone down last month...so the cunning plan is failing to stimulate the economy just as any half intelligent person knew it would. The banks are just hoarding it, and making a huge profit buying into a one way bet...

  • Comment number 75.

    Well we are all in a fine mood today! Don't blame the economists - even if they had raised siren voces they would have been ignored!

    So if you must kick somebody then lets start with ourselves. WE are the ones that have let this happen by both our actions and inertia. We took the loans and credit cards and mortgages - nobody put our arms up our backs. We watched as jobs were lost to Asian suppliers. We elected he politicians who didn't know or didn't care what was happening. We accepted as truth the nostrum that you can't beat the market. We created the opportunity for the Sir Freds of this world. We believed the lie that it's better to make money from financial services (i.e. not adding value) than it is to invest in actions where people get their hands dirty.

    So if we want revenge - start with us.

    Now. Let's get real and start putting it RIGHT

  • Comment number 76.

    Can somebody answer this question for me?

    Japanese electronics manufactures have risen in volume for the 3rd successive month. Hooray! - signs of a global upturn - let's all celebrate.

    However, electronic sales have FALLEN globally!

    So where is all this product going? Why is it being portrayed as a posititve indicator?

  • Comment number 77.

    Post 54/56/66 - the 'wise words' post 54 mentioned, and to which I referred, were specifically these ...

    "The British people can face peril or misfortune with fortitude and buoyancy, but they bitterly resent being deceived or finding that those responsible for their affairs are themselves dwelling in a fool's paradise" [Winston Churchill]

    and not every other comment/quote Winston Churchill may (or many not) have said [...and certainly not the one referred to in post 66, whether it was ever said or not!]

  • Comment number 78.

    I echo the comments and sentiments in Post 56 and 75 - We could blame general apathy (Ignoromics*) for allowing Poweromics* to thrive, but that alone doesn't solve the problem ... it just allows the ensuing crisis to continue to get worse.

    However Ignoromics will have to be reduced for Poweromics to be effectively challenged, and for an alternative solution to be found e.g. one focused on 'adding value' and 'wealth creation' (Leanomics*), instead on one that 'destroys value' whilst promoting 'wealth manipulation' (Poweromics).

    IMHO The 'battle of values' is here* - and depending on how this goes will affect the future of us all ... our children, and our children's children** ...


    David Clift, a Future 500 Leader

    * take a look at https://poweromics.blogspot.com/2009/06/leanomics-v-poweromics-ignoromics_01.html for definitions
    ** take a look at https://poweromics.blogspot.com/2009/07/battle-that-transcends-nations.html for instance.

  • Comment number 79.

    During the Depression there were market recoveries galore. In our case it's just people fleeing from cash when the risk looks better over in Asian or Oil mini-bubbles. This is just it - as soon as any kind of market recovery looks like it might be underway, currencies take a nose dive. It's just oscillating flows of money, but, ladies and gents, the trend is downhill without an end in sight.

  • Comment number 80.

    #77 leonomist It was said, or more accurately, written. It was written in a departmental minute dated May 12th 1919.

    No recognised authority disputes its authenticity, and consequently it is covered in the The Official Biography of Churchill.

    If you want to go around quoting people, or beatifying people it is as well be fully appraised of all their relevant views.

  • Comment number 81.

    #75 foredeckdave - So "no-one put our arms up our backs." Funny that because I remember a time when the police were swarming all over UK coal fields putting plenty of arms up backs and plenty of knees in groins.

    What is it with the desire of people to falsify history? Is the UK turning into North Korea? If we just ignore the things we don´t like then maybe they never actually happened.

  • Comment number 82.

    This may be off topic but i believe it is important enough to be published regarding blog behaviour...

    i have received word from the mods that my post #68 was removed....actually it can not have been removed as it was never published in the first place...however apparently it was removed due to potential defamation ...well as a retired lawyer i can assure the mods that in law there was no defamation in my post , in fact the instances quoted where taken from BBC's own reports....

    i just looked up the BBC rules and here they are regarding defamation:

    A statement about an individual or organisation is deemed to be defamatory if it harms their reputation by:

    *Exposing the individual or organisation to hatred, ridicule or contempt;
    *Causing the individual or organisation to be shunned or avoided;
    *Lowering the individual or organisation in the estimation of right-thinking members of society; or
    *Disparaging the individual in their office, profession or trade or the organisation's office, profession or trade....

    Well that just about inhibits any criticism actual or implied of the members of the government....making 90% of posts on the Peston, Stephanomics and Robinson blogs liable to be removed. I am referring this matter to the BBC Trustees as i believe that these rules are inhibiting free speech.

  • Comment number 83.

    jolo13 (#74) "The banks are just hoarding it, and making a huge profit buying into a one way bet... "

    Presumably, because the banks have international clients/shareholders and they only see the British Treasury/taxpayer as a source of liquidity? It's obvious when one thinks about it. People who pay taxes for services in the UK don't appear to fully appreciate the nature of globalization. The UK government may get the money back one day, but in the mean-time, banks will use the cash as they think best for all their shareholders who are all ove rthe world are they not? Not just in the UK.

  • Comment number 84.

  • Comment number 85.

    Post 80 - I didn't provide the original quote (though I did refer to it) and I'm not into 'beautifying' anyone.

  • Comment number 86.

    #81 armagediontimes,

    OK Cassandra. You got me on that one -well maybe!

    Whilst the police were swarming all over the UK coalfields what were the mass of the population saying? My memory may be flawed but I didn't hear too many voices raised in support of the miners. I did hear a lot of "well this strike effects (they meant inconveniences) me".

    So please don't accuse me of falsifying history - I'll leave that to JJ

  • Comment number 87.

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

  • Comment number 88.

    The issues are many. The governments mainly are giving the funds to other levels of government to maintain the bureaucracy, i.e., others lose their jobs but not the government. Governments are creating public works projects that do not produce sustainable employment. Banks are not lending as a chip to be used against government regulations, they would like the opportunity to steal again. Neither banks nor governments grasp the lack of confidence that the people have in either. The US Fed now refers to the event as a "perfect storm", which is simply untrue, it was the "consequences of greed." No one has been held accountable and that will continue the misgivings of the people. The economics are the economics, but this is about public confidence in these institutions and no one sees any change and with public funds supporting enriched retirements and unemployment continuing to increase it is time for the cheerleaders to notice that the stadium is empty. The banks and governments almost seem proud of how they have handled the greatest public betrayal in modern history, no remorse, no empathy and maintenance of the status quo. This wasn't a gold laden ship sinking on its way back from the New World, it was an attack by pirates who boldly sailed into harbor,docked and continue to count their booty in public, under the gallows they should be swinging from, while the officials assure us all that a ship sank in a storm. Tell a tale long enough and people will accept it as the truth.

  • Comment number 89.

    #85 leanomist. You did not provide the original quote but you sought association by reference to the "wise words." I merely provided other words from the same source.

    Without any evidence whatsoever you sought twice within the space of 2 lines to impugn the accuracy of those words, and hence to imply either stupidity or some kind of malicious intent on my part.

    I did not suggest you were seeking to "beautify" anyone or anything. That is why I used to verb to beatify. Aside from its religious meaning I think you will find that this means to exalt above all others.

    But hey, lets move on who cares about accuracy.

  • Comment number 90.

    This is getting annoying.

    jolo13 - #82 - Eberytime I post anything that refers to a cold war going on in Africa betwen the US and CHina, as I see it, it gets censored.

    Now, BBC, I am posting with information about a website called africom dot mil. Why are you censoring it? I will complain about this.

  • Comment number 91.

    #86 foredeckdave. Yeah OK you are not into deliberately falsifying history - apologies.

    But that is where is started, the destruction of the miners was a necessary precondition for all that has followed.

    The final outcome was always obvious - only the timing was unknown. You can only grow richer by growing things, by extracting things or by making things. All the rest is just so much hot air.

  • Comment number 92.

    Huh. Nice summary. Shame about the authors.

    "As the 16-month-old disintegration of the post-World War II financial system seems to be accelerating to a climax, Pope Benedict XVI is preparing a major papal encyclical outlining the principles behind a just and stable economy"

    https://www.globalresearch.ca/PrintArticle.php?articleId=12527

  • Comment number 93.

    #91 armegiodtimes

    Now I totally agree with "You can only grow richer by growing things, by extracting things or by making things. All the rest is just so much hot air."

  • Comment number 94.

    When things go wrong and taxes rise we always get the "Me an MY money is leaving". When unemployment rises we always get the "brightest and best will leave". Now we are getting the "if you don't play our game we'll take our wealth elsewhere". Whilst there is no doubt that some do, experience tells us that the majority either don't or can't.

    So why don't we re-take control of the situation. Demand that our politicians stop playing the international financiers game and return national financial structures towards supporting our own economic developement. Oh you can't do that! Finance is international and 'they' won't stand for it. Well I believe that they will.

    These so-called financial giants (individuals and organisations) may have been extreemely silly in chasing short-term illusiary gains but they are not toally stupid. They know that the old model is irreprably broken - hence they are moving money faster and faster to try and retain their 'wealth'. This latest high on the FTSE is an indicator of this when viewed with the currency and futures markets (more on them another time). Therefore any market that offers a stable home wil be welcomed with open arms.

    I truly believe that Europe can do this. I don't think that the USA can due to their slaveish adherence to the American Dream and outright rejection of any measure the even faintly smells of socialism. The question is will it happen?

    Without major pressure from the 'people' pressurising the political, finacial and commercial leaders to return to basic economic principles - NO

  • Comment number 95.

    #53 "Have you ever met anybody who actually uses one regularly. How many need a tool to get stones out of horses hooves these days."

    They have a wide variety these days. I have two of them. One for office and general use and one for outdoor use. And I use both fairly regularly.

  • Comment number 96.

    #54 ".....a parliament that believes a 700 flat screen television is wholly, exclusively and necessarily for parliamentary duties"

    Of course, it is !! They have to vet all the porn that's going around these days !! Why, they might actually be politically incorrect porn !! :-)

  • Comment number 97.

    #82 jolo13

    Unfortunately the category of 'wit' must also be added to the list critera deemed unacceptable by the BBC. The first post to this afternoon's Nick Robinson blog 'A final thought before a summer break' by 'bertrambird' was deleted. The comment was only 5 words long and certainly did not break any of the BBC rules. The comment was purely a very witty (and quick) repost to Nick's blog.

    I repeated (and therefore plagiarised 'bertrambird's' post in my post #47...that was was NOT deleted. This proves a gross inconsistency on the part of the BBC moderators that clearly smacks of political censorship.

    I sincerely wish you the best of luck with regard to your complaint with the BBC trustees.

  • Comment number 98.

    #72 "Me too. I bought 150 tins of sardines, 500 bottles of still water, 20kg of lentils and 40kg of flour. That should keep us going for a wee while when the banks lose everything on asset bubble."

    Don't forget wood !! You'll need lots of it !! Sufficient for something 50 cubits long, 40 cubits wide and 30 cubits high !! And don't forget the animals marching in two by two but please, please leave out the damn mosquitos and flies !! :-)

  • Comment number 99.

    #74 "Can somebody answer this question for me?

    Japanese electronics manufactures have risen in volume for the 3rd successive month. Hooray! - signs of a global upturn - let's all celebrate.

    However, electronic sales have FALLEN globally!

    So where is all this product going? Why is it being portrayed as a posititve indicator?"

    The clue is in the qualifier(s) or lack thereof !! It's the *Japanese* manufactures that have gone up but it's the *unspecified* sales that has gone down !! This is an old trick to garner the interest of the readers !!

    How have they got sales figures for those developing countries that have chaotic governments ?? And yet, there will have been sales to them !! Indonesia, for instance, consistently report low sales figures !! That's because much of the electronics sold there are *smuggled* in !! The manufacturers will report their manufactures but the smugglers will be loath to report their sales, won't they ??

    Ciggies are smuggled into UK everyday but does that mean that ciggie manufacturers are reporting huge productions while Britain reports a huge drop in smoking because "official" ciggie sales are down ??

  • Comment number 100.

    #93 Now I totally agree with "You can only grow richer by growing things, by extracting things or by making things. All the rest is just so much hot air."

    To that, I must add "...you can also get rich by stealing the fruits of others' labour but it must be done legally" !!

 

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