Poll: General election voting round 5 (final one)

[Judgeneo]

Here's a great article by Nobel prize-winning economist Paul Krugman on why austerity didn't work.

http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion

Key takeaways:

- The harsher the austerity, the lower the growth
- UK austerity meant lower growth in the first two years of the last parliament
- UK is alone in believing that austerity has worked and the economic evidence for austerity leading to higher growth has been discredited

This would suggest that austerity going forward will result in lower growth - hence the Tory/UKIP plans would most harm the economy.

I've lost a lot of respect for Krugman over the years, he just seems to completely ingore parts of the market.
The article glosses over the reasons and theories that borrowing rates are low in the debt-high euro area, i.e. political will to keep the Euro together at any cost, and the lack of places to invest capital at any meaningful rate elsewhere
He refers to Greece as a unique case, which is rather bizzare as sky high soverign debt has caused collapse of nations multiple times in history.
Productivity is not mentioned at all.
I could go on, but this quote tells you all you really need to know:

It is impossible for countries such as the US and the UK, which borrow in their own currencies, to experience Greek-style crises, because they cannot run out of money – they can always print more

You really have to question the sanity of any economisist that states this. It is EXACTLY the type of financial thinking that led to the 2008 banking crisis.

2008 should have been 2001. It wasn't, and the problems exasperated and caused havok in 2008. We're due another hit at the end of the next parliament, or the start of the next. The "cannot run out of money" reality that Krugman et. al peddles may push this date back, but like in 2001 the problems will remain, and grow behind the scenes. This mentality will cause havok, the next crash may not be banks, but whole nations.

 

[scorza]

I'll agree for the first couple of terms Labour were blessed with a boom cycle but in that time spent all the money making services better and employing lots of civil servants. Times were good as money was being thrown around. Towards the end though, not a week went by where people looked at things like house prices and the price of credit and the abundance of it all so we could continue to spend, and thought there's trouble coming if this keeps up. Then the recession hit and whilst I agree Labour didn't cause that recession - they had spent the rainy day fund this country had to get through it. to top it they bailed out every man and dog and stuck it on the countries credit card.

In case you forgot in 2001 there was a minor global recession that the UK managed to steer clear of (cause: 9/11 and dot-com crash). True this wasn't the 'end of boom and bust' but it was an impressive achievement nontheless.

You seem to be under two false impressions, firstly that we didn't make it through the great financial crash of 2008 - we did, and secondly that any government is going to keep a stash of a trillion dollars handy in case of a rainy day - uh uh it ain't going to happen. People talk about selling off the gold reserves, which I don't really understand myself, but in the grand scheme of things it is irrelevant - Italy has the third highest amount of reported gold reserves of any country in the world and a fat lot of good it is doing for their economy right now.

 

[ubersonic]

Thanks.

It's obviously not aimed at you.

 

[Mr Jack]

I'll agree for the first couple of terms Labour were blessed with a boom cycle but in that time spent all the money making services better and employing lots of civil servants.

Why do you say "spent all the money making services better" like it was a bad thing?

Then the recession hit and whilst I agree Labour didn't cause that recession - they had spent the rainy day fund this country had to get through it. to top it they bailed out every man and dog and stuck it on the countries credit card.

Before the recession hit, our debt-to-GDP was lower than in 1997. The rise in debt-to-GDP ratio was entirely down to bailing out the banks. In doing so, they avoided a far worse crash.

 

[delta0]

If the Lib Dems go into a coalition with UKIP, they can wave goodbye to whatever seats they haven't already lost come the 2020 election.

No not a coalition with ukip just a supporting vote. Con and lib coalition will be necessary to secure lib and they will always seek the largest party.

 

[ubersonic]

People talk about selling off the gold reserves, which I don't really understand myself

Basically, Gordon Brown took some of the countries gold, and sold it off.

After announcing in the house of commons that he was going to do it and tanking the price of gold /facepalm.

 

[thep02]

It's obviously not aimed at you.

You are aware that most unemployed people either had or desperately want a job?

The meme of the "doley" is a couple of hundred thousand at most throughout the country and tbh they are unsuitable for long term structured work anyway because of mentality or habits, best just left alone while every help is given to people desperate for work.

 

[jimjamuk]

Why do you say "spent all the money making services better" like it was a bad thing?

Its not when you can afford it, but the whole solution to any problem 10 years ago was to spend our way out of it.

Don't get me wrong the early years I cant complain at but the habit of spending to get out of any problem carried into the latter years when everyone could see something was coming.

 

[Terminal_Boy]

This is what riles me up about some UKIP supporters, this misguided approach of ANYONE who opposes you MUST be a raving socialist.

Just because we don't want Nigel "man of the people" Farage anywhere near Westminster, don't see the EU as this big evil empire and don't think it's fair to blame the failings of the NHS, traffic congestion, high house prices and rubbish social care on immigration doesn't make us all lefties.

Correct. That doesn't make you lefties.

It makes you Common Purpose dupes.

 

[AGD]

You really have to question the sanity of any economisist that states this. It is EXACTLY the type of financial thinking that led to the 2008 banking crisis.

No. The banking crisis was a banking crisis. It was not caused by high government spending.

2008 should have been 2001. It wasn't, and the problems exasperated and caused havok in 2008. We're due another hit at the end of the next parliament, or the start of the next. The "cannot run out of money" reality that Krugman et. al peddles may push this date back, but like in 2001 the problems will remain, and grow behind the scenes. This mentality will cause havok, the next crash may not be banks, but whole nations.

The crisis in Greece is no way comparable to what we have experienced. That is the point he was making. Krugman argues with facts and graphs. You have presented no data for your arguments.

 

[thep02]

Basically, Gordon Brown took some of the countries gold, and sold it off.

After announcing in the house of commons that he was going to do it and tanking the price of gold /facepalm.

He did so as part of an unofficial international attempt to manipulate the price of gold the Fed, ecb and CBC were all in on it and it is tabloid infantalism to pretend otherwise.

 

[ubersonic]

You are aware that most unemployed people either had or desperately want a job?

And they are obviously not the type of person it was aimed at either (to be fair nobody on this forum is, because computers are generally harder to operate than condoms so the knuckledraggers generally don't frequent places like this, navigating Facebook is usually the max of their ability).

 

[Judgeneo]

Basically, Gordon Brown took some of the countries gold, and sold it off.

After announcing in the house of commons that he was going to do it and tanking the price of gold /facepalm.

Which was entirely intentional. He did so in order to increase bank liquidity, when enabled them to start lending again, lessening the economic hit that much of the world had at that time.

It worked, but it would have been better for the country in the long run to have taken the hit then, as we would have been less exposed to the chaos of 2008, and probably would have made the government more fiscally prudent in the proceeding years.

 

[scorza]

Basically, Gordon Brown took some of the countries gold, and sold it off.

After announcing in the house of commons that he was going to do it and tanking the price of gold /facepalm.

Which is why I don't understand it, because it doesn't make any sense to do it that way and Brown was a shrewder operator than that.

Unlike you, I'm not one for conspiracy theories, but I do wonder about this: http://blogs.telegraph.co.uk/financ...own-sold-britains-gold-at-a-knock-down-price/ This doesn't fully explain Brown's actions either, but makes a bit more sense.

 

[thep02]

And they are obviously not the type of person it was aimed at either (to be fair nobody on this forum is, because computers are generally harder to operate than condoms so the knuckledraggers generally don't frequent places like this, navigating Facebook is usually the max of their ability).

So what do you want to do gas them?

They exist, they are English and part of our nations heritage leave them alone they cost nothing and are inconsequential to our nations finances.

If you want you can have a gold star for being better than them but unless you're Hitler it's not wirth the time or effort which would be far better spent on folk who want our help.

 

[AGD]

And the reply to that article http://www.theguardian.com/business/2015/jan/06/paul-krugman-got-it-wrong-austerity-jeffrey-sachs

The reply doesn't counter the argument that growth and unemployment are worse than they would have been without austerity. He just says that the austerity we faced hasn't led to a huge economic disaster. The two are not incompatible.

 

[Judgeneo]

No. The banking crisis was a banking crisis. It was not caused by high government spending.

Was it? I hadn't realised... Yes it was a banking crisis. Caused by irresonsible lending of banks, and borrowing by house buyers, both of whom were under the illusion that the money was risk free. This risk-free, print all the cash mentality is exactly what Krugman now advocates, but on a soverign level.
Madness.

The crisis in Greece is no way comparable to what we have experienced. That is the point he was making. Krugman argues with facts and graphs. You have presented no data for your arguments.

Yes, Greece was and is far worse. It was caused though by high government debts. High debts accumulated because the market thought all eurozone debt was essentially the same grade as each other, meaning Greece could borrow at far lower of a rate than their ability to re-pay would normally allow.

I could quite easily find figure for all of this, I think I have done so before in SC. but I'm at work, so I won't this time.

 

[do_ron_ron]

They do have that data but it doesn't appear in the poll of polls for various reasons, not least the pollsters often don't poll regional parties like the SNP.
Not least it would give a very false impression of the British national average and the outcome of the election, e.g. the SNP is something like 3.5% of the British vote but it only makes sense to look at SNP in the context of Scottish seats.

Also the method use to poll typically involves a careful selection of 1000-1500 people that aim to represent the national average demographic, i.e. it is not a random 1000 people but carefully selected 1000 people. After the polling they then look at the demographics they questioned and modify the vote percentages to reflect the true national demographic, e.g. if they inadvertently ended up with more old people, or males, or working class than the national average then they correct for this. This is what makes them reasonably accurate and consistent with each other when normally a random 1000 people sample would be meaningless.

the problem with the small regional parties is that if apply their voter scores nationally you risk corrupting the data, e.g. just because x% of people of a sample including Scottish voters vote for SNP doesn't mean that x% of the entire UK will vote SNP.

It is much easier to only sample national parties, and do separate regional polls for scotland, NI etc.

So their polls are basically pants. To not include The SNP for example who are going to hold a huge sway on who gets in Govt. negates their poll.

 

[John40]

So what do you want to do gas them?

They exist, they are English and part of our nations heritage leave them alone they cost nothing and are inconsequential to our nations finances.

If you want you can have a gold star for being better than them but unless you're Hitler it's not wirth the time or effort which would be far better spent on folk who want our help.

Funniest thing I've read for ages.

 

[AGD]

Was it? I hadn't realised... Yes it was a banking crisis. Caused by irresonsible lending of banks, and borrowing by house buyers, both of whom were under the illusion that the money was risk free. This risk-free, print all the cash mentality is exactly what Krugman now advocates, but on a soverign level.

Just like people who make the mistake of comparing household budgets to government budgets, you are comparing bank finances to those of nations with their own currencies. They are not the same.

Krugman isn't saying 'print all the cash', 'borrow everything', he is simply suggesting (with evidence) that austerity leads to lower growth. He says we shouldn't be slashing government spending right now whilst the economy is still fragile, and that the risks of higher government spending have been overstated.