Economy, economy, economy

Wow, balance! Albeit nothing more than lightweigth commentary.

We need some substance please Nick, it has been direly lacking for weeks.

Wow, balance! Albeit nothing more than lightweigth commentary.

We need soem substance please Nick, it has been direly lacking for weeks.

Nick

Any comment on the fact that when the tories suggested giving employers £2500 to take on those who had been out of work for 6 months or more the government said it was "complete fantasy" and "desperate stuff"?

Here is a story about the governmetns press release...

https://www.order-order.com/2009/01/mcnulty-slams-browns-desperate-golden.html

Don't see this as point-scoring by David Cameron. He's merely drawing attention to the shortcomings of the way the government is dealing with the economy.

This is one area where there is disagreement between the two parties, Labour and Conservative - no longer sharing the middle ground?

I like comedy
Our country is being run by the Marx Brothers.
Don't call me stupid stupid because you always say that.

Well done Nick. Now you are reflecting what I believe is the majority view in this nation that NEITHER main party are speaking for the people of this country.

The economy is a mess. Brown did not start it, but his policies have made it worse in the UK than it should have been. The people that caused it were the politicians, in each country effected, that did NOTHING to end the irresponsible and unsustainable actions of the BANKS.

Solely blaming the Americans and the sub-prime sector for this is like blaming a car bumper for a car crash that in reality was caused by driving too fast on ice. The bumper is where the impact is felt first, it is NOT the cause.

What this has taught us, (I HOPE) is that the UK needs a diverse, dynamic economy built on more than just banking. We need to be able to massively increase our exports to bring IN money. We need much more inward investment. We got the lions share of EU inward investment in the 1990's. Our tax policies are leaving us less than competitive in this area now.

Shaking electronic money backwards and forwards at ever increasing speeds was never going to substitute for a really strong and sustainable economy. Labour have failed to use the strong times to build a diverse economy based on exporting goods and services. Actually, in an act of working class treachery, they have allowed manufacturing in this country to stagnate and fail.

We need some way to reinvigorate this massively important sector of the economy in a sustainable way.

Answers on a postcard as to how though, as neither main party appears to have the answer, hence their descent into childish bickering.

At least this lates blog was not a labour propaganda peice. Well done Nick. Credit where credit is due, eh?

the-real-truth

I read that this morning too, yet another Conservative policy adopted by Nu Labour. And still they continue to all the conservatives a do nothing party.

I expect the National Loan Guarantee Scheme is next on the cards for plagiarism, albeit 5 months too late.

Hi Nick,

Seems to me that Gordon Brown is on thin ice claiming that this is a global problem (and, as such, we played our part) but then to blame the USA for it.

And his self-edification won't cut much ice with the electorate - when faced with unemployment, high fuel bills and a mortgage they cannot pay, they are unlikely to console themselves with the notion that they have a super-human Premier at the helm.

See you in the pub.

PS: Can you keep us posted on progress of the Banking Bill please?

Specifically, the Government's proposal to remove the clause in the law that requires the BoE to publish its weekly balance sheet.

This is important, since it means that the Government could simply print more money (as euphemisms go, "quantitative easing" is right up there) and we would be none the wiser.

Brown says the Tories are the do nothing party. The Government is becoming the do something, anything, give me something I can announce now party. Lots of arm waving but not really anything working, is it? Prove me wrong.

OK so contrary to one of my earlier posts asking why labour refused to copy tory ideas, when they really aught to now, I must give them credit for doing just that. The plan to give employer's a cash hand-out for taking on the long-term unemployed was originally promoted by the tories last year and roundly condemned by labour as unworkable and ridiculous. Now they are stealing it.

Well done, but, what they really should steal is the tory plan to guarantee loans. That is the policy that labour really really SHOULD steal. It is backed by the CBI, the IoD, the FSB and many leading banks too.

This is an issue that transcends party politics, for God's sake Gordon, STEAL THAT POLICY!!!

I'm not sure if "extreme tedium" is an illness, but I certainly feel afflicted by it currently.

The continuing Punch and Judy show of our politicians is getting incredibly annoying. We all see that Labour is struggling to come up with effective fixes for the country's problems. We see reasonable alternatives being suggested by the other parties, and even though this is such a serious crisis we see no attempt at cross party solutions - I feel that at a time for justifiable political cooperation there is none.

The situation is being treated more and more like a battlefield for the oncoming general election and nothing more. Labour clearly want to be seen as the "we did it our way" party reardless of the outcome and regardless of the future cost.

I think Brown is not helping the situation by being so inflexible and sticking rigidly to a particular dogma.

I feel that the government has lost all credibility by not looking at the wider issues and is fixated on "saving" the economy at any cost - I feel the drive is to save Brown, not the economy, to save Labour and not Britain.

This is a huge gamble that the goverment is taking and the stakes belong to our future and not to this government. This crisis is not about one person or one party. We cannot afford to continue to be tricked in this way.

You should finished this line:

"We are living through the first global financial crisis of the global age. We have witnessed nothing less than a worldwide failure of the banking system - a failure that began in America..."

with somthing along the lines of:

And was exasperated by the fact that as we thought that we had abolished boom and bust for ever. We spent all the spoils from the boom times and havent any savings to soften the landing.

So Im borrowing our soft landing from our childrens pensions.

Hey ho

It is also a scandal that the so called "graduate internships" i.e. hide unemployed graduates from the unemployment total, will only be paid a little more than the current student grant of £2,835, that works out at GBP1.69 per hour.

BTW I think the 2500 for jobs idea is tosh, its not going to work, will just be more millions down the drain.

Especially with companies knowing that NI is going up soon.

Quash the quangos, reduce tax on jobs (Employers NI) and incentivise companies to take on staff with some form of useful tax breaks.

Scrap the VAT cut, increase the Personal Allowance to £10,000.

Scrap tax on savings up to £20,000, stop proactively taking the tax at source from savings accounts and watch the money poor into banks which will have strengthened balance sheets.

Legislate the banks to lend as long as they have carried out open risk assesment.

Our political masters are still, by and large, playing politics, or fiddling while Rome burns, or reorganising the deck-chairs on the Titanic - choose your metaphor.

Whilst there's no question that the UK's unholy economic mess can be laid squarely at Gordon Brown's feet (the "let's all blame America ..." theme is an insult to voters' intelligence), our atrocious political situation can be laid squarely at David Cameron's feet.

The Tories have failed to carry out the duties of HM's Loyal Opposition for the past decade and they're now in a hole of their own making. Anything the Tories say these days will sound like a volte face after 10 years of desparately trying to look and sound like the Labour Party, in the wholly mistaken belief that we'd reached the end of left-right politics.

Now that we're buckling under 10 years of Brown's unreconstructed socialism (the "capitalist" banking crisis was fuelled by Gordon Brown's desire to see every Tom, Dick and Harry get rich quick and then for him to bask in the glow of the UK's fantasy prosperity), the Tories are struggling to make the case for right-of-centre politics and economics.

David Cameron is going to have to be much more radical in his attacks on the Labour Government (enter John Redwood?) if he's to stand a hope in hell of winning over the electorate.

Possibly only when the UK economy completes its inevitable slide into a screaming basket case, with GB firmly at the helm, might the British people wake up and condemn the Labour Government out of hand. Meantime, we have to hope that either David Cameron or some other politician (Vince Cable?) steps up to the plate, understands the true (disastrous) nature of the UK economy and, moreover, proposes and takes some radical and realistic steps eventually to lead us out of Gordon Brown's blazing building.

Once again, the Labour Party has betrayed the British people when let loose on the economy. One wonders if we'll ever learn? At least this time, Gordon Brown has crafted the mother of all economic failures so maybe we'll never see the likes of a Labour Government again?

I shan't hold my breath.

#3 The-real-truth

That's why Labour is always bleating at The Conservatives "What would you do?"

It's so they can steal their ideas.

Labour - The Do Nothing Original Party.

How about actually sorting out the lack of credit that is forcing companies to go out of business and losing jobs, rather than creating new job? As usual grandstanding and spin from this atrocious government.

Brown is arrogant, delusional and utterly mendacious. His tiresome repetition about all our problems "starting in America" is an obvious smokescreen to conceal the fact that UK plc is faring worse than all our competitors.

He took all the credit for the good times (mostly down to Ken Clarkes' economic groundwork and benign global conditions, most notably easy credit) yet stubbornly refuses to concede any responsibility for his many failings (constantly fudging employment figures, ignoring the debt bubble despite warnings from the IMF since 2003, off balance sheet debts with PFI, huge public sector spending that has patently failed to deliver, etc)

I despised Thatcher when she was in office but at least she sorted out the economy and I never got the impression she didn't follow her core beliefs. Brown, on the other hand, only seems to be concerned to clinging on to power after ten years of plotting against his boss.

Alistair Campbell hit the nail on the head when he said Brown was "psychologically flawed". It is plain for all to see.

There are valid charges which can be laid directly at the door of Gordon Brown, whether this is a "global" recession or not. Firstly, Gordon Brown created the regulatory framework in his first term as Chancellor, which so failed to regulate the banks and building societies in this country. Secondly, Brown irresponsibly ramped up Government spending and borrowing during the boom years, further inflating the credit and housing bubble and leaving the Government finances in a terrible mess and completely unprepared to cope with the current slump.

So Brown is culpable, regardless of the "global" nature of what is happening!

Surely not a balanced blog???

What this country has had for the last eleven years of misrule is a

SOCIAL AND ECONOMIC CRISIS, STUPID!

They go together and the crash is synonomous.

Conservatives are up again in the polls.

The Bouncer is waiting at the door to evict his namesake...

Re: purpleDogzzz @ 6

An interesting post. I would say that ministers are not solely pointing the finger of blame at the US for the current crises. They are simply saying that's where the catalyst came from, the real causes - as you point out - are the inherent problems in the global capitalist system.

On manufacturing however I tend to disagree with you. If we are to have a capitalist economy we shouldn't prop up non-viable aspects of the economy just for the sake of it. Instead the workforce needs to be retrained to work in industries where we still can be globally competitive.

Zanu-NuLabour will be going to the polls in May - I'd bet my mortgage on it, if it was worth anything anymore! The gap between government spending and its tax income continues to grow exponetially as the real ecomony shrinks and public sector costs expand.

This leaves HMG fundamentally insolvent, and is in many ways similar to the situation in the mid-seventies when Dennis Healey was forced to go cap in hand to the IMF.

El Gordo can't allow this to happen again before a general election, so the earlier this year the better for an election, while he can still say he is 'doing something', and in the reflection of Obama's honeymoon period in the US.

Hi Nick,

Quote of the day has to be from shadow work and pensions secretary Chris Grayling, regarding Brown and Purnell's announcement on jobs this morning:

"It's ironic that the government are accusing Tories of being a do-nothing party and then adopting the Conservatives' proposals on unemployment."

See you in the pub.

Governing party: "It's a global problem and we cannot solve it".

Opposition party: "The governing party cannot solve it".

I guess they are both right.

Sorry, typo. Meant to write:

synonymous

Strange isn't it that Brown claimed the credit for economic growth (even that achieved under previous Tory Governments) then deflects the blame for the recession onto America and the World.

The reality is that much of the growth achieved during the last 10 years was one achieved by inflating the debt. The measure of the government,s culpability will be the relative recession compared to other countries.
Gordon Brown nailed his colours to the wall when he said that Britain was uniquely qualified to have a shallower and shorter recession than others. We will find out if what he nailed to the wall was little more that artificially coloured jelly.

Some Historian Gordon Brown..

What were the characteristics of the Great Depression? It was preceeded by an unprecedented expansion in global trade and an enormous credit boom.

What kind of fool uses this empty rhetoric to whip up hysteria about a global crisis caused by influences way beyond our control?An old fool called Gordon Brown.

But nobody is laughing anymore; people have had enough of Gordon Brown spending and spending and more spending. None of it is working and it's all our money.

There is a complete disconnect between the idea that we should spend our way out of the downturn and where the money is coming from. Newlabour apolgists, not content with twelve years of the public sector growing faster than the private sector without ever being able to pay for itself now demand more like the greedy cash addicts they are.

Stop spending. The splurging public spending and credit growth of the past twelve years will take generations to pay off. Not a single newlabour apologist oon this post has made the faintest attempt to expalin where the money is going to come from. Now is your chance.

Is Britain about to win the Euro millions?

Are we about to get all our gold back at cost price?

Did Britain's ancient granny die leaving Britain a fortune?

Did britain work really hard and get a bonus to pay off the overdraft?

When Gordon Brown drones on about it being right to spend more moeny in a downturn he means this; it's right to go heavily overdrawn. No-one who has ever had an overdraft is under the illusion that it can't be paid off and neither should we be.

This is money he should have saved while preaching about ending boom and bust, instead he carried on wasting vast amounts of public money and he's still at it.

Until this debt junky goes into rehab and spends the rest of his life repeating the mantra that he is a recovering spendaholic there will be no end to Gordon Brown's wasting of the taxpayers' money.

Just as eating the house turned out to be a flawed business model for so many ordinary people under newlabour who now have mortgages they will never pay off so the UK should stop spending now.

Gordon Brown's policies are dangerous and irresponsible. His new year pledge to build tomorrow today is a pledge to build a massive debt today to be paid off tomorrow by all our children. It is a reckless and self indulgent policy that is already failing and msut be rejected.

Call an election

Force those parasitic long term sick back to work - even if there are no jobs available. But at least they wont be scrounging!!

Give un-employed grads "internships" - to get them off the unemployment register whilst using their skills

Sounds like the Ministry of Propaganda (aka Mandelson & Campbell Puppet Masters Extraordinaire - pulling Gordy's strings) are working hard.

Perhaps the Tories and Lib Dems should also copyright any future ideas so that the Government will have to come up with ideas of their own.

Roll on 2010 when we can dump the dummies!!

It seems each day while this country is going down the zubes Gordon is acting like a real plonker.

Its no good blaming everything on global economics, whilst he stood by an allowed this country to indulge in racking up credit way beyond its means.

That is why he are in so much doo-doo at the moment. With are left with the prudent bailing out the inprudent.

Gordon`s latest idea, which is obviously designed to appeal to middle england with an election due anytime, to get people off the dole is another headline grabbbing non starter.

In these days of economic gloom if you were an employer with the pick of the crop would you seriously want to take on someone who has been long term unemployed and has lost the enthusiam for getting out of bed everymorning and clocking on for work?

Long term unemployment is a problem that has been created by both parties; but it is Labour more than most who have moved people off the employed list and hid them on invalidity benefit. Which, by its very nature, has a whole host of add ons which has given people a reasonable lifestyle.

(Before people start shouting I live on a very large council estate and see it for myself everyday. It is real and not imagined.)

People have been consigned to a life where working for a living is a totally alien concept and have bascially been given early retirement by the Govt.

As a result many now have a drink or drugs problem; because of the company they keep and because idle hands make idle work many have also fallen into a life of crime. Their children, of whom there are many, are being brought up in households where benefits are the sole income and these children see it as their own future; because they are taught no different. They are no taught to have respect for others or how to get on in life.

It is rather ironic that today of all days that a report has been published saying that the Uk is an unequal place to grow up in.

When I was at school in the 50s 60s this sort of inequality did not exist to such an extent as it does today. If you wanted to suceed then you were encouraged to do so, your background did not hold you back.

Now it seems, it is this disfunctional family life, often referred to David Cameron that is causing the real problem.

As David Cameron said over the weekend we need a complete change. Gordon Browns only policy is to blame everyone else except himself. He was allowed by Tony Blair to dictate monetary and fiscal policy for this country for a decade and we are now all paying the price for his failures.

Another Labour Govt is utterly unthinkable; but David Cameron and Nick Clegg have really got to get their digits out and come up with the right policies that would make real social change across the whole of this country. If they don`t then unfortunately its more of the same. Then it would be a case of, "would the last person to leave this country please turn out the light".

The future looks bleak from where I am standing unless Brown goes and we have real change in his place.

The cut in VAT was an expensive irrelevance.

The new scheme for jobs will be equally useless, but cost less, because employers are not taking on new employees just now. In case the government haven't noticed, they are laying people off.

What is needed is credit for businesses.

That is why, eventually, the government will adopt the Tories' guarantee policy.

It's tough for the Tories. If they propose something it's rubbished by the government and not adopted by the government until things have got worse.

By the way, one might ask our beloved Prime Minister how he proposes to pay for this. It would, after all, be the first question asked of Mr Cameron. But we know the answer: Mr Brown is not going to pay for it: his children and others' children are!

I agree with others that it's a pleasant change to see balance from the author, but it rather misses the point.

The country has been hugely damaged by this 'World saviour, home failure' leader of the "did nothing then, desperately try anything now" party. Every day that passes that they fail to acknowledge their failings and blame anybody and everybody else for our problems, things can only get worse.

The Tories can't do anything yet so ripping their policies apart doesn't achieve anything. Rip the government's "policies" apart first, highlight their short comings and then maybe we can stop further damage. Stop them lying, spinning and withholding and then we might just be able to have a reasonable, balanced debate about what to do next.

The media and the BBC in particular are letting us down badly. The electorate must be still sleeping off its debt fueled hangover. Time to tell it how it is and wake them up. Wake up Britain, we are in dire straits and the enemy is within. The sooner we pull together to fix this the sooner we can look to some respite, but be under no illusion. It's going to be a long and hard haul.

21 Chris

Whoah! Whoah!

Are you now saying (at last) that Complicance Managers, Global Warming Awareness Managers (God Help Us), Street footballe Exces and all the rest of them are viable or not viable?

I'm no economist but don't you need to make money you do have to produce something that someone wants to buy for more than it cost to make. I'm sure the above such jobs do none of that, apart from make the people who undertake them feel important, and take money for could be classed for old rope.

I've reached the conclusion that if Party A proposes to promote mum and apple pie, Party B will immediately condemn the policy as unfair to fathers and promoting unhealthy eating of too much sugar. There always seems to be a "gob on legs" to rubbish whatever anyone else proposes, leaving the rest of us bemused as to who is really interested in UK plc, as opposed to themselves.

Nick
Much better a far more balanced piece.
Though it could be said the last sentence was more aimed at spiking the most powerful weapon of the conservatives but no nit picking.
Jeff Randall in his advert for his program to night has the tag line “what would I do if I were the Government? RESIGN”. So he believes that the situation is bad.
I for one will not get sick of hearing the “point scoring” on how much debt we are running up.
I have 3 children and it is my concern for their future that made me turn into a blogger.
What I find most terrifying is the lack of any sound evidence for the headless chicken actions of Labour.
3 months ago (3 months) in the PBR the Government said we would be out of recession and seeing growth by the third quarter of this year.
They based the catastrophic borrowing figures on this ridiculous assumption. This can now be seen by everyone to be a recession that will go on far longer. Two years is now the duration that people are quoting but it could be even longer and deeper. They’re now saying that the contraction in the economy could be 3% this year. It only reached 1.75% in the whole duration of the 1980’s Thatcher recession.
This is the question of the age. What levels will the final extent of Government debt & Enron liabilities rise too?
Can we sell and service all of this debt? There are many signs coming out that investors will not buy all of the GLOBAL bonds being created by the GLOBAL stimulus countries. Where is all of this money going to come from?
Obarma is now going to spend money that he cannot afford and could destroy the American economy if you don’t believe me then I suggest you look at this.
https://www.chrismartenson.com/crashcourse/chapter-12-debt
Nick I will never get bored with people who try to avoid the Armageddon we are riding to.
Please watch this and lets have some serious questioning of the Government on where they are taking us.

#6 PurpleDogzzz

A great post that I think does summarise many people's views.

What annoys many people about Gordon Brown's attitude to the current crisis is his simple inability to accept a portion of the blame after over a decade of claiming the credit for the growth in the economy.

As you say, we need a more diversifeied economy and a priority to any Government in power should be to heavily push science and maths to help create a 21st century manufacturing/engineering economy alongside the existing financial services sector. Create a tax system that attracts investment in these types of industries.

The main failure of this Governement has been to believe its own spin about the end of boom and bust; the failure of the last Conservative Government was not to re-establish a modern manufacturing sector after ridding the country of the burden of outdated industries.

#21 chrisleopard:

Look, sorry and all that, but that sort of temperate post just won't do on here. No slagging off of Brown, no knocking Cameron, no accusations of bias against Nick, and even Osborne and Mandy get away without a kicking.

Pity about your views on Iraq, but we can't all be perfect.

Gold medals at the G20 meeting for GB (Gordon Brown)??

Come on Nick - please don't even suggest this and try and inflate his ego for doing anything right during this crisis. The government acted too slowly and in the wrong manner. In order to move this forward we need to start some of the projects that are ready to go that will use large amounts of government money - and we need to cut the waste. Even though we are insolvent, we have to find a way through this quagmire that is our economy, and if Gordon is still there he must do this, and he must show what is being cut from government in the process.

Also it is not for the opposition to dictate policy, even though it appears they are and a bit of Mandelson spin is showing itself again and again. Milburn back now so it will be Campbell Milburn and Mandy all working in their duplicitous ways for Gordon - heaven help us!

And one more thing...why is Gordon Brown spending his entire time banging on about this problem beginning in America?

This is a bit like the man who pours petrol over himself and then complains when his neighbour lights a cigarette.

Girdin Brown deregulated the financial system so that banks leverage rocketed to all time highs; 90x at Northern Rock had never been heard of under Thatcher or Major but Gordon Brown was determined not to end the boom and just handed out more petrol.

Utter folly. And shameless to complain abut the Americans being the one to light the cigarette.

The whole country can now see the utter recklessness of the Gordon Brown credit and public sector spending boom and wants an end to it.

Call an election.

#s 14,17: Legislate the banks to lend ...
I agree, if banks aren't doing lending, just what is the point of them?


#21 "workforce needs to be retrained to work in industries where we still can be globally competitive."
And in manufacturing terms those would be ... what? Maybe aero engines, motor racing and offshore installation engineering? Then what? Not quite enough of those to go round ...
Far East has stolen our competitive edge in so many areas of manufacturing that we stand little chance of getting that back. Hence the move in recent years to more service sector jobs being created. Banking and finance epitomised that trend, hence governments laying off regulating them too hard; but that's all come home now to roost.

Sadly I predict a very long and continued decline in this country's fortunes unless we can get our country's highly creative energies properly engaged again - and that's all getting killed off in the schools. Don't get me started on that, though ...

#3 the-real-truth

I think the £2500 is a step in the right direction in that it is (finally) an encouragement to employ, but I don't think it goes far enough.

I have something of a rare commodity these days - a (moderately) successful UK manufacturing business. We design and make hi-tech products in a niche market, and export about 85% of our £5m turnover. We have 45 staff. In short, perhaps an example of a business that should be encouraged in these harsh times (although to be fair, the trashed exchange rate is a bonus at the moment). Anyway, here's an idea....

We have recently had to pay a corporation tax bill of about £300k. Give me half of it back, and I will employ 5 graduate engineers (at proper salary, not "internship" stuff), for a year. We can keep them on next year if we get another 50% back. After that, I expect them to generate enough income to justify their own salary.

The "unemployment" count goes down, I get my new products designed quicker, our turnover goes up, exports increase, future corporation tax take will be higher, HMRC will get 40% of the £150k back in income tax / NI anyway. Who loses? Apart from a bit less in the pot to fund some non-jobs.....

Only slight downside is finding the 5 graduates. The last two I employed are Indian and Vietnamese, because no suitable British ones applied. They are both brilliant though. Much better work ethic and better basic literary / numerical skills than their UK contemporaries. Sorry - different debate.....

30. Another Old Boy

You can bet your life Brown's children won't be paying for it. They will be living in a mansion in Scotland with fantastically free health care and other benefits paid for by the English. Unless we stop it..........

Gordon can call it Global until he's blue in the face,we don't do global here in fact ,MPs don't seem to know where the real north of England is and stopped some way short in Liverpool for there cabinet meeting jolly at our expense.

We are more realistic here and blame the guy who promised us an end to boom and bust (remember him ?).

People are sick to death of being lied too,day in day out we see gordon brown telling us he is superman,he isnt hes just another failure,the people want change,he should save us all a lot of money and have a combined euro and general election.......

HarryPagetFlashman # 32

I was talking about the economy and the rather ill-advised notion that propping up failing industries for the sake it would be a good thing.

You are talking about something else entirely.

32, Flashman

Manager for Global Warming! What a load of old tosh. I don't see much global warming through my iced up windscreen these days. A lot of people have made a lot of money out of "global warming", "environmental recycling issues" and, oh yes, the hole in the ozone layers which has mysteriously closed up (but they confine that one to the small print nowadays).

Big, huge, fiddle, all designed to distract us, just like the "War on Terror" which can never actually be won can it?

jimbrant @ 36

Sorry, I'll try to be more inflammatory next time!

Maybe include some personal attacks on other bloggers, ridiculously opinionated statements, reference articles from 'news papers' like the mail etc. etc. :)

@21 re "On manufacturing however I tend to disagree with you. If we are to have a capitalist economy we shouldn't prop up non-viable aspects of the economy just for the sake of it."

I am not calling for blank cheques or subsidies to prop up uncompetitive businesses. I am calling for a way to unburden and allow our manufacturing to become competitive, and not through low wages. How is this done? other than reducing bureaucracy and costly politically correct initiatives the compensation culture, honestly I have no idea, but the political leaders are paid a lot more money than I and have access to far more brilliant people than I in order to find a way through. Labour have not managed it, on the contrary, they have made our manufacturing sector weaker during the last 11 years.

I do not know the immediate or full answer, other than relying solely on a thriving banking services sector is NOT sufficient for a sustainable G7 size economy. This is why I asked, answers on a postcard?

Wont Brown's constant heaping the blame on America backfire? If there was intelligent life in Downing Street, they might have spotted that Obama's back office team is largely inherited from Bush. Many of the policies will be similar, basically because Obama does not have the luxury of financial leeway.

So criticising America as the cause is also a dig at Obama. My dealings with the US on most levels, have shown they are much smarterthan they let on. Their outward demeanour veers between inscrutable and poker-faced, and like elephants they also have long memories. The sheer ineptitude of this government never ceases to amaze me, but to rubbish one of UK's most important and loyal allies (WW1 WW2 etc.)is disgusting.

38. At 11:42am on 12 Jan 2009, RobinJD wrote:

And one more thing...why is Gordon Brown spending his entire time banging on about this problem beginning in America?



Come on you really have ask that.

Its called passing the buck and saving your arse.

At form in which he is well practiced.

Nick

If your feeling uncharacteristically chipper this morning and would like a cure so that you may safely adopt your more usually lugubrious manner; I suggest you pick up on this article next time you meet your mate Gordon.

Always keen to help

https://www.marketoracle.co.uk/Article8080.html

Chris

I see! so making faux jobs to inflate employment figures, whilst generating no revenue has no connection to this then.

As for propping up failing business (like Woolworths)however, I agree with you. However, smaller businesses are still getting knocked to banks still not playing ball.

Peter (Orange) Hain getting a good kicking from Brillo Neill on Daily Politics regarding the Labour launch this morning of the tory proposal from last November. Deservedly.

My, my. How pious Gordon looks in the picture above.

I saw him on TV this morning. Four sentences in and he was blaming the banks in America and the Conservatives for the mess we're in.

For once, Nick I agree with you. I have had enough point scoring about the economy.

#44

flamepatricia, whether your a size 18 or 22
is irrelevant, whether you have a larger backside than most is of no consequence.

What counts is, what part you want to play in a collective and responsible society.

Well! what part do you want to play?

Does anyone know the answer to the folowing.

1). What value in US dollars has been put against the US sub prime fiasco.

2). Why Gordon Brown keeps on saying that it is this government investing in jobs, people, business etc. Why can't he say this is the TAXPAYER that is investing.

Nick - wow, what can I say? Have you been reading the comments on here lately by chance?

This is the msot balanced blog we have seen to date from you..

WELL DONE MAN :-)

It is now beyond tiresome to hear Brown (A.K.A the King of the Borgs ) speaking like a robotic machine, constantly repeating the same phrases over and over again. It is completely impossible to warm to this man .
What for example does the phrase "Global age" actually mean ? It is sheer nonsense.

Nick - many thanks for this, looks like a balanced post, which is refreshing!

It feels like you may have been listening to some of the feedback that gets posted here. If so, I shall start reading your blog on a regular basis again.

It's all save, save, save from young Dave
and if you dont want to put it in the bank just put it under the mattress, nothing wrong with that, says Camera On Cameron,
Ken Dodd did it.

The conservative way? everybody else in the world is wrong, young Dave, the young pretender knows better, than the whole world?.........aye-right.

Nick,

Your blog seems to reflect a more balanced approach, however, as many contributors have noted, you still need to be more critical of the policies and actions of the government than you have managed to date.

The collapse of many businesses and the knock on effect on jobs, tax revenues and benefit payments is an area that you have never explored. For there to be any hope of an early end to the recession, we need to be realistic about what we need to raise through further government bond issues or through future tax increases in an unfriendly economic environment.

Have you recently sought clarification about the forecast level of government borrowing this year or next? What is the current projection on unemployment for 2009 / 2010 (excluding the short term internship proposal)?

Once you have a better picture on these issues, then you can start to ask the right questions of the government as to their proposed actions and the likelihood of a general election this side of 2010. From my own perspective, even allowing for the spin from Mandy, et al, Brown would be monumentally stupid to wait until 2010, therefore expect a nasty and vicious campaign from Brown starting later this month.
ATB

I was sick of all this at the end of last year !

It is so boring !

Doom and Gloom constantly.

Any minute we're all going to move on and be wondering what it was all about!

Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.Doom and Gloom constantly.

Before all this it was


Property is going up up all is fabulous!

up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!up up all is fabulous!

Well if all else fails and GB/AD can't raise their £150 billion this year / next year then

Who're you goin' to call?

[Personal details removed by Moderator]

Lightweight? You overestimate them, this bunch are featherweights who've given the assets we needed away to recover with to Wun Hung Lo (Merchant Bank) Pty Ltd, on the grounds that their London registration and the ltd means they're British.
That's why there's some thinking happening over on RP's blog working towards giving them some serious challenge, come the day of the Glorious Election.

Nick

I see Crash Gordons leaden touch has not deserted him.

We (the tax payer) has just aquired half of hbos/lloyds...

Just days after Lloyds were fined by in the USA (https://news.bbc.co.uk/1/hi/world/americas/7821600.stm).

I know it is only a quarter of a billion pounds - but I do resent paying other peoples fines...

Even if our cash doesn't go directly on the fine, it will be used to plug any holes caused by the fine (which comes down to the same thing).

HarryPagetFlashman @ 50

Glad to see we agree on that aspect of economics.

On the so-called 'faux' jobs, while some of the examples you refer to are clearly absurd you cannot really measure the results of a community worker's labour in monetary terms.

As for propping up employment figures, you have said yourself that these jobs are local not national government posts.

Regarding the announcement today by Gordon Brown about commiting GBP500 million to stimulate employment by offering employers GBP2500 to take on the unemployed, have three questions.

1) Why was this not implemented in November, when it was proposed by the Conservatives?
2) Why have they watered down the proposal by excluding those unemployed for less than 6 months? The original Conservative proposal was to include those unemployed for 3 months or more.
3) How will this be funded?

45. chrisleopard

Sorry, I'll try to be more inflammatory next time


Please do we get enough wet flannel from the big man.

Brown was happy to take full credit for the booming economy (although it was all based on credit) but now it's gone bad, very bad, it's everyone elses fault.

There attempt over the weekend and today supported by the BBC to implement back to work policy is priceless.

Most businesses are experiencing a reduction in staff levels so these muppets decide to run a back to work policy for the long term unemployed when workers are being laid off.
Sustain the current workforce in order to keep taxes rolling in.

Our PM is tinkering with this and that trying to look busy when in real terms the horse bolted long ago and the government has run out of money and ideas.

#53 derekbarker

you are no longer a joke, you are now being offensive!

I think an apology is in order!

Does young Dave cut it?

Well! the save, save save young Dave calls a press conference to release a poster? yes! a poster that the conservative leader says will be posted all around Britain.

Wow! great economics young Dave......


Waste...Waste....Waste comes to mind.

the1beard

Have you been taking notice of anything which has been said over the past few weeks?

This is not going to be over any minute - or any time soon for that matter. It really is constant doom and gloom and it will be for some time to come.

I'd try and get used to it if I were you.

Come on Nick - please make as one of your New Year resolutions a promise to return to non partisan reporting. This used to be one of your great strengths.

Personally I am fed up listening to the Prime Minister using the same old spin and sound bites:

* the do nothing party..
* summits..
* global age, global problem..
* whatever has to be done...
* a failure that started in
America..
* I am listening..

Words are meaningless - it's solutions that count. And so far those tried have simply not worked..

As already highlighted by 'the-real- truth' despite his disdain for the Tories the Prime Minister has pinched yet another of there ideas.

I feel at least the electorate now has a real choice - to support the continuing journey into the abyss of a debt ridden future for this Country or to rise to the harder challenge of rebuilding a sound financial base for our children and grandchildren.

Let us have an early election to decide - I know which I would support.

Nick, congratulations on producing something that isn't biassed towards Labour and Brown. Perhaps now I have said something that praises you, you may consider allowing me to contribute to your articles as since the last time I dared to suggest you were biassed towards Brown & co I have been barred from commenting.

Oh dear

Looks like the chavs will have to replace their new plasma TVs with more energy -efficient ones.

Still, all helps the economy, all this spending!

"The plasma screen television is poised to become the next victim of the battle to curb energy use.
Giant energy-guzzling flatscreens are expected to be banned under legislation due to be agreed by the EU this spring.
Plasma screens have been nicknamed the '4x4s' of the living room because they use up to four times as much electricity and are responsible for up to four times as much carbon dioxide as traditional cathode ray tube sets."

Politicians do what politicians do and we'd be best advised to try and ignore them and the games they play.

But for most folk struggling to survive in the private sector, there is only one rational choice at present - get a public sector job.

Even in the 'home of capitalism', the USA, a 'Government job' is now a very desirable place to be.

Maybe the private sector will become a sensible place to work again one day, but it certainly a very uncomfortable environment right now for many people.

#40 unusual_example

As it happens I think it is a bad idea (for much the reasons in the McNulty memo!) - it isn't focused on new jobs.

It may help some, but the government have already said that they have no way of knowing how many people would have got jobs anyway, and how many newly unemployed will be discriminated against...

So it is just throwing money into space (like the VAT cut) and hoping it does something.

As you describe, jobs are created by employers who beleive that they can use other peoples labour profitably...

The government needs to lose all the red tape and interfere less.

58. At 12:45pm on 12 Jan 2009, derekbarker wrote:

The conservative way? everybody else in the world is wrong, young Dave, the young pretender knows better, than the whole world?.........aye-right.

That's rich, from your headline grabbing socialist mob (Nu Labour). If they had not squandered the countries coffers over the last 10 years and commited the biggest broken promise in history by allowing house prices to take off then we would not be in this mess.

Tony Bliar and Brown promised they would not allow this to happen.

If this had been the case then high risk borrowing would not have occured on a scale that we now see.

Year on year the B of E and the government could see private debt spiralling out of control and did nothing to stem or control it so don't go blaming the tories or liberals for your governments last 10 years of mis-management and squandering of a nations assets.

Once again Derek you confirm Nu Labours stance............................Spend what you don't have.

DerekBarker

You sound very desperate this morning, message not getting across?

Isnt the real difference between parties:


Labour wins the next election and:

1. Mandleson becomes a god.
2. Brown believes that he has become a god.

The duo then deliver:
a. Even bigger government
b. More spin, lies and sleaze than you can stomach
c. More waste and even more Quangos
d. Super higher levels of taxation
e. Continued erosion of civil liberties
f. More powers handed to Europe


Conservatives win the next election and:












Oh who cares…...... at least 1 and 2 above dont become a reality

70#

Hey, Sacha Baron Barker has returned!!!

Ah the joy of parties trying to score points against one another while real people suffer.

The concerns for our politicians should be centered around what is needed to help the people of the UK that they are paid to represent. Labour should be open to what the other parties have to say and not dismiss without proper interest, Tories should rejoice that something they MAY have suggested first is considered to be a possible help.

If this is not the case then the Labour and Tory leadership consider their parties standing/ reputation/success as more important than the welfare of the UK population.

Unfortunately when difficult times arise party politics shows just how weak our party political system really is.

Mature leaders in this situation would say "this is bigger than us, lets put our heads together, work together and save our country"

But genuine maturity among our politicians would seem impossible.

Runs for cover before the flames descend

59. At 12:46pm on 12 Jan 2009, smfcbuddie wrote:
Nick,

The collapse of many businesses and the knock on effect on jobs, tax revenues and benefit payments is an area that you have never explored. For there to be any hope of an early end to the recession, we need to be realistic about what we need to raise through further government bond issues or through future tax increases in an unfriendly economic environment.

===

The UK needs to raise GBP157 Billion by April from the markets.

A recent German bond auction flopped, signaling bad news for governments trying to raise finance for multi-billion heavy stimulus packages. The 10-year €6bn bond auction received bids of only €5.24bn, or 87%, the second worst result ever.

===

Squeaky b*m time!

yellowbelly1959

Read your post about plasma TV's.

There was a bit on TV last week about how wonderful the new energy efficient light bulbs were.

The only snag is, that if one is broken, the room has to be vacated for at least 15 minutes because of the toxins inside it.

I've just bought several of these bulbs and nowhere on the box does it warn me of that.

Brilliant, eh?!

Interesting comment in the Martha Karney interview of Gordon Brown on Wato.
Asked about using Northern Rock he said that they were "broke", something that wasn't part of the story when it was nationalised.
Any guess how much that poorly considered nationalisation will actually cost the British taxpayers?

yellowbelly1959

"The plasma screen television is poised to become the next victim of the battle to curb energy use.
Giant energy-guzzling flatscreens are expected to be banned under legislation due to be agreed by the EU this spring.
Plasma screens have been nicknamed the '4x4s' of the living room because they use up to four times as much electricity and are responsible for up to four times as much carbon dioxide as traditional cathode ray tube sets."

.........................................................

Oh dear. It wasn't that long ago that government was banging on about the new digital switchover, was it?!

...right hand, left hand.....!!

Further evidence of Gordon Brown's economic illiteracy, who, like everyone in ZANU Labour, has never actually run a business. I run a small business. A paltry employer's signing-on bonus will not persuade me to hire a long-time unemployed person. What will, is a sustained and significant increase in profitable demand for my products. The best way to stimulate such demand is to reduce income tax.

Call a general election now.

74. yellowbelly1959

I went shopping for a TV earlier this month.

It was freezing, I left the kids huddled in front of the plasma models to warm up.

DerekBarker

You were suggesting above that everybody should be following Gordon and Baraks plans. Here is a point you might want to consider.

"today the average family of four in America is associated with $732,000 of debt"

Source [Unsuitable/Broken URL removed by Moderator]

This is before they started spending on the TARP and the stimulus package.

You really have no regard for the fact that you're spending our children's earnings before they start to setup their own homes and families. A large portion of their earnings will not be available to them for their futures because you spent it on ours.
Power corrupts but absolute power corrupts absolutely.

#70

So still no defence of the spend, spend, spend moeny we haven't got from Dollybarker.

What a surprise.

Call an election

Even The Right Monetary and Fiscal Policy Can't Get Us Out of the Depression


DIE ZEIT: Can the right monetary and fiscal policy keep the US out of a recession?

Alan Greenspan:

"Probably not. Global forces can now override most anything that monetary and fiscal policy can do. Long-term real interest rates have significantly more impact on the core of economic activity than the individual actions of nations. Central banks have increasingly lost their capacity to influence the longer end of the market.

Two to three decades, ago central banks were dominant throughout the maturity schedule.

Thus, the more important question is the direction of long-term real interest rates."

Alan Greenspan
The Great Irony of Success
© ZEIT online, 30.1.2008


If short-term risk-free interest rates are 0% doesn't it that mean that credit is worthless?

A Credit Free, Free Market Economy will correct all of those dysfunctions.

The alternative would be to wait till, on the long run, most of our productive assets get physically destroyed either by war or by rust.
It will be either awfully deadly or dramatically long.

We Need, Hence, to Cancel All Interest Bearing Debt and Abolish Interest Bearing Credit.


This Age of Turbulence People Want an Exit Strategy Out of Credit,
An Adventure in a New World Economic Order.

? Exit Strategy out of Credit
https://edsk.org/

? A Specific Application of Employment, Interest and Money. [For my Fellows Economists]
https://edsk.org/interest.html


Press release of my open letter to Chairman Ben S. Bernanke:

Chairman Ben S. Bernanke, Quantitative Easing Can't Work!
https://www.prlog.org/10165667.html


Yours Sincerely,

Shalom P. Hamou AKA 'MC Shalom'
Chief Economist - Master Conductor
1776 - Annuit Cœptis.

#77
Silent-majority.

What makes you think the last conservative government got it right?

The right to buy, high unemployment, high interest rates and a GDP rate of 43%, thats the legacy of the last conservative government.

Why? does young Dave think he is right and the rest of the world is wrong on the stimulus front.

Is the one voice in the darkness right?

Come on silent, Dave wants to isolate Britain.

#78
PortcullisGate, Do you think, calling a press conference to release a poster, that Camerons says will be posted all over Britain is a good idea and good use of conservative funds.

Dont you think the cost of that poster may have been put to better use in nowadays?

#76 the-real-truth

I take your point; perhaps "a step in the right direction" was a bit OTT. Maybe "furtive glance in the right direction" would be nearer the mark.

Fundamentally you are right - £2500 on its own wouldn't make someone create a new job, but it may assist a little if you have an opening anyway. My point was simply that it was something, even a very small something, that shows that maybe, just maybe, someone somewhere has twigged that encouraging employers (i.e. creators of wealth) may well be the catalyst that could ultimately turn our fortunes around.

Whilst I wouldn't quite put it in the same pathetic class as the VAT fiasco, I agree that the detail of this plan leaves much to be desired, and could well in itself end up being something and nothing. But at least it seems they are trying to focus on the one group who could make a difference.....

And as for the red tape etc., I couldn't agree more.

@58 Barker

Lets turn that around

It's all spend spend spend from Old Gordon
and if you dont want to Spend it we'll take it off your children in borrowing anyway

The Labour way? everybody else in the world is wrong, Old Gordon, the old faker knows better, than the whole world?.........aye-right.

@ 31, thomasak001: Superb, and spot on!

A trillion pounds of debt, soaring unemployment, massive recession, and the best Brown can do is steal a tory policy which he'd previously said was mad, say the tories are a "do nothing" party, and blame the whole thing on the americans and thatcher.

He'll need to do a lot better than that if he wants to save his party from permanent annihilation come the next election.

#81
123geronimo

Futher more, the tories are trying their best to over see the failure of the stimulus package.

Cameron, doesn't want Brown to succeed with the stimulus plan.

How bad is that, the conservative party and their supporters trying their best to undermine Great Britain and the recovery stimulus.

Even the very conservative President Bush
puts his hands up and endorsed a stimulus for America.

@ 40, unusual_example, that is exactly the kind of thing I was hoping would come forward when I was writing my post @ 6.

We need to give active support and encouragement to business that actually create real wealth and bring money in from overseas. We need much much more of these. Congratulations on your exporting success, yours is the type of business I was referring to.

In my own business, the vast majority of the revenue is generated overseas currently too. We write requirements management and systems engineering software The business is there to be made, but it is increasingly difficult to keep a business going with all the needless bureaucracy and the costs thereof involved.

Derekbarker

You were suggesting above that everybody should be following Gordon and Baraks plans. Here is a point you might want to consider.

"today the average family of four in America is associated with $732,000 of debt"
Source https://www.chrismartenson.com/crashcourse/chapter-12-debt
This is before they started spending on the TARP and the stimulus package.

Labour really has no regard for the fact that they’re spending our childrens earnings before they start to setup their own homes and families. A large portion of their earnings will not be available to them for their futures because Labour spent it on ours.
Power corrupts but absolute power corrupts absolutely.

91 derekbarker

Is the one voice in the darkness right?

...................................................................

'Fraid not Derek. You're on your own there. That isn't to say that DC could do any better, but he definititely couldn't do any worse!