Talk is cheap

We need strict global banking regulation and bring an internationally operating shadow banking system under the control of enforceable tax laws globally.
You can find a more detailed argument at:

https://globalinsights.wordpress.com/

Scientists try to probe the abstract and bring it into reality.
The financial whizz-kids (lying'tists) have achieved the opposite - and it's all fallen back to Earth.
Ms Flanders is quite right - "talk is cheap". A plentiful unending supply of it.
I've offered most of my savings to a young friend to close a gap on some borrowing she needs to buy a flat. She's gone away to think about it. It's been a straight forward, simple discussion, took 10 minutes, wife happily agrees also. Nothing abstract, straightforward. I've declined from believing in Uncle Sam and his 7 dwarfs. There's our local community to protect.

Stephanie, you report as though you want the old system back, c.2006/7, and by implication, assume that we all do too. What is so bad about the big banks going down the drain? Why is reform (aka more regulation) the only show in town? Sound money and free markets would do the job better and obviate the need for the great and the good to oversee it all.

Do you think global fiscal stimulus is a no-brainer? Do you not agree it is a euphamism for the command economy? Do you agree that it can only be funded by directing resources away from other areas, albeit snaffling pensions via inflationary measures?

Why is a stimulus provided via the IMF necessary? How is it to be funded, by deficit from the G20 or more funny money in the form of newly generated SDRs?

As for protectionism, what do you call the effect of a devaluation of the GBP?

There are a number of glaring contradictions in policy.

First: more regulation has the opposite effect from re inflating the bubble.

Second: doing what caused the bubble cannot logically be the solution caused by the bubble.

Third: the sum of money are gigantic compared to the size of the stimulus packages.

Fourth: a 'recovery' cannot be returning to the same as before as that let to the bubble and the crash.

These (and other contradictions) are obvious to everybody - except apparently to those who attend the summits - why?

As usual, I would have expected there to be two sets of meeting going on today. The front policy meeting which is reported on, and the meetings in the corridors, back rooms and on the phone between the civil servants and advisors.

It is this second meeting which often actually works out where the mutual ground is, works out how details will be agreed, changed, turned round and accepted or rejected.

I am baffled by the journalistic and political idea that in two days a ton of things can be actually done in what it a highly complex situation - complex enough that I find I can trust NONE of the reporting.

This meeting starts the process - the next one highlights the progress. But the real work will be out of site.

Like all economists and economic journalists, you're really just guessing what's going to happen. The last year has shown that the economic rule book has been re-written and that the only certainty is uncertainty. The only way forward that I can see is to have all the banks we've taken over merged into a bank of national unity as it were and to offer decently priced loans and mortgages to businesses and individuals. the banks have taken our money and have kept it just to keep their capital base up.

What people fail to understand is that when Americans talk about free trade, they only mean they should be allowed to trade freely in external markets. It's only ever a one-way street with the Americans; they must be allowed to trade freely while instituting protectionist measures at home.

The conventional economics solution...

"I know! Lets make it BIGGER this time!"

They are central bankers working for bankers, what else are they going to do?

Here is the essence of "The Money Problem"; Our entire supply of money is created by money lenders.

Money lenders should only have the power to distribute money, not create or destroy it.

I liked your piece on the Today programme this morning Stephanie, pointing out the real time decisions continually needing to be made at the current time, and the long lead time from any fruit borne from G20 bonding sessions. I just wish that Alistair Darling, by comparision, didn't still come across on the Today programme as if still struggling with an Economics Made Simple A level primer....

The tail has been wagging the dog for so long now that there is no point talking about the G20 *UNTIL* they actually get it together to put the regulation in place, and not a moment too soon when they do.

Stephanie,

For the finance ministers to try to correct the problem, they need to have an understanding of what caused the problem. Clearly this understanding is lacking in all the leaders, including most notably the very embarrasing British PM who still rates himself very highly.

The bottom line is the world is overdosed on debt and the process of deleveraging is happening rapidly. This naturally implies that there will be a sharp, painful but necessary economic contraction. The more the leaders try to leverage the world up with more debt, the slower the recovery will be. If the world does recover the excess money in the system will simply lead to the kind of inflation witnessed in Zimbabwe.

What the governments need to do is make sure the companies who did not take excessive risk are helped out and those who did (like Citi, BofA, AIG, RBS and HBOS - to mention the most notorious in the group) are left to go insolvent and sort their problems out in the insolvancy courts. (Give money to the strong and allow them to be stronger, not give money to the incompetents and allow them to contiue being incompetent.)

The American government does what it is told to by the American voters, not like in some countries. And the voters and taxpayers are hopping mad right now. Hundreds of billions have been paid out to bail out banks and other large financial institutions where multi-millionaire executives have gotten huge bonuses and severance packages at taxpayer expense while many Americans are losing their jobs, their homes, their life savings. They will not sit still for the trillions now being committed that will be paid for by them and their children in the future going largely to create jobs in other countries. Free trade is not fair trade. Not when factory workers in china are paid $30 a month instead of $30 an hour and there are no EPA or OSHA regulations and no labor laws or lawsuits, or anything for private companies to deal with that increases the cost of doing business. It will be very hard for President Obama to resist the clarion call for protectioinist tarriffs even if it means walking out of the WTO. I'm sure there will be many supportive economists who will assert that the impact of the Smoot Hawley tarriffs in the 1930s was minimal and is only dragged out to justify the export of American jobs.

If the 2 trillion in uncollectable mortgages was all there was to the economic crisis then it would be a bad recession and the world would survive it. But with the leveraged pyramid of what are in effect guarantees that these mortgages will be paid back, the problems has been multiplied 10, 20, 30 fold or more and the numbers simply swamp what the world can possibly produce to cover those guarantees called CDSs and CMOs. All this was the result of removing regulations instead of strengthening them. And now the very same people who advocated removing them are in charge of bailing the world out. It won't work. There is probably no amount of money that the US government can give AIG that will assure its long term survival.

Meanwhile China is starting to get worried about its trillion dollar loan to the US government. It is gravely afraid it will be paid back in sharply devalued currency. It's a little late for that now. They should have thought of that before they made those loans. They should have been tied to inflation in the US but they weren't. China is going to get a lesson in Americanomics. There is no way the US will destroy the trillions of dollars in a few years to prevent devaluation from taking its toll. It would be political suicide for anyone in the US government to try it. Live and learn China.

I wonder if you can put it more simply

Gordon thought he'd saved the world, but unfortunately the time between one conference and the next allowed everyone to see through what he was offering.

He appears to be very good at spinning, but implication is weak

Looks like a bad school report

Maybe what he needs is a new mandate so that he appears less ostracised at the meeting because he is seen as only having a short time left in office

It's tectonic isn't it...and that's why it's difficult.

If this was about business as usual the G20 would come up with aform of words..they'd have come up with one before the ministers had even arrived.

But it's more about now "Richer countries getting poorer...point....end"... and the shifts in power involved; so there isn't the same possibility of a placebic end of meeting announcement.

China and Arabic countries are not goign to just pay money some later this year it can be business as usual for the HD Plaasma buying western consumers..... at least not without getting something back in return...and devalued dollars and Pounds aren't what they have in mind.

The Bank and Finance meltdown has hit the real economy and so real politics starts here.,.... unfortunately.

I watched the coverage. Nothing of importance was said in front of the cameras. What was said was patronising in its banality. They remain committed to growth, apparently. Whom do these clowns represent, again?

G20 Summit

Master Puppets talking amongst themselves - with the Master Puppeteer out of sight...but pulling the strings.

The Master Puppeteer is a (banking) law unto itself - and it is accountable to no-one but itself.

Bring the Master Puppeteer to account - not just chosen Master Puppets/Sacrificial Lambs - and maybe, just maybe, humanity might get itself out of this global, national & local mess.

But there will be a huge cost - not just financial.

Bring the Master Puppeteer to account, Darling - before it's too late.

And for those of you who might dismiss this as simply another 'economic conspiracy theory', you'd be simply mistaken.

Suivez la monnaie...et la puissance...

Voila !

'Global Monkeys & The Organ-Grinder' came to mind, while watching the G20 'perform' at South Lodge Hotel today - with the Organ-Grinder nowhere to be seen.

Find the Organ-Grinder, and maybe - just maybe - we might get ourselves out of this....but it will be at a high cost - not just economically.

Horsham indeed. Stephanie you're a diamond.

Because the teaser rates were extended over time, the toxic assets are a time release liability that will contunue to expand for several years. The full extent of the liability won't be known until all of the teaser rates have expired and those mortgages that are going to go into default actually do. And each time the G20 thinks they have built a dyke high enough and strong enough to contain the tide, a new tsunami much higher will come along to wipe it away. We are still going into the forest, not coming out of it.

I was at Bridgewater shopping mall today. People were milling around but I didn't see any shoppers at cash registers or walking around with purchases in their hands. One jewelery store owner told me that although she had all of her merchandise on sale for 80% off or $10 a piece, whichever was greater, she was not going out of business and will restock her store. We're taking bets if she is just whistling past the graveyard. She said things would get better in about a year. When I asked her why she thought so, she said "because it just has to." That's what's going on at Horse-feathers this weekend, finance ministers whistling past the graveyard. Thanks to them and their friends, the world is bankrupt.

We all know this is just another showpiece event... a get together that will allow all those leader in danger of losing their next elections to go back to their electorate and tell them how the world listened....

What will the lending rules be in the future?

What will we need to hold on deposit in banks to provide liquidity?

We can surely then work out how much money will be in circulation in OUR economy and have some idea of house prices, car sales, retail spending, etc.....

Or we can mess about for another couple of years and eventually get there!

G20 is just a talking shop. Gordon and his glove puppet Darling's big plan is to get all of the major central banks to inflate paper money in unison in order to escape the worldwide banana. The Americans, whilst agreeing on the precepts, are somewhat reticent to endorse these measures. The Europeans (the Germans and the French) are even less enthusiastic about the strategy; after all the EU is a unified currency. The others - with the exception of the Chinese - are bit part players in the game.

Interesting that Hillary Clinton recently beat a path to Beijing's door to try and persuade them to continue to lend the Americans more money. Whether they go for it is hard to say for now. Nevertheless, the US motive is to try to convince China (and the rest of the world) that their economy is the key to ending the whole crisis. But why should China save the 'middleman' in all this? Why not give the money to their citizens? They have the savings, don't they?

In the final analysis, what it all boils down to is a ramshackle global effort to try and save the fiat money banking system. Either we accept the total command economy or we reject it and let sanity prevail and return to sound money through TRUE free-market capitalism. There is no middle course available.

Brown has one resion and one resion only for wanting a global solution and that is to stop the city of london becoming a ghost town.

The resion he set up the FSA the way he did was to encourage big firms into the city.

3 weeks ago the US congress were told the there regulator relaxed rules because big banks were talking of leaving the US to London because of the lighter regulation of the FSA here. So much for G.Brown claiming that its the USA's fault.

If we tighten up our rules the big companies will leave for the middle east or irland. Several last year left just because of G.Browns constant Tax changes.

IF we lost so 50% of the Footsie it would bankrupt the UK, and Brown could not borrow and spend a penny. Were lucky that clown actually realisies that.

What ever happens we the UK will still end up with one of the lightest touch regulators, its just the Brown is trying to get global rules for all markets to prevent an exidus.

How depressing that the main BBC headline from the G20 meting was "We are committed to deliver the scale of sustained effort necessary to restore growth," And one of the main quotes from Darling was "We are prepared to take whatever action is necessary."

Is my memory failing me, or have they all said this several months ago? Was I naive to think that the purpose of the G20 meeting was to move to the next stage - actually coming up with a coordinated effort of things to do now.

With Crash sitting in his self-dug hole I am increasingly coming to the view that his self-preservation strategy is to concentrate on the world solution, at the expense of the national solution, so that, when it fails dismally, he can stand up and blame the leaders of the other G20 nations for the failure.

With respect, given the gravity of the situation, the tone of your critique is, to my mind, excessively harsh.

Politicians are paid by their constituencies. There is already an outcry in the USA that about a third or maybe as much as a half of the works portion of the stimulus package will actually go to undocumented foreign labour, instead of desperate Americans.

California has been my home since 1965; believe me, the picture over there right now is beyond ugly. It is in fact far more terrifying than 9/11, because it impacts people everywhere the eye can see, and it is not an event with a clear conclusion. This is an open-ended catastrophe. There is no pathway to kathartic retribution either: you can't exactly bomb Wall Street. The number of "jokes" circulating calling for the heads (literally) of worst offenders are indicative of a deeply grim, potentially explosive, mood.

Under the circumstances, whatever he might believe of personally endorse, Geithner can't say much. Nor can he do much. The fact is there is no precise idea anywhere in the US of the size of the financial crater that has been created through the lunatic exuberance of as yet untold numbers of intoxicated speculators, and clueless bankers who never bothered to read their own fine print, much less attempt to comprehend what the reams of paper they were signing actually promised to pay for.

Life in the US has been such a roller coaster of fun since the party boys took over a score of years ago, no one ever actually envisioned having to foot the bill for these ridiculous inflated pricing structures. And it is not just housing. It is the credit card rates and penalties; it is the cash point transaction fees; it is the whole huge can of worms of a topsy-turvy greed-driven approach to banking in which the people who killed the goose laying the golden eggs -- who bled the consumer into near extinction, via a thousand humiliating cuts at every turn -- collected gargantuan compensation for being only marginally qualified to serve. And you have plenty of qualified UK experts who witnessed the great obscenity of this.

The vast majority of US residents never experienced anything remotely like the present mess. Only a small minority remember war. It will take a little time for them to come to grips with what has happened, and to brace up, as European leaders already have, to the illogical but unavoidable necessity of now having to throw good money after bad, in truckloads.

Until there is consensus amongst US taxpayers, their employees (the American leadership) will be very choosy with their words. On the other hand, wise wizards like Paul Volcker are actually stepping up to say what really must be said: that those Americans who actually can afford to -- and there are still many millions of them -- must spend, and spend with some abandon, out of their own self-interest.

Money not spent by the wealthy now to reignite consumption only increases the likelihood of far worse tax increases down the line. If the US is driven by an absence of adequate tax revenue to simply printing currency to "support recovery," the still-affluent will be called upon to contribute greater chunks of their wealth than they might like like to projects they may not approve of. How much better to go out instead and splurge on something one heartily endorses!

I think the Horsham meet-up did better than expected. Behind the smiles and pleasantries, I detect resolve. The "rifts" as BBC calls them are minimal, and rightly voiced; realism and the determination not to be cowed by crisis, not to back away, but indeed to do whatever is necessary -- up to and including discarding bad ideas inherited from misguided elders -- is very much on display.

That is a good thing. Now let us see what their chiefs say, on April 2nd, and hope it is of a kind, and possibly even better.

All we have to go on any more is hope. Hope is a lot better and more constructive than despair. And when paired with actual competence, with relentless effort, hope does often end in a good outcome. That was how the awful wars were won -- and here, in Europe, everyone remembers.

Stephanie,

Alistair Darling's comments make clear that the G 20 will be agreeing an agenda for reform over time. I get the clear impression he is lowering expectations on what the Leaders will agree. He is right to do that as otherwise the markets will react badly to unfulfilled expectations. When he mentions the need to do whatever is "necessary", this is couched in individual national terms. The reality is that as nation-state tax revenues are funding stimulii, it must be nation-state self interest dictating size and application of funding. The common international agenda for reform is all subject to further agreement over time. These are merely " agreements to agree". By comparison, the November communique reads as more concrete. I suppose this one is the hors d'oeuvres for April.

The more important documents are the appendices attached to yesterday's communique on banking and state of progress on initiatives for reform agreed in Washington. Mr Peston will be disappointed to see the commitment to free and competitive and innovative commercial banking as the best means for intermediating capital flows from those who want to lend to those who want to borrow.There are some important commitments on government openess on the detail of their national bank bail-outs, unconventional measures and exit strategies. I hope journalists/mps hold our central bankers and politicians to account on these commitments.

The 'state of progress' document is very disappointing in terms of updating on action. Everything seems to be moving painfully slowly.

If the G 20 ends up as a talking shop, matters should move to a G 7 / bilateral sphere where immediate action is more of a realistic likelihood. The power-play will involve China asserting itself more through the institutions.

Meanwhile, no one is telling us about where in the UK we stand on the vital question of loss of overall credit capacity due to retreat of securitised credit markets and whether our banks remain under-capitalised to bridge the gap as matched with credit demand. Where are the published statistics?

#8 true-liberal
Absolutely have you considered

Nationalising the Money supply not the
banks ?

has anyone noticed the dropping of the
FRB word
I believe its changed to Capital Value

Ratio (minimum ratio of 8%

So they can create £100 for every £8

Still with the inevitable bust prospect


JOIN THE MONEY REFORM PARTY and

make money democratically

accountable.

Hi Stephanie

I agree with your conclusion that not much was achieved and in truth not much was likely.

One of the factors in this must be the decline in Gordon Brown's position. Last autumn with his bank bailout he was claiming to have been the saviour of the banking system. However as further expensive bailouts have come it is quite clear that he wasn't.

Also if the main objective is to stop/reduce protectionism then I am afraid we were probably reminded of two things. One is our competitive devaluation which if it isn't an actual policy is very convenient and two is "British jobs for British workers." The rest of the world must be aware of this statement.

So ironically the UK was probably the worst place for the summit to be held..... which is a shame as any policy towards oprn and free trade would be helpful.

"Make money democratically accountable", says 'ourpaine'.

To do that, we must make the 'money-men' democratically accountable.

To do that, we must make the likes of Rothschild accountable.

We can't do that, so to "make money democratically accountable" is a pipe-dream.

Dream on.

Talk is cheap? What else would you expect from the US/UK sphere???

"26. At 11:18am on 15 Mar 2009, ourpaine wrote:

I believe its changed to Capital Value"

I think the current term is "Capital Adequacy Requirement". Same thing.

Our "leaders" have a problem. How do they keep the existing system in place for their real paymasters but be seen to have "done something" for the plebs.

What I find difficult to understand is that for months now Brown has been banging the despatch box at Cameron stating that his stimulous plan is the correct plan and the richest countries are backing it and doing the same.

If this is the case why are so many governments at the G20 summit reluctant to spend any more cash on the stimulous packages.

Looks like Brown has stood out as the biggest risk taker in Europe with his countries financial security....................not the first time this government has done that.

Brown and Labour government are simply out of their depth with irrisponsible tax & spending levels and 2010 can't come quick enough for his removal from office by the electorate.

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

Several things are clear.

We cannot continue as before. FRB is hyperbolic and therefore bust.

There can be no more growth. The planet will not support it.

Birth control looks a good start.


The plague would bring down prices. It did last time.

G20 meeting. Yawn.

Battery powered cars? There is not enough Lithium in the world to do it.

Lithium is found at the bottom of salt lakes. Know of many? It is like Cadmium, a filthy heavy metal.



"toxic US bank assets." If they are toxic, they are not assets, are they?

....Latest News from Horsham.......

....Merkel tables motion to stop Brown from planting wet kisses on her cheek. Not in Germanic cultural interests she says

....Sarkosy shrugs shoulders, gives quizical Gallic smile and offers bail-out kissing plan to Brown

....Brown states
'I have nothing to apologise for.
It was all part of a charm offensive - one smackerooney and Germany hands over all its money to save my disasterous plan of paying zero interest to savers'

....Obama reports 'Yeah Michele doesn't go too overboard on it either, she said it was like kissing the new dog'

....Chinese delegation remain inscrutible and quote from Sun Tzu 'Art of War'
'all action must lead to logical ending. Army destined to defeat, fights in the hope of victory. A victorious Army wins its victories before seeking battle'

..... Darling doesn't understand any of what is going on and says
'We are all agreed to do whatever it takes - whatever that is - can somebody tell me what it might be please ?'

...Meanwhile Mervyn King remains lost in the corridors at South Lodge
'Well I had a plan when I came in. it must have gone a bit wonky somewhere...'

(end of report)

The trouble is, few people have yet identified the real problem in the first place. And the Anglo-American leadership are desperately trying to avoid people finding out. They prefer to let everyone think that the problem was a financial crisis leading to an economic decline, when the truth is an economic decline (starting in the United States, to be sure, but which would've reached these shores sooner rather than later) led to a financial crisis.
In other words, as the American economy declined, people couldn't service their debts, especially in the "sub-prime" sphere, leading to huge problems for the banks.
The REAL problem is that the economy was never decoupled from its sensitivity to high oil prices, no matter how the great and good of economic theory tried to claim otherwise. The industrialised economies will always suffer when the price of oil escalates out of control.
But what do fiscal stimulus packages do, other than store up problems for the future? They were a regular feature of the Bush presidency and all they did was postpone the day of reckoning until now. I can't see fiscal stimulus packages doing anything and they'll just become less and less effective as time goes by.
People aren't stupid. Any extra money that comes their way now is used to pay down debt or stuffed into bank accounts (as paltry as the return is) for use when the governments eventually have to start repaying their huge debts. And all extra public spending on infrastructure does is create a few jobs so that more people can put a little away for a rainy day.
The Japanese have bridges here, there and everywhere as a result of their various packages. But the Japanese economy never recovered. Japan did okay, but as a result of exporting, the domestic economy never recovered.

Well done Gordon - some joined up thinking at last (let's hope he doesn't agree to pay for it all).

Let's hope the big economic issue big like runaway population growth are discussed in the 'joined up thinking' (sounds wonderful - must have sent Gordon on a management course?).

If Gordon has put GBP 1.3 trill in to the bail out already (with the bad banks fiddling their accounts for further write downs this year) is this joined up thinking going to cost us any more by the end of the performance?

My guess is that the finall tally will be GBP two or even three trill - before Gordon opens his parachute - Yes - You all think I'm barmy - WAIT AND SEE!

"33. At 3:14pm on 15 Mar 2009, Toldyouitwould wrote:

Lithium is found at the bottom of salt lakes. Know of many? It is like Cadmium, a filthy heavy metal."

Wrong.

Lithium is in fact the lightest metal and non toxic... They use it to treat depression... In the same group as Sodium. It can be extracted from seawater if you want to throw energy at it. It's simply easier to get from salt beds because it is already concentrated. Also, unlike fossil fuels, it can be recycled.

strategycall (#34) Excellent!

Talk is cheap....'

I think not ,consider what the pied piper of sedgfield is earning on his USA tour ,for explaining how he persuaded his ratpack to willingly hurl themselves over the edge ,whilst he joined JPsMorgansborg ,who have also bitten off more than they could eschew and may also go over the edge themselves ,but not before The great yogi Blair moves onto soylent greener preservation.

Not even an inca high priest could have engendered such compliance from his victims [in the days before bankerrs and wallets where hearts had to suffice]

I can see Tony standing there at the edge encouraging the brat pack,with nithoods if necessary , to believe that they were the parrotshoot regiment saving westearn civiliesation ,shaking their hands and saying " I will be with you always even at the going down of the spun"

A few words for bankers

https://www.youtube.com/watch?v=RCMSllnea_o

To restore trust in and between financial institutions regulatory reform at national and international level is vital, the whole system only exists by virtue of rules and regulations the crisis can be described in terms of either the inadequacy of the regulations or adherence to and enforcement of them. As far as fiscal stimuli are concerned the avoidance of squandering any but the worlds renewable resources should be integral to the economic thinking and not supplementary to it and here more than any where international regulation and coordination is essential so that environmentally dirty players can have no advantage over their cleaner rivals. However we can only expect the G 20 meeting to give a work in progress a shove forwards and not expect immediate results, impatience withour dear leaders is important.

#33 "Lithium is found at the bottom of salt lakes. Know of many? It is like Cadmium, a filthy heavy metal."

Naughty child !! You have not memorised your Periodic Table as you were instructed !! Lithium is the third lightest element after Hydrogen (atomic number 1) and Helium (atomic number 2) !!

Now go to the back of the class and no sweeties for you for a month !!

Meanwhile, back at the ranch (or should that be a farm) in Horsham, whilst our Glorious Leader is quantitatively easing our economy down the tubes, the Chinese are building up their stocks of reserves with their stimulus packages - https://www.chinadaily.com.cn/bizchina/2009npc/2009-03/06/content_7546608.htm !!

I think throwing wealth at farmers and such like is money far better spent than pouring it down a financial black hole !! At the very least, we can eat the food !!

How do you eat a black hole ?? I'm sure Stephen Hawkings will be very interested in the answer !!

#26 "make money democratically accountable."

What an excellent idea !! Anyone who cannot repay their debts shall be made debt peons/indentured servants until the debts are repaid !! Very democratic and very accountable !!

How about making politicians and civil servants personally and democratically accountable ?? The French used the guillotine and the Chinese now use 9mm bullets !! It may have far more effect that making money accountable !!

With the pre-G20 spats between France, Germany and the UK, all members of one so-called community, was there any likelihood of serious and detailed consensus at the G20 ?

Until there are some real signs of recovery from this global recession, which give a firmer indication of how an economic rally can be nurtured, politicians will continue to do what they do best - talk !

"More fiscal stimulus a no-brainer".

Perhaps good to read a paper co-authored by John Taylor, the US economist who devised the Taylor rule for central banking policy.

This paper raises many doubts about the benefits of a fiscal stimulus, if there are any. It also argues that some of the assumptions used by Obama's economists are untenable in the long term, like keeping interest rates at zero. Moreover, the Obama ecnomists use an old-Keynesian model that does not allow for rational expectations, i.e. it does not allow for any behavioural changes by individuals who discount the effect of the stimulus, like very likely tax increases.

[Unsuitable/Broken URL removed by Moderator]

Seems to me, these Libertarian/ Austrian types take the following stance:

We don't want rules: we don't want government intervention.

We do want rules: we want a gold standard.

Conclusion: we don't need rules but we do need rules.

I see the clarity of the Libertarian/ Austrian argument. If money was gold, and there was no lending or borrowing, everything would be alright.

The fact that gold has no intrinsic value doesn't seem to bother them. The fact that without lending there would be no banks, unless banks charged us for depositing our wealth with them, seems to have escaped them.

These Libertarianismists are clear thinkers.

They seem to advocate banks charging depositors for the safe keeping of their wealth in a non-lending environment.

Therefore, under this thinking, the government should tax savings. That way the government encourages us to spend or the government raises taxes and spends the money for us. This seems to be in keeping with the Libertarian business model.

Theories, damned theories and statistics.....

#7 Ah you've hit the nail on the head, as they say.

Stephanie,

what more to say? Horsham?

horse-trading? smoke and mirrors?

nothing of substance. nor will the G20 meeting. good press opportunity for them and no doubt, the anarchists and other nutters that crawl out of the woodwork at those events.

whilst GB tries to look good, the US and let's face it, every other nation is only and will only ever be, self-interested.

GB admittedly is out of his depth and the UK, let's be truthful just does not have the resources to get ourselves out of it without recourse to an agreement with other nations.

But they are protecting their own interests first, naturally, so we are left in the mire.

Nothing new there then!

"More fical stimulus a no-brainer"

Not according to everyone.

The american economist John Taylor, well-known for his Taylor rule for setting interest rates, has co-auhored a paper that raises many doubts about the benefits of fiscal stimulus, if there are any. Crowding out of private investments and higher taxes in the medium to longer term may hurt the economy more than government spending and lower taxes in the short term.

The paper also questions the assumptions of Obama's economists Romer and Rosenberg who claim that the Obama stimulus package will save or create 3.5 million jobs. The Romer and Rosenberg report assumes that interest rates stay zero indefinitely and the model used is an old-keynesian one, rather than a new-keynesian model that incorporates rational expectatios, i.e. changes in behaviour by individuals who discount expected future events such as higher taxes to pay down the government debt.

The paper's title is:

New Keynesian versus Old Keynesian Government Spending Multipliers

It can be found on the web.

No. 48. Econoce

Fiscal stimulus is good if it helps the private sector become more efficient. Businesses need to find new efficiencies to enable them to cut costs without cutting wages or employment.

That said, it is unlikey we will find new efficiencies fast enough to prevent the recession worsening. It is likely that businesses will simply be forced to cut more jobs in order to save money.

Therefore, I would concentrate on finding new ways to produce Britain's necessities - such as food and energy. If we have self-sufficiency in necessities, we are less likely to suffer imported price inflation caused by the weak pound. Imported price inflation is bad when businesses are already having to cut costs.

The risk is the government's fiscal stimulus merely pays the unemployed to build roads to nowhere. If the new roads don't help the private sector reduce costs, then the whole exercise will be a depletion of scarce resources which won't stop business profits from falling and unemployment from increasing.

Business profits are falling
Tax receipts are falling
Unemployment is increasing
Where will the government spend the money it doesn't have?
The government only has one chance to spend the money wisely.

No Stephanie: talk is expensive, especially when it's funded out of the pubic purse.

Stephanie,

How right you are when you say,

"But talk is cheap."

I am reminded of something I read in Erich Fromm's The Sane Society, where he refers to the 18th century French author and writer, Victor Cherbuliez. Apparently Cherbulliez determined that ". . .between 1500BC and 1860AD no less than about 8,000 peace treaties were signed, each one supposed to secure permanent peace, and each one lasting on an average two years!"

So even when the politicians stop talking and put pen to paper in agreements and treaties, it often does not mean very much.

I then wonder whether politicians and indeed humanity overall is capable of doing anything meaningful to ensure that it does not keep repeating the same old mistakes of the past. After all, the fiasco around LTCM was meant to lead to major reforms on Wall Street, yet despite those events, little was done to stop the explosion of the derivatives market. Then on the business corruption front, the Enron, WorldCom disasters were meant to lead to tougher SEC oversight. Where was the SEC in the lead up to the current economic maelstrom?

One cannot help but view the current round of "jaw, jaw" as just a continuation of the same old rubbish.

After all, the USA in particular is never likely to acquisce economic power to a major institutional power such as the IMF, anymore than it would give the UN power to decide where it should or should not invade!

true-liberal (#37) Not quite true on toxicity - (just in case anyone still thinks it could be used as a salt subtitute).

Regarding Lithium.

See the video by Nottingham University Chemistry Department at

https://www.periodicvideos.com/videos/003.htm

A quote people would perhaps do well to remember...

"Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in.

But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits."

Sir Josiah Stamp - President of the Bank of England in the 1920's, the second richest man in Britain.

With apologies for changing course slightly, could you do a bit of journalistic digging into the bank lending commitment. Crash Gordon and his side-kick have been at great pains to say that, as part of the latest support to banks, legally binding lending commitments have been obtained from the participating banks.

My question - is there any spin in here?

Am I too cynical to think that there may be a let-out clause such as "subject to the prospective borrowers meeting bank credit criteria"? What is the time profile likely to be? If it is a genuine legally binding commitment, will we see borrowers failing to meet the criteria for most of the time period and then see a mad panic of lending to pretty much any borrower in the final, say, month?

My anecdotal observation, based on no first hand knowledge, is that businesses wanting to borrow for working capital are getting a "no" answer because they are seen as high risk. What is Crash Gordon doing to reduce or share that risk? Nothing?

is it necessary to fly these politicians all over the world just so they can appear important? the G20 finance ministers spent millions to say "we will do our best to end the crisis" ....well what else would they say?

G20 will be exactly the same, a huge amount of money will be spent for what is a photo opportunity to stand next to obama...... and a final bland communique that you could write now....No Stephanie talk is not cheap..

"Talk is cheap" - especially in a G20 Global Summit - when there is too much economic theorizing, and too little economic realpolitik.

May we have a 'reality check' in our economic theorizing :

For example, not mentioning the likes of Rothschild in a G20 Summit of Global Finance Ministers & Central Banks, is rather like not mentioning Freud in a Psychology Degree Syllabus.

RWS

Regarding Lithium,

Have a look at ultracapacitors. Have a look at the product from EEStor, or their claimed product at least.

I guess no-one agreed on anything because there's nothing in the pipeline to agree to.

They've all gone home to pursue their own agenda for rescuing their own countries.

I see Australia has declared a cut back on its immigration numbers to prevent them competing with Australians for the reducing number of jobs. Sensible or protectionist or perhaps both.

Gordon obviously has no ideas how to rescue this country so is concentrating on denying he will put up the cost of our booze.

Nice diversion when you've nothing else to offer. Problem is he's already doing it year on year anyway by more than inflation.

Let's hope this is the end of his saving the world campaign and he will now bow out gracefully.

Looks like a period of inaction from now on until the next big fire.

"52. At 10:43am on 16 Mar 2009, JadedJean wrote:

true-liberal (#37) Not quite true on toxicity - (just in case anyone still thinks it could be used as a salt subtitute)."

And one can overdose on dihydrogen monoxide as well.

"46. At 09:27am on 16 Mar 2009, MrTweedy wrote:
Seems to me, these Libertarian/ Austrian types take the following stance:
We don't want rules: we don't want government intervention.
We do want rules: we want a gold standard.
Conclusion: we don't need rules but we do need rules.
I see the clarity of the Libertarian/ Austrian argument. If money was gold, and there was no lending or borrowing, everything would be alright."

This is a misconception of the Libertarian case. They don't want a gold *standard*. They simply want the government out of the money creation process. They believe this will rapidly lead to gold being chosen as money as the existing banking system collapses on it's debt. So, no standard. Simply, gold is chosen by the market as money and transactions are carried out by weight. For example by the pound (Now isn't that a silly idea). No standard required; e-gold, bullionvault and the like already allow this, though they don't use such archaic measures.

Second they aren't against lending, and neither am I BTW. However they believe that the only thing which allows Fractional Reserve Banking to survive is government support of banks which are by their nature insolvent. Without that support, the reserve ratio would grow until effectively there would be full reserve banking. This is primarily where I disagree with Libertarian thought. We've already had gold as the monetary system, the politicians were completely unable to keep their hands off it and the money lenders were able to inflate and deflate credit nevertheless. Perhaps not to the megabubble we have had since 1971, but nevertheless.

"The fact that gold has no intrinsic value doesn't seem to bother them"

Gold does have an intrinsic value. It is scarce. Politicians (and bankers) are unable to simply magic more into existence at the drop of a spending promise and thereby steal some of your and my hard earned value. Physical gold itself is therefore a stable measure.

MrTweedy # 49
"Fiscal stimulus is good if it helps the private sector become more efficient."
It does not because...
"...fiscal stimulus merely pays the unemployed to build roads to nowhere."
What is the point of "crowding out" private sector business by throwing good money after bad? The whole idea of fiscal stimulus is a pointless exercise.
According to Ludwig von Mises,
"...there is need to emphasise the truism that a government can spend or invest only what it takes away from its citizens and that its additional spending and investment curtails the citizens' spending and investment to the full extent of its quantity."
(Human Action, chapter 29, section 1)

MrTweedy # 46
I think your talents are wasted on this blog. You ought to be on TV; you really are very funny - you make me laugh!
Enough of the frivolity, here's something you may wish to read about the "barbarous relic".
https://mises.org/story/3368
Enjoy!

THis might be of interest to some :

The "Rothschild-Lodge" Theory of Banking & Finance states that "global banking and finance is run solely in the interests of the House of Rothschild, as set out in the G20 Summit held at South Lodge in Horsham, on Saturday March 14 2009."

true-liberal (U9476027) and LibertarianKurt (U13819051)

Thank you for your replies. I would say that although gold is scarce, it only has a value placed upon it by mankind. Tapirs are scarce; so why not use them for currency? I guess tapirs are not easily divisible into smaller denominations, and they do decay over time, and you can't take a tapir to the Antiques Roadshow.....
Anyway, my favourite precious metal is platinum. To my mind, platinum is more "valuable" than gold as it has real value to industry and is more beautiful to artists. For example, Cartier's platinum jewellery is far more beautiful than their creations in gold (my wife can't afford to own any Cartier, but she has books with colour pictures). Platinum is much more scarce than gold. If we collected all the platinum in the world, it would only be enough to cover one football pitch. Platinum is used for industrial processes, and considered a strategic metal by the US government. In fact, white gold was introduced as a substitute for platinum in jewellery at the outbreak of World War II, as all the platinum had to be used for war production.

True-Lib -
Thanks for explaining that a little credit is a good thing, and lots of credit is a bad thing. I agree with that point of view. When people rail against "fractional reserve lending" I was thinking they don't want any lending/borrowing at all. In my day we didn't have the term "fractional reserve lending" or the term "Libertarian"; so I am not always able to follow some of the more academic arguments on this blog....

Academics are a lot like financial derivatives -
(i) Academics are almost unintelligible; and
(ii) Academic arguments, like financial derivatives, tend to net off to zero.

Libertine Kurt -
I think a little bit of black humour or satire helps us get through the day. I tend to post on here as a way of relieving anxiety by letting off steam. I realise that my views will have no influence over those in government, but my writing here helps me cope with the day to day pressures in these times of economic crisis.
Remember to dream of La Belle Epoque - a time where new technologies improved lives that were unclouded by income tax or socialism.
Remember, beauty is the promise of happiness....

Maybe the recent stockmarket rallies mean the crisis is over; what do you think? Is it time to get back into equities?

"Is it time to get back to equities?", asks MrTweedy.

God knows, Mr Tweedy, but this I know : it's time plutocracy (of, by & for powerful people) stopped gambling with the people's lives and money...

In Casino Capitalism, the House always wins.

Is it time to close the Casino ?

"TALK IS CHEAP"

This is what one gets when a culture prides high verbal IQ above all else. Verbal here includes symbolic but not spatial (logical at root).

The problem is two-fold. First this feminises the culture because females on average, are better verbally than they are spatially (this is brain-gender thing incidentally, i.e. it is not strictly X vs Y chromosome as far as I an tell from the evidence). Secondly, the downside to the first is that the culture becomes progressively less grounded in physical reality, and prone to spin and 'mendacity'. If something reads well, sounds good, looks good, it is true and popular. Sadly, truth is spatially/naturally grounded.

To reverse this means reversing the feminisation of Liberal-Democracies, and probably, the abandonment of Liberal-Democracy, which at root, is anarchistic.

Sorry to be the bearer of such bad news, but I fear this is true.

No. 65. RichardWSymonds

Bobby Peston today says we must help the bankers help us. He says the casino must be kept open, if only to try to fleece foreign investors of their money.

Casino and buccaneer banking, plus defence manufacturing, are the only exports Britain has in the world.....

No 66. JadedJean

As a compromise, why don't we opt for a command economy run by women?

You get your centralised decision making, and women still get recognition in the workplace.

Check this out:
https://earth2tech.com/2008/11/02/video-blacklight-powers-validation-process/

Apparently this Blacklight Power has got 60mill USD for this stuff, and it's energy source is independently verified by Rowan University at producing about 100 times more energy than chemically possible, cold fusion style. The physics boffins speculate that Casimir cavities are responsible for the extra energy, which means that they are getting their energy probably from quantum vacuum.

As if that isn't enough, some University of Colorado boffins have spun off their own company (Jovion Corp) and are looking for 10mill USD funding into quantum vacuum extraction:
https://nextbigfuture.com/2009/02/jovion-corporation-gets-patent-for-zero.html

If these things work, we're looking at free energy.

More on the same:
https://www.scienceblog.com/cms/comment/reply/18408

Now there's optimism for you! Free energy. If this works, they can keep their G20 and their SDRs, they're irrelevant.

#64 MrTweedy

Whither tapirs? Their use as an international currency may boost the economies of Brazil and Malaysia, but the UK would have to surrender other reserves to adhere to the Tapir Standard.

Then what about the abolition of tapir relief as a result of Chancellor Darling's reform of CGT last year? Was this part of an international conspiracy?

#68

Thatcherism helped start all this! What are you talking about! :-)

Mr Tweedy (#67) "Bobby Peston today says we must help the bankers help us. He says the casino must be kept open, if only to try to fleece foreign investors of their money."

Which is precisely what one should expect of course, as the Masters of The Universe will do anything, say anything, in order to try to return to the (perverse) 'status quo'. What's so depressing is that every day, week, month, we read/hear financial journalists spin this sorry story for them, no doubt, receiving promises of Hollywood style accolades along the way. The truth is, there can be no recovery to where it all was, as it was 'bad' practice (egregious securitization of predatory lending/usury). Now that Private Sector (sucker) scam has been blown, the idea seems to be to restart the scam but this time with Public funds and 'promises' of better regulation. But hold on....the Treasury Committee has been told that the regulators couldn't keep up with the 'evolving' machinations of the Financial Sector - and the same story was given last night on Panorama viz seizing the assets of organised criminals. This is clearly because money buys lawyers, and the law has nothing to do with truth, just legalities. The Public Sector (Executive) has been thinned, poached, sinecured, call it what you like - it's been happening across the board for a couple of decades at least.

Or have I got all this completely wrong?

Mr Tweedle #64

'Is it time to get back into equities?'

Are you sure you would want to do that and become richer than a Fred on two pensions ?
Just think you would have so much money you could contribute to the Labour Party and buy yourself an ermine suit as Lord Itchy of Tweed. And when the blogs came up about 'Bloated Lords - Why we need more of them' you wouldn't be able to join in !

Alternatively, you could invest now and when Stephanie interviews you in the future about how you became so rich, you could reply
'I just did the opposite of what Brown and King recommended.
When they said 'spend', I invested.
When they said 'panic', I replied ' two chances of me panicking- nil and zero'
'So Stephanie, I put the Tweedle success story down to an anti-Brown investment policy with entry and exit points indicated as the inverse of the Government latest ONS measurement of the
'Weimar Extension of the Trusted Spin Operation Confidence Kurtosis'
(WET SOCK)

'Thus the secret of the Tweedy success story is all down to the Wet Sock method*'
(*copyright Tweed Corporation of Infinity and Beyond Inc)

JadedJean 66:

My God what a mouthful. No wonder academia is lampooned as it is.

No. 74. strategycall

Thanks for knowing more about me than I know myself. The vision of Lord Itchy of Tweed is attractive; I could then buy my wife the antique Cartier she's always wanted.

Equities for inflation it is then!! It could pay dividends in the long run, if companies make profits that is.

No. 73. JadedJean wrote:
"Or have I got all this completely wrong?"

No, you are right - there is little truth and justice in British law.

The law is a game like everything else. Remember, Britain invented games and hobbies, and gave them to the world. The Americans then commercialised them and sold them back to us.

No. 71. fairlopian_tubester

You remembering the heady days of Business Tapir Relief brought a smile to my face.


No.69. and No.70. FrankSz

If they develop free energy it would mean I wouldn't have to compete against China afterall. And there's me clearing the decks for action and spreading sand on the floor.....

Talk IS cheap - so are financial journalists unless they are very careful.
Where were you Stephanie, when everyone except you were being so hopeless?

FrankSz (#72) "Thatcherism helped start all this!"

The ism bit being operative as it was allegedly Keith
Joseph's ideology (which I assert was anarchistic. This is traditionally
anti-statist/anti-command economy and anti-outgroup). It should be more
obvious, but to many, it isn't. I suspect Keith Joseph may, at root,
have been a Trotskyite. Back in the early decades of the C20th (see the
USA immigration laws to prevent more 'anarchists' coming from
Central/Eastern Europe), little distinction was made between Trotskyites
and Anarchists. Later, in the 1930s the CNT, POUM, International
Brigades and Orwell in Spain were all anti-Stalinist i.e. anti Big
Government - no doubt they would have hated Old Labour and like others later tried to infiltrate as Militant/New Labour etc?)

Mr Tweedy (#68) As to your (tongue-in-cheek) suggestion - given my
analysis of what basically drives dysgenesis (and anarchism/free
marketeerism) - i.e too many bright women in Higher Education and the
workplace reducing fertility in the upper half of the distribution and
thus within the population whilst swelling the 'proletariat' and
'underclass' - your interesting solution is surely no solution at all?

Surely it would just make matters even worse in the long run (or is that
better for the 'Libertarians'?) Its pernicious modus
operandi ((education, education, education), is, as I see it, delayed by at least a generation, and so is ever-so insidious. One has to think about it, so I suspect most people don't? Is that how it works?

Just a 'paranoid' thought, albeit a very worrying one.

;-(.

doctor-gloom (#75) "My God what a mouthful. No wonder academia is lampooned as it is.

Are you a member of the 'underclass' then? :-)

No. 80. JadedJean

All human society is a pyramid with a wide base. It doesn't matter what the polical structure is, there will always be the wealthy and the elite at the top, paid for by the work of those at the bottom. Britain as a country must attempt to ensure it is not towards the bottom of the world pyramid. You fear that intelligent women in Britain do not have enough offspring, which will directly cause Britain to slide down the world pyramid. Historically, this debate has been running for at least 100 years. The British middle class of c1900 had less children than the working class. The Edwardians debated it hotly, and referred to the "menace of the masses".
https://bbc.kongjiang.org/www.bbc.co.uk/bbcfour/documentaries/features/menace-masses.shtml


If we put a statue of a Suffragette on the fourth plinth, it will illustrate women's struggle for emancipation, and you can cock an ironic wink at it everytime you pass by on your way to work in the morning. Absolute freedom is absolutely limiting.

You must find a way of making your fortune by expoiting the mass market to your advantage. That way, you will learn to love it. Use it for your own convenience.....

MrTweedy (#82) "The British middle class of c1900 had less children than the working class. The Edwardians debated it hotly, and referred to the "menace of the masses"."

They did indeed debate it. R B Cattell also warned about it in the mid 1930s (the APA refused him agong recently!) and Germany definitely acted upon it anbd look what happened to them! Herrnstein and Murray (1994) warned about it for the USA and look what has happened to them. ETS mae a video in February 2007 and just got ignored. Back in Edwardian times (it's Darwinian incidentally) it was a menace which threatened, but it wasn't something which they had to endure to the extent that we do today. Today, we have New Labour (and their Neoconservative predessors) ramping up the engine of dysgenesis via female education like there will be no tomorrow. Do they know something that the rest of us don't, or are they just the agents of menace?

Having encountered much of it, I'm no longer sure that I want to learn to love the mass-market.

That doesn't bode well at all does it? ;-(

Mmmmmm am I a member of the underclass? Now there's one to ponder. Class concepts are a problem (oops should I say 'problematic'?). They're pretty slippery concepts as I'm sure you're aware, and generally assigned by others to others in order to categorise and 'order' their lives (yuk!). Don't you agree? Anyway, it hardly matters, what with the 'death of class' and all the rest of that enlightened Neo Marxist twaddle. But yeah, I like to think of myself as a member of the underclass. Very interesting that you should spot it. All those years of looking on from the outside no doubt gave you an insight into what motivates the underprivileged like myself, and dare I say many others suffering this 'downturn' in UK plc.

Orwell's 'take' on class is the most accurate, in my opinion :

HIGH
Those who do not need to work - UPPER CLASS (eg LANDOWNING ARISTOCRACY)(EG ROTHSCHILD) - aka Plutocrats

MIDDLE
Those who do need to work - WORKING CLASS (WHICH INCLUDES THE DAILY MAIL'S "MIDDLE CLASS") - aka Modern Slaves

LOW - Those who need to work, but can't - UNDERCLASS (EG BENEFIT CLAIMANTS) - aka 'Runts of a Litter')

Source : "The Theory & Practice of Oligarchical Collectivism" by Immanuel Goldstein ('The Book Within The Book' of 1984)

doctor-gloom (#84) "All those years of looking on from the outside no doubt gave you an insight into what motivates the underprivileged like myself, and dare I say many others suffering this 'downturn' in UK plc."

Too many individualists out and about encouraging everyone to foul their own nests, the promotion of contrary to the fact equalitarianism and inciting people to believe that if it can't be put into a simple sound bite it just isn't worth the effort - hasn't helped matters.

See yesterday's blog.

For example. How can 50% of the population be bright enough to benefit from a univerity education if intelligence is a) largely genetic and b) Gaussian distributed? Is it really any wonder that many of those now running the show don't know what they're doing (and can't be told either, becasue they've got degrees 'n stuff)?

PS. It's useful to classify/categorise. Nouns are very useful. They enable one to know what one's talking about, and others to know what one is talking about. Are you an anarchist (aka Libertarian aka NeoCon aka ****) as well as a member of the 'underclass' ;-)

Mr Tweedy

"I wouldn't have to compete against China afterall."
What kind of business are you in? Some kind of manufacturing? Send me all the information about the business operations, from process maps and throughput to technologies and systems and I'll send you a revised version with reduced costs.

JadedJean

Anarchists huh? Thatcher England felt like an oppressive police state to me. Funny I think Thatcher was one of the reasons I left the country, and I have met many expats who felt the same way. TBH I can't even remember what it is like in the UK now. I look back on the UK as a bored and miserable populace of violent yobs with little access to decent countryside.

RichardWSymonds (#85) Ah, but Orwell/Blair was an anti-Statist Trot i.e. a bottom-up 'anarchist' or Menshevik (see Miliband's idea of democracy or that of Isaac Deutscher, Tony's favourite author allegedly). Goldstein was probably Orwell's chum Emma Goldman, deported from the USA. Sadly, they were never exactly straight talkers - 1984 (Miners STrike too) has to be seen through Thatcherite eyes. She was our Trotsky. Who knows what this lot have been up to!

I say stick with 'anti-statists'. They will use anything to bring down the status quo, even alternative humour (see the common theme?). Over the last 30 years or so the UK population has unwittingly destroyed the Welfare State it struggled to build under Old Labour, and all because to some over in the USA/NYC, that was Stalinist. With that has gone a once highly reputable Civil Service. Now it's largely staffed by people who either don't know, or don't care, what they are doing.

That's what needs a 'recovery'. But it's a very tall order alas, and one I see little hope for at present.

So you think that somehow it's all just programmed in at birth? Oh dear, oh dear. Hang on, I think that deserves another oh dear, so here we go: oh dear. No I can be a little more direct: Rubbish, and you know it. Furthermore, you're dangling quite a few contentious old concepts and ideas in there as well. You know what I mean: 'intelligence' and the notion of genetic determination (especially when you bring in that big thing called society, or even culture, and God knows all the other fashionable reinventions of these concepts). I really thought all that tired old stuff had been well and truly booted in to touch. Evidently not. Then again I always have had a bit of a soft spot for that crusty old reprobate Plato, as well as some of the other half crazed psycho loons that inflicted their ideological ideas on their 'clients'. Never mind though, the world is indeed a mysterious place. Oh, by the way, thanks for reminding what a noun is. I suppose the trick with nouns is figuring out the good ones from the bad ones, the pretentious ones from the unpretentious ones and maybe the dangerous ones from the 'safe' ones?. But thanks for the reminder, it's so easy to forget these things.

FrankSz (#87) Look to what Thatcher and her backers were taking on: statism at home (Labour) and supposedly (with Hollywood Reagan note), Stalinist USSR abroad. Her 'dregulative' polices whilst prima facie designed to promote the individual, in reality comprised selling off the family silver, i.e. destroying the state both at the level of the nationalised Means of Production ('the unions') as well as the Civil Service. The UK state was sold off, ostensibly 'to the people', just as it was in the early 90s in the USSR - endeding up in the hands of a few rather than the people. Maybe what you recall as aversive/oppressive was the state being torn apart? We're just seeing the ugly consequences of what those behind Thatcher and Reagan fomented 30 years ago, it's just that dysgenic fertilty has produced more people who naively buy into the nefarious rhetoric of debt driven consumerism as 'freedom'.

DrGloom

Actually it's correct. Intelligence is genetic, to a large extent. For an easy summary look at the popular book Freakonomics for example.

I don't think it's all about intelligence though. A lot of people get by by being determined or focused, or because of other characteristics. Some people have poor average intelligence but are good at a certain task.

It raises interesting questions about aims for abundance though (whether they be through temporary credit explosions or through advanced technology). When we have a system that can provide anything for everyone, what would we have in place to pressure the genetic stock away from degradation?

And one for JadedJean: does it matter? If you have read 'The Selfish Gene' by Richard Dawkins you will probably agree that it is the gene that is the subject of evolution and it is the gene that aims to replicate. As long as we can reproduce, we fulfill their needs. As we grow less intelligent and more malformed, we integrate into a vast machine of automated supply and automated decision making - do we just give way to the birth of a new intelligence?

#88 JadedJean

Can you remind us of the exact dates during which we had a highly regard civil service. Clearly it was not before 1783. I can attest to this having studied their performance over American Independence. From what I have read, they were not much better through the days of Empire and they certainly made a hash of things as they determinedly grew the welfare state. The fact is that the civil service is actually at the root of all that is rotten in this country. A bunch of self-aggrandising, self-serving sycophants with feather bedded pensions. In their current manifestation we see glimpses of the enormity of their folly and complicity in creating the economic situation today.

Who exactly do you hold up as an example of sound governance? What system would you like to see? What entity do you place superior to the individual?

In terms of our "moral intelligence" (or moral instinct?), we have simply lost the plot.

Our so-called 'adult' discernment of moral right and wrong has nearly reached extinction, by wall-to-wall 'relativist' propaganda - both political & corporate.

George Orwell - like Noam Chomsky - cut through the ####.

No wonder they get a bad press !

If Orwell was alive today - and he read about the G20 Summit at Horsham - methinks he would ask some pretty unpalatable, but critical, questions...such as...

Franksz 91:

This is getting rather dark my friend. Much as I admire Dawkins I don't buy into his 'selfish gene' idea. Far too reductionist for me. As for the old genetic determinist chestnut, well I'm reasonably well read on that stuff and there's just something slightly awkward about resuscitating these arguments now (ideas like that are often used strategically by some to further their own particular brand of the good society). Although you do hit on an interesting point about what attributes seem to contribute to 'success'. As I understand it 'intelligence', as we might conventionally understand it, is often a poor indicator of future success, or for that matter social 'utility'. I suspect there's a bit of special pleading going on by those that consider themselves intelligent. I've seen it so many times, the elevation of the life of the mind as a defence against what Popper called the 'strain of civilisation'. Quite a sad thing to behold. So called intelligent people wasting their lives on too much introspection. If we want to understand 'individualism' this is the cruellest and most degrading form it can take. A gross overestimation of the usefulness of a particular form of so called 'intelligence'. The thrill of the self delusion that one is somehow superior to others.

FrankSz (#91) Despite what some people like think of Dawkins and his popular books, DNA is neither 'selfish' nor 'altruistic'. We farm animals, and when we do, we do so a keen eye to their genetic pedgree. Our Liberal-Democratic cultures are now verbally/feminine brain-gender biased and there is a price to pay for that in terms of 'Pursuit of Truth'.

Geo-politics isn't blind to any of these dynamics (see #143 and other posts here.

Germany tried grappling with this demographic problem in the 1930s and was painted a monster for doing so. Yet much the same continues to happen today in the Middle East (see #125 link off the above). What I'm drawing attention to here is covert, and probably often largely unconscious, in-group interests at the expense of out-group interests (see Robert Trivers on group strategies throughout the animal kingdom, most of it is not conscious or conspiratorial). See the marked changes in NYC demographics in the last century, and remember a) power concentrates in the hands of a small cognitve elite and b) cognitive ability is Gaussian in distribution. This can be a great leveller in the upper tail of the ditribution (in terms of absolute group numbers) when group mean IQs differ by a few points....

FrankSz (#91) This is all about probabilities or actuarial analysis, not individuals. Have a close look at the statistics provided in #5 here and consider what's said in parts 1-3 (#143, #145 and #146) off the link in the last post. Then consider the origin of recent economic events. This is not about finding scapegoats or blaming, it's about explication of what happens when groups compete for collective self-interest, part of which is lobbying for de-regulation of the contraints which limit 'predatory' behaviour.

It's a cruel world, and the promotion of globalism may be seen (in the wake of the expose of securitization) as an economic/financial version of dropping toxic munitions on child-like people from 40,000 feet whilst sheltering behind the spin of contrary-to-fact equalitarianism and even worse, caveat emptor.

JadedJean

Andrew Marr, on BBC2 last night, said the intelligent gene theory holds no water. He had his own DNA tested and he was found to possess no intelligent genes at all. Clearly he is intelligent; so that throws that gene argument out of the window. (I'm not sure who tested his DNA, I think it might have been Mr Kipling, but I wouldn't want to speculate on that side of the argument).

Meanwhile, on Channel 4, David Baddiel visited schools in the USA and he found that average students could be nurtured into highly intelligent adults by the use of modern teaching techiques.

All in all a bad night on popular television for your theories.....

The TV presenters concluded we are all equal. Having said that, these same presenters earn 10 times or even 40 times the average wage; so clearly equality does not stretch to remuneration. I think the presenters get paid for their charisma....the old "It factor".

Quick, I'm going to get my DNA tested by Mr Kipling, to see if I have the charisma gene.......It's my only hope of escaping the all pervasive mass market junk culture.

MrTweedy (#97) "Andrew Marr, on BBC2 last night, said the intelligent gene theory holds no water. He had his own DNA tested and he was found to possess no intelligent genes at all.

That's irony....

The evidence for the genetic basis of IQ is from quantitative genetics (twin and other family studies) not molecular genetics at present, so it's impossible that anyone has had their DNA tested for intelligent genes ;-)

Furthermor, there is no scientific evidence that we can raise intelligence through education. jensen mae this point in 1969 and nothing has changed since. There is evidence that people can be, and are, 'taught to the test', which is not the same thing. I repeat: There is no evidence that environmental programmes (teaching) raises intelligence.

David Baddiel would appear to be impresed by the Rose, Kamin and Lewontin camp rather than Jensen and Rushton etc. But then there is cash to be had if you can sell alchemical snake-oil given the US No Child Left Behind legislation, and Every Child Matters here. Sadly, if you look into any of these pogrammes from HeadStart on, they just don't work. Oeople want to believe it can be done, and that's what the deregulated free-market depends upon. Education is being ever more commercialised. Beware.

see: Rushton, J. P., & Jensen, A. R. (2008). James Watson’s most inconvenient truth: Race realism and the moralistic fallacy. Medical Hypotheses, 71, 629-640

The majority of the population is sadly all too easily misled about the facts of the matter. Just as we have no evidence that we can raise intelligence by environmental means, we are no good at rehabilitating offenders either. It is now widely believed by competent applied professionals tgat this is because most behaviour is the expression of our genes. This conclusion is based upon our having tried (as teachers, psychologists, social workers, probation officers etc), for decades, to change behaviour for the better, but our having dismally failed. Tyat is what the research shows. The social and political implications of this have yet to sink in for most people alas. Those who say otherwise are like bankers now out of a job, they will say anything to get back on the gravy train.

#96

I don't know though, I think Thatcher and their ilk were simply not aware of the consequences. They were focused on taking power from the unions in an attempt to decrease labour costs and deal with specific economic indicators of the time, but were unaware that a more balanced distribution of wealth is necessary for a domestic economy to be able afford to purchase its own products, and were unaware that by concentrating wealth they would be increasing competitiveness and thus degrading society.

You know until recently I was living in one of those old communist constructs from the days when people lived in state assigned 'free' accomodation. Most, I think, residential dwellings here are still state regulated, and the one I was living in had state regulated rents. What was nice, in fact wonderful, about the area was that you had such a diverse spread of people in one building. There was a couple of decrepit alcoholics on the ground floor, me a software architect/analyst, some telecom manager downstairs, some old couple across the hall where one used to electronics for Tesla, some young tear away punk living with drunk mum, all kinds. What was nice was how everyone was perfectly civilised and friendly to each other. The 'standards of living' were similar, but for most this was unimportant - largely because 'standard of living' means 'how beautiful and accessible is the countryside' for most people here.

As things have got more 'westernised' I can see the old problems I ran away from starting to come here. People are getting mortgages they can barely afford and moving to private accomodation. This is causing 'good areas' and 'bad areas' to show the first signs of happening. You can start to see the first groups of bored, yob type kids wandering around because both parents are working. You start to hear about divorces and mental illness because the couples don't have the time or money now to travel or spend time outdoors, because they are working about this new thing called 'debt' (mortgages only really came available about ten years ago). Education standards are falling, because both parents are working they just stick their kids in front of the TV or PC - all the teachers are complaining about it. The teachers complain about new politically correct policies from the West that don't apply - they don't understand why they can't threaten a violent and unruly child. The list goes on and on.

While here people remember the bad old days of Communism, many feel things have got worse. I think it's just the beginning - while there are people who believe the US/Western model is still worth following, society will just break down and degrade.

No. 87. FrankSz wrote:
"Send me all the information about the business operations, and I'll send you a revised version with reduced costs."

Frank, dear chap
Many thanks for your offer of help, but I'm bound by a duty of confidentiality to my customers and shareholders. Hence, I cannot divulge any information.

My reference to "China is coming" is just a pet theory of mine. What starts as a cheap subcontractor slowly develops into a major competitor - think of Japan out-competing the British car and motorcycle industries, think of India out-competing the Lancashire textile mills, think of Korea out-competing the British shipbuilding industry. The West thinks that with modern technology there will be enough wealth to go round, and all countries will eventually enjoy a high standard of living. However, I suspect there aren't enough natural resources to support true globalisation. Hence, we get more competition rather than better co-operation.