I loved this comment from Lord Turner yesterday:
If you chuck enough monetary stimulus at an economy something happens. It is as if we have had a cracking great hangover, had a stiff drink and off we go again.
I think that's a pretty good description of Bullingdon Club economics.
So is this, from the same source:
We have spent the last few years talking about the need to rebalance the economy away from a focus on property and financial services and towards investment and exports. We are now back to growth without any rebalancing at all.
That's Conservatism for you.
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I am not so sure about thus. People have a choice. They have a choice to invest in manufacturing from the UK or buy from China. They don’t use their choice. No one asks people to buy property. THe banks have made their choice, look at the Coop for a great company.
To quote; “Speaking in Davos, Turner said the UK was responding to a cocktail of economic stimulus in the past five years — low interest rates, quantitative easing, and special government schemes to promote bank lending and mortgage borrowing”.
That’s pretty clear I would have thought, Clare. Our so-called recovery is nothing more than a rise in consumption and house prices encouraged purely by the action of the state. In other words, just as Lord Turner says in the article, which I assume you haven’t bothered to read, it is the same unsustainable debt based model for growth we had before the financial crash. The same model which right wingers criticise New Labour for following!
Your talk of choice is absurd. Everything this government does encourages people to take on debt to buy hugely overpriced houses, and take on other borrowing for consumer spending because the government is holding down interest rates.
When these interest rates go up, this so-called recovery will be revealed for the nonsense it is. An irresponsible, unsustainable bubble created for purely political reasons by a morally and intellectually bankrupt government.
Agreed
Well said!
However people have a choice.
Likewise people don’t need to eat fattening food from fast food joints. But they do, people, have a choice.
That is pedantry
Sorry – but id that is what you think choice is then it’s incredibly narrow horizons that you enjoy
The role of government in a liberal democratic society is neither to take away people’s choices wholesale nor to abandon people to their choices. It’s to act on social structures so as to push social and economic processes in a collectively beneficial direction. Saying ‘that’s people’s choice’ is an utterly spurious load of nonsense. They’d make different choices under different circumstances. It’s not the government’s job to make people’s choices for them but it is the government’s job to oversee the conditions under which people make their choices.
Simple.
Actually Clare, there is very little manufacturing industry in this country. Not the domestic electronics sort, and very little of the motor vehicle sort. When you get down to the nuts and bolts, literally, most of UK manufacturing is assembly of imported parts. Even paying someone minimum wage and working them for 60 hours a week would be too high a labour cost. If you want to pay2 or 3 times the price for a UK designed product where all the parts are made here, then ok. But there are very few.
I imagine companies could do more to keep manufacturing here -in the US Apple, apparently, outsourced to China to save $4 on each I pad -yes, I know this adds up to a lot but often maximisation of shareholder and board member profits takes precedence over social usefulness -this is simply wrong.
As for Lord Turner -he’s right but i don’t respect the man because he is a poacher turned gamekeeper -the banks over reliance on real estate scam has been crescendoing for over 30 years -where were his objections before the crash?
Poachers sometimes have to become gamekeepers
In my early twenties I was quite unaware of the issues on which I campaign
My only defence is so was everyone else
Yes -Richard but THESE people DID know! And he doesn’t have excuse of youth! I have always felt Turner to be a self seeking opportunist; the bouffant hair do has not helped in my estimation of him either! If he’s helping, all well and good -but i doubt he’s an advocate of the Courageous State!
The SMMT would dispute your comment on motor vehicles – explained here:
http://www.smmt.co.uk/industry-topics/uk-automotive-sector/
I walk around Land Rover, and see Bosch; made in Korea and Germany
I walk around Nissan, and see made in Japan.
I walk around Triumph, and see made everywhere except UK.
I see a lot of assembly, little manufacturing.
Jobs coming home?
¨Meanwhile, in China entire cities are built around manufacturing centers. Multiple factories, each complementing the other, are built by the government and these large industrial complexes have become cities onto themselves. Workers do not have homes, but rather are housed in dormitories. Every need but the worker could have is met by the factory. Food, shelter, http://hat4uk.wordpress.com/2014/01/23/uk-employment-analysis-no-signs-of-economic-recovery-just-desperation/medical attention, everything is provided¨
Read the full article: http://www.catholic.org/technology/story.php?id=44500
Now to ONS: http://i44.tinypic.com/28jxw9e.png
(from http://hat4uk.wordpress.com/2014/01/23/uk-employment-analysis-no-signs-of-economic-recovery-just-desperation/)
I do not see an economy based upon cleaning each others backsides as either resurgent or desireable.
New car sales need a look at as well. Alternative fuelled vehicles rose sharply, doubtless because of various subsidies, and the effect of over 300,000 motability vehicles cannot be ignored (especially with the atos[ers] deciding that 3 out of 5 currently disabled are not: disabled that is)
Inventory stacking cannot be ignored either!
Figures mean what you want them to mean. And the right wing is very good at meanings.
Now, where is Ed and the very-slightly-lefter-than-the-righties party?
Oh yes, they´ve got jobs. As time continues to meander along, Ed is continually chasing the tidbits thrown on the ground for him to chase.
It would appear some people have missed this last year.
http://britishfamily.co.uk/
http://www.bbc.co.uk/news/uk-21024336
http://www.bbc.co.uk/news/uk-22031502
Luke-the vast majority of people can’t afford a roof never mind buy British -families like the Bradshaws have a decent income coming in and indulge in a middle class pastime of localism -the idea is good but barely on the list of priorities for most. maybe if the world of finance invested in small businesses we’d get more of this happening.
I have had a question mark over the wisdom of the ‘home owning democracy’ for many years. I am not an economist so I have never been sure of my reasoning, but it seems to me that the impact of the policy is reflected in the ability to hold a strong currency. Unless I’m mistaken higher interest rates attract inward currency investment, creating a stronger Pound.
A strong currency, we are told, makes British goods more expensive abroad. Given, however, the decimation of our primary, secondary and tertiary industries in the 80’s and 90’s it is reasonable to presume that most manufacturers rely, at some point in the supply chain, on imported raw materials or components. A strong currency would make their purchase (and hence the cost of production per unit) cheaper. An intelligent manufacturer would then simply reduce purchase price to reflect that reduction in cost.
When the property rush first started all those years ago I noticed a correlation between the strong Deutschmark and the low rate of home ownership in Germany (it stood for many years at around 13% and even now is still only in the forties) when we already had levels in excess of 50%.
It is risible, I think, for Osborne to describe interest rates as being part of a ‘fiscal macro-economic toolkit’ given to the BoE by his government(channel 4 news last night). Interest rate increases would have the subtlety of an atomic warhead. We know it, they know it. So what else has the Bank got? More QE? Blow the bubble up, boys, blow the bubble up.
As I have already said I am not an economist, so please feel free to correct me.
JohnM
I walk round BMW in Hams Hall and see 400,000 4 cylinder engines per year manufactured for all BMW’s worldwide.
I walk around the new JLR engine manufacturing plant in Wolverhampton which is recruiting 1400 people.
Ford manufacture 1 MILLION engines a year in Dagenham + Bridgend & 80% are exported.
No jobs there, obviously.
BTW – Nissan Sunderland manufactures more cars than the entire Italian car industry & exports 20% of output to Russia.
Hope this helps with your analysis of the UK motor industry.
For once I think you are being objective
We do make things