No Brexit Extension

[drfchound]

Anyone who voted Tory in the last election should hang their heads in shame foisting this lot of incompetents on us!

In your opinion.
I didn’t vote Tory by the way.

Just curious, which of the current government, Sunak aside, looks vaguely competent to you?

About as many as there are in each of the other Parties.

[drfchound]

Hound.

We went through this in March.

I made a bet that no-one on the Labour side would criticise Sunak for massively increasing the debt because it was correct economics.

Have you heard anyone make that criticism on the Labour benches?

Compare and contrast with the shameful, shameless, wrong and deeply damaging line that the Tories took in 2009, screaming Deficit Deniers when Labour (correctly) ran huge deficits in response to the GFC.

I suspect your gut reaction will be that I'm playing politics. But I'm not. If that was my intention, why would I support what Sunak has done to date. Just stop and compare the two cases. In both cases the Chancellor did EXACTLY the textbook economic thing. In only one, the Opposition were a disgrace.

I will wait and see.
There is no doubt in my mind that somewhere down the line that someone from the Opposition will throw the  spiralling ND back at the current government and blame them for it.

[BillyStubbsTears]

Hound.

There IS a perfectly valid criticism to be levelled at the Tories on that score, and I do expect Labour to use it. But it's not the one you are suggesting.

Back in 2010, anyone who knew anything about economics knew that Osborne's plan to get the deficit under control through Austerity was bullshit.

He said he'd cut Govt spending and balance the books by 2015.

But economics doesn't work like that.

Deficits get large during recessions when Govt income (taxes) collapse but Govt spending (NHS, schools, defence etc) has to go on.
 
The way you correct that is by getting the economy firing again, so people and companies are making money and paying taxes.

If you cut Govt spending in a recession, as Osborne idiotically did with his Austerity, you depress the economy. So tax income stays low. And you can never  cut hard enough to balance the books because every spending saving depresses the economy further and reduces tax income.

So if course, Osborne never got close to balancing the books by 2015. But Austerity continued. And he said he would balance the books by 2018.

He didn't and he was gone by then. Hammond replaced him and continued Austerity. And said he'd balance the books by 2020.

Which we didn't of course.

And now he's gone. And prior to COVID, the Treasury was saying we'd balance the books by 2025. Or maybe 2030 if we left the EU with no deal.

This has been spectacularly bad economic management. And it was all predicted in 2010.

So yes, we hit the COVID crisis with Govt finances far worse than they should have been. And it is perfectly valid to shout criticism on that issue.

But I will categorically guarantee that there'll be no policy from Labour to criticise the Tories for running up debt in order to protect the economy from COVID. Come back and re-visit this issue periodically. I suspect you'll have to question your "they're all as bad as each other" stance.

[drfchound]

How can YOU categorically guarantee that Labour won’t criticise the government about this in future?

Also, it always amazes me how you know so much more about how to run the economy that the Tory government.
Really impressive.

Oh, and I notice that you didn’t comment on whether Sunak took the decision himself to introduce the furlough scheme or whether he took instructions from Johnson.

[SydneyRover]

Why don't you point out something the tories have done which has been good for the country over the past 10-11 years hound, look on the bright side, give us something to build on?

[BillyStubbsTears]

Hound.

From experience. I'm making a predicition and emphasising how sure I am about it. I'm leaving myself open to ridicule if I'm wrong, but I'm as sure as I can be about anything that I won't be. Like I said, come back in a year or two and see who is right. And if I am, will you please stop this "they are all as bad as each other" line?

As for my knowledge, I read widely on the history of economic thinking. I'm not an expert on economics, but I read those who are and that's what shapes my opinions. How do you come to your opinions?

You will not find a serious economist anywhere who thinks that the Barber Boom or the Lawson Boom were anything other than catastrophic misunderstandings of economics. There WERE a few prominent economists who gave intellectual underpinning to Austerity and Osborne used to quote them aggressively.

There was a vigorous debate in 2009/10 between the majority who believed in the standard model (that attempting to cut the deficit in a recession was dangerously wrong-headed) and a small but vocal few who reckoned they had found a new theory. The key ones there were Kenneth Rogoff and Carmen Reinhart at Harvard University, who studied the economic performance of countries with high debt. They claimed to have found clear evidence that countries whose debt-to-GDP ratio went above 90% had seriously weaker economic futures. Since our debt to GDP ratio was heading that way, Osborne took this as a green light to do what they really wanted to do anyway - cut Govt spending. He refused to listen to conventional economic opinion that doubted Rogoff and Reinhart's findings. Here he is approvingly quoting R&R in a speech just before the 2010 election, justifying Austerity.
https://conservative-speeches.sayit.mysociety.org/speech/601526

As Ken Rogoff himself puts it, "there's no question that the most significant vulnerability as we emerge from recession is the soaring government debt. It's very likely that will trigger the next crisis as governments have been stretched so wide."

The latest research suggests that once debt reaches more than about 90% of GDP the risks of a large negative impact on long term growth become highly significant.

...We are forecast to break through 90% of GDP in just two years time.

Osborne won the 2010 election with that line. And then instigated the most savage cuts in public spending since the early 1980s. NHS funding froze when it needed to be rising 3-4% a year to keep up with the ageing populaton. Shamefully, school spending was slashed. Most stupidly of all, Govt investment in capital expenditure on roads, rail, housing, IT etc was cut beyond the bone. And the economy flatlined. Real wages collapsed and have only just got back to pre-2008 levels. And that unleashed a the torrent of (justified) anger that we have seen build over the last decade, that Farage directed so skillfully in the wrong direction.

Anyway. Back to R&R. You know what happened next? (This would be beyond hilarious if the consequences were not so disastrous.) A year or two later, a young, unknown PhD student was trying to check R&R's findings and he couldn't get his numbers to match theirs. So he e-mailed R&R and asked if he could get access to their data and calculations. (Because that's how science works - if one person says X is true, it needs to checked by other people and confirmed.) R&R sent him their Excel spreadsheet. And when he looked at it, he says he could not believe her eyes and had to get several other people to double check it.

R&R had made an error in their spreadsheet. They'd not calculated the data correctly. They had taken an average of the economic performance of countries after having high debt, but they'd not included all the data in that average. They'd missed out several who had very GOOD economic performance. When the error was corrected, there WAS a relationship between debt and economic performance, but it was the other way round! Countries that had high debt had BETTER economic performance!

There was uproar in the economics profession. The ones who had spoken out against Austerity were utterly vindicated. No-one now serious talks about Austerity as a viable way out of debt.

So Osborne ditched Austerity, right?

What do you reckon?


PS: Don't trust my word. Here's a fuller account of the story. Utterly shameful, the damage that this did.
https://theconversation.com/the-reinhart-rogoff-error-or-how-not-to-excel-at-economics-13646

[BillyStubbsTears]

Oh aye. And I haven't got a clue whether Sunak was directed by Johnson. I've not expressed any opinion on that so I've no idea why you are asking me.

[Not Now Kato]

Looks like we've missed another rather important milestone....
 
https://twitter.com/i/events/1301551546510061570
 
 
Brexit - the gift that keeps giving!  When will you leavers admit you got it wrong?

[drfchound]

Oh aye. And I haven't got a clue whether Sunak was directed by Johnson. I've not expressed any opinion on that so I've no idea why you are asking me.

I’m asking you because you haven’t expressed an opinion on it, if you had done I wouldn’t have asked.

[BillyStubbsTears]

And yet more lefties playing politics over Brexit

Sorry, my mistake...serious businesspeople tearing their hair out over the the Govt's handling of Brexit.

https://www.bbc.co.uk/news/uk-54021421

[BillyStubbsTears]

Oh aye. And I haven't got a clue whether Sunak was directed by Johnson. I've not expressed any opinion on that so I've no idea why you are asking me.

I’m asking you because you haven’t expressed an opinion on it, if you had done I wouldn’t have asked.

Right. So you ignore the substantive points about economics, question why I think I'm so clever, then ask me to comment on something I have zero interest in?

[SydneyRover]

Looks like we've missed another rather important milestone....
 
https://twitter.com/i/events/1301551546510061570
 
 
Brexit - the gift that keeps giving!  When will you leavers admit you got it wrong?

Looks like they've passed their use by date?

[drfchound]

Oh aye. And I haven't got a clue whether Sunak was directed by Johnson. I've not expressed any opinion on that so I've no idea why you are asking me.

I’m asking you because you haven’t expressed an opinion on it, if you had done I wouldn’t have asked.

Right. So you ignore the substantive points about economics, question why I think I'm so clever, then ask me to comment on something I have zero interest in?

Not at all, I didn’t respond to your economics essay because I can’t argue against any of the points you made as you are always right (no pun there).
It just amazes me how much more you know that the Chancellors of the past.
Truly.
I asked you about the Sunak/Johnson thing because you always have a point of view on anything to do with politics, especially on the economics side of things.
I suspect though that Johnson probably did make the decision and asked Sunak to do the figures but that you are reluctant to give BJ any credit.

[BillyStubbsTears]

Hound.

I'm not "reluctant to give Johnson credit". I have no idea and no way of knowing who took the decision. For what it's worth, given that Sunak has an economics background and Johnson has a notorious lack of interest in the detail of anything other than his career, if I were forced to guess I'd say it was Sunak who drove this, but I genuinely don't know.

Regarding the issue of knowing more than previous Chancellors, I'm not sure what to say. Other than that the four egregious mistakes I pointed out last night by Tory Chancellors over the past half century, were ALL called out AT THE TIME as mistakes by prominent economists. So the question is not whether I know more than Tory Chancellors, it's whether world renowned macroeconomists (who I read) know more than the Tory Chancellors. By the way, you too could read them. There's nowt special about me.

Who would you prefer to believe on economics? Eminent professors from Oxbridge who have spent their life studying the theory and history of macroeconomic policy? Or Osborne (failed journalist and Tory party worker before entering politics) Lawson (navy officer and journalist - now a hired hand by the petrochemical industry to scuttle round the world denying climate change), Howe (Army officer and QC) or Barber (Army officer and lawyer)?

[selby]

  Billy, Kato and Syd at Hound, bloody worried about Glyn, where the hell is he.

[ravenrover]

I don't get this love affair with Sunak, surely he is just the mouthpiece for all the civil servants at the Treasury. It's not like he comes up with all these ideas himself

[Filo]

Sunak will abolish the Pension triple lock, because of Covid average earnings next year are predicted to rise by up to 25%, meaning that in April 2022 there is a potential 25% rise in the state pension, no way will a Tory Govt allow that, so they’ll abolish the triple lock, in reality it was n’t a triple lock at all was it

P.S. keeping the triple lock was a Tory manifesto pledge

[drfchound]

Sunak will abolish the Pension triple lock, because of Covid average earnings next year are predicted to rise by up to 25%, meaning that in April 2022 there is a potential 25% rise in the state pension, no way will a Tory Govt allow that, so they’ll abolish the triple lock, in reality it was n’t a triple lock at all was it

P.S. keeping the triple lock was a Tory manifesto pledge

Where has it been said that wages will rise by 25% Filo?

[Filo]

Sunak will abolish the Pension triple lock, because of Covid average earnings next year are predicted to rise by up to 25%, meaning that in April 2022 there is a potential 25% rise in the state pension, no way will a Tory Govt allow that, so they’ll abolish the triple lock, in reality it was n’t a triple lock at all was it

P.S. keeping the triple lock was a Tory manifesto pledge

Where has it been said that wages will rise by 25% Filo?

https://inews.co.uk/news/uk/state-pension-triple-lock-sunak-pensions-manifesto-pledge-541947

[Janso]

Anyone who voted Tory in the last election should hang their heads in shame foisting this lot of incompetents on us!

In your opinion.
I didn’t vote Tory by the way.

Just curious, which of the current government, Sunak aside, looks vaguely competent to you?

About as many as there are in each of the other Parties.

Perhaps, though they're not in Government are they? It doesn't really answer my question.

[drfchound]

Sunak will abolish the Pension triple lock, because of Covid average earnings next year are predicted to rise by up to 25%, meaning that in April 2022 there is a potential 25% rise in the state pension, no way will a Tory Govt allow that, so they’ll abolish the triple lock, in reality it was n’t a triple lock at all was it

P.S. keeping the triple lock was a Tory manifesto pledge

Where has it been said that wages will rise by 25% Filo?

https://inews.co.uk/news/uk/state-pension-triple-lock-sunak-pensions-manifesto-pledge-541947

An artificial increase though Filo.
Not everyone was furloughed either were they?

[Glyn_Wigley]

Sunak will abolish the Pension triple lock, because of Covid average earnings next year are predicted to rise by up to 25%, meaning that in April 2022 there is a potential 25% rise in the state pension, no way will a Tory Govt allow that, so they’ll abolish the triple lock, in reality it was n’t a triple lock at all was it

P.S. keeping the triple lock was a Tory manifesto pledge

Where has it been said that wages will rise by 25% Filo?

https://inews.co.uk/news/uk/state-pension-triple-lock-sunak-pensions-manifesto-pledge-541947

It says 2.5%, not 25%.

[drfchound]

Sunak will abolish the Pension triple lock, because of Covid average earnings next year are predicted to rise by up to 25%, meaning that in April 2022 there is a potential 25% rise in the state pension, no way will a Tory Govt allow that, so they’ll abolish the triple lock, in reality it was n’t a triple lock at all was it

P.S. keeping the triple lock was a Tory manifesto pledge

Where has it been said that wages will rise by 25% Filo?

https://inews.co.uk/news/uk/state-pension-triple-lock-sunak-pensions-manifesto-pledge-541947

It says 2.5%, not 25%.

The article says “when employees return to work and start receiving their full pay again, average earnings will receive a sharp,  albeit artificial, rise of 25%”.

[scawsby steve]

I don't get this love affair with Sunak, surely he is just the mouthpiece for all the civil servants at the Treasury. It's not like he comes up with all these ideas himself

In that case Raven, you'd surely have to say the same about all the good Labour Chancellors of the past, including Dennis Healey and Gordon Brown?

[BillyStubbsTears]

Denis Healey, certainly.

It quite possible that there was something approaching a coup d'etat at the Treasury in 1976. There's that long-established idea that Labour bankrupted the country and had to go cap in hand to the IMF for a loan to bail us out.

What is rarely said in the media (I cannot begin to imagine why...) is that the numbers that the senior Treasury officials gave to Healey to convince him that Labour had spent up were wrong. The Govt's financial position was nowhere near as bad as it appeared. And we didn't actually need the IMF bail out - we never called on it, just went through the humiliation for Labour of having to go on our knees and ask for it.

And that humiliation has stuck. People still refer to Labour bankrupting the country in 1976.

Healey was convinced afterwards that the numbers were deliberately doctored by the Treasury officials to force Labour into cutting spending, and possibly to deliberately politically harm Labour in the eyes of the electorate.

[Janso]

I read a while ago that Sunak is pretty hands on as Ministers go.

[Filo]

Sunak will abolish the Pension triple lock, because of Covid average earnings next year are predicted to rise by up to 25%, meaning that in April 2022 there is a potential 25% rise in the state pension, no way will a Tory Govt allow that, so they’ll abolish the triple lock, in reality it was n’t a triple lock at all was it

P.S. keeping the triple lock was a Tory manifesto pledge

Where has it been said that wages will rise by 25% Filo?

https://inews.co.uk/news/uk/state-pension-triple-lock-sunak-pensions-manifesto-pledge-541947

An artificial increase though Filo.
Not everyone was furloughed either were they?

Artificial or not thats the figure they’ll use for the pension increase

[drfchound]

Possibly use.

[Filo]

Possibly use.

You are arguing for arguings sake, the figure they will use if the triple lock is not abolished will be the rise in average earnings, whatever that may be, but it is currently forecast to be 25%

[drfchound]

Possibly use.

You are arguing for arguings sake, the figure they will use if the triple lock is not abolished will be the rise in average earnings, whatever that may be, but it is currently forecast to be 25%

No I am not Filo.
Sunak clearly says (according to the article anyway) that he can’t comment on future policy.
There is the possibility that given the very unusual circumstances that an adjustment could be made to balance out the very unusual circumstances.

Unless you can categorically guarantee that your suggestion will be used.