Rishi Sunak and economics

[wilts rover]

And Cameron & Osborne were elected on a promise to bring the debt down. Where upon they (and Hammond) doubled it.

Boris has the best interests of the country at heart - the bloke who refused to provide free school meals (twice) because 'we couldn't afford it', but gave millions to his friends and cronies, and thinks No Deal is better than a bad Deal whatever the cost in jobs!

[drfchound]

I see that the Labour Party are going to abstain from the vote tomorrow.
I wonder why?

[Filo]

I see that the Labour Party are going to abstain from the vote tomorrow.
I wonder why?

Tomorrow?

[drfchound]

I see that the Labour Party are going to abstain from the vote tomorrow.
I wonder why?

Tomorrow?

Ha, I typed that up last night and can’t have clicked on it until just now.
I have been busy with my loft conversion and am trying to catch up with events on here.
Speed reading lots of it.
Apologies, should have either clicked on it last night or changed it.
Senior moment ?

[BillyStubbsTears]

It's very simple Hound.

They agree with the lockdown. But they disagree with the economic support package. So they cannot in good faith vote for the overall package of proposals.

But

If they voted against, the proposals would be voted down and that would be the worst of all worlds.

What do YOU think they should have done?

[drfchound]

I asked a question, that is all.

[BillyStubbsTears]

So I assume you are happy with the answer?

[drfchound]

So I assume you are happy with the answer?

I will withhold my thoughts on that if you don’t mind.

[BillyStubbsTears]

Is this some new style of discussion that I haven't twigged?

You ask a genuine question. You get a genuine answer. You're asked if the answer suffices. You choose not to reply.

Can't see it catching on, myself.

[Glyn_Wigley]

Why is there an obsession with "balancing the books" though? what country actually does this? macroeconomics isn't the same thing as a household budget.

It's because idiots who don't understand economics (but like to think that they do) actually think like bookkeepers and not like economists.

[big fat yorkshire pudding]

Why is there an obsession with "balancing the books" though? what country actually does this? macroeconomics isn't the same thing as a household budget.

It's because idiots who don't understand economics (but like to think that they do) actually think like bookkeepers and not like economists.

But, it can lead to inflation which may sound fine but may not be.  Imagine 10% inflation the pressure moves to companies to fill that gap in wages which is incredibly difficult.  There are also a number of policies aligned to inflation so just saying we will borrow and inflate our way out of massive hole has much more impact than you realise.

[Campsall rover]

Ok BST just seen your stats. So I am holding my hands up.

To be honest i do not read the newspapers any more.  I just watch the news and political TV programmes and make my own judgments on individual politicians and politics in general.

Starmer comes across as someone who might do a reasonable job if the Labour Party were to be elected next time.
Wilson, Callaghan, Foot & Kinnock were either poor leaders or far too Left wing and they were never going to get my vote. Thought Blair might have been ok but he turned out to be uninspiring and Brown well i never trusted him with the economy when Chancellor or PM. The wrong Milliband was made leader. Our MP Ed Milliband in Don North was too left wing to be elected where as David might have had a chance.

So that left the Conservatives to vote for as i always though they would be marginally better at running the country.
The Liberals were never going to get power and most of the time were unsure what they stood for anyway.
UKIP were far too right wing for me and Farage i would not trust as far as i could throw him.

So there you go. Let us see what Boris and his merry men do with the country post Pandemic. They have a very tough job on.
Maybe I will vote Labour next time. If I think Starmer has a United party to lead and has sensible centre ground policies to offer the country then you never know.
There is always a first time. You never know.

One thing is certain is I have an open mind.
Unlike one or two on this forum.

[Campsall rover]

Why is there an obsession with "balancing the books" though? what country actually does this? macroeconomics isn't the same thing as a household budget.

It's because idiots who don't understand economics (but like to think that they do) actually think like bookkeepers and not like economists.

Have none of our Chancellors done a degree on economics? Hopefully they have.
Do you have one Glyn? You seem quick to call them bookkeepers. Think they might actually know quite a bit about economics.

[BillyStubbsTears]

Thanks for that post Campsall. I'm all for open discussion.

What I've never understood is how the Tories have this reputation for being responsible with the economy. Look at the record over the past 50 years. There have been at least four occasions where Tory Chancellor's implemented policies which were fundamentally in contradiction of basic economic theory, and led to entirely avoidable economic messes.

1972 Anthony Barber massively increased Govt spending in an already vibrant economy. It led to the infamous Barber Boom which resulted in a huge rise in inflation that took years to control.

1981, Geoffrey Howe did the polar opposite. Cut spending and hiked interest rates in the depth of the worst recession since 1930. The economy tanked. Unemployment topped 3 million.

1988, Nigel Lawson gave huge tax cuts in an already booming economy. As with Barber, that resulted in an unsustainable boom, a huge rise in inflation and the inevitable crash and recession of 90/91.

2010 George Osborne's Austerity. The most destructive mistake of them all. Choked off the recovery from the GFC. The economy stagnated for 3 years. Wages had only just got back to 2008 levels when COVID hit.

In all that time, the one Tory Chancellor who did the right thing was Ken Clarke who borrowed and reduced interest rates to get the economy firing again in the early 90s. That set us up for 15 years of decent, solid growth.

Yet the Tories have the reputation for competence.

Regarding Brown, we were the one and only major world economy not to have a recession in 2001/2. We had a decade of sensible growth and a reinvestment in school, health, transport. Then when the GFC struck and the world was pitched into a shocking recession, he led the global effort to coordinate Govt spending to mitigate the worst effects and stop a bad recession becoming a second Great Depression. I've never understood why he is considered a disaster.

[BillyStubbsTears]

Campsall.

Sunak has a 1st class degree in Politics, Philosophy and Economics from Oxford.

That makes his comments in the OP all the more indefensible. He MUST know that they are nonsense, as the guy from the (very right wing) IEA said in the link on the previous page. Which means Sunak is deliberately choosing to mislead people.

[Campsall rover]

1988 Booming economy. Thatcher was PM through out the 80’s

Whether you like or despise Maggy the fact is she turned this country round after tha disaster of Callaghan and the Unions who were trying to run the country.

Yes I know the Miners suffered, Steel workers etc etc. But some very painful decisions had to be made for the long term benefit of the country. We were on the slippery slope in 1979/80 and we had a leader who had the conviction and determination to turn it round. By the late 80’s as you said yourself the country was in i boom.
Agreed Lawson then made a pigs ear of it.

Question are most people in work better off now than they were 40 years ago.

Most people. Yes those on min wage possibly not. Min wage should be at least £10 per hour.

[Axholme Lion]

1988 Booming economy. Thatcher was PM through out the 80’s

Whether you like or despise Maggy the fact is she turned this country round after tha disaster of Callaghan and the Unions who were trying to run the country.

Yes I know the Miners suffered, Steel workers etc etc. But some very painful decisions had to be made for the long term benefit of the country. We were on the slippery slope in 1979/80 and we had a leader who had the conviction and determination to turn it round. By the late 80’s as you said yourself the country was in i boom.
Agreed Lawson then made a pigs ear of it.

Question are most people in work better off now than they were 40 years ago.

Most people. Yes those on min wage possibly not. Min wage should be at least £10 per hour.

The problem with making the minimum wage £10 p/h is that you then need to increase the wages of people currently on £10 who deserve more than minimum wage.

[SydneyRover]

1988 Booming economy. Thatcher was PM through out the 80’s

Whether you like or despise Maggy the fact is she turned this country round after tha disaster of Callaghan and the Unions who were trying to run the country.

Yes I know the Miners suffered, Steel workers etc etc. But some very painful decisions had to be made for the long term benefit of the country. We were on the slippery slope in 1979/80 and we had a leader who had the conviction and determination to turn it round. By the late 80’s as you said yourself the country was in i boom.
Agreed Lawson then made a pigs ear of it.

Question are most people in work better off now than they were 40 years ago.

Most people. Yes those on min wage possibly not. Min wage should be at least £10 per hour.

Thatcher did change things Campsall but frittered away the oil boom money on tax cuts for the already rich instead of investing it in rebuilding the old industrial areas, retooling etc and a future fund for everyone.

[Campsall rover]

1988 Booming economy. Thatcher was PM through out the 80’s

Whether you like or despise Maggy the fact is she turned this country round after tha disaster of Callaghan and the Unions who were trying to run the country.

Yes I know the Miners suffered, Steel workers etc etc. But some very painful decisions had to be made for the long term benefit of the country. We were on the slippery slope in 1979/80 and we had a leader who had the conviction and determination to turn it round. By the late 80’s as you said yourself the country was in i boom.
Agreed Lawson then made a pigs ear of it.

Question are most people in work better off now than they were 40 years ago.

Most people. Yes those on min wage possibly not. Min wage should be at least £10 per hour.

The problem with making the minimum wage £10 p/h is that you then need to increase the wages of people currently on £10 who deserve more than minimum wage.

How do you decide who should get £10 and who should get £11 of £12

The fact is people should get a minimum which is enough to feed their families and pay there utility bills without getting into debt or having to go to food banks.  I would think in 2020 a 40 hr week should equal £400 a week.
One thing the Tories have been good at is increasing the personal allowance by well above the rate of inflation over the last 10 years. I would go further and give it a significant jump to £15.000.
National insurance does though need to start at a fairly low threshold as it currently is. State pensions need to be fully funded.
Everyone in work should be contributing into a work based pension and that should always imo be transferable to a new employer or even transferable into to a personal pension if they became self employed.

There are still many companies who do not offer the statuary Work based Pension and it amazes me that the Government have not got on top of this very unsatisfactory situation.

The Government have found the money to get through this pandemic and therefore should find he money to give substantial increases to Nurses, who are ridiculously under paid for the work they do. 
Teachers too need to feel much more valued as they have one of the most important jobs in any society.
Far too many good teachers are  leaving the profession as they are under paid and under valued and also have to work under some ridiculous pressures put on them to achieve targets. Teaching Children should never just be about targets.

Better wages = better living standards = More consumer spending = more Income tax revenue & more VAT revenue.
Surely that’s a win win situation or am i missing something.

[Campsall rover]

BST have you not been somewhat contradictory.
You have just said the Tories created a boom in the 1980’s and then they started another 15 year period of sustained economic growth from around 1993 to 2008
which Blair continued in his spell as PM.

That does not sound like too bad a record to me.

Any way i am damn sure you and me could do a better job than the lot of them.
At least we live in the real world & not those Ivory Towers in Central London.

Independence for Yorkshire. What do you say. May as well as Scotland will be getting it very soon.
Population of Yorkshire is slightly higher as well.

[Glyn_Wigley]

Why is there an obsession with "balancing the books" though? what country actually does this? macroeconomics isn't the same thing as a household budget.

It's because idiots who don't understand economics (but like to think that they do) actually think like bookkeepers and not like economists.

Have none of our Chancellors done a degree on economics? Hopefully they have.
Do you have one Glyn? You seem quick to call them bookkeepers. Think they might actually know quite a bit about economics.

I wasn't referring to any Chancellors, just as Janso wasn't referring to any in the post I replied to.

[Campsall rover]

Why is there an obsession with "balancing the books" though? what country actually does this? macroeconomics isn't the same thing as a household budget.

It's because idiots who don't understand economics (but like to think that they do) actually think like bookkeepers and not like economists.

Have none of our Chancellors done a degree on economics? Hopefully they have.
Do you have one Glyn? You seem quick to call them bookkeepers. Think they might actually know quite a bit about economics.

I wasn't referring to any Chancellors, just as Janso wasn't referring to any in the post I replied to.

We were talking about the economics of running the country so who were you referring to.

[Glyn_Wigley]

Why is there an obsession with "balancing the books" though? what country actually does this? macroeconomics isn't the same thing as a household budget.

It's because idiots who don't understand economics (but like to think that they do) actually think like bookkeepers and not like economists.

Have none of our Chancellors done a degree on economics? Hopefully they have.
Do you have one Glyn? You seem quick to call them bookkeepers. Think they might actually know quite a bit about economics.

I wasn't referring to any Chancellors, just as Janso wasn't referring to any in the post I replied to.

We were talking about the economics of running the country so who were you referring to.

Idiots who don't understand economics (but like to think they do). Just as I said.

[BillyStubbsTears]

Campsall.

I think there's a misunderstanding here. An economic boom is not something to crow about. It means the economy is overheating and if it's not controlled, it leads to a crash.

Think of it this way. Company X makes widgets for use in a range of consumer goods. They can make 1000 a day and that covers usual demand.

If the economy starts to boom, more people want to buy the consumer goods. So there's more demand for the widgets. The market would like there to be 1500 widgets a day available.

Company X can do one of two things.

1) Keep on turning out the 1000 widgets. But because demand is so high, they can up their prices and let the company who is prepared to pay the highest price buy the 1000. Say Company Y. But that means that the consumer goods that Company Y make are now more expensive. So they out their prices up. So inflation goes up. So workers want higher wages. But that puts up costs across the economy. And because Company X's workers now want higher salaries, the cost of producing widgets goes up. So the have to put their prices up. Vicious circle starts.

2) Company X chooses to expand capacity to produce 1500 widgets a day. But that's expensive. It means a new factory and more new staff. So they take out a big bank loan. Which is fine as long as the higher demand lasts. But if it falls back again, they are faced with laying staff off, mothballing the factory and still having to pay back the loan.


So you REALLY don't want big booms. Because the consequences of big booms are big slumps, for the reasons given in those examples. Either inflation gets out of control, or companies get highly leveraged and a small reduction in demand becomes massively amplified.

In simple terms, steady growth of 3% per year will give you 12% growth over 4 years. Equally, a mad boom of 10% growth for 2 years followed by a recession of -4% growth for two years would give you the same total growth. But the latter is a far worse situation. Because it is tipping firms from expansion to contraction. It's tipping workers from overtime to redundancy[1].

You can look at the numbers. From 1950 to the mid 90s, we had a string of booms and busts. The worst ones unquestionably were under the Tories, but they happened under Labour too. But under Brown, before the GFC which was a totally different problem, growth was nice and steady for 10 years. Precisely what companies and individuals want, so they can plan ahead.


[1] That happened to the firm I worked for after graduating. In 1989-90, you could do as much OT as you wanted,without squaring it with the Directors. I was putting in 55 hours many weeks. By the middle of 1991, when the crash came, the company shrank by half its staff. A couple of colleagues had overstretched themselves on mortgages in the good times and lost their houses when the crash came. THAT was the Lawson boom and bust.

[wilts rover]

Quick explainer of what the current Tory government have said about reducing National Debt - and what has actually happened.

https://twitter.com/ToryFibs/status/1334402345610977281

[selby]

  I bet the Labour Party Lord Mayor of Liverpool knows F*** all about economics, but it looks like he knows how to skim off the top of those that do.

[selby]

  Well Rishi can really count, his wife is worth more than the Queen, and Billy thinks he's thick.

[Filo]

  I bet the Labour Party Lord Mayor of Liverpool knows F*** all about economics, but it looks like he knows how to skim off the top of those that do.

Immediately suspended from the party, unlike a certain Tory MP arrested for serious sexual offences, and hasn’t said a word in months after previously being very outspoken, and still votes in the HoC

[SydneyRover]

  I bet the Labour Party Lord Mayor of Liverpool knows F*** all about economics, but it looks like he knows how to skim off the top of those that do.

You should try and to tune your radio in to the real world selby, your mates can't even be arsed to hide it any more.

Want a multimillion PPE payout from the government? Apparently, all you have to do is befriend a Tory MP

The Tories' 'chumocracy' over Covid contracts is destroying public trust

https://www.independent.co.uk/voices/covid-ppe-contract-johnson-audit-report-b1749301.html

https://www.theguardian.com/commentisfree/2020/nov/21/tories-covid-contracts-public-trust-government

[Janso]

  I bet the Labour Party Lord Mayor of Liverpool knows F*** all about economics, but it looks like he knows how to skim off the top of those that do.

Immediately suspended from the party, unlike a certain Tory MP arrested for serious sexual offences, and hasn’t said a word in months after previously being very outspoken, and still votes in the HoC

You won't get a serious response from the new Minister for Whattabouttery.