The Politics Thread

[Worthy4England]

Sometimes history can teach us a great deal.

A political heavyweight like Roosevelt always claimed he wished he'd injected more money in to the New Deal. Many of our problems are as political as economic.

Maybe this isn't what you're doing, but why do people insist on carping on about the New Deal and 1930s economics as if it's at all relevant to the problems we face today?

And at any rate, all that taught us was that it takes a bloody big war against the Germans to really get things going again...

Have economic principles changed that much that anything that was done successfully previously, is automatically irrelevant?

[thebish]

They were dis-agreeing with you, as you pointed out, it was bollox.

are there voices in your head??

[Worthy4England]

They were dis-agreeing with you, as you pointed out, it was bollox.

are there voices in your head??

Yes. Mine.

How about yourself?

[thebish]

Sometimes history can teach us a great deal.

A political heavyweight like Roosevelt always claimed he wished he'd injected more money in to the New Deal. Many of our problems are as political as economic.

Maybe this isn't what you're doing, but why do people insist on carping on about the New Deal and 1930s economics as if it's at all relevant to the problems we face today?

And at any rate, all that taught us was that it takes a bloody big war against the Germans to really get things going again...

I'm sure LK can have a go at that... but, to return to the original prompt...

do you think deeper, faster cutting will lower public borrowing? If so - after 500 days of coalition government - why is borrowing at unprecedented levels - at levels significantly higher even than they were under the supposedly profligate Labour administration...

[mummywhycantieatcrayons]

Have economic principles changed that much that anything that was done successfully previously, is automatically irrelevant?

Ok, well, firstly, the extent to which the New Deal was actually a success is, I think, not as clear as the conventional wisdom on the point seems to suggest. But I'd need a lot more knowledge at my fingertips than I have to discuss that seriously, so we'll park that.

I'm not suggesting that 'economic principles' have changed, but rather that the economic context is very different.

America in the 30s had enormous potential for sustained growth - lots of room for new technology and processes to increase productivity exponentially, lots of natural resources at home, and not that many big competitors on the world stage.

That potential for growth simply does not exist either here or in the States in 2011. Yes, we have changes in processes and technology that can deliver some growth, but it's mostly wiped out by pressures from the massive emerging, or, rather, emerged economies who can do most of we can do but cheaper. Oh and they're also competing with us for natural resources now when they weren't before. And if we think we're feeling it, Italy has got it even worse...

Anyway, this is the essential truth that we need to adapt to - that rich world growth is harder to come by than ever. And that's why what was sensible in 1930s America does not easily inform what is sensible here and now.

[mummywhycantieatcrayons]

Sometimes history can teach us a great deal.

A political heavyweight like Roosevelt always claimed he wished he'd injected more money in to the New Deal. Many of our problems are as political as economic.

Maybe this isn't what you're doing, but why do people insist on carping on about the New Deal and 1930s economics as if it's at all relevant to the problems we face today?

And at any rate, all that taught us was that it takes a bloody big war against the Germans to really get things going again...

I'm sure LK can have a go at that... but, to return to the original prompt...

do you think deeper, faster cutting will lower public borrowing? If so - after 500 days of coalition government - why is borrowing at unprecedented levels - at levels significantly higher even than they were under the supposedly profligate Labour administration...

Well I have outlined my pessimism around the prospects for growth above, so it seems to me that cutting wasteful spending where we can has to be a priority, and if it can be done now rather than delayed then it should.

I'm just not sure there are many quick wins around at the moment that mean that spending £1 will bring in more than £1.

Of course, it might just be that we're fecked whatever... unfortunately that's a conclusion that a growing number of people are reaching.

[thebish]

Sometimes history can teach us a great deal.

A political heavyweight like Roosevelt always claimed he wished he'd injected more money in to the New Deal. Many of our problems are as political as economic.

Maybe this isn't what you're doing, but why do people insist on carping on about the New Deal and 1930s economics as if it's at all relevant to the problems we face today?

And at any rate, all that taught us was that it takes a bloody big war against the Germans to really get things going again...

I'm sure LK can have a go at that... but, to return to the original prompt...

do you think deeper, faster cutting will lower public borrowing? If so - after 500 days of coalition government - why is borrowing at unprecedented levels - at levels significantly higher even than they were under the supposedly profligate Labour administration...

Well I have outlined my pessimism around the prospects for growth above, so it seems to me that cutting wasteful spending where we can has to be a priority, and if it can be done now rather than delayed then it should.

I'm just not sure there are many quick wins around at the moment that mean that spending £1 will bring more than £1.

Of course, it might just be that we're fecked whatever... unfortunately that's a conclusion that a growing number of people are reaching.

you're probably right on the quick wins... but I wouldn't be at all surprised if in 6months time (maybe less) Georgie rolls out a government spending stimulus package that he suddenly discovers he was going to do all along and don't we remember him promising to do so...

[Worthy4England]

Sometimes history can teach us a great deal.

A political heavyweight like Roosevelt always claimed he wished he'd injected more money in to the New Deal. Many of our problems are as political as economic.

Maybe this isn't what you're doing, but why do people insist on carping on about the New Deal and 1930s economics as if it's at all relevant to the problems we face today?

And at any rate, all that taught us was that it takes a bloody big war against the Germans to really get things going again...

I'm sure LK can have a go at that... but, to return to the original prompt...

do you think deeper, faster cutting will lower public borrowing? If so - after 500 days of coalition government - why is borrowing at unprecedented levels - at levels significantly higher even than they were under the supposedly profligate Labour administration...

Well I have outlined my pessimism around the prospects for growth above, so it seems to me that cutting wasteful spending where we can has to be a priority, and if it can be done now rather than delayed then it should.

I'm just not sure there are many quick wins around at the moment that mean that spending £1 will bring more than £1.

Of course, it might just be that we're fecked whatever... unfortunately that's a conclusion that a growing number of people are reaching.

you're probably right on the quick wins... but I wouldn't be at all surprised if in 6months time (maybe less) Georgie rolls out a government spending stimulus package that he suddenly discovers he was going to do all along and don't we remember him promising to do so...

But we were promised that cutting all that wasteful Labour spending from the Department of Paperclips alone, could run a Western economy for about 15 years?

[thebish]

But we were promised that cutting all that wasteful Labour spending from the Department of Paperclips alone, could run a Western economy for about 15 years?

I'm not getting caught out this time!! now you're Ed balls, right?

[Lord Kangana]

We're definitely f*cked if the Germans stop bailing out Europe. You only have to witness the growing civil unrest in Greece to realise what could happen across the Med if the the money stops coming. I forsee a break down in law and order, and sort of super version of what we witnessed here over summer. That could easily spread across Europe. I've already seen masses of extreme left graffiti in France. Whatever your views on the place, it isn't normal.

As for the New Deal, well the resoning was very much " if we're screwed, we're going down anyway, and cutting won't help that, so why not spend on the off chance it'll work?".

If you have a direct line to DavCam, perhaps you could suggest he follows a policy of regionalism, so for example invest in aerospace technology in the North West, food and drink in the south west, Car Industry in the mids. And f*ck Yorkshire. Its not as daft as it sounds, a Tory Cabinet minister was on the radio the other day accepting that too much emphasis had been placed on London in the last 30 years, and it was imperative to the future of our nation that we sorted that.

[mummywhycantieatcrayons]

As for the New Deal, well the resoning was very much " if we're screwed, we're going down anyway, and cutting won't help that, so why not spend on the off chance it'll work?".

With respect, I don't think that's right.

That was the era of "all we have to fear is fear itself".

Which is to say that their problems were mainly cyclical/confidence based, and the fundamentals were ok.

I don't want to be excessively bearish, but I do we think have more to fear than fear itself.

[Worthy4England]

Have economic principles changed that much that anything that was done successfully previously, is automatically irrelevant?

Ok, well, firstly, the extent to which the New Deal was actually a success is, I think, not as clear as the conventional wisdom on the point seems to suggest. But I'd need a lot more knowledge at my fingertips than I have to discuss that seriously, so we'll park that.

I'm not suggesting that 'economic principles' have changed, but rather that the economic context is very different.

America in the 30s had enormous potential for sustained growth - lots of room for new technology and processes to increase productivity exponentially, lots of natural resources at home, and not that many big competitors on the world stage.

That potential for growth simply does not exist either here or in the States in 2011. Yes, we have changes in processes and technology that can deliver some growth, but it's mostly wiped out by pressures from the massive emerging, or, rather, emerged economies who can do most of we can do but cheaper. Oh and they're also competing with us for natural resources now when they weren't before. And if we think we're feeling it, Italy has got it even worse...

Anyway, this is the essential truth that we need to adapt to - that rich world growth is harder to come by than ever. And that's why what was sensible in 1930s America does not easily inform what is sensible here and now.

The conversation shouldn't be one of whether doing the same thing as in the 30's would result in 200% growth, it's whether doing the same thing as in the 30's would result in 0.05% or 0.1% growth. I don't believe anybody would expect the same growth rate as the 1930's in the US, it's whether there would be some positive impact.

I'm not sure what essential truth we're adapting to, we've historically been at -2.5 to +2.5% growth for decades, generally between 0 and +1% for most of your lifetime. There will always be emerging economies. These present growth opportunities for us (within that corridor of 0 - 2% growth), as well as threats. For one thing, they will all encounter rising inflation at some point, unless they can control their growth. India is currently at about 8% growth & 10% inflation. The inflation has been on a steadily upward spiral for quite a while now. Businesses in my sector are now using alternative locations than India (not at the moment removing what we have there, just not putting as much work over there as we did 15 years ago). Why? Because the employee base over there is moving jobs every 6 months, which causes us a problem. Growing too fast causes it's own problems, as we saw to our cost in the 1980's with boom and bust.

[mummywhycantieatcrayons]

The conversation shouldn't be one of whether doing the same thing as in the 30's would result in 200% growth, it's whether doing the same thing as in the 30's would result in 0.05% or 0.1% growth. I don't believe anybody would expect the same growth rate as the 1930's in the US, it's whether there would be some positive impact.

No it's actually neither of those things - what's important is whether it pays for itself or not (i.e. is it affordable).

[Prufrock]

If it helps, I reckon, and have for a while, that we are utterly DOOOOOOMED. Like mega-f*cked.

[mummywhycantieatcrayons]

If it helps, I reckon, and have for a while, that we are utterly DOOOOOOMED. Like mega-f*cked.

I am now convinced of that too. There is no way out of the Euro crisis, equities are still probably 20% overvalued here, and we are heading for Credit Crunch II: The Sequel.

[Prufrock]

If it helps, I reckon, and have for a while, that we are utterly DOOOOOOMED. Like mega-f*cked.

I am now convinced of that too. There is no way out of the Euro crisis, equities are still probably 20% overvalued here, and we are heading for Credit Crunch II: The Sequel.

The Euro was always going to have to confront the problems of having a single currency within states of hugely differing wealth. Now, with all those other trifling global matters it's fecking Armageddon. We're cutting everything that moves and yet borrowing is still going up! America, if it didn't have enough problems of it's own, is fighting an internal, ideological economic war. Pre-credit crunch, I always liked the idea of Congress being controlled by one party and the President coming from the other. It seemed a nice check. Now it just seems crippling, as nobody can get anything through without massive concessions.

Oh well, at least we aren't Italian.

I'm starting to think it is time to start learning Chinese. Should make this human rights' law fun though!

[Verbal]

The time for China, Turkey and Mexico has come.

I for one welcome our new overlords.

[mummywhycantieatcrayons]

The Euro was always going to have to confront the problems of having a single currency within states of hugely differing wealth.

We'll make a Tory of you yet...

[mummywhycantieatcrayons]

We're cutting everything that moves and yet borrowing is still going up! America, if it didn't have enough problems of it's own, is fighting an internal, ideological economic war. Pre-credit crunch, I always liked the idea of Congress being controlled by one party and the President coming from the other. It seemed a nice check. Now it just seems crippling, as nobody can get anything through without massive concessions.

Obama... does he have the skills of intrigue, dealmaking and realpolitik that a great leader needs? Perhaps it's an impossible situation for anybody, but it's difficult to look at American politics and not think he's been a divisive influence.

[Hoboh]

As for the New Deal, well the resoning was very much " if we're screwed, we're going down anyway, and cutting won't help that, so why not spend on the off chance it'll work?".

With respect, I don't think that's right.

That was the era of "all we have to fear is fear itself".

Which is to say that their problems were mainly cyclical/confidence based, and the fundamentals were ok.

I don't want to be excessively bearish, but I do we think have more to fear than fear itself.

Your right you know, the ones we really should fear are all the monoply toady money men and credit raters whom it would seem are out ofthe scope of any governments control. Their balance sheets of make believe cash piles should be shown to be what they are, worthless pieces of paper but powerful enough to ruin whole countries, paper nukes! Then we can deal with the reality of a gigantic ecconomical cock up.