Have Labour realised the election is more than three years away?
I don’t think Labour really know that the game has changed. The move to fixed term parliaments means Ed Miliband find themselves in a totally different position to someone like Cameron circa 2005 or Blair in 1994.
In 2005 Cameron suspected the next election wouldn’t be for five years – and he turned out to be right. But he nearly had to fight an election in 2007 against a newly inaugurated Brown.
This meant that Cameron spent a lot time and effort trying to appear electable, trying to appear “in-touch” by visiting the arctic, liberal by hugging hoodies and as a better heir to Blair than Brown could ever be.
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Why we should support QE (or printing money)
Printing £75bn does not sound like a plan to make us all richer. It sounds like a plan to turn us into Zimbabwe.
But last week Mervyn King, Governor of the Bank of England, announced that is exactly what he will be doing. When complete, the Bank’s Quantitative Easing, or QE, programme will have seen £275bn leave the printing presses, nearly £5000 for every person living in the UK.
The Bank’s actions appear odd, even dangerous, only because of the rarity and extremity of our situation.
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Printing money is okay – we do it all the time!
A lot of people get very worried by the Bank of England printing money. We can trace this line of thought back to the great political economists of the nineteenth century like JS Mill, but it finds itself common on the left and right these days.
You can print yourself into hyperinflation, or even accelerating inflation which can eat into living standards and cloud relative prices. But you can find yourself in deflation by failing to print enough. It is this second problem we have been closer to right now.
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Deportation of gay Ugandan halted
Despite being “obviously gay”, and suffering post-traumatic stress disorder from his treatment in Uganda, until two weeks ago Robert Segwanyi was to be deported.
This has now been halted ‘due to complexity and merits of the case’ and the dangers Robert would face were he to be deported to Uganda, home to the infamous “Kill the Gays” Bill (read the full e-mail from LGBT Asylum News here).
The depth of homophobia in Uganda has been well documented. At the time the deportation was ordered the UK Government were still denying the danger faced by gay deportees to Uganda.
This advice was changed in April to reflect the real situation in Uganda but Robert’s deportation was shockingly not halted.
Even though the poor country has also been threatened with having aid payments slashed if moves to impose the death penalty for homosexuality were not stopped, absent the terrific campaign led by LGBT News, Robert would have been deported to Uganda. (I would like to offer a personal thanks to my MP Rushanara Ali, who contacted the Home Office expressing her concern less than 18 hours after I brought this to her attention).
He was released from detention on the 5th of September, with no reason given.
He has since been informed that ‘due to complexity and merits of the case’ he will be allowed to lodge a fresh claim with a right of appeal.
He is by no means now safe, but he does have a court date due on the 2nd October and it is hoped sanity will prevail.
Even looters with Blackberrys can be ‘poor’
Many of this week’s riots have been organised by Blackberry’s Blackberry Messaging Service (BBM). This allows for anonymised, tough to trace messages to be sent for free. It seems this service has been used to coordinate and direct the mayhem that has seen London’s worst violence in decades.
A lot of people seem to think that this means that arguments that the rioters are driven in part by poverty to be silly.
“How can you be poor when you own a Blackberry?!” they cry.
Stock markets plunge over fears for Italy
Fears for the global economy have intensified further following lacklustre growth from Italy and growing fears of contagion in Europe’s periphery. Here are some graphs from the FT.
Stocks are way down. This does not augur well for growth. The UK’s major trading partners are all in Europe, so our stocks have taken a major hit too.
Investors are also fleeing to safety, interest rates on even sclerotic UK and dysfunctional US government debt are down.
These governments can borrow cheaply than last week or last month, not because they are well run (have you seen George Osborne?), it is because they are less of a basketcase than many others. We’re seeing a flight to safety.
As Duncan highlights, BNY Mellon has recently even started charging people to store money there, so worried are investors.
The Bank of England, Federal Reserve and European Central bank need to act quickly to stem the market’s (and my) panic. They need to reaffirm a commitment to providing liquidity if it is needed and they need to commit to reflating the core Western economies so they can deleverage and expand more easily. I’m getting that 1937/2008 feeling again.
Even MigrationWatch think Maurice Glasman is over the top
Maurice Glasman recently called for a moratorium on all migration to the UK, as part of his Blue Labour project. Sir Andrew of Migration Watch UK called this “over the top.”
Yeah, they of “as seen in the Mail and Express” fame, oft also seen spurting bile against migrants. They think he is being “over the top.
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Want more reasons why the financial sector is bad for us?
First, from Felix Salmon:
File under “things you never knew the Fed did during the financial crisis”: an $80 billion loan scheme known as ST OMO, which was so obscure that even Barney Frank had no idea it existed when he required the Fed to turn over its lending data in his Dodd-Frank bill.
These loans were insanely cheap — the interest rate on them was as low as 0.01%, even as the Fed’s main bank window was charging 0.5%. Ivry has looked at these charts very carefully, and by measuring how tall the bars are he’s worked out how much money each bank borrowed at any given time; Credit Suisse topped out at $45 billion, for instance.
So much for Walter Bagehot’s advice to lend freely at a penalty rate! Banks get into trouble and receive secret loans. Sods.
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Two reason the Tory ‘growth strategy’ is likely to hurt
Sunny’s initial reaction to the Bank of England May Inflation Report is logical, the Tories ‘growth strategy’ isn’t working because:
…there isn’t much demand or household confidence in our economy. And why might that be? Thanks to Osborne’s massive spending cuts.
I’m cool enough to have just watched a recording of press conference.
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Is the financial sector bad for Britain?
Following on from a series of posts recently by me on the financial sector, VoxEU has published an article supporting the broad thrust of my argument; finance is too big, too powerful and needs to be shrunk.
Our results show that the marginal effect of financial development on output growth becomes negative when credit to the private sector surpasses 110% of GDP. This result is surprisingly consistent across different types of estimators (simple regressions and semi-parametric estimations) and data (country-level and industry-level).
The threshold at which we find that financial development starts having a negative effect on growth is similar to the threshold at which Easterly et al. 2000 find that financial development starts increasing volatility.
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» Why Quantitative Easing doesn’t make common sense
» Barclays was also bailed out – Diamond doesn’t deserve a bonus
» Ten myths about private rented housing
» Even on the left, morality has its limits
» The NHS bill could be a Waterloo moment for the govt
» Ken Livingstone and gay rights – it just isn’t an issue
» Abu Qatada deportation: what about our principles?
» New study shows a Robinhood tax would boost growth
» In defence of Sky News’ re-Tweeting ban
» Another reason to continue banker bashing
» An attack on the wind industry is an attack on UK jobs
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