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.
Why is the mainstream media so bad?
Writing in general exists to either entertain, inform, explain, describe, argue, persuade and advise, or for no particular reason at all; quite often writing is just absent-minded scribble. The media in all its forms performs these roles every single day.
The Westminster Skeptics quite understandably see the media as a tool for informing the public, explain the facts and describe the situation. They promote an evidence-based approach and critical thinking in the areas of policy, media, and legal reform, and I enjoyed going along to their most recent meeting on Monday night.
However, I would argue that most people see the media as entertainment. continue reading… »
Snow joke: GDP shrinks more than expected
Fresh from the Office of National Statistics:
UK gross domestic product (GDP) in volume terms decreased by 0.6 per cent in the fourth quarter of 2010, revised down from a decrease of 0.5 per cent published in January.
This was not due exclusively to snow either, although it clearly had an impact:
The disruption caused by the bad weather is likely to have contributed approximately 0.5 percentage points of the 0.6% decline, that is, if there had been no disruption, GDP would be showing a slight fall.
In the face of depressed demand, and a still weakened economy the Tories desperately need a Plan B.
Sunny adds: This is significant also because Tories expected the -0.5% figure to be quite conservative. But its worse than expected now.
Update: Ed Balls has sent out a statement saying:
These are disappointing figures which confirm that the recovery stalled and the economy contracted at the end of last year, even once the effects of the snow have been taken into account.
Of course we should always treat one quarter’s figures with caution, but it is not cautious for the Treasury to plough on regardless. George Osborne was complacent in declaring before Christmas that he had saved the economy and secured the recovery. And he is being complacent now in refusing to accept that his choice to cut too deep and too fast is holding back our economy and putting jobs at risk.
2011 should be the year when the British economy grows strongly and the recovery is secured. Yet the early signs are that the Tory-led Government’s reckless decision to abandon Labour’s plan to halve the deficit over four years has seen the economy take a turn for the worse. We now face the worst of all worlds – unemployment and inflation both rising, growth stalled and consumer confidence collapsed. And this is before the Government’s extreme fiscal tightening really starts to bite.
The Chancellor appears to be in denial. It is simply not credible for George Osborne to casually dismiss these figures once again and blame the wrong kind of snow rather than the wrong kind of economic policy. If the economy does not grow strongly this year – and make up the ground we lost at the end of 2010 – the Chancellor will have failed his first major test. He should change course before it’s too late.
Where’s the evidence Aaron Porter was racially abused?
Protests took place yesterday against the Tory led coalitions higher education cuts and fee hikes.
Throughout the campaign against the cuts, Aaron Porter has been a poor representative of the student body politic. Somewhat dithering, sometimes anonymous and something of an establishment lackey he is not a popular man.
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Cheney to face charges of corruption in Nigeria
Well if ever a story made me rub my hands with childish glee, this would be one.
Notorious warmonger Dick Cheney is to be charged with corruption in connection to his time at Halliburton – a company which made rather a lot of money from Dick’s notorious warmongering.
Reported by the BBC today:
Nigeria’s anti-corruption agency is to charge former US Vice-President Dick Cheney over a bribery scandal that involves a former subsidiary of energy firm Halliburton.
And from the Huffington Post:
Nigerian authorities will charge former Vice President Dick Cheney over a bribery scandal that is alleged to involve Halliburton, BusinessWeek reports. An arrest warrant “will be issued and transmitted through Interpol,” said Godwin Obla, the prosecuting counsel at the Economic and Financial Crimes Commission in Nigeria.
My little value added on this would be a reference to this extradition treaty between Nigeria and the US that entered into force in June 1935. Who wants to bet it will be enforced? Anyone?
Do Tories not believe in social mobility any more?
He may be a bastard, a class warrior, or a prophet, in any case, but what soon-to-be-Lord Flight said is certainly open to interpretation.Dave Osler hears tones of Keith Joseph’s eugenicism, something which cost him a chance to be Tory leader, Lenin does the same. Chris sees the class hatred, but somewhat excuses Flight, because in a way he is correct, if you change someone’s incentives, their actions will likely change.
What surprised me is that someone on the alleged right has a problem with poor people breeding (The upper classes produce heirs, the middle classes have families, the lower orders breed). This behaviour seems to rather give the game away as far as social mobility is concerned.
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Could a Flat Tax could make Britain a more progressive place?
Everyone knows that Flat Taxes are nasty regressive things associated with the Adam Smith Institute, the reactionary-capitalist-pig-dog-enemy-of-the-people Tim Worstall and the ex-communist world.
What most people don’t know is that a flat income tax is much more progressive than the income tax which we currently charge people, as I’ll show below.
The conference that says the earth is flat!
This is a book that exists. This is a book that exists and is not a joke.
This is a book that says that “Galileo Was Wrong: The Church Was Right” and that the Earth is at the centre of the Universe.
There’s a conference too!
Sometimes I have so much faith in humanity, but times like these I wonder how we’ve managed to survive these 6014 years.
Sunny adds: Perhaps the BBC can invite these guys over for a discussion to present both sides of the debate, as they frequently do with Global Warming coverage.
Does more equality mean lower growth? Does that matter?
I quite like the idea of humanity progressively getting richer. By that I mean continuing increases in productivity being used to make and do more stuff from fewer resources.
But I also like the idea of a more equal society. What if the two of these are at odds with one another?
A price worth paying, perhaps? Jimmy Reid said that he was “prepared to sacrifice a margin of efficiency for the value of the people’s participation.” And many on the left echo this statement.
continue reading… »
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» We’re turning The Spirit Level into a film: help us in that goal
» I love the counter-productive attitude of right-wing commentators
» Watch out for the TPA’s report arguing for more cuts tomorrow
» The resurgence of bigoted conservatism in Ireland
» What’s the point of being ‘British’?
» The tragedy behind the Sam Hallam case
» Will JP Morgan be able to walk away from billion dollar losses?
» Labour is now even more reliant on left-wing voters
» We need the minimum wage for under-21s to be raised
» Has Liam Byrne discovered his conscience over disability benefits?
» Why the jobs crisis is far worse than headline figures
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