The banker loving, baby-eating Tory party thread (regenerated)

[Stevo985]

12 hours ago, LondonLax said:

You do realise if inflation falls back to 3% the prices are still rising don’t you? Just not as fast as 10%?

For it to be a ‘huge bonus’ you’d need deflation, i.e. prices to go down to what they were before the 10% inflation levels. 

This. 
 

there’s no magical baseline that everything reverts to when inflation goes down. We never get that 10% back. 
 

Things keep increasing, just at a slower rate

[Stevo985]

5 minutes ago, tinker said:

So over two years prices will have gone up 13% 

More than 13. It compounds

[bickster]

24 minutes ago, Stevo985 said:

More than 13. It compounds

13.3% - Yes I'm Sad

[Stevo985]

9 minutes ago, bickster said:

13.3% 

Exactly

[MakemineVanilla]

According to Nobel Prize winner Milton Friedman, there is only one cause of inflation and that is government.

[KentVillan]

On 12/01/2023 at 10:44, MakemineVanilla said:

According to Nobel Prize winner Milton Friedman, there is only one cause of inflation and that is government.

Which is transparently wrong, of course. You can easily find examples that contradict his argument. Natural disasters can damage crop harvests or affect supply of raw materials. Blaming government for everything that goes wrong in the world, and praising markets for everything that goes right, is dogmatic commitment to a belief system, not an empirically grounded analysis.

[KentVillan]

Continuing previous post, you could blame supply chain issues on global govt handling of Covid or the Russia / Ukraine / NATO / etc govts handling of war in Ukraine, but ultimately these are external shocks that the UK govt had little control over - in effect, natural disasters.

Just hard to make the argument that it all comes down to monetary policy / fiscal policy / oversized state, unless that’s your personal obsession.

You can say it’s *mainly* a domestic policy issue, and then maybe you have a leg to stand on, but all this binary either/or nonsense is a kind of fundamentalism.

[MakemineVanilla]

33 minutes ago, KentVillan said:

Which is transparently wrong, of course. You can easily find examples that contradict his argument. Natural disasters can damage crop harvests or affect supply of raw materials. Blaming government for everything that goes wrong in the world, and praising markets for everything that goes right, is dogmatic commitment to a belief system, not an empirically grounded analysis.

So how would you explain the difference in inflation between Germany and the UK, after the "oil shock" of the 1970s?

They were both subjected to the same tripling of the price of crude but Germany averaged inflation of 5% and the UK hit 25%, same crisis but vastly different outcomes.

[bickster]

22 minutes ago, MakemineVanilla said:

So how would you explain the difference in inflation between Germany and the UK, after the "oil shock" of the 1970s?

They were both subjected to the same tripling of the price of crude but Germany averaged inflation of 5% and the UK hit 25%, same crisis but vastly different outcomes.

That very question backs up exactly what @KentVillan was saying. External cause, not a government cause. Neither the UK nor Germany started the Yom-Kippur War. How the two governments dealt with that has nothing to do with the trigger for inflation which is what was being discussed.

[KentVillan]

39 minutes ago, MakemineVanilla said:

So how would you explain the difference in inflation between Germany and the UK, after the "oil shock" of the 1970s?

They were both subjected to the same tripling of the price of crude but Germany averaged inflation of 5% and the UK hit 25%, same crisis but vastly different outcomes.

Government action can exacerbate or mitigate the impact of exogenous shocks. That doesn't mean all inflation is caused by government.

West Germany was the richest economy in Europe (and the 3rd biggest in the world) at the time, so it had some inherent advantages. The oil shock was still a major economic and political challenge, but West Germany had resources that some other governments didn't have to tackle that head on, and also avoided making some of the mistakes on price controls that exacerbated the crisis elsewhere.

But as I said, there's a difference between saying "governments often make inflation worse" and "governments always cause inflation".

[MakemineVanilla]

53 minutes ago, KentVillan said:

Government action can exacerbate or mitigate the impact of exogenous shocks. That doesn't mean all inflation is caused by government.

West Germany was the richest economy in Europe (and the 3rd biggest in the world) at the time, so it had some inherent advantages. The oil shock was still a major economic and political challenge, but West Germany had resources that some other governments didn't have to tackle that head on, and also avoided making some of the mistakes on price controls that exacerbated the crisis elsewhere.

But as I said, there's a difference between saying "governments often make inflation worse" and "governments always cause inflation".

I think a large proportion of the UK's 1970s inflation was created by the government(s).

Reginald Maudling the Tory chancellor implemented a "dash for growth" budget in an attempt to create an over-ambitious growth of 4%, this ultimately led to a balance of payments deficit, which forced Labour to devalue sterling, in 1967. I think this combined to create inflationary conditions in the UK economy.

In Germany the trade union movement proved a stronger force and they actually agreed to wage cuts, to offset the increase in the price of oil.

The USA also had inflation higher than Germany.

I think Friedman's quote was appropriate to his time, after Nixon scrapped the Bretton Woods Agreement, and the age of fiat currency began.

You will probably disagree but that is how I see it.

[KentVillan]

19 minutes ago, MakemineVanilla said:

I think a large proportion of the UK's 1970s inflation was created by the government(s).

Reginald Maudling the Tory chancellor implemented a "dash for growth" budget in an attempt to create an over-ambitious growth of 4%, this ultimately led to a balance of payments deficit, which forced Labour to devalue sterling, in 1967. I think this combined to create inflationary conditions in the UK economy.

In Germany the trade union movement proved a stronger force and they actually agreed to wage cuts, to offset the increase in the price of oil.

The USA also had inflation higher than Germany.

I think Friedman's quote was appropriate to his time, after Nixon scrapped the Bretton Woods Agreement, and the age of fiat currency began.

You will probably disagree but that is how I see it.

I don't disagree, it's just that none of that proves any universal truths - it's all context-dependent. That was my point.

[MakemineVanilla]

53 minutes ago, KentVillan said:

I don't disagree, it's just that none of that proves any universal truths - it's all context-dependent. That was my point.

Don't they say that if there are four economists in a room, there willl be five opinions.

Famously, didn't the Queen ask some top economists what caused 2008 and they didn't have a clue.

[KentVillan]

5 minutes ago, MakemineVanilla said:

Don't they say that if there are four economists in a room, there willl be five opinions.

Famously, didn't the Queen ask some top economists what caused 2008 and they didn't have a clue.

The problem with economists is they like to think they are the most scientific of the social scientists, but they unavoidably get sucked into very specific political contexts, and tend to overstate their arguments in reaction to their opponents. Plus it's always much more interesting to say, "here are the one or two big things that explain everything" than to say, "well actually this is so **** complicated we can never really understand exactly how economies work".

Microeconomics is a pretty solid discipline with plenty of provable facts that hold up over time and different contexts. It's macroeconomics where it's often much more of an art, and there's so much scope for subjectivity and value-based arguments.

[sidcow]

12 minutes ago, KentVillan said:

The problem with economists is they like to think they are the most scientific of the social scientists, but they unavoidably get sucked into very specific political contexts, and tend to overstate their arguments in reaction to their opponents. Plus it's always much more interesting to say, "here are the one or two big things that explain everything" than to say, "well actually this is so **** complicated we can never really understand exactly how economies work".

Microeconomics is a pretty solid discipline with plenty of provable facts that hold up over time and different contexts. It's macroeconomics where it's often much more of an art, and there's so much scope for subjectivity and value-based arguments.

It is too complicated. 

Look at Brexit. There were clearly thousands of little intricacies all interlinked that this proposing Brexit had absolutely no idea about, how knock on effects stack up into huge unsurmountable problems. 

There is no way you can just make major changes and full understand how they will play out (especially in the place of Brexit where they didn't even want to actually try and work it out). 

Edited January 13, 2023 by sidcow

[ml1dch]

An undeclared and unofficial credit facility of up to £800,000 to the Prime Minister?

Definitely no possibility of a conflict of interest arising from that.

[Genie]

6 minutes ago, ml1dch said:

An undeclared and unofficial credit facility of up to £800,000 to the Prime Minister?

Definitely no possibility of a conflict of interest arising from that.

Someone just donated £1m to “his office” last week too. 

[ml1dch]

On 07/07/2022 at 11:18, magnkarl said:

Yeah, the amount of dirt one can find on the Zahawi's is unreal. His father essentially stole Iraqi wealth and fled, and his son has been a grifter his whole adult life, very keen on cars, ladies and booze. 

He's not the from rags to riches Messiah the Daily Heil is portraying him as.

Reports today that he's now agreed to pay £3.7m in unpaid capital gains tax from the sale of YouGov that he'd previously claimed were nothing to do with him.

I assume that criminal charges for tax evasion will be following. 

[Genie]

32 minutes ago, ml1dch said:

Reports today that he's now agreed to pay £3.7m in unpaid capital gains tax from the sale of YouGov that he'd previously claimed were nothing to do with him.

I assume that criminal charges for tax evasion will be following. 

I bet they won’t. 

It’s always an innocent error when a politician breaks the law. Worst case scenario (for him) is resigning. 

[CVByrne]

On 13/01/2023 at 15:04, bickster said:

That very question backs up exactly what @KentVillan was saying. External cause, not a government cause. Neither the UK nor Germany started the Yom-Kippur War. How the two governments dealt with that has nothing to do with the trigger for inflation which is what was being discussed.

The mass money printing in response to Covid was is a big factor in the inflation. Needed to be done but there was always going to be a cost to it.