Bolitics The New Condem Government

[tonyh29]

Not at all Cable voiced an opinion not actual govt policy

I remember when all your labour sites and blogs you like to quote from were saying we would have an interet rate rise and more QE this year and were stating it as fact

None of them happened either

IF winter fuel cuts happen then you can decide to attack this government for it but to attack them for something they haven't actuall done is just barking

[drat01]

:-) Tony - I have to admire your attempts at deflecting away from the admission of a very senior member of the Gvmt that Winter Fuel Payments were to be cut and favoured by the Tory party. As said pretty much in the same way they said they would not cut VAT, not hit front line services, impact the defence budget, stop funding for school sports.

The admission that there is open dissent about the speed and the "cack-handed" way they are being handled really does show them up for what they are all about.

So if this is just Cable' opinion and not policy, why has he not resigned or been sacked? He is either telling massive lies or the truth. If its the former then he cannot remain, if its the truth then Cameron and Clegg are being shown for all to see what they are really about

[tonyh29]

Tony can you please show where any party have actually said that cuts were not necessary?

Forgive the long link but I'm on my phone but does this one work for you :-)

http://m.guardian.co.uk/politics/2010/nov/30/labour-gordon-brown-cuts-douglas-alexander?cat=politics&type=article

[peterms]

...My point is that government spending power doesn't derive from collecting money...

It does, though, ultimately. Not in the absolute immediate sense - unless I physically have a pound I can't spend a pound - but in the longer term. The government (of any country) either borrows money (bonds etc.), gets it through taxing the wealth of its citizens, or gets it through trading state assets - oil, minerals, processed goods..etc. or through gifts from elsewhere.

I've read some more stuff since last time, and it seems to be a fallacy, a particular economic theory or philososphy, that governments can just magic wealth and money from nowhere. They can't. Not without consequences. It's why places like much of Africa have huge debt, it's why S.American countries have had major problems, it's why Zimbabwe is in a mess (partly). Otherwise, they'd just do some of the "magic" and hola! problem solved, no third world debt.

The "rules" under which the world's financial systems operate dictate this. We, the UK, can't change the rules to the "magic" version. The rest of the world will not allow us or anyone else to invent money from nowhere to pay debt, or fund stuff, because it would cause them harm, and vice versa.

The inticacies are way more complex, but the underlying principles are that "magicing" a bunch of money from nowhere is just a bollocks theory of some people who (maybe rightly) don't like the way things are.

We are told that governments collect money from taxes in order to finance their spending. But then, we're also told that banks take deposits from savers in order to lend money. Neither are very good descriptions of what happens.

Governments do create money from nowhere, and you're quite right that this creates consequences. Those consequences could be economic growth and increased national wealth, or in circumstances where the creation of government credit far outstrips the underlying capacity of the economy, it could be damaging and inflationary. So if the creation of government credit is used to attempt to purchase goods and services beyond the ability of the economy to provide them, inflation must result. If the economy has a lot of slack, then creating money to purchase things will provide stimulus and growth. I'm not saying, at all, that the creation of money and credit will always and everywhere solve problems, regardless of the state of the economy or the purpose to which the money is put.

Zimbabwe is a pretty special case, as I think everyone would agree. They increased spending at the same time as the productive capacity of the economy was collapsing, with the loss of a lot of food production and manufacturing output. As for Africa and Latin America, I suggest their debt has more to do with the continuing transfer of wealth from them to western countries and companies, facilitated by the IMF and their "structural adjustment programs", with the privatisation, deregulation, asset-stripping and looting which follows.

The rules are those we have chosen to follow, not laws of nature. Consider Ireland, for example. Their government has chosen to impose what will turn out to be severe financial hardship in order to protect wealthy investors from the consequences of some poor decisions. And our government is creating higher unemployment and cutting services not because it is economically inevitable, but in order to bail out banks and put pressure on wages, so that financiers can continue to extract more money from the rest of us. It's political choice, not anything else. Pretending that there is some external constraint on them, eg that the deficit must be eradicated, is just a smokescreen to disguise the nature of the political choices which have been made, and to obscure in whose interests the governments concerned are actually working.

[avfc89]

Other than cut, cut, cut.

though they denied it all the way through the election campaign haven't the Hypocrite party now admitted that they would have also had to cut cut cut ?

The Tories may be acting to fast , time will tell on that , but they are necessary

This isn't necessary Tony. It is purely ideological and you know this very well; so stop trying to deflect the responsibility of YOUR party.

[tonyh29]

So if this is just Cable' opinion and not policy, why has he not resigned or been sacked?

when Prescott thumped the egg thrower was he reflecting Labour Policy ?

When Brown called that woman a Bigot was he reflecting Labour policy ?

nope they were expressing opinions , all be it rather appalling ones

hence they weren't sacked or resigned ..though Prescott should have been without question

[snowychap]

What Vince Cable said about Rupert Murdoch and BSkyB

The Telegraph this morning chose not to publish the most explosive part of the remarks made by Vince Cable, the Business Secretary, to undercover reporters.

A whistleblower has passed me the full interview. Here are the excised comments by Mr Cable.

"I am picking my fights, some of which you may have seen, some of which you may haven't seen.

"And I don't know if you have been following what has been happening with the Murdoch press, where I have declared war on Mr Murdoch and I think we are going to win".

The conversation then turns to other matters for a few minutes. And then Mr Cable talks again about Rupert Murdoch and the £7.5bn takeover bid by his media conglomerate, News Corporation, for the 61% of British Sky Broadcasting which it doesn't already own.

What is important to know is that in respect of whether the takeover bid will be allowed, Mr Cable has a quasi-judicial role. It is he who will make the final decision on whether the takeover should be blocked or subject to strict conditions, because of its effect on so-called "plurality" or choice for consumers.

"Well I did not politicise it, because it is a legal question," Mr Cable says. "But he [Mr Murdoch] is trying to take over BSkyB - you probably know that."

The reporter says: "I know vaguely."

Cable: "With considerably enhanced..."

Reporter: "I always thought that he had BSkyB with Sky anyway?"

Cable: "No, he has minority shares and he wants a majority - and a majority control would give them a massive stake."

"I have blocked it using the powers that I have got and they are legal powers that I have got. I can't politicise it but from the people that know what is happening this is a big, big thing.

"His whole empire is now under attack... So there are things like that we do in government, that we can't do... all we can do in opposition is protest."

I have been passed a full copy of the interview by a whistleblower who is upset that the Telegraph chose to omit these remarks.

They are not included in a transcript that was published on the Telegraph's site this morning under the heading "the full transcript".

The Telegraph has been a leading opponent of News Corporation's attempt to acquire the whole of BSkyB. In October, the Telegraph's chief executive, Murdoch MacLennan, signed a letter - along with senior executives of the BBC, Channel 4, the Daily Mail and Trinity Mirror - asking Mr Cable to consider blocking the takeover.

The disclosure of Mr Cable's private views on Mr Murdoch and the proposed takeover of BSkyB makes it extremely difficult for him to fulfil his role as the ultimate arbiter of whether the deal should proceed under the 2002 Enterprise Act.

News Corporation is bound to challenge his impartiality.

He is due to receive a report from Ofcom, the media regulator, on the impact on plurality of the bid by the end of the year. After that he has to decide whether to refer the deal to the Competition Commission.

If Mr Cable does ask for an investigation by the Competition Commission, it would ultimately be his decision whether the deal should be permitted, once he has received the advice of the Competition Commission.

Today the European Commission said it saw no competition grounds to block the takeover.

[Demitri_C]

Other than cut, cut, cut.

as opposed to labours spend spend spend?

what i dont understand about both sets of parties is why they cant balance both? seriously **** hell

[tonyh29]

It is purely ideological

so I keep hearing from those that aren't too chuffed that the coalition isn't pursuing left-wing ideologically driven policies

though I suppose to be fair to Brown his massive tax and overspend into massive deficit was not ideological driven , it was greed driven, the greed to redistribute billions of poor taxpayers money to people like Fred Goodwin :winkold:

[drat01]

So if this is just Cable' opinion and not policy, why has he not resigned or been sacked?

when Prescott thumped the egg thrower was he reflecting Labour Policy ?

When Brown called that woman a Bigot was he reflecting Labour policy ?

nope they were expressing opinions , all be it rather appalling ones

hence they weren't sacked or resigned ..though Prescott should have been without question

:-) - Tony I have seen some attempts at deflection but that is up there mate. The instances you mention are nothing like what is happening here. Fantastic effort from you

[drat01]

Cable has to leave office now. How convenient for the past few days Cameron and Clegg have been singing the praises of Laws.

[Richard]

its obvious that the Tory party are looking to still look after their "friends" in areas like the banks while completely spinning a line to the public

As opposed to the Liebour party looking after their friends in areas like the banks while now spinning a line to the public?

Councils in poorer typically Labour held areas are hit the hardest while the Tory led ones in more affluent areas receive increases

Which of course is rubbish given that there are Tory councils who have also received big cuts to the settlement given.

[TrentVilla]

Councils in poorer typically Labour held areas are hit the hardest while the Tory led ones in more affluent areas receive increases

Which of course is rubbish given that there are Tory councils who have also received big cuts to the settlement given.

Actually Richard from what I've seen that isn't accurate.

Sure some Tory councils have recieved cuts but there not amongst the biggest, not even close as I understood it. Its also not the full story as some council, Tory ones aren't getting cuts at all.

[peterms]

Cable has to leave office now. How convenient for the past few days Cameron and Clegg have been singing the praises of Laws.

I like this bit from Clegg:

Clegg says Cable was embarrassed by what he said. Clegg can understand why. "End of story."

Oh, OK then Nick, that should kill the story.

[CarewsEyebrowDesigner]

Councils in poorer typically Labour held areas are hit the hardest while the Tory led ones in more affluent areas receive increases

Which of course is rubbish given that there are Tory councils who have also received big cuts to the settlement given.

Actually Richard from what I've seen that isn't accurate.

I'm sure someone can find it, but on This Week they discussed it and showed that it is indeed true that a good lot of Tory rural heartlands are getting cuts like 0.5% whilst poorer Labour heartlands, especially up towards Newcastle, are getting massive cuts.

[Awol]

@ Peterms,

I've agreed with you more about the theory of the current situation with bankers than I ever have about anything else, but one thing I think this discussion is missing is an appreciation of why the current cuts in government spending cuts are necessary.

Mr Bland nailed it in an earlier post when he said:

The "rules" under which the world's financial systems operate dictate this. We, the UK, can't change the rules to the "magic" version.

Once the decision was made to transfer the debts of gamblers and criminals to the public purse then the damage done was pretty much irreversible. When the crunch came politicians of all stripes bottled the big call and in doing so merely increased the scale of the crisis.

That was then, now we have to muddle along and try to be one of the last men standing when it all falls apart in order to limit the eventual damage. Central to that is maintaining the confidence of idiots with more money than sense so they continue financing our debt (Note: All the current lot are doing is trying over the course of five years to get us to a place where we cease to borrow more than the revenue we take in. During this Parliament that means we still add approxiately 400 billion to the national debt). If you are being chased by a lion you only need to be faster than the man next to you to avoid being eaten.

The fundamental difference between the last government and this one is (imo) that they can see this. Until the whole thing falls apart and we can build a new system that is not based on the lunacy of fractional reserve banking, then we have to appear a less risky bet than others. Tragically that means people with no responsibility for what has gone on suffering the short term consequences of keeping the national head above water.

We can't change things unilaterally without beggaring ourselves, so we must attempt to tread water as this farce plays itself out to the inevitable collapse - at least if we want those with real wealth to lend to trust UK plc when the dust settles again.

As a smarter man than me once said: "BIAD".

[peterms]

May be mixing two things together here. PB's comment and mine related to whether governments can create spending power by themselves, rather than whether a government deficit requires to be repaid - though I think from previous posts PB also agrees the deficit must be repaid.

My view is that issuing debt to "fund" the creation of government spending is a convention, a self-imposed rule, not a necessary fact; and that the story that the current deficit must be cut is a cover story for ideologically motivated actions. Both things are based on the false analogy between an individual, household or firm, and a sovereign government.

I agree that if two people are being chased by a lion, usually only the slower gets eaten. However, if the danger is a quicksand or a tsunami, the death of your colleague won't save you. Moving before you get irretrievably caught, on the other hand, might. It seems to me that we are being told to stand still, because those are the rules. It would be wiser to recognise that the rules are harmful, and act accordingly.

Making these cuts doesn't keep our head above water. It's more like submerging ourselves so the bankers and international capital can stand on our heads and keep themselves clear of the shitstorm they created.

[Awol]

Ok Peter - and don't take this the wrong way - the possible solutions that UK can take unilaterally without massively damaging our economy are what?

[peterms]

Ok Peter - and don't take this the wrong way - the possible solutions that UK can take unilaterally without massively damaging our economy are what?

Invest in public infrastructure. The rate and location of investment would need to be planned so as not to overheat various sectors, or else construction companies just put prices up.

Start planning a change to the taxation system, to focus on land tax instead of income tax. The reason for this would be to tackle the uncontrolled volatility in the property market which has done so much to fuel boom and bust, as well as creating massive indebtedness across the whole population in order to further enrich the holders of wealth.

Introduce proper regulation of the finance sector. There's only so much that can be done on this unilaterally, but something is better than the absence of effective regulation we've seen recently.

Direct lending to the places it's needed, especially SMEs which will increase productive capacity and employ people. This could be done via loan guarantees as well as a far more directive approach to the banks.

Enhance skills training, looking especially at the skills we are most likely to need in the near to medium future.

Put a lot more effort into working out what we are going to do to protect ourselves against the next energy crisis, assuming that we can't simply appropriate energy from other countries at cut-price rates. Get a lot more people and firms working on energy conservation and sustainable production.

Far from damaging the economy, these steps would significantly strengthen it. The common theme is trying to capture the benefits for ourselves, rather than see our economy as a plaything for global capital. These measures are all possible and achievable, and the outcomes would be welcomed by most people, though not by the people who are currently asset-stripping the economy.

There are other things we can't accomplish unilaterally, and we need to work with others. One example would be whether we wish to bolster Merkel's position that insolvent banks should take a hit, rather than fleece the public to protect them from their own misdeeds. We need a strong and clear voice on this, but I suspect our current government's views and actions are the exact opposite.

[blandy]

PMS has me right - I do think that the UK cannot change the system alone, I do think that the country needs to get to a state where it isn't every year ad infinitum, running at an operating loss.

Therefore I think some cuts are needed, some tax rises are needed, and changes to the things we can control are needed. Banks for one. Tax avoidance for another.

I also agree many of the changes made by the ConLibs are ideological rather than non-political. I think some of them are wise, some of them not.

I think more spending on Green stuff and infrastructure is needed - things that will benefit the country for decades to come. I don't agree with the Tory idea of export led recovery as being realistic.

From a position of ignorance I don't agree with the line PMS proposed re the financial system - it is not something I can see as credible, and therefore AWOL's question is a good one.

[edit] posted at the same time as Peter's above, which I hadn't seen and completely agree with[/edit]