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IN THE ILLUSION - GOING NOWHERE?

Not being a wonk, I see a lot of numbers.
Are these derived from real money or the imaginary sort? Or can we no longer tell the difference?

Cut interest rates significantly and the economy will end up like that in Japan for the past ten years, totally screwed !

Worst in 60 years?

Why 60 years which takes us back to 1948 (sorry to be arithmetic!) But wasn't 1948 the same as 1930 plus a World War? So what Alastair Darling is saying is worse than anyone under about 90 can remember.

Fortunately I have accesses to a couple nonagenarians. They recall big wage cuts. No Health Service at all. No electric lighting in most of the country - just oil lamps and candles. Very, very few cars. Not much mechanised farming. Hearing of marchers from Jarrow (Oct 36). Basically a World where many people lost all they had in speculative ventures. My nonagenarians were born during the First World war and lived through the flu pandemic of 1917.

What is so special about 1948.

Jan 1st - Nationalisation of UK railways - about time we did this again too! (Is AD indicating that there will be a National Transport Policy?)

July 5th NHS founded!

(Jan 30th Mahatma Gandhi assassinated!)

Economically wasn't the World recovering from the War, weren't we essentially totally in hock to the USA ,and Sweets were still to be rationed for five more years!

Hi Paul

My personal views , as always -

You forgot to mention about the 1979 recession that with the higher interest rates not everyone lost out, savers got a good return and also paid tax on it.

Higher interest rates also convinces people to start saving.

Higher Interest rates also attracts foreign money into the UK banking system.

I think Brown is trying to put a bandage on the problem until after the next General Election.

I'll be watching Sterlings value today to see what confidence the Markets takes from all this !

Thanks for the update.

The economy has already stalled to 0% growth in the last quarter. Higher interest rates will not restore markets confidence once and for all. Even if the chancellor takes the right action now to clean the system (cut back spending, raising interests to combat inflation), it’s going to take a long time for the economy to adjust and recover. Along the way, unemployment will shoot up and a lot of homes will be repossessed. This is the sad thing about bubble in the economy – it is never a pretty scene when it bursts.

Who would’ve thought back in 2007 that Prime Minister Brown’s legacy as a 10-year chancellor will be his own Achilles Heels? He can reshuffle his cabinet, but I doubt it would make a difference. I only hope it is not going to be Ed Balls replacing A Darling, the same man who advised Gordon to scrap the 10p tax band.

"The real difficulty with Mr Darling's "arguably the worst for 60 years" assertion - now, if not withdrawn not reiterated - was not that it "talked down the economy". Most voters will have no problem with a politician actually telling it like it is. The problem is it was wrong."

By about twenty years - it's shaping to be 1929 all over again, - "But it's different this time!"

Yeah! Do a google on Phil Gramm and his missus, who together have been at the heart of the project to remove all the precautionary regulation put in place to guard against a recurrence of the financial meltdown of eighty years ago.

Of course, it can be said to originate in the USA, but nobody participates in the USA's banking system and follows its lead more enthusiastically than the UK lot.

Peace and prosperity
ed

what is going on is that people who look at long term charts that have data going back to the american civil war see a 'once in many generations' event is possible.

i suspect the term 60 years is code for a many generations' event . Traders of 40 years experience have never seen this.

The financial system is actually trading insolvent ie debts are greater than stock valuation. which for any other firm would mean closure but one cannot close the financial system.

Funds are sacking because they cannot borrow money to trade and some brokers may go under because now there is not enough business to go round because trading volume is down.

money is the lubricant of the economic machine. What Darling is saying is there is no lubricant and so the machine might grind to a halt. A once in many generations event.

The decisions for policy makers are actually quite simple. Eliminate what you can't do leaves with what you can do. IMO that means a two way grid that will generate hundreds of thousands of jobs, billions in income, a massive tax take and free people from high fuel bills making the uk economy more competitive.

From the way HMG are siding with the energy companies propaganda about the reason for spurious rises in gas and electricity imo they want to make the public's pips squeak over energy prices to pave the way for nuclear.


A two way grid is directly opposed to the nuclear route and so we will miss out on something that benefits the public and the nation [rather than just foreign owned multinationals]. Pity.

#8 bookhimdano

The only problem with your two-way grid scheme is that it will not fill the projected energy gap. It can only produce power when the sun shine or the wind blow, micro wind turbines have been proved to be useless. What happens on a dull winter day when their is also no wind (probably foggy ) right at the time when energy demand is at its highest.

That is not to say that we should not offer a two-way grid to the public, but the only way to provide a carbon free energy future is to force the energy companies to invest in nuclear.

For me the difference of between this economic downturn and the ones since the 2nd world war, is the levels of personal debt.
In the hard times immediately post-war and the early 70's people probably had rent to pay, utility bills and food to buy for their families. During early 80's and early 90's more people had mortgages.

Today, millions of people have spent money, they have not yet earned. If things turn as bad as the early 80's and unemployment rises rapidly, house repossesions, (contrary to what many commentators are saying) could dwarf the levels of the early 1990,s.

9.
a two way grid manages energy across the whole of the uk not just in one region or one method of energy. solar does not need sunlight. Heat pumps use the earths warmth but for nuclear lobbists there is always the fear the earth might go cold?

the only problem with a two way grid is psychological and vested interests against it. we all know that the nuclear lobby and their govt agents have a history of using DDT [Department of Dirty Tricks].

see how hard they fight against a 2 way grid that will create hundreds of thousands of jobs, generate billions in revenue and lower fuel bills for ordinary people and make the govt popular.


How BNFL deployed its dirty tricks arsenal

An official reply to an Irish MP who had written to Tony Blair calling for Sellafield to be closed down was secretly scripted from documents prepared by British Nuclear Fuels.

This article appears to blame the Conservatives for a recession that occured the year after they came to power, far too early for their policies to have had that kind of influence.

This is either ignorance of basic economics or a deliberate attempt to misrepresent the Conservative Party's record. Either case suggests that Mr Mason is in the wrong job.

Paul - even for the ´óÏó´«Ã½ this is a unbelievable ... you include the recession of 1980 without mentioning the Callaghan government going cap in hand to the IMF and the events leading upto that recession - Did Thatcher's government have to go to the IMF? Crisis? What Crisis? was lampooned by Supertramp at the time...

Thatcher came to power during the second oil price shock when prices of crude oil rose from some $5 a barrel in the mid/late 70's to $40 a barrel in 1981 when British industry collapsed due to incompetent management, militant unions ( you know something about that) and business uncertainty about weather it was economic to invest in the UK.
Link here

I know the ´óÏó´«Ã½ editorial staff has a visceral hatred of Thatcher and the Conservatives and an fawning attitude to Labour but this is ridiculous - please be more subjective and balance.

But since this going to be moderated I expect this won't be published

Mysoniscalledharry (aka Anonymous on the guido blog!).

I actually had pictures of Callaghan at the ready to finish the piece off with last night but we ran out of time. Sorry you found it unbalanced.

However, technically, and with the help of the IMF, the Callaghan years werw growth years. Here are the figures:
1976 2.64
1977 2.39
1978 3.24
1979 2.69

Now here is the GDP figure for 1980:
minus 2.09

Now here is the GDP figure for 1974 (the bust following the Barber boom):
minus 1.36

Isn't it possible that these two examples are in fact more damaging to Mr Darling since the government is claiming to have escaped the "Tory boom and bust" years etc?

Thanks for commenting. I don't moderate the blog it's an outside company. I don't really know what their criteria are but it should not get taken down unless there are expletives or libel.

I find this article inaccurate, biased and naïve.

You take a current downturn which has barely begun (we are what....12 months in?) and then compare that to an inflationary, global economic crisis which occurred after several years of Labour being in office. The conservatives then happened to be in office for the first year of that downturn. So do you think they are to blame?

Raising taxes and cutting public spending were a necessity at the time to get the economy functioning again. The Tories made hard, unpopular but crucial decisions.

It is a disgrace that this kind of Left-wing propaganda is funded by tax payers. If this is really as critical as you can be about the current situation that New-Labour have got us into, then perhaps your would be more suited to a spell in Labour government - not as a supposedly partisan commentator on economic policy for the Beeb.