[liveing in exile]

Dear Mr. Darling,


Please find below my suggestion for fixing Britain 's economy. Instead of giving billions of pounds to banks that will squander the money on lavish parties and unearned bonuses, use the following plan. You can call it the Patriotic Retirement Plan:



There are about 20 million people over 50 in the work force. - Pay them £1 million apiece severance for early retirement with the following stipulations:



1) They MUST retire and not work again. Twenty million job openings - Unemployment fixed.


2) They MUST buy a new British CAR. Twenty million cars ordered - Auto Industry fixed .


3) They MUST either buy a house or pay off their mortgage - Housing Crisis fixed .


4) They must send their kids to school / college /university - Crime rate fixed


5) Buy £50 of alcohol / tobacco a week there's your money back in duty / tax etc


It can't get any easier than that!


P.S. If more money is needed , have all members of parliament pay back their falsely claimed expenses and second home allowances

[DanConservative]

Wow, I don't think I have ever read anything more nonsensical than this.

1 we don't have/can't lend they much money

2 giving money to an industry won't fix it, it'll just temporarily give it false hope until credit tap is turned off and inflate the prices to a ridiculous extent.

3 in a couple of generations time we'd be in exactly the same mess except with a great deal more debt to deal with.

I'm not sure whether that was supposed to be satirical but it was downright daft.

[Am_Fìobhach]

It would seem you know little of either (a) how industry is financed or (b) observing the date of posts and ignoring those that have ceased to have relevance ("necro-posting" some term it)

[DanConservative]

I have complete understanding of the financing of industry and how much of an abject failure the Keynesian consensus has been over the last 20 years. The housing and car bubbles caused by similar false inflations I think it's pretty easy to understand that if you throw money at an industry and give investors false encouragement then when that tap is turned off the capital will HAVE to devalue back to it's original worth.

[political_animal]

DanConservative wrote:

I have complete understanding of the financing of industry and how much of an abject failure the Keynesian consensus has been over the last 20 years. The housing and car bubbles caused by similar false inflations I think it's pretty easy to understand that if you throw money at an industry and give investors false encouragement then when that tap is turned off the capital will HAVE to devalue back to it's original worth.

No understanding of A_F's point b) I see

[DanConservative]

political_animal wrote:

No understanding of A_F's point b) I see

It was a post with no comments and so I decided to bring it back into the forum since it's a topic that people often think they get when rarely they do.

[Am_Fìobhach]

Well, you certainly don't! Honestly, trying to equate such things as the "housing bubble" with Keynesian economics! Next it'll be the "South Sea Bubble", no doubt (18th Century economic collapse)

[DanConservative]

The housing bubble and the subsequent housing collapse which lead to an international and certainly west-dominated recession was caused by Keynesian economic policy which has dominated the UK and the USA for the last 15 years.

The government was backstopping loans in the USA to keep people buying homes, and whilst the government ensured that people could buy homes (which means they could sell them too) by providing low risk loans the industry boomed. This was done by top Keynesians at the fed that followed the mantra that as long as money is in circulation it will be invested and spent and hopefuly will leave us with a better economy in the long run. When the banks wouldn't lend anymore, the government backstopped even more loans at even more favourable rates which ultimately lead to their collapse when Fanny May et al could no longer backstop mortagages and other house building projects. This capital was immediately devalued. This was all in the name of Keynes.

There is a phrase "we're all Keynesians now" and that is put about by the left, as they enjoy the idea that there is worldwide consensus. You tread a very thin and stupid line to say economics hasn't been the trade of the Keynesians for the last 15 years when it has.

[Am_Fìobhach]

Total, utter, unadulterated bullshit. Not necessarily what you say of various governments' actions, but your vain attempt to, in some way, try to equate those actions with Keynesian economics.

[General Mike]

Quote:

try to equate those actions with Keynesian economics.

Well, it's certainly not classical economics, nor supply-side economics nor Marxism. If you had to pin the tail on someone, it would be Keynes, though clearly Keynes himself cannot take the blame on account of having been dead for 60 years.

[DanConservative]

General Mike wrote:

If you had to pin the tail on someone, it would be Keynes

Damn straight, the government advisers are all from the current consensus school of economics, Keynesians!

Am_Fìobhach makes himself look like an idiot when he claims that government economic advisers since the Thatcher/Regan years haven't been strong adherents to the Keynesian school of economics. It's pretty much a well known fact that he doesn't like to admit. Even Bush's advisers were massive Keynesians and the huge stimuli he put into the US economy were all Keynesian ideals. Because any right-wing economist doesn't do SIMULUS because it's control of the free-market.

People shouldn't open their mouths when they don't know what they're talking about, especially when they couldn't be more wrong.

The whole recession was caused from the HOUSING BUBBLE, the bubble which itself started in America and was thanks to government backed low interest rates for people buying mortagages! This is nothing but Keynesian you fool!

Urgh some people. At least you have sense General Mike!

[Am_Fìobhach]

DanConservative wrote:

Am_Fìobhach makes himself look like an idiot when he claims that government economic advisers since the Thatcher/Regan years haven't been strong adherents to the Keynesian school of economics. It's pretty much a well known fact that he doesn't like to admit. Even Bush's advisers were massive Keynesians and the huge stimuli he put into the US economy were all Keynesian ideals. Because any right-wing economist doesn't do SIMULUS because it's control of the free-market.

People shouldn't open their mouths when they don't know what they're talking about, especially when they couldn't be more wrong.

The whole recession was caused from the HOUSING BUBBLE, the bubble which itself started in America and was thanks to government backed low interest rates for people buying mortagages! This is nothing but Keynesian you fool!

It's nowt to do with anything "Keynesian" - indeed, it has far more the flavour of unbridled monetarism about it (though it's not exactly that either). I do happen to know what I'm talking about in this context: perhaps you might care to develop a rather less pre-judged position?

[DanConservative]

The fact is many many academics on this issue have noted how much Labour differed from the new orthodoxy brought in during the Thatcher years. They didn't deviate completely from the old ways, certain inflation targets and the removing of political discretion but that doesn't change the fact that government took an active role in many of the things going on within the economy and this helping hand, interventionist approach is of course indicative of Keynes.

Then came the stimulus package, that is unashamedly a Keynesian idea that only does further harm to the economy which is demonstrating that is has been built on unsound principles.

[Am_Fìobhach]

I might as well accuse present and past UK and US governments of being slaves to monetarism - it just isn't - and wasn't - so. As I think I've already pointed out, this "housing bubble" thing owes rather more to non-interventionist policies than interventionist ones. If it had been up to me, for instance, there would probably have been a more interventionist approach there, but it would not have been very popular. For instance, I might well have prevented banks etc. moving beyond the "traditional" 2.5 X annual income rule when assessing mortgage viability.

[DanConservative]

Am_Fìobhach wrote:

I might as well accuse present and past UK and US governments of being slaves to monetarism - it just isn't - and wasn't - so. As I think I've already pointed out, this "housing bubble" thing owes rather more to non-interventionist policies than interventionist ones. If it had been up to me, for instance, there would probably have been a more interventionist approach there, but it would not have been very popular. For instance, I might well have prevented banks etc. moving beyond the "traditional" 2.5 X annual income rule when assessing mortgage viability

Well there you have it, you have completely shown you misunderstanding of all the economic nonsense you have spouted on this thread and the others.

Go and look up the now insolvent Freddy Mac and Fanny May (think those spellings are right) companies and come back to me. They were government companies in the USA that backstopped mortagage loans when lending from conventional banks started to dry up, as less houses were sold. When these two companies started to see a slowing down of new mortagages they increased their credit (opposite of what banks did) and they eventually went bust - the intervention or stimuli just didn't work. This is when the housing bubble burst and this is when it travelled over here. This is what saw the banks under and this is what ultimately started the recession.

How about instead of nationalising banks (which that kind of regulation would basically do) you just allow poor banks to fail and backstop peoples savings. What incentive is there for a bank to be careful on the way it lends when it knows the government will rescue their bonuses if all goes tits up? Banks will soon learn from the mistakes of their peers and watch out how much they lend. Why did we nationalise northern rock when Branson wanted to buy it? All this talk of Conservative ideological cuts, when it was Labour ideological nationalisation that lead to stupid decisions like that one, it's rather rich isn't it.

The governments since Thatcher are/were not monetarists and the recession problems have not been caused to any extent by our government but by Keynesian principles of the US government, which were not helped by the diversions made from free-market principles under Blair and Brown.

[Am_Fìobhach]

You may recall that the final straw that sprung the banking collapse was...

...the US government's refusal to bale out a bank - and not exactly the largest of banks at that (Lehmann Bros.).

You who understands so much, it's interesting what you choose to ignore in your own, rather petty-minded "crusade" against Keynesianism.