Taxpayer subsidies to support energy companies Tax cuts that deliver huge sums to wealthy individuals and businesses Both funded by borrowing An end to limits on bankers' bonuses
The Tories are making very clear whose side they are on.
Remarkable - they seem determined to live up to a Socialist Workers Party caricature. I've spent all my life even in my most left-wing moments conceding that lots of Conservative Ministers thought they had the best interests of the whole country at heart, they just saw the route differently. I'm struggling to think that at the moment.
They are 100% invested in trickle-down economics. They believe that making rich people richer benefits everyone. I am not sure that works. I am even less sure that it works within the space of two years.
The interesting scenario is that the Ukrainian war ends, the economy rebounds and the Truss administration picks up the credit, despite their policies.
I don't see the end and the rebound happen before the next election, though.
Even when the war ends, the sanctions will probably continue, and the strategic restructuring away from dependency on Russian energy will almost certainly continue.
I think a more likely scenario is that people will be unwilling to give the government the benefit of the doubt once the war is over, even though a not-insignificant proportion of our woes can still be placed at the door of the Russian invasion.
However, it will inevitably be proceeded by a bounce induced by "Plucky Britain beat the Russkies! Well done Liz!" tabloid puffery.
Something along those lines might be a reason to favour Joe Biden in 2024. The United States is doing most of the heavy lifting against Russia, second to the Ukrainians, of course.
The army bases in the UK are full of Ukrainians being trained
No doubt, though we can't give Ukraine much heavy equipment because we don't have much to give and, as the Germans and indeed Russians have also discovered, a lot of warehoused kit has not been maintained properly.
None of which will affect America, and particularly the Biden regime, taking the credit for pushing back Russia, what with the presidential election in 2024.
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
Running a structural deficit of 4% during pre-crash times is utterly catastrophic as when the crash inevitably comes and you inevitably need countercyclical spending to go with it, then you have nowhere to go.
The fact that some other countries were nearly as bad as the UK doesn't justify or excuse what Brown did.
But it is hard to blame Brown's fiscal policy for us being hit *much worse than others* when Brown's fiscal policy was *pretty much the same as others'*. That was the point I was responding to. Also worth noting that our debt to GDP ratio in 2007 was 41% (down from 43% in 1997) compared to a G7 average of 81%. So we had plenty of space to run countercyclical fiscal policy, certainly compared to other countries, and indeed the increase in our debt to GDP ratio between 2007 and 2010 (33pp) was almost identical to the G7 average (32pp), suggesting that we were indeed able to run a countercyclical fiscal policy just like other economies.
Except it wasn't the same as others, it was via your own figures worse than others. And of course its worth noting that the G7 average includes the UK so the G7 average was itself getting dragged down by Brown's terrible performance.
Debt to GDP isn't the relevant figure, the deficit is, although its worth noting via your own figures again in the span of three years Brown nearly doubled our debt-to-GDP figure whereas G7 nations debt-to-GDP increased by much less than half.
Gordon Brown's peak debt to GDP being around 3% iirc which was on a par with preceding Conservative governments. It was not significant and did not cause or exacerbate the GFC.
Also, aiui Team Truss has determined, as Cheney said of Reagan, that deficits don't matter and that George Osborne's austerity was a mistake that hobbled Britain's economy.
It was not on a par with preceding governments whatsoever. This is the problem with economically illiterate Labour excuse makers who want to take an average and apply that to the pre-crash figure well over a decade after the last crash.
At the comparable stage of the economic cycle for the previous recession the Conservative government went into the downturn running a surplus, not a deficit let alone a significant deficit. Had Brown done what the Tories had done and built up a small surplus in the good years before the crash then then the crash could have been managed with standard cyclical borrowing leading to an average 3% being maintained even with the GFC.
3% deficit works as an average over an economic cycle if you have growth and moderate inflation to devalue that deficit, but it doesn't work as the starting point pre-crash which then leads to a blow-up well beyond that as a result.
Says that the Ukranians require a superiority of at least 3:1 and they don't have it. Someone should tell him about Goose Green. Who the attackers are, how they are trained, equipped and motivated is more important than simple numbers.
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
Running a structural deficit of 4% during pre-crash times is utterly catastrophic as when the crash inevitably comes and you inevitably need countercyclical spending to go with it, then you have nowhere to go.
The fact that some other countries were nearly as bad as the UK doesn't justify or excuse what Brown did.
But it is hard to blame Brown's fiscal policy for us being hit *much worse than others* when Brown's fiscal policy was *pretty much the same as others'*. That was the point I was responding to. Also worth noting that our debt to GDP ratio in 2007 was 41% (down from 43% in 1997) compared to a G7 average of 81%. So we had plenty of space to run countercyclical fiscal policy, certainly compared to other countries, and indeed the increase in our debt to GDP ratio between 2007 and 2010 (33pp) was almost identical to the G7 average (32pp), suggesting that we were indeed able to run a countercyclical fiscal policy just like other economies.
Except it wasn't the same as others, it was via your own figures worse than others. And of course its worth noting that the G7 average includes the UK so the G7 average was itself getting dragged down by Brown's terrible performance.
Debt to GDP isn't the relevant figure, the deficit is, although its worth noting via your own figures again in the span of three years Brown nearly doubled our debt-to-GDP figure whereas G7 nations debt-to-GDP increased by much less than half.
Gordon Brown's peak debt to GDP being around 3% iirc which was on a par with preceding Conservative governments. It was not significant and did not cause or exacerbate the GFC.
Also, aiui Team Truss has determined, as Cheney said of Reagan, that deficits don't matter and that George Osborne's austerity was a mistake that hobbled Britain's economy.
It was not on a par with preceding governments whatsoever. This is the problem with economically illiterate Labour excuse makers who want to take an average and apply that to the pre-crash figure well over a decade after the last crash.
At the comparable stage of the economic cycle for the previous recession the Conservative government went into the downturn running a surplus, not a deficit let alone a significant deficit. Had Brown done what the Tories had done and built up a small surplus in the good years before the crash then then the crash could have been managed with standard cyclical borrowing leading to an average 3% being maintained even with the GFC.
3% deficit works as an average over an economic cycle if you have growth and moderate inflation to devalue that deficit, but it doesn't work as the starting point pre-crash which then leads to a blow-up well beyond that as a result.
That might make sense if you credit Gordon Brown with steering Britain around the GFC, completely avoiding it, only to fall into a classic bust at precisely the same time.
And as I just said, not even the government believes this Osbornian nonsense. The new mantra is: austerity bad; deficits immaterial; growth good. I hope they succeed, although I'm not entirely clear of the mechanism for growth.
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
Running a structural deficit of 4% during pre-crash times is utterly catastrophic as when the crash inevitably comes and you inevitably need countercyclical spending to go with it, then you have nowhere to go.
The fact that some other countries were nearly as bad as the UK doesn't justify or excuse what Brown did.
But it is hard to blame Brown's fiscal policy for us being hit *much worse than others* when Brown's fiscal policy was *pretty much the same as others'*. That was the point I was responding to. Also worth noting that our debt to GDP ratio in 2007 was 41% (down from 43% in 1997) compared to a G7 average of 81%. So we had plenty of space to run countercyclical fiscal policy, certainly compared to other countries, and indeed the increase in our debt to GDP ratio between 2007 and 2010 (33pp) was almost identical to the G7 average (32pp), suggesting that we were indeed able to run a countercyclical fiscal policy just like other economies.
Except it wasn't the same as others, it was via your own figures worse than others. And of course its worth noting that the G7 average includes the UK so the G7 average was itself getting dragged down by Brown's terrible performance.
Debt to GDP isn't the relevant figure, the deficit is, although its worth noting via your own figures again in the span of three years Brown nearly doubled our debt-to-GDP figure whereas G7 nations debt-to-GDP increased by much less than half.
Gordon Brown's peak debt to GDP being around 3% iirc which was on a par with preceding Conservative governments. It was not significant and did not cause or exacerbate the GFC.
Also, aiui Team Truss has determined, as Cheney said of Reagan, that deficits don't matter and that George Osborne's austerity was a mistake that hobbled Britain's economy.
It was not on a par with preceding governments whatsoever. This is the problem with economically illiterate Labour excuse makers who want to take an average and apply that to the pre-crash figure well over a decade after the last crash.
At the comparable stage of the economic cycle for the previous recession the Conservative government went into the downturn running a surplus, not a deficit let alone a significant deficit. Had Brown done what the Tories had done and built up a small surplus in the good years before the crash then then the crash could have been managed with standard cyclical borrowing leading to an average 3% being maintained even with the GFC.
3% deficit works as an average over an economic cycle if you have growth and moderate inflation to devalue that deficit, but it doesn't work as the starting point pre-crash which then leads to a blow-up well beyond that as a result.
That might make sense if you credit Gordon Brown with steering Britain around the GFC, completely avoiding it, only to fall into a classic bust at precisely the same time.
And as I just said, not even the government believes this Osbornian nonsense. The new mantra is: austerity bad; deficits immaterial; growth good. I hope they succeed, although I'm not entirely clear of the mechanism for growth.
What do you mean "steering Britain around the GFC, completely avoiding it, only to fall into a classic bust" . . . the GFC was a classic bust!
That's the problem, you still think there is something unique or exceptional and "if only the GFC hadn't happened". Crashes happen, they're a fact of life, and its purely hubris to think you can "eliminate boom and bust".
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
Running a structural deficit of 4% during pre-crash times is utterly catastrophic as when the crash inevitably comes and you inevitably need countercyclical spending to go with it, then you have nowhere to go.
The fact that some other countries were nearly as bad as the UK doesn't justify or excuse what Brown did.
But it is hard to blame Brown's fiscal policy for us being hit *much worse than others* when Brown's fiscal policy was *pretty much the same as others'*. That was the point I was responding to. Also worth noting that our debt to GDP ratio in 2007 was 41% (down from 43% in 1997) compared to a G7 average of 81%. So we had plenty of space to run countercyclical fiscal policy, certainly compared to other countries, and indeed the increase in our debt to GDP ratio between 2007 and 2010 (33pp) was almost identical to the G7 average (32pp), suggesting that we were indeed able to run a countercyclical fiscal policy just like other economies.
Except it wasn't the same as others, it was via your own figures worse than others. And of course its worth noting that the G7 average includes the UK so the G7 average was itself getting dragged down by Brown's terrible performance.
Debt to GDP isn't the relevant figure, the deficit is, although its worth noting via your own figures again in the span of three years Brown nearly doubled our debt-to-GDP figure whereas G7 nations debt-to-GDP increased by much less than half.
Gordon Brown's peak debt to GDP being around 3% iirc which was on a par with preceding Conservative governments. It was not significant and did not cause or exacerbate the GFC.
Also, aiui Team Truss has determined, as Cheney said of Reagan, that deficits don't matter and that George Osborne's austerity was a mistake that hobbled Britain's economy.
It was not on a par with preceding governments whatsoever. This is the problem with economically illiterate Labour excuse makers who want to take an average and apply that to the pre-crash figure well over a decade after the last crash.
At the comparable stage of the economic cycle for the previous recession the Conservative government went into the downturn running a surplus, not a deficit let alone a significant deficit. Had Brown done what the Tories had done and built up a small surplus in the good years before the crash then then the crash could have been managed with standard cyclical borrowing leading to an average 3% being maintained even with the GFC.
3% deficit works as an average over an economic cycle if you have growth and moderate inflation to devalue that deficit, but it doesn't work as the starting point pre-crash which then leads to a blow-up well beyond that as a result.
That might make sense if you credit Gordon Brown with steering Britain around the GFC, completely avoiding it, only to fall into a classic bust at precisely the same time.
And as I just said, not even the government believes this Osbornian nonsense. The new mantra is: austerity bad; deficits immaterial; growth good. I hope they succeed, although I'm not entirely clear of the mechanism for growth.
What do you mean "steering Britain around the GFC, completely avoiding it, only to fall into a classic bust" . . . the GFC was a classic bust!
That's the problem, you still think there is something unique or exceptional and "if only the GFC hadn't happened". Crashes happen, they're a fact of life, and its purely hubris to think you can "eliminate boom and bust".
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
Running a structural deficit of 4% during pre-crash times is utterly catastrophic as when the crash inevitably comes and you inevitably need countercyclical spending to go with it, then you have nowhere to go.
The fact that some other countries were nearly as bad as the UK doesn't justify or excuse what Brown did.
But it is hard to blame Brown's fiscal policy for us being hit *much worse than others* when Brown's fiscal policy was *pretty much the same as others'*. That was the point I was responding to. Also worth noting that our debt to GDP ratio in 2007 was 41% (down from 43% in 1997) compared to a G7 average of 81%. So we had plenty of space to run countercyclical fiscal policy, certainly compared to other countries, and indeed the increase in our debt to GDP ratio between 2007 and 2010 (33pp) was almost identical to the G7 average (32pp), suggesting that we were indeed able to run a countercyclical fiscal policy just like other economies.
Except it wasn't the same as others, it was via your own figures worse than others. And of course its worth noting that the G7 average includes the UK so the G7 average was itself getting dragged down by Brown's terrible performance.
Debt to GDP isn't the relevant figure, the deficit is, although its worth noting via your own figures again in the span of three years Brown nearly doubled our debt-to-GDP figure whereas G7 nations debt-to-GDP increased by much less than half.
Gordon Brown's peak debt to GDP being around 3% iirc which was on a par with preceding Conservative governments. It was not significant and did not cause or exacerbate the GFC.
Also, aiui Team Truss has determined, as Cheney said of Reagan, that deficits don't matter and that George Osborne's austerity was a mistake that hobbled Britain's economy.
It was not on a par with preceding governments whatsoever. This is the problem with economically illiterate Labour excuse makers who want to take an average and apply that to the pre-crash figure well over a decade after the last crash.
At the comparable stage of the economic cycle for the previous recession the Conservative government went into the downturn running a surplus, not a deficit let alone a significant deficit. Had Brown done what the Tories had done and built up a small surplus in the good years before the crash then then the crash could have been managed with standard cyclical borrowing leading to an average 3% being maintained even with the GFC.
3% deficit works as an average over an economic cycle if you have growth and moderate inflation to devalue that deficit, but it doesn't work as the starting point pre-crash which then leads to a blow-up well beyond that as a result.
That might make sense if you credit Gordon Brown with steering Britain around the GFC, completely avoiding it, only to fall into a classic bust at precisely the same time.
And as I just said, not even the government believes this Osbornian nonsense. The new mantra is: austerity bad; deficits immaterial; growth good. I hope they succeed, although I'm not entirely clear of the mechanism for growth.
What do you mean "steering Britain around the GFC, completely avoiding it, only to fall into a classic bust" . . . the GFC was a classic bust!
That's the problem, you still think there is something unique or exceptional and "if only the GFC hadn't happened". Crashes happen, they're a fact of life, and its purely hubris to think you can "eliminate boom and bust".
No, it really wasn't.
Yes, it really was.
We went into recession, unemployment went up, tax revenues went down, benefit claims went up etc, etc, etc - exactly what a classic bust is.
In what way did the GFC differ from "a classic bust"?
For everyone getting excited about the Russian TV debates, this thread is worth a read in full.
https://twitter.com/YudinGreg/status/1570101455847297024 I have seen people taking Boris Nadezhdin’s statements on Russian TV as a sign of a crack in the dominant narrative. https://twitter.com/JuliaDavisNews/status/1569070513909022720… This is not the case... ...Nadezhdin is an old liberal from the 90s, a comrade of Boris Nemtsov. Nemtsov decided to mount a real opposition to Putin (with a dismal outcome). Nadezhdin opted for playing along Putin’s rules of fake opposition and joined one of his puppet parties... The benefit of this strategy is that you are regularly invited to these shitshows as a strawman to be humiliated. This is how you gain national recognition, (helps on the election day!)...
They are not nothing, and certainly the liberal voices have gone far further than in the recent past, but need to be seen in context.
This probably averts what could have been a major problem for the US economy.
BREAKING: President Joe Biden says a tentative railway labor agreement has been reached, averting a strike that could've damaged the economy before the midterms. https://twitter.com/AP/status/1570344365712879619
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
Running a structural deficit of 4% during pre-crash times is utterly catastrophic as when the crash inevitably comes and you inevitably need countercyclical spending to go with it, then you have nowhere to go.
The fact that some other countries were nearly as bad as the UK doesn't justify or excuse what Brown did.
But it is hard to blame Brown's fiscal policy for us being hit *much worse than others* when Brown's fiscal policy was *pretty much the same as others'*. That was the point I was responding to. Also worth noting that our debt to GDP ratio in 2007 was 41% (down from 43% in 1997) compared to a G7 average of 81%. So we had plenty of space to run countercyclical fiscal policy, certainly compared to other countries, and indeed the increase in our debt to GDP ratio between 2007 and 2010 (33pp) was almost identical to the G7 average (32pp), suggesting that we were indeed able to run a countercyclical fiscal policy just like other economies.
Except it wasn't the same as others, it was via your own figures worse than others. And of course its worth noting that the G7 average includes the UK so the G7 average was itself getting dragged down by Brown's terrible performance.
Debt to GDP isn't the relevant figure, the deficit is, although its worth noting via your own figures again in the span of three years Brown nearly doubled our debt-to-GDP figure whereas G7 nations debt-to-GDP increased by much less than half.
Gordon Brown's peak debt to GDP being around 3% iirc which was on a par with preceding Conservative governments. It was not significant and did not cause or exacerbate the GFC.
Also, aiui Team Truss has determined, as Cheney said of Reagan, that deficits don't matter and that George Osborne's austerity was a mistake that hobbled Britain's economy.
Except....this was a time of unprecedented receipts. The housing market was going bananas, profits were high, and it was a time where debt to GDP didn't need to be as high given the circumstances in the economy. Simply, we were spending too much. I don't think anyone disputes that, no matter what they think the answer (austerity/non-austerity) should have been.
"Tory politicians have backed a campaign which has been launched to give the late Queen the title of 'Elizabeth the Faithful' because 'the Great' is rather common and has been used by despots and conquerors."
The root causes of the global financial crash were as much behavioural as structural - and prominent among them was the bank bonus culture. There's not a shred of doubt about this.
You are right and wrong.
As you well know, it was about people creating products that no one really understood, most notably those who bought them. It was then the big revelatory lesson learned that it turns out that assets are correlated and you can't diversify your risk.
To say it was "bankers bonuses" is not really getting to the nub of the problem. It was as you say behavioural and went far deeper than the simple construct of bankers bonuses whereas it was the entire corpus of investment banking and how it earns its income.
In saying the bonus culture was a big factor I'm all right and no wrong. The sector decided to dispense with the noble art of risk management and the bonus culture was greatly to blame for this. But of course you're correct about wider and deeper and "more to it" etc.
How, logically, could the bank bonus culture have caused the financial crash? The bonuses were paid by private companies out of profits. And, as Topping says, it was the bizarre products which were created and not understood which caused the collapses - the run on Northern Rock was nothing to do with bonuses. No-one who worked for Northern Rock received the big bonuses that are criticised. Not all banking is the same and "bankers bonuses" has become a vague catch-all term which is often unfair - especially to those who work in retail banking earning less that average earnings. The people receiving the astronomical bonuses were city traders.
One of the significant factors not THE cause. There were lots of causes. But the remuneration structure steered to reckless risk-taking and fraud and this led to destabilized institutions and dysfunctional markets. Then you just need a trigger and ... CRASH.
(edit: I'm talking about the global crisis not just Northern Rock)
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
Running a structural deficit of 4% during pre-crash times is utterly catastrophic as when the crash inevitably comes and you inevitably need countercyclical spending to go with it, then you have nowhere to go.
The fact that some other countries were nearly as bad as the UK doesn't justify or excuse what Brown did.
But it is hard to blame Brown's fiscal policy for us being hit *much worse than others* when Brown's fiscal policy was *pretty much the same as others'*. That was the point I was responding to. Also worth noting that our debt to GDP ratio in 2007 was 41% (down from 43% in 1997) compared to a G7 average of 81%. So we had plenty of space to run countercyclical fiscal policy, certainly compared to other countries, and indeed the increase in our debt to GDP ratio between 2007 and 2010 (33pp) was almost identical to the G7 average (32pp), suggesting that we were indeed able to run a countercyclical fiscal policy just like other economies.
Except it wasn't the same as others, it was via your own figures worse than others. And of course its worth noting that the G7 average includes the UK so the G7 average was itself getting dragged down by Brown's terrible performance.
Debt to GDP isn't the relevant figure, the deficit is, although its worth noting via your own figures again in the span of three years Brown nearly doubled our debt-to-GDP figure whereas G7 nations debt-to-GDP increased by much less than half.
Gordon Brown's peak debt to GDP being around 3% iirc which was on a par with preceding Conservative governments. It was not significant and did not cause or exacerbate the GFC.
Also, aiui Team Truss has determined, as Cheney said of Reagan, that deficits don't matter and that George Osborne's austerity was a mistake that hobbled Britain's economy.
Except....this was a time of unprecedented receipts. The housing market was going bananas, profits were high, and it was a time where debt to GDP didn't need to be as high given the circumstances in the economy. Simply, we were spending too much. I don't think anyone disputes that, no matter what they think the answer (austerity/non-austerity) should have been.
Yes, there is a good deal in that. But as it happened, the GFC came along and rendered it all moot. Then Osborne came along and flatlined the nascent recovery inherited from Labour, and here we are.
"Tory politicians have backed a campaign which has been launched to give the late Queen the title of 'Elizabeth the Faithful' because 'the Great' is rather common and has been used by despots and conquerors."
They are trolling Boris, who tried to get "the Great" moving and for whom "the Faithful" is unimaginable; for that matter the new King will regard it as the leaking pen of royal soubriquets. Let us call her Elizabeth II, like we did for the past 70 years.
Says that the Ukranians require a superiority of at least 3:1 and they don't have it. Someone should tell him about Goose Green. Who the attackers are, how they are trained, equipped and motivated is more important than simple numbers.
Numbers matter - but it's numbers in any given locality that count. Plus the ability to follow up or reinforce.
The better mobility* - and vastly better command and control of the Ukrainians - allows them to overwhelm Russian forces at points of collision, chosen by Ukraine.
*The infantry mobility vehicles supplies by NATO are arguably more important than the tanks which haven't been.
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
The man on the street in the UK felt it most keenly because our financial institutions had a vulnerable business model and we know who changed the regulatory oversight regime for financial institutions, now, don't we.
Northern Rock wasn't based in Arkansas.
And what inspired the change in the business model ? The kind of thinking coming from the right of the Tory party.
Actually the Tories specifically warned Brown about the risks he was taking, warnings that came prophetically true.
Osborne was literally giving speeches saying that Labour weren't going far *enough* in deregulating just before Northern Rock
Says that the Ukranians require a superiority of at least 3:1 and they don't have it. Someone should tell him about Goose Green. Who the attackers are, how they are trained, equipped and motivated is more important than simple numbers.
As Robin Hood famously said:
"You wish to end this? You wish to go home? Then we must stop fighting amongst ourselves, and face that the price for it may be dear. I for one would rather die than spend my life in hiding. The Sheriff calls us outlaws, but I say we are free. And one free man defending his home is more powerful than ten hired soldiers. The Crusades taught me that. I will make you no promises, save one: that when you truly believe in your hearts that you're free, then I say we can win!"
Very interesting thread on how lying from top to bottom of the Russian military has caused serious problems.
1/ Did a culture of institutionalised lying contribute to Russia's recent disaster east of Kharkiv, by giving its senior commanders a distorted and false picture of the true situation on the ground? A 🧵 reviewing the evidence. https://twitter.com/ChrisO_wiki/status/1570169288849326082
Very illuminating series of threads. It must be bad as even the official russian statements on corruption are terrible.
Analyst on R5L’s wake up to money - tracking a basket of essential goods says price difference between Morrissons and Aldi is now 40%. Explained by Morrisons having to service a gigantic debt.
Shop at Aldi, people.
Good morning
I heard that report as well and it is astonishing that Morrisons apparently have a 7 billion debt
Shop anywhere but Morrisons would be the message
5live also discussed Kwarteng's proposal to abolish city bonuses and it really does make you wonder if the conservative party have lost all it's instincts to govern
It may be the right thing from a business sense, but the optics are shocking and hands yet another gift to labour
It is the right thing from city workers sense. It is a bad thing for shareholders and really bad for government and taxpayers who will eventually have to fund another bailout with years of austerity.
I'm curious about this idea that bankers bonuses caused the subprime mortgage crisis.
I am even more curious about the idea that there will ever be another bank bailout.
Extreme bankers bonuses create incentives for bankers to gamble with the banks money. If they win, fantastic, if they lose its not their money and as long as you can talk the talk and know some of the right people, it is still easy to get another job.
That culture feeds through to the banks to gamble, notionally with their money, but knowing they have a government funded back stop as they are too big to fail.
Take away the controls and regulation and sooner or later we shall be back to bail outs.
Well, it's too bad the Labour government didn't do something about it then...
Of course. Not sure why you think that is relevant when they have not been in power for a long time and it is the current governments policies that will matter.
Well, the view of Labour supporters on the GFC is "it started in America".
That's not the view of Labour supporters, it is a statement of fact.
The global [key word, there] financial crisis started in America. Britain was very poorly placed to weather it because Gordon Brown had spent the previous 6 years [after an admirable initial period of restraint] pissing money up the wall, spending more than he raked in even during times of relative financial health. Personally I couldn't give a fig how big bankers' bonuses are. I don't care at all about the optics, I care about the gap between what we spend and what we earn. That should be the #1 issue for a chancellor of the exchequer to worry about. If this measure narrows that gap (and I am at best agnostic about whether it will) it should be welcomed.
Britain was hit badly because we have a large globally exposed financial sector and one of our biggest banks was in the midst of an ill-advised over-leveraged buying spree at the top of the market. Running a structural deficit of 4% of GDP in 2007 compared to a G7 average of 3% is unlikely to have been a significant factor in explaining why we were hit worse than others, no matter how much people want it to be Gordon Brown's fault.
The man on the street in the UK felt it most keenly because our financial institutions had a vulnerable business model and we know who changed the regulatory oversight regime for financial institutions, now, don't we.
Northern Rock wasn't based in Arkansas.
And what inspired the change in the business model ? The kind of thinking coming from the right of the Tory party.
Actually the Tories specifically warned Brown about the risks he was taking, warnings that came prophetically true.
Osborne was literally giving speeches saying that Labour weren't going far *enough* in deregulating just before Northern Rock
Immediately after Brown became Chancellor and started the process of deregulation by creating a separate FSA, Peter Lilley as Shadow Chancellor warned:
“with the removal of banking control to the Financial Services Authority – the ‘super-SIB’ – it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.” (Hansard, 11 November, 1997)
I am so looking forward to Jacob Rees Mogg declaring the end to the cap on bankers' bonuses as a big Brexit benefit and explaining why making the very rich even richer benefits everyone. It will be spectacular.
Something something politics of envy, British success story something constitutional outrage, large bowl of porridge, something Brexit.
My understanding is that the cap on bankers' bonuses was imposed by the EU. So, lifting that cap means that the government can at last demonstrate one very clear benefit of Brexit as the UK goes it alone.
We should all celebrate: Brexit has a point, after all. Vote Brexit, make bankers richer. Yay.
That was identified by Remainers, rightly or wrongly, as a key motivation for Brexit IIRC even before the referendum, wasn't it? Also the impending EU clampdown on tax havens.
Revenues in some parts of the banking business are down 80-90% this year.
Historically you had low fixed costs (an MD at a broking firm might have a salary of £100k and earn up to £750k as a bonus. So you are ok in a horrible year.
Now the salaries are £300k and the bonuses capped at £600k. The total compensation is about the same - but in a bad year the banks lose pots of money
My heart bleeds. Poor bankers.
Not often you meet poor bankers. You have rich ones, very rich ones and filthy rich ones.
So willing to pay taxes though. Certainly there hasnt been decades of development of methods of tax avoidance, all totally necessary and reasonable and not a way for rich folks to get away with things poor people can't.
Comments
None of which will affect America, and particularly the Biden regime, taking the credit for pushing back Russia, what with the presidential election in 2024.
ETA but yes, Britain tops the Euros.
At the comparable stage of the economic cycle for the previous recession the Conservative government went into the downturn running a surplus, not a deficit let alone a significant deficit. Had Brown done what the Tories had done and built up a small surplus in the good years before the crash then then the crash could have been managed with standard cyclical borrowing leading to an average 3% being maintained even with the GFC.
3% deficit works as an average over an economic cycle if you have growth and moderate inflation to devalue that deficit, but it doesn't work as the starting point pre-crash which then leads to a blow-up well beyond that as a result.
And as I just said, not even the government believes this Osbornian nonsense. The new mantra is: austerity bad; deficits immaterial; growth good. I hope they succeed, although I'm not entirely clear of the mechanism for growth.
That's the problem, you still think there is something unique or exceptional and "if only the GFC hadn't happened". Crashes happen, they're a fact of life, and its purely hubris to think you can "eliminate boom and bust".
We went into recession, unemployment went up, tax revenues went down, benefit claims went up etc, etc, etc - exactly what a classic bust is.
In what way did the GFC differ from "a classic bust"?
https://twitter.com/YudinGreg/status/1570101455847297024
I have seen people taking Boris Nadezhdin’s statements on Russian TV as a sign of a crack in the dominant narrative. https://twitter.com/JuliaDavisNews/status/1569070513909022720…
This is not the case...
...Nadezhdin is an old liberal from the 90s, a comrade of Boris Nemtsov. Nemtsov decided to mount a real opposition to Putin (with a dismal outcome). Nadezhdin opted for playing along Putin’s rules of fake opposition and joined one of his puppet parties...
The benefit of this strategy is that you are regularly invited to these shitshows as a strawman to be humiliated. This is how you gain national recognition, (helps on the election day!)...
They are not nothing, and certainly the liberal voices have gone far further than in the recent past, but need to be seen in context.
BREAKING: President Joe Biden says a tentative railway labor agreement has been reached, averting a strike that could've damaged the economy before the midterms.
https://twitter.com/AP/status/1570344365712879619
"Tory politicians have backed a campaign which has been launched to give the late Queen the title of 'Elizabeth the Faithful' because 'the Great' is rather common and has been used by despots and conquerors."
(edit: I'm talking about the global crisis not just Northern Rock)
The better mobility* - and vastly better command and control of the Ukrainians - allows them to overwhelm Russian forces at points of collision, chosen by Ukraine.
*The infantry mobility vehicles supplies by NATO are arguably more important than the tanks which haven't been.
"You wish to end this? You wish to go home? Then we must stop fighting amongst ourselves, and face that the price for it may be dear. I for one would rather die than spend my life in hiding. The Sheriff calls us outlaws, but I say we are free. And one free man defending his home is more powerful than ten hired soldiers. The Crusades taught me that. I will make you no promises, save one: that when you truly believe in your hearts that you're free, then I say we can win!"
“with the removal of banking control to the Financial Services Authority – the ‘super-SIB’ – it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.” (Hansard, 11 November, 1997)