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A Point of view: What would Keynes do?
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Prof Eman
Posted: 06 August 2012 13:31:29(UTC)
#22

Joined: 08/04/2010(UTC)
Posts: 480
Jeremy
Your post at #18.
BAE's Al Yamana Deal in Saudi Arabia.
An arms deal. Also in 2010 BAE Systems pleaded guilty to a US Court, to charges of false accounting and making misleading statements in connection with the sales.
Not everybody's cup of tea.
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Jeremy Bosk
Posted: 07 August 2012 18:24:23(UTC)
#23

Joined: 09/06/2010(UTC)
Posts: 1,316
I avoid defence and tobacco stocks myself. But that contract serves to illustrate the nature of the modern industrial economy. Most equipment sold from this country is so complex that it needs servicing by experts and intensive training for the users. Which frequently means that more money is made in the after sales market than in the original sale. Passenger aeroplanes are a prime example. The noise and chemical pollution from those is also pretty atrocious. An ethical investor could easily end up with nothing left to invest in.

America is an overweening bully and its legal system is so corrupt and politicised that no conclusions about morality can be drawn from any convictions there.
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Prof Eman
Posted: 07 August 2012 21:22:53(UTC)
#24

Joined: 08/04/2010(UTC)
Posts: 480
Jeremy, interesting comments, and others.
I want to introduce a Union point of view into the discussions.
http;//www.guardian.co.uk/business/2012/aug/05/pay-equality-unions-will help-britain-back-to-work
Pay equality and strong unions will put Britain back to work by Frances O'Grady The Observer, Sunday 5 august 2012
"These are terrible times. We are stuck in the longest double-dip recession since the second world war and the worst slump in modern economic history. We can also say that the most damaging crash has been met by the poortest policy response."
"More than 2.5 million people are out of work, and are usually on poorer benefits than they would have been under Mrs T. Another 2 millon are underemployed , whilst those in work have seen their real incomes fall for two years."
"We face a triple crisis: no growth, not enough jobs and falling living standards. And yet the government's sole focus on the deficit means that it is making each of these things worse."
"The share of the economy going into wages has been falling since the late 1970's and as that slice of the pie has shrunk, those at the top have grabbed more."
"Real wages of those in the middle stopped rising in 2003. Between 2003 and 2008 the economy grew by 11%, but very little of that growth has trickled down from the top."
"Britain is a text book case of how growing inequality leads to economic crisis. By 2008 the UK had the highest ratio of household debt to GDP of any major economy."
"What we really need for a sustainable recovery is "wage led" growth."
"What is now clear is that anti-union policies both here and in the US helped fuel the 2008 crash, and that stronger unions delivering a fairer society must be part of the road to a future that works. "
Well worth a read. Keynesian in parts? Aggregate demand?
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Jeremy Bosk
Posted: 08 August 2012 16:13:28(UTC)
#25

Joined: 09/06/2010(UTC)
Posts: 1,316
I completely agree with the diagnosis.

I wish I could believe that the unions had the power to counter the malign policies of this government. Unfortunately Thatcher and her successors, including the Quisling Blair, have worked to weaken this defence against criminally insane and sociopathic governments. Aside from a social welfare role in such things as unfair dismissal cases, the unions are irrelevant.

We must wait and see if the misbegotten voters who put these vermin in power remember where they left their hearts, consciences and brains before the next election.
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Prof Eman
Posted: 08 August 2012 22:04:53(UTC)
#26

Joined: 08/04/2010(UTC)
Posts: 480
re Sir Mervyn King
The Olympic inspiration was based on Lottery Cash investment. Precisely what is missing at UK plc.
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Graham Barlow
Posted: 09 August 2012 12:12:30(UTC)
#27

Joined: 09/03/2009(UTC)
Posts: 203

Thanks: 3 times
Was thanked: 33 time(s) in 22 post(s)
Unfortunately for all of us the Germans are right. European Governments including the UK have been on a wasteful profligate spending spree completely out of line with the domestic real GDP. for years. They have largely invested in nothing but have given away a large proportion of the created wealth on worthless projects which has created a dependant population on state handouts. Keynes would have been appalled at the so called Welfare State, and even Beverage forecast that if not controlled would lead to dependency. We have reached a point of decreasing returns on further increases in Taxation. People will just not bother to work for peanuts. When you are confiscating over 50% of the GDP through the Tax system you are in real trouble. The Black economy will thrive and is doing so. The number of times you are offered a different price for cash nowadays is the big indicator. 20% VAT for instance is totally immoral. The average small business man is struggling to make that as a gross mark up. Yet these fools cannot see the obvious. , a substantial decrease would in fact stimulate the economy and the Tax collected would substantially increase. This has already been proven by the Major and Thatcher Governments. Why cannot these Politicians see this?. I believe they are totally in the hands of Civil Servant Mandarins who have NEVER run a business and live in a world of Theory. There is no link in their mind between Economic theory and a populace trying to make a living. They could be running a research Lab studying Ants or Bees. It is all so far removed from reality. The rhetoric issued about stimulus in real terms is cosmetic tinkering to try and keep you happy while they Tax and spend to the pips squek. Lets get this straight once and for all to really stimulate the economy ,stop taxing at these levels , get off the peoples' backs. Make it really worthwhile to work and go into business where you can keep the rewards not hand them over to the feckless.
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1 user thanked Graham Barlow for this post.
Gill Pelosi on 15/08/2012(UTC)
Prof Eman
Posted: 10 August 2012 22:59:12(UTC)
#28

Joined: 08/04/2010(UTC)
Posts: 480
Graham Barlow
As regards state dependance, the rewards are lower than under Mrs T, and continue to be lowered. As such if your theory was correct we should be reaping the benefits by now, but the opposite seems to be true.
As such the problem seems more to do with, obssesion about austerity and trillions stashed off shore, which make little if any contribution to our economy, based on rewards like bank bonuses.
Please also note that even in the home of capitalism, the USA, they found it necessary to give the unemployed "pay checks".
As regards taxation, it is significant, and the VAT rate of 20% is likely to drive the black economy. However, that seems to be mainly limited to individuals and small businesses, as larger Companies can claim it back, on top of claiming it as an expense. Having said that, a reduction in the VAT rate under Labour did help stimulate the economy.
As regards stimulating the economy we could do with boosting aggeregate demand. As suggested by Keynes it could be by boosting investment. To stay clear of mandarins and banks/financial services, my approach would be to give direct government grants, say 20% of cost, (to negate VAT where applicable) for NEW tooling/machinery/plant/equipment and small business construction such as on building extensions. Businesses tend to know best what is worthwhile and where to invest, and do not need intermediaries.
Can I have peoples' thoughts on this one?
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Jeremy Bosk
Posted: 11 August 2012 02:16:56(UTC)
#29

Joined: 09/06/2010(UTC)
Posts: 1,316
How about quantitative easing for the people?

Suddenly, quantitative easing for the people seems possible

Please read these articles and think about them. Also read the work history of the author. Anatole Kaletsky knows his economics.

These articles make much more sense than the lunacy of Austerity during a recession.
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2 users thanked Jeremy Bosk for this post.
Prof Eman on 11/08/2012(UTC), Guest on 19/08/2012(UTC)
Prof Eman
Posted: 11 August 2012 14:02:32(UTC)
#30

Joined: 08/04/2010(UTC)
Posts: 480
Jeremy and others.
Jeremy thank you for your latest contribution.
Two things strke me most in the articles.
"Distributing money to the general public was the one response to intractable recession which united Milton Freedman and John Maynard Keynes."
Adair turner of Britain's Finanacial Sevices Authority challenged the pervasive complacency of central bankers and called for new ideas that might combine central-bank money creation with Govt decision making on how to bypass banks and inject this money into the non-finanacial economy of consumption, investment and jobs.
Seems that both of them are on the same wave length as me.
My suggestion could be a good starter in QE for the people QEP. i.e. distributing newly created money straight to the public.
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1 user thanked Prof Eman for this post.
Guest on 19/08/2012(UTC)
Prof Eman
Posted: 12 August 2012 22:49:52(UTC)
#31

Joined: 08/04/2010(UTC)
Posts: 480
Just to change tack a little.
Want to go back to my first post
"I can see water spiders, gracefully skimming as light and reasonable as air, the surface of the stream without any contact at all, with eddies and currents underneath."
One such undercurrent is anti-US feeling in Europe.
The most recent example being the Standard Chartered affair. Is UK the next to be picked on and have its AAA rating removed.
After all who in Europe needs enemies with friends like the US?
In the murky world of international finance can anyone give me a list a clean US international banks?
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