Why the Lib Dems are great

[i_got_poison]

No, they didn't.
What they were guilty of was not re-regulating the financial sector, rather than leaving Tory "self-policing" in place.


I'll reiterate the same easily-checkable facts that I've told you before: The deficit is overwhelmingly the result of the banks bail-out. The bail-out was necessary, here as in many other national economies large and small, to prevent economic collapse.

To blame the results of the banks' abysmal lending decisions, poor understanding of the financial instruments they created and/or invested in and short-sightedness on a pair of cretinous politicians really is the mark of a thoroughgoing idiot.

the bail outs could've been prevented if the banks had been regulated properly. allowing retail and investment banks to
operate in the same sphere created a pathogenic environment. CDO's and CDS' were the disease.

you do realise the bail outs represents socialism for the elite?

 

[i_got_poison]

I’ve demonstrated that Labour had increased the share of debt as GDP by 10% during the 00s before the fiscal crash. If they had kept it as low as it was after the good economic growth in their first years of government, rather than increasing it during the following period of steady growth then we would like Germany have much more room for manoeuvre.

I’m not even sure we can assume Brown's argument that the bank's needed bailing out with public expenses as being correct. He ended up rewarding failure within the market thus allowing the banks to carry on with business as usual whilst the rest of us picked up the bill for their bonuses. The market might actually have been able to contain a the collapse of one or two banks reasonably well.

ear ye, hear ye... the erudite have spoken.

 

[elbows]

Im not going to pretend that Labour made our position in the crisis easier. But its fucking well stupid to go along with the Tory narrative that its somehow a problem simply of the uk's making. The market couldnt contain shit, its a international structural problem and very little we could have done would free us from contamination.

Ideologies that made the world go round have been found wanting. There are epic failures in the works, things that Brown could never have prevented. Its true that by buying into these failed ideas New Labour took us even further along that road to nowhere, but given the suffocating nature of these ideas I dont think anybody who opposed this stuff stood any chance of getting anywhere near power for the last 20 years.

 

[Streathamite]

the bail outs could've been prevent if the banks had been regulated properly. allowing retail and investment banks to
operate in the same sphere created a pathogenic environment. CDO's and CDS' were the disease.

you do realise the bail outs represents socialism for the elite?

and you know damn well that if Labour had put in place all the regulations needed to forestall what happened, the tories and the LDs would have screamed blue murder about how "labour's heavy-handedness will kill business"

 

[frogwoman]

Oh talking f that i have a great new idea for a benefit fraud / tax poster

"IF you raise taxes i will take all my money out of the country"
"No ifs No buts - No tax dodgers"

 

[ViolentPanda]

It was still in a growth period that they allowed debt to grow, the grapth demostrates that growth.

being a Whig, you should be au fait with the old adage "speculate to accumulate". That is, some borrowing, to support infrastructure development/renewal, is a good thing, even if it means increasing borrowing in a growth period (and you do realise that borrowing during such a period is generally cheaper and more politically-acceptable too, right?).

Germany had less of a defecit before the financial melt-down then we did. The extent to which banks have had to be bailed out has more to do with domestic real-estate than regulation.

It had little to do with domestic real estate, except insofar as there's only a very small speculative market for property in Germany, so there was no property bubble.
I do hope you're not trying to insinuate, either, that the domestic property bubble here was more than an extremely minor contributory factor in the financial crisis here.
German banks have much closer regulation on what they're able to invest in. The fact that their domestic banks weren't exposed to financial instruments loaded with toxic debt to anywhere near the degree of our domestic banks, is what left them on a better footing.

There would have been consequences, but transferring all the private debt to public debt wasn't without consequences including the public sector cuts we are now seeing as a reaction to the sovereign debt crisis that has spread across Europe.

Take a look at 20th century history in "the west". There is an inevitable consequence to bank failure. A domino effect onto even sound banks that causes them to also fail: Panic behaviour among depositors. If those debts hadn't been transferred, we'd be looking at such consequences as currency devaluation, high inflation, and massive capital flight. We've been here before.
Oh, and to most economists, cuts aren't an issue, but rather how and where you make the cuts, over what period, and at what taper.

 

[elbows]

Anyway both the Tories and Lib Dems will end up being eaten by their own narrative. They cant go on about the UKs failings for too long without having an actual plan for what our economy should be in future. Even the Canadian leader who did the cuts that the Tories are using as a model knows that such a deficit reduction strategy only works when other aspects of the economy are healthy. Humiliation awaits. I bet the Tories will then change the story to focus on the international stuff.

And even if we want to stick within the confines of a stupidly narrow story thats just about debt, talking only about government debt is pretty stupid. If we look at weaknesses in the UKs position compared to Germany, the savings of the citizens is quite a part of the story too, and I see no plans to tackle that stuff.

 

[ViolentPanda]

the bail outs could've been prevent if the banks had been regulated properly.

I believe that was implicit to my point, but thanks for repeating it.
"Proper" regulation, though, was never on the cards. Not from a post-Foot Labour, from the Lib-Dems or from the post-Heath Tories. Once neo-Liberalism was accepted as "the only game in town", anything that militated against as "free" a banking/financial market as possible couldn't be approached.

allowing retail and investment banks to operate in the same sphere created a pathogenic environment. CDO's and CDS' were the disease.

No, the disease pre-existed CDOs and CDSs by decades. They wouldn't have been possible without the de-regulation of the mid 1980s

you do realise the bail outs represents socialism for the elite?

I realise that such a claim can be made by people who enjoy a turn to the tabloidesque, but anyone with an interest in economic and social stability within a democratic paradigm should be able to work out for themselves that although the costs of the bail-out were high, what price economic and social destabilisation?

 

[ViolentPanda]

ear ye, hear ye... the erudite have spoken.

Only if your idea of erudition equates to the partisan claptrap of a Sun leader-writer.

 

[ViolentPanda]

Im not going to pretend that Labour made our position in the crisis easier. But its fucking well stupid to go along with the Tory narrative that its somehow a problem simply of the uk's making. The market couldnt contain shit, its a international structural problem and very little we could have done would free us from contamination.

Ideologies that made the world go round have been found wanting. There are epic failures in the works, things that Brown could never have prevented. Its true that by buying into these failed ideas New Labour took us even further along that road to nowhere, but given the suffocating nature of these ideas I dont think anybody who opposed this stuff stood any chance of getting anywhere near power for the last 20 years.

Absolutely, Mr. Elbows, absolutely.

 

[frogwoman]

Only if your idea of erudition equates to the partisan claptrap of a Sun leader-writer.

I don't understand why they post up propaganda as opposed to thoughts of their own. I know they're capable of thinking ffor themselves so why write all this sloganising discredited bollocks

 

[ViolentPanda]

Anyway both the Tories and Lib Dems will end up being eaten by their own narrative. They cant go on about the UKs failings for too long without having an actual plan for what our economy should be in future.

Or without acting to undermine that economy in the long run.

Even the Canadian leader who did the cuts that the Tories are using as a model knows that such a deficit reduction strategy only works when other aspects of the economy are healthy. Humiliation awaits. I bet the Tories will then change the story to focus on the international stuff.

Of course, or find another little war to interfere in.

And even if we want to stick within the confines of a stupidly narrow story thats just about debt, talking only about government debt is pretty stupid. If we look at weaknesses in the UKs position compared to Germany, the savings of the citizens is quite a part of the story too, and I see no plans to tackle that stuff.

Not only savings, but the continued willingness of German banks to lend. Virtuous circle kind of stuff which, all things being equal, and if Germany wasn't having to spend so much propping up the southern part of the Euro-zone, would currently see them sitting even prettier than they are.

 

[ViolentPanda]

I don't understand why they post up propaganda as opposed to thoughts of their own. I know they're capable of thinking ffor themselves so why write all this sloganising discredited bollocks

It's a lot easier to mouth a party line than it is to open yourself to the possible cognitive dissonance inherent to forming and informing your own opinions from fact rather than tropes.

 

[frogwoman]

exactly, im in a party, but i have my own views and way of expressing them that doesnt sound like it came out of a textbook or a press release, i dont need to post up bollocks all the time about this that and the other

not that it is bollocks of course, but you know

 

[Streathamite]

It's a lot easier to mouth a party line than it is to open yourself to the possible cognitive dissonance inherent to forming and informing your own opinions from fact rather than tropes.

yesh, their heads would prolly dexplode if they started applying any amount of critical rigour to the Party Line!

 

[ericjarvis]

The real problem is that the blue, yellow, and red tories are all in hock to big money. We let British politics get too expensive to work any other way because the vast majority of us couldn't be arsed to deal with politics other than via the mass media. So all the parties "borrowed" huge sums of money from people with a limited right wing agenda, low taxes for the wealthy and minimal regulation of business and finance. So when the shit hit the fan, and the fantasy economy of the majority of the capitalist world came unstuck, we were left in a mess.

So I see the Labour Party as a bunch of sell outs who traded everything they stood for in order to have a taste of power, the Tories as the self serving bunch of wealthy and greedy bastards they have always been, and the Lib Dems as a bunch of largely middle class shits who have never grown out of student politics. However the real blame lies with the British people. We've let them do this to us, largely because we pay lip service to the idea of not trusting politicians, and then we discuss politics as if somehow one set of them must be telling the truth. The simple fact is that the number of politicians in the UK who live in the real world can be counted on the fingers of one thumb.

 

[ericjarvis]

Anyway both the Tories and Lib Dems will end up being eaten by their own narrative. They cant go on about the UKs failings for too long without having an actual plan for what our economy should be in future.

Or without acting to undermine that economy in the long run.

I believe they have already done that.

Back in the late 80s I worked as an assistant to one of Brown's opposition Treasury team. When the housing market crashed we had economic modelling that predicted it pretty much to within a matter of weeks. It was coming, we knew it was coming, but we stuck by the long standing tradition that the opposition are careful about talking down the economy. So whilst warnings were given, they were carefully worded and very subdued. The Tories had played by similar rules in the 70s.

This time around the opposition parties loudly and clearly talked down the British economy. Now that wouldn't have mattered if there wasn't an international financial crisis. As it is they should really share in the blame. They did everything in their power to ensure the economy got screwed in order to take advantage politically. It's something that British politicians didn;t used to stoop to. Acting in a way that harms the nation in order to gain power was once seen as something an honourable person would never do. Sadly the days of anything resembling decency in politics are gone.

 

[elbows]

This time around the opposition parties loudly and clearly talked down the British economy. Now that wouldn't have mattered if there wasn't an international financial crisis. As it is they should really share in the blame. They did everything in their power to ensure the economy got screwed in order to take advantage politically. It's something that British politicians didn;t used to stoop to. Acting in a way that harms the nation in order to gain power was once seen as something an honourable person would never do. Sadly the days of anything resembling decency in politics are gone.

Well I recall some in the media were quite shocked when the Tories started mentioning the unmentionable when in opposition. But nothing really happened, it didnt end up costing the UK dear on international markets or in terms of credit ratings did it? They got away with it, and so I dont see it as having had much impact on the scale of the mess we are in.

 

[moon23]

ViolentPanda;11156618]being a Whig, you should be au fait with the old adage "speculate to accumulate". That is, some borrowing, to support infrastructure development/renewal, is a good thing, even if it means increasing borrowing in a growth period (and you do realise that borrowing during such a period is generally cheaper and more politically-acceptable too, right?).

Problem is Brown's government spending boom did nothing to help enterprise, and instead went all on typical Labour tax and spend projects which became unsustainable. £12BN on CfH, foreign wars, quangoes, complex tax credit schemes, and PFI. He should have been aiming to reduce the deficit in the good times so we could afford to get capital moving again in the hard times.

Germany was able to delay it's deficit reduction program and spent a vast amount on getting business moving again.

It had little to do with domestic real estate, except insofar as there's only a very small speculative market for property in Germany, so there was no property bubble.
I do hope you're not trying to insinuate, either, that the domestic property bubble here was more than an extremely minor contributory factor in the financial crisis here.
German banks have much closer regulation on what they're able to invest in. The fact that their domestic banks weren't exposed to financial instruments loaded with toxic debt to anywhere near the degree of our domestic banks, is what left them on a better footing.

Northern Rock? You remember that bank that needed bailing out that was built on the basis of supplying credit to the domestic housing boom? It raised it's money to fuel our ever increasing cost of mortgages on the back of the US money markets that were themselves affected by their own real-estate collapse. The reason Germany banks fared better is because they had less money invested in sub-prime real estate.

Take a look at 20th century history in "the west". There is an inevitable consequence to bank failure. A domino effect onto even sound banks that causes them to also fail: Panic behaviour among depositors. If those debts hadn't been transferred, we'd be looking at such consequences as currency devaluation, high inflation, and massive capital flight. We've been here before.
Oh, and to most economists, cuts aren't an issue, but rather how and where you make the cuts, over what period, and at what taper.

I agree how and where you make the cuts are important. I personaly would shave 5% of the NHS budget, delay trident, invest in reducing tax avoidance and reduce military expenditure. Burnham though he could make £4.35bn cuts from the NHS when he was in power, so Labour were thinking of NHS cuts too. A bit of pressure on the NHS would help reduce their vast amounts of waste.

 

[moon23]

I believe they have already done that.

Back in the late 80s I worked as an assistant to one of Brown's opposition Treasury team. When the housing market crashed we had economic modelling that predicted it pretty much to within a matter of weeks. It was coming, we knew it was coming, but we stuck by the long standing tradition that the opposition are careful about talking down the economy. So whilst warnings were given, they were carefully worded and very subdued. The Tories had played by similar rules in the 70s.

This time around the opposition parties loudly and clearly talked down the British economy. Now that wouldn't have mattered if there wasn't an international financial crisis. As it is they should really share in the blame. They did everything in their power to ensure the economy got screwed in order to take advantage politically. It's something that British politicians didn;t used to stoop to. Acting in a way that harms the nation in order to gain power was once seen as something an honourable person would never do. Sadly the days of anything resembling decency in politics are gone.

If anything Liberals and Conservatives talked down the scale of the cuts needed and the extent to which the defecit was out of control.

 

[Santino]

So you accept my point about mendacious, power-hungry Lib Dems. Good for you.

 

[butchersapron]

If anything Liberals and Conservatives talked down the scale of the cuts needed and the extent to which the defecit was out of control.

You mean they lied?

Bizarre line of defence.

 

[moon23]

So you accept my point about mendacious, power-hungry Lib Dems. Good for you.

One of the sad things about the election was a lack of any serious discussion about where to make the cuts, Labour were the party in government and they dodged being pinned down on anything. Lib Dems could have made a case for more cuts, they had a budget that was independently audited out, but not winning the election there was never a hope of implementing it. Now I think the important thing is to demonstrate strength in the fiscal plan to get the economy working.

 

[elbows]

If anything Liberals and Conservatives talked down the scale of the cuts needed and the extent to which the defecit was out of control.

What planet are you on? They were not going to go on about specific cuts, or increase to VAT, but the Tories in particular talked the scale of things up, not down.

 

[butchersapron]

about where to make the cuts

You question begging motherliker.

 

[Pickman's model]

One of the sad things about the election was a lack of any serious discussion about where to make the cuts, Labour were the party in government and they dodged being pinned down on anything. Lib Dems could have made a case for more cuts, they had a budget that was independently audited out, but not winning the election there was never a hope of implementing it. Now I think the important thing is to demonstrate strength in the fiscal plan to get the economy working.

one of the sad things about your posts is your failure to comprehend what you're talking about.

 

[moon23]

You mean they lied?

Bizarre line of defence.

I think there was a collective denial on behalf of all parties to talk about the cuts in the election campaign in anything other than abstract terms for fear of frightening the electorate.

 

[butchersapron]

What planet are you on? They were not going to go on about specific cuts, or increase to VAT, but the Tories in particular talked the scale of things up, not down.

In fact the tories used their aggressiveness on the cuts as the clear blue water defining issue. The lib-dems were on the other side at this point.

 

[Santino]

But the Lib Dems lied in abstract terms as well as in concrete terms.

 

[Pickman's model]

I think there was a collective denial on behalf of all parties to talk about the cuts in the election campaign in anything other than abstract terms for fear of frightening the electorate.

example pls