Who does Gideon Osborne think he is kidding?

This Tory-dominated government claims there is no alternative to austerity. Below, nine leading economists, including a Nobel Prizewinner and one of the Chancellor's own advisers, say that's wrong - and offer a different path:-

Cut VAT back to 17.5%
Christopher Pissarides
Agree financial transaction tax
Jeffrey Sachs
Reduce NI contributions
David Blanchflower
Print money for the public
Sushil Wadhwani
Start a national investment bank
Robert Skidelsky
Lift the cap on immigration
Jonathan Portes
Lend directly to small businesses
George Magnus
Launch a green new deal
Ann Pettifor
Set up a recovery fund
Christopher Allsopp

For the details of each of those suggestions, click on the links on this page:-
http://www.newstatesman.com/economy/2011/10/alternative-coalition

It has been announced that the number of companies in financial trouble is growing, the number of firms in distress in the third quarter of 2011 is 23% higher than the same period last year.

A growing number of economists are now calling for some form of economic boost, but chancellor George Osborne still insists that his plan is the right one for Britain. I can well imagine George Osborne on board the Titanic as it fills with water, telling everyone that this ship is unsinkable.

Why are there never any icebergs around just when you want one?

On 14 October, ‘The New York Times’ ran an editorial about the UK government’s economic policy. The purpose of it was to warn American policy makers from making the same mistakes as Cameron and Osborne.

This is the first paragraph: “For a year now, Britain’s economy has been stuck in a vicious cycle of low growth, high unemployment and fiscal austerity. But unlike Greece, which has been forced into induced recession by misguided European Union creditors, Britain has inflicted this harmful quack cure on itself."

And this is the last paragraph: “Austerity is a political ideology masquerading as an economic policy. It rests on a myth, impervious to facts, that portrays all government spending as wasteful and harmful, and unnecessary to the recovery. The real world is a lot more complicated. America has no need to repeat Mr. Cameron’s failed experiment."

For the full article:-
http://www.nytimes.com/2011/10/15/opinion/britains-self-inflicted-misery.html?_r=2&scp=2&sq=David%20Cameron&st=Search

I'm not convinced that American economists have a lot to teach anyone else. They have not been in a worse condition since 1931.

The 20th. Century was notable for the ascendancy of "Western" commerce over what we were pleased to term "Third World Countries", but that is all now going into reverse, with the strengthening of a Global Economy. Workers in the formerly poor countries like China, India and some South American places are beginning to exact a proper working wage for their labour, and it is our importations that have to pay the bill.

What goes around comes around.

Workers in the formerly poor countries like China, India and some South American places are beginning to exact a proper working wage for their labour

I don't really think that's what's happening or else businesses wouldn't be flocking to places like China. Statistically, the United States still boasts having the most productive workers in the world, but businesses believe that only consumers must pay more for higher quality. Instead, they are exploiting cheap labor overseas because these overseas workers are NOT getting a proper working wage ... and there are few laws that require one.

Even now, Republican presidential hopeful Herman Cain is espousing a plan to eliminate minimum wage laws in the poorer areas of America in order to stimulate economic growth ... not for the workers but for the businesses. Thus Cain's plan is to begin setting up what he calls "Opportunity Zones" in the US. What they really should be called is "Serfdom Zones" because that's what it really amounts to.

What this means is that America will begin setting up areas in our nation that will effectively be Third World with Third World wages and Third World working conditions ... but with First World prices. Can we say "cha-ching?" Just think of the profits!

I plan to post more about this in my blog later today (tonight for the Brits).

QUOTE: a plan to eliminate minimum wage laws in the poorer areas of America

It's been done before. Caused a Civil War, but fortunately the Good Guys won.

If after all this time of government interference people haven't worked out that a minimum wage set by a government simply doesn't work, there's no hope left for common sense. Open your eyes.

If after all this time of government interference people haven't worked out that a minimum wage set by a government simply doesn't work, there's no hope left for common sense. Open your eyes.

So you are advocating a financial "race to the bottom" for the average worker? Without minimum wage laws in place, businesses would simply exploit desperation by paying excessively low wages to people glad to have any kind of job at all. Why else do you think Herman Cain wants to set up "Opportunity Zones" in the poorest areas? Well ... because there are a lot of desperate people to exploit. It is a "target rich environment." After all, it won't help the citizens of these areas one iota. Only the businesses will get a boon because now they can hire people for practically nothing, work them half to death, and make a killer profit by selling their sweatshop-produced goods to wealthier consumers somewhere else. Thus the money won't even stay within these communities.

It's a scheme, an exploit, and the first pockets of Third World life right here in the USA. I predicted this would happen eventually as Globalization erodes the standard of living for everyone not on the "rich list."

Oh, this may interest you, as well:

Good Graph Friday: US manufacturers are making one thing - profits

The last few years have been tough on many Americans who work in the manufacturing industry, but they haven't been nearly as tough on the manufacturers’ profits.

After-tax profits for U.S. manufacturers totaled $159.7 billion in the second quarter, according to the Census Bureau. That’s nearly triple what they were in the second quarter of 2009, when corporations were just starting to emerge from the deep economic blows of 2008. The data is seasonally adjusted.

So ... we should get rid of minimum wages for ... what reason, exactly? To hand corporations even MORE profits?

Hello Shirina,
For someone to actually have the gall to condemn the minimum wage, is IMO absolutely the pits. It shows a lack of compassion for their less fortunate fellow human beings. Easy enough do do when hiding behind a user name and cannot be identified.

It is obvious that those who voted Tory at the last election and who have openly admired the Witch Thatcher, are greedy and selfish to the nth degree and who obviously enjoy the exploitation of others.

I'm sure you can remember a time when companies had a social responsibility to the area that they built in. To gain a degree( back in the 70's) in management, one of the key questions was regarding sociai impact of a company (no1 question being after responsibilty for shareholders money). Back in those days apprenticeships were abundant in most trades and the wages were dire for apprentices who were expected to be supported by their parents and family (only 100 years earlier and people paid to have their kids indentured). Now families don't look after their kids, governments insist they know better on how to bring up a family. Kids do not learn about responsibilty (the government will look after you), 16 year olds believe they should start on top dollar or it's not worth getting out of bed.

Sorry Shirina, if you believe it's all about profits remember where pensions come from!

More sweeping generalisations Land?

The current wage for an apprentice is £2.50, thats if you can get an apprenticeship......

Not everyone who is unemployed and living at home get benefits,,,,My son who following his 2 weeks manditory training and 'work exprience', 5 years ago, which failed to assist him in getting a job had his benefits stopped and he has relied on the Bank Of Mum & Dad since despite many job applications but few interviews.......

I am happy to say that he has finally managed to get a part time job 22.5 hours a week.........But he has to wait 6 weeks before he gets his first pay packet so a little more support from parents is still needed.......

Happy he's found something astradt. 2 weeks training is not an apprenticeship. When I was an apprentice engineer my first wage was £1.10.6d. This had to cover my fares to work (2 buses) lunch, clothes and entertainment. Naturally it was my parents that had to stand my costs. The company (Rose Forgrove) was internationally recognised as one of the best in its field and at the end of the apprenticeship it was known that there wouldn't be a job available for most. What you did get was great training and the ability to pretty much walk into any engineering field on top money.

Isn't that how it's meant to work, not really a generalisation, simply facts.

I agree that apprenticeships were a great thing, it showed that the employer was prepared to invest in the employee, how often do we hear of companies complaing that they can't 'get' skilled staff, thye never say anything about the number of trainees they are taking on......

As a nurse I trained under the system where you spent the majority of your time on the wards learning how to nurse from doing the job, not like now when more time is spent in the classroom and reading books on how to nurse....and you didn't need a bucket full of GCSE to get in and a Degree at the end......It was like an apprenticeship and I believe it made for better nurses....

I know that my sons 2weeks was not an apprenticeship, it was supposed to teach him the skills to write a CV , interview techniques and give him 5 days working for companies, at the governments expence, to teach him about what it would be like to have a job........at least 2 of the companies told him that if they had had a vacancy thye would have offered him a job but thye didn't so it was thank you for your effort but goodbye...........

Schoolchildren don't get wages, so why is it a matter for debate that whilst learning a job on the job, the wages aren't very good. The rewards come later for the skilled tradesman who can command a premium for knowledge and ability. There is a parallel with professionals who as Doctors, Vets, Solicitors or Accountants don't start to earn real money until they are thirty years old.

Time spent learning a skill is rarely wasted.

The exception of course are the Spivs and slickers in the City of London who can make millions using other peoples' money. In a just Society, trading "derivatives" would be classed as Theft.

Bloody hell OW, yet another post that I agree with.

:affraid: Give us a kiss then.

If you two keep agreeing fawningly with each other and trading physical greetings, I can guarantee that you will end up in the Pease Pottage Conservative Club notes...

Oh Noh! Not THE NOTES!!!!

That's typical- as soon as the football is over on a Saturday, the hoi-polloi arrive on here...

Wonder who Gideon supports.

Come on The Blues!

Always assumed it was Coven Tory City...


And talking of Coven Tories....

(helloquizzy.com)

Always assumed it was Coven Tory City...



Wher do you get them??

Of course if we are going back to the "seventies" and before, apprenticeships were available to thousands of young people.
As OW has rightly said, a young apprentice in those days would not expect to earn very much whilst being trained up as a skilled person.
The problem became somewhat different when the Witch took over. So much of our industry was eliminated.(one reason why we now struggle with growth because of her having destroyed our manufacturing base.)

Since those good old days before Thatcher, the dog eat dog doctrine she created has paved the way for greedy employers exploitation of the young who if and I repeat if they can find a job, or better still a genuine apprenticeship, then they are the fortunate few, unfortunately.

Unemployment has risen under past and present Tory governments, the creation of unemployment makes for cheap labour. Our young people who are castigated by some people who consider them all to be lazy and expecting too much from an employer, are feeling the thin edge of the wedge. Employers and Tory governments are only interested in greed and high profit margins which looks after the bosses and in particular the shareholders. They can get away with exploitation of the young and anyone else who is desperate for a job, or as now is the case, forced to take jobs that pay a pittance, which again is a brutal and not a helpful Tory policy for the likes of these poor down trodden sods.

"Always assumed it was Coven Tory City.." Clever!!!!.

A lot of Tories favour The ARS N AL, although most of those I suspect are Back Benchers.

Yep. Amongst Tories it does make you wonder how many male members are actually keen on 'Udders Feeled...'

We should try to avoid spoiling lovely relationships, where possible.
.......... with lobbyists particularly, upon whom so many Ministers depend for their beer-money.

It seems to me that you people are never going to get your finances in order until such time as you rein in your spending on socialism. How many hundreds of billions is that costing you that you will never recover in any way shape or form?
 
gator

Am I to be included in the expression "you people"? It's almost always used by someone with whom I have little in common, and who knows that.

Point take ROB. However, I don't see that as pure socialism because the good citizens of the USA do get some benefit and some value from the actions of the US military. OTOH, what manner of benefits does a nation get when almost half of its residents are sucking off the public teat and providing nothing in return?
 
gator

Gator!

How can half of the population do anything ELSE than suck of the treasury teat?

Our Shipbuilding has gone to Germany and Poland
Our Coal industry has gone to Poland
Our Steel works have gone to Italy and INDIA
Our aircraft manufacturing base has gone to Brasil, Italy and any other sod that wants it
Our Services are mostly foreign owned
Our workforce is the EASIEST to SACK/PAYOFF in the EU! Companies go tits up and we are on the dole
Even relocating for a Brit Company is easy - many have done it - to Tunisia, Poland, Italy and Slovenia, and each "relocation" means more poor sods on the dole queue.
(for the word GONE in this message, read - WAS GIVEN)
Well, actually, we PAID them £46million a DAY to take them!

All this done by Conservative Governments in the 80s WITHOUT any referendums or input by the people on what they think!
The LAbour (ie SOCIALIST) Government from 1998, to 2010 was as Conservative as any red hot tory, just in a diffefernt mask!

We are where we are not BECAUSE WE WANT TO BE HERE, but through double dealing self serving mountebanks, because we, the people let them away with it? NAH, because the legislation here has been so secretly tied up that to complain is next to a terrorist charge!

Just to add insult to injury, all the waif's and strays from EU are INVITED here by these same numpties to exacerbate the problem! But as usual, it is the ill, the infirm and the incapable who get the blame for all the shortcomings in the UK!

The British Prime Minister is a laughing stock all accross Europe

As growth slumps, and as inflation and unemployment soar, Mr Cameron (Batman) and George Osborne (Robin) are constantly offering advice to the Eurozone members on the best way forward, to draw an analogy I guess it would be rather like King Herod offering advice on maternity services.

We all know and accept that we cannot go mad with spending, but spending nothing and simply cut, cut, cut, has led to slowing growth, as predicted by the leadership of the Liberal Democtats prior to the general election of 2010, and as predicted by many leading economists.

Anyone who doubts economic wisdom should read this sentence:-

The government is already set to borrow £46 billion MORE because of slower growth, higher inflation and soaring unemployment.

The simple economic equation is this: Invest a little in the right place to get a good return, encouraging growth will automaticly reduce your deficit and debt, but try telling this to George Osborne, anyone would think he is devastating public services out of pure spite and political ideology - Oh! I forgot, he is.

OTOH, what manner of benefits does a nation get when almost half of its residents are sucking off the public teat and providing nothing in return?

The US military, at least during the Cold War provided what is called a "peace dividend." So while we spent 50 years spending trillions on supercarriers, main battle tanks, figher-interceptors, attack helicopters, cruise missiles, and stealth bombers, they were never used to do what they were designed to do: Defeat the Russians. We never had to defeat the Russians because the socialism that is the US military provided a large enough deterrent to the Soviets that war between our two nations was never a likely scenario.

Our "sucking of the public teat," as you call it, provides an equally important deterrent against civil unrest. Even though our "socialism" is abysmal compared to more civilized nations, without it, we would see a lot more nastiness on our streets. Now, you're more than welcome to live in a war-torn nation where desperate people do desperate things in the name of survival, but I wouldn't want to see that here. If you're so eager to take what little the poor have to fulfill some right-wing ideology, then you had best be prepared to reap the consequences. At that point, Iran - a nation you suggested I move to - might actually begin to look preferable compared to a nation in the throes of violent revolution. Have you learned nothing whatsoever from the storming of the Bastille and the subsequent Terror of Robespierre? Or must we, yet again, be condemned to repeat history because of our nonsensical failure to learn from it?

'Compass' has just launched its "Plan B; a good economy for a good society", with the support of 100 economists. Plan B offers an alternative political economy that includes short term emergency measures like reversing cuts to get the economy moving again, directing quantitative easing to a Green New Deal, and creating a British Investment Bank to leverage investment in low carbon sectors such as housing, transport and renewable energy.

Plan B is also about laying the long term economic foundations for the good society. The report has an emphasis on the ‘core economy’ of families and outlines policies for a rebalancing of time spent working and ‘living’. It argues that we should be moving beyond viewing ‘GDP’ as the sole measure of economic success.

http://clients.squareeye.net/uploads/compass/planbonepager.pdf

http://www.guardian.co.uk/politics/2011/oct/29/plan-b-economy-george-osborne

An important contributor to Tory-party funds has come up with a wheeze to beat even PFI for stupidity. The suggestion is to lend money to entrepreneurial companies backed by the sums held in Pension Funds. I thought the Stock Exchange existed for a similar purpose, but in any case what's the provision for failure?

Our hopeless Chancellor has sold Northern Rock to Richard Branson for £747 million, which represents a loss of £400 million on what the last government paid for it in order to prevent a run on British banks. Branson owns a Caribbean island and already does well out of the British taxpayer, and now he gets a bank on the cheap. When the banking industry has settled down a little, he will probably sell up, either to a foreign bank or perhaps through a flotation, and make himself a handsome profit. Once again under the Tories, a very wealthy individual benefits at our expense.

Labour has raised questions both over the substance and the timing of the sale. Ed Balls, the Shadow Chancellor, said: “It is being sold off at a loss and I think there is a question as to whether or not this is the best time, with the markets in turmoil, to get the best deal”. Chi Onwurah, the Labour MP for Newcastle Central (which includes Northern Rock’s headquarters) added: “I am concerned the Tory-led coalition are selling the bank at a £400 million loss and that their refusal to look seriously at a co-operative model means they are out of touch with the British people’s desire for a longer term, sustainable banking model”. Even Tory MP Mark Field said: “I am very concerned about whether we are getting really good value for the taxpayer. There has to be a sense that Richard Branson has got the deal he was craving four years ago for a song today”.

Branson has promised there would be no further compulsory redundancies for three years beyond those already in the pipeline.

For more details:-
http://www.independent.co.uk/news/business/news/osborne-sells-off-northern-rock-for-400m-loss-6264087.html