Bolitics The New Condem Government

[Awol]

The Nimrod is a 50 year old air frame design. It was based on the comet airliner and still looks like a comet airliner. Plus there are much cheaper types of aircraft that do the same job.

There is/was no more capable platform for its role in the whole world than than the MR4. Let's take an island nation of similar size and with similar strategic interests as ourselves for comparison, say Japan. They operate 101 fixed wing maritime patrol aircraft, we will operate none - despite already having invested 3 billion quid into the programme.

Besides, how many of these "cheaper aircraft that [can't] do the same job" are we buying instead? Zip. Putting aside the other vital roles of Nimrod for a second, that utterly compromises our nuclear capability. Sooner or later a Russian Akula class sub will record the acoustic signature of a V class missile boat putting to sea and our deterrent of instantly deployable instant sunshine is no longer worth squat.

But without Harriers (which in the modern era have certain deficiencies), they are useless. HMS Ocean carries out the role of being the platform for support helicopters plus HMS Albion and Bulwark and the RFA Bay Class ships have the capacity to carry helicopters too.

Newsflash, (that wasn't in the commons statement) the RN will have to:

Decommission either Ocean or Illustrious following a short study of which can provide the most effective helicopter platform.

Mothball either Albion or Bulwark.

Decommission a Bay Class amphibious support ship.

That's in addition to losing the Ark and 4 Frigates. Current escort hull strength is now 23, down from 35 in 1997 - since when the last government simply didn't bother to replace the hulls being decommissioned.

So, for the next decade:

Only 1 LPH in service (Ocean or Illustrious) all other flat tops decommissionned.

Only 1 LPD in service and 1 in mothballs.

Virtually new Bay Class to be decommissioned leaving just 3 in service.

Subsequent decade:

Strike carrier and LPH capability shared upon a single platform with another in mothballs, but in reality probably sold.

Sorry mate but yesterday Cameron retired UKPlc from the naval business.

[JulieB]

Bank of England governor Mervyn King signalled tonight that he was closer to embarking on a second round of quantitative easing after he said there was a strong case for pumping funds into the economy to spur growth and prevent inflation falling below its 2% target.

The problem is that in the main QE is not working as it should do sufficiently because the Banks aren't in the main playing ball...instead they're just playing lip service. They've accessed massive amounts of released cheap money at 0.5% from the B of E post credit crunch & then simply lent these funds back to the UK Treasury in the form of long term Gilt notes paying between 2-3.75% since Lehman's crash to fund our enormous deficit!!! Madness - This has given banks a decent enough margin on it's own .........which means that the retail banking sector haven't actually needed to do what they are primarily supposed to be around for... which is to lend to Joe Bloggs and SMEs to keep the UK economy functioning correctly.

As I've said before the City has become like some "quantative easing re-cycling centre", where it's hard to see an end product!

Things are starting to ease a little but Banks & financial institutions have never had it so good to build back up their balance sheets post credit crunch. LIBOR is only just over 1%...yet retail mortgages are well above that figure 3-4%. Commercial lending, overdrafts and credit card rates have actually increased, which has meant the outcome on SMEs & the UK economy it that they've been squeezed NOT eased!!!

IMHO the Banks have been allowed to hold UK PLC to ransom..........they continue to get away with murder, particularly since massive consolidation has retracted competition to a level where the whole thing stinks of a cartel.

Any layman can see they are screwing their customers whereever possible to build their balance sheets back up, buy back the tax payers share & tell the UK government to do one over how much bonus they pay themselves.

Despite the gloom & doom in the rest of the normal employment world out there, with public sector cuts looming - Bankers - in a survey published last week - expect their salaries and revenues to increase. Quelle surprise... NOT!!!

....consequently the government are in a bit of a no win situation though because they are reliant on the Banks so much to keep UK PLC ticking over and as we've seen at the the end of the day they have to support the Banks because they can't afford to let them fail....However much Vince Cable rattles his saber! As soon as the coalition start talking tough they threaten to move offshore! Although that certainly wouldn't wash with me!...I'd just show them the door & take up the slack with a National Bank!!

We need some healthy competition in the UK Banking sector and some more foreign banks moving in to the UK bigtime, but it's not easy because the players already in "Team City" pull such alot of weight in the boot room, that the players are not adverse to outmuscling anyone who dares to threaten their place in the team. Ask anyone who works in the City to tell you what REALLY goes on regarding the Investment Banks and the dirty tricks they play to keep their market share.

Mervyn & B of E pumping money into the Economy is not the answer without "Team City" pulling together for the greater good and that just ain't going to happen in the real world. Team City are just a bunch of mercenaries out for a pay day. As ably demonstrated by "player" RBS (using our money mind)- supporting a Kraft US takeover over of Cadbury's - At the end of the day it's ALL about the money!

Stinks doesn't it!!

[leviramsey]

In shocking news, there's an outburst of common sense from the BoE: Mervyn King hints at fresh round of quantitative easing

Bank of England governor says strong case for pumping money into economy to spur growth and stop inflation falling below 2%

Bank of England governor Mervyn King signalled tonight that he was closer to embarking on a second round of quantitative easing after he said there was a strong case for pumping funds into the economy to spur growth and prevent inflation falling below its 2% target.

King warned the next decade would be bumpy and the UK would struggle to claw back the 10% of output it lost following the banking crash.

A lower exchange rate is expected to support a rise in exports and help rebalance the economy towards investment and exports.

As evidenced by my posts on the economy I'm no expert but here's a few laymans' thoughts/questions anyway..

Devaluing Sterling through QE could do a number of things:

Lowers the cost of exports

Increases the cost of imports/Leads to inflation

QE, if executed perfectly, is in effect no different from raising VAT (across the board, without zero-rating), and has the added benefit of debt relief.

It's the option beloved of any number of Latin American basketcases, but it's ultimately the only politically and practically viable when you're in the spot in the "D process" (debt deflation) that we are.

[leviramsey]

The problem is that in the main QE is not working as it should do sufficiently because the Banks aren't in the main playing ball...instead they're just playing lip service. They've accessed massive amounts of released cheap money at 0.5% from the B of E post credit crunch & then simply lent these funds back to the UK Treasury in the form of long term Gilt notes paying between 2-3.75% since Lehman's crash to fund our enormous deficit!!! Madness - This has given banks a decent enough margin on it's own .........which means that the retail banking sector haven't actually needed to do what they are primarily supposed to be around for... which is to lend to Joe Bloggs and SMEs to keep the UK economy functioning correctly.

The root of the problem is and always was that asset prices (fed by leverage) grew to the point relative to their cash flows that debt could not be serviced. Until the point that asset prices generally decline markedly relative to cash flows, you're not going to see bank lending pick up.

Additionally, what bank is going to lend at decent rates if they have the slightest inkling that large inflation (which is the result if in fact we're not in a deflationary situation) is around the corner?

[bickster]

This from yesterday, be worth looking at what they don't cut today…

Britain’s Shock Doctrine

Posted October 18, 2010

The economic crisis is the disaster the Conservatives have been praying for. Now they can reshape the economy on corporate lines.

By George Monbiot. Published in the Guardian 19th October 2010.

We’ve been staring at the wrong list. In an effort to guess what will hit us tomorrow, we’ve been trying to understand the first phase of the British government’s assault on the public sector: its bonfire of the quangos. Almost all the public bodies charged with protecting the environment, animal welfare and consumers have been either hobbled or killed(1). But that’s only half the story. Look again, and this time make a list of the quangos which survived.

If the government’s aim had been to destroy useless or damaging public bodies, it would have started with the Commonwealth Development Corporation. It was set up to relieve poverty in developing countries, but when New Labour tried, and failed, to privatise it, the CDC completely changed its mission. Now it sluices money into lucrative corporate ventures, while massively enriching its own directors. Private Eye discovered that in 2007 this quango paid its chief executive just over a million pounds(2). The magazine has also shown how the CDC has become entangled in a series of corruption cases(3). Uncut. Unreformed.

The same goes for the Export Credit Guarantee Department. The ECGD effectively subsidises private corporations, by underwriting the investments they make abroad. At one point, 42% of its budget was spent on propping up BAE’s weapons sales(4). It also pours money into drilling for oil in fragile environments(5,6). A recent court case showed how it has underwritten contracts obtained with the help of bribery(7,8). Uncut. Unreformed.

The Sea Fish Industry Authority exists “to help improve profitability for the seafood industry”(9). Though it is a public body, all but one of its 11 directors work for either the fishing industry or food companies(10). They seek to “promote the consumption of seafood”(11), to “champion the industry in public debates”(12) and to “influence the regulatory process” in the industry’s favour(13). Uncut. Unreformed.

Can you see the pattern yet? Public bodies whose purpose is to hold corporations to account are being swept away. Public bodies whose purpose is to help boost corporate profits, regardless of the consequences for people and the environment, have sailed through unharmed. What the two lists suggest is that the economic crisis is the disaster the Conservatives have been praying for. The government’s programme of cuts looks like a classic example of disaster capitalism: using a crisis to re-shape the economy in the interests of business.

In her book The Shock Doctrine, Naomi Klein shows how disaster capitalism was conceived by the extreme neoliberals at the University of Chicago(14). These people believed that the public sphere should be eliminated, that business should be free to do as it wants, and almost all tax and social spending should be stopped. They believed that total personal freedom in a completely free market produces a perfect economy and perfect relationships. It was a utopian system as fanatical as any developed by a religious cult. And it was profoundly unpopular. For a long time its only supporters were the heads of multinational corporations and a few wackos in the US government.

In a democracy under normal conditions, those who were harmed by abandoning public provision would outvote those who gained from it. So the Chicago programme couldn’t be imposed in these circumstances. As the Chicago School’s guru, Milton Friedman, explained, “only a crisis – actual or perceived – produces real change.”(15) After a crisis has struck, he added later, “a new administration has some six to nine months in which to achieve major changes; if it does not act decisively during that period, it will not have another such opportunity.”(16)

The first such opportunity was provided by General Pinochet’s coup in Chile. The coup was plotted by two factions: the generals and a group of economists trained at the University of Chicago and funded by the CIA. Their ideas had already been comprehensively rejected by the electorate, but now the electorate was irrelevant: Pinochet used the crisis he had created to imprison, torture or kill anyone who dissented. The Chicago School policies – privatisation, deregulation, massive tax and spending cuts – were catastrophic. Inflation rose to 375% in 1974; the highest rate on earth. Even so, Friedman insisted that the programme was not going far or fast enough. On a visit to Chile in 1975 he persuaded Pinochet to hit much harder. The result was a massive increase in unemployment and the near-eradication of the middle class. But the very rich became much richer, and the corporations, scarcely taxed, deregulated, fattened on privatised assets, became much more powerful.

By 1982, Friedman’s prescriptions had caused a spectacular economic crash. Unemployment hit 30%; debt exploded. Pinochet sacked the Chicago economists and started re-nationalising stricken companies, whereupon the economy began to recover. Chile’s so-called economic miracle began only after Friedman’s doctrines were abandoned. The Chicago School’s catastrophic programme pushed almost half the popultaion below the poverty line and left Chile with one of the world’s highest rates of inequality(17).

But all this was spun by the corporate media as a great success. With the help of successive US governments, similar programmes were imposed on dozens of countries in which crises ensured that the population was unable to resist. Other Latin American dictators copied Pinochet’s economic policies, with the help of mass disappearances, torture and killings. The poor world’s debt crisis was used by the IMF and the World Bank to impose Chicago School programmes on countries that had no option but to accept their help. The US hit Iraq with economic shock and awe – privatisation, a flat tax, massive deregulation – even as the bombs were still falling. After Hurricane Katrina wrecked New Orleans, Friedman described it as “an opportunity to radically reform the educational system”(18). His disciples immediately moved in, sweeping away public schools while the residents were picking up the pieces of their lives, replacing them with private charter schools.

Our crisis is less extreme, so, in the United Kingdom, the shock doctrine cannot be so widely applied. But, as David Blanchflower warned yesterday, there’s a strong possibility that the cuts programme will precipitate a bigger crisis: “it’s a terrible, terrible mistake. The sensible thing to do is to spread [the cuts] over a long time”(19). That’s another feature of disaster capitalism: it exacerbates the crises on which it thrives, creating its own opportunities.

So we shouldn’t wonder that 35 corporate executives wrote to the Telegraph yesterday, arguing, just as Milton Friedman used to do, for a short, sharp shock, before the window of opportunity closes(20). The policy might hit their profits for a while, but when we stagger out of our shelters to assess the damage, we’ll discover that we have emerged into a different world, run for their benefit, not ours.

clicky (I think it may also have been in the Guardian)

Its always better to look at what they aren't telling you

[peterms]

...The government’s programme of cuts looks like a classic example of disaster capitalism: using a crisis to re-shape the economy in the interests of business...

If there's one sentence which sums up what's really happening, it's that one.

[snowychap]

Prediction for the most repeated maxim of the day: Spending to return to 2006 levels.

[Risso]

clicky (I think it may also have been in the Guardian)

Published in the Guardian 19th October 2010.

I think it may have been as well!

[blandy]

This is illogical - the writer proposes increasing structural (over) spending to remedy deficit problems. In other words to add to the deficit by over spending. Or to put it another way, to make things worse.

No. He's proposing that the larger part of the deficit is in fact cyclical, not structural; and that the remedy lies in adjusting cyclical factors to deal with it, especially trying to stimulate growth.

He is not proposing embarking on creating structural deficits to counter a cyclical problem...

My grasp of economics is not strong, and I'm finding stuff out al lthe time. The thing that I don't follow with that article is that, given it's apparently good sound practice to follow Gordon Brown's golden rule (no one I've heard has ever said it's the wrong thing to do, not even the Tories), and that the rule seemed to be that over the length of a natural economic cycle, gov't should not increase the level of borrowing, unless it is to fund things for the future [like a high speed rail link, or a power station, or school building etc..] the article seems to my reading, in the bit I quoted, to be proposing the opposite, in part - to increase the percentage of public spending not on things to benefit the future, but just on stuff for the here and now - whether that be benefits, public sector wages, pointless quangos, plush offices for minsters, NHS costs, or whatever - the good and the bad. In other words to spend your way out of debt, not by spending on (as I said in an earlier post) improving the country's infrastructure, green projects, environment and transport etc, which would be good, but on things which are wasteful and which have no genuine positive benefit to anyone and which make the situation worse next year, and the year after.

In a simple analogy, if your house heating bills are more than your income, you can either

a) turn the heating up or leave it as it is and eventually get repossesed

turn the heating down and freeze

c) spend on insulation and draft proofing, knowing that this will over time bring your bills down permanently.

The tories seem to be proposing and that article, in part, a)

[blandy]

The Nimrod is a 50 year old air frame design. It was based on the comet airliner and still looks like a comet airliner. Plus there are much cheaper types of aircraft that do the same job.

There is/was no more capable platform for its role in the whole world than than the MR4. Let's take an island nation of similar size and with similar strategic interests as ourselves for comparison, say Japan. They operate 101 fixed wing maritime patrol aircraft, we will operate none - despite already having invested 3 billion quid into the programme.

Besides, how many of these "cheaper aircraft that [can't] do the same job" are we buying instead? Zip. Putting aside the other vital roles of Nimrod for a second, that utterly compromises our nuclear capability. Sooner or later a Russian Akula class sub will record the acoustic signature of a V class missile boat putting to sea and our deterrent of instantly deployable instant sunshine is no longer worth squat.

But without Harriers (which in the modern era have certain deficiencies), they are useless. HMS Ocean carries out the role of being the platform for support helicopters plus HMS Albion and Bulwark and the RFA Bay Class ships have the capacity to carry helicopters too.

Newsflash, (that wasn't in the commons statement) the RN will have to:

Decommission either Ocean or Illustrious following a short study of which can provide the most effective helicopter platform.

Mothball either Albion or Bulwark.

Decommission a Bay Class amphibious support ship.

That's in addition to losing the Ark and 4 Frigates. Current escort hull strength is now 23, down from 35 in 1997 - since when the last government simply didn't bother to replace the hulls being decommissioned.

So, for the next decade:

Only 1 LPH in service (Ocean or Illustrious) all other flat tops decommissionned.

Only 1 LPD in service and 1 in mothballs.

Virtually new Bay Class to be decommissioned leaving just 3 in service.

Subsequent decade:

Strike carrier and LPH capability shared upon a single platform with another in mothballs, but in reality probably sold.

Sorry mate but yesterday Cameron retired UKPlc from the naval business.

Indeed. and just on Nimrod - The MRA4 is essentially a re-engineered, re-built aircraft that is 93 per cent new.

- Gathers, processes and displays up to 20 times more data than the MR2.

- Equipped with more than 90 antennas and sensors and contains over six million lines of software code.

- Able to fly 6,000 miles or 14 hours without refuelling and can scan an area the size of the UK every 10 seconds.

This is not a 50 year old anything. it is (or was) the most capable MPA in the World.

[snowychap]

The thing that I don't follow with that article is that, given it's apparently good sound practice to follow Gordon Brown's golden rule (no one I've heard has ever said it's the wrong thing to do, not even the Tories), and that the rule seemed to be that over the length of a natural economic cycle, gov't should not increase the level of borrowing, unless it is to fund things for the future [like a high speed rail link, or a power station, or school building etc..] the article seems to my reading, in the bit I quoted, to be proposing the opposite, in part - to increase the percentage of public spending not on things to benefit the future, but just on stuff for the here and now - whether that be benefits, public sector wages, pointless quangos, plush offices for minsters, NHS costs, or whatever - the good and the bad. In other words to spend your way out of debt, not by spending on (as I said in an earlier post) improving the country's infrastructure, green projects, environment and transport etc, which would be good, but on things which are wasteful and which have no genuine positive benefit to anyone and which make the situation worse next year, and the year after.

I think the one thing that the article doesn't do is suggest the areas in which spending ought to be targeted in order to revive growth (I've read through a couple of times and can't see it, anyway).

Indeed, I think that is part of the point of his article as he is suggesting that the debate, in as much as it is one, is only surrounding the speed and depth of cuts and not how/whether sufficient sustainable growth (enough to put the public finances in a better position) is brought about. I think he is criticizing both the Osborne/coalition crowding out argument and the apparent lack of a counter to that from the opposition (just saying smaller cuts, more slowly - though I have seen a few like Timms talk about capital spending cuts) and implicitly suggesting that the discussion ought to be moved towards the areas that you mention (e.g. capital spending) when talking about long-term growth strategy.

What he was saying, it appears to me, in the bit that was quoted, was that the reasons behind the deficit were, in his view, largely not structural as is the suggestion/analysis that appears to be prevalent.

When he is talking about not attacking welfare payments, he isn't necessarily talking about a specific kind of fiscal stimulus (that has been suggested in some places) but just the natural process of automatic stabilizers where increased transfer payments help to smooth the impact of economic shocks.

He also subsequently goes on to say that the specific area of welfare ought to be part of a separate debate in itself rather than simply wrapped up as 'an element of macroeconomic adjustment.'

[markavfc40]

http://img683.imageshack.us/img683/4776/smugcunt.jpg' alt='smugcunt.jpg'>

Uploaded with ImageShack.us

The most irresponsible, incompetent and to add to that smug looking **** in Britain.

[Richard]

^^^ Nice bit of abuse always adds to a reasoned debate I find

[Chindie]

A few departments have cancelled press briefings.

Hmm.

[markavfc40]

^^^ Nice bit of abuse always adds to a reasoned debate I find

Thanks Trickie.

I do find it rather unsettling though that the irresponsible prick below born with a sliver spoon in his mouth is making decisions that will effect people he just cannot relate to.

http://img202.imageshack.us/img202/4776/smugcunt.jpg' alt='smugcunt.jpg'>

Uploaded with ImageShack.us

[Awol]

^ Do you think Gordon Brown related to normal people (or even mankind as a species) when he was Chancellor?? I think Osborne is a tit but attack him for his policies not for being rich, it just smacks of envy.

[Jon]

I don't care where anyone was born or educated TBH, if they are the best persopn for the job.

To stick pictures of him up and have a go at him for his name and/or background etc just seems a bit silly.

[Richard]

Prediction for the most repeated maxim of the day: Spending to return to 2006 levels.

Not sure if it will be that or "these are ideological changes"

[dundeevilla]

^ Do you think Gordon Brown related to normal people (or even mankind as a species) when he was Chancellor?? I think Osborne is a tit but attack him for his policies not for being rich, it just smacks of envy.

Multi-millionaire members of the country's elite ruling class telling us "we are all in this together" does stick in the craw somewhat.

[snowychap]

Prediction for the most repeated maxim of the day: Spending to return to 2006 levels.

Not sure if it will be that or "these are ideological changes"

Ha ha. Touché.

(Though it is rather true :winkold:).