Miliband STILL surprised about the ‘cost of living’ crisis?

[Isitmebut]

Isitmebut …for those politicians with Economics degrees, it does not seem money or time well spent if they didn’t ‘get’ that after ANY recession - never mind the worse recession for 80-years and previous migrant policies that meant 2 million new citizens LOWERED the wage rates for lower paid BEFORE the financial crisis of their making – that it ALWAYS takes years for businesses & therefore wages to recover.

Recessions, especially big stonking ones, are called recessions, for a reason. D’ah.

Mr Miliband & his financial guru Mr Balls have a nice P.P.E degree that includes E.conomics AND they were in government when they reversed the lower band income tax rate band, increased council taxes over 13-years by over 100% (for what?) and over those same 13-years saw the oil price rise from around $20, to just under $150 a barrel, without lifting a finger to help the population on THOSE cost of living rises.

Trying to control electricity prices when he didn’t build a single nuclear reactor in power, so we will have power ‘outages’ at the next big winter, can not work. Splitting banks to boost lending when we have far less of them since 2008, is another gimmick.

According to BBC figures, the UK had 580,000 under 24-year old unemployed in 2004, a rise to 711,000 by the crash, and handed over 921,000 to the coalition in 2010; spot the trend on a 'big picture' problem?

If he had any real ideas how to solve our core problems, how did that happen during the boom decade to 2007, that won’t get worse under them, without any money left?

Fiddling here and there, like moving deck chairs on the Titanic, won't solve the problems he left, IMO.

Not only that, but his government pumped up housing costs to ridiculous levels.

To be fair A.P…, I think that the near record low GLOBAL interest rates prior to the crash, had a lot to do with that, and even then, in a G7 that includes the U.S., Japan and all the major EU countries, our BoE Base Rate was higher than the lot of them.

The problem was ‘supply and demand’ and apart from loads of one bed roomed flats across major cities North of Watford, , during a boom time we were creating homes at 40-year low figures which would have been a problem whether his government had a secret immigration plan or not.

The government in Dublin, who really went to town on cheap interest rate funded homes, recently bulldozed 300,000 partially built homes that had no demand and was keeping prices down – the complete opposite from here, where we had 'built up' around 2 million looking for social homes, that around 2004, on a net basis of ‘sell offs’ and new building, equated to around ZERO.

Yes we have to build a lot more now and encouraging rather than taxing large builders is helping, but it is playing ‘catch-up’ on a grand scale.

Isitmebut

To be fair A.P…, I think that the near record low GLOBAL interest rates prior to the crash, had a lot to do with that, and even then, in a G7 that includes the U.S., Japan and all the major EU countries, our BoE Base Rate was higher than the lot of them.

You seem to be arguing that if other countries have low interest rates, the UK is required to have them too.

The interest rates were not remotely near record lows before the crash. That came after the crash.

Trying for a ‘two-for’ here, my point on global interest rates was that it was a time of global low interest rates, mainly based on falling inflation, but other financial factors as well i.e. the dot com crash in the U.S., the aftermath of the Japanese financial crisis 20-odd years before, where their base rate was 0.10% and still is - and the majority of EU countries who may never has seen such cheap and plentiful money, including Dublin.

In the UK, prior to the crash, fixed rate mortgages etc were at what, 4-5%, not record lows, but when was the last time seen, 25-years ago? But certainly enough in price and availability to fuel a boom.

Clear a Base rate of 0.50% if THE record low, not seen ever, even when the BoE was formed in the late 1600’s I believe.

It's pathetic to try to blame the 'cost of living crisis' on New Labour.

This has been a long time coming, across various governments, since the beginning of the 1980s, when neo-liberal policies took off.

Since then, the share of income towards the middle-class has dropped precipitously. The total share of income tax, however, shifted away from corporations on to individuals.

Couple that with privitisation and deregulation, we have a situation where the average person is earning less, paying more (proportionately to total income revenue) in tax, and paying more for day to day living costs.

This is something that has been going on for three decades, in the US and UK, and to some extent, europe.

A Short History of Neoliberalism (And How We Can Fix It)

by Jason Hickel

www2.dse.unibo.it/ardeni/ESI_2013/NLP_A%20Short%20History%20of%20Neoliberalism.pdf

ttosca….re your “it's pathetic to try to blame the 'cost of living crisis' on New Labour”, and then going on to dubious historical reasons why this has happened.

Firstly then, you will certainly agree with me, that the obvious effects of a recession aside, MIliband in building a whole election campaign blaming the Coalition for Labour’s recession, AND saying that he has all the answers by State intervention, is WORSE than pathetic, it is a blatant electoral LIE.

Secondly, I have no interesting arguing with anyone on their apparent belief that the 1970’s was a British success story, where manufacturing began the 1970’s at around 29% of our economy and when Thatcher took over, it had already declined to the low 20 percents, heavily subsidized by taxpayers, paying 32p plus basic rate income tax, up to 80 odd percent upper income tax, and 90 odd % tax on investment income – in an economy so successful, that Labour had to call in the IMF to financial bail out, in 1976.

Furthermore, I don’t care a jot about socialist airy fairy theories about the 1970’s manufacturing success story when the economy could not break out of high double digit inflation around 20%, workers pay rises 1-2% on an annual average over that inflation = prices/pay upward spiral, millions of man hours lost through strikes AND should any company manage to make a profit through all that, they paid 50% of it away in Corporate Tax.

Never mind the Chinese to come later, the above was the unsustainable UK business/manufacturing ‘model’, with ‘the people’ paying taxes through the nose, that was taking on the German and Japanese manufacturers, WITH NONE OF THOSE PROBLEMS, and having their British bottoms handed to them on a platter.

“That’s all I got to say about that” as I would prefer to keep the subject ‘current’, with political records and their aftermath over recent administrations; but frankly posts like yours helps me understand why many people don’t realise that PM’s get State Funerals for FIXING an unsustainable UK economic basket case, NOT causing one.

Isitmebut-

ttosca….re your “it's pathetic to try to blame the 'cost of living crisis' on New Labour”, and then going on to dubious historical reasons why this has happened.

There's nothing dubious about it. Almost every economist will agree that the neo-liberal era began in the late 1970s and has continued ever since.

Firstly then, you will certainly agree with me, that the obvious effects of a recession aside, MIliband in building a whole election campaign blaming the Coalition for Labour’s recession, AND saying that he has all the answers by State intervention, is WORSE than pathetic, it is a blatant electoral LIE.

You're very confused. Miliband isn't blaming the Coalition for the recession, nor is it Labour's recession. It was a global financial crisis, and was not caused by any single government or confined to any single country. It was caused by casino Capitalism and casino Capitalists. It is the culmination of years of gambling, fraud, and deregulation in the finance sector. The UK was hit particularly hard because it relies to heavily on finance.

What Milliband is arguing is that the Coalition have not done enough to help 'ordinary' people suffering from the effects of the recession. I don't know how Labour might have acted differently, but it's certainly the case that the Coalition are making the poor and middle-classes pay the most for a recession which they did not cause. It is they who are suffering from the public spending cuts which are causing the steep rise in food bank use and steep rise in homelessness.

“That’s all I got to say about that” as I would prefer to keep the subject ‘current’, with political records and their aftermath over recent administrations; but frankly posts like yours helps me understand why many people don’t realise that PM’s get State Funerals for FIXING an unsustainable UK economic basket case, NOT causing one.

Please remain calm. I'm not arguing that the 60s or 70s economic model in the UK was ideal. However, it is the case that neo-liberal economic policies, which are being further pushed by the coailition, have seen the middle-class hammered and almost completely destroyed.

If you would like to look at the statistics, I would be happy to point you to some sources. I can show you how the share of national income for the average worker has dropped, how real wages have stagnated for the majority of people despite productivity increasing, and how wealth inequality is now as bad as it was during the Edwardian era.

Ttosca…call it ‘neo’ whatever you want, by 1979 this country was going down the toilet, as who running a business now could have competed internationally with the economic conditions of the 1970s; which took a few harsh years to fix, then business growth pick up, taxes came down, pretty much what is happening now, after the recent Labour economic basket case handover..

Next the financial crash was TOTALLY avoidable, as I mention on this ‘politics’ section post below, second post of mine. In a period of U.S. financial deregulation, Brown had visited ex Fed Chairman Greenspan before 1997 and liked what he heard, and when came to power in 1997, he took away direct responsibility of the BoE and formed a regulatory ’tripartite’, why?

This Brown ‘tripartite’ still including the BoE, it also included the Uk Treasury HE controlled and the (then) new FSA with too wide a brief (from garage forecourt guarantees to huge City hedge Funds) – and it is now well known to have been a total disaster, with both Brown and the FSA apologising for looser bank regulation, as bank lending shot up.

www.mumsnet.com/Talk/politics/1969660-Labour-banks-splitting-won-t-fix-capacity

If you look at a graph of UK bank balance sheet growth, from 1997 just mortgage lending went up from £21 billion annual lending to £115 billion in late 2007, which was an unprecedented rate of growth.

Next re what “Miliband was arguing”, first of all we KNOW exactly what Labour was going to do about it, which was more of the same, spending MORE than the £158 bil a year than we were earning, happily heading for a national debt figure of AT LEAST £1.5 trillion (£1,500,000,000,000 in real money) by 2015. The UK electorate was told in Labour’s 2010 manifesto that Labour post 2010 would CUT LESS, TAX MORE, than the other parties.

Labour’s contemptible cowardice in government, with the state of the nations books in front of them, was NOT to tell the electorate WHAT they would cut at in ANY detail, or WHAT they would TAX MORE, other than the National Insurance contributions and Fuel Duty bravely budgeted to come in AFTER the election.

So if Miliband was a real man, never mind a politician, he would not be able to show his face and criticise the ‘Plan A’ of the coalition, when their plan would have took us on the road to economic stagnation for years to come – as like 1979, you cannot keep spending on a monetarily gorged unreformed State (nationalised or not) - and in doing so, try to keep paying for it by keep taxing an economy, to obtain ‘growf’, Mr Balls style.

The difference between 1979 and 2010, is that the FALLOUT from their social/economic model put in place by them over 13-years of mostly a global boom, where adding 2million new citizens and benefits rise enormously through ‘full employment’ was not SEEN by the electorate to hit the fan – as the brave, but unpopular decisions Labour should have made in the years BEFORE 2010, were made by the Coalitions.

The day Miliband ‘fesses up’ to the extra tax measures Labour PROMISED in their 2010 manifesto for all, it will be the day I feel that the man has ANY political credibility, at all, never mind indicating that they could do better for the middle classes now, or after the 2015 election.

*isitmebut-

Ttosca…call it ‘neo’ whatever you want, by 1979 this country was going down the toilet, as who running a business now could have competed internationally with the economic conditions of the 1970s; which took a few harsh years to fix, then business growth pick up, taxes came down, pretty much what is happening now, after the recent Labour economic basket case handover..

I'm not sure why you have such a problem with the term 'neo-liberalism'. It's a well known economic phenomenon:

""Neo-liberalism" is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer."

www.corpwatch.org/article.php?id=376

Whilst businesses were more highly regulated and taxed, working people actually had a great deal more job security and disposable income.

Next the financial crash was TOTALLY avoidable, as I mention on this ‘politics’ section post below, second post of mine. In a period of U.S. financial deregulation, Brown had visited ex Fed Chairman Greenspan before 1997 and liked what he heard, and when came to power in 1997, he took away direct responsibility of the BoE and formed a regulatory ’tripartite’, why?

Of course financial deregulation contributed greatly to the crash. Deregulation occurred in most Western countries, especially the US and UK. You can blame Labour for this, if you like. I don't care. I'm not here to defend Labour. Readers should be reminded, though, that the Tories were pressing for even more financial deregulation at the time. It's hard to see how the Tory scum would have been stricter with the banks when they receive the majority of their political party funding from the City of London.

Next re what “Miliband was arguing”, first of all we KNOW exactly what Labour was going to do about it, which was more of the same, spending MORE than the £158 bil a year than we were earning, happily heading for a national debt figure of AT LEAST £1.5 trillion (£1,500,000,000,000 in real money) by 2015. The UK electorate was told in Labour’s 2010 manifesto that Labour post 2010 would CUT LESS, TAX MORE, than the other parties.

Before the crash, the deficit was around 3%, which is not really that high. Most governments in the UK throughout the past few decades have run a deficit. The problem is that when the financial crisis and subsequent recession hit, tax revenues dropped to the floor, so expenditures greater outweighed tax revenue, so the deficit increased massively. It was not government spending per se which caused the deficit problem, despite the Tory parrot message that tries to divert blame for the crisis from the financial sector towards spending on schools and hospitals.

So if Miliband was a real man, never mind a politician, he would not be able to show his face and criticise the ‘Plan A’ of the coalition, when their plan would have took us on the road to economic stagnation for years to come – as like 1979, you cannot keep spending on a monetarily gorged unreformed State (nationalised or not) - and in doing so, try to keep paying for it by keep taxing an economy, to obtain ‘growf’, Mr Balls style.

If you think public spending needs to be reigned in and government revenue increased, fair enough. The coalition are not cutting spending so much to fix the deficit, but because of ideological reasons. Osborne has already stated that he would continue his austerity program indefinitely if elected, and the Coalition are making cuts to services which represent a tiny, tiny fraction of government spending whilst reducing tax rates for corporations and the rich, and then refusing to chase tax avoiders. It's pretty clear that reducing the deficit isn't the main priority here, it's reducing the state.

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The rest of your post is a bit of a rant. So don't vote Labour, I don't care. All of the mainstream parties are right-wing neo-liberal parties and are all beholden to the City and to powerful corporations. Regardless of which combination of the three who get in, we're going to see more of the same, with ordinary people getting shafted whilst politicians serve their corporate masters. The difference is merely a matter of degree.

The only way things will change is when people force them to change.

ttoscayou have some interesting theories but unfortunately many of them are fundamentally incorrect – so I will answer them in two parts.

You say “whilst businesses were more highly regulated and taxed, working people actually had a great more job security and disposable income”, well unfortunately history does not agree with you on this – especially once the virtually closed domestic economies were opened to GLOBAL competitive influences (imports), where company profits for R& D, the price to the consumer (and quality) mattered on manufacturers order books

Furthermore all I know is within the UK economy pre 1979 wasn’t working and unfortunately we cannot ask most of the UK companies their thoughts on worker security back then, as due to a number of factors I listed before, AS THEY DO NOT EXIST NOW; corporate bankruptcy does very little to “job security and “disposable income” in my opinion. Yet is could not have been the UK workers potential to blame, as without trade union militancy (and the 1970’s and early 1980’s rampant UK price-earnings spiral) driving UK prices higher than their overseas competitors, the UK is making far more cars now than in those good old 1970s.

Regarding the crash, I have yet to see any evidence of Tories asking for looser banking control but much evidence of the Tories trying to get Labour to cut needless red tape/regulation across all areas and probably the City. If you find anything that showed those nasty Tories bullied Mr Brown into creating a ‘perfect storm’ of looser regulatory controls and a banking balance sheet monster, please post the link.

Regarding the Tories and banks, if you want me to show you the list of people Brown took from the City to be his taxpayer funded paid senior advisers and list of City donors e.g. Private Equity companies, I’ll get them for you.

ttosca Part two; Why the UK deficit is CERTAINLY Labour’s fault.

On the UK economy and annual budget prior to the financial crash which you say “at 3% of the economy” was not much – and that Brown’s Labour was NOT a criminally wasteful and irresponsible government PRIOR to the crash and thus causing the huge £158 billion annual deficit in 2010, the largest in Europe.

Where I DO agree with you is as employed tax receipt FALL and benefits RISE (look up ‘Economic Stabilisers’) recessions CAUSE annual budget deficits and therefore cumulative national Debt, but that is as far as our agreement goes.

Let us remember that Old Labour voters in 1997 wanted to make sure that New Labour was not going to ‘tax high, spend badly’ as before, so Brown promised to adopt the (then) Conservative spending plan until the next election. So by 2002/3, the UK virtually had A BALANCED BUDGET, and the UK had the option to start paying down the national debt, enlarged by the western recession in the early 1990’s.

But Mr Brown had other ideas, a self confessed financial demi-god; good lord this man had cured the ‘boom and bust’ economic cycles of the past.

The problem PRIOR to the crash was that apart from a mountain of personal debt/consumption, it was the LABOUR GOVERNMENT spending and ever rising City profits/tax receipts of £60 to £100 billion a year, that was providing much of the UK’s GDP growth - that on the first recession, the UK economy built on debt, City profits and taxpayer funded spending, would collapse = the Uk’s annual budget spending in near balance 2002/3, became a honking big deficit of £158 bil by 2010.

You question the Conservative Budget Deficit ideology, but their belief is to at least BALANCE the nations annual books TO PROVIDE NATIONAL OPTIONS, but Labour’s ideology, was more reckless spending in a 2010 general election manifesto of ‘more of the same’ with more tax rises, to achieve unsustainable Ballsian ‘growf’. The Uk is already paying £50 billion plus A YEAR just to service our debt, with government bond interest rates at record lows, and Labour wanted MORE of the same?

So what was Labour’s ‘more of the same’, apart from a rising Benefit Bill that should have been FALLING in the good times when Brown boasted of recode EMPLOYMENT, but without reforms and continue abuse, would rocket to unsustainable levels, as in any recession?

Brown had decided to throw money at the unreformed and inefficient public Sector, which in ‘real’ terms spending was increased over 5% per year, unprecedented in Europe – but It was the big fat ANNUAL cost of big fat government e.g Quangos, often run by apparatchiks on £50k to £200k salaries. Forget the newspapers name below, it reports on an independent Taxpayer Alliance report.
www.dailymail.co.uk/news/article-1214001/The-cost-quango-Britain-hits-170bn--seven-fold-rise-Labour-came-power.html

But the damage to the Public Sector in the likes of Hospitals and School ANNUAL budgets, will go on for up to several decades, as Mr Brown provided buildings etc on ‘the never, never’, via Private Finance Initiatives (PFI) with the Private Sector paying the up front bills, but the State paying through the nose e.g. £100 to change light bulb, for many years to come.
www.telegraph.co.uk/health/healthnews/8779598/Private-Finance-Initiative-where-did-all-go-wrong.html

And in the private sector, strategic UK tax paying manufacturing jobs were being lost under Labour through a global manufacturing and consumption boom; 1 million jobs lost by 2005, 2-years BEFORE the crash even began. In 1997manufacturing as a percentage of UK output had remain around 22% since 1980, but under Labour, with money being spent elsewhere, manufacturing was around 11% of our economy by 2010.
www.independent.co.uk/news/business/news/million-factory-jobs-lost-under-labour-6150418.html

Blaming the coalition for not growing the Uk out of the recession via exports, when much of our manufacturing capacity no longer existed, was a farce, rebuilding business confidence, was going to take time – all part of the legacy Mr Brown left, but the bill, both financial and social, of squandering the best chance to change the Uk for the better, will go on for generations.
www.taxpayersalliance.com/economics/2009/09/new-book-reveals-the-total-cost-of-gordon-browns-mishandling-of-the-economy-as-3-trillion-or-3000000.html

Isitmebut

I think you have KO'd ttosca...... Thank You!!

I was going to read your posts properly Isitmebut then saw you linked to the tax payers alliance yeah cos they're credible.

Let me remind you who introduced PFI. Oh, wait, the Tories. They love it.

The Tories were proposing to carry on with Labour's spending plans pre crash. So they couldn't have been that bad.

TheGreatHunt

I was going to read your posts properly Isitmebut then saw you linked to the tax payers alliance hmm yeah cos they're credible.

They are famous for using lots of numbers and long words and adding up and maths in their research pieces, which often confuses our dear friends on the left who do rather struggle with such things.

(If the left didn't struggle with numbers, the only possible explanation for the reason that they always leave the economy in ruins when they leave power is malevolence).

Oh do fuck off.

I probably understand better than you do. However, the Taxpayers' Alliance are run by a bunch of tax dodgers. Not credible in the slightest.

TheGreatHunt

Oh do fuck off.

I probably understand better than you do.

Yes, of course you do. Of course.

However, the Taxpayers' Alliance are run by a bunch of tax dodgers. Not credible in the slightest.

So their ability to perform arithmetic is directly affected by their tax status? What a strange world some people do inhabit.

No their ability to produce independent credible reports is called into question.

Anyone with any sense knows that you can always find statistics to back up your arguments.

If economics was a science, which it isn't, then governments would know the correct course of action to take.

Economics is not a science. You cannot pin point the current economic situation onto one particular course of action - that's why people are still arguing and will continue to do so.

The reasons for the Great Depression are not fully understood - why do you think the Taxpayers' Alliance will have answers?

TheGreatHunt

No their ability to produce independent credible reports is called into question.

By you and lots of other bien-pensants.

Anyone with any sense knows that you can always find statistics to back up your arguments.

And when you can't, you scream and shout and call the other side bad names. Racist. Xenophobe. Homophobe. Little Englander. Tax Dodger.

You haven't actually answered the lack of independence point.

You've called plenty of names yourself.

flatpackhampster….FYI I am not trying to “ko” anybody, what I aim to do is expose many of the ‘mistruths’ and tribal blinkers that party politicians in the media and posters here, utter - and quite prepared to debate them on here, without the negatives of profanities when loosing the tribal argument. And on that subject;

The Great Hunt…..let me answer your points.

Firstly your objection to the Taxpayer Alliance, which I assume was regarding their figures on Labour Quangos, rather than the book re the £3 trillion Brown wasted, as that was not written by the Alliance, they just précised it.

According to the Taxpayers Alliance, under Labour they increased Quangos to 994, their staff levels increased from 1 million in 1997 to 1.5 million and costs had risen by £170 billion, if you disagree these figures, what do YOU believe, qualified by any external links if possible?

Next on the Public Finance Initiatives (PFI), where during Labour’s time they used the Private Sector to fund Hospitals and Schools at great ANNUAL expense to current taxpayers, their children and grandchildren’s children - with huge company profits to the companies due to Labour’s rubbish contract/price negotiations – are you saying that as Labour were incompetent and abused a private sector facility that the Tories used first, that all this ANNUAL debt affecting the ANNUAL budgets of hospitals and schools, is the Tories fault?lol

No doubt then that the link I provided on Labour losing 1 million manufacturing jobs from 1997 to 2005, was not only the Conservatives fault, you can authoritatively cite Thatcher’s policies 20-years before?

Regarding your accusation that the Tories said that they would carry on with Labour’s 2010 spending plans; are you reading the right year’s General Election manifesto??? Labour on balance said that versus the Consevatives & Lib Dems that they would ‘cut less, tax more and increase the annual budget deficit’ from the sub £160 billion in 2010 – which as they challenged Ballsian ‘growf’ and deficit reduction is why the Conservatives lost electoral ground before hand, and Brown’s ’deficit, was deficit?’, would have sent our interest rates soaring.

If you want proof of the different post election economic strategies, bearing in mind Miliband’s platform on energy prices, the cost of living and to tax the bejesus out of company profits, do you remember Labour raid on Fuel Duty and National Insurance Contributions pre 2010 election, to come in AFTER the 2010 general Election – that were reversed by Osbourne?

Increasing NICs is a ‘tax on jobs’, and shows that apart from increasing the fat State further to ‘create’ growf with 100% taxpayer funded jobs, Labour had no idea whatsoever HOW to create jobs in the Private Sector, especially the manufacturing jobs they lost from 1997 to 2010.

P.S. The Great Depression of the 1930’s was caused by reckless financial growth and when the pooh hit the fan, the U.S. government did NOT do enough support the banks through a cash liquidity crisis, by pumping copious amounts of cash into the economy to compensate for the lack of bank lending - as U.S. Fed Chairman Bernanke (and others) have done since 2007/8, via the likes of QE.

TheGreatHunt

You haven't actually answered the lack of independence point.

Why should I? The idea that just because someone's political ideology is different to yours they can't produce useful research is so arrogant I see nothing in it to answer.

Well then you're a bit naive. Of course it matters, especially coming from a group like the TPA.

Sorry but you think can explain the great depression in one para? Hahahaha

I'm on my phone so cannot respond easily but quickly - I picked you up on PFI because the Tories introduced it and certainly did not complain when they saw what Labour did with it. Perhaps Labour wouldnt have needed to plough so much £ in if the Tories hadn't let it all crumble. It's always the same cycle - the Tories squeeze and shit all over state assets, labour spend spend spend to fix it. Maybe balance is needed between the two. Both are folly for long term economic stability.

Remind of what the Tories did to replace the manufacturing jobs lost due to the destruction of the miners' industry? Yes it needed to go but decades later, miner communities are living in poverty. Go Tories for replacing the jobs eh? They had no long term plan.

Also, I'm not a labour voter by the way.