Which is more important now: political reform or the economy?

[FrakkinTheReturningOfficer]

Political reform is going to be bad for the economy, in the short term at least.

Sorting out the economy probably means putting political reform on hold.

Which would you choose?

This is capitalism or rather neo liberalism going down the toilet, twenty years after communism did.

Neither system works

again not true. capitalism is the only system that has ever worked...in its various forms. (feudalism and tribalism you can regard as proto-capitalism.) All that will result from this is a new capitalist form will arise - there has never truly been a free market anyway.

lets not forget that in comunist countries, the Communist party member's kids weren't the ones to starve...there was never a really communist system in operation.

"the complex, high risk instruments that undoubtedly did pley a role in the creation of the financial crisis"

hmmm...they 'played a role' did they?

I am middle-class, not rich. The millions and millions of people who voted Tory throughout the English regions were not rich. They were ordinary people who said no thanks to the chains of socialism.

I like common sense, and Noam Chomsky...and no utopias. I want new politics, not constant reflections to the past...

Yes much debt was already raised by successive govts, in the belief growth would continue for good, free market fantasies...

And Scandinavia was only a quick short cut to a more balanced economy, not a blueprint for the future...

But let's also be clear: there is no such and never will be such a thing as the 'free' market.

The humongous bailout by The State makes that point rather well I feel.

swc, as I understand it, the mendacious Goldman Sachs operation was in Greek government bonds. I don't think, as things stand, it's possible to create such a clear separation (although it sounds as though a clear separation would be a good thing).

Oooohhhh no blame the banks on here EAP - people spouting shite who obviously don;t know enough about the economy to realise that if that and the financial sector went up the swanny we would all be well and truely fecked.

Do you realise that one of the major high street banks were moments away from not having any money to fill their cash machines at one point - that is the small man on the street problem which not bailing out the banks would have caused - think of everyone who banked with them not being able to get at any of their money all the whiney little feckers would have been on their hands and knees beggingh the government to do something about it.

ANd they have not effectively bailed out the banks they have given them an asset backed loan and as for wannting to stop bonuses in those banks the government are clever enough to realise to get their money back they need big hitters staying and earning them their money back - or I suppose we could fill their positions with the great masses who whine about bank bonuses and see how bloody well they get on investing your pensions and investments.

sophable we will have to wait to see how Clegg, from his rich banking family, possibly speaking from Coolfonz's dacha or chateau, will take a scythe to the banks, when he shakes on a deal with the Etonian millionaire, Cameron.

Madame C, yeah exactly, the banks held a gun to the population and bankers have to be incentivised not to destroy the economy, as you've just pointed out...

The arrogance of the right, of power. "The great masses who whine..." Dear oh dear.

oh please swc, don't patronise...'too complicated for you all to understand'.

no one is accusing bankers of being evil, doesn't mean that the system isn't pernicious, and i do believe, and have met many people in the financial sector that know they are doing something that fucks ordinary people...which isn't good for their mental or physical health tbh.

That would be the bank bailout caused by speculating wankers, yes? And now we should take our tongues out of the speculating wankers' arses just long enough to ask them what they want us to do next, yes?

There is a lot of confusion about what caused the crash. Did complex instruments play a part? That is all we hear but I think there is a fundamental paradox at play which is never discussed: I put it you when you create a environment where everyone thinks that the economic cycle is dead, IRs are stable and low, inflation is low, everything going nicely, then people will take larger and larger bets. Risk management works to a degree but then over a long period of time there is a build up of risk, so when the crash comes it is harder.

So the paradox is when you manage an economy well and create stability, risk premia narrow and people take bigger and bigger risks which build up. Eventually you get a big crash; no surprises there. Even without complex financial instruments we would have eventually had a build up of leverage. Just look at the role straight forward property borrowing n this and previous crashes.

It annoys and amuses me that financiacial journalists fail to point this out.

Clegg's a fucking wanker as well...per-lease...politicians, nothing an AK47 can't sort out

clegg isn't the point claig...the libdems are blessedly democratic compared to the other parties...he won't be able to act alone.

govt bonds are not what brought northern rock down swc.

and no one is arguing that they did.

common sense and Noam Chomsky are an oxymoron, a bit like a fine mess or an honest politician or a Labour politician who is only there to serve the working class.

DavidHameron, I agree there is no such thing as a 'free' market, that is an example of doublespeak to fool people. Taxpayers' money was handed over in a reverse bank robbery.

We will not get economic growth without risk taking. I think that we need social justice along side capitalism to ensure fairness and some amount of redistribution.

TDiddy, indeed. There is no such thing as economics, only politics. It is a political ideology - no limits to growth, markets etc - which poisons politics and finance.

They even have economists in North Korea, but they are just more party apparatchiks...supporting a system that is corrupt and collapsing...same everywhere...we have X Factor they have stupid flag waving shit...

No, swc, I think the argument is that we shouldn't let the market dictate policy because to do so is anti-democractic.