UK General Election 2015
Discussion
AJS- said:
As I said it isn't necessarily a good investment but it does store value over time, even if the value is depreciating in terms of other goods. I don't see any sense in which it isn't this so I can only assume you're defining the term differently and you mean that fiat money is not a reliable store of value or a good investment to hold while governments are able to print more of it without restriction or an obligation to back this up with anything. If that's what you mean then we agree on it.
I still don't know how you then link that to manufacturing versus services.
The link between a higher value manafacturing based economy v a lower value services etc based one and that link also being part of what it means to 'back the currency up with something',is absolutely clear in the case of comparing the stability and value of the ( former ) German Mark with that of the ( former ) currencies of places like Spain,Greece and Ireland for just three examples.In addition to what happened when the idea of money being an independent 'store of value' was taken to its logical conclusion in the form of the Euro which defines and values the currency of Greece,Spain and Ireland etc the same as that of Germany.The point being that it takes a strong manufacturing base creating trade balance or trade surplus 'in manufactured goods' to actually 'back up the currency'. I still don't know how you then link that to manufacturing versus services.
I think the key thing there isn't manufacturing versus services but low versus high value. The hardly earth shattering realisation that making money is good. Woupd it be better to take a service company like PWC, which doesn't manufacture anything, and have all their legions of highly paid accountants and other professionals, and to retrain them to make cheap plastic toys?
AJS- said:
I think the key thing there isn't manufacturing versus services but low versus high value. The hardly earth shattering realisation that making money is good. Woupd it be better to take a service company like PWC, which doesn't manufacture anything, and have all their legions of highly paid accountants and other professionals, and to retrain them to make cheap plastic toys?
Using your example, what value add do accountants do?At a simplistic level, why do we need them?
Scuffers said:
Using your example, what value add do accountants do?
At a simplistic level, why do we need them?
At a simplistic level we don't. In a complex, advanced economy with byzantine tax laws and huge complex companies they are pretty much essential. You might just as well ask why do we need bookshelves or toast racks or any other manufactured good.At a simplistic level, why do we need them?
AJS- said:
At a simplistic level we don't. In a complex, advanced economy with byzantine tax laws and huge complex companies they are pretty much essential. You might just as well ask why do we need bookshelves or toast racks or any other manufactured good.
And that's the point, if we did not have stupidly complex tax and corporate laws?As for a bookshelf, its a one off cost
Can't remember who it was but they pointed out that investment banking added no value to society.
AJS- said:
I think the key thing there isn't manufacturing versus services but low versus high value. The hardly earth shattering realisation that making money is good. Woupd it be better to take a service company like PWC, which doesn't manufacture anything, and have all their legions of highly paid accountants and other professionals, and to retrain them to make cheap plastic toys?
I'd guess that imported toys adds a fair bit to our overall net trade deficit which is obviously calculated with the financial/service sector's contribution included in the figure.The issue is that in general manufacturing is worth more in value to the net trade figures,either by reducing imports and/or in the form of exports,than excessive reliance on the relatively lower value of 'services' is worth.www.tatsachen-ueber-deutschland.de/en/economy/main...
Therefore to reverse your question would it be better to close down all of the UK's remaining manufacturing sector and divert the redundant capacity into increasing the service sector in all its forms even more.By my logic the increase in the already unsustainable trade deficit in manufactured goods would crash the economy within a year.While by your logic country would be better off.
When the fact is this country gave up its manufacturing base,that more than rivaled that of Germany's,in favour of running a massive trade deficit in manufactured goods for political reasons based on the economics of the madhouse.
You either misunderstand or misrepresent my logic. I never said that manufacturing things was bad or that services were inherently better. It's the idea of using policy to attain a certain make up of the economy - a form of planned economy - which I am against. I am especially against using tariffs to achieve this, and I think focusing on the balance of trade is an often damaging distraction.
On the other hand there is a legitimate argument that manufacturing is made unduly difficult by the regulatory environment in the UK, with a whole host of things from education to planning laws and the ridiculous global warming fraud. But this is an argument you don't appear to be making.
On the other hand there is a legitimate argument that manufacturing is made unduly difficult by the regulatory environment in the UK, with a whole host of things from education to planning laws and the ridiculous global warming fraud. But this is an argument you don't appear to be making.
AJS- said:
You either misunderstand or misrepresent my logic. I never said that manufacturing things was bad or that services were inherently better. It's the idea of using policy to attain a certain make up of the economy - a form of planned economy - which I am against. I am especially against using tariffs to achieve this, and I think focusing on the balance of trade is an often damaging distraction.
On the other hand there is a legitimate argument that manufacturing is made unduly difficult by the regulatory environment in the UK, with a whole host of things from education to planning laws and the ridiculous global warming fraud. But this is an argument you don't appear to be making.
The 'balance of trade' is exactly the issue in determining the value of the currency and levels of debt.As shown by the German v Greek economy example amongst other less extreme ones.On the other hand there is a legitimate argument that manufacturing is made unduly difficult by the regulatory environment in the UK, with a whole host of things from education to planning laws and the ridiculous global warming fraud. But this is an argument you don't appear to be making.
As for the idea of a 'planned economy' Germany's post was economic 'miracle' or for that matter the US economy of the 1960's didn't happen by accident.All of that was/is based on the fact that a strong domestic manufacturing base is an essential ingredient together with making sure not to import goods to a higher value than is exported and/or consumed in the domestic market when those goods can be produced domestically.If that takes tarrifs and quotas to enforce then why not.
As for the global warming issue I've made it clear enough that is one of the policies which only UKIP can sort out being the only realistic global warmist sceptic party.With my view being that we need to abandon the religion and get back to a domestically produced coal fired energy policy.
As for 'planning' the problem is more one of the demolition and change of use of our pre existing industrial areas than the need to build new ones by destroying yet more green field areas.
You're just wrong about this. Balance of trade is one factor in the current account which helps determine currency value and has no impact what so ever on government borrowing.
You could argue that Germanys success post WW2 was precisely because it didn't have severe import tariffs. They made stuff as good as any in the world and imported equipment to develop quickly. By contrast Britain protected it's market from innovation and ended up with the shambles of British Leyland.
You could argue that Germanys success post WW2 was precisely because it didn't have severe import tariffs. They made stuff as good as any in the world and imported equipment to develop quickly. By contrast Britain protected it's market from innovation and ended up with the shambles of British Leyland.
AJS- said:
You're just wrong about this. Balance of trade is one factor in the current account which helps determine currency value and has no impact what so ever on government borrowing.
You could argue that Germanys success post WW2 was precisely because it didn't have severe import tariffs. They made stuff as good as any in the world and imported equipment to develop quickly. By contrast Britain protected it's market from innovation and ended up with the shambles of British Leyland.
By your logic money is a store of value in its own right.In which case you'd be contradicting yourself by now saying that the balance of trade 'helps' ( actually is the main factor ) which determines the value of the currency.That 'value' obviously then also transferrs not only to the buying power of the budgets which the public sector is allocated but also high levels of high value wage employment adds massively to the tax revenues which that budget is based on.You could argue that Germanys success post WW2 was precisely because it didn't have severe import tariffs. They made stuff as good as any in the world and imported equipment to develop quickly. By contrast Britain protected it's market from innovation and ended up with the shambles of British Leyland.
Then you go on to say that Germany got and continues to get where it is today by allowing in massive levels of imports.When the trade figures show that Germany doesn't do trade deficit only surplus wherever possible.As for the reasons for that yes Germany has always had a protected market on the simple basis that German consumers simply didn't/don't buy imports given the choice.For the simple reason that they don't need to because ( a ) the value of their high employment high wage economy allows them to buy relatively more expensive domestic made products and (b there is no point when their products are reasonable quality and they know that doing so would just create the situation which we've got of turning a trade balance/surplus situation into massive trade deficit instead with all the implications of that which I've described.
IE the perfect storm of oversupplied labour market,resulting in a low wage economy,high trade deficit,low value for the currency in real terms,low tax take,public sector starved of cash,and falling living standards for the working class at least.Unlike Germany and especially unlike 1960's America.
As for British Leyland as I've said like most other aspects of post war British industry the problems can be traced back to the damage done to the economy of having to pay the debts and rebuild the damage incurred fighting two world wars ironically against Germany.In which all the evidence suggests that Germany got a better deal out of the recovery plan than us for obvious strategic reasons in keeping them onside against the eastern Bloc and Russia.In addition to the economic ideology of a country which has mostly been based on the idea of the antithesis of the Fordist model in terms of wages.
While even with all that advantage the best that Germany could do when it mattered v BL was that German Zodiac with its 6 cylinder,late 1950's on Ford type McPherson strut and steering box front end and early 1960's semi trailing Triumph type rear end in the form of the 3.0 litre BMW E3 v the Jaguar XJ12 even with the benefit of Jaguar pricing theirs at half the price.
The final proof that it is all about the strength of the domestic manufacturing sector as a proportion of the population and that the value of the currency is just a reflection of that maybe you could explain why the pound is only around a half of its value against the dollar since the mid to late 1960's having also fallen to a third of that value during the 1980's.Or why the pound was worth over 12 Swiss Francs in 1965-68 while it is worth less than 2 Swiss Francs now.Bearing in mind we didn't have oil or gas revenues online during the 1960's.
Balance of trade is a component, balance of trade in goods is part of that. Services earn money that is just as real.
I didn't say Germany got where it is because of high levels of imports, but that it didn't get there because of trade restrictions.
Erhard was a radical liberal in economic terms who slashed income taxes and was himself sceptical of the European Community which he saw as bureaucratic and protectionist.
After the treaty of Rome there wasn't really any legal or taxation difference as far as I know between buying a Volkswagen and buying a Peugeot or an Alfa. There might have been a dose of patriotism in consumers but it seems reasonable to assume this would have also have been true of France and Italy.
As for the currency values, pre 1971 they were managed against the dollar which itself was tied to gold so there is only so much you can read into them as compared with today's essentially free floating values.
Incidentally the Bretton Woods arrangement became unsustainable for the US after over a decade of current account deficits during the miracle economy of the 1960s which you keep mentioning.
I didn't say Germany got where it is because of high levels of imports, but that it didn't get there because of trade restrictions.
Erhard was a radical liberal in economic terms who slashed income taxes and was himself sceptical of the European Community which he saw as bureaucratic and protectionist.
After the treaty of Rome there wasn't really any legal or taxation difference as far as I know between buying a Volkswagen and buying a Peugeot or an Alfa. There might have been a dose of patriotism in consumers but it seems reasonable to assume this would have also have been true of France and Italy.
As for the currency values, pre 1971 they were managed against the dollar which itself was tied to gold so there is only so much you can read into them as compared with today's essentially free floating values.
Incidentally the Bretton Woods arrangement became unsustainable for the US after over a decade of current account deficits during the miracle economy of the 1960s which you keep mentioning.
AJS- said:
Balance of trade is a component, balance of trade in goods is part of that. Services earn money that is just as real.
I didn't say Germany got where it is because of high levels of imports, but that it didn't get there because of trade restrictions.
Erhard was a radical liberal in economic terms who slashed income taxes and was himself sceptical of the European Community which he saw as bureaucratic and protectionist.
After the treaty of Rome there wasn't really any legal or taxation difference as far as I know between buying a Volkswagen and buying a Peugeot or an Alfa. There might have been a dose of patriotism in consumers but it seems reasonable to assume this would have also have been true of France and Italy.
As for the currency values, pre 1971 they were managed against the dollar which itself was tied to gold so there is only so much you can read into them as compared with today's essentially free floating values.
Incidentally the Bretton Woods arrangement became unsustainable for the US after over a decade of current account deficits during the miracle economy of the 1960s which you keep mentioning.
I think you're massively understating that historic issue of at least German patriotic consumer buying habits acting as an effective trade barrier against imports.In which case 'Erhard' obviously had the hypocritical luxury of that in calling on everyone else to open up their markets to German exports on an open door basis.IE Germany was/is only acting in its national interest in which as I said it only likes doing business from the situation of trade always being in Germany's favour wherever and in whatever form possible.I didn't say Germany got where it is because of high levels of imports, but that it didn't get there because of trade restrictions.
Erhard was a radical liberal in economic terms who slashed income taxes and was himself sceptical of the European Community which he saw as bureaucratic and protectionist.
After the treaty of Rome there wasn't really any legal or taxation difference as far as I know between buying a Volkswagen and buying a Peugeot or an Alfa. There might have been a dose of patriotism in consumers but it seems reasonable to assume this would have also have been true of France and Italy.
As for the currency values, pre 1971 they were managed against the dollar which itself was tied to gold so there is only so much you can read into them as compared with today's essentially free floating values.
Incidentally the Bretton Woods arrangement became unsustainable for the US after over a decade of current account deficits during the miracle economy of the 1960s which you keep mentioning.
As for the US economy of the 1960's being unsustainable I'd guess that had more to do with people like Nixon and Reagan,selling America's economic interests,in the form of its overwhelming superiority in manufacturing ability and Fordist wage structure,out to the global free market economy than anything else.Which those like Heath,Callaghan and Thatcher etc etc also did in our case firstly in the case of the EEC,then also the far Eastern producers.To catastrophic economic effect,regarding our consumer spending power,trade figures and the resulting balance of payments crisis in all sectors of the economy ever since.
As for currency values as I said that issue of a pound being worth over 12 Swiss Francs during at least the mid to late 1960's is as good a guide as any as to how much the loss of our manufacturing base has eroded the value of the currency.Which explain in large part where we are today in having a public sector which can't make the budget figures add up because in real terms the pound is worth peanuts by comparison with the 1960's.While low wages paid in already effectively worthless money are not able to make up the shortfall in the form of tax revenues.
The fact is the developed western economies are going down the tubes with only Germany managing to hang on because,unlike us and the US,it hasn't ( yet ) slaughtered its manufacturing sector in favour of a relatively low wage services based economy and an unsustainable rate of imports of manufactured goods and with the Euro acting as a foreign aid scam to keep the rest of the EU afloat and the market for German exports going.Although the German domestic market is slowly weakening as it gradually makes the similar mistake of moving away from that high paying Fordist model wage structure.In which case it will just be a question of wether it will be the Pound,or the Euro,or the US Dollar which collapses in value first in the long term .
America's industrial decline was well under way by the time Reagan was elected and owed far more to the success of Germany and Japan than to a lack of trade tariffs.
I fail to see how comparing a currency pair from the Bretton Woods era to the same currency pair now tells you anything.
There is much to admire about Germany but the trade tariffs they don't have are needless to say not one of them.
Since this is getting a bit circular why don't you put forward the policies you would like to see implemented to achieve your goal of getting rich by making more stuff?
I fail to see how comparing a currency pair from the Bretton Woods era to the same currency pair now tells you anything.
There is much to admire about Germany but the trade tariffs they don't have are needless to say not one of them.
Since this is getting a bit circular why don't you put forward the policies you would like to see implemented to achieve your goal of getting rich by making more stuff?
AJS- said:
America's industrial decline was well under way by the time Reagan was elected and owed far more to the success of Germany and Japan than to a lack of trade tariffs.
I fail to see how comparing a currency pair from the Bretton Woods era to the same currency pair now tells you anything.
There is much to admire about Germany but the trade tariffs they don't have are needless to say not one of them.
Since this is getting a bit circular why don't you put forward the policies you would like to see implemented to achieve your goal of getting rich by making more stuff?
As I've said patriotic customer loyalty to the domestic manufacturing industry, in the knowledge that anything else will crash the economy,is as good a trade 'tarrif' as any in the case of Germany.I fail to see how comparing a currency pair from the Bretton Woods era to the same currency pair now tells you anything.
There is much to admire about Germany but the trade tariffs they don't have are needless to say not one of them.
Since this is getting a bit circular why don't you put forward the policies you would like to see implemented to achieve your goal of getting rich by making more stuff?
As for my policies I've made them clear enough.We need to do what we should have done in the early 1970's in going for a protectionist trading policy in favour of the domestic manufacturing sector instead of the opposite.
Patriotic consumers are great, and I believe Britain still has many but there has to be a product to justify it. Astons are great cars and would be my first choice in that bracket, partly because they're British and have a sort of emotional hold on my imagination, but mostly because they're the car I want. The F type is the most beautiful car in that category, and I'd love to own one. But if you ask me to choose between any Rover since the SD1 Vitesse and it's opposite number from BMW I'd probably go for the BMW because it's a vastly better car than a derustproofed Honda. The SD1 was deeply flawed but I'd forgive it something because the idea was good and something because it was British. Ultimately though I would rather Rover had upped their game than BMWs had been made more expensive in Britain, because other people who aren't petrol heads or British won't be so forgiving and will buy the BMW instead.
As for your policies, well great but put some meat on it. How would you use trade restrictions to build world class industry?
As for your policies, well great but put some meat on it. How would you use trade restrictions to build world class industry?
The lies and BS have well and truly started.
Miliband promises to be responsible with the economy, cut public spending and borrowing.
http://www.bbc.co.uk/news/uk-30677112
Meanwhile Cameron has stated he would like to hold the EU referendum earlier than promised.
http://www.independent.co.uk/news/uk/politics/davi...
And Clegg reckons that the Tories cannot be trusted with handling public services and Labour cannot be trusted with the nation's finances hence suggesting that the Lib Dems being in government is vital for the country.
http://www.itv.com/news/update/2015-01-05/nick-cle...
Miliband promises to be responsible with the economy, cut public spending and borrowing.
http://www.bbc.co.uk/news/uk-30677112
Meanwhile Cameron has stated he would like to hold the EU referendum earlier than promised.
http://www.independent.co.uk/news/uk/politics/davi...
And Clegg reckons that the Tories cannot be trusted with handling public services and Labour cannot be trusted with the nation's finances hence suggesting that the Lib Dems being in government is vital for the country.
http://www.itv.com/news/update/2015-01-05/nick-cle...
In many ways Clegg made his bed in 2010 and now he's got to lie in it. He's going to spend the next 5 months furiously disassociating himself from the bits of the current government that he can blame on the Tories. That is going to make it near impossible to cosy up to the Tories again in May. Which leaves him with Labour, who I doubt he'll spend too much time criticising. Who really thinks selling yourself as the party who will get Ed Miliband to power is a winning line? I'm not convinced.
The real danger is that power the Liberals had at the last election (note I say power, rather than direct transfer of voters), will be split into three between the SNP, the Liberals and UKIP. That is a toxic mix if ever I saw one.
The real danger is that power the Liberals had at the last election (note I say power, rather than direct transfer of voters), will be split into three between the SNP, the Liberals and UKIP. That is a toxic mix if ever I saw one.
BlackLabel said:
The lies and BS have well and truly started.
Miliband promises to be responsible with the economy, cut public spending and borrowing.
http://www.bbc.co.uk/news/uk-30677112
Meanwhile Cameron has stated he would like to hold the EU referendum earlier than promised.
http://www.independent.co.uk/news/uk/politics/davi...
And Clegg reckons that the Tories cannot be trusted with handling public services and Labour cannot be trusted with the nation's finances hence suggesting that the Lib Dems being in government is vital for the country.
http://www.itv.com/news/update/2015-01-05/nick-cle...
Miliband promises to be responsible with the economy, cut public spending and borrowing.
http://www.bbc.co.uk/news/uk-30677112
Meanwhile Cameron has stated he would like to hold the EU referendum earlier than promised.
http://www.independent.co.uk/news/uk/politics/davi...
And Clegg reckons that the Tories cannot be trusted with handling public services and Labour cannot be trusted with the nation's finances hence suggesting that the Lib Dems being in government is vital for the country.
http://www.itv.com/news/update/2015-01-05/nick-cle...
Labour really did use that colour!
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