Unemployment down, inflation down. Was Gordon right?

[130R]

You're easily impressed. Any idiot can borrow money, paying it back is the difficult bit.

[fido]

Fittster said:

If Gordon was unhappy with they way either of them did their roles he had the power to remove them from office.

If only wished Mandelson, Darling etc. tried to removed Gordon from office in the national interest. As i hinted at before, they were good players batting for the wrong team. Just wait for the memoirs to unfold, i suspect they will be writing lovely things about him.

[Mojocvh]

Fittster said:

So has Gordon's Keynes economics saved the day? Banking bailed out and continuing as normal, inflation is coming down (so QE hasn't led to hyperinflation) and today's unemployment figures are down:

"The number of people unemployed in the UK fell by 34,000 to 2.47m in the three months to May, official figures show.

Meanwhile, those claiming Jobseeker's Allowance fell in June by 20,800 to 1.46m, the Office for National Statistics (ONS) said."

BBC

So did Gordon and New Labour save us from a depression.


Let's see anyone out troll this post today!

Interstingly both myself and partner have been "denied" jobseekers allowance after having to sign on.

We get ZERO from the state after our redundancies despite some combined 40+ years of NI/Tax contributions.

So perhaps the reason the figures are falling is that people cannot afford to travel 35 miles by car to sign on (and why should they if they recieve nothing fot it) and thus you have a large number of unenployed out of the system.


Mo.

Edited by Mojocvh on Wednesday 14th July 13:59

[The real Apache]

Because of savings?

[Fittster]

130R said:

You're easily impressed. Any idiot can borrow money, paying it back is the difficult bit.

I'm pretty open minded about the situation, although I don't go along with the line that everything bad is the fault of Gordon Brown and CMD will lead us all to the promised land.

The huge cuts in public spending that many are calling for on this forum certainly has associated risks to a weak, consumer economy like the UKs. Failing to acknowledge those risks undermines the arguments positive sides. To avoid the recession turning into a depression New Labour/Gordon's policy was Keynesian(ish),it would have been better to start with surplus but the electorate had decided they liked lots of public spending so there you go. I don't recall much anger when the policy was initially directed at the financial services industry. Can we be sure it has worked? No, but the early signs are positive.

Paying back debt isn't hard if you have a printing press (I thought everyone was comfortable with Merv getting busy knocking up shiny new pounds). If slashing public spending triggers deflation and a weaker economy paying the debt would become ever more difficult.

Things aren't as black and white as many on PH would like to paint them.

[Mojocvh]

The real Apache said:

Because of savings?

Nope.

Means tested JSA, small (and I mean freaking small) input from paymaster general. One off = both dobbed over.

[AllTorque]

Mojocvh said:

The real Apache said:

Because of savings?

Nope.

Means tested JSA, small (and I mean freaking small) input from paymaster general. One off = both dobbed over.

I'm facing redundancy and am expecting to get contribution-based JSA - was this not offered?

[ZondaMark]

Fittster said:

Things aren't as black and white as many on PH would like to paint them.

Without being rude, that does seem a bit rich coming from you.

[130R]

Fittster said:

New Labour/Gordon's policy was Keynesian(ish),it would have been better to start with surplus..

Without ever running a surplus can you explain the difference between Keynesian economics and just borrowing money?

[Fittster]

NoelWatson said:

Fittster said:

What should the target be set to or would you prefer to go back to another system (summon the ghost of Alan Waters)?

If we have to stick to CPI I would set the target lower. However, I would rather introduce a measure that actually resembled real world inflation.

Wasn't the move to CPI from RPI part of the process of a possible entry to the Euro (one of Gordon's five economic tests)?

"In his Pre-Budget Report statement on 10th December 2003 Gordon Brown the Chancellor of the Exchequer changed the Governments inflation target to a new base the Harmonised Index of Consumer Prices HICP which has been renamed the CPI. The level of the new CPI inflation target for the Bank of Englands Monetary Policy Committee MPC was set at a symmetrical 2 with immediate effect.

HICPs were originally developed in the EU to assess whether prospective members of European Monetary Union would pass the required inflation convergence criterion and then of acting as the measure of inflation used by the European Central Bank to assess price stability in the euro area."
source

RPIX is at 4.2pc, if the BoE went gunning for that by raising interest rates do you think that would be good for the overall economy.

And does it matter:

"So would the Bank be doing anything different if it were still targeting RPIX? I’m not convinced – in fact I’m sure it wouldn’t. For the truth is that, as we’ve said before, the Bank is simply no longer obeying the inflation target remit it has been set. Yes, of course, it pays lip service to the 2pc target, and it couches its economic forecasts in terms of the inflation target (hence the fact it calls them “Inflation Reports”) but, realising that mechanistically targeting inflation would mean it would potentially have had to raise interest rates in the teeth of Britain’s worst recession in living memory, it has, sensibly, pretty much chosen to ignore the CPI"

Telegraph

[ZondaMark]

Fittster said:

RPIX is at 4.2pc, if the BoE went gunning for that by raising interest rates do you think that would be good for the overall economy.

And does it matter:

"So would the Bank be doing anything different if it were still targeting RPIX? I’m not convinced – in fact I’m sure it wouldn’t. For the truth is that, as we’ve said before, the Bank is simply no longer obeying the inflation target remit it has been set. Yes, of course, it pays lip service to the 2pc target, and it couches its economic forecasts in terms of the inflation target (hence the fact it calls them “Inflation Reports”) but, realising that mechanistically targeting inflation would mean it would potentially have had to raise interest rates in the teeth of Britain’s worst recession in living memory, it has, sensibly, pretty much chosen to ignore the CPI"

Telegraph

Do you not think that had RPI or RPIX been used in the first place we'd have avoided the housing bubble?

[Fittster]

ZondaMark said:

Fittster said:

You are going to have to expand on that point.

Brown's decision to switch to CPI, which ignores housing costs, is the root cause of our housing bubble and subsequent bust.

As I understand it the move was for a possible entry to the Euro as it harmonised the UKs measure of inflation with that used on the continent.

To lay the blame for a housing bubble at Gordon's door and ignore the actions of the financial services industry is pretty one-sided view of events. Who actually lent all the money?

[Mojocvh]

AllTorque said:

Mojocvh said:

The real Apache said:

Because of savings?

Nope.

Means tested JSA, small (and I mean freaking small) input from paymaster general. One off = both dobbed over.

I'm facing redundancy and am expecting to get contribution-based JSA - was this not offered?

Not at all.

Good Luck.

[ZondaMark]

Fittster said:

As I understand it the move was for a possible entry to the Euro as it harmonised the UKs measure of inflation with that used on the continent.

Doesn't matter. It's also perhaps not just the use of the measure itself, but the strict mandate in which it was implemented which meant housing had to be ignored.

Fittster said:

To lay the blame for a housing bubble at Gordon's door and ignore the actions of the financial services industry is pretty one-sided view of events. Who actually lent all the money?

The banks' role hasn't been ignored, but they couldn't have done what they did without the monetary expansion which allowed runaway house prices. This is the root of the problem, whether intentional or not.

[NoelWatson]

Fittster said:

To lay the blame for a housing bubble at Gordon's door and ignore the actions of the financial services industry is pretty one-sided view of events. Who actually lent all the money?

Agreed, but Gordon was mainly to blame

[elster]

May wasn't a true reading of the month, as there was the GE.

[staceyb]

Mojocvh said:

AllTorque said:

Mojocvh said:

The real Apache said:

Because of savings?

Nope.

Means tested JSA, small (and I mean freaking small) input from paymaster general. One off = both dobbed over.

I'm facing redundancy and am expecting to get contribution-based JSA - was this not offered?

Not at all.

Good Luck.

Yup I just qualified for contribution based JSA, now I have been unemployed for longer than 6months I no longer qualify for either contributions or means-tested JSA, so I stopped going to the Job centre as they have nothing to offer me. So i am no longer included in the unemployment figures, and there are lots more like me now.

[Political Pain]

"Unemployment down, inflation down. Was Gordon right?"

In a word.... No.

[Fittster]

130R said:

Fittster said:

New Labour/Gordon's policy was Keynesian(ish),it would have been better to start with surplus..

Without ever running a surplus can you explain the difference between Keynesian economics and just borrowing money?

Call it what you like but do you think it would have been right for the government to have cut public sector in the middle of the recession? The point of thread was, the Labour government increased spending during the recession when many of the people here were saying we couldn't afford it, today there are signs of improvement in the economy. So with the benefit of hindsight were the government economic decisions during the recession correct? It's only a topic of discussion to fill a dull afternoon.

[Conian]

Fittster said:

The number of people unemployed in the UK fell by 34,000
Meanwhile, those claiming Jobseeker's Allowance fell in June by 20,800

So..... that means 13,200 people got jobs but didnt stop claiming the allowance?