Monday, October 20, 2008

Oh shit...

So, it seems that the government are preparing to adopt the Keynesian policy of spending fuck loads of public money on trying to "pump prime" the economy, a move that Patrick at the LPUK Blog calls "Baldrick Economics".
Has anyone else noticed the flaw in Darling's Cunning Plan? We simply don't have any money just waiting to be released.

Personal debt is is at record levels. Our national household savings ratio is negative, meaning we aren't actually saving anything at all. Businesses are being hit by the credit crunch because they aren't sat on big piles of cash, that's why a lack of credit to make payroll, for instance, is proving so damaging.

There is no existing money to be loosened by pump priming. All the government is doing is putting us all in more hock to the future. It's a clusterf*ck.

Quite. The other problem, of course, is that when you start pouring loads of cash into the economy—that is, increasing the money supply—you end up with one guaranteed result: inflation.

And since government spending is so colossally inefficient and wasteful, it is, in any case, going to cost considerably more to "pump-prime" the economy in this way than it would if you let voters keep more of their money and spend it as they wish.
It's always worth, at points like this, reminding ourselves of the four ways of spending money, as espoused by Milton Friedman and summarised by P J O'Rourke in All The Trouble In The World.
  1. You spend your own money buying something for yourself—you therefore try to get the best possible product for the best possible price.

  2. You spend someone else's money buying something for yourself—you still try to get the best possible product, but you are not so concerned about the price.

  3. You spend your own money buying something for someone else—you are deeply concerned about the price, but you are not nearly so worried about the quality of the product.

  4. You spend someone else's money buying something for someone else—in which case, who gives a shit?

"Clusterfuck" is hardly an adequate word to describe this situation.

Fucking hellski.

9 comments:

Dave H. said...

Yesterday, Patricia Hewitt oh-so patiently explained how introducing a law forcing employers to spend time considering requests for flexible working arrangements 'enabled' them to do it.

On planet Hewitt, asphyxia was a perennial problem until a law compelling people to breathe was introduced.

And she wasn't the minister for back-to-front, arse-over-tit, looking-glass reasoning* but the minister for business FFS.

*I'm grasping for a phrase like like 'unalloyed lunacy'.

The Filthy Smoker said...

Labour 1976:

"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step." (James Callaghan)

New Labour 2008:

Darling: "I'll spend our way out of recession."

To paraphrase Peter Cook, they've learnt from their mistakes and are confident they can repeat them exactly.

max the impaler said...

A Trotsky house conveyancer and a Marxist with a history degree are just what the economy requires at the moment.Fucked ,doesn't get anywhere near the description needed.

Roger Thornhill said...

We are Soylent Red.

Anonymous said...

wait for it, the only way to get us out of the inflation will be a new, global currency. problem-reaction-solution anyone?

Rob said...

The reason they are doing this is to fuck up the public finances, so when the Conservatives win the next election they'll have to raise taxes, making them extremely unpopular.

Everything New Labour does is done to advance their interests.

Anonymous said...

It is simple.
It is NOT about the economy.
It never, ever was; it never, ever will be.
It's about control.

If they fuck the economy, it's to control you.
If they reflate the economy, it's to control you.
It's to keep you in your fuckin' place, and they in theirs.

farasha said...

Well, isn't it nice to see that our good friends across the pond are having much the same problems as we are in the states?

The whole world's going to hell in a pretty little handbasket lined with our tax dollars. I guess now I have to pick another country to flee to in case McCain the Animatronic Android gets elected.

I've heard that Japan is nice in November...?

Anonymous said...

Brown has fucked up our economy. Anyone with half an understanding of finance & economics will appreciate this as a fact.

The fact that he is not alone in his idiotic, spendthrift ideology does not excuse him from blame. His apparent solution is even more hilarious. It's like the unemployed man in the street 'consolidating' all his loans for the flat screen telly & new car through ocean finance. One day the merry-go-round has to stop.

But the real villain of the piece is the Cameron/Osborne double act. Tory-boys on the look out for power - "what a wheeze that would be hey wot.." What a couple of cunts.

Any competent statesman with a grasp of what is wrong with Brown, his party and the mess they have left us with would have a massive lead in the polls by now.

They don't have that lead because 1/3 of the people are too fucking stupid to analyse anything past a few sound bites repeated endlessly on our 24 hour news media and the other third know they are fuckwits and have no more of an idea of what to do than Brown & Darling.

I thought desperate times generally produced great leaders... So where the fuck are they?

God (if there is one) save us..