news & politics:discussion

[Punksnotdead]

53 minutes ago, Zoo Music Girl said:

We still haven't put ours on so we are also well in credit with the government payment thingy. I suppose can't complain really but is it just delaying the problem until the subsidy ends?

Freezing here this morning. Just off to do my shopping & if it hasn't warmed up by the time I get home, the heating is going on!

[cellar]

Inflation isn't just caused by higher levels of spending or consumer confidence. Cost-push inflation clearly has more to do with the inflation we are seeing than any fiscal policy, and is why as others have pointed out, other countries central banks have had to raise interest rates. The triple-whammy of Covid, into post-Covid spending and then the war in Ukraine are huge drives of inflation. Spending behaviour only really is involved in the second part of that (and even then, in specific sectors I would imagine, as people spent on things they couldn't during lockdown).

The Truss mini-budget was an act of massive incompetence which everyone can agree on, but FTSE 100 and GBP/USD have returned largely to where they were before the 23rd September.

The Tories are to blame for a lot of things*, but when people try to blame them for things that are out of their control (in the same way people blamed Labour for the 2008 recession), it just looks silly, and it devalues any arguments that you might link to them.

 

*Sort of a separate point, but when I say this, I generally tend to think of things pre-Covid - everything after that its tricky to measure against I feel. Having parties during lockdown obviously not being one of them 😂

[steviewevie]

16 minutes ago, cellar said:

Inflation isn't just caused by higher levels of spending or consumer confidence. Cost-push inflation clearly has more to do with the inflation we are seeing than any fiscal policy, and is why as others have pointed out, other countries central banks have had to raise interest rates. The triple-whammy of Covid, into post-Covid spending and then the war in Ukraine are huge drives of inflation. Spending behaviour only really is involved in the second part of that (and even then, in specific sectors I would imagine, as people spent on things they couldn't during lockdown).

The Truss mini-budget was an act of massive incompetence which everyone can agree on, but FTSE 100 and GBP/USD have returned largely to where they were before the 23rd September.

The Tories are to blame for a lot of things*, but when people try to blame them for things that are out of their control (in the same way people blamed Labour for the 2008 recession), it just looks silly, and it devalues any arguments that you might link to them.

 

*Sort of a separate point, but when I say this, I generally tend to think of things pre-Covid - everything after that its tricky to measure against I feel. Having parties during lockdown obviously not being one of them 😂

the main problem with the mini budget was that it shattered whatever confidence the markets had in GB and why bank had to step in and govt had to a quick reverse ferret on everything including a new chancellor and PM...and this is causing current govt to go the extra mile in terms of reducing borrowing to try and get that confidence back...which means tax rises and spending cuts, which will just make life even harder for many when we have all this other shit going on. 

[steviewevie]

2 minutes ago, OverlyComplicated said:

But blaming Labour for the 2008 Global Financial Crisis didn't make the Tories look silly it lead to them being in power for over a decade and people to this day still seem to think somehow Gordon Brown nuked the world economy.

If you're holding the ball when the music stops your the one who has to lick the shit off, the economy is in a hell of a state and the Tories have been in power forever as far as it's anyone's fault it's theirs. People would prefer to believe that than accept there's nothing a government could do to avoid the incoming crisis.

👆

[mattiloy]

8 minutes ago, OverlyComplicated said:

 

If you're holding the ball when the music stops your the one who has to lick the shit off

What

[steviewevie]

8 minutes ago, OverlyComplicated said:

But blaming Labour for the 2008 Global Financial Crisis didn't make the Tories look silly it lead to them being in power for over a decade and people to this day still seem to think somehow Gordon Brown nuked the world economy.

If you're holding the ball when the music stops your the one who has to lick the shit off, the economy is in a hell of a state and the Tories have been in power forever as far as it's anyone's fault it's theirs. People would prefer to believe that than accept there's nothing a government could do to avoid the incoming crisis.

yeah, so Ozanne is right, it is all the tories fault 

(even if it isn't)

...and maybe labour can keep this narrative going when most of their spending plans are banjaxed when they get into office.

[Guest]

23 minutes ago, steviewevie said:

yeah, so Ozanne is right, it is all the tories fault 

(even if it isn't)

...and maybe labour can keep this narrative going when most of their spending plans are banjaxed when they get into office.

I’m framing the first bit of this post 😉

Never let the Tories get away with anything, they’ll be the first to do it to others. 

[lost]

That appears to be the way it works. Biden's approval ratings on the economy & inflation are no better than the Tories.

[fraybentos1]

Interest rates have been way too low for way too long. It is a big reason that houses are so unaffordable. The Bank of England is largely going to have to follow the Fed's lead on interest rates and they will be raising them for a while to come.

[Guest]

It is quite funny to me that the Tories can blame others for all their problems and some will lap it up yet when they get blamed for problems those people suddenly are all up in arms. ‘It’s not fair..’ etc. 

Edited November 4, 2022 by Ozanne

[cellar]

52 minutes ago, steviewevie said:

the main problem with the mini budget was that it shattered whatever confidence the markets had in GB and why bank had to step in and govt had to a quick reverse ferret on everything including a new chancellor and PM...and this is causing current govt to go the extra mile in terms of reducing borrowing to try and get that confidence back...which means tax rises and spending cuts, which will just make life even harder for many when we have all this other shit going on. 

The mini budget was undoubtedly terrible - the conspiracy theorist in me wonders if it was all intentional to soften us up for what was to come (I do love The Thick of It though). But the point is that some sort of intervention was necessary, the option Truss picked was never going to work, but there had to be something. But am I understanding correctly that you think that the measures implanted now are a direct result of the mini budget, and not of the larger issues at play? Put another way - would the measures implemented now have been different if there wasn't a mini budget, do you think? 

53 minutes ago, OverlyComplicated said:

But blaming Labour for the 2008 Global Financial Crisis didn't make the Tories look silly it lead to them being in power for over a decade and people to this day still seem to think somehow Gordon Brown nuked the world economy.

If you're holding the ball when the music stops your the one who has to lick the shit off, the economy is in a hell of a state and the Tories have been in power forever as far as it's anyone's fault it's theirs. People would prefer to believe that than accept there's nothing a government could do to avoid the incoming crisis.

But you agree that blaming Labour for 2008 is silly, right? 

As I said, the Tories are to blame for a lot of things. But trying to blame them for the inflation we're experiencing is ridiculous. Also I don't think there is anything any government can do to avoid the crisis we are in, and whatever is coming next - only attempt to mitigate it as much as possible. Market reaction seems to like these attempts more than Truss', at least.

[steviewevie]

17 minutes ago, cellar said:

The mini budget was undoubtedly terrible - the conspiracy theorist in me wonders if it was all intentional to soften us up for what was to come (I do love The Thick of It though). But the point is that some sort of intervention was necessary, the option Truss picked was never going to work, but there had to be something. But am I understanding correctly that you think that the measures implanted now are a direct result of the mini budget, and not of the larger issues at play? Put another way - would the measures implemented now have been different if there wasn't a mini budget, do you think? 

I think the need to balance the books has become the priority for govt because they don't want to spook the markets again...there is a possibility that Kwarteng could have used the fiscal statement to set out the energy payment plan and left it at that for now, markets would have not gone ape shit but seen it as a necessary temporary policy instead of permanent unfunded tax cuts  apparently paid for by growth but with zero evidence that this could work, and Truss would still be in power and we'd still be looking at a tough couple of years, but now we have extra austerity on top (probably).

[lost]

Same thing would of happened as the energy plan was part of the issue. The two year guarantee was £150bn whilst the tax cuts £45bn. By reversing Kwarteng's energy plan by 18 months that's a £112.5bn liability removed. Much higher than the tax cuts.

[Zoo Music Girl]

4 hours ago, Punksnotdead said:

Freezing here this morning. Just off to do my shopping & if it hasn't warmed up by the time I get home, the heating is going on!

Yeah we caved. 

[Guest]

The markets issue with the mini-budget was the unfunded tax cuts. So many people have confirmed that. 

[Neil]

2 hours ago, cellar said:

Inflation isn't just caused by higher levels of spending

it isn't caused by higher levels of spending, but it can't exist without higher levels of spending.

[cellar]

46 minutes ago, steviewevie said:

I think the need to balance the books has become the priority for govt because they don't want to spook the markets again...there is a possibility that Kwarteng could have used the fiscal statement to set out the energy payment plan and left it at that for now, markets would have not gone ape shit but seen it as a necessary temporary policy instead of permanent unfunded tax cuts  apparently paid for by growth but with zero evidence that this could work, and Truss would still be in power and we'd still be looking at a tough couple of years, but now we have extra austerity on top (probably).

The need to balance the books should be a priority right now, as should not wanting to spook the markets - the ripple effect of market downturn affects everyone. It seems the second part has been achieved in the short term, so that's good. I think by saying you think Kwasi should have just stuck to energy plan is still not looking at the bigger picture of needing to intervene in some way to tackle a global financial issue. Yes, it was a terrible intervention (as I've already said, and there was evidence that it wouldn't work, never mind zero evidence that it would), but there does need to be an intervention. It will be interesting to see the OBR report on the 17th - I hope they include some comparison of projections if mini budget hadn't been scrapped.

I'm still not sure either if you're arguing that the austerity measures are a direct result of the mini budget or not, but it kind of seems like you are.

 

12 minutes ago, Neil said:

it isn't caused by higher levels of spending, but it can't exist without higher levels of spending.

I said it isn't "just" cause by higher levels of spending (and went on to say that, in the current situation, is mostly caused by cost-push inflation, which is specifically not about increased demand).

So yes, inflation can exist without higher levels of spending, when the cost of production increases. Easiest way to think about this is when the cost of items that are bought regularly in consistent amounts rise in price - no one is going out and having a mad milk-buying spree, but the cost is still rising. 

[steviewevie]

1 hour ago, lost said:

Same thing would of happened as the energy plan was part of the issue. The two year guarantee was £150bn whilst the tax cuts £45bn. By reversing Kwarteng's energy plan by 18 months that's a £112.5bn liability removed. Much higher than the tax cuts.

Yes, but energy plan borrowing markets could maybe understand, a one off cost that was necessary and that could be paid off overtime, and is being done elsewhere although admittedly not by as much. But tax cuts are permanent, were seen as too much, too uncosted, too risky and Kwarteng kept going on about doing more until it went pop. It was dumb as fuck.

[steviewevie]

17 minutes ago, cellar said:

I think by saying you think Kwasi should have just stuck to energy plan is still not looking at the bigger picture of needing to intervene in some way to tackle a global financial issue

maybe rejoining EU would be a start, and maybe investing in things instead of just cutting.

[lost]

3 minutes ago, steviewevie said:

Yes, but energy plan borrowing markets could maybe understand, a one off cost that was necessary and that could be paid off overtime, and is being done elsewhere although admittedly not by as much. But tax cuts are permanent, were seen as too much, too uncosted, too risky and Kwarteng kept going on about doing more until it went pop. It was dumb as fuck.

Seems the same to me a number on a spreadsheet. Unless the markets know when the Ukraine situation will be resolved I don't know how they'd be able to know that it was a one off fixed cost? 

As far as I can see the markets are now going to dominate what politian's can and cant do for the foreseeable future:

 

Edited November 4, 2022 by lost

[steviewevie]

10 minutes ago, lost said:

Seems the same to me a number on a spreadsheet. Unless the markets know when the Ukraine situation will be resolved I don't know how they'd be able to know that it was a one off fixed cost? 

As far as I can see the markets are now going to dominate what politian's can and cant do for the foreseeable future:

 

yes, could be a problem for Labour, but we'll see...election 2 years away and Labour still need to win.

too markets it isn't just a number on a spreadsheet, it's all about confidence...and those tax cuts broke it.

 

Edited November 4, 2022 by steviewevie

[steviewevie]

1 hour ago, lost said:

Same thing would of happened as the energy plan was part of the issue. The two year guarantee was £150bn whilst the tax cuts £45bn. By reversing Kwarteng's energy plan by 18 months that's a £112.5bn liability removed. Much higher than the tax cuts.

but also with this...they should have done the 6 months thing that Labour proposed, along with the windfall tax thing too...and then do it more targetted.

[cellar]

10 minutes ago, steviewevie said:

maybe rejoining EU would be a start, and maybe investing in things instead of just cutting.

Yes both nice ideas, though I don't know enough about how rejoining EU would work... How long would that take? I'd wager not soon enough to tackle the immediate problems we face financially. 

[steviewevie]

2 minutes ago, cellar said:

Yes both nice ideas, though I don't know enough about how rejoining EU would work... How long would that take? I'd wager not soon enough to tackle the immediate problems we face financially. 

might help with some growth forecasts so we could borrow more.

[cellar]

20 minutes ago, steviewevie said:

might help with some growth forecasts so we could borrow more.

You reckon? Either way, it doesn't seem a likely path right now.

At least we're not entertaining the idea that the mini-budget/Tories is/are directly responsible for global inflation anymore.