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Caveat Emptor

By Mike Cunningham On October 13th, 2013 at 11:41 am

If I, whilst running a British-based company making garments for example, initiated or allowed unsafe working practices to occur, I would be guilty of offences against Health & Safety Law. Similarly, if the company I ran overloaded a factory floor-space with machinery, to the extent of some 200% of the safe working load to which that same factory floor was designed, and if a structural collapse happened, with deaths resultant from that overloading, I would be guilty of manslaughter.

However, if I ran a retail company specialising in fast-moving clothing priced at low market prices, and sourced all those clothes, dresses, coats etc. from a company in, say, Bangladesh; all my responsibilities would be made towards ensuring that I was getting the products ordered, on time and in good order; so that my shops would be stocked with clothing which my customers wished to buy.  I might wish to ensure that the clothing stocked in my shops were not produced using child labour, or manufactured during unsafe or overlong hours; but my responsibilities would be to my own company, or the shareholders if the company were publicly owned.

I would not, repeat not, have to burden myself or my company’s shareholders with either the responsibility, the cost or the vast expense of paying huge death benefits or compensation if another company, on another continent, made certain choices in overloading a factory with excess machinery, or made untruthful statements to their employees, in order to make then work in unsafe or deadly conditions; because I didn’t employ the company or the workers: I simply placed a clothing order.

BRITISH ECONOMY HEADED FOR GROWTH!

By Pete Moore On September 5th, 2012 at 2:16 pm

Hang out the bunting, ‘cos we’re saved.

At long last, the government has spotted what the British economy has been missing: a Growth Implementation Committee.

Isn’t that splendid news?

I’m sure the coming Growth Implementation Committee Action Plan will be exciting, giving the Growth Implementation Committee Action Plan Implementation Sub-Committee lots of pointers on how to implement growth.

Oh yes.

 

IT’S OK WHEN THE STATE DOES IT

By Pete Moore On July 5th, 2012 at 2:58 pm

The Bank of England’s economic commissars have ordered up another £50bn off the presses. This brings the total to a whopping £375bn and, like the previous efforts at QE, it’ll be used to buy up government bonds to hold down interest rates.

Forget the other banker boys, this is the real rate manipulation scandal: it’s the government and Bank of England colluding to keep the government over-spending by cheating savers today and looting the young tomorrow to pay it back.

ECONOMY BACK INTO RECESSION IT NEVER REALLY LEFT

By Pete Moore On April 25th, 2012 at 9:14 am

The numbers are out and the UK economy is “back in recession”. It shrank by 0.2% in Q1, following a 0.3% contraction in the preceeding quarter. I can hardly claim to be surprised at the news. In truth the economy has been flatlining for four years, just trundling along with Sir Mervyn King’s money printing.

That’s four wasted years of government economics. There is another way. The Greatest Depression happened in the US in 1920/21. Most economic indicators in that year were worse than those between 1929 and 1932. There’s a good chance you’ve never heard of this, the most severe depression in recent economic history. The reason is that the response of President Warren Harding in 1920/21 was most unlike that of Hoover and FDR from 1929 onward and necessarily denies State propagandists the opportunity to mythologise about heroic government.

Here, let America’s greatest economist explain the response of the White House to the Greatest Depression and why it ended so quickly. Every word Murray Rothbard says is vital and has real meaning. Compare and contrast his description with the ignorant, damaging actions of government know-nothings today who desperately flail around for solutions to deep economic problems which they created and cannot possibly solve except by sacking themselves.

GOVERNMENT BUSINESS AS USUAL

By Pete Moore On April 24th, 2012 at 10:24 am

The numbers are out, and last year the government added £126 billion of borrowing to your children’s tab for things we’re supposedly getting today. It takes total government debt, less financial sector interventions, to £1.0225 trillion. Here kids, play with that.

It’s a stunning success for “austerity”, I’m sure you’ll agree. Or maybe not.

I know the Keynesian fairytale. Government must reduce annual borrowing slowly, very slowly, to the point where it’s not borrowing anything some years into the future. If spending falls too quickly then aggregate demand will collapse (I know, but Keynesians say this) and very bad things will happen. It’s drivel of course. What they never notice is that such mega government taxation, borrowing and spending itself is injurious to demand.

Can I point to an economy where the government collapsed spending and a boom was the result? Yes, and I’m pointing at the post-war American economy. Between 1944 and 1948, government spending collapsed by three quarters. The result was the great post-war boom. It was a time when millions of men were demobbed and joined the labour force, leading to calls from Keynesians that spending must actually be increased lest unemployment rockets. That’s yet another thing they got wrong.

The U.S. economy during the post-World War II years is exhibit A against the Keynesian view that economies will necessarily suffer high unemployment and slow growth when governments make big cuts in government spending. Why did the U.S. economy do so well in the years following World War II given how badly it had done in the years preceding America’s entry into the war? The answer, in a nutshell, is that dramatically reducing government spending and deregulating an economy can take that economy from sickness to health. In short, one of the main things a government can do to help a weak economy recover is to step aside.

And EuroSlime #2 speaks

By Mike Cunningham On July 8th, 2011 at 7:22 am

 

Well, Nick, no we shouldn’t. They chose their own mess, let them sort it out themselves!

Cash or credit?

By ATWadmin On July 8th, 2010 at 9:26 am


As I listened to the M.P. for Bridgewater bleating on about the cuts in school building whilst on the Today Programme this morning, I suddenly realised the vast gulf which exists between ‘us’ as ordinary British subjects of Her Majesty, and those who are ‘voted’ to represent us in Parliament, as well as those who purportedly work in Government.


As with the ‘Expenses’ saga, so with anything which involves real life thinking. The saying ‘They just don’t get it’ summed in total the attitude of the MPs when their pillage and rapacious appetites were thrown wide open by those wonderful Telegraph front page headlines. ‘They’ just did not understand the anger and bitterness which was generated by the news that our representatives had virtually been given a free run at the chocolate factory, and there had been no limits set on their appetites.


So to the flawed release of school building budget cuts which had to be revised, and Ian Liddell-Grainger’s interview on the BBC, which is what I found so incredible. The reason why the amount of money available for the building budget was being cut was because we didn’t have the money, but the genius from Bridgewater was ready with his reply. “We’ll build the schools now, and pay later on than we should” was his economically-judged answer. What this illiterate moron was stating was that Labour and Gordon Brown was correct when they enlarged PFI funding by some 700%. What his reply said was that it was okay, in his view, to put the nation in hock for billions because ‘things have got to get better, later on’ and when the bills come due, we, or rather our grandchildren, will pay. The schools in Bridgewater are so important to the economy that we must abandon the spending cuts, not of course for everybody; just for my Bridgewater constituents, who are really special!


As I said, ‘They really, really, do not get it’!

BRITAIN TO BE DEATHBED OF KEYNESIANISM

By ATWadmin On February 23rd, 2010 at 8:52 pm

A DEATH to be welcomed certainly, if only economic catastrophe didn’t foreshadow its demise. Still, in Bloomberg’s Michael Lynn I finally stumble on someone who is as pessimistic as I am:

Britain has been following the mainstream prescriptions of his followers more than any developed nation. It has cut interest rates, pumped up government spending, printed money like crazy, and nationalized almost half the banking industry. Short of digging Karl Marx out of his London grave, and putting him in charge, it is hard to see how the state could get more involved in the economy.

The results will be dire. The economy is flat on its back, unemployment is rising, the pound is sinking, and the bond markets are bracketing the country with Greece and Portugal in the category marked “bankruptcy imminent.” At some point soon, even the most loyal disciples of Keynes will have to admit defeat, and accept that a radical change of direction is needed […]

But no, we had to borrow and spend and bail out because the crackpot followers of Keynes’ crackpot theories knew best, so here we are. Greece awaits.

In reality, Britain has the worst of all possible worlds: a stagnant economy, a crippling budget deficit and rising prices. The Keynesian consensus is that things would have been far worse without the stimulus provided by government. And if the economy isn’t pumped up with inflated demand, it will collapse back into recession. If it’s not working, that just proves the stimulus should be even larger.

It is the argument quacks always push: If the medicine isn’t working, increase the dosage.

Some will have seen the government plunge the Great British people into chronic debt and wondered how yet more debt was the solution to the crises, then allow themselves to slip under the cloak of propaganda that clever minds were at work, all the while wondering what magick this is. If that was you, no magick was at work and your instincts are correct; you cannot spend your way out of debt, as your elders taught.

And yet, reality has to intrude into this debate at some point. The deficit can’t get much bigger, interest rates can’t be cut much lower, and sterling can’t lose much more value.

Stimulating the economy isn’t working. In fact, it’s only making it worse […]

Which anyone in business will tell you. I’m waving off old friends and associates on a weekly basis. Firms are going bust at a growing rate. In the meantime, Cameron is worried about Tesco selling padded bras. Yes, it’s going to get worse, which is why the black dog stalks me ever closer.

What’s needed is a total change of direction. Get the deficit under control. Raise interest rates to restore confidence in the pound, and reward saving. Cut taxes to stimulate enterprise and investment.

And yet the real lesson of the U.K. in 2010 will be of wider significance. A country can’t spend its way out of a recession. And it can’t fix what was at root a problem of too much debt by just borrowing more and more.

As we were saying. The fundamentals of the British economy are so bad that I cannot see anything but catastrophe before the year end. All that can hold it off this year is runaway price inflation, which is catastrophe in the long, slow run.

Thank you to all those who knew best and voted for the greatest vandals on modern British history.

TORY ECONOMIC CROWING – THE CHEEK OF IT

By ATWadmin On October 23rd, 2009 at 12:14 pm

SHADOW CHANCELLOR Gideon Osborne has put the boot into Darling, claiming that the government plan to pull the country out of recession is in tatters after figures showed the economy is still shrinking:

Mr Osborne said it was “deeply concerning” that the UK economy was still in recession while countries like France and Germany had come out of it six months ago.

“It destroys the myth that Britain was better prepared and destroys the myth the government had a recovery plan,” he told the BBC.

Chutzpah! I don’t recall Osborne or his chum Cameron manning the barricades against the disastrous Brown/Darling strategy that snatched depression from the jaws of a downturn. What I remember is the Tories in a shootout with the socialist government over who can tax and spend the most. Even now the Tories promise only a slight reduction in the growth of state spending and they’ll maintain Labour’s pernicious tax rates. As for Osborne, he’s busy demonstrating that he’s learned nothing and has no idea what to do:

 “We need a change in direction to get the country working again.”

Does anyone believe Osborne has a clue what he’s talking about? We need government to get out of the way so the economy can kill debt and sink malinvestments, we need interest rates to rise and reward the saving of real capital, we need government to stop pretending it can save an economy by sucking vast amounts of wealth from it. Instead, Osborne would continue to stuff the economy because he’d do exactly what the socialists are already doing.

HOPES FOR GREEN SHOOTS OF RECOVERY …

By ATWadmin On October 23rd, 2009 at 9:53 am

 … dashed on the rocks of economic reality.

6:18 GMT Britain’s worst recession since 1930s expected to have ended, experts say – trumpets the Telegraph headline.

After five consecutive quarters of contraction, the majority of economists predict the economy grew 0.2pc during the third quarter of the year. The Office for National Statistics is scheduled to release the figures at 9.30am.”

The possible end of the recession is likely to be seized upon by Gordon Brown as a vindication of the billions of pounds of life support given the economy since the financial crisis plunged it into recession. Starting with the injection of £47bn into Royal Bank of Scotland and Lloyds in October last year, the economy has enjoyed a blitz of measures designed to prevent it tipping into depression.

9:31 GMT Experts haven’t a clue – says the BBC:

The UK economy unexpectedly contracted by 0.4% between July and September, according to official figures, meaning the country is still in recession.

Aye, the longest recession since records began, no less. So much for those PhDs, fancy spreadsheets and “blitz of measures designed to prevent depression” eh, experts? Next time, try studying real economics instead of that Keynesian voodoo rubbish. You may have understood the business cycle, avoided cheerleading the catastrophic policies which blew up the economy and not sedated it further under the guide of pretendy stimulus packages and brainless bail outs. 

In fact, no. Instead, go and join Gordon Brown and his hope of miraculous economic news, in a darkened room.