Question about New Labours record on economy/investment

[beorhthelm]

Agree with you to a degree, but not convinced the B of E had the inclination or the teeth to do anything about it.

thats sort of what im saying, they didnt have the teeth as they where moved aside to make room for the FSA. inclination is another "what if" scenario, i would venture they could have made more noise, but didnt want to be the party poopers, while letting the FSA have plenty of rope...

In the end a few people in the city and banks made a lot of money out of a lot of innocent people.

as did the government (kinda the point here?)

 

[PILTDOWN MAN]

I'm struggling to see what's automatically wasteful about spending money on new schools and hospitals, more nurses, better social care for older people or kitting out the armed forces.

First of all your last point sticks in the throat somewhat.

What is wasteful is if you haven't got the money in the first place. Labour borrowed when the economy was booming. That's the time pay off the debt not triple it.

Spend, spend spend oh f**K!

 

[larus]

The reason why the financial services industry contributed such huge sums to the Treasury was that they were making far larger sums in profits.

I don't have an issue with it, so long as it is done honestly and ethically, words which are lacking in a banker's vocabulary.

As for government regulation, it is a non starter in reality, most bankers/lawyers/accountants are smarter than politicians, and can easily circumnavigate the rules, especially since the globalisation of the industry.

I actually agree with you. However, I would add the caveat, that it's not that bankers are any worse than any other group of people in society. There's corruption/cowboys in all trades/professions; be that builders, mechanics, doctors, lawyers, politicians, etc. The vitriol towards bankers is overdone.

The country/population was only too happy to reap the rewards from these activities in the good times, but then to cry foul when the dodgy activities got found out.

The attitude of bankers has a resemblance to people and house prices. Trying to make money for doing nothing.

 

[El Presidente]

I actually agree with you. However, I would add the caveat, that it's not that bankers are any worse than any other group of people in society. There's corruption/cowboys in all trades/professions; be that builders, mechanics, doctors, lawyers, politicians, etc. The vitriol towards bankers is overdone.

The country/population was only too happy to reap the rewards from these activities in the good times, but then to cry foul when the dodgy activities got found out.

The attitude of bankers has a resemblance to people and house prices. Trying to make money for doing nothing.

I think if the bankers had shown some contrition for their activities (and let's be honest, they were making large sums from legitimate day to day business, before becoming too greedy with the failure to do proper risk analysis in relation to borrowings and then repackaging toxic debt as AA quality) then there would be less of a backlash. But since the return to profitability in the last twelve months the snouts have been deep in the trough faster than you can say CDO Squared.

 

[Chicken Run]

I'm struggling to see what's automatically wasteful about spending money on new schools and hospitals, more nurses, better social care for older people or kitting out the armed forces.

Let me help you in your apparent struggle and it's quite simple really, Labour created the biggest welfare state since the war, but never had the funds to run it, so here is the problem, you can create all you want, but you need sound back-up to keep it going. We had none of that under the last government, only wishful thinking.

 

[Biscuit]

So the problem here is you're annoyed New Labour invested in public services such as schools, hospitals, social care etc when the economy was in good shape?

Would you rather they invested while in bad shape? Or perhaps, you'd be happier - as a tory - to not see the public services being invested in at all?

 

[El Presidente]

Labour created the biggest welfare state since the war

True, SCRAP the NHS, you know it makes sense.

 

[beorhthelm]

So the problem here is you're annoyed New Labour invested in public services

or, maybe the issue is New Labour overinvested, spending on tick at level that were unsustainable, or "investing" where not appropriate.

 

[Simster]

Totally missed my original point about the 25% tax revenues and 'investment' in public services.

Never mind; carry on.

He didn't miss this point though, did he?

It seems that the only person who thinks anyone thinks this is you.

 

[drew]

i think you'll find half the problem was taking regulation away from the BoE, who would indeed be knowledgable and better suited, and gave it to the FSA who didnt have the right personel or focus. they spent their time worrying about the output of financial journalists who might ramp a stock, rather than the real issues of the what the wider market was upto. to be fair, alot of people even in the banks didnt understand what everyone was upto either, so they couldnt self-regulate. the international nature of the market didnt help, but noone even asked questions about where all the money was coming from. Brown had created a new economic paradigm, no one want to rock the boat.

so essentially, Brown allowed lax regulation and took all the credit and spent all the procedes, but blamed it on a global crisis (which his policy underpinned) when it went pear shaped. we'll never know if would have occured under the Tories, would they have allowed the unequipped FSA to run so far, would they have understood the risks (mates in the banks etc) and reigned it in?

Why is it that whenever we have threads like this you seem to be blinkered to the fact that this would have happened under the Tories. The Tories were for even more deregulation so how would they have prevented the UK being sucked into a global recession?

But the point is, if the city was reckless and, by implication, needs to be controlled better, then the profits which it will (would have), generated would have been a lot less. This 'dishonest/fraudulant' profit wouldn't have been made, therefore, the tax revenues wouldn't have been there.

G.B/T.B/New Labour supporters have claimed that so much was invested in public services which was all their good work because they were running such a strong eceonomy. Yet when this have been seen to be not such a good thing, it's a case of 'not my fault guv'.

Personally, I don't blame the city for the mess that we are in; however I do blame the government for the structural problem with the budget. Financial service have provided a lot more benefit to this country than problems IMO.

The city didn't force people to take out mortgages; the banks didn't force people to borrow excessively on credit cards; the bank didn't force up house prices.

All praise the Holier than thou bankers, despite the absence of any moral code (could be describing MPs as well!)

And I struggle to understand why it is always assumed that throwing huge sums of money is always the right answer. As soon as anyone start to talk about accountability/value for money, the assumption is this is 'just wanting to cut public servies and give tax cuts to the rich'.

You seem to assume that spending lots of money is a good thing. For example, the PFI schemes (set-up by the Tories and expanded hugely under Labour), is a complete waste of tax-payers money. Private companies are going to make huge, guaranteed profits for years, due to the contracts signed. This is an example of throwing money at a problem, but not getting value for money.

I do not have an issue paying taxes; I don't have an issue with public services. I do have an issue with money being wasted.

Your problem is that you seem to dismiss any public spending as doing any good.

First of all your last point sticks in the throat somewhat.

What is wasteful is if you haven't got the money in the first place. Labour borrowed when the economy was booming. That's the time pay off the debt not triple it.

Spend, spend spend oh f**K!

During the first part of their administration I think you will find that Labour were paying off the national debt,and at a higher rate than the Tories ever did. Also, by 2007, they were spending a smaller percentage of the the National GDP than your tory boys were doing when they left office in 1997.

 

[beorhthelm]

Why is it that whenever we have threads like this you seem to be blinkered to the fact that this would have happened under the Tories. The Tories were for even more deregulation so how would they have prevented the UK being sucked into a global recession?

maybe because i dont have the benefit of a quantum leap machine to test other time lines and do not *know* what might have actually happened under a Tory administration? Brown implemented the regulation that led to this situation; a tory implementation might have been better or worse. they may have removed the FSA and given oversight back to the BoE. they may have allowed a minor recession to occur back in the early 00's rather than borrow to propup the economy and prime a bubble. The global recession might not have been under a different set of policies in the UK, the second (in some areas 1st) largest market place (not refering to underlying economy). And if to form, the Tories probably wouldnt have been spanking all the revenue on pet projects, but on tax cuts; come the decline the public finances wouldnt have been in such a poor state.

the *fact* is it was Browns policies (though apparently Blair is wanting some of the praise... er ok then) that brought us here.

 

[Chicken Run]

So the problem here is you're annoyed New Labour invested in public services such as schools, hospitals, social care etc when the economy was in good shape?

Would you rather they invested while in bad shape? Or perhaps, you'd be happier - as a tory - to not see the public services being invested in at all?

No, the problem here is I'm annoyed by idiots like you that think it's ok to spend, invest when you don't have the money or plan to do so, and throw the public service card as some sort of "it's ok it's education after all" card, simple really.

And as far as me not being concerned about investing in public services, your sounding like a twat now!

 

[drew]

maybe because i dont have the benefit of a quantum leap machine to test other time lines and do not *know* what might have actually happened under a Tory administration? Brown implemented the regulation that led to this situation; a tory implementation might have been better or worse. they may have removed the FSA and given oversight back to the BoE. they may have allowed a minor recession to occur back in the early 00's rather than borrow to propup the economy and prime a bubble. The global recession might not have been under a different set of policies in the UK, the second (in some areas 1st) largest market place (not refering to underlying economy). And if to form, the Tories probably wouldnt have been spanking all the revenue on pet projects, but on tax cuts; come the decline the public finances wouldnt have been in such a poor state.

the *fact* is it was Browns policies (though apparently Blair is wanting some of the praise... er ok then) that brought us here.

What deregulation are you referring to then? I thought deregulation of the financial sector was started in the early 1980s and was done to allow the UK market to compete for business with the deregulated US market!

Have a read of these two articles. Gordon Brown isn't blameless but he wasn't the catalyst for the problems the world suffered as so many toryboys on this forum seem to quick to suggest.


HOW THE SECURITIES & EXCHANGE COMMISSION OPENED THE FLOODGATES FOR ABUSE IN 2004 | Goals for Americans

http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-thatchers-baleful-influence-lives-on-760508.html


As for your assertion that the tories would have been giving tax cuts rather than spending money on 'pet projects' (what the f*** are they then as I don't consider rebuilding crumbling schools and improving the NHS as 'pet projects') then maybe you are right, tax cuts to the wealthiest.

I would however remind you that in 2007, ie prior to the credit crunch, Government spending as a percentage of GDP was lower than when the tories left power in 1997. Now, I don't have a crystal ball but I suspect that, taking away the cost of the credit crunch, ie bailling our the banks and all that fiscal stimulation, we would not be concerned with the deficit. Now before the likes of Larus jump down my throat, I am fully aware there are a lot of additional factors such as the fact that if the financial sector was better regulated then there would have been less revenue to the exchequer but then no doubt that would have resulted in a different budget from the Government.

Had the tories been in power, we would be in a worse situation. Schools would still be in crumbling buildings and the NHS would be in a state of collapse. We would have still gone to war in Iraq as the Tories would have been more in bed with the Republican Bush than Blair was. There would be less policemen on the streets than there is now with all that would entail and we wouldn't even know about MPs fiddling their expenses as there would not be such a thing as the Freedom of Information Act. The gap between the rich and the poor would be even bigger.

 

[drew]

No, the problem here is I'm annoyed by idiots like you that think it's ok to spend, invest when you don't have the money or plan to do so, and throw the public service card as some sort of "it's ok it's education after all" card, simple really.

And as far as me not being concerned about investing in public services, your sounding like a twat now!

How on earth do you expect a government, of any ilk, to run the country if they don't borrow money. Its the nature of a capitalist economy. I think the crucial part of your sentence is when you say 'or plan to do so'. When did the Labour government not plan to have the income? I didn't have the money to buy a house but the kind mortgage company looked at my employment status at the time and deemed I could afford future payments so lent me the money. What's the difference?

There maybe people that disagree with financial projections for growth etc but that invariably is a difference of opinion. Look at the fact that the economy is growing, probably down the Labour measures, and that fact would have brought in extra tax revenue. It remains to be seen whether we get a double dip. In the mid 90s, Canada had austerity measures introduced to reduce a massive deficit. Some economists argue that that solved their problems whilst others argue that it hindered their recovery which actually happened on the back of increase in demand.

Time will tell whether Cameron gets away with it or if little Florence Rose Endellion will be celebrating her 5th birthday back in the constituency home rather than No.10!

 

[beorhthelm]

HOW THE SECURITIES & EXCHANGE COMMISSION OPENED THE FLOODGATES FOR ABUSE IN 2004 | Goals for Americans

As for your assertion that the tories would have been giving tax cuts rather than spending money on 'pet projects' (what the f*** are they then as I don't consider rebuilding crumbling schools and improving the NHS as 'pet projects')

of course, ALL expediture has been NHS and Schools, and maximising value for money to improve front line services there. at no point has any policy been designed to either increase employment or the power of a department or the influence od the state. silly me.

you might like to look up the changes in the US poilcy on lending under Clinton to promote the availablity of loans to poorer backgrounds; a worthy aim, but in widley seen as sowing the seeds of the boom. deregulation of the 80's was tn the issue, so much as newer rounds of deregulation with poorer oversight in place. its more complex than one single event, but Brown had his hand on the tiller while the problems were building up.

as for your crystal ball, we *would* be concerned with the deficit sans bank bailouts (mostly loans or gaurantees) because Brown broke his own rules on borrowing over the economic cycle. the cycle ended, but Labour was still spending, projecting strong growth continuing past the end of the cycle.

"had the tories..." is ifs and buts, we could play all day. if Callaghan had won in 1979 we might have GDP half of what it is today and returned to 3 day week as we paid off the IMF. history records the facts of the matter, good and bad. hasnt the rich/poor gap increased under Labour anyway? so much for New Labour's principles.

 

[drew]

of course, ALL expediture has been NHS and Schools, and maximising value for money to improve front line services there. at no point has any policy been designed to either increase employment or the power of a department or the influence od the state. silly me.

you might like to look up the changes in the US poilcy on lending under Clinton to promote the availablity of loans to poorer backgrounds; a worthy aim, but in widley seen as sowing the seeds of the boom. deregulation of the 80's was tn the issue, so much as newer rounds of deregulation with poorer oversight in place. its more complex than one single event, but Brown had his hand on the tiller while the problems were building up.

as for your crystal ball, we *would* be concerned with the deficit sans bank bailouts (mostly loans or gaurantees) because Brown broke his own rules on borrowing over the economic cycle. the cycle ended, but Labour was still spending, projecting strong growth continuing past the end of the cycle.

"had the tories..." is ifs and buts, we could play all day. if Callaghan had won in 1979 we might have GDP half of what it is today and returned to 3 day wasn't the 3 day week during the Conservative government led by Heath? week as we paid off the IMF. history records the facts of the matter, good and bad. hasnt the rich/poor gap increased under Labour anyway? so much for New Labour's principles.

Ok then, describe each round of deregulation and the date it was brought in. Much of it was before labour got anywhere near No.10. Yes, Brown had his hand on the tiller but he was, as it mistakenly turns out, persuaded by the City not to change course with regard to deregulations and much as it probably pains you to ever admit, a course that the Tories believed. So what do you think Brown should have done to avert the credit crunch in Britain in terms of regulating the financial sector.

 

[beorhthelm]

drew, you seem to be advocating "not my problem guv, was like it when i got here" is a fine policy. point of the thread was, Labour made hay while the sun shone, did bugger all to change anything.

Labour want to take credit for the positives of this policy (lots of cash to throw around) but take none of the responsibility for the current mess, which is paritally their doing (global crisis aside they continued to increase spending in the cycle when spending should have been reined in).

im not sure the Tories would have done much different in the past few years; but i do beleive they wouldnt have left the toothless FSA in charge in the run up, and would have been cutting spending as the peak of the cycle past, which *might* have averted the worse of the situation. but thats speculation. reality is, Brown didn't avoid the problems, and compounded them. you cant see this, yet ealier said i was blinkered?

 

[drew]

drew, you seem to be advocating "not my problem guv, was like it when i got here" is a fine policy. point of the thread was, Labour made hay while the sun shone, did bugger all to change anything.

Labour want to take credit for the positives of this policy (lots of cash to throw around) but take none of the responsibility for the current mess, which is paritally their doing (global crisis aside they continued to increase spending in the cycle when spending should have been reined in).

im not sure the Tories would have done much different in the past few years; but i do beleive they wouldnt have left the toothless FSA in charge in the run up, and would have been cutting spending as the peak of the cycle past, which *might* have averted the worse of the situation. but thats speculation. reality is, Brown didn't avoid the problems, and compounded them. you cant see this, yet ealier said i was blinkered?

I think you will find it is an opinion that he compounded the problems, not a fact. As mentioned before, spending as a percentage of GDP was lower prior to the credit crunch than when the tories were in power. That is because Labour did, contrary to your assertion, do something about it and repaid about 6% of the national debt. However, as a result of the recession, it was decided to prop up the economy with spending rather than let the free market take it's toll on jobs and the additional burden that would place on the state. We could have let the various banks fail and all the savers would have lost thousands.

As it turns out, the last quarter showed better growth than anticipated so, it is opinion that Brown compounded the problems in the manner you are eluding to.

Personally, I never liked Brown and some of Blair's comments are no doubt true about his unsuitability to be Prime Minister but it is still my opinion that the country is in a far better state now than it would have been had we had 13 more years of conservatism.