I normally enjoy Simon Heffer's columns in the Telegraph. They are exquisitely crafted and very well written. He has a fine command of our beautiful and flexible English language. He is also a staunch Thatcherite and the quintessential English gentleman. However, his column today was an absolute disgrace.
Some of his attacks on Cameron are justified, but Cameron is in a much more difficult position than Heffer gives him credit for. Cameron has too tread the tightrope of volatile public opinion. Gordon Brown is/was a master of political positioning, using it to great advantage in 2001 and 2005. I do believe that the Tories will not be effected by the 'Cuts vs Investment' line because Labour polled less votes in England than the Tories in 2005, and the Tories will crush Labour this time. And in 2005, the SNP wasn't the force it is today, eating away into Labour's heartlands. But, as the commentariat frequently point out, Cameron still hasn't 'sealed the deal' with the electorate. His personal ratings are high, suggesting that Cameron himself is popular in the country. But people still view the party with suspicion, because the Tories didn't scream about their record from the rooftops during their 8 years of drift. They should have hammered home their economic record to stop Brown claiming credit for Norman Lamont's hard work. Cameron has a lot of work to do in making the Tories credible.
Heffer should immediatly apologise for comparing the 50% tax rate to Belsen. Heffer should know how the class warriors in the Labour Party work. The Labour Party's propaganda arms in the Grauniad and the BBC will repeat endlessly that the Tories favour the rich. Cameron has to achieve a massive swing to simply gain a small majority. Heffer should be more appreciative of the task Cameron faces if he truly wants a Conservative government.
Wednesday, 29 July 2009
QE
I believe we should cut spending now, and massively to avoid a fiscal crisis. I have never believed the Keynesian rubbish that governments can prime the pump when private sector demand collapses. To offset the deflationary impact, monetary policy should be expanded as far as possible. QE isn't inflationary because monetary growth has collapsed.
If Europe, the US, Asia and Britain came together and announced a massive monetary expansion, the crisis would be over sooner than we think. Central banks could purchase corporate bonds through open market operations. The Bank of England has used the newly minted money to buy gilts instead of corporate bonds. It is banks that need liquidity. They can lend this money out into the real economy, providing ''real help now.''
Capacity utilization is at an all time low, at 68% in America, and 60% around the world. That will put a ceiling on inflationary pressures for now. Also, according to Ambrose Evans Pritchard, the monetary multiplier ran at 1.6 on average during the last decade. It is now at 0.893. As he said in his article, ''The velocity of money has slowed to a crawl.''
The output gap in America is 7%. There is plenty of room for monetary expansion. The Great Depression was in part a consequence of the Federal Reserve failing in its remit to provide liquidity to the banking system when it reduced the money supply by 1/3.
Then when the recovery returns, the Bank can engage in open market operations by selling back the bonds, thus reducing the money supply. They can also use interest rates, but interest rates should stay as low as possible for now.
Although I am an Austrian in the economics sphere, we are not in a position to implement its doctrine. While we have central banks and a fiat currency, we should use them. When we have finally recovered, and if governments have the guts to slash spending and offset that with monetary expansion, the deficits will be small, and some may have balanced budgets or even surpluses. Surpluses may be a pipe dream however due to automatic stabilisers. But if we continue with unconstrained discretionary spending, our credit rating could be downgraded and a gilt strike will follow. We should have a decade after the crisis to balance budgets around the world, before a phased return to a gold standard. Governments have shown them to be completely incapable of managing a fiat currency properly. It allows them to indulge in corporatist fascism and fund special interest groups. It's time to return to fiscal prudence... now.
Capacity utilization is at an all time low, at 68% in America, and 60% around the world. That will put a ceiling on inflationary pressures for now. Also, according to Ambrose Evans Pritchard, the monetary multiplier ran at 1.6 on average during the last decade. It is now at 0.893. As he said in his article, ''The velocity of money has slowed to a crawl.''
The output gap in America is 7%. There is plenty of room for monetary expansion. The Great Depression was in part a consequence of the Federal Reserve failing in its remit to provide liquidity to the banking system when it reduced the money supply by 1/3.
Then when the recovery returns, the Bank can engage in open market operations by selling back the bonds, thus reducing the money supply. They can also use interest rates, but interest rates should stay as low as possible for now.
Although I am an Austrian in the economics sphere, we are not in a position to implement its doctrine. While we have central banks and a fiat currency, we should use them. When we have finally recovered, and if governments have the guts to slash spending and offset that with monetary expansion, the deficits will be small, and some may have balanced budgets or even surpluses. Surpluses may be a pipe dream however due to automatic stabilisers. But if we continue with unconstrained discretionary spending, our credit rating could be downgraded and a gilt strike will follow. We should have a decade after the crisis to balance budgets around the world, before a phased return to a gold standard. Governments have shown them to be completely incapable of managing a fiat currency properly. It allows them to indulge in corporatist fascism and fund special interest groups. It's time to return to fiscal prudence... now.
Tuesday, 28 July 2009
New Labour cronies
The list of Cabinet ministers who have had no life experience beyond SW1 is rather frightening. Let me give several examples. We have four Great Offices of State; The Prime Minister, the Chancellor, The Foreign Secretary, The Home Secretary.
Alistair Darling has absolutely no experience of economics. He hasn't worked in finance, banking or economic analysis and forecasting. Yet, in the worst economic situation since the 1930's, we have a man in charge of our economic affairs at the Treasury who trained as a lawyer! Gordon Brown too was bereft of economic experience. Both Brown and Captain Darling are career politicians. Surely, even in good times, someone trained as an economist or at least someone with business experience should be in charge of the Treasury.
The last person to have an economics degree and be Chancellor was Nigel Lawson I believe. And he also worked as a financial journalist. Norman Lamont worked as an investment banker. I've never bought into the idea that Kenneth Clarke was a good Chancellor. He was merely competent. Norman Lamont reacted very quickly after the ERM debacle, putting in place the new monetary framework. He established the quarterly Inflation Report. He established the monthly meetings between the Chancellor and the Bank of England Governor. He also introduced the inflation targetting regime. Recovery was already under way when Clarke became Chancellor, and Clarke did something that he always accused Brown off, he took credit for the tough decisions and hard work of his predecessor. There is one exception to this rule however. Sir Geoffrey Howe, one of the most formidable and tough Chancellors of the 20th century. It was his experiment with monetarism that helped bring inflation down from 20% to 3%. Howe trained as a lawyer, but he was very well versed in economics, particularly the Friedmanite Chicago School. He is the exception to prove the rule.
Now, I move on to the Foreign Secretary, a grand, very well respected government position, currently occupied by the hapless and ridiculous David Miliband. There should be specific qualifications required to be Foreign Secretary. One should have military or diplomatic experience. If not that, one should have experience of working abroad and advising foreign governments or businesses. William Hague will be an exceptional Foreign Secretary. He has had real life experience beyond Westminster. David Miliband has followed the life path of the typical New Labourite stooge. He left university and joined a think-tank, the pretentiously named 'Institute for Public Policy Research.' He was a policy analyst there. He hasn't worked in the private sector. He hasn't worked abroad. He then moved from the IPPR to become Tony Blair's Head of Policy and developed the 1997 manifesto. He was then parachuted into a safe seat in South Shields. He was environment secretary, and now foreign secretary. It is a disgrace that a man so obviously unqualified is allowed to occupy one of the most prestigious posts of government in the world. And because of this, he has managed to offend the Indian government by refusing to obey diplomatic protocols.
He has a disturbing lack of foreign policy knowledge. Labour MP's and ministers (with the exception of Kim Howells) seem to be completely clueless in foreign policy, whether it be the history of the areas of interest, and they seem to ignore the geo-political and economic context. Iran could have easily been diplomatically crushed when oil prices crashed because Mahmoud Ahmadinejad has funded pork barrel schemes based on oil prices and future expectations. The head of the Foreign Affairs Select Committee is always bereft of foreign affairs experience. He was a Trade Unionist. Both Miliband and Gapes are hideously anti-Israeli. They believe the rubbish that is spouted by the hard and soft left about the ''occupation of Palestine'' and the oppression of the Palestinian people. Israel should be our strongest ally in the Middle East, but if we keep treating that proud and noble nation like occupiers and terrorists, then we don't deserve to be Her friend.
James Purnell is another who has no experience of life outside of politics as is;
1) Andy Burnham
2) Lord Mandelson of Everything
3) Geoff Hoon
4) Shaun Woodward (treacherous turncoat)
5) Yvette Cooper
6) The disgusting Ed Balls
7) Jim Murphy
8) Douglas Alexander
9) Ed Miliband
10) John Denham
Contrast this with the work experience of the Shadow Cabinet, which is filled with industrialists and businessmen.
http://dailyreferendum.blogspot.com/2009/04/cabinet-vs-shadow-cabinet-previous.html
In politics, we should have experienced men and women on both sides of the house. Decades ago, the Labour side was filled with Trade Unionists, miners and workers in the old heavy manufacturing industries (steelworks etc). The Tory benches were filled with people from business or the military. The Liberals weren't full of people at all. We are in the most serious and dangerous economic circumstances in 80 years, so we need the most experienced Cabinet we've ever had. But there is no chance of that happening with Brown. He has filled his Cabinet with sycophants and party drones to weak to challenge his dwindling authority. Cameron has a very experienced shadow Cabinet. He could bring in people like John Redwood, John Whittingdale, Peter Lilley, Brian Binley etc. John Redwood would make an excellent Chancellor one day.
Alistair Darling has absolutely no experience of economics. He hasn't worked in finance, banking or economic analysis and forecasting. Yet, in the worst economic situation since the 1930's, we have a man in charge of our economic affairs at the Treasury who trained as a lawyer! Gordon Brown too was bereft of economic experience. Both Brown and Captain Darling are career politicians. Surely, even in good times, someone trained as an economist or at least someone with business experience should be in charge of the Treasury.
The last person to have an economics degree and be Chancellor was Nigel Lawson I believe. And he also worked as a financial journalist. Norman Lamont worked as an investment banker. I've never bought into the idea that Kenneth Clarke was a good Chancellor. He was merely competent. Norman Lamont reacted very quickly after the ERM debacle, putting in place the new monetary framework. He established the quarterly Inflation Report. He established the monthly meetings between the Chancellor and the Bank of England Governor. He also introduced the inflation targetting regime. Recovery was already under way when Clarke became Chancellor, and Clarke did something that he always accused Brown off, he took credit for the tough decisions and hard work of his predecessor. There is one exception to this rule however. Sir Geoffrey Howe, one of the most formidable and tough Chancellors of the 20th century. It was his experiment with monetarism that helped bring inflation down from 20% to 3%. Howe trained as a lawyer, but he was very well versed in economics, particularly the Friedmanite Chicago School. He is the exception to prove the rule.
Now, I move on to the Foreign Secretary, a grand, very well respected government position, currently occupied by the hapless and ridiculous David Miliband. There should be specific qualifications required to be Foreign Secretary. One should have military or diplomatic experience. If not that, one should have experience of working abroad and advising foreign governments or businesses. William Hague will be an exceptional Foreign Secretary. He has had real life experience beyond Westminster. David Miliband has followed the life path of the typical New Labourite stooge. He left university and joined a think-tank, the pretentiously named 'Institute for Public Policy Research.' He was a policy analyst there. He hasn't worked in the private sector. He hasn't worked abroad. He then moved from the IPPR to become Tony Blair's Head of Policy and developed the 1997 manifesto. He was then parachuted into a safe seat in South Shields. He was environment secretary, and now foreign secretary. It is a disgrace that a man so obviously unqualified is allowed to occupy one of the most prestigious posts of government in the world. And because of this, he has managed to offend the Indian government by refusing to obey diplomatic protocols.
He has a disturbing lack of foreign policy knowledge. Labour MP's and ministers (with the exception of Kim Howells) seem to be completely clueless in foreign policy, whether it be the history of the areas of interest, and they seem to ignore the geo-political and economic context. Iran could have easily been diplomatically crushed when oil prices crashed because Mahmoud Ahmadinejad has funded pork barrel schemes based on oil prices and future expectations. The head of the Foreign Affairs Select Committee is always bereft of foreign affairs experience. He was a Trade Unionist. Both Miliband and Gapes are hideously anti-Israeli. They believe the rubbish that is spouted by the hard and soft left about the ''occupation of Palestine'' and the oppression of the Palestinian people. Israel should be our strongest ally in the Middle East, but if we keep treating that proud and noble nation like occupiers and terrorists, then we don't deserve to be Her friend.
James Purnell is another who has no experience of life outside of politics as is;
1) Andy Burnham
2) Lord Mandelson of Everything
3) Geoff Hoon
4) Shaun Woodward (treacherous turncoat)
5) Yvette Cooper
6) The disgusting Ed Balls
7) Jim Murphy
8) Douglas Alexander
9) Ed Miliband
10) John Denham
Contrast this with the work experience of the Shadow Cabinet, which is filled with industrialists and businessmen.
http://dailyreferendum.blogspot.com/2009/04/cabinet-vs-shadow-cabinet-previous.html
In politics, we should have experienced men and women on both sides of the house. Decades ago, the Labour side was filled with Trade Unionists, miners and workers in the old heavy manufacturing industries (steelworks etc). The Tory benches were filled with people from business or the military. The Liberals weren't full of people at all. We are in the most serious and dangerous economic circumstances in 80 years, so we need the most experienced Cabinet we've ever had. But there is no chance of that happening with Brown. He has filled his Cabinet with sycophants and party drones to weak to challenge his dwindling authority. Cameron has a very experienced shadow Cabinet. He could bring in people like John Redwood, John Whittingdale, Peter Lilley, Brian Binley etc. John Redwood would make an excellent Chancellor one day.
Open letter and response
I posted a message on the Independent newspaper website, to which a Keynesian replied as follows;
''Your theory of how this depression could be solved is founded on a fundamental error, innate to all "state-haters", that the free market always rights itself. You have not learned one jot from what Keynes said: that free markets AREN'T self-correcting. Manifestly they are not, because depressions existed even before there was state economic intervention. It is YOUR theory of that markets work perfectly that is seriously at fault. Keynes's theory aimed at explaining why it was at variance with the real world, where they don't.Just because there is an output gap, it doesn't mean it will be filled, because of the nature of expectations. Economies can be trapped in underemployment equilibrium. It was only the massive spending by all major nations in preparation for World War Two that kick-started the economy last time round.Cutting public spending massively while the rest of the economy is still contracting will only compound the problems we have and put us into an even more intense depressionary spiral.''
He didn't address my comments about the 1921 recession in America and how it was solved (spending and tax cuts) but he just offered the usual Keynesian diatribe about how markets don't work etc. Here was my response;
''Free market doctrines didn't fail because we've had a mixed economy. Central Banks and Governments control and regulate credit and money supply, and they allowed a credit boom.
I didn't say markets work perfectly. Human beings are imperfect, and therefore anything we create or operate in will not be perfect, but it is much better than Keynesian economics, which was proved to be a farce everytime some idiot implemented a fiscal stimulus.
Trade ended the Great Depression, not ''stimulus.'' Contrary to popular belief, Hoover was a fiscal and monetary expansionist. FDR increased state spending by 104%. Some say that he was doing well until 1937 when he tried to balance the budget. Yet if that was the case, in 1945, we would have relapsed back into depression when a budget deficit of 21% was turned into a surplus of around 2%. Yet the post war recession lasted 8 months and unemployment was 3%, compared to a 14% average for the Great Depression.
Between 1992-95, Japan tried 6 fiscal stimulus programmes totalling 65.5 trillion yen. They cut income taxes in 94, and in 98 they cut taxes by another 2 trillion. Overall, during the 1990's, Japan tried 10 fiscal stimulus programmes totalling 100 trillion yen, and not one of them worked. Gerald Ford tried a fiscal stimulus to alleviate stagflation in the 70's, and it failed.
We should cut spending massively now because it is worthless and there is no evidence that there is a multiplier effect. We should offset the deflationary effect of this with massive monetary stimulus through QE, interest rates and various open market operations.
However, I note that you didn't respond to my evidence about the 1921 recession, you merely insulted my comments instead of offering a critique of them. I hope you extend the same courtesy I have extended you if you choose to reply. ''
''Your theory of how this depression could be solved is founded on a fundamental error, innate to all "state-haters", that the free market always rights itself. You have not learned one jot from what Keynes said: that free markets AREN'T self-correcting. Manifestly they are not, because depressions existed even before there was state economic intervention. It is YOUR theory of that markets work perfectly that is seriously at fault. Keynes's theory aimed at explaining why it was at variance with the real world, where they don't.Just because there is an output gap, it doesn't mean it will be filled, because of the nature of expectations. Economies can be trapped in underemployment equilibrium. It was only the massive spending by all major nations in preparation for World War Two that kick-started the economy last time round.Cutting public spending massively while the rest of the economy is still contracting will only compound the problems we have and put us into an even more intense depressionary spiral.''
He didn't address my comments about the 1921 recession in America and how it was solved (spending and tax cuts) but he just offered the usual Keynesian diatribe about how markets don't work etc. Here was my response;
''Free market doctrines didn't fail because we've had a mixed economy. Central Banks and Governments control and regulate credit and money supply, and they allowed a credit boom.
I didn't say markets work perfectly. Human beings are imperfect, and therefore anything we create or operate in will not be perfect, but it is much better than Keynesian economics, which was proved to be a farce everytime some idiot implemented a fiscal stimulus.
Trade ended the Great Depression, not ''stimulus.'' Contrary to popular belief, Hoover was a fiscal and monetary expansionist. FDR increased state spending by 104%. Some say that he was doing well until 1937 when he tried to balance the budget. Yet if that was the case, in 1945, we would have relapsed back into depression when a budget deficit of 21% was turned into a surplus of around 2%. Yet the post war recession lasted 8 months and unemployment was 3%, compared to a 14% average for the Great Depression.
Between 1992-95, Japan tried 6 fiscal stimulus programmes totalling 65.5 trillion yen. They cut income taxes in 94, and in 98 they cut taxes by another 2 trillion. Overall, during the 1990's, Japan tried 10 fiscal stimulus programmes totalling 100 trillion yen, and not one of them worked. Gerald Ford tried a fiscal stimulus to alleviate stagflation in the 70's, and it failed.
We should cut spending massively now because it is worthless and there is no evidence that there is a multiplier effect. We should offset the deflationary effect of this with massive monetary stimulus through QE, interest rates and various open market operations.
However, I note that you didn't respond to my evidence about the 1921 recession, you merely insulted my comments instead of offering a critique of them. I hope you extend the same courtesy I have extended you if you choose to reply. ''
Hypocrisy of Tony Benn
I have an obsession with Anthony Wedgewood Benn. Some would call in unhealthy. I despise his prognostications about capitalism and socialism. He behaves like a wizened old master, one who dispenses invaluable advice and is always right. Tony Benn has never been right in his entire life. He is a filthy hypocrite.
He preaches redistribution of wealth. Tony Benn has an estimated fortune of £4,000,000. He hasn't voluntarily redistributed the wealth himself. He could easily do so by donating his fortune to the Treasury so they can hand it out to poor communities. It could make a big difference to a lot of lives.
He preaches the abolition of private property and nationalisation. Benn has a country house, Stansgate Estate, and a house in Holland Park, one of the most exclusive areas in London. He could nationalise these houses and let the poor live in them. They are very substantial properties. Many homeless people throughout London could have easy shelter. But Benn dosen't practice what he preaches. He claims to be a representative of the working classes. As long as he dosen't have to live like on eh!
Benn is far too rich to know what it is like to live on a very low wage. He dosen't know what it is like to be worried about making the payments on final warning notices. So Benn should cease being the monstrous hypocrite he so obviously is.
Like all socialists, Benn lives by the creed;
''Do as I say, not as I do.''
He preaches redistribution of wealth. Tony Benn has an estimated fortune of £4,000,000. He hasn't voluntarily redistributed the wealth himself. He could easily do so by donating his fortune to the Treasury so they can hand it out to poor communities. It could make a big difference to a lot of lives.
He preaches the abolition of private property and nationalisation. Benn has a country house, Stansgate Estate, and a house in Holland Park, one of the most exclusive areas in London. He could nationalise these houses and let the poor live in them. They are very substantial properties. Many homeless people throughout London could have easy shelter. But Benn dosen't practice what he preaches. He claims to be a representative of the working classes. As long as he dosen't have to live like on eh!
Benn is far too rich to know what it is like to live on a very low wage. He dosen't know what it is like to be worried about making the payments on final warning notices. So Benn should cease being the monstrous hypocrite he so obviously is.
Like all socialists, Benn lives by the creed;
''Do as I say, not as I do.''
Monday, 27 July 2009
A plan for economic recovery
I'm sick of seeing left wing ''commentators'' peddle the myth that cutting public spending in a recession is bad. In 1921, America entered a depression. It lasted for 1 year. That 1 year equalled the first year of the Great Depression in terms of output last. President Warren Harding CUT TAXES and CUT SPENDING. The economy recovered quicker than at any other time in history, and was only beaten by the recovery that happened because of the Reagan tax cuts. By cutting the size of the state, Harding created extra capacity in the economy. But slashing taxes, he created extra demand and the recovery came because he essentially did nothing and let the people spend the money they work for.
Britain is in a uniquely horrible position. If the Credit Rating Agencies downgrade our debt rating, the yields on gilts will jump because investors will view government bonds as more risky, and they will want more of a risk premium. This will send borrowing costs through the already broken roof.
In 1981, the budget was panned by 364 economists, but these academic economists didn't understand market principles. The markets saw the very tough action against the deficit and realised Mrs T was serious about reducing the deficit, and investment flows increased. Of course, the 2% interest rate fall also helped. In delicious irony, the economy started to grow a few days after the publication of the economists' letter.
Academic economists are not market operators. Most, with a few honourable exceptions, don't understand the ''irrational exuberance'' of the marketplace. They abide by Keynesian principles (despite Keynesian economics being the most flawed economic theory of all time e.g. Keynes said that recessions were caused by a lack of effective demand, yet he never explained why people all of a sudden decided to stop spending at exactly the same time. Also, the idea that governments can prime the pumps is a lie. Governments don't create wealth. Central banks do. Governments consume wealth. Because we had a massive deficit (against Keynesian advice), they had to take the money from somewhere else and redistribute it.
Both Brown and Darling have said ''a lot of what Keynes said was right and still applies today.'' This quote just proves that Darling and Brown have never read the General Theory of Employment, Interest and Money. Keynes advocated building up a fiscal surplus during the good times in order to prime the pump during the bust. Brown built up a massive deficit before the crisis hit.
Even though I am a card-carrying Conservative, I am not a fan of Cameron. However, he was right to say that a ''monetary crisis needs monetary solutions.'' This is entirely correct. Fiscal policy is useless. We should slash spending now, and massively increase the QE programme, which, contrary to the uninformed armchair economists, will not cause inflation. There are massive output gaps in America and Britain, and these will stop inflation from rising for now. Also, capacity utilisation on average around the world is around 60%, so there is too much spare capacity for massive inflation.
The Bank of England should buy corporate bonds and not gilts. Most of the asset purchases have been gilts and not corporate bonds. Purchasing lots of corporate bonds will create extra reserves, and therefore extra liquidity. If the EU and the Asian bears start to do this, the recession will be over in a matter of months. And when the output gap closes and spare capacity is reduced, the central banks of the world can engage in open market operations to start selling back these bonds.
Britain is in a uniquely horrible position. If the Credit Rating Agencies downgrade our debt rating, the yields on gilts will jump because investors will view government bonds as more risky, and they will want more of a risk premium. This will send borrowing costs through the already broken roof.
In 1981, the budget was panned by 364 economists, but these academic economists didn't understand market principles. The markets saw the very tough action against the deficit and realised Mrs T was serious about reducing the deficit, and investment flows increased. Of course, the 2% interest rate fall also helped. In delicious irony, the economy started to grow a few days after the publication of the economists' letter.
Academic economists are not market operators. Most, with a few honourable exceptions, don't understand the ''irrational exuberance'' of the marketplace. They abide by Keynesian principles (despite Keynesian economics being the most flawed economic theory of all time e.g. Keynes said that recessions were caused by a lack of effective demand, yet he never explained why people all of a sudden decided to stop spending at exactly the same time. Also, the idea that governments can prime the pumps is a lie. Governments don't create wealth. Central banks do. Governments consume wealth. Because we had a massive deficit (against Keynesian advice), they had to take the money from somewhere else and redistribute it.
Both Brown and Darling have said ''a lot of what Keynes said was right and still applies today.'' This quote just proves that Darling and Brown have never read the General Theory of Employment, Interest and Money. Keynes advocated building up a fiscal surplus during the good times in order to prime the pump during the bust. Brown built up a massive deficit before the crisis hit.
Even though I am a card-carrying Conservative, I am not a fan of Cameron. However, he was right to say that a ''monetary crisis needs monetary solutions.'' This is entirely correct. Fiscal policy is useless. We should slash spending now, and massively increase the QE programme, which, contrary to the uninformed armchair economists, will not cause inflation. There are massive output gaps in America and Britain, and these will stop inflation from rising for now. Also, capacity utilisation on average around the world is around 60%, so there is too much spare capacity for massive inflation.
The Bank of England should buy corporate bonds and not gilts. Most of the asset purchases have been gilts and not corporate bonds. Purchasing lots of corporate bonds will create extra reserves, and therefore extra liquidity. If the EU and the Asian bears start to do this, the recession will be over in a matter of months. And when the output gap closes and spare capacity is reduced, the central banks of the world can engage in open market operations to start selling back these bonds.
The Guardian agrees with it...
Therefore it must be bad. I consider my views normal, sane, logical and well reasoned if the Guardian thinks the opposite to me. The Guardian represents all that is wrong with journalism. The Guardian as a whole represents the poison that infects the Left, and the stinking hypocrisy in everything they espouse.Let's talk Polly Toynbee as the main example. A multi millionaire with an extensive property portfolio, at a first glance, we would expect her to be a centrist or on the centre right. She is firmly on the Left. I haven't got a problem with that.
People have the right to choose where their political proclivities lay. But in choosing to espouse a left wing creed, she should live by it. Over the years, Mrs Toynbee has advocated higher taxes on the rich. She has argued for redistributive social democracy. Yet she hasn't taken any steps whatsoever to redistribute her own, mainly inherited wealth. She has called for everybody to publicly declare their incomes, yet hasn't declared her own, though apparently she earns around £140,000 per annum. She rants on about the non existent problem of child poverty in this country, yet she hasn't turned her extensive number of properties into care homes for children.
I routinely give money to charities for victims of natural disasters, because it is a cause I believe in. I don't lecture other people for not giving money to it. She has criticised private education and selective education, despite grammar schools being the greatest method of lifting poor children out of a life of penury and giving them a chance at success. She is the product of a private education, and even when she was sent to a comprehensive it happened to be the most elitist of them all, Holland Park School, dubbed the Eton of the state sector. She then proceeded to Oxford, not because of her brain, which is remarkably average, but because of her extensive family connections.She represents the whole left wing culture of demonising success and pouring water over the burning fire of ambition. She constantly bemoans that the gap between the richest and poorest is at its widest ever.
SO FUCKING WHAT!!! I am what she would call one of the proletariat. I live next to a council estate, and have seen it all when it comes to seeing people fuck up their lives. Toynbee wants to keep us here! I don't want to stay here. I want to earn lots of money, pay my taxes and live a comfortable life, the one Mrs Toynbee so enjoys. But I can't if Polly gets her way and raises tax on everyone with two cars. She constantly prognosticates about economics and why we should all adopt reckless and downright idiotic Keynesian spending programmes. She dosen't explain why they will work, or how. She dosen't even have a rudimentary knowledge of economics. If she did, she'd realise that there is one massive fallacy in Keynesian thinking, that borrowing from A to give to B dosen't actually increase aggregate demand in the economy because there is no new money, it has merely been redistributed.Then people like George Monbiot write articles pontificating about climate change on printed paper, paper that is obtained by cutting down trees. And in keeping with their left wing hypocrisy, they only consider the side of the argument they agree with.
In terms of my own political journey, when I was a communist, I never considered the arguments of the other side, I just called opponents ''sycophants of the rich.'' Now I am a free market libertarian, I always consider what the Left has to say, because I know I can refute it. That is the best way. I never instigate a slanging match. My insults are always a response to someone insulting me first.The Guardian launched a campaign to stamp out tax avoidance. The Guardian Media Group has taken advantage of a loophole that enables them to avoid hundreds of millions in taxation. Polly never mentions that. The GMG was founded by a tax avoider. Polly never mentions that.Now, regarding the Guardian's position on the budget, they have taken the predictable route. ''Taxation is the only easy way to restore a very small measure of sanity to the unjust rewards of the rich'' These are the words of La Toynbee. Unjust rewards have been made by the bankers. But these rewards have been provided by her beloved STATE.
STATE SPONSORED FAILURE TOYNBEE. These taxation measures have taken us onto the wrong side of the Laffer Curve, and thus the Treasury will lose revenue. But Toynbee, who believes only the state can alleviate poverty, dosen't know anything about basic economics. It has been proven beyond doubt that punitive tax regimes drive away entrepeneurs. Without them, we wouldn't have the tax to pay for the grand utopian schemes Toynbee is so fond off.Here is a copy of an email I sent to La Toynbee. I have yet to receive a reply.
From: "**** ****"
To: polly.toynbee@guardian.co.uk
I have just read another one of your unintentionally hilarious columns. I don't know how you do it, but you should try stand up comedy. In one of your columns, you mentioned you were a Keynesian. Weren't you a Keynesian during Brown's 10 years at the Treasury, when he ran up a huge budget deficit? I'm going to guess you haven't read the General Theory of Employment, Interest and Money. And I'm guessing you only know what most people believe Keynesian economics represents. Keynes advocated budget surpluses during periods of economic growth. Brown didn't. He achieved a surplus in 2001, but only by following Conservative spending plans. He extended the economic cycle by two further years in order to claim a surplus. But ever since then, he has run up a massive budget deficit, the fourth largest in the developed world. Keynes himself would be apopleptic at the size of the deficit. So why have you turned into a Keynesian all of a sudden? Is it because it is in fashion? I know you have no journalistic standards, and your hypocrisy knows no bounds, but even this is just socialist sycophancy at its worst.Secondly, you know prognosticate the Keynesian economics will help us out of this mess. It won't. If you knew anything about economics instead of merely pretending to know, you'd realise Keynesianism has never worked.
FDR's New Deal was a failure. Unemployment never fell below 14%. FDR merely continued the policies of Herbert Hoover. In his four years, he increased taxes. He increased the top rate of tax from 25% to 63%. Keynes was an advocate of high taxes during boom years. Hoover was a protectionist. He passed the Smoot-Hawley Tarriff act. He increased government spending by 47% in four years. FDR continued these policies, and the Depression continued until the war, when the world was forced to trade because of the war.You claim our national debt is low. What about PFI liabilities, Railtrack, the public sector pensions liabilities and the bank bailouts. All of that money has to be paid back, and debt is money owed to somebody else. But as a millionaire with a villa in Tuscany, you won't care about us working classes struggling to make ends meet because we are crippled by high taxes.Now, to address another Keynesian fallacy. Keynes was critical of monetary policy and its effectiveness at dealing with recession.
Now, as an advocate of the Austrian School of Economics, I tend not to agree with Milton Friedman, but when he mentioned that monetary policy could have stopped the Depression, he was right, because the Federal Reserve decided to contract the money supply right at the moment banks needed liquidity. Keynes believed fiscal policy was the best way to deal with a recession. I certainly believe in permament tax cuts and controlled public spending. But when the government cuts taxes during a recession, people tend to put it away in anticipation of future tax rises. Also, there is a fallacy in Keynesian thinking. To put money into the economy, the government has to take it from somewhere else. It takes from A, to give to B. This just equals AB. No new money has been injected into the economy. I advise you to research some basic economics before you pretend to be an economist La Toynbee.As well as the failure of the New Deal, perhaps you should take a look at the history of Keynesian economics when applied. They led to the stagflation in the 1970's, when inflation hit 26%. It led to the abandonment of the Gold Standard, which has caused so much damage in the long run because there is no effective monetary restraint because fiat currency is just announced as money because the governments says it is.
Milton Friedman devised his monetarism theory, which was moderately successful where applied, although I am a fan of the Austrian School. You may laugh at that claim, because unemployment hit 3,000,000. Mr Friedman warned that the application of his policies would result in a stopover period, where high unemployment was sustained, but it would be reduced in the long run because economic imbalances would be balanced. And now the world targets inflation, a direct result of Mr Friedman's thinking.You have also attacked the economic thinking of Mr Cameron and George Osborne. You should consider that David Cameron actually has a degree in economics, whereas Brown dosen't, so already he knows more than Brown about economics. Gordon Brown knows as much about economics as you. It's why he ran up a huge budget deficit at the top of the economic cycle, when almost all other comparable economies were running small surpluses or were in equilibrium. Derek Scott, Tony Blair's gifted economic advisor from 1997, said that Labour's economic inheritance was the best of the 20th century. Inflation had been killed, national debt was low because PFI wasn't utilised often. Interest rates were at 6.5%. Unemployment was falling rapidly, and the economy was growing steadily, all because of the decisions taken by Norman Lamont and Kenneth Clarke. That's right. I hope you respond to this email, and if you do, you make say that if I support Norman Lamont, I know nothing of economics myself. Norman Lamont was opposed to the ERM.
It was the Europhiles like Howe, Heseltine and Clarke who favoured it. Lamont made the best of a bad situation, and his last budget set the course for the halving of the budget deficit and reduction of national debt. He started from a low level of national debt, 26% of GDP.You have called Cameron's economic medicine populist poison and that it won't work. Cameron has NOT called for spending cuts. He has called for the slowing of growth. I hope he does take a scalpel to the public sector. You claim to be a champion of it, yet you almost exclusively use the private sector, e.g. schools, hospitals. It is another example of your disgusting hypocrisy, but Guardian writers don't have any morals, then again, neither do most Telegraph or Times writers anymore. The only columnist worth listening to is Simon Heffer. Most papers have signed up to the idea of fiscal stimulus. Cameron has opposed it, and rightly so. Unlike you Mrs Toynbee, we the working classes, or you do you prefer to call us the proletariat?, live in the real world. We understand that more government spending equals more taxes. Like Labour, you propagate the lie that spending cuts means cutting nurses, cops and teachers. You know it isn't true, but you are so in with the Labour establishment you prefer power at the expense of morals. We spend over £100 billion a year of quango's that serve no purpose. If we cut them, that is £100 billion in tax cuts. Because we've cut spending, people won't anticipate future tax rises, and we can spend it, thus stimulating the economy, and providing a fiscal stimulus without borrowing. Cameron has advocated a similar cause of action. His loan guarantee scheme is also favourable. Monetary activism is needed to solve a monetary crisis.Your most hilarious claim, that social democracy is the answer, is just plain piffle. Britain has been a social democracy ever since 1997, when Blair and Brown opted for the Maastrict social chapter. We have had a massive welfare state, dedicated to alleviating the non existent problem of poverty. You like to claim poverty was rife under Thatcher and Major, and child poverty was too. There is no such thing as poverty in this country. Yes, there are the rich and poor. But if you lived in the real world, and not the fairy, rarified world of the Guardianista's, you'd realise that real poverty exists in poor African countries that are run by power mad Marxists. Most of the European countries follow the social democracy model. America is forecast to have a weaker recession than Europe and Britain. Social Democracy is a cancer to business. In 1997, Britain was the 10th most competitive economy in the world. 10 years after social democracy, we are 10th lowest. High taxes hurt businesses. The lower their corporation tax, the more people they can employ. You are very wealthy. I don't begrudge that. But you haven't earned your wealth, it was inherited. When you criticise tax dodging, why don't you criticise the Guardian Media Group. They are a bunch of tax dodging bastards. You have no idea what it is like to work to help pay the bills. You have no idea how soul destroying it is to see your income taxed for inefficient public services and armies of advisors. Until you experience that, you have no right to spout that we need high taxes for good public services. We could easily cut £100,000,000,000 from expenditure without cutting nurses, policemen and teachers. We could abolish RDA's, the quangocracy, and because people don't send letters anymore, we could privatise the Post Office. I prefer letters to the boring world of impersonal emails, but people like you don't deserve the time it takes for me to craft a beautiful hand written letter.
Also, I'd imagine you'd prefer to email.You have also criticised Cameron for following a similar path to Geoffrey Howe's infamous 1981 budget. I happen to believe Geoffrey Howe was the most successful Chancellor in 20th century politics. As always with Conservative governments, they exist to clean up the mess left by Labour governments. Geoffrey Howe took some very hard and in some cases, downright nasty decisions to reduce a massive budget deficit. It kicked inflation out of the system, and allowed rapid economic growth. It was only when Lawson eased fiscal policy far too rapidly that inflation came back, but it never reached the 26% under Labour.There are several reasons why Howe's budget was necessary. It was deflationary, and it gave investors the confidence that Britain was committed to control its budget deficit. The economy started to improve days after the budget. Cameron has not advocated anything like Geoffrey Howe's budget. I don't know if George Osborne has the guts to do so. We are not facing deflation, despite what you claim, we are facing inflation. CPI has risen. Inflation has risen in Europe and America. RPI has only fallen because of house prices. It is the only time CPI inflation has been any use. Brown only changed it so he could avoid counting the inflationary pressures from his housing boom.To finish it off, I ask for a reply. I'd love to see how you'd spin this. I'd love to see you accuse me of being a Tory. I am a party member indeed. But I am not a Cameroon. I am a supporter of John Redwood and John Whittingdale. Both have experience beyond Westminster. Redwood worked as a financier, and Whittingdale was an economist. You didn't even complete university, so bear that in mind when you spout such ridiculous tripe about the Opposition. George Osborne has been vindicated by events. Mervyn King has voiced support for his stance. So has Germany.
You may reply that Germany has put in place a larger fiscal stimulus than Brown, but remember, they had a substantial budget surplus, because they were believers in sound money and fiscal prudence. Brown has caused a small gilt strike in this country, and the pound has fallen 30% against a basket of currencies, even the currency of Thailand has strengthened against the pound. I urge you to read Keynes' book, and then read Milton Friedman's books. Then read the Denationalisation of Money by Friedrich Hayek, and the Theory of Money and Credit by Ludwig von Mises. I am of course assuming you can read, and judging by the ideologically confused nature of your columns, I doubt that. I am not a qualified economist, but I am only 18. I could run the country better than Brown.Go and learn some basic economic theory. Hell, you can pay me and I will teach you La Toynbee, but you will need to redistribute your own wealth to us working class proles. Also, you should nationalise your extensive housing portfolio, and allow the so called people who live in poverty in this country to use your housing. Will you La Toynbee? Will you advertise in the Guardian that you are opening up your houses for the poor? I didn't think so. Practice what you preach fool.Yours in disgust****
People have the right to choose where their political proclivities lay. But in choosing to espouse a left wing creed, she should live by it. Over the years, Mrs Toynbee has advocated higher taxes on the rich. She has argued for redistributive social democracy. Yet she hasn't taken any steps whatsoever to redistribute her own, mainly inherited wealth. She has called for everybody to publicly declare their incomes, yet hasn't declared her own, though apparently she earns around £140,000 per annum. She rants on about the non existent problem of child poverty in this country, yet she hasn't turned her extensive number of properties into care homes for children.
I routinely give money to charities for victims of natural disasters, because it is a cause I believe in. I don't lecture other people for not giving money to it. She has criticised private education and selective education, despite grammar schools being the greatest method of lifting poor children out of a life of penury and giving them a chance at success. She is the product of a private education, and even when she was sent to a comprehensive it happened to be the most elitist of them all, Holland Park School, dubbed the Eton of the state sector. She then proceeded to Oxford, not because of her brain, which is remarkably average, but because of her extensive family connections.She represents the whole left wing culture of demonising success and pouring water over the burning fire of ambition. She constantly bemoans that the gap between the richest and poorest is at its widest ever.
SO FUCKING WHAT!!! I am what she would call one of the proletariat. I live next to a council estate, and have seen it all when it comes to seeing people fuck up their lives. Toynbee wants to keep us here! I don't want to stay here. I want to earn lots of money, pay my taxes and live a comfortable life, the one Mrs Toynbee so enjoys. But I can't if Polly gets her way and raises tax on everyone with two cars. She constantly prognosticates about economics and why we should all adopt reckless and downright idiotic Keynesian spending programmes. She dosen't explain why they will work, or how. She dosen't even have a rudimentary knowledge of economics. If she did, she'd realise that there is one massive fallacy in Keynesian thinking, that borrowing from A to give to B dosen't actually increase aggregate demand in the economy because there is no new money, it has merely been redistributed.Then people like George Monbiot write articles pontificating about climate change on printed paper, paper that is obtained by cutting down trees. And in keeping with their left wing hypocrisy, they only consider the side of the argument they agree with.
In terms of my own political journey, when I was a communist, I never considered the arguments of the other side, I just called opponents ''sycophants of the rich.'' Now I am a free market libertarian, I always consider what the Left has to say, because I know I can refute it. That is the best way. I never instigate a slanging match. My insults are always a response to someone insulting me first.The Guardian launched a campaign to stamp out tax avoidance. The Guardian Media Group has taken advantage of a loophole that enables them to avoid hundreds of millions in taxation. Polly never mentions that. The GMG was founded by a tax avoider. Polly never mentions that.Now, regarding the Guardian's position on the budget, they have taken the predictable route. ''Taxation is the only easy way to restore a very small measure of sanity to the unjust rewards of the rich'' These are the words of La Toynbee. Unjust rewards have been made by the bankers. But these rewards have been provided by her beloved STATE.
STATE SPONSORED FAILURE TOYNBEE. These taxation measures have taken us onto the wrong side of the Laffer Curve, and thus the Treasury will lose revenue. But Toynbee, who believes only the state can alleviate poverty, dosen't know anything about basic economics. It has been proven beyond doubt that punitive tax regimes drive away entrepeneurs. Without them, we wouldn't have the tax to pay for the grand utopian schemes Toynbee is so fond off.Here is a copy of an email I sent to La Toynbee. I have yet to receive a reply.
From: "**** ****"
To: polly.toynbee@guardian.co.uk
I have just read another one of your unintentionally hilarious columns. I don't know how you do it, but you should try stand up comedy. In one of your columns, you mentioned you were a Keynesian. Weren't you a Keynesian during Brown's 10 years at the Treasury, when he ran up a huge budget deficit? I'm going to guess you haven't read the General Theory of Employment, Interest and Money. And I'm guessing you only know what most people believe Keynesian economics represents. Keynes advocated budget surpluses during periods of economic growth. Brown didn't. He achieved a surplus in 2001, but only by following Conservative spending plans. He extended the economic cycle by two further years in order to claim a surplus. But ever since then, he has run up a massive budget deficit, the fourth largest in the developed world. Keynes himself would be apopleptic at the size of the deficit. So why have you turned into a Keynesian all of a sudden? Is it because it is in fashion? I know you have no journalistic standards, and your hypocrisy knows no bounds, but even this is just socialist sycophancy at its worst.Secondly, you know prognosticate the Keynesian economics will help us out of this mess. It won't. If you knew anything about economics instead of merely pretending to know, you'd realise Keynesianism has never worked.
FDR's New Deal was a failure. Unemployment never fell below 14%. FDR merely continued the policies of Herbert Hoover. In his four years, he increased taxes. He increased the top rate of tax from 25% to 63%. Keynes was an advocate of high taxes during boom years. Hoover was a protectionist. He passed the Smoot-Hawley Tarriff act. He increased government spending by 47% in four years. FDR continued these policies, and the Depression continued until the war, when the world was forced to trade because of the war.You claim our national debt is low. What about PFI liabilities, Railtrack, the public sector pensions liabilities and the bank bailouts. All of that money has to be paid back, and debt is money owed to somebody else. But as a millionaire with a villa in Tuscany, you won't care about us working classes struggling to make ends meet because we are crippled by high taxes.Now, to address another Keynesian fallacy. Keynes was critical of monetary policy and its effectiveness at dealing with recession.
Now, as an advocate of the Austrian School of Economics, I tend not to agree with Milton Friedman, but when he mentioned that monetary policy could have stopped the Depression, he was right, because the Federal Reserve decided to contract the money supply right at the moment banks needed liquidity. Keynes believed fiscal policy was the best way to deal with a recession. I certainly believe in permament tax cuts and controlled public spending. But when the government cuts taxes during a recession, people tend to put it away in anticipation of future tax rises. Also, there is a fallacy in Keynesian thinking. To put money into the economy, the government has to take it from somewhere else. It takes from A, to give to B. This just equals AB. No new money has been injected into the economy. I advise you to research some basic economics before you pretend to be an economist La Toynbee.As well as the failure of the New Deal, perhaps you should take a look at the history of Keynesian economics when applied. They led to the stagflation in the 1970's, when inflation hit 26%. It led to the abandonment of the Gold Standard, which has caused so much damage in the long run because there is no effective monetary restraint because fiat currency is just announced as money because the governments says it is.
Milton Friedman devised his monetarism theory, which was moderately successful where applied, although I am a fan of the Austrian School. You may laugh at that claim, because unemployment hit 3,000,000. Mr Friedman warned that the application of his policies would result in a stopover period, where high unemployment was sustained, but it would be reduced in the long run because economic imbalances would be balanced. And now the world targets inflation, a direct result of Mr Friedman's thinking.You have also attacked the economic thinking of Mr Cameron and George Osborne. You should consider that David Cameron actually has a degree in economics, whereas Brown dosen't, so already he knows more than Brown about economics. Gordon Brown knows as much about economics as you. It's why he ran up a huge budget deficit at the top of the economic cycle, when almost all other comparable economies were running small surpluses or were in equilibrium. Derek Scott, Tony Blair's gifted economic advisor from 1997, said that Labour's economic inheritance was the best of the 20th century. Inflation had been killed, national debt was low because PFI wasn't utilised often. Interest rates were at 6.5%. Unemployment was falling rapidly, and the economy was growing steadily, all because of the decisions taken by Norman Lamont and Kenneth Clarke. That's right. I hope you respond to this email, and if you do, you make say that if I support Norman Lamont, I know nothing of economics myself. Norman Lamont was opposed to the ERM.
It was the Europhiles like Howe, Heseltine and Clarke who favoured it. Lamont made the best of a bad situation, and his last budget set the course for the halving of the budget deficit and reduction of national debt. He started from a low level of national debt, 26% of GDP.You have called Cameron's economic medicine populist poison and that it won't work. Cameron has NOT called for spending cuts. He has called for the slowing of growth. I hope he does take a scalpel to the public sector. You claim to be a champion of it, yet you almost exclusively use the private sector, e.g. schools, hospitals. It is another example of your disgusting hypocrisy, but Guardian writers don't have any morals, then again, neither do most Telegraph or Times writers anymore. The only columnist worth listening to is Simon Heffer. Most papers have signed up to the idea of fiscal stimulus. Cameron has opposed it, and rightly so. Unlike you Mrs Toynbee, we the working classes, or you do you prefer to call us the proletariat?, live in the real world. We understand that more government spending equals more taxes. Like Labour, you propagate the lie that spending cuts means cutting nurses, cops and teachers. You know it isn't true, but you are so in with the Labour establishment you prefer power at the expense of morals. We spend over £100 billion a year of quango's that serve no purpose. If we cut them, that is £100 billion in tax cuts. Because we've cut spending, people won't anticipate future tax rises, and we can spend it, thus stimulating the economy, and providing a fiscal stimulus without borrowing. Cameron has advocated a similar cause of action. His loan guarantee scheme is also favourable. Monetary activism is needed to solve a monetary crisis.Your most hilarious claim, that social democracy is the answer, is just plain piffle. Britain has been a social democracy ever since 1997, when Blair and Brown opted for the Maastrict social chapter. We have had a massive welfare state, dedicated to alleviating the non existent problem of poverty. You like to claim poverty was rife under Thatcher and Major, and child poverty was too. There is no such thing as poverty in this country. Yes, there are the rich and poor. But if you lived in the real world, and not the fairy, rarified world of the Guardianista's, you'd realise that real poverty exists in poor African countries that are run by power mad Marxists. Most of the European countries follow the social democracy model. America is forecast to have a weaker recession than Europe and Britain. Social Democracy is a cancer to business. In 1997, Britain was the 10th most competitive economy in the world. 10 years after social democracy, we are 10th lowest. High taxes hurt businesses. The lower their corporation tax, the more people they can employ. You are very wealthy. I don't begrudge that. But you haven't earned your wealth, it was inherited. When you criticise tax dodging, why don't you criticise the Guardian Media Group. They are a bunch of tax dodging bastards. You have no idea what it is like to work to help pay the bills. You have no idea how soul destroying it is to see your income taxed for inefficient public services and armies of advisors. Until you experience that, you have no right to spout that we need high taxes for good public services. We could easily cut £100,000,000,000 from expenditure without cutting nurses, policemen and teachers. We could abolish RDA's, the quangocracy, and because people don't send letters anymore, we could privatise the Post Office. I prefer letters to the boring world of impersonal emails, but people like you don't deserve the time it takes for me to craft a beautiful hand written letter.
Also, I'd imagine you'd prefer to email.You have also criticised Cameron for following a similar path to Geoffrey Howe's infamous 1981 budget. I happen to believe Geoffrey Howe was the most successful Chancellor in 20th century politics. As always with Conservative governments, they exist to clean up the mess left by Labour governments. Geoffrey Howe took some very hard and in some cases, downright nasty decisions to reduce a massive budget deficit. It kicked inflation out of the system, and allowed rapid economic growth. It was only when Lawson eased fiscal policy far too rapidly that inflation came back, but it never reached the 26% under Labour.There are several reasons why Howe's budget was necessary. It was deflationary, and it gave investors the confidence that Britain was committed to control its budget deficit. The economy started to improve days after the budget. Cameron has not advocated anything like Geoffrey Howe's budget. I don't know if George Osborne has the guts to do so. We are not facing deflation, despite what you claim, we are facing inflation. CPI has risen. Inflation has risen in Europe and America. RPI has only fallen because of house prices. It is the only time CPI inflation has been any use. Brown only changed it so he could avoid counting the inflationary pressures from his housing boom.To finish it off, I ask for a reply. I'd love to see how you'd spin this. I'd love to see you accuse me of being a Tory. I am a party member indeed. But I am not a Cameroon. I am a supporter of John Redwood and John Whittingdale. Both have experience beyond Westminster. Redwood worked as a financier, and Whittingdale was an economist. You didn't even complete university, so bear that in mind when you spout such ridiculous tripe about the Opposition. George Osborne has been vindicated by events. Mervyn King has voiced support for his stance. So has Germany.
You may reply that Germany has put in place a larger fiscal stimulus than Brown, but remember, they had a substantial budget surplus, because they were believers in sound money and fiscal prudence. Brown has caused a small gilt strike in this country, and the pound has fallen 30% against a basket of currencies, even the currency of Thailand has strengthened against the pound. I urge you to read Keynes' book, and then read Milton Friedman's books. Then read the Denationalisation of Money by Friedrich Hayek, and the Theory of Money and Credit by Ludwig von Mises. I am of course assuming you can read, and judging by the ideologically confused nature of your columns, I doubt that. I am not a qualified economist, but I am only 18. I could run the country better than Brown.Go and learn some basic economic theory. Hell, you can pay me and I will teach you La Toynbee, but you will need to redistribute your own wealth to us working class proles. Also, you should nationalise your extensive housing portfolio, and allow the so called people who live in poverty in this country to use your housing. Will you La Toynbee? Will you advertise in the Guardian that you are opening up your houses for the poor? I didn't think so. Practice what you preach fool.Yours in disgust****
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