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UK Election 2015

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Brian said:
Failing to predict an increase in the value of gold so selling it "cheaply" and missing out on money we didn't actually have to lose is seen as a bigger mistake than throwing around £27bn down the drain chasing an ideology on Black Wednesday. 15% interest rates and a loss of billions caused directly by the party who claim they're the only people who can manage the economy.

It's not to be ignored. Ever.
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Why do you keep bringing up this Black Wedneday '£27bn'? There have been FOI requests and the true cost was £3.3-£3.4bn. Look it up. And as much as Black Wedneday was really bad at the time, the decisions made were designed to keep us within the criteria of the ERM, so were made for a reason as opposed to a whim or some idealology.

Luckily, the mistakes made actually ended up being a positive for the UK in that it helped lower and stabilise inflation, which helped kickstart the economic recovery that resulted in the recent significant growth period that we all enjoyed. On top of that, the experiences of Black Wednesday acted as a significant brake/deterrent as regards hitching ourselves to external monetary systems and likely this is what influenced our decision to not join the Euro.

The gold sell off was a badly judged/timed decision.....and it's still not clear why Brown did it or what we gained by the sell off at the time?
 
auric said:
Good use of assets but not too clever in the eyes of propaganda merchants, gold bugs and assorted nutters.
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One leaves it as an exercise for the reader to price the risk of a gold to mixed bonds swap :)

It's also worth noting that speculative losses on gold are a straight cash loss. Other mistakes involving loss of GDP and represent idle resources which are orders of magnitude more significant in terms of long term damage to the economy in terms of hysteresis, social costs, etc. etc. The two biggest macro mistakes by governments -- the long tail unemployment of the 80s that came from the failed Monetarism experiment of 1979-81; the 4-5% loss of GDP in 2010-11 from failed Austerity experiment -- dwarf the others with ERM debacle a distant third.

Top 3 all Tory governments and chancellors I note. And the two biggest from following heterodoxical economic policies for which there was little to no supporting evidence.
 
KC Cantiaci said:
The gold sell off was a badly judged/timed decision.....and it's still not clear why Brown did it or what we gained by the sell off at the time?
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Divergence of assets from commodities to interest bearing bonds.

Total cost about £1.9bn (assuming perfect timing of sales).

To asses this properly you have to look at the balance of the portfolio and take views / price the risks involved. You also have to take this decision in 1999 not 2015.

You also have, if you are going to take such a simplistic view, explain 1) the failure to sell the rest of it in 2011 and b) the reason/performance of selling half of it in 1970 or whenever it was.
 
Paul R said:
You're with Thatcher on that one?

Paul
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I am not sure I follow but on instinct I never agree with Thatcher :)

And of course as I noted before whatever mistakes Major, or indeed Brown made, they are dwarfed by the mistakes made by Thatcher in 79-81.
 
matthewr said:
You also have, if you are going to take such a simplistic view, explain 1) the failure to sell the rest of it in 2011
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There's an argument he sold the gold to force the price to a 20yr to allow the banks to buy back their lending gold at a profit and prevent a huge collapse.
 
thebiglebowski said:
Well I guess that's shorter than your usual response to any criticism of labour in posting pages of pie charts and graphs to induce coma.
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It was such a silly point a joke was the only appropriate response.

Graphs and charts are the easiest way to highlight the errors of fact frequently posted here whilst avoiding lengthy technical explanations. If they induce coma then I suggest you avoid discussions about the economy.

FWIW I am often very critical of Labour. I defend them mainly against the prevalent charges of economic mismanagement as I don't think they stack up and against the dubious triangulation of the "false centrists" who like to describe slightly to the left of the Tories as the middle ground and against the nihilism 'they are all the same and terrible' view.
 
Looks like others were doing the same thing at the same time http://www.bbc.co.uk/blogs/legacy/thereporters/robertpeston/2008/03/gold_and_gordon_brown.html
To be fair to them, they weren’t alone in reducing their gold holdings. The Swiss, the Belgians and the Dutch also sold very significant amounts.
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May be one reason to sell.
Faced with the prospect of a global collapse in the banking system, the Chancellor took the decision to bail out the banks by dumping Britain’s gold, forcing the price down and allowing the banks to buy back gold at a profit, thus meeting their borrowing obligations.
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http://blogs.telegraph.co.uk/financ...own-sold-britains-gold-at-a-knock-down-price/

And wiki says
More recently, it has been suggested that the sale, and its seemingly inept management, was a deliberate attempt to drive down the gold price in order to rescue several banks which had highly leveraged short positions in gold.[14][15][16]
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https://en.wikipedia.org/wiki/Sale_of_UK_gold_reserves,_1999–2002

All way above my pay grade.

Those with access might like to follow the FT thoughts on the subject Britain was right to sell off its pile of gold - FT.com
 
JADISMAN said:
Nevertheless the economy was growing, not contracting.
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You misunderstood the point Wren-Lewis was making. He was referring to the policy of *fiscal contraction* that Gordon Brown undertook in his first two years as Chancellor on the basis of his election promises to stick to Major's plans and how that was very different to Osborne's similar policy in 2010-12.

So why will history judge Osborne so much more harshly than Brown? Why did Osborne's policy cost each UK household on average at least £4,000, while Brown's (inherited) contraction had no similar cost in terms of lost resources?

The answer, of course, is that the macro contexts were very different. Brown's fiscal contraction happened when the economy was relatively strong, and interest rates were above 6%. Osborne's austerity happened when the economy was just starting a recovery from a deep recession, and interest rates were at their then Zero Lower Bound (ZLB) of 0.5%. Mainstream macroeconomic theory says that these different contexts make all the difference: when interest rates are at the ZLB, monetary policy cannot counteract the negative impact of fiscal austerity on output.
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KC Cantiaci said:
I think he does otherwise he's liable to forget stuff.....things like the economy......you know....trivial bits and bobs ;)
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Haha :)

I don't know enough about it to argue the point but it's irrelevant to me.

I thought he was sincere and that would be enough for my vote were I living in Blighty :cool:
 
matthewr said:
I am not sure I follow but on instinct I never agree with Thatcher :)
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IIRC wanting to shadow the Mark and join the ERM was a policy that Thatcher disagreed with against a general background of cross party assent. This might have been a contributory factor of her downfall. It's a long time ago.

And of course as I noted before whatever mistakes Major, or indeed Brown made, they are dwarfed by the mistakes made by Thatcher in 79-81.
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Normal service is resumed...

Paul
 
Paul R said:
Normal service is resumed...
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You dispute that the experiment in Monetarism was a failure? Thatcher certainly abandoned it after her monetary aggregate targets were missed by orders of magnitude and GDP fell and manufacturing output collapsed in 1980 and 81.

And of course the disastrous effects on unemployment which stayed very high in an almost unique manner through to the Lawson boom.

UK+unemployment.jpg
 
maxflinn said:
Haha :)

I don't know enough about it to argue the point but it's irrelevant to me.

I thought he was sincere and that would be enough for my vote were I living in Blighty :cool:
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It was a light dig as Miliband did a speech at the Labour Party conference earlier this year without any notes/key points cards, in an effort I guess to be natural and be seen to know his stuff in front of Labour supporters, but forgot to mention one of the key elements in the run up to this election which is the economy/deficit. He was panned and labelled with the typical 'out of touch with the electorate' type comments by the media and opposing parties.
 
KC Cantiaci said:
It was a light dig as Miliband did a speech at the Labour Party conference earlier this year without any notes/key points cards, in an effort I guess to be natural and be seen to know his stuff in front of Labour supporters, but forgot to mention one of the key elements in the run up to this election which is the economy/deficit. He was panned and labelled with the typical 'out of touch with the electorate' type comments by the media and opposing parties.
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Ah right.. As I say I'm not up to speed with all this.

A bit of a stupid mistake on his part, to be fair :eek:
 
KC Cantiaci said:
It was a light dig as Miliband did a speech at the Labour Party conference earlier this year without any notes/key points cards, in an effort I guess to be natural and be seen to know his stuff in front of Labour supporters, but forgot to mention one of the key elements in the run up to this election which is the economy/deficit. He was panned and labelled with the typical 'out of touch with the electorate' type comments by the media and opposing parties.
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Maybe Miliband didn't want to talk about the economy or deficit at the time. Did the media and opposing political parties know what he was going to talk about, did they have access to the speech he had prepared?

Did they hell.

It was just that the right-wing media and opposing parties needed to have something to moan about. They haven't stopped moaning since then and it's really boring.

The run-up to this general election is the worst I can ever remember. I am sure that the commentators will be trying to analyse the politicians' farts next.

They also keep saying that this is the most important election since votes were invented. I mean, who really cares?

Labour and the Tories are so similar. It will be the same pro-capitalist/EU/corporations and banks, mob who get into power as before, albeit under an different name perhaps.

How many times do we have to be told by the politicians, and the patronizing media, that the SNP will probably work in conjunction with Labour on a vote-by-vote basis during the next government?

l know who I am going to vote for and I can't wait until the whole process is over.

If Hug Me Dave and his clowns lose, I might celebrate by going down to Whitehall to chant "C^^^, c^^^, C^untMoron f*** off."

Jack
 
auric said:
Good luck with that. Remember what happened to Walter Wolfgang a decade or so ago?
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He was thrown out of a Labour Party conference for heckling Jack Straw about Iraq.

What a horrible, slimy, f***wit Jack Straw is.

I hope there will be lots of people in Whitehall celebrating when the Tories lose.

Jack
 
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