Everyone has seen the disturbing scenes of the "boat people" crossing the Mediterranean to try to find a new life in Europe. Hundreds of thousands have crossed from Africa and the Middle East and hundreds of thousands more are on the way.
I agree with Matteo Renzi that Europe must respond in a united way and that all countries of the EU should play their part by accepting a fair share of asylum speakers. He has also proposed that economic migrants should be repatriated and unfortunately for those who are not regarded as candidates for asylum this is a harsh reality. The world is organised by nation states and all states regulate who is allowed to settle and who is not. A nation state also must also regulate the activities of people who have not entered the state "legally". The scenes at Calais yesterday were disturbing.
The situation regarding the boat people will only get worse. The UN estimates that there are sixty million displaced people in the world as the result of wars, famine and poverty. Western Europe has a responsibility to help these people and treat them humanely. For centuries, Western European nations including the UK, France, Germany, Belgium and Spain have colonised Africa and the Middle East. Our nations have destabilised and in some cases enslaved the local population. We have organised the mass movement of people as economic migrants.
We have imposed ourselves upon the indigenous people of Africa and the Middle East as economic migrants ourselves. We have also imposed wars upon the people that we have colonised. The First and Second World Wars were classic examples from the twentieth century. In the twenty first century we have invaded Iraq and Libya without thinking what would happen in the future.
We have quite possibly organised adverse climate change by pouring industrial quantities of carbon di-oxide and other greenhouse gases into the atmosphere. The consequences of climate change could be worse for the people of Africa and the Middle East than war.
Western Europe has a responsibility to help and it is little wonder that millions of people are on the move towards Europe. The migrants believe that they should be helped and they also believe that we have a moral duty to help them; their case is strong.
We are rich enough as a European society to allow a good number of economic migrants settle. We must be realistic about this however. Eventually the number could become so great that it threatens the economic viability of Europe itself; but this will not happen for a long time. A seriously weakened and disorganised Europe will not be able to provide the aid necessary to help potential migrants stay in their own country. Europe will not be able to meet its moral obligation to offset the effects of climate change and war.
Britain must play its full part to assist the EU to solve the problems of mass migration. We are not being forced to do anything by the European Commission and we are exercising our right not to accept the migrants despite the pleas of the European Commission. This is a rather ironic position as many "euro sceptics " aver that the European Commission tells us what to do - they don't. Britain should act because it has a moral obligation to do so. All Europeans have an obligation because we have benefited, most certainly, from the past subjugation of African and Middle Eastern states.
It is not good enough to say that it is someone else's problem.
http://www.theguardian.com/commentisfree/2015/jun/23/mediterranean-migrant-crisis-not-italy-but-europe
http://www.theguardian.com/world/2015/jun/15/we-will-hurt-eu-if-migrant-crisis-is-not-fixed-says-italian-pm-matteo-renzi
Thursday, 25 June 2015
Monday, 15 June 2015
Mount Kinabalu and Rationality
Sholto Byrnes wrote a brilliant article about the Mount Kinabalu tourists who stripped off on reaching the summit of the mountain in a fit of exuberance and then filmed themselves doing it and transmitted the scene across the world in a fit of exhibitionism. They were warned not to do this by their local guide. They were arrogant to ignore him. He could have saved them from time in jail if they had had the brains to listen to him.
http://www.independent.co.uk/voices/comment/malaysia-tourist-arrests-ive-witnessed-the-method-in-the-countrys-superstitious-madness-10316229.html
Many would claim that it is irrational to believe in god and animists beliefs or a mixture of the two. I am one of them. However, who I am to criticise those that do. Like Sholto Byrnes I too have travelled to Malaysia and Indonesia. My wife and I have friends there. One of our Indonesian friends leads Muslims groups to Mecca for the Hajj pilgrimage, she also believes in ghosts. She holds on to her beliefs with good grace and humour even when I tease her that apparitions should show their appearance without clothes on, because clothes have no soul and they cannot survive a trip to the after world. I wonder what happened to the souls of the Mountain's Western tourists?
Malaysian and Indonesian animists do not have a monopoly on irrationalism as it is rife across the world. Westerners may live in a "post- Christian rational society" but despite the efforts of Newton, Darwin, Einstein and Heisenberg most of western thinking is dominated by irrationalism; most of our beliefs and decisions are not based on reason or evidence.
If we were all to think rationally racism, sexism, nuclear bombs, chemical weapons, the divine right to rule, fashion houses and cosmetics and hi-fi shops etc. would not exist. If we thought rationally we would take action on climate change.
Perhaps the worst form of irrationality is racism. It has been proven by science that there is only one race of Human Beings - homo sapiens sapiens - The Neanderthals and the Denisovans who were fellow members of our species, and who could be claimed to be separate races, died out thousands of years ago. However, we still persist in defining humans by race in defiance of all the evidence. Westerners cannot claim to be the rational "race" as it is condescending and arrogant to think that we are better than the animists.
The Kinabalu tourists cannot be condemned for acting emotionally as emotions drive the human race to survive, multiply, love, create art, architecture and engineering works. Without emotion our species could not exist. Emotion dominates our character. However, if the emotional side of our character uses rational thinking to make weapons of war, pollute the planet and deny other people their right to have alternative opinions then we get ourselves into trouble.
Tourists would do well to recognise and follow the wisdom of the locals; you could avoid doing a stretch in jail or worse - being lynched. You could be saved from drowning by swimming in the wrong river or against the wrong tide. Whenever there is rational advice offered in goodwill please take it.
Why not read another brilliant article.
http://www.theguardian.com/commentisfree/2015/jun/12/kinabalu-naked-backpacker-las-vegas-rome-malaysia-tourists
http://www.independent.co.uk/voices/comment/malaysia-tourist-arrests-ive-witnessed-the-method-in-the-countrys-superstitious-madness-10316229.html
Many would claim that it is irrational to believe in god and animists beliefs or a mixture of the two. I am one of them. However, who I am to criticise those that do. Like Sholto Byrnes I too have travelled to Malaysia and Indonesia. My wife and I have friends there. One of our Indonesian friends leads Muslims groups to Mecca for the Hajj pilgrimage, she also believes in ghosts. She holds on to her beliefs with good grace and humour even when I tease her that apparitions should show their appearance without clothes on, because clothes have no soul and they cannot survive a trip to the after world. I wonder what happened to the souls of the Mountain's Western tourists?
Malaysian and Indonesian animists do not have a monopoly on irrationalism as it is rife across the world. Westerners may live in a "post- Christian rational society" but despite the efforts of Newton, Darwin, Einstein and Heisenberg most of western thinking is dominated by irrationalism; most of our beliefs and decisions are not based on reason or evidence.
If we were all to think rationally racism, sexism, nuclear bombs, chemical weapons, the divine right to rule, fashion houses and cosmetics and hi-fi shops etc. would not exist. If we thought rationally we would take action on climate change.
Perhaps the worst form of irrationality is racism. It has been proven by science that there is only one race of Human Beings - homo sapiens sapiens - The Neanderthals and the Denisovans who were fellow members of our species, and who could be claimed to be separate races, died out thousands of years ago. However, we still persist in defining humans by race in defiance of all the evidence. Westerners cannot claim to be the rational "race" as it is condescending and arrogant to think that we are better than the animists.
The Kinabalu tourists cannot be condemned for acting emotionally as emotions drive the human race to survive, multiply, love, create art, architecture and engineering works. Without emotion our species could not exist. Emotion dominates our character. However, if the emotional side of our character uses rational thinking to make weapons of war, pollute the planet and deny other people their right to have alternative opinions then we get ourselves into trouble.
Tourists would do well to recognise and follow the wisdom of the locals; you could avoid doing a stretch in jail or worse - being lynched. You could be saved from drowning by swimming in the wrong river or against the wrong tide. Whenever there is rational advice offered in goodwill please take it.
Why not read another brilliant article.
http://www.theguardian.com/commentisfree/2015/jun/12/kinabalu-naked-backpacker-las-vegas-rome-malaysia-tourists
Friday, 12 June 2015
Sir Tim Hunt the Nobel Laureate
Sir Tim Hunt should be asked to rescind his resignation from the Royal Society forthwith; he has apologised for his remarks which were a bit crass. I expect you have already read about it but just in case.
http://www.inquisitr.com/2162909/tim-hunt-resigns-nobel-laureate-steps-down-as-honorary-professor-after-sexist-remarks-cause-backlash/
Recently a French satirical magazine , Charlie Hebo, deliberately set out to provoke Muslims and to offend their prophet; and when the magazine was attacked Western Liberals quite rightly turned out to show their solidarity with the magazine and promote free speech. Tim Hunt's silly remarks pale into insignificance in the offensive stakes. So leave him alone. A serious scientist has the right to make mistakes does he not?
Similarly young people have the right to express themselves by stripping off their clothes, if they want to, in the liberal West but surely not on a sacred Malaysian mountain. The young people concerned were lucky that they were released from gaol by a reasonable judge after 3 days in detention under remand. It is a pity that the people shouting abuse at Tim Hunt cannot show the same tolerance as the judge.
http://www.castanet.net/news/Canada/142058/Naked-mountaineers-freed
I am all in favour of women's rights including their right to call me a wimp when I sneeze with "Man 'Flu" ; I don't shout out that they are being sexist and offensive. I show some tolerance for their stupidity and it is a pity that the same tolerance is not shown in the other direction.
The Royal Society will not have the courage to ask Tim Hunt to rethink his resignation. The world his now full of cowards who are afraid of shrieking voices. You are now what you say not what you do and the world is a worse place because of this.
http://www.inquisitr.com/2162909/tim-hunt-resigns-nobel-laureate-steps-down-as-honorary-professor-after-sexist-remarks-cause-backlash/
Recently a French satirical magazine , Charlie Hebo, deliberately set out to provoke Muslims and to offend their prophet; and when the magazine was attacked Western Liberals quite rightly turned out to show their solidarity with the magazine and promote free speech. Tim Hunt's silly remarks pale into insignificance in the offensive stakes. So leave him alone. A serious scientist has the right to make mistakes does he not?
Similarly young people have the right to express themselves by stripping off their clothes, if they want to, in the liberal West but surely not on a sacred Malaysian mountain. The young people concerned were lucky that they were released from gaol by a reasonable judge after 3 days in detention under remand. It is a pity that the people shouting abuse at Tim Hunt cannot show the same tolerance as the judge.
http://www.castanet.net/news/Canada/142058/Naked-mountaineers-freed
I am all in favour of women's rights including their right to call me a wimp when I sneeze with "Man 'Flu" ; I don't shout out that they are being sexist and offensive. I show some tolerance for their stupidity and it is a pity that the same tolerance is not shown in the other direction.
The Royal Society will not have the courage to ask Tim Hunt to rethink his resignation. The world his now full of cowards who are afraid of shrieking voices. You are now what you say not what you do and the world is a worse place because of this.
Tuesday, 19 May 2015
UK Deflation
In the year to April 2015 Britain entered into a period of deflation. Over the last year retail prices have fallen by 0.1%. This is not such a bad thing provided the deflation is not deep and long lasting. You may well ask why £385 billion of quantitative easing or money printing did not create inflation. Well it did; it inflated the price of houses, commercial property and stocks and shares. Of course, when the price of baked beans goes up it is a bad thing as far as economists are concerned but when house prices go up it is a good thing.
House prices going up is a good thing if you already own a house but it is not so good if you are a young couple paying £1,000 a month for a grotty flat because you can't afford to get on the bottom rung of the housing ladder.
House prices going up can also be a bad thing if they create a property bubble which when it bursts causes distress selling and repossessions. A property bubble could also bring on another financial crisis. Private borrowing to fund housing stands at almost £2 trillion. This level of debt is becoming unsupportable. We could be heading for trouble.
The causes of retail price deflation are a reduced oil prices, supermarket competition and the high level of the pound which reduces the price of imports. If deflation gets out of hand it will be difficult for the Bank of England to use the traditional policy of reducing interest rates to create inflation as rates are at an all time low. Perhaps some more money printing will do the trick but this time the money should be given to the non-banking sector. The non-banking sector will spend the money on investment and purchases rather than property. Prices will then go up in the retail sector.
We need a bit of deflation in the property market and a little inflation in the retail market. The financial authorities should act now to achieve this. Inflation at 2% will help to relieve the debt burden for all of us.
House prices going up is a good thing if you already own a house but it is not so good if you are a young couple paying £1,000 a month for a grotty flat because you can't afford to get on the bottom rung of the housing ladder.
House prices going up can also be a bad thing if they create a property bubble which when it bursts causes distress selling and repossessions. A property bubble could also bring on another financial crisis. Private borrowing to fund housing stands at almost £2 trillion. This level of debt is becoming unsupportable. We could be heading for trouble.
The causes of retail price deflation are a reduced oil prices, supermarket competition and the high level of the pound which reduces the price of imports. If deflation gets out of hand it will be difficult for the Bank of England to use the traditional policy of reducing interest rates to create inflation as rates are at an all time low. Perhaps some more money printing will do the trick but this time the money should be given to the non-banking sector. The non-banking sector will spend the money on investment and purchases rather than property. Prices will then go up in the retail sector.
We need a bit of deflation in the property market and a little inflation in the retail market. The financial authorities should act now to achieve this. Inflation at 2% will help to relieve the debt burden for all of us.
Thursday, 7 May 2015
UK 2015 General Election - 35% won't vote but who can blame them?
This has been the most dreadful and arid general election campaign that I have ever experienced. The only thing that the politicians want to talk about are unrealistic promises and the budget deficit.
With regards to the budget they seem to be acting like amateur bookkeepers. None of the politicians have talked about using national funds to improve the economy to help the incomes of the majority of our citizens.
Any economy must be a mixture of both capitalist and social enterprise. We need capitalism to generate wealth and we need social enterprise to provide the best infrastructure of transport, health and education to support wealth generation. There seems to have been no debate whatsoever on how this can be achieved.
There has been no debate on the best methods of distributing the national income or the economics of how to do this. It is apparent that in the last 30 years income has trickled up from the poor and the middle classes to the very rich in a form of reverse economic communism. There has been no real attempt to regulate this. Neo-classical economic thinking has become entrenched within the thinking of all political parties. This form of economics of "laissez-faire" thinking has failed us completely. The efficient markets hypothesis has almost led us into economic oblivion just as surely as it did in 1929. Our politicians have nothing to offer us as an alternative. There has been no public debate.
The British economy is progressing towards another property asset bubble. UK individual private debt is approaching 2 trillion pounds this sum is greater than government debt. Add to this another 2 trillion of corporate debt and the economy looks weaker. The UK banks are exposed to about 6 trillion pounds of above the line debt with possibly another few trillion pounds of below the line debt. All this adds up to the possibility of the UK economy crashing again if there is another financial crisis.
The 2008 financial crisis was not caused by government debt it was caused by Banks being unable to fund their debts because their counter balancing assets were mostly junk. Since 2008 the situation for Britain has hardly improved. The public are blissfully unaware of this and the politicians have buried their heads in the sand and are living in hope. They have no plan to improve the private balance sheet of UK incorporated. They can only talk about a couple of billion here or there on the government accounts.
The 350 billion pounds of quantitative easing spending which was not voted for by anybody has been used by the Banks to invest in property and the stock market and this is creating new asset bubbles in both markets.
In the 1960s the two major parties boasted about their house building programmes and vied with each other to build more houses. They actually achieved this.
In the 1960s the balance of payments was a key issue in the election. No party would have dreamt of allowing the means of industrial production to be relocated overseas; both parties would have seen the danger of this but of course neo-classical economics was not so prominent.
In the lead up to the UK joining the Common Market we saw discussion of the pros and cons in every election campaign. When we joined the EU no one worried about free movement of labour or immigration. We were a much more generous minded society then even though we were not as rich.
In the elections during the 60s and 70s foreign policy was high on the agenda; we thought carefully about going to war or bombing another country to achieve a diplomatic aim. Both the Conservative party and the Labour party kept us out of the Vietnam war and our country was the better for it.
In the 1960s and 1970s our country would not have supported an extreme right wing government in the Ukraine without full discussion and the approval of the British people. The memory of the second world war was still too painful.
The newspapers , media and the political parties seem to be frightened to talk about foreign policy and Britain's future relations with the World and Europe. All they want to talk about is their obsession with budget deficits.
Large swathes of our youth live in a country which cannot provide them with any sort of decent home or a steady job. They face living with their parents for extended periods or flat sharing in poor quality and expensive private housing. Their future looks bleak but where is the plan to get them out of this predicament? There isn't one and no one is talking about it.
Millions of people are relying on food banks or loans (gifts) from their family and friends to help them get by - what sort of future do they have? This is not up for discussion in the election.
Not even the Green party has talked about climate change and if this issue is not tackled by all of us then any talk of the economy and bookkeeping is academic. There will not be an economy.
35% of people won't vote in the 2015 election can you blame them? The politicians have failed us but worse of all we have failed ourselves.
With regards to the budget they seem to be acting like amateur bookkeepers. None of the politicians have talked about using national funds to improve the economy to help the incomes of the majority of our citizens.
Any economy must be a mixture of both capitalist and social enterprise. We need capitalism to generate wealth and we need social enterprise to provide the best infrastructure of transport, health and education to support wealth generation. There seems to have been no debate whatsoever on how this can be achieved.
There has been no debate on the best methods of distributing the national income or the economics of how to do this. It is apparent that in the last 30 years income has trickled up from the poor and the middle classes to the very rich in a form of reverse economic communism. There has been no real attempt to regulate this. Neo-classical economic thinking has become entrenched within the thinking of all political parties. This form of economics of "laissez-faire" thinking has failed us completely. The efficient markets hypothesis has almost led us into economic oblivion just as surely as it did in 1929. Our politicians have nothing to offer us as an alternative. There has been no public debate.
The British economy is progressing towards another property asset bubble. UK individual private debt is approaching 2 trillion pounds this sum is greater than government debt. Add to this another 2 trillion of corporate debt and the economy looks weaker. The UK banks are exposed to about 6 trillion pounds of above the line debt with possibly another few trillion pounds of below the line debt. All this adds up to the possibility of the UK economy crashing again if there is another financial crisis.
The 2008 financial crisis was not caused by government debt it was caused by Banks being unable to fund their debts because their counter balancing assets were mostly junk. Since 2008 the situation for Britain has hardly improved. The public are blissfully unaware of this and the politicians have buried their heads in the sand and are living in hope. They have no plan to improve the private balance sheet of UK incorporated. They can only talk about a couple of billion here or there on the government accounts.
The 350 billion pounds of quantitative easing spending which was not voted for by anybody has been used by the Banks to invest in property and the stock market and this is creating new asset bubbles in both markets.
In the 1960s the two major parties boasted about their house building programmes and vied with each other to build more houses. They actually achieved this.
In the 1960s the balance of payments was a key issue in the election. No party would have dreamt of allowing the means of industrial production to be relocated overseas; both parties would have seen the danger of this but of course neo-classical economics was not so prominent.
In the lead up to the UK joining the Common Market we saw discussion of the pros and cons in every election campaign. When we joined the EU no one worried about free movement of labour or immigration. We were a much more generous minded society then even though we were not as rich.
In the elections during the 60s and 70s foreign policy was high on the agenda; we thought carefully about going to war or bombing another country to achieve a diplomatic aim. Both the Conservative party and the Labour party kept us out of the Vietnam war and our country was the better for it.
In the 1960s and 1970s our country would not have supported an extreme right wing government in the Ukraine without full discussion and the approval of the British people. The memory of the second world war was still too painful.
The newspapers , media and the political parties seem to be frightened to talk about foreign policy and Britain's future relations with the World and Europe. All they want to talk about is their obsession with budget deficits.
Large swathes of our youth live in a country which cannot provide them with any sort of decent home or a steady job. They face living with their parents for extended periods or flat sharing in poor quality and expensive private housing. Their future looks bleak but where is the plan to get them out of this predicament? There isn't one and no one is talking about it.
Millions of people are relying on food banks or loans (gifts) from their family and friends to help them get by - what sort of future do they have? This is not up for discussion in the election.
Not even the Green party has talked about climate change and if this issue is not tackled by all of us then any talk of the economy and bookkeeping is academic. There will not be an economy.
35% of people won't vote in the 2015 election can you blame them? The politicians have failed us but worse of all we have failed ourselves.
Monday, 20 April 2015
The plight of the migrants
Once again we are seeing the plight of migrants to Europe who are refugees escaping war and famine in the Middle East and Africa. The people attempting to cross the Mediterranean from Libya to Italy are desperate. No one risks their life to board a flimsy boat at the behest of people traffickers unless they are desperate.
The reaction of European governments to this humanitarian disaster has been shameful. Also I am ashamed of the reaction of some of my fellow countrymen to this issue. The people trying to come to Europe are not economic migrants who want to sponge off our society; they are desperate to survive. If they are allowed to remain in Europe then they will be more than glad to work and make a contribution to the societies that welcome them.
Western governments have contributed to the malaise in Africa and the Middle East by indulging in wars to try to contain conflicts and problems that they do not understand. This is exemplified by the bombing of Libya. Britain and France did not have a plan for restoring stable government in Libya after Colonel Gaddafi was deposed. Our governments did not understand the politics and the intervention led to disaster.
We do not understand Syria either; western governments have armed the opposition to President Assad without any understanding of the politics and have allowed Isis to obtain huge quantities of western arms , probably, for free. Before the Syrian crisis millions of refugees were not fleeing Syria despite the despotic nature of the regime. Everyone knew the risks of opposing the regime but those who kept their heads down were relatively safe. Most despotic states fail and self-implode and then the time becomes right to obtain genuine political change but imposed from within the state.
The resources which western governments expend on war would be better deployed by promoting peace and useful economic activity. The world must also tackle over population and climate change. The rich and powerful nations of the world have the ability to improve the economic lot of the poor nations and this will help to reduce over population and famine.
The rich nations also have it within their power to mitigate the effects of climate change to reduce pressure on food and water supplies and alleviate famine.
If we all thought rationally then we could find solutions to the problems of migration by promoting peace, economic development and an equable climate for all.
If we persist with the policy of only promoting self interest we are going to head for disaster. We will not solve the problems of Africa and the Middle East by allowing a situation where millions and millions of people are forced to migrate. Everyone would rather stay at home so lets make all homes comfortable enough so that no one needs to run away. Migration should an option for the adventurous rather than a necessity for the desperate.
The reaction of European governments to this humanitarian disaster has been shameful. Also I am ashamed of the reaction of some of my fellow countrymen to this issue. The people trying to come to Europe are not economic migrants who want to sponge off our society; they are desperate to survive. If they are allowed to remain in Europe then they will be more than glad to work and make a contribution to the societies that welcome them.
Western governments have contributed to the malaise in Africa and the Middle East by indulging in wars to try to contain conflicts and problems that they do not understand. This is exemplified by the bombing of Libya. Britain and France did not have a plan for restoring stable government in Libya after Colonel Gaddafi was deposed. Our governments did not understand the politics and the intervention led to disaster.
We do not understand Syria either; western governments have armed the opposition to President Assad without any understanding of the politics and have allowed Isis to obtain huge quantities of western arms , probably, for free. Before the Syrian crisis millions of refugees were not fleeing Syria despite the despotic nature of the regime. Everyone knew the risks of opposing the regime but those who kept their heads down were relatively safe. Most despotic states fail and self-implode and then the time becomes right to obtain genuine political change but imposed from within the state.
The resources which western governments expend on war would be better deployed by promoting peace and useful economic activity. The world must also tackle over population and climate change. The rich and powerful nations of the world have the ability to improve the economic lot of the poor nations and this will help to reduce over population and famine.
The rich nations also have it within their power to mitigate the effects of climate change to reduce pressure on food and water supplies and alleviate famine.
If we all thought rationally then we could find solutions to the problems of migration by promoting peace, economic development and an equable climate for all.
If we persist with the policy of only promoting self interest we are going to head for disaster. We will not solve the problems of Africa and the Middle East by allowing a situation where millions and millions of people are forced to migrate. Everyone would rather stay at home so lets make all homes comfortable enough so that no one needs to run away. Migration should an option for the adventurous rather than a necessity for the desperate.
Thursday, 16 April 2015
UK Economics 2015
All of the opponents in the UK general election have ignored some disturbing facts about the UK economy: productivity is down and the trade deficit or balance of payments deficit is up. They have few or no real policies to improve either.
Productivity was down by 0.2% for the last quarter of 2104 and overall our productivity as a nation is insufficient to get the economy moving and reduce our budget deficit and national debt.
To improve productivity we must invest in skills, manufacturing equipment, infrastructure, house building, new products and the means to bring new products to the export and domestic markets. An improvement in productivity will enable our nation to compete more effectively in international and domestic markets. It will also allow us to reduce the debt burden.
It is apparent that very little of the £375 billion of quantitative easing (QE) generated by the Bank of England has been directed at investment in the real economy. Such a large input of liquidity into the economy should have generated some inflation in the real economy - so far it has not. Inflation helps to reduce the burden of debt. The billions spent on QE have been used by the banks to support their balance sheets by investing this money in the stock and property markets. The effects of QE are to artificially inflate asset prices in the property and stock markets. This form of inflation is not included in the inflation statistics therefore there is no real pressure on the Bank of England to control it. We are in danger of creating new asset bubbles just like we did prior to 2007.
QE is benefiting property speculators and financiers rather than industries in the real economy who produce goods for sale or build roads, railways and hospitals etc..
When it is more productive, the real economy generates more higher valued jobs and this means that the government needs to spend less on social benefits.
http://uk.reuters.com/article/2015/04/01/uk-britain-employment-productivity-idUKKBN0MS48J20150401
Linked to productivity is the balance of trade deficit. For the month of February 2015 Britain's overall balance of trade deficit was £2.859 billion up from £1.536 billion in January. Our exports to the US fell in February 2015. Every year Britain records enormous balance of trade deficits and this means that we are not paying our way as a nation and we have to live on credit. Poor productivity along with the higher value of the pound contributes to the balance of trade deficit.
Huge amounts of hot money are continuing to come into Britain to fuel financial speculation; this increases the value of the pound and makes our goods more expensive in export markets. Our pound is not increasing in value because we are running a trade account surplus. Hot money is not being used to fund the real economy therefore productivity suffers and the balance of trade suffers too.
http://www.tradingeconomics.com/united-kingdom/balance-of-trade
We need a new economic model of capitalism which generates wealth in the real economy. Our governments have almost left the running of the economy to the Bank of England who are using interest rate policy and QE to try to regulate financial matters only. We need the Treasury and the Department of Business to get more involved in running the economy. Monetary policy alone will not solve the structural problems of the British economy: we need to become more productive. A central bank cannot be expected to direct monetary policy towards this end. Fiscal policy must become more involved again. It was a mistake to allow the central bank to determine economic policy as it is more concerned with protecting finance rather than industrial investment.
The next government of the UK must rescue fiscal policy and industrial investment as part of a completely coherent economic and monetary policy to control supply and demand and investment in the real economy and its workers.
None of the political parties in this election have mentioned the trade deficit or the failure of Britain to improve its productivity. It almost seems as if the political establishment has given up promoting sound and stable economic development. Our politicians seem only interested in arguing about book keeping rather than using the money of the nation to create real wealth. They are thinking more like sales ledger clerks than management accountants. If they continue in this vein there is not much hope for a real economic recovery. Long term stagnation,lost opportunity and continuing poverty for a substantial proportion of the population could be the unfortunate result.
It is time for the politicians to have the courage and nous to wrest back economic power from financial speculators and grant it to the wealth creators in the real economy of entrepreneurs and workers alike.
Productivity was down by 0.2% for the last quarter of 2104 and overall our productivity as a nation is insufficient to get the economy moving and reduce our budget deficit and national debt.
To improve productivity we must invest in skills, manufacturing equipment, infrastructure, house building, new products and the means to bring new products to the export and domestic markets. An improvement in productivity will enable our nation to compete more effectively in international and domestic markets. It will also allow us to reduce the debt burden.
It is apparent that very little of the £375 billion of quantitative easing (QE) generated by the Bank of England has been directed at investment in the real economy. Such a large input of liquidity into the economy should have generated some inflation in the real economy - so far it has not. Inflation helps to reduce the burden of debt. The billions spent on QE have been used by the banks to support their balance sheets by investing this money in the stock and property markets. The effects of QE are to artificially inflate asset prices in the property and stock markets. This form of inflation is not included in the inflation statistics therefore there is no real pressure on the Bank of England to control it. We are in danger of creating new asset bubbles just like we did prior to 2007.
QE is benefiting property speculators and financiers rather than industries in the real economy who produce goods for sale or build roads, railways and hospitals etc..
When it is more productive, the real economy generates more higher valued jobs and this means that the government needs to spend less on social benefits.
http://uk.reuters.com/article/2015/04/01/uk-britain-employment-productivity-idUKKBN0MS48J20150401
Linked to productivity is the balance of trade deficit. For the month of February 2015 Britain's overall balance of trade deficit was £2.859 billion up from £1.536 billion in January. Our exports to the US fell in February 2015. Every year Britain records enormous balance of trade deficits and this means that we are not paying our way as a nation and we have to live on credit. Poor productivity along with the higher value of the pound contributes to the balance of trade deficit.
Huge amounts of hot money are continuing to come into Britain to fuel financial speculation; this increases the value of the pound and makes our goods more expensive in export markets. Our pound is not increasing in value because we are running a trade account surplus. Hot money is not being used to fund the real economy therefore productivity suffers and the balance of trade suffers too.
http://www.tradingeconomics.com/united-kingdom/balance-of-trade
We need a new economic model of capitalism which generates wealth in the real economy. Our governments have almost left the running of the economy to the Bank of England who are using interest rate policy and QE to try to regulate financial matters only. We need the Treasury and the Department of Business to get more involved in running the economy. Monetary policy alone will not solve the structural problems of the British economy: we need to become more productive. A central bank cannot be expected to direct monetary policy towards this end. Fiscal policy must become more involved again. It was a mistake to allow the central bank to determine economic policy as it is more concerned with protecting finance rather than industrial investment.
The next government of the UK must rescue fiscal policy and industrial investment as part of a completely coherent economic and monetary policy to control supply and demand and investment in the real economy and its workers.
None of the political parties in this election have mentioned the trade deficit or the failure of Britain to improve its productivity. It almost seems as if the political establishment has given up promoting sound and stable economic development. Our politicians seem only interested in arguing about book keeping rather than using the money of the nation to create real wealth. They are thinking more like sales ledger clerks than management accountants. If they continue in this vein there is not much hope for a real economic recovery. Long term stagnation,lost opportunity and continuing poverty for a substantial proportion of the population could be the unfortunate result.
It is time for the politicians to have the courage and nous to wrest back economic power from financial speculators and grant it to the wealth creators in the real economy of entrepreneurs and workers alike.
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