David Blanchflower- Cassandra who wasn't listened to.

Entertainer

http://www.guardian.co.uk/commentisfree/2009/jun/07/bank-england-business-finance

Through 2007 onward I was ­worried that there was much more slack in the economy than my MPC colleagues seemed to believe. Consumer confidence started to collapse from November 2007. Capacity utilisation, and the investment and employment intentions of companies were falling fast. Rising oil prices were pushing up on the consumer price index, but it was clear that this was a speculative bubble: falling demand around the world would soon pull the oil price down.

StevieJ

Entertainer wrote: »

http://www.guardian.co.uk/commentisfree/2009/jun/07/bank-england-business-finance

It was obvious that the inflation at the time was imported via commodities and wage inflation was well under control. The biggest surprise was that they didn't react faster last summer when commodity prices started to collapse, although loads on this board actually wanted interest rates to increase :eek: (if I remember correctly) so that house prices would collapse.

Heyman_2

StevieJ wrote: »

It was obvious that the inflation at the time was imported via commodities and wage inflation was well under control. The biggest surprise was that they didn't react faster last summer when commodity prices started to collapse, although loads on this board actually wanted interest rates to increase :eek: (if I remember correctly) so that house prices would collapse.

You do remember correctly, don't forget though that Tim Besley of the MPC was also calling for rates to increase just a couple of months before they went off a cliff.

We were (and are still) in unpredictable times and it shows how difficult it is to call what is just around the corner. :rolleyes:

It's a bit rich of Blanchflower to be making out he's some kind of Sage on this though, given that he asked for a cut at pretty much every MPC meeting for the last few years, almost regardless of the economic circumstances.

ILW

Heyman wrote: »

It's a bit rich of Blanchflower to be making out he's some kind of Sage on this though, given that he asked for a cut at pretty much every MPC meeting for the last few years, almost regardless of the economic circumstances.

He's propbably got a tracker mortgage.

the_ash_and_the_oak

tbh think idea was mayb that they should have risen much earlier in the bubble (04? earlier?) but... while the gravy train was rolling maybe tempting to leave it a bit longer (we weren't alone in that either)

Numenor

the_ash_and_the_oak wrote: »

tbh think idea was mayb that they should have risen much earlier in the bubble (04? earlier?) but... while the gravy train was rolling maybe tempting to leave it a bit longer (we weren't alone in that either)

I couldn't have put it better myself. Blanchflower was calling for a rate cut, then disaster strikes, the rates get cut and he says "Nyah nyah, I told you so!" What kind of wisdom is that?!

I noticed as far back as 2005 that house prices were rising too fast and needed to be addressed. If action had been taken then, we may have managed to prevent the situation getting as bad as it has over the last year. For ages I bored my OH with rants about what a useless Chancellor Gordon Brown was when all he could think to do to help first time buyers was make it easier to take on more debt, rather than help lower the prices like he should have done. It was all because it was helping fuel his 'miracle economy'.

dopester

the_ash_and_the_oak wrote: »

tbh think idea was mayb that they should have risen much earlier in the bubble (04? earlier?) but... while the gravy train was rolling maybe tempting to leave it a bit longer (we weren't alone in that either)

It is what they are paid for. To stop serious imbalances in the economy building up and to take heat out of the system. Even if it brings about short-term pain.

It is called being responsible, above the worshipping glory you love to receive from the electorate. Never expect Labour to make any such decisions - ever.

Not.. "Oh.. well this is a new paradigm now.. and we don't have the powers anyway as split between Treasury and FSA, and we don't know who is in charge, nor are house prices in our basket.. so we know the party is becoming outrageous and participants getting even crazier.. but we'll let it run."

mewbie_2

Let's try to remember that his job as part of the MPC was supposed to be to control inflation. That's all. Not to act as some kind of gnu after the event.

the_ash_and_the_oak

Numenor wrote: »

I couldn't have put it better myself. Blanchflower was calling for a rate cut, then disaster strikes, the rates get cut and he says "Nyah nyah, I told you so!" What kind of wisdom is that?!

I noticed as far back as 2005 that house prices were rising too fast and needed to be addressed. If action had been taken then, we may have managed to prevent the situation getting as bad as it has over the last year. For ages I bored my OH with rants about what a useless Chancellor Gordon Brown was when all he could think to do to help first time buyers was make it easier to take on more debt, rather than help lower the prices like he should have done. It was all because it was helping fuel his 'miracle economy'.

think 05 was too late by some distance tbh and by then was prob 'easier' just to roll it on and hope for the best

barrooo

Cassandra who wasn't listened to.

You've been watching too much of the apprentice, either that or you're Margret Mountford.;)

Degenerate

If Blanchflower had got his way, interest rates would have been so low that back last year when we really needed it, we would have had little left to cut.