Brexit, the economy and house prices part 5

gfplux

Perhaps it will take this.
This post is full on and Centre BREXIT.

Just like Quebec, Catalonia and Pandemics like Zika or Ebola, Britain is blighted. Why would anyone wanting a foothold in Europe invest in a Britain who could suddenly reverse a decision and stay or leave.
Even if Britain were to stay in the EU, Brexit Blight will effect Britain for a lifetime if not longer.

cogito

gfplux wrote: »

Perhaps it will take this.
This post is full on and Centre BREXIT.

Just like Quebec, Catalonia and Pandemics like Zika or Ebola, Britain is blighted. Why would anyone wanting a foothold in Europe invest in a Britain who could suddenly reverse a decision and stay or leave.
Even if Britain were to stay in the EU, Brexit Blight will effect Britain for a lifetime if not longer.

This post is also full on and centre Brexit. EU blight would have affected the UK Eternally if we had not voted leave.

Yours is not the only POV, you know.

System

cogito wrote: »

I tend to agree with this as far as the UK is concerned as UKIP has done its job and the SNP is in decline.

It's a totally different matter though elsewhere in the EU. Populism (by which I mean people who think differently from the Elites) has resulted in political change in France, Germany - still with no functioning government is sight more than 3 months on from the election - Austria, Poland and Hungary and stirrings elsewhere. The elite has no answer at present.

The populist wave seems to have affected the whole of the western world. The brexit vote was timed almost perfectly to ride that wave. There's no way back so we'll have to move on.

I think the outlet in the rest of the world was Trump in the USA and votes for the right in Europe. I suspect when the wave recedes people will wonder what they were thinking and vote them out.

12% of the UK electorate voted UKIP in 2015. I reckon a lot of those can't quite remember what they were so angry about or why.

GreatApe

GreatApe wrote: »

I will comment on your video when I watch it later

Views as I watch:

Mark: Why would anyone think it a good idea to cut government borrowing in a banking crisis

Making it sound as if that is what happened. No what happened was governments borrowed massively during the recession they did not cut. Eg France deficit grew to ~8% of GDP and then slowly the government tried to cut down over the next 10 years. I doubt anyone same thinks you can run a 8% deficit indefinitely.

Mark: Not all the governments can cut debt at the same time because there are all customers of each other

But the public vs state is what really matters. In recessions the public tend to stop spending and start saving so governments step in and borrow more and spend more. However as a recession works itself through the public should start spending and borrowing more normally and that would give the space for the government to cut back its borrowings

Mark: Sarcastically, The model is that if you cut taxes by 50% and look at from now to the end of your life you will pay so much less tax in the future that today you have so much more money today so you will run to ikea and buy a sofa curing the recession before it happens haha its bollox

A stupid example that does not make sense Mark. It all depends on what taxes are cut and how that is funded.

Mark: What happens instead is if you slash the public sector GDP shrinks and debt gets bigger.

Clearly a fallacy why not take it to its extremes. Lets do the opposite and expand the public sector so GDP gets bigger. Well lets just keep doing that iteration a few times until the public sector is 60% of GDP 70% of GDP 80% of GDP 99% of GDP right mark?

Mark: All the countries that shrank their GDP ended up with more debt!

Ok but which country shrank their GDP on purpose?
Sounds like you have the cart before the horse.
UK GDP shrank in 2009 due to a recession and debt massively increased.
The recession happened as most recessions do the public stopped spending as much so lower taxes and more government spending on the jobless.
What is or was your suggestion that in 2009 the UK (or other EU) countries should have run an even higher deficit to keep GDP up? We were already close to 10% budget deficit should we have done 20% budget deficit? Also importantly how do you envisage spending that? Hire more state workers or cut more taxes in 2009? If you hire more people what do you do later fire them in a couple of years when the recession works itself out? Also what jobs do you have them do? If tax cuts you even said yourself that in a recession tax cuts seem not to add a lot to demand so you just create a country with more public savings and more government debts?

Mark: Austerity is about saving the banks folks it always is

What austerity? The UK state expanded its debt more than £1 trillion over the decade likewise many other EU states did the same eg France was not far behind also adding about 1 trillion euro to their state debt. Even the USA added $11 trillion in debt from 2007-2017. What austerity?

Also what do you mean exactly 'its all about saving the banks folks'?
Do you envisage a parallel universe where the EU or even the world has no banking system? How would that work?

Mark: Member states cant devalue

Said as if that is a solution to 'austerity'
Well the UK devalued from $2.1 to $1.35 that is a 35% devalution
It did not get rid of 'austerity' nor has the UK economy boomed

Mark: You did not need to do two years of austerity the ECB just needed to backstop bonds earlier with QE like the brits and USA

Agree all the Major central banks should have in 2008 said we will cover all government debt and MBSs the recession would have been over quicker. But why mix everything up. Bailing out banks bad, not bailing out banks bad.

Mark: 40% of GDP to support EU banks. Just one question was there a vote on this to give that much of your money to banks and bankers?

!!!!!! mark you just said a sentence ago QE fixed the banking system and should have been done two years sooner.

Mark: When you bailout banks you bailout people like me: I have shares I have a house I have a pension.When you bail out banks you are bailing out the top 20%

Two things: When you bail out the banking system you have a shorter more shallow recession bailing out the poor as they depend on the state. So the banking system should have been bailed out with promsises much sooner

When you bail out the banking system you do not bail out property or shares you only bail out debt holders. There are two roads. One is let the system go kaput which results in a harder longer recession which hurts the poor most.

If the system goes kaput you have somehting like £5 trillion in credit and £5 trillion in debt. Maybe each side takes a 20% haircut. So 10 x old pensioners with £50,000 in the bank find out their the bank has just taken 20% and their funds are down to £40,000 and the homeowner with a £500,000 mortgage finds the bank has accepted his offer to cut his mortgage to £400,000 for not handing the keys back.

That is the quick way to do it. The alternative is to cut interest rates to 0.5% and have the above happen slowly. You still have a wealth transfer from the grandmothers with 10 x £50k savings in the bank to the homeowner with £500k mortgage. Only instead of both getting a 20% haircut on their savings/debt instantly they get it done much more slowly with 10 years of lower interest payments from the homeowner to the old pensioners.

Do you realize this Mark?
in 2008 the choice was a wealth transfer from savers to debtors either through bank defaults requiring haircuts or though low interest rates for a decade. The worlds governments choose the low interest road as the alternative would probably have been much more costly in jobs and GDP

Mark: Seems to be suggesting public debt exists and is high so the richer can pay lower taxes.

Perhaps there is some truth to this but how much. The only question is can the budget deficits be cut solely on the backs of 'the rich'?

The 'rich' if you define them as the top 1% are those who earn more than £160,000 income and they pay 27.5% of the income tax. Even if you doubled their tax from 45% to 90% you would not have enough to cover the budget deficit and this assumes that they can carry on earning and spending as they do now. But of course that is bonkers as you have taken a person earning £1 million and having £550,000 of that to themselves to having only £100,000 to themselves clearly they can not spend as much as they previously did and they are much much more likely to simply leave or stop working if their marginal tax is 90%

So while I agree if governments could not borrow money that taxes on the rich would be higher it is a fallacy to suggest all of that would fall on the rich. If governments could not borrow I suspect half would fall on cuts and half on additional taxes. The additional taxes would mostly have to fall on the middle as you cant increase marginal income taxes to 90% to try and put the additional taxes only onto the rich

Mark: Government bonds are easy money, they crowd out the market.

Index linked gilts yield negative 1.5% so its not easy money you are losing money on them

Mark: Civil society is about protecting the rich from the poor

Sure but why do you need to make that sound like a negative.
The rich are primarily rich because they offer the world goods and services the world wants/needs and the world in exchange offers them notional paper dollar valuations.
Jeff Bezos now the richest man did not steel his wealth. What right do the poor have to say take him hostage and demand $10 billion for his safe release?
So long as a person makes a fortune through free trade they are doing the world a net good

Mark: I need the state to keep me safe from the poor

Oh mark you have no idea.
Governments exist because the great apes have dominance hierarchy
Democracy is the lest destructive way we have to allow the changeover of dominance hierarchy

The rich dont need the state to protect them, they would be at or near the top of the dominance hierarchy even in the stone age



OK its getting too borning

kabayiri

There is no point talking about poverty, relative or otherwise.

We should focus on change. Are there people out there who see their lives getting better or worse.

Well, for a whole bunch of reasons, there a bunch of them who see things not improving at all.

Was Brexit like a life raft that people try to cling on to? Perhaps. It's the same when people voted for Trump, or the Greeks voted for the socialist crowd who basically failed them.

Btw, I don't think Mr Blyth is a socialist advocate by any means.

He had one simple message : PAY YOUR TAXES !

A startling fact was that corporate taxes had gone from 20% to 2% (he wasn't talking specific to UK). It's the poor old masses who have to take up the slack.

Tromking

cogito wrote: »

I tend to agree with this as far as the UK is concerned as UKIP has done its job and the SNP is in decline.

It's a totally different matter though elsewhere in the EU. Populism (by which I mean people who think differently from the Elites) has resulted in political change in France, Germany - still with no functioning government is sight more than 3 months on from the election - Austria, Poland and Hungary and stirrings elsewhere. The elite has no answer at present.

Brexit has the potential at least to be a rather benign safety valve for the type of populism that is currently blighting mainland Europe.
Listen to the usual suspects and you’d think the UK was an economic basket case racked with political instability. Considering the fundamental change in direction that comes with the Brexit vote, the UK is doing quite nicely.

Thrugelmir

gfplux wrote: »

Why would anyone wanting a foothold in Europe invest in a Britain who could suddenly reverse a decision and stay or leave.

Because it remains a sound and stable place to do business on the global stage. While not newsworthy there are plenty of people who simply get on with life everyday. Simply taking events in their stride.

GreatApe

kabayiri wrote: »

There is no point talking about poverty, relative or otherwise.

We should focus on change.

That is so easy to say with absolutely no thinking and care for the change
I would say dont fix what isn't broken.

In the UK we have it great, high wages full employment and lots of freedom an opportunity.
The cup is 95% full its a dam fool who looks at a 95% full cup and thinks you know what we need right now is a total overhaul of this system which keeps the cup 95% full because my theoretical system is going to make the cup 100% full

Are there people out there who see their lives getting better or worse.

Both. But the media dont report on people bettering their situation and highlight and propagate people doing badly and worse off people simply lying about poverty. Like that big fat question time woman who was held up as an example of the evil tory cuts forcing her to go hungry. Yet she somehow manages to keep to BIG dogs and maintain a 120kg frame pleading food poverty.

kabayiri

GreatApe wrote: »

That is so easy to say with absolutely no thinking and care for the change
I would say dont fix what isn't broken.
...

You vote to change your own situation I say.

I owe precisely nothing to voters in any other area than my locality. If someone else does likewise and thinks their situation is broken, it's not for me to tell them differently.

I always said FOM was a crock, so I voted against it. Call me selfish, sure. It won't make a difference to me.

Thrugelmir

Italian Government dissolved today. Election still a couple of months away. With another weak coalition Government the likely outcome. Difficult to see Brexit talks moving forward quickly. While so many of the EU's major players are distracted by internal issues.