# Will There Be a Double Dip Recession?: With Poll



## toblerone3 (May 17, 2010)

Big round of public spending cuts coming and beginning this year rather than next thanks to the Condem coalition. Will this help trigger a double-dip recession?

Nb. Two successive quarters of negative GDP growth.


----------



## girasol (May 17, 2010)

How do I know?


----------



## toblerone3 (May 17, 2010)

Iemanja said:


> How do I know?



I also have no idea. But there lots of people on Urban who actually do know the answer!


----------



## butchersapron (May 17, 2010)

Yes. the liberal cuts will ensure it happens.


----------



## Maurice Picarda (May 17, 2010)

It's not really down to Gideon. It's about business confidence and access to liquidity, which is a global issue. The double dip (which is more likely than not) will start in the US.


----------



## toblerone3 (May 17, 2010)

butchersapron said:


> Yes. the liberal cuts will ensure it happens.



Was this what happened in 1979-1981? Trying to find the data.


----------



## girasol (May 17, 2010)

toblerone3 said:


> I also have no idea. But there lots of people on Urban who actually do know the answer!



No there isn't, no one knows the answer, the best anyone can do is have an educated guess.


----------



## toblerone3 (May 17, 2010)

People's collective guesses about economics can be a self-justifying expectation?


----------



## toblerone3 (May 17, 2010)

Iemanja said:


> No there isn't, no one knows the answer, the best anyone can do is have an educated guess.



Hopefully some educated guesses will appear on this thread.


----------



## toblerone3 (May 17, 2010)

According to this article from the US there has never been a double dip recession and it is unlikely to happen.

http://finance.yahoo.com/tech-ticker/stop-worrying-about-a-double-dip-recession--it-has-never-happened-before-398508.html?tickers=spy,^dji,qqqq,dia,^gspc,eem

http://finance.yahoo.com/tech-ticker/stop-worrying-about-a-double-dip-recession--it-has-never-happened-before-398508.html?tickers=spy,^dji,qqqq,dia,^gspc,eem

Links don't seem to be working. The commentator here is Henry Blodget.


----------



## Maurice Picarda (May 17, 2010)

toblerone3 said:


> According to this article from the US there has never been a double dip recession and it is unlikely to happen.


 
I saw a good presentation recently which portrayed every recession since 1930 as a double-dip one. Still, you can prove anything you like with graphs.


----------



## FridgeMagnet (May 17, 2010)

I am not convinced of the point of worrying about this particular quirk of numerology.


----------



## toblerone3 (May 17, 2010)

Maurice Picarda said:


> I saw a good presentation recently which portrayed every recession since 1930 as a double-dip one. Still, you can prove anything you like with graphs.



The presentation here was that there were not a double dip recession in the early 1980s it was two seperate recessions. Not sure how this is different.


----------



## Maurice Picarda (May 17, 2010)

Just spotted who the author of your piece was.

I don't like to be ad hominem, but Harry Blodget's behaviour in the dotcom boom was really very naughty indeed. So you have to ask whose interests he's serving here.


----------



## shagnasty (May 17, 2010)

European car sales are down .there are fears that the housing market will drop, a double dip is possible


----------



## ska invita (May 17, 2010)

Housing CRASH and BURN i reckon.


----------



## ferrelhadley (May 17, 2010)

103 months of housing inventory still to be cleared in the US



> 103 The number of months it would take to sell off all the foreclosed homes in banks’ possession, plus all the homes likely to end up there over the next couple years, at the current rate of sales.


That figure is based on all houses currently at 60 days delinquency being likely to foreclose.


Dropping out of the mortguage assistance plan.


> The number of homeowners dropping out of the Obama administration's main mortgage assistance plan is growing, and is now almost equal to the number who have received permanent relief.
> 
> The Treasury Department's report on Monday was the latest evidence of problems in the administration's $75 billion program. While officials insist the program is helping the housing market turn around, critics say it is merely delaying an inevitable surge in foreclosures.
> 
> ...




Banks of England estimates crisis may end up costing $200 trillion.They have a much more rosey outlook on the US economys medium term outlook than me.

China splutters as home sales drop 50% in one month


Home foreclosures may top 45 000 a month in the US come the end of this year


> Bank of America (BAC: 16.35 +0.06%), which currently forecloses on 7,500 homes every month will see that number rise to 45,000 by December 2010 as one senior executive pointed out at a recent trade show. However, a spokesman for BofA told HousingWire, he could not confirm the numbers and they do not reflect a public position of the bank.



Sovereign debt vigilanties move in for the kill
Greece was first and like the slow fat kid at the back wheezing while everyone tries to outrun the velociraptors, the comedy kill in the flick. One of the few big beasts in the global economy that could kick the shit out of them stood up and saved the Greeks necks, Germany. But now even mighty Germany is loading up on debt to save the overspenders in the Euro. The velociraptors are eyeing up Portugal, Italy and Spain who are cutting and cutting to lighten the load and run faster. In Britain we shall be ditching the unneeded stuff like housing benefits and social insurance so we can keep our SLBM and CVAs. Got to look like a big player no matter what the cost!

Sovereign debt crisis. Its not even started yet. When it hits the US and Japan then the ciris will be underway.

More Than a Million in U.S. May Lose Jobless Benefits


> Since the U.S. recession began in December 2007, Congress has extended the length of unemployment benefits for the jobless three times. Now, the lawmakers may have reached their limit.
> 
> They are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million.
> 
> It’s a deadline that has rarely been mentioned in recent debates over jobless benefits, in which Republicans have delayed aid because of cost concerns. The deadline hasn’t been lost on Teauna Stephney, a 39-year-old single mother from Bothell, Washington, who said she could become homeless once her $407 weekly checks stop in June.



On their bike and get a job.

You know a job, you have seen one recently havent you? No, oh thats them fucked then.

40 million on food stamps.

The UKs spending to stave off a big ugly recession.







The USs spending to stave off a big ugly recession






Ok IIRC the UK did allow companies to hold back on the tax for a while due to credit unavailablity. Some of that might come back soon. But still thats whats propping it all up. And even with all that the housing market in the states looks ready to drop on its arse soon. The unemployment is reaching depressionary levels not just another recession. The baby boomers retirements is coming soon and they need to start saving like crazy. When Ronnie Raygun was elected chimp in chief the US saved about 10% of its income as it should, this should have grown as its population bulge moved towards retirement. But by the time the toxic texan left office it was zero % savings.....

God this is only some of the problems. I could go on and on and on and on.

This recession was the first bump on a very long road.

And how did we get here???


----------



## lizzieloo (May 17, 2010)

Without a shadow of a doubt, the Tories are going to send us down further than we were.


----------



## toblerone3 (May 17, 2010)

wow just looked at the poll 23 to 1 in favour of a double dip recession!!!  

Is this sort of certainty reflected elsewhere?  What do the bookies say?


----------



## toblerone3 (May 17, 2010)

Is it even possible to bet on there being a double dip recession?


----------



## toblerone3 (May 17, 2010)

In the states the latest odds given by Investment News is that there is a greater than 50% chance of a double dip recession.

http://www.investmentnews.com/article/20100505/FREE/100509949

Urban thinks 23 to 1 that there will be a double dip recession.

Urban75 is much gloomier than Investment News.


----------



## toblerone3 (May 17, 2010)

http://www.businessinsider.com/char...terstock+(ClusterStock)&utm_content=Bloglines

Zero chance of a double dip in the US according to Business Insider !!

For some reason I'm having difficulty sourcing assessments of the UK situation.


----------



## toblerone3 (May 18, 2010)

Why is Urban so certain that there will be a double dip recession when other sources are no worse than 50-50 (more or less


----------



## Proper Tidy (May 18, 2010)

For a start, you're getting all your information from investment and business sources.

If you want to know the dangers of smoking, you don't ask a tobacco company.


----------



## Crispy (May 18, 2010)

Gloom hat on

Peak oil will make sure we see permanent recession, maybe with some happy upward bumps on the way down.


----------



## toblerone3 (May 18, 2010)

Crispy said:


> Gloom hat on
> 
> Peak oil will make sure we see permanent recession, maybe with some happy upward bumps on the way down.



An 'L-shaped' recession is what you're predicting.


----------



## toblerone3 (May 18, 2010)

Proper Tidy said:


> For a start, you're getting all your information from investment and business sources.
> 
> If you want to know the dangers of smoking, you don't ask a tobacco company.



Surely business and investment sources are the best sources to answer this sort of question. I'm aware that I'm talking about quite a narrow definition of recession (based on GDP growth). But I see no reason for investment magazines to purposely delude themselves on this. They are not just selling people a story about recession or growth. They stand to gain or lose money as a result of these predictions. The "tobacco company executives" here are smoking cigarettes are not just selling them.

Predictions about unemployment is a different question. Which I am not asking here. There is always a lag between the economy picking up and jobs increasing and companies and the City get rich on this lag.


----------



## toblerone3 (May 18, 2010)

ferrelhadley said:


> 103 months of housing inventory still to be cleared in the US
> 
> That figure is based on all houses currently at 60 days delinquency being likely to foreclose.
> 
> ...



Thanks ferrelhadley! 

There's quite a lot of links here. So I'm going to have a look at them tomorrow. You seem to be fairly downbeat to say the least compared to the sources I posted.


----------



## shagnasty (May 18, 2010)

Surely if people think there will be a double dip recession then they will act accordingly ie spend less ,be less likely to take credit on for  long term major items ie cars, houses etc


----------



## Proper Tidy (May 18, 2010)

toblerone3 said:


> Surely business and investment sources are the best sources to answer this sort of question. I'm aware that I'm talking about quite a narrow definition of recession (based on GDP growth). But I see no reason for investment magazines to purposely delude themselves on this.



No of course, that is why they all predicted the credit crunch followed by global recession, unlike those pesky Marxist economists who kept saying 'invest invest invest'.

Oh wait...


----------



## FreddyB (May 18, 2010)

The economy is currently growing but only barely. Removing £6billion from it this year doesn't seem like the best plan to me. The BoE guvnor Mervyn reckons the recovery will be ok and cutting the deficit is a brilliant idea. 

The point is though - who gives a fuck? Even with the economy growing unemployment is still rising. Thes question is will the Libs and their mates policies make the lives of ordinary people better or worse? Cutting "waste" or in other language peoples livelihoods is a cunts game throwing people out of work in the name of "national interest". 

Fuck the numbers look at the people


----------



## shagnasty (May 18, 2010)

That's the problem it is numbers not people with their fears for the future whether they can pay the rent ,gas bill,phone bill etc.If their going to stay in their job or go on to miserly benefits they will change their lives completely.Its a right cluster fuck and the politician dont care as long as they can fiddle their expenses bastards


----------



## ernestolynch (May 18, 2010)

At least Gideon is responsible for the economy now, he'll protect us.


----------



## Falcon (May 18, 2010)

Iemanja said:


> No there isn't, no one knows the answer, the best anyone can do is have an educated guess.


Unfortunately, we have all the information we need to take more than a guess.

We have £1 trillion public debt. We have £250 billion in unfunded public sector pension liability. We have £165 billion budget deficit. We have public debt loan interest repayments of £40 billion. Each of those numbers is going the wrong way, rapidly. Our population is getting older, reducing taxes and increasing pension and health care costs. 

The money was borrowed on the expectation that the world oil supply would continue to double every 35 years - that supplies the energy that growth depends on. The Energy Information Agency - the official forecasters - leaked their internal forecast in Washington last month  confirming that it will more than half in the next 25 years. Our economy depends on the US, and they are technically insolvent and running their economy, like us, on debt fumes - if California, Illinois, New York and New Jersey were companies, they would be formally bankrupt.

This isn't a "double dip" recession - this is a permanent recession.

Given such huge debts and interest repayments, spiralling costs, and plummeting energy to support growth, it would be interesting to hear optimists view on how there can be any recovery.


----------



## Dr Jon (May 18, 2010)

this ^^^

Given that outlook for liquids, it it clear that the solids are on collision course for the air-con and closing rapidly.


----------



## Blagsta (May 18, 2010)

toblerone3 said:


> Why is Urban so certain that there will be a double dip recession when other sources are no worse than 50-50 (more or less



If you go back 4 years, a lot of economic "experts" and politicians were saying that boom and bust was a thing of the past.  Most people with a historical left wing view thought this was nonsense.  Who proved to be right?


----------



## ferrelhadley (May 18, 2010)

Stock prices massively over valued. Too risky and low returns. 

But alot of Americans have their fate tied to the stock market in the 401Ks, their pension plans. 

I like this coment....


> Whatever happens in the next couple of years, the odds are overwhelming that investors who buy stocks today will reap puny returns for 10 years. For example, if you'd purchased shares at today's PE of 22 in early 2003, you would have gotten a return of around 3% a year, barely enough to compensate for inflation, let alone buy the blood pressure medication you'd need to survive the scary ride of stock ownership.



So much money sloshing around the world looking for somewhere to make a return. 

US treasuries have their problems too.



> More importantly, I hope that you now get the larger point: that you're putting your capital at serious risk if you make a long-term loan to the safest borrower in the world, the U.S. government. Sure, getting your interest and principal from Uncle Sam is guaranteed. But that doesn't mean that you're making a safe investment. Be warned.



So where can you sink your money you are squirrelling away for retirement? Not into propetry, not into stocks, not into bonds..... what about comodities?


So your average middle aged middle income American, the consuming engine of the global economy now has to save and find somewhere safe to save. The government has to cut spending and probibly raise taxes.


----------



## littlebabyjesus (May 18, 2010)

Falcon said:


> We have £1 trillion public debt. We have £250 billion in unfunded public sector pension liability. We have £165 billion budget deficit. We have public debt loan interest repayments of £40 billion. Each of those numbers is going the wrong way, rapidly. Our population is getting older, reducing taxes and increasing pension and health care costs.
> 
> The money was borrowed on the expectation that the world oil supply would continue to double every 35 years - that supplies the energy that growth depends on. The Energy Information Agency - the official forecasters - leaked their internal forecast in Washington last month  confirming that it will more than half in the next 25 years. *Our economy depends on the US*, and they are technically insolvent and running their economy, like us, on debt fumes - if California, Illinois, New York and New Jersey were companies, they would be formally bankrupt.
> 
> ...



How so? 

The UK's biggest trading partner is the EU. In the years to come, the UK will come to be much more dependent on the health of China and India than the US. 

The UK's debt is still much lower than it was at the end of WW2, and the 40s and 50s saw sustained growth at the same time as huge debts were repaid. 

Peak oil is a challenge. The credit crunch crisis was itself sparked by a spike in oil prices. But the more expensive oil becomes (and at the moment, it is much cheaper than it was at the spike that caused the recession), the more minds, energy and resources will be concentrated on finding an alternative source of energy. 

Eventually, I would like to see us move away from the self-destruction of an economy dependent on endless growth to function, but even within that paradigm, it is a failure of imagination not to be able to see beyond oil-based economies.

I would foresee growth over the medium term. Why not? Confidence in the system is slowly returning, and that is what is needed above all for robust economic activity and growth – confidence.


----------



## Crispy (May 18, 2010)

littlebabyjesus said:


> Peak oil is a challenge. The credit crunch crisis was itself sparked by a spike in oil prices. But the more expensive oil becomes (and at the moment, it is much cheaper than it was at the spike that caused the recession), the more minds, energy and resources will be concentrated on finding an alternative source of energy.



The big question, of course, is "can the alternatives be ramped up faster than oil's decline?"


----------



## butchersapron (May 18, 2010)

littlebabyjesus said:


> How so?
> 
> The UK's biggest trading partner is the EU. In the years to come, the UK will come to be much more dependent on the health of China and India than the US.
> 
> ...



...and spending, not cuts. Masses of it.

Very interesting article here: Who owns our Debt?



> Firstly 70% of all debt, or thereabouts, is UK owned.
> 
> At least a quarter of it is owned by the Bank of England – and therefore costs us, in effect, nothing. After all, the interest paid goes back to the government.
> 
> ...



Odd that the ongoing investment strike is so rarely mentioned as well.


----------



## sihhi (May 18, 2010)

Does anyone have access to the linked article?

http://www.ft.com/cms/s/0/fa26401e-6193-11df-aa80-00144feab49a.html


----------



## toblerone3 (May 18, 2010)

Blagsta said:


> If you go back 4 years, a lot of economic "experts" and politicians were saying that boom and bust was a thing of the past.  Most people with a historical left wing view thought this was nonsense.  Who proved to be right?



But on the other hand left wing economists have often predicted economic collapse and its not happened.


----------



## Doctor Carrot (May 18, 2010)

toblerone3 said:


> But on the other hand left wing economists have often predicted economic collapse and its not happened.



Take a look at the history of neo liberalism.  It's been riddled with crises since the 1970s.  These crises have shifted about the globe but now there's no where else for them to go and now a big shit storm has been set off and it's going to get worse, unlikely to get better if the current situation stays in place.  This isn't just my view point, it's the view point of countless academics and of all the economists who correctly predicted the 2008 crash.  

This really is just the beginning.  Jobs have gone and none have sprung up to replace them, pensions buggered, and let's not forget the personal credit bubble that's surely going to burst soon.  The personal debt of the UK population is just astronomical.

This may sound pretty grim of me but bring it on I say.  I want it all to burn because I fucking hate it and it's got to burn before anything can replace it. IMO of course .


----------



## toblerone3 (May 18, 2010)

butchersapron said:


> ...and spending, not cuts. Masses of it.
> 
> Very interesting article here: Who owns our Debt?
> 
> ...



So if the Tories are planning to do exactly the wrong thing in order to achieve economic recovery, the big question is why?

WHY?

Is is incompetence or is there a sinister political sub plot in a similar way to breaking the unions was the silver lining (from the Tories point of view) behind the double dip recession of the early 1980s.  ???


----------



## Doctor Carrot (May 18, 2010)

toblerone3 said:


> So if the Tories are planning to do exactly the wrong thing in order to achieve economic recovery, the big question is why?
> 
> WHY?
> 
> Is is incompetence or is there a sinister political sub plot in a similar way to breaking the unions was the silver lining (from the Tories point of view) behind the double dip recession of the early 1980s.  ???



It's just business as usual, surely? Rich run off with everything while we get fucked.  Banks are already back in massive profit, paying each other big bonuses etc.  Hedge fund managers getting $3 billion each, in the midst of a crisis.  Why aren't they paying it back? Why are we paying it back? The answer's obvious because the ruling class want more and more for themselves and they don't give a fuck about the rest of us.


----------



## toblerone3 (May 18, 2010)

Doctor Carrot said:


> This may sound pretty grim of me but bring it on I say.  I want it all to burn because I fucking hate it and it's got to burn before anything can replace it. IMO of course .



So there's an element of wishful thinking in your prediction of economic collapse and crisis. "Bring it on", you say.

But the question I asked is *NOT*

"Do you *want* there to be a double dip recession?"

*BUT*

"Will there be a double dip recession?"


----------



## invisibleplanet (May 18, 2010)

Out of interest, does anyone know how many £££'s has the invasions of Afghanistan and Iraq + ongoing war have cost the taxpayer in Britain since 2001?


----------



## Doctor Carrot (May 19, 2010)

toblerone3 said:


> So there's an element of wishful thinking in your prediction of economic collapse and crisis. "Bring it on", you say.
> 
> But the question I asked is *NOT*
> 
> ...



Yeah I know, I answered it:

Yes there will be a double dip recession which will morph into permanent recession.

I don't 100% mean that I want it to happen, i'm not exactly willing it to happen but happen it will.


----------



## Doctor Carrot (May 19, 2010)

invisibleplanet said:


> Out of interest, does anyone know how many £££'s has the invasions of Afghanistan and Iraq + ongoing war have cost the taxpayer in Britain since 2001?



£7,895,673,247,890,333,210,756.71p


----------



## toblerone3 (May 19, 2010)

invisibleplanet said:


> Out of interest, does anyone know how many £££'s has the invasions of Afghanistan and Iraq + ongoing war have cost the taxpayer in Britain since 2001?



About £10bn at a guess (based on the £4.5bn cost of the first three years extrapolated to seven years) 

http://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War

Including Afghanistan maybe double that.

"Based on assumptions set out in our book, the budgetary cost to the UK of the wars in Iraq and Afghanistan through 2010 will total more than £18 billion. If we include the social costs, the total impact on the UK will exceed £20 billion."

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article3419840.ece


----------



## toblerone3 (May 19, 2010)

It seems to me there is a problem here with axes to grind.

In very crude terms

Left wing economists want to talk down the economy in order to facilitate collapse and subsequent reform and revolution

Right wing liberal commentators want to talk up confidence in the economy to protect the golden money making goose.


----------



## ymu (May 19, 2010)

toblerone3 said:


> Why is Urban so certain that there will be a double dip recession when other sources are no worse than 50-50 (more or less


Because we just elected a bunch of hardline monetarists (the generation who were Tory students at the height of Thatcher's crimes) who still think Keynes is a dirty word. This is a global crisis, but it's not identical for every economy. The UK was very badly hit because we have a higher proportion of our GDP coming from banking than any other country, and we've survived reasonably well so far because the government did a pretty good job (in their own narrow terms) of keeping things afloat.

Cutting the deficit too soon risks undoing the recovery. Cutting public sector jobs, in particular, has a minimal impact on spending when there are no other jobs to go to - we just end up paying benefits to people who were paying much of their income back in tax whilst spending the rest in ways that boosted the economy. 

Bankers and business men want us to cut the deficit. Economists and the IMF say this is crazy talk. I know who I believe.



> Crucially, the slow recovery shows that growth depends in large part on aggregate demand (basically total investment and consumption), and not on the money supply. That was John Maynard Keynes's ground-breaking argument after the Depression of 1929-33.
> 
> The problem with monetarist limits on fiscal policy is that they lack any genuine economic rationale. They are largely intended to reassure the world economy that global finance won't have to compete with public authorities on international money markets. As such, monetarism locks governments into a fiscal cage in order to promote the free movement of worldwide capital. But in the current situation, with massive output gaps, public spending won't crowd out private investment. Expenditure on shovel-ready infrastructure projects or spending vouchers for low-income groups helps restore confidence and boost the economy through the multiplier effect – demand begets demand.
> 
> http://www.guardian.co.uk/commentisfree/2009/dec/11/greece-credit-downgrade-eurozone-monetarism


----------



## toblerone3 (May 19, 2010)

Bankers, businessmen, economists and the IMF I can't really see an obvious difference of interest between the different groups. I'm sure you could find quotes from each of the four groups in favour of cutting spending this year and also opposed to cutting spending this year.

Also no-one is really arguing that there wont have to be cuts at some point. As far as I can see its a fairly technocratic argument about the timing of cuts. A choice between squeezing the brake pedal this year or driving on and hitting the brake pedal slightly harder next year.


----------



## Doctor Carrot (May 19, 2010)

toblerone3 said:


> It seems to me there is a problem here with axes to grind.
> 
> In very crude terms
> 
> ...



That's just nonsense.

Who are you more likely to listen to? The people who (both on the left and right) predicted the 2007 crash or the people who said there was nothing to worry about?  I'm not talking about just economists either.  People from a wide range of disciplines said the 2007 crash was coming.  The same people who predicted the 2007 crash have all, so far, said the chances of a double dip and more woe to come is extremely high.

You don't even need people to predict it anyway, just open your eyes and look.


----------



## toblerone3 (May 19, 2010)

Doctor Carrot said:


> That's just nonsense.
> 
> Who are you more likely to listen to? The people who (both on the left and right) predicted the 2007 crash or the people who said there was nothing to worry about?  I'm not talking about just economists either.  People from a wide range of disciplines said the 2007 crash was coming.  The same people who predicted the 2007 crash have all, so far, said the chances of a double dip and more woe to come is extremely high.
> 
> You don't even need people to predict it anyway, just open your eyes and look.



I'm not disagreeing with you and most of the others on this thread and saying that there wont be a crash. I would just like to hear both sides of the story. If its so obvious that there is going to be a double dip recession why is the mainstream media (and non mainstream media) not reflecting this?

What does Urban know that most other people don't?


----------



## audiotech (May 19, 2010)

A lot of the toxic debt in the system hasn't been calculated as yet.


----------



## toblerone3 (May 19, 2010)

The Bank of England is well and truly sitting on the fence on this one by the sound of it.

"The latest Monetary Policy Committee meeting began a day after the national election which produced a coalition government led by Prime Minister David Cameron, and MPC members were waiting to see what the government intends to do to reduce a record deficit.
The likelihood that the new government's plans would be more drastic than those set out by the previous government "created further uncertainty about the prospects for activity and inflation," the minutes said.
"The MPC remains firmly in wait and see mode," said Jonathan Loynes, economist at Capital Economics.
"But with the economic recovery still fragile, the upward pressure on inflation set to fade and a huge fiscal squeeze looming, we still think that a further loosening of monetary policy is more likely than a tightening over the next year," Loynes said."

http://www.google.com/hostednews/ap/article/ALeqM5ibg8utRWL5JbkhbXsHXsTa-KKn8wD9FPSP700


----------



## Doctor Carrot (May 19, 2010)

toblerone3 said:


> I'm not disagreeing with you and most of the others on this thread and saying that there wont be a crash. I would just like to hear both sides of the story. If its so obvious that there is going to be a double dip recession why is the mainstream media (and non mainstream media) not reflecting this?
> 
> What does Urban know that most other people don't?



They know not to listen to the media and that the media is generally subservient to power.  

I really don't know how one can look at the shit storm currently sweeping Europe, see that our situation is virtually the same as Greece and not conclude that we're heading for more trouble.


----------



## ymu (May 19, 2010)

toblerone3 said:


> Bankers, businessmen, economists and the IMF I can't really see an obvious difference of interest between the different groups. I'm sure you could find quotes from each of the four groups in favour of cutting spending this year and also opposed to cutting spending this year.


No. It's basic economics, and the bankers and businessmen are still clinging onto the failed model that made them rich got us into this mess. The IMF are hardly instinctive Keynesians, but they have no interest in handing over the global economy to the speculators.



> The International Monetary Fund today provided a boost for Labour's campaign strategy when it warned rich western countries that their economies were too weak for spending cuts, tax increases or higher interest rates.
> 
> In its influential World Economic Outlook, the IMF said the recovery in global growth over the past year had relied on "highly accommodative" policies and there was a risk of a relapse.
> 
> ...


----------



## FreddyB (May 19, 2010)

Doctor Carrot said:


> They know not to listen to the media and that the media is generally subservient to power.
> 
> I really don't know how one can look at the shit storm currently sweeping Europe, see that our situation is virtually the same as Greece and not conclude that we're heading for more trouble.


 
Our situation is nothing like the situation in Greece.


----------



## Doctor Carrot (May 19, 2010)

FreddyB said:


> Our situation is nothing like the situation in Greece.



So a big fuck off deficit, cuts to public services and freezing public sector pay in Greece is nothing like what's going to happen here is it?  Have you been living in a cave for the last few months?


----------



## kyser_soze (May 19, 2010)

Well one difference in the UK is that the taxation system actually collects taxes, and we're not pinned in the Euro. Another difference is that despite what some might like to think, the UK gov hasn't fiddled it's figures (as much) as Greece, and didn't do so to remain in a currency regime it was hugely unsuited too.

Here's a newsflash - no one, not left wing or right wing economists, knows what is going to happen. As Yoda says 'Always emotion is the future', and that's plenty on display on this thread, as it _always_ is on threads speculating on economic futures.


----------



## Doctor Carrot (May 19, 2010)

kyser_soze said:


> Well one difference in the UK is that the taxation system actually collects taxes, and we're not pinned in the Euro. Another difference is that despite what some might like to think, the UK gov hasn't fiddled it's figures (as much) as Greece, and didn't do so to remain in a currency regime it was hugely unsuited too.
> 
> Here's a newsflash - no one, not left wing or right wing economists, knows what is going to happen. As Yoda says 'Always emotion is the future', and that's plenty on display on this thread, as it _always_ is on threads speculating on economic futures.



Granted there's some differences to Greece but we're still pretty fucked.  Whether it actually does go into double dip recession is a moot point really.  Unemployment has risen again, there's fewer jobs and yada yada, i'm sure you know the drill.  I wouldn't be too confident about the UK's ability to collect tax, what with £25 billion going missing every year.

To pretend, as some have on here, that it's all gonna be hunky dory and there's no need to worry is just laughable.  Of course no one knows what's going to happen, no one knows anything about any given subject really but pretty safe predictions can be made and I predict that it's fucked.


----------



## 1%er (May 19, 2010)

toblerone3 said:


> Big round of public spending cuts coming and beginning this year rather than next thanks to the Condem coalition. Will this help trigger a double-dip recession?
> 
> Nb. Two successive quarters of negative GDP growth.


I think if they raise VAT to 20% and cut 6 billion from spending over 12 months it is inevitable.


----------



## kyser_soze (May 19, 2010)

But to be fair, given your political inclinations, would you believe it to be otherwise? 

I doubt that it'll be hunky dory, but by the same chalk I doubt it'll be the end of the world as we know it.


----------



## Quartz (May 19, 2010)

I'm fearful that not just are we on the brink of a second dip, but a near-complete collapse. I can't help feeling that it would have been better in the longer term to have let the banks go bust and move on. The governments have pumped lots of money into the money markets and you can guess where much of this has ended up.

I fear we're screwed.


----------



## Doctor Carrot (May 19, 2010)

kyser_soze said:


> But to be fair, given your political inclinations, would you believe it to be otherwise?
> 
> I doubt that it'll be hunky dory, but by the same chalk I doubt it'll be the end of the world as we know it.



I'm not saying it will be the end of the world as we know it but when the parties themselves say "Deeper cuts than Thatcher," "More economic pain that at any time since the second world war" and "Savage Cuts" it doesn't take much to work out that shit is heading in the direction of the fan.  In fact it's precisely the fact the parties are saying these things that make me even more inclined to think the shit is going to hit the fan in quite a severe way. 

My political inclinations are irrelevant really. I just pay attention to the facts and listen to people who have been correct about these sorts of things in the past.


----------



## FreddyB (May 19, 2010)

Doctor Carrot said:


> So a big fuck off deficit, cuts to public services and freezing public sector pay in Greece is nothing like what's going to happen here is it?  Have you been living in a cave for the last few months?



No, I haven't been swallowing the crap that Gideon's been feeding me either. The Greeks are unable to service their borrowing, we can. The Greeks sovereign debt is worthless, ours actually rose in value off the back of Greek crisis, we were seen by the markets, despite idiots thinking the sky is falling our heads, as a safe haven. 

I suppose the sky is blue in Greece as well as here and I hear that water in Greece is wet as well


----------



## elbows (May 19, 2010)

toblerone3 said:


> I'm not disagreeing with you and most of the others on this thread and saying that there wont be a crash. I would just like to hear both sides of the story. If its so obvious that there is going to be a double dip recession why is the mainstream media (and non mainstream media) not reflecting this?
> 
> What does Urban know that most other people don't?



It does get mentioned in the media quite often, its just not trumpeted around too much. One big reason for this is the idea that a fair amount of the health of the economy is based on sentiment & mood. If everyone thinks another recession is coming then it makes it a bit more likely that it will, because peoples fears for the future cause them to make some decisions based on feeling poorer than they might actually turn out to be if things go well. Although it is possible to overstate the influence this stuff has on the economy, its a real factor, and the media walk a tight rope when deciding how much to hype up an economic crisis and how much to downplay it. Its one of those big issues whre a point can be reached that the media decides, or is 'advised', to 'be responsible'. It seems to go in phases, the financial crisis was reported in scary doom terms for a long time, but then over the course of a few months there was quite a change to the balance of their output. In the most recent crisis a turning point in this regard was when some people started mentioning green shoots, and whilst the talking heads expressed cynicism about this, the mood music has gradually been altered somewhat. (This happened some time ago now, after the initial acute phase of the financial crisis had ended). Still given the austerity measure coming our way the music is not exactly happy happy joy joy, and the messages remain rather mixed.

As for the reality, Im with the long-term woemongers, due to peak oil etc etc, so how about a bumpy ride along the plateau featuring a tripple, quad or more dip recession. If all this pans out as predicted then the word recession will hardly suffice and they will return to daring to mention the depression word or come up with some new phrase to describe our plight.

Unless of course there are some impressive tricks up some powerful sleeves, in the face of multiple depressing fundamentals there is always the chance that someone will pull a rabbit out of the hat, its been done before, but Im not sure how sustainable the rabbits are.


----------



## Falcon (May 20, 2010)

littlebabyjesus said:


> Peak oil is a challenge. The credit crunch crisis was itself sparked by a spike in oil prices. But the more expensive oil becomes (and at the moment, it is much cheaper than it was at the spike that caused the recession), the more minds, energy and resources will be concentrated on finding an alternative source of energy.


Yeah. Unfortunately, the notion that alternatives sources of energy are a matter of determination is an empirical idea invented by neoclassical economists in the 70's to try and decouple economic growth from resource scarcity. Sadly, it isn't based on anything observable in the real world, and trivially falsifiable. They predicted US continental production in 1956. 1970 was the start of a revolution in technology, from remote satellite sensing, downhole instrumentation, supercomputer processing of seismic data, geochemistry and geophysics. It all took place on the most business friendly continent on the planet with the best educated workforce. There was plenty of exogenous stimulous - energy crises, oil price rises, etc - to 'concentrate the best minds'.

Didn't make the slightest bit of difference to the forecast. Surplus energy allows us to devise technologies. It does not follow, and has never been shown, that technologies allow us to make surplus energy. The idea that it can is a myth sustained by wishful thinking and a reluctance to look at data.







"Renewable energy" is a hallucination. Conventional studies of alternative energy system outputs neglect the additional energy requirements you need to maintain stable currencies, stable financial systems, stable networks of trust institutions, global transportation infrastructure and standing armies, upon which the necessary industrial manufacturing systems depend. Hydrocarbon energy sources power these with considerable energy margins. Renewable energy sources don't even produce positive outputs after their currently externalised energy inputs are internalised, let alone provide enough surplus to replace 50+ million barrels a day of hydrocarbon in 25 years. And 80% of the planet are only starting to wake up to the consumptions we've been enjoying for 100 years.

After the second world war, we were in an octave-per-decade energy doubling. We are now on an octave-per-decade energy contraction. I think you need to recalibrate your optimism.


----------



## LLETSA (May 21, 2010)

Don't know about recession; the word depression seems to be creeping back into the discourse.


----------



## Quartz (May 21, 2010)

That graph only refers to the USA oil production, doesn't it? There are massive reserves elsewhere. So the graph is not really meaningful. Peak oil will be a problem, but not for many, many years.


----------



## LLETSA (May 21, 2010)

Quartz said:


> That graph only refers to the USA oil production, doesn't it? There are massive reserves elsewhere. So the graph is not really meaningful. Peak oil will be a problem, but not for many, many years.





It isn't only the US that's peaked. We have too. As have a number of other major oil producers. The biggest, Saudi Arabia, is widely regarded as approaching peak production, if it hasn't already. 

Where are these massive reserves?


----------



## Dr Jon (May 21, 2010)

Quartz said:


> That graph only refers to the USA oil production, doesn't it? There are massive reserves elsewhere. So the graph is not really meaningful. Peak oil will be a problem, but not for many, many years.



Presumably you missed the graph Falcon posted here:


----------



## ferrelhadley (May 21, 2010)

Quartz said:


> That graph only refers to the USA oil production, doesn't it? There are massive reserves elsewhere. So the graph is not really meaningful. Peak oil will be a problem, but not for many, many years.


Its lower 48 crude and lease condesate.


And yes there are huge reserves in other parts of the world. But those reserves are being exploited with all we can muster. The last of the major portions of Ghawar (Haradh III) have now been brought online available to pump but use far more wells than the offical reports. This strongly indicates the worlds largest field is straining to keep up. The second and third largest fields, Burgan Complex and Cantarell have both gone into decline. In Cantarells case droping to 1/3 of its production volumes of only 5 years ago, the price of nitrogen injection. The largest oil field found in the past 30 years (basically since Cantarell IIRC) was Kashgan in 2000 yet the difficulties of that field mean it is not yet in production 10 years later. The other great hope has been Sugar Loaf\ Tupi of off the Brazial coast. But deepwater is increadibly expensive and the current disaster in the Gulf of Mexico casts a long shadow over all deepwater production ventures.

Most of the worlds giant and super giant fields have been in production for over 30 years and most are showing signs of age.

The IEA stated that decline rates for all current giant and super giant fields will be c. 6.7% pa. 






Given a 10 year bull run on oil prices that sees it at $70 per barrel in a disasterous recession, where is all this new oil that people talk about? Why has no one found it? These need to be giant fields, they can only exist in very narrow geological conditions. The new stuff we are finding is often at the bottom of the oil window, that is so deep it is close to the point oil begins breaking down into lighter hydrocarbons. It is often under two kilometers of rock salt, that is pretty damned tough on drills and it is at temperatures that through huge challanges on the engineering equipment that is used to bring it up, expensive questions.

Where oh sage is this oil. Tell me, the whole world is looking for it as it will make them fortunes.


----------



## toblerone3 (May 21, 2010)

All this stuff about peak oil is very interesting and at some point it will link with global economic growth. But are we at that point now? How can we be sure? This is all very reminiscent of the Oil Shocks of the mid-1970s and there was recovery from that.


----------



## LLETSA (May 21, 2010)

toblerone3 said:


> All this stuff about peak oil is very interesting and at some point it will link with global economic growth. But are we at that point now? How can we be sure? This is all very reminiscent of the Oil Shocks of the mid-1970s and there was recovery from that.





Yes, recovery because three major oil fields were discovered. So far no equivalents are on the horizon.


----------



## Falcon (May 21, 2010)

toblerone3 said:


> All this stuff about peak oil is very interesting and at some point it will link with global economic growth. But are we at that point now? How can we be sure? This is all very reminiscent of the Oil Shocks of the mid-1970s and there was recovery from that.


In the 70's we were still expanding the oil supply. It is contracting now. 

This shows the link between the oil rate limit, the oil price and the economic shocks.





(source: 2010 Peak Oil report (PDF))


----------



## toblerone3 (May 24, 2010)

Well I've been listening to the news, reading the interesting posts on this thread and absorbing the mood music. And I'm going to say that yes I think there WILL be a double dip recession. 'W-shaped' at best, possibly 'L-shaped' if things get worse.

I want to be proved wrong. I've thinking about when we will be able to judge whether there is going to be a double dip. I would say early December when we've had two more quarters of economic growth results and some of the early effects of the spending effects will start to feed in.  We will be able to judge in early December I think.

As for those who say "bring it on" I dont agree with this. Although there will be interesting things happening for sure.


----------



## kyser_soze (May 24, 2010)

Incidentally, what's the time frame that counts for a 'double dip' recession? No one's specified that, have they? I mean technically _every_ recession has been a 'double dip' since recessions are part of the economic cycle (and not just of capitalism, but probably best to ignore that for now), so when should we expect to see the next two quarters negative growth?


----------



## Idaho (May 24, 2010)

Not a double dip. Just the end of our current Kondratiev Wave

The recession is over already. These terms aren't really relevant to normal people. Recession is about whether money is able to make money. For a while money was losing money. Now it's back in the saddle and increasing profits by sacking lots of people and cutting down on public expenditure. The 'real' recession is only just starting for the average person. 2011 and 2012 are going to be grim.


----------



## toblerone3 (May 24, 2010)

kyser_soze said:


> Incidentally, what's the time frame that counts for a 'double dip' recession? No one's specified that, have they? I mean technically _every_ recession has been a 'double dip' since recessions are part of the economic cycle (and not just of capitalism, but probably best to ignore that for now), so when should we expect to see the next two quarters negative growth?



One of the articles I 've read recently was denying that there had ever been a double dip recession. It claimed that the recessions (in the US) of 1979 (?) and 1981 (?) were actually two separate recessions !!  We had negative GDP growth in the middle of 2009. So anytime before the end of 2011 counts as a double dip IMO.  

I would expect third quarter 2010 through to first quarter 2011 being the time most likely for negative GDP growth.


----------



## kyser_soze (May 24, 2010)

So no, you don't have a defnitive criteria for the period of time between the first and second set of periods of negative growth. So basically this entire thread is meaningless.


----------



## toblerone3 (May 24, 2010)

Idaho said:


> Not a double dip. Just the end of our current Kondratiev Wave



The Industrial Revolution—1771
The Age of Steam and Railways—1829
The Age of Steel, Electricity and Heavy Engineering—1875
The Age of Oil, the Automobile and Mass Production—1908
The Age of Information and Telecommunications—1971

What's the sixth wave going to be about then? - Environment and Sustainability?


----------



## toblerone3 (May 24, 2010)

The Early 1980s recession in the United States is cited as an example of a W-shaped recession. The National Bureau of Economic Research considers two recessions to have occurred in the early 1980s.[4] The economy fell into recession from January 1980 to July 1980, shrinking at an 8 percent annual rate from April to June of 1980. The economy then entered a quick period of growth, and in the first three months of 1981 grew at an 8.4 percent annual rate. As the Federal Reserve under Paul Volcker raised interest rates to fight inflation, the economy dipped back into recession (hence, the "double dip") from July 1981 to November 1982. The economy then entered a period of mostly robust growth for the rest of the decade.

Source: http://en.wikipedia.org/wiki/Double-dip_recession#W-shaped_recession


----------



## Idaho (May 24, 2010)

toblerone3 said:


> The Industrial Revolution—1771
> The Age of Steam and Railways—1829
> The Age of Steel, Electricity and Heavy Engineering—1875
> The Age of Oil, the Automobile and Mass Production—1908
> ...



Teleporting and space travel


----------



## kyser_soze (May 24, 2010)

toblerone3 said:


> The Industrial Revolution—1771
> The Age of Steam and Railways—1829
> The Age of Steel, Electricity and Heavy Engineering—1875
> The Age of Oil, the Automobile and Mass Production—1908
> ...



Bio and nanotechnologies.

You still haven't answered my question - what criteria are you using? From your wiki quote you seem to be saying '3 quarters' would count as the time between the periods of growth. So are you saying we'll be in recession again come the GDP report in Q3 (which will be announced around the end October), and that this will constitute a 'W' shaped recession, double dip or whatever?


----------



## toblerone3 (May 24, 2010)

kyser_soze said:


> You still haven't answered my question - what criteria are you using? From your wiki quote you seem to be saying '3 quarters' would count as the time between the periods of growth. So are you saying we'll be in recession again come the GDP report in Q3 (which will be announced around the end October), and that this will constitute a 'W' shaped recession, double dip or whatever?



I'm flattered that you think I'm qualified to judge criteria about what counts as a double dip recession. If this was a bet at the bookies or some kind of incentive-based target then, I agree I would have to define it precisely. 

Lets say for the sake of argument that negative GDP growth in Q3, Q4 or Q1 2011 would count as a double dip provided it was followed by a second quarter of negative growth. One quarter alone would probably be characterised as a 'blip'


----------



## kyser_soze (May 24, 2010)

You seem to be confused.

A 'recession' is defined quite specifically as 'two sucessive quarters of negative growth'. My question is 'What is the time period allowable between sucessive periods of recession' to call it 'double dip'? 2 quarters? 3? 4? More?

So what is the qualifying period?


----------



## toblerone3 (May 24, 2010)

kyser_soze said:


> You seem to be confused.
> 
> A 'recession' is defined quite specifically as 'two sucessive quarters of negative growth'. My question is 'What is the time period allowable between sucessive periods of recession' to call it 'double dip'? 2 quarters? 3? 4? More?
> 
> So what is the qualifying period?



I don't think there is an official definition. The early 1980s recesssions judged by some to be a double dip and by others to be two seperate recesssions. There was also the complicating factor of two 'blips' one in between the 'dips' and one after the 'dips'.


----------



## kyser_soze (May 24, 2010)

So what's _your_ definition of a DD, and the one we're going to hold you up to since you've bravely laid your cards on the table and said it'll definitely happen.


----------



## toblerone3 (May 24, 2010)

kyser_soze said:


> So what's _your_ definition of a DD, and the one we're going to hold you up to since you've bravely laid your cards on the table and said it'll definitely happen.



Q1 2011 negative growth followed by another quarter of negative growth = double dip
Q2 2011 negative growth plus one more etc = two seperate recessions.

That contradicts what I said earlier but I didn't realise I was going to be pushed so hard on this.


----------



## kyser_soze (May 24, 2010)

So how long is that? *forced to count*

So, we came out of recession in Q4 2009. So for you, to be a DD, the gap would be _maximum_ 4 quarters? So if we go back into recession in Q4 2010 it'll count? (I assume this is what you mean rather than Q1 2011 since that would be 5 quarters since coming out of the first recessionary period).


----------



## toblerone3 (May 24, 2010)

kyser_soze said:


> So how long is that? *forced to count*
> 
> So, we came out of recession in Q4 2009. So for you, to be a DD, the gap would be _maximum_ 4 quarters? So if we go back into recession in Q4 2010 it'll count? (I assume this is what you mean rather than Q1 2011 since that would be 5 quarters since coming out of the first recessionary period).



OK I'll shift it again. Minimum four quarters of growth for a seperate recession. So Q1 2011 plus further quarter of negative growth = two seperate recessions. Q4 negative growth plus one further quarter of growth = double dip.

Another thing is that GDP figures are often revised. So for this purpose we will use the initially announced GDP growth figure.

So we are ready to gamble. What odds are offered here. Urban is about 7 to one in favour of a double dip?

Gamble...


----------



## Falcon (May 25, 2010)

The best you will get is a dead cat bounce. The existing committed oil megaproject investment will sustain new production capacity for another 18 months. Any production after that would have to have come from investment started 8-10 years ago, which was never made. So we have 4.5% depletion with no offset, growing Saudi/China/India demand, an oil price bound for +$150/bbl, massive structural sovereign debt and the system rigged to implode again.

Permanent recession.


----------



## toblerone3 (May 25, 2010)

Falcon said:


> The best you will get is a dead cat bounce. The existing committed oil megaproject investment will sustain new production capacity for another 18 months. Any production after that would have to have come from investment started 8-10 years ago, which was never made. So we have 4.5% depletion with no offset, growing Saudi/China/India demand, an oil price bound for +$150/bbl, massive structural sovereign debt and the system rigged to implode again.
> 
> Permanent recession.



Although I voted for a double dip, I have great difficulty believing this, the permanent recession bit. We will know by this autumn who is right.


----------



## treelover (May 25, 2010)

'HOW WILL THE CUTS BE FOUGHT?
Filed under: economy — Andy Newman @ 10:05 am

George Osborne believes a recruitment freeze on civil servants will save £163m a year For a detailed breakdown and analysis of the cuts proposed by the Con-Dem government I will be following Left Foot Forward, who have both more resources and talent than I do, for unpacking the detail.

In summary they say:

    The main story of the day is the Government’s announcement of £6 billion in cuts this year. The Independent reports that civil servants will be told today that they are being banned from recruiting any new staff in a “severe setback for students who are due to graduate this summer”. The paper believes that 300,000 Whitehall and public sector workers may lose their jobs. The Telegraph puts the figure at 3,000. The paper says that other cuts will include a “populist gesture” of cutting central government funding for speed cameras.

The Times believes that Vince Cable’s Business Department will “bear the brunt” of the cuts with £900 million in savings over the next nine months. This will include culling regional development agencies in the South, quangos, and some of the last-minute grants and loans extended by his predecessor, Lord Mandelson. Nick Clegg is widely quoted saying the cuts would be “painful and controversial”. The Financial Times reports that, “trade union leaders are gearing up for a fight with the coalition government” over the cuts. Brendan Barber, general secretary of the Trades Union Congress, said the spending cuts to be announced on Monday were “dangerous” and risked a “double-dip recession”.'

http://www.socialistunity.com/?p=5938#comments'


At last sections of the left are beginning to think about alternative economic strategies again to counter the neo-liberal hegomony of the IMF, ConDem, cuts as shock therapy, etc an excellent piece on SU argues that this is necessary, though SU usually focuses on the dead end of identity politics.


----------



## treelover (May 25, 2010)

'The economic consequences of George Osborne

Posted on Monday 24 May, 2010


TO PARAPHRASE the words of a truly awful 1960s musical hit, this is famously the dawning of the age of austerity. My prediction is that the results of rapidly throwing the Keynesian multiplier into reverse gear will not at all be pretty.The measures just unveiled by George Osborne can only mean lower national income, less investment and consumption, and higher unemployment.'

http://www.davidosler.com/2010/05/the-economic-consequences-of-mr-osborne/#more-2118



another one by Dave Osler who argues we are back in a time of Hayek.


----------



## treelover (May 25, 2010)

quote button still not working!


----------



## kyser_soze (May 25, 2010)

[ quote ] then [ / quote ] if the button's not working properly. (obv without the spaces...you watch, the bastards going to work now...


----------



## toblerone3 (Jun 7, 2010)

*Stock markets and euro down on double-dip fears*

Stock markets getting the jitters.

http://news.bbc.co.uk/1/hi/business/10252263.stm


----------



## Kanda (Jun 7, 2010)

toblerone3 said:


> Stock markets getting the jitters.
> 
> http://news.bbc.co.uk/1/hi/business/10252263.stm



Stock Markets have had the jitters for the last 3 weeks. 

It's pretty normal after bad non-farm friday results.


----------



## toblerone3 (Jun 25, 2010)

Saw Will Hutton on This Week last night. Hedging his bets basically.

He was saying that the budget would be damaging for the economy but didn't think it would cause a double dip recession. But that international economic factors could change this.


----------



## ymu (Jun 25, 2010)

David Blanchflower said:
			
		

> I am now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession or worse, not least because there is no room for interest-rate cuts, although lots of additional quantitative easing (QE) from the Bank of England could soften the blow.
> 
> http://www.newstatesman.com/economy/2010/06/public-sector-budget-obr



Blanchflower was the only member of the MPC to call the crash correctly. We is in for a tough ride folks ...


----------



## toblerone3 (Jul 23, 2010)

*1.1% GDP Growth in UK in Second Quarter 2010*

Looks like we might all be wrong about the Double Dip recession! 

http://www.bbc.co.uk/news/business-10737352


----------



## toblerone3 (Jul 23, 2010)

bump as the boards are behaving very oddly at the moment.


----------



## Falcon (Jul 23, 2010)

They have been printing money. Of course it has appeared to grow. It will continue to appear to grow for as long as they continue to print money, until inflation kicks in. As soon as they stop printing money, it will stop appearing to grow.

The energy supply has not grown for 5 years -- upon what other basis do people imagine it might have grown ?


----------



## London_Calling (Jul 23, 2010)

Statistically yer double-dip is fairly remote anyway but I'm not sure this number makes that any less likely.


----------



## AnnO'Neemus (Jul 23, 2010)

toblerone3 said:


> *1.1% GDP Growth in UK in Second Quarter 2010*
> 
> Looks like we might all be wrong about the Double Dip recession!
> 
> http://www.bbc.co.uk/news/business-10737352


But then again, the impact of public spending cuts are yet to be felt.

And a slight boost could be a post-election thingy.  There was uncertainty in the pre-election period, so growth and confidence were lower.  If you're starting from a lower base, then growth is magnified, kind of thing.  Or something like that.


----------



## toblerone3 (Jul 24, 2010)

AnnO'Neemus said:


> But then again, the impact of public spending cuts are yet to be felt.
> 
> And a slight boost could be a post-election thingy.  There was uncertainty in the pre-election period, so growth and confidence were lower.  If you're starting from a lower base, then growth is magnified, kind of thing.  Or something like that.



Very true and also according to the Toblerone definition of double dip we wont know about whether or not we are going to experience a double dip recession until the first quarter figures for GDP growth in 2011 are announced in late April 2011.



toblerone3 said:


> OK I'll shift it again. Minimum four quarters of growth for a seperate recession. So Q1 2011 plus further quarter of negative growth = two seperate recessions. Q4 negative growth plus one further quarter of growth = double dip. Another thing is that GDP figures are often revised. So for this purpose we will use the initially announced GDP growth figure.


----------



## toblerone3 (Jul 24, 2010)

This could be just a


----------



## Dr Jon (Jul 24, 2010)




----------



## toblerone3 (Aug 11, 2010)

New jobless figures out today but concerns about the impact of the coming expected rise in unemployment and lower growth forecasts from the Bank of England. 

Some economic expert on Radio5 saying "no 'respectable' economic expert is now predicting a double dip recession"


----------



## Falcon (Aug 11, 2010)

toblerone3 said:


> Some economic expert on Radio5 saying "no 'respectable' economic expert is now predicting a double dip recession"


Those would be the same respectable economic experts that failed to predict the first recession. 

'Respectable' economics only works under an assumption of an infinite-acting matter/energy system. That assumption no longer holds, so 'respectable' economics is indistinguishable from astrology.


----------



## poster342002 (Aug 14, 2010)

As I said on the other thread - recovery or no recovery, double-dip or no double-dip the jobs are GONE for good and are NOT coming back. Ever.


----------



## toblerone3 (Sep 14, 2010)

toblerone3 said:


> New jobless figures out today but concerns about the impact of the coming expected rise in unemployment and lower growth forecasts from the Bank of England.
> 
> Some economic expert on Radio5 saying "no 'respectable' economic expert is now predicting a double dip recession"



Well last month. No double dip was the received wisdom. One month later the fear of a double dip is back!

http://uk.reuters.com/article/idUKLNE68C00X20100913


----------



## toblerone3 (Sep 14, 2010)

toblerone3 said:


> New jobless figures out today but concerns about the impact of the coming expected rise in unemployment and lower growth forecasts from the Bank of England.
> 
> Some economic expert on Radio5 saying "no 'respectable' economic expert is now predicting a double dip recession"



Well last month. No double dip was the received wisdom. One month later the fear of a double dip is back!

http://uk.reuters.com/article/idUKLNE68C00X20100913


----------



## toblerone3 (Sep 14, 2010)

poster342002 said:


> As I said on the other thread - recovery or no recovery, double-dip or no double-dip the jobs are GONE for good and are NOT coming back. Ever.


 
Which jobs specifically are you talking about?


----------



## toblerone3 (Oct 18, 2010)

http://www.bbc.co.uk/news/business-11561137

Latest from Ernst and Young is that there will not be a double dip but there will be a "soft patch" in the economy this winter!


----------



## toblerone3 (Apr 26, 2011)

Will tommorrow morning (when the first quarter 2011 GDP figures are announced) be the morning of the double dip? after a 0.5% contraction in the final quarter of 2010.


----------



## toblerone3 (Apr 26, 2011)

87% of Urban posters on this poll from last year think this will happen.


----------



## toblerone3 (Apr 26, 2011)

http://news.sky.com/skynews/Home/Bu...st_Quarter_Gross_Domestic_Product_Figures_Due


----------



## free spirit (Apr 26, 2011)

toblerone3 said:


> http://news.sky.com/skynews/Home/Bu...st_Quarter_Gross_Domestic_Product_Figures_Due





> "We are looking at (nought) point 4 (per cent)... (it) means we didn't even recover the ground lost to snow in the fourth quarter, so we're actually net contraction from September to the end of March in circumstances where we're meant to be recovering."


if these figures are correct then if I'm reading it right, if it wasn't for the snow we could have had somewhere around -0.1 to 0% growth in both quarters. In other words the economy has gone from growing its' way out of recession to stagnating with a real possibility of returning to actual recession, and all before the main cuts actually start to bite this month.

this joke of a coalition are plumbing new depths of stupidity.


----------



## ymu (Apr 26, 2011)

Wouldn't bet against it...


----------



## toblerone3 (Apr 26, 2011)

I heard on the radio this morning that the 1981 wedding of Charles and Dianna marked the nadir of the 1980s recession, but the stock markets only really started to recover when Dianna fell pregnant.


----------



## shagnasty (Apr 27, 2011)

the  figures will show a small rise tomorow just enough for osbourne to bull shit about his policies working.It won't bring much joy to anybody else


----------



## Shevek (Apr 27, 2011)

I think there will eventually be another bigger recession but I think the recovery could trundle on for a fair while. I don't neccesarily think it will be back to back recession. I think we might have a few years of growth.


----------



## littlebabyjesus (Apr 27, 2011)

shagnasty said:


> the  figures will show a small rise tomorow just enough for osbourne to bull shit about his policies working.*It won't bring much joy to anybody else*


 
This is the important point for me. I voted against a double dip last year and I still think that is probably right, but that doesn't mean I was optimistic generally. If very low growth is combined with a transfer of wealth towards the wealthiest, that is of little succour. I would rather see  double dip combined with wealth transfer downwards. This isn't the measure I'll be looking at to see whether things are getting better or worse.


----------



## toblerone3 (Apr 27, 2011)

Well 0.5% growth in first quarter. Shagnasty was right. Official definition of a double dip has been avoided, just, but as somebody pointed out on another thread the economy is still smaller than it was last autumn. Figures would fit with an L-shaped recession a la Japan in the nineties and noughties. 

I'm not sure whether it is correct to say that the effect of the spending cuts has yet to have been felt in the economic figures as there is a certain amount of anticipation built into economic investment. So the gloomiest period in pure economic terms may be when everybody is looking at future prospects of cuts rather than after the cuts have been implemented. 

But I think it would be true to say that there is still a danger of second order effects from the cuts. Ie job cuts leading to cuts in spending leading to further loss of confidence and more job cuts. To that extent I think that there is a possibility of two further successive quarters of negative economic growth. Whether that is a double dip or two seperate recessions is a matter of definition. Earlier in this thread I defined Q1 2011 as the last chance saloon for those predicting a double dip, but its a matter of definition.


----------



## ymu (Apr 27, 2011)

toblerone3 said:


> But I think it would be true to say that there is still a danger of second order effects from the cuts. Ie job cuts leading to cuts in spending leading to further loss of confidence and more job cuts.


Second order effects? The confidence fairy is the most important factor and not the actual, real availability of money for buying stuff?


----------



## ymu (Apr 27, 2011)

What happened _before_ a million people lost their jobs to austerity mania:


----------



## BigTom (Apr 27, 2011)

no double dip yet - growth of 0.5% .. there's another thread on that though

e2a: thought I was replying to the last post, didn't realise it was a post at the bottom of a page!


----------



## ViolentPanda (Apr 27, 2011)

Shevek said:


> I think there will eventually be another bigger recession but I think the recovery could trundle on for a fair while. I don't neccesarily think it will be back to back recession. I think we might have a few years of growth.


 
What "recovery", what "growth"? Economic stagnation isn't "recovery" or "growth", it's stagnation.


----------



## iROBOT (Apr 27, 2011)

I would hold on all the "revcovery" talk until the cuts bite.

We've seen nothing yet.


----------



## toblerone3 (Apr 27, 2011)

ymu said:


> Second order effects? The confidence fairy is the most important factor and not the actual, real availability of money for buying stuff?


 


iROBOT said:


> I would hold on all the "revcovery" talk until the cuts bite.
> 
> We've seen nothing yet.



So what signal to look at?   The confidence fairy or the cuts biting?


----------



## ymu (Apr 27, 2011)

You believe in the confidence fairy?


----------



## iROBOT (Apr 27, 2011)

toblerone3 said:


> So what signal to look at?   The confidence fairy or the cuts biting?


 
Both.

This countries only for the rich now.


----------



## ymu (Apr 27, 2011)

The rich won't be sticking around, in an economically useful sense anyway. Those who need to work for their over-rewarded living will be heading to ASEAN. Those who rely on their capital to work for them won't be investing it here.


----------



## iROBOT (Apr 27, 2011)

The rich have been threatening to leave the City of London for years now. I say we call their fucking bluff.


----------



## ymu (Apr 27, 2011)

iROBOT said:


> The rich have been threatening to leave the City of London for years now. I say we call their fucking bluff.


 
So does the Financial Times:



> While everyone pays lip-service to the need for a safer system, not everyone’s commitment runs very deep. In recent months the financial sector has been lobbying ever more fiercely against structural change or higher capital requirements, arguing that the banks are pretty much safe as they are.
> 
> Institutions have warned that further regulation would simply result in defections to less onerous jurisdictions. HSBC is talking to its shareholders about whether it should move its domicile to Hong Kong. Standard Chartered has hinted that it might do the same.
> 
> ...


----------



## littlebabyjesus (Apr 27, 2011)

ymu said:


> Second order effects? The confidence fairy is the most important factor and not the actual, real availability of money for buying stuff?


 
Yes, basically. The amount of money available is dependent on confidence – the confidence of borrowers to borrow and lenders to lend.


----------



## ymu (Apr 27, 2011)

littlebabyjesus said:


> Yes, basically. The amount of money available is dependent on confidence – the confidence of borrowers to borrow and lenders to lend.


 
And that has nothing to do with the borrower's current earnings and future job prospects?

Are half a million jobs expected to go in the private sector because there's not enough confidence, or because the public sector is cutting half a million jobs, meaning half a million people not spending as much as they used to and a loss of £1.50 to the private sector for every £1 saved on public sector salaries?

Where does confidence come from, if not the anticipated circulation of money in the near future?


----------



## BigTom (Apr 27, 2011)

yeah, the confidence fairy is important - but more so in reverse - I remember a large study being done which showed a strong correlation between the number of times "recession" appeared in media articles and a recession happening within 6 months iirc (maybe within a year) throughout the 80s and early 90s across the western world.

If people are worried about a recession, they stop spending because they want to make sure they are ok should they lose their jobs, they certainly won't borrow money or take on extra financial commitments.
The stagnation that has happened in the last 6 months has had two causes imo - one is the ending of the effect of the monetary stiumulus and the other, more important one is the nervousness of people about how they might be affected in the cuts.

Once the cuts actually start to happen there will be a direct effect which will be even stronger.. I would still place money on a recession in 2011, Q3 & Q4 I think, rather than Q2 & Q3.. construction sector dropped 4.7% and that's usually a good indicator of where the economy is heading.  Cuts will start to bite heavily (esp. council cuts) may/june and lots of people will stop spending once those 3-month consultation notices go out..


----------



## littlebabyjesus (Apr 27, 2011)

The confidence fairy is crucially important to capitalist economies. Of course the cuts and job losses are going to have a massive and concrete effect, but it is ridiculous to deny the central role to confidence in a capitalist economy that is largely financed by debt. Debt can only ever function with confidence.

To take a simple example, if most people think that the price of housing will go up, it will go up. If most people think it will go down, it will go down. This is how asset bubbles happen. And if enough people thought housing was about to go up in price, lenders would lend, borrowers would borrow, and there would be more money sloshing around in the economy than before. Of course, if that rise in asset value is not matched by a rise in real output, such an influx of money has to lead to a crash somewhere down the road. But there you have capitalism - a series of booms and crashes. TBh I agree with an earlier poster that a period of Japan-style flat economy is a likely future for us in the UK. I don't see another crash around the corner, but neither do I see the kind of confidence that leads to booms.


----------



## ymu (Apr 27, 2011)

littlebabyjesus said:


> The confidence fairy is crucially important to capitalist economies. Of course the cuts and job losses are going to have a massive and concrete effect, but it is ridiculous to deny the central role to confidence in a capitalist economy that is largely financed by debt. Debt can only ever function with confidence.


Which is why we get credit crunches when it all comes crashing down.

Economics is about money moving around. The confidence fairy is a Friedmanite, supply-side fantasy. It's wrong. It's why we're in this mess.


----------



## littlebabyjesus (Apr 27, 2011)

It's not a fantasy. It is not a thing any sane person would base their economic policy on. But that doesn't make it a fantasy. It is something that is recognised by Keynsian economics just as much as Friednmanite economics. The attitude towards it may be different, but the acknowledgement that it is a process that happens is there in both instances.


----------



## toblerone3 (Jul 26, 2011)

wonder if the Q2 GDP figures published today will show that the economy is in a double dip recession.


----------



## London_Calling (Jul 26, 2011)

Isn't the usual definition 3 consecutive quarters of negative growth?


----------



## Balbi (Jul 26, 2011)

There's the technicality I suppose that Q4 and this years Q1 actually indicated a shrink in the economy the negative growth followed by a tiny positive growth of a smaller economy than last years Q3 - in effect the economy had shrunk by a small amount by March. With the meagre growth in Q2, a negative growth that cancels out Q2 would mean that the economy is smaller than last year, and has been contracting irregularly for three quarters.


----------



## London_Calling (Jul 26, 2011)

to my mind 'recession' implies an economy is twisting in the wind; this is a managed position.


----------



## BigTom (Jul 26, 2011)

London_Calling said:


> Isn't the usual definition 3 consecutive quarters of negative growth?


 
*2* consecutive quarters, so whatever the gdp figures today we won't be in recession, despite the fact that if it is negative, we will have seen a contraction of the economy over the last 9 months (-0.5% Q4 2010, 0.5% Q1 2011)


----------



## magneze (Jul 26, 2011)

0.2% "growth"


----------



## Balbi (Jul 26, 2011)

- 0.5 , 0.5 (growth of a smaller economy) , 0.2


----------



## King Biscuit Time (Jul 26, 2011)

So that's basically 3 quarters of stagnation.


----------



## kained&able (Jul 26, 2011)

apparently the royal wedding is being blamed.

err wasn't that meant to help the economy in some way?(although googling about the place there always seemed to be lots of debate on this and i can't see a govermenat source saying ti would be a boost from a cursory glance)

dave


----------



## Divisive Cotton (Jul 26, 2011)

last time they put the blame on the bad winter weather!


----------



## Divisive Cotton (Jul 26, 2011)

kained&able said:


> apparently the royal wedding is being blamed.
> 
> err wasn't that meant to help the economy in some way?(although googling about the place there always seemed to be lots of debate on this and i can't see a govermenat source saying ti would be a boost from a cursory glance)
> 
> dave



i had tweet about this:



> PrimlyStable
> by johnedenuk
> Mirror, 17/11: ROYAL WEDDING COULD GIVE ECONOMY £620M BOOST, PREDICTS EXPERT. Mirror, 24/7: OSBORNE BLAMES ROYAL WEDDING FOR ECONOMIC WOES.


----------



## Divisive Cotton (Jul 26, 2011)

> Joe Grice explains that these data were affected by a range of factors: the additional bank holiday for the Royal Wedding, the Royal Wedding itself, the after effects of the Japanese tsunami, the first phase of Olympic ticket sales and warm weather in April.



so that explains it


----------



## Santino (Jul 26, 2011)

I think they're including the sale of Olympics tickets in the figures - about half of that 0.2%.


----------



## cybertect (Jul 26, 2011)

Confused messages all round before today's figures.

UK economy set for royal wedding feel-good factor: BBC, 16 Nov 2010

Royal wedding: marriage will cost economy £5bn The Telegraph, 23 Nov 2010

How Much Did Royal Wedding Cost Britain? Wall Street Journal, 29 April 2011 (inconclusive).


----------



## BigTom (Jul 26, 2011)

kained&able said:


> apparently the royal wedding is being blamed.
> 
> err wasn't that meant to help the economy in some way?(although googling about the place there always seemed to be lots of debate on this and i can't see a govermenat source saying ti would be a boost from a cursory glance)
> 
> dave


 
http://www.telegraph.co.uk/news/ukn...dding-will-boost-British-economy-by-620m.html
link for a telegraph story - no govt. spokesperson but yeah def. was a theme about the wedding boosting the economy..

We really, really need to take this argument to the austerity merchants - they want to reduce the deficit, but they won't be able to if the economy doesn't grow.. and the evidence is there for the lack of growth.. all the excuses in the world are just sounding more and more desperate..


----------



## King Biscuit Time (Jul 26, 2011)

From Political Scrapbook - the 0.2% growth commemorative plate.


----------



## yield (Jul 26, 2011)




----------



## littlebabyjesus (Jul 26, 2011)

BigTom said:


> We really, really need to take this argument to the austerity merchants - they want to reduce the deficit, but they won't be able to if the economy doesn't grow.. and the evidence is there for the lack of growth.. all the excuses in the world are just sounding more and more desperate..


 
We do need to take the argument, but there's a need to do it even more than that. At the moment, nobody should even be trying to reduce the deficit - it is the deficit that has been keeping the economy from collapsing and a large deficit may be needed for some time yet. The big lie from the govt is that the deficit is the cause of the crisis. It isn't. It is a response to the crisis. It needs to be repeated again and again: the deficit is not the problem here, and if necessary, nobody should be afraid of _increasing_ it for a period.


----------



## FreddyB (Jul 26, 2011)

littlebabyjesus said:


> We do need to take the argument, but there's a need to do it even more than that. At the moment, nobody should even be trying to reduce the deficit - it is the deficit that has been keeping the economy from collapsing and a large deficit may be needed for some time yet. The big lie from the govt is that the deficit is the cause of the crisis. It isn't. It is a response to the crisis. It needs to be repeated again and again: the deficit is not the problem here, and if necessary, nobody should be afraid of _increasing_ it for a period.


 
All absolutely true. Spending is essential to support the economy and growth is the surest way to reduce the deficit over time. But.  

Where is future growth going to come from?


----------



## littlebabyjesus (Jul 26, 2011)

FreddyB said:


> All absolutely true. Spending is essential to support the economy and growth is the surest way to reduce the deficit over time.


 
Kind of. Actually, what growth does is it makes a certain level of deficit sustainable. 

But you can't talk about the government deficit in isolation - it has to be looked at within the context of the entire economy. If the private sector is paying back debt faster than it is borrowing - ie operating at a surplus - then government can, and should, operate at a deficit. Otherwise the money supply contracts and you have deflationary pressures. All economies over the last few decades have been operating with constantly growing money supplies - ie a constantly growing level of outstanding debt. 

That's functional within a growing economy in our current economic model. You can certainly argue that this model needs changing and the way money enters the system needs changing. But that is most emphatically not what the austerity advocates are after. Quite the reverse - and that is what makes austerity a simply perverse measure if judged by its effect on the overall health of the economy. It can only really be understood as a naked attack on the poor and a naked attack on the concept of collective provision.


----------



## Kaka Tim (Jul 26, 2011)

Fuck me, the way this is being reported is straight out of 'the dog eat my Gross Domsestic Product' school of economic excuses.


----------



## 100% masahiko (Jul 26, 2011)

King Biscuit Time said:


>


 
Awesome!


----------



## FreddyB (Jul 26, 2011)

littlebabyjesus said:


> Kind of. Actually, what growth does is it makes a certain level of deficit sustainable.
> 
> But you can't talk about the government deficit in isolation - it has to be looked at within the context of the entire economy. If the private sector is paying back debt faster than it is borrowing - ie operating at a surplus - then government can, and should, operate at a deficit. Otherwise the money supply contracts and you have deflationary pressures. All economies over the last few decades have been operating with constantly growing money supplies - ie a constantly growing level of outstanding debt.
> 
> That's functional within a growing economy in our current economic model. You can certainly argue that this model needs changing and the way money enters the system needs changing. But that is most emphatically not what the austerity advocates are after. Quite the reverse - and that is what makes austerity a simply perverse measure if judged by its effect on the overall health of the economy. It can only really be understood as a naked attack on the poor and a naked attack on the concept of collective provision.


 
I understand that. The deficit as a proportion of GDP is what matters, not the actual number which is why growth reduces it, even if it increases. 

The need for growth underpins every approach, austerity or otherwise. Without it any deficit becomes more unsustainable. The fact that the private sector as a whole is paying more debt back than it's borrowing indicates that there is no obvious path to growth. Finance driven consumer spending as the model for growth doesn't really exist any more being as it was largely based on constantly rising house prices. What now?


----------



## BigTom (Jul 26, 2011)

littlebabyjesus said:


> We do need to take the argument, but there's a need to do it even more than that. At the moment, nobody should even be trying to reduce the deficit - it is the deficit that has been keeping the economy from collapsing and a large deficit may be needed for some time yet. The big lie from the govt is that the deficit is the cause of the crisis. It isn't. It is a response to the crisis. It needs to be repeated again and again: the deficit is not the problem here, and if necessary, nobody should be afraid of _increasing_ it for a period.


 
agreed, but first off, let's get them thinking about whether austerity will solve the problem they see.. then when they are looking for the alternatives we can bring this in and argue that increasing the deficit for a period is the key to removing it in the mid-long term..


----------



## BigTom (Jul 26, 2011)

FreddyB said:


> I understand that. The deficit as a proportion of GDP is what matters, not the actual number which is why growth reduces it, even if it increases.
> 
> The need for growth underpins every approach, austerity or otherwise. Without it any deficit becomes more unsustainable. The fact that the private sector as a whole is paying more debt back than it's borrowing indicates that there is no obvious path to growth. Finance driven consumer spending as the model for growth doesn't really exist any more being as it was largely based on constantly rising house prices. What now?



This kind of links in to one of the bigger issues I'm having at the moment which is that actually I think we need to find a steady state (ie: growth in line with population) for environmental/sustainability reasons.  We at least need to reject the idea that growth must happen.  However, given the economy is still at a smaller size than it was pre-2008 crash, it's not such a big issue.
Growth I think should be driven by investment in the green manufacturing sector.. Free Spirit has written some excellent posts on this matter in other threads.. helps to deal with the current economic crisis as well as longer term issues of climate change and energy dependance/usage which feeds into ideas of steady state economics/sustainability.

(I'm not totally sold on steady state stuff btw, I've not had the headspace for many years to delve into it and see how well it relates to sustainability nor of course look into what levels of economic production/consumption would be sustainable etc.. it's a very complicated thing anyway, and so I don't really know how to relate it to our current situation.. but in the short term, we need growth to escape this crisis - so lets drive that growth from places that will work towards solving other issues as well)


----------



## littlebabyjesus (Jul 26, 2011)

BigTom said:


> agreed, but first off, let's get them thinking about whether austerity will solve the problem they see.. then when they are looking for the alternatives we can bring this in and argue that increasing the deficit for a period is the key to removing it in the mid-long term..


 
I'd go even further than that. It is highly questionable whether anyone should wish to ever get rid of the deficit. It serves the same function as the rising housing market served in previous years - which had the effect of increasing the private sector 'deficit' - exactly the same function within the economy: that of increasing the money supply. 

Restricting the money supply causes economic disaster - it causes the economy to seize up. But increasing it through extension of the collective debt rather than extension of privately held debt would seem to me to be a rather desirable thing to do. There is a case for maintaining a permanent public-sector deficit.


----------



## Divisive Cotton (Jul 26, 2011)

fucking hell if you watched the bbc's main report on this you'd have thought it signalled economic success not failure


----------



## magneze (Jul 26, 2011)

It was 0%, but Osborne decided to buy a new yacht yesterday.


----------



## London_Calling (Jul 29, 2011)

This is a decent interactive chart showing UK debt-to-GDP ratio over the middle term, and in an international context; click countries to include  in the graph:

http://blogs.wsj.com/economics/2011/07/27/downplaying-a-u-s-ratings-downgrade/tab/interactive/


It's IMF data, and obv. includes growth projectons that will have to adjust according to who is Chancellor/in power.


----------



## toblerone3 (Nov 1, 2011)

Growth soars to 0.5% in third quarter.

http://www.bbc.co.uk/news/business-15535518


----------



## krink (Nov 1, 2011)

phew! that's good news. we can all relax now


----------



## ayatollah (Nov 1, 2011)

Another "interesting" factor in the lead up to what looks very much like a double dip recession, is the pretty solid signs that China is in severe danger of having its own property bubble collapse. Yep that is the same "Miracle dynamo economy" which Western economists seem to think can pull us all out of a recession AND fund the Eurozone !

Quite why (some) western economists think an economy almost entirely geared to producing and selling stuff to US in the West (in return for our dodgy bonds --- SUCKERS !!!) can somehow become a major market for western (non raw material) EXPORTS , is quite beyond me .... but so many governments and their advisors still hope that it will be so .

Nope , looks like the World is slipping into a real 1930's LONG DEPRESSION - mainly self inflicted, because of the crap neo Liberal economics pursued by national governments and the IMF (which even Keynsianism long ago rubbished) - that when faced by national debt , each government should cut its spending "to balance its budget" ... like a wee household. WRONG ! In a recession governments on a world co-ordinated scale have to get GROWTH going again by deficit spending EVEN THOUGH THIS INCREASES DEBT in the short term.

Tough times ahead.


----------



## OneStrike (Nov 1, 2011)

Just a small observation.  With growth so slow over the last 12 months and net immigration quite high, per capita GDP growth is clearly lower than GDP.


----------



## ferrelhadley (Nov 28, 2011)

> 10.29am: The OECD said that public spending cuts, falling household consumption and weak exports had all weakened the UK economy, leading to its prediction of a double-dip recession.
> The OECD forecasts come just a day before chancellor George Osborne delivers the autumn statement in parliament, accompanied by economic growth forecasts from the independent Office of Budget Responsibility.
> Looking at the detail of the predictions, the OECD estimates that the UK will shrink by 0.1% in the last three months of this year, and then by 0.6% in the first three months of 2012 (a recession being commonly defined as 'two consecutive quarters of negative growth').
> The Paris-based agency said that that Bank of England should expand its quantitative easing budget again, to £400bn (from £275bn at present).
> The OECD also predicted that the UK unemployment rate will rise to 9.1% by 2013 (up from 8.3% today), leading to an increase in social problems and homelessness.


----------



## ViolentPanda (Nov 28, 2011)

It'll be interesting analysing the spin Osborne's advisers put on this.


----------



## London_Calling (Nov 28, 2011)

Whatever he says, he's more or less exactly where he wants to be; a tweak of £5 bill on infrastructure and £400 mill on housing is like a finger of adjustment on the tiller of the good ship Etonian Ideology.

The point is, he is still largely in control - as much as you can be in the modern world. Nothing has happened to change that.


----------



## Kaka Tim (Nov 28, 2011)

So do the urban75's 73 amatuer economists get a nobel prize?

Cos pretty much all the 'experts' said double dip was 'unlikely'. Just like 'nobody' forsaw the economic crash, apart from loads of ordinary people talking about it down the pub and on forums like this.


----------



## magneze (Nov 28, 2011)

London_Calling said:


> Whatever he says, he's more or less exactly where he wants to be; a tweak of £5 bill on infrastructure and £400 mill on housing is like a finger of adjustment on the tiller of the good ship Etonian Ideology.
> 
> The point is, he is still largely in control - as much as you can be in the modern world. Nothing has happened to change that.


The "extra" £5bn is in the form of more cuts. So he's solving the problem created by cuts by ... more cuts.


----------



## free spirit (Nov 28, 2011)

> _The Paris-based agency said that that Bank of England should expand its quantitative easing budget again, to £400bn (from £275bn at present)._



fuck quantitative easing.

As far as I can see the only concrete things QE has achieved is a major contribution to a 5% rate of inflation, and huge bank bonuses and profits, from the money injected into the financial markets via QE.

What we need is major up front infrastructure investment in renewable energy, and energy efficiency, and investment in manufacturing capability in those areas so that as much of the investment as possible can remain in the UK, and the UK can export this tech. None of this will cause any problems with our debt rating as it will increase the countries collateral upon which the debt ratings are partly based, and will lead to growth, jobs, increased taxes, decreased welfare spending, improved balance of trade figures etc etc

How fucking far down this false debt crisis / austerity spiral do we have to go before this idiotic economic ideology is finally kicked into touch?


----------



## Kaka Tim (Nov 28, 2011)

And a major social housing biulding programme - with the building firms required to take on youngsters as apprentices.


----------



## free spirit (Nov 28, 2011)

Kaka Tim said:


> And a major social housing biulding programme - with the building firms required to take on youngsters as apprentices.


yep - preferably to be council owned.


----------



## ferrelhadley (Nov 29, 2011)

free spirit said:


> What we need is major up front infrastructure investment in renewable energy, and energy efficiency, and investment in manufacturing capability in those areas so that as much of the investment as possible can remain in the UK, and the UK can export this tech.


What we are getting is £5 billion a year to go into roads among other projects.


> Chancellor of the Exchequer George Osborne will present a 30 billion-pound ($46 billion) program to finance the construction of roads, railways and infrastructure projects as he tries to stop the British economy sliding back into recession.


Link

Apparently financed by drawing money out of tax credits. It will not be going into projects till April. Our GDP is something like £1350 billion. Now the chacellor wants to move £5 billion from one pot to another to stave off recession.
This is the bit I love


> The decade-long plan,



and then there is this



> In Tuesday's pre-budget statement, Osborne will hand out about £250m of taxpayers money to steel, cement, chemical and other industries that use a lot of power. The main aim is to "protect" them from the European Union's emissions trading scheme.
> This is beyond parody: the shameless industrial lobbying in Brussels so weakened the EU ETS that the energy-intensive giants are already wallowing in an estimated €4bn windfall of carbon pollution permits. The European Commission estimates this will rise to €7bn-€12bn by the end of 2012.
> But these colossal cash mountains would be enough to keep jobs in those companies safe, you might think. You'd be wrong. In May, Tata Steel announced it was sacking 1,500 workers in the UK and blamed "EU carbon legislation". At the same time, Tata had banked almost €400m of free money from EU carbon legislation. As a very senior UK businessman said to me: "Powerful people pretending to be victims is really, really offensive."


Link

The loan guarentees for small businesses are likely to be used to underwrite the already safe customers or just extend existing credit facilities for well financed new businesses.

At a guess the rail section of the infrastructure will be to accelerate Crossrail back towards its original timetable and maybe some electrification projects. Fair enough there. That and perhaps money for HS1.

But a load of it is likely to be swallowed up by the motorway widening schemes underway, uncluding the M25.

While the Germans are buying into UK ocean power technology.


> Siemens is raising its equity stake in an company developing tidal energy plants, a sign the technology is gaining mainstream attention.
> Siemens raised its stake in UK-based tidal energy developer Marine Current Turbines from less than 10% to 45%, because it likes the predictability of ocean energy, reports Technology Review.
> While solar and wind farms find it hard to project the next day's output, the gravitational pull of the moon and sun couldn't be more reliable. It can calculated centuries in advance, Michael Axmann, CFO for Siemens's solar and hydro division told Technology Review.
> This low volatility increases the value of the energy produced, making it less risky for investors and operators.


A technology we will no doubt be buying back form them in a decade or so as we scramble to make up for lost time.

Oh and the housing measures are pretty ace as well. 50% reduction if you buy your council house and the councils are not to get most of that anyway.
And off course there is the guarentee for 95% mortgages for first time buyers. I have not yet seen the small print but it is likely to mean the top tier of first time buyers will be able to buy bigger houses, not that the median first time buyer is likely to see that 95% mortgage. Its a sop to the house building industry as it can only be used for newbuilt houses.


----------



## Kaka Tim (Nov 29, 2011)

Great. Nicking poor peoples tax credits (which will lead to further contraction of the economy) to chuck some bunce to his mates in the construction industry.


----------



## goldenecitrone (Nov 29, 2011)

ViolentPanda said:


> It'll be interesting analysing the spin Osborne's advisers put on this.



It will all be blamed on Labour's profligate spending and the collapse of the Eurozone. But George has heroically managed to protect us from the worst of these stormy economic seas. I reckon.


----------



## ViolentPanda (Nov 29, 2011)

goldenecitrone said:


> It will all be blamed on Labour's profligate spending and the collapse of the Eurozone. But George has heroically managed to protect us from the worst of these stormy economic seas. I reckon.



That's the obvious move, sure, but (at least to my thinking) if they do that, then those particular excuses (and they *are* very obviously excuses rather than reasons) lose potency in future travails. (new) Labour managed to milk blaming the Tories for over a decade once in power. I'm not sure even a dullard like Osborne would want to use up a prime resource so quickly, especially given his not-very-favourable record in steering our economy.


----------



## ferrelhadley (Nov 29, 2011)

goldenecitrone said:


> and the collapse of the Eurozone.


Link


----------



## kabbes (Nov 29, 2011)

Lots in the news about how "pension schemes" were going to pay for these road-widening bonanzas.

As a supposed professional expert in things like pension schemes, I am confused as to the manner in which this is supposedly going to happen.  And the kabbess is _specifically_ an expert in pensions schemes and she didn't get it either.

I guess we're going to have to read the actual detail to find out what they mean.  But on the face of it, it sounds like horseshit.  Expenditure on public infrastructure does not have a direct investment return for the private investor unless that infrastrucure starts charging a walloping great fee for its use.  Are we looking at the M25 having two toll lanes or something?

Anybody already looked into this and figured out how they've managed to spin this line?


----------



## ferrelhadley (Nov 29, 2011)

Apparently it is a variation on PFI but for the pension schemes.


----------



## kabbes (Nov 29, 2011)

So it isn't really pension schemes paying for it then, any more than it would be if the government sold gilts to pension schemes and then used the money raised to pay for it.  Which is what happens with government projects anyway.


----------



## bignose1 (Nov 29, 2011)

Will a double dip recession mean Greece wont be able to produce humous and taramasalata


----------



## MellySingsDoom (Nov 29, 2011)

bignose1 said:


> Will a double dip recession mean Greece wont be able to produce humous and taramasalata



You're not taking enough pitta on this very serious issue   This economic falafel is no laughing matter, sir.


----------



## bignose1 (Nov 29, 2011)

MellySingsDoom said:


> You're not taking enough pitta on this very serious issue  This economic falafel is no laughing matter, sir.


Ouzo does it, olive it out... but thanks for halouminating the problem...no athens taken


----------



## MellySingsDoom (Nov 30, 2011)

bignose1 said:


> Ouzo does it, olive it out... but thanks for halouminating the problem...no athens taken



No probs - we need to take the Parthenon of least resistance in these matters, and let's face it. there's never a dolmades moment when it comes to the Greek economy - it's all in the eye of the beholder, or within the retsina, if you will.


----------



## Wolveryeti (Nov 30, 2011)

Financial pundits are said to be predicting a moussaka when markets open tomorrow.


----------



## ayatollah (Dec 1, 2011)

Beware of Greeks bearing gilts.


----------



## ayatollah (Dec 1, 2011)

On a more serious note though, Double Dip Recession it almost certainly IS , which whilst giving all us  clever bastards who predicted it on here ages ago some considerable bragging rights... is also kinda scary. I don't know about youse but  I'm getting a distinct 1930's Deja vu feeling about all this - can a massive revival for George Formby be far off ?

And thanks to that panic monger  bastard from the Bank of England with his helpful "Brace yourselves" advice,  the "better half" is now insisting that we start holding large amounts of our vast wealth in CASH, ready for the cash machines to run dry when the Eurozone implodes in the near future. It'll be strategic stocks of SPAM next !


----------



## goldenecitrone (Dec 1, 2011)

ayatollah said:


> On a more serious note though, Double Dip Recession it almost certainly IS , which whilst giving all us clever bastards who predicted it on here ages ago some considerable bragging rights... is also kinda scary. I don't know about youse but I'm getting a distinct 1930's Deja vu feeling about all this - can a massive revival for George Formby be far off ?



Not that far.


----------



## audiotech (Dec 1, 2011)




----------



## taffboy gwyrdd (Dec 2, 2011)

Didn't answer. With respect, it's a false premise of a question. We are in a long term historical depression with very minor upward statistical blips which can't really be trusted anyway. Talk of staving off "double dip" has served a propaganda function to divert us from this and make us think we weren't still essentially in recession, which we clearly are.

ETA: note how "they" are talking about another credit crunch now. It's fucking hilarious how stupid they think we are. They spooned out scores of billions of funny money to "get the banks lending". Oh look, they kept it all, minus fees and bonuses. So long suckers, they know resistance won't add to a hill of beans and even if it does they will just abuse the vagueness of the Public Order Act to clobber people.

Oh, and the latest Keiser Report is superb as usual

http://www.youtube.com/watch?v=v5qomm4g2rk


----------



## audiotech (Dec 2, 2011)

$7.7 trillion in the US alone was spooned out, mostly in secret and then to cap it all it turns out now that MF Global, a major broker and derivatives dealer, even began dipping into their own customer accounts (there will be others) for their own nefarious activities. Now with the US and EU member states insolvent, with EU states teetering on the brink of collapse, it promises to be a new year when to many people the mattress on their bed starts to look like the safest place to deposit their hard earned savings.


----------



## ferrelhadley (Dec 2, 2011)

ayatollah said:


> On a more serious note though, Double Dip Recession it almost certainly IS ,


Its not even a double dip. It will be closer to at least a decade of low growth and drops back into recession or quarters with contraction.
It is possible that we may avoid a technical recession, two quarters of contraction but growth is so low that for many it will be indistinguishable. This is the so called 'L' shaped recession that was discussed in 2007-2009. Many people felt that the US (and the west) was headed their because it was repeating the mistakes of Japan in the 90s. That is when the property market collapsed the banking system was left under capitalised for too long. This was very aggressively addressed over the past 3 years with all the money being created for the banking sector. But the strong suspicion among many, now including the likes of Paul Krugman and Dr Doom Roubini is that this in itself is not enough to recover from the crash. That there is too small a portion of wealth in the hands of the workers in the west and that this and other social changes will inhibit spending and growth. Real wages have been near stagnant or falling for a long while now. The credit boom masked this trend in reducing wealth as people who had houses were able to refinance and use that money to spend in the economy creating jobs. When the credit boom ended decades of stored up trouble began to unwind. Some of this was addressed like the collapse in the value of assets held by banks, they need assets so they can lend money. But other issues were also exposed. People no longer had rising assets in there 'portfolios', i.e. houses were falling rapidly in price (except the UK where they have barely clung on) so the lack of savings for retirement were exposed. The assumption was when you retire you simply sell your house for a smaller one and live off the procedes. Now people in their 40s, 50s and 60s are having to save the more conventional way. Whats more the actual pensions most thought they had have been reduced and they will have to save even more to make up for that.

American specific problems cover healthcare where the very high costs now mean people have to sink increasing amounts of their personal wealth into cover for illness. This also reduces the velocity of money and slows the economy. From a government perspective the problem is that the infamous pig in the python is approaching retirement. The baby boomers are getting to ages where they qualify for government medical cost cover. This means in the coming years far more money will be going to medical cover leaving less for others.

Another set of problems at the other end of the demographic is the lack of young workers coming into the labour market. This is actuall the same thing that happened to Japan 20 years ago, where they have also experianced a similar demographic change. This means that the number of people working and earning tax vs people retired is likely to fall. So the burden of earning vs spending on retirement will fall heavier on the earning. Part of this is that many countries state pension fund was not run as an investment but money was spent when it was collected.

All of this is happening while the western economies lose manufacturing to cheaper markets creating gaps in trade balance. Western economies have made up this gap in part by service sector growth. Instead of buying t-shirts which were expensive by a reasonable portion of the cost went to local workers to buy more tshirts, we had tshirts wher the costs were low and the difference was spent on starbucks where some of the money went to local worker who then bought tshirts (and sometimes starbucks). But the labourers from the new ecnomies are not being paid enough to make up the gap, so there is a real deflation in worker earnings. [it all ties together].

And offcourse there is the uncut side of things. That is that corperations and wealthy individuals have massively reduced the amount of their earnings they pay to western governments. This has placed great pressure on western economies. The response to which has been.... yep cuts in workers income, cuts in worker numbers, cuts in pensions.

And now we have the attacks on education. The private sector recieves a huge, staggeringly huge, subsidy form the state in terms of its cost of labour by having had a high quality, near free, education system. You can get engineers, computer coders, economists, lawyers, graphic artists, accountants, translators, network technichians and on and on avaialble from the UK labour market who have had only a small amount of debt to pay of for their skills. Now the pool of new skilled talent is to be shrunk and the costs that talent have to contribute to their skills will massively increase. At the high end this may not have much impact. But economies are not built solely on top talent. Shrinking the number of people who are not firsts from Oxbridge by 2:1s and 2:2s from former pollys will mean that eventually the supply will start to exceed supply and costs will go up. Britain will become a less skilled workforce and lose out to those contries still investing in its work force. Although individuals will be able to demand more money the total amount of skilled labour will fall so quite possibly reducing again the amount of money the labour force has to spend and they have to  spend much of that paying down debts, so they cant save to buy housing which means they will be having to pay money to older wealthier land lords etc etc etc etc.

The entire structure of the western economy is in a pretty weak shape. We are not set out for years of fast growth. The emerging economies may be able to grow or may also suffer as less demand for new goods cannot be replaced by local demand. That is still and unanswered question.

Thats without looking at the urgent need to completely change our infrastructure to meet peak oil and climate change, but then again the irony is that meeting those problems can solve some of the above problems. But as we are not about to set out to solve any of these issues we can look towards several more years of low growth followed by recessecions as we stumble through a set of playbooks written for a world of ultimately limited labour markets.

Here is a graph that illustrates the what has been said.

In previous recessions pent up demand from people being afraid of their jobs, businesses that they would survive, ment that when a recovery looked underway people who had gotten out of the recession in one piece went out and bought what they wanted. This created a big surge in demand and factories had to hire to produce and hired people had jobs so they could spend. Previously recessions had a miniboom built into them. But in 2001orders were going outside the economy and the boom took its time until the housing boom hired people. Now the resumption in demand after the trough has not appeared, or at least it largely left the economies of the west and went east. All the economic theories seemed to have not understood that what worked in the past no longer works. I believe that Gideon and co think that cuts saved previous recessions and Gordon and co that it was spending.

We are running our economies to a play book that is out of date.

Offcourse all of this is just my opinion and you can bet there will be people very keen to tell me how wrong I am and that their hobby horses are the real reason etc etc etc.


----------



## ayatollah (Dec 2, 2011)

A very well reasoned and (to me anyway ) pretty convincing set of arguments,  ferrelhadley.. so to precis your position... "we are well and truly up shit creek"... longterm.

I particularly liked your  examination of the various aspects of the lack of effective demand problem -- which of course all the austerity measures are going to  merely end up "digging the hole ever deeper".

I also strongly suspect that just to "put the tin lid" on everything, the neoLiberal economists "poster boy economy" of China will soon implode as a result of both its own property bubble, the collapsing export market, and of course its own internal lack of domestic demand to sustain the gap created.

Nail biting times ahead (for protein if nothing else).


----------



## 100% masahiko (Dec 15, 2011)

http://news.sky.com/home/business/article/16130848

Even Santa can't save the day.


----------



## Quartz (Dec 15, 2011)

ferrelhadley said:


> And now we have the attacks on education. The private sector recieves a huge, staggeringly huge, subsidy form the state in terms of its cost of labour by having had a high quality, near free, education system.



Is this part of your argument true? Companies pay taxes which - in part - fund the state education system.


----------



## Streathamite (Dec 15, 2011)

Quartz said:


> Is this part of your argument true? Companies pay taxes which - in part - fund the state education system.


yes, but the Uk has lower corporation tax - and more legal tax avoidance - than just about every other major economy


----------



## yield (Jan 25, 2012)

UK in recession says Item Club economic forecasters
BBC News 16 January 2012.


> The UK may have already slipped back into recession, economic forecaster the Item Club has warned.
> The think tank said gross domestic product shrank in the final quarter of last year and would contract again in the current three-month period.
> It said that even if the eurozone could resolve its problems the UK economy would grow by just 0.2% this year.
> It also predicted unemployment would rise by a further 300,000 to just below three million people.
> ...


I'm sure we'll hear officially soon.

Of course some of the inflation was caused by quantitative easing.


----------



## Falcon (Jan 25, 2012)

It is a sad process to watch. Easter Island was once richly wooded. The islanders needed the wood for fuel but, more importantly, they needed it for making boats because that was the only way to catch fish, and they needed to catch fish because the land didn't supply enough food.

They cut down all the trees. At some point, some benighted islander will have turned to his dim pal, pointed to the last tree, and said the equivalent of: "We are probably in technical recession". Then chopped it down. They promptly died of starvation and cold. They are the original deservers of the Darwin Award.

We aren't a grass skirt wearing, stone age society. Which somehow makes the stupidity and hubris even more appalling.


----------



## littlebabyjesus (Jan 25, 2012)

Not sure how much inflation qe has caused tbh. The tragedy of qe is that it has affected the economy so little. There were so many better things to do with that money

I voted no on this poll originally and it looks like I may be proved wrong. The idiotic thing is that there was - still is - absolutely no need for a double dip. The stupidity of it simply astounds me.


----------



## Falcon (Jan 25, 2012)

littlebabyjesus said:


> I voted no on this poll originally and it looks like I may be proved wrong


Looks like it.


----------



## toblerone3 (Jan 25, 2012)

Technically not a double dip yet but an L-Shaped recession. However if George Soros and Max Keiser are right it will happen.


----------



## Falcon (Jan 25, 2012)

> The huge reserves of coal, oil and gas held by companies listed in the City of London are "sub-prime" assets posing a systemic risk to economic stability, a high-profile coalition of investors, politicians and scientists has warned Bank of England's governor, Sir Mervyn King...billions of pounds of fossil fuel reserves will rapidly lose value and cause a "major problem" for institutional investors and pension funds...The letter's authors point out that "five of the top 10 FTSE 100 companies are almost exclusively high-carbon and alone account for 25% of the index's entire market capitalisation"
> 
> - Guardian "Fossil fuels are sub-prime assets, Bank of England governor warned"



So if they don't price carbon, we will enter irreversible climate change in five years. If they do price carbon, 25% of the UK stock market will become subprime assets.

This isn't about double dip.


----------



## littlebabyjesus (Jan 25, 2012)

know what, things change. Technology changes. Old is replaced by new. There is nothing to fear from a change to other sources of energy. We should be sinking our energies into it. And if oil companies fail then so be it. Let them, if they want to remain energy companies, lead the way in developing new energy sources. If they don't want to do that let them fail. We wouldn't oppose digital camera technology on the basis that it would harm kodak.


----------



## Kaka Tim (Jan 26, 2012)

littlebabyjesus said:


> know what, things change. Technology changes. Old is replaced by new. There is nothing to fear from a change to other sources of energy. We should be sinking our energies into it. And if oil companies fail then so be it. Let them, if they want to remain energy companies, lead the way in developing new energy sources. If they don't want to do that let them fail. We wouldn't oppose digital camera technology on the basis that it would harm kodak.



Yes a brand new abundant and cheap source of energy  will  magically appear out of thin air just as soon as those boffins put their minds to it. Bound to happen.


----------



## Falcon (Jan 26, 2012)

littlebabyjesus said:


> There is nothing to fear from a change to other sources of energy.


Well, there is the teensy inconvenience that 3 billion people got born in the last 100 years because we've been using a couple of hundred million years of sunlight to make plants grow faster, and that supply of energy carrier is now halving every 7 years.


----------



## Falcon (Jan 26, 2012)

.


----------



## ymu (Jan 26, 2012)

littlebabyjesus said:


> Not sure how much inflation qe has caused tbh. The tragedy of qe is that it has affected the economy so little. There were so many better things to do with that money
> 
> I voted no on this poll originally and it looks like I may be proved wrong. The idiotic thing is that there was - still is - absolutely no need for a double dip. The stupidity of it simply astounds me.


High inflation was due to commodity prices, not QE. As you say, precious little of that money made it's way back into the economy. We should have higher inflation targets anyway - best way to outrun the debt (as we did after WWII when the debt was ten times higher relative to GDP).

Krugman's written a lot on this. Not sure if anyone has in the UK - maybe Martin Wolff at the FT.

This article points out that inflation fears are all about making the rich richer, nothing to do with sound economics. Loads on his blog about the inflation bogeyman and the failure of inflation to explode as predicted (by the morons who got us into this mess and are determined to suck us dry instead of getting us out of it).


----------



## ymu (Jan 26, 2012)

Kaka Tim said:


> Yes a brand new abundant and cheap source of energy will magically appear out of thin air just as soon as those boffins put their minds to it. Bound to happen.


Nuclear, especially MOX, is the obvious medium-term answer. Expensive to build, but that's OK - we need the jobs.

Just not in earthquake zones, and not via corner-cutting private contractors.


----------



## Kaka Tim (Jan 26, 2012)

ymu said:


> Nuclear, especially MOX, is the obvious medium-term answer. Expensive to build, but that's OK - we need the jobs.
> 
> Just not in earthquake zones, and not via corner-cutting private contractors.



Will still come nowhere near to supplying enough energy to replace hydro carbons, nor will even the very best case scenarios for renewables. And you also hit limits of raw material production very quickly for things like solar panels and uranium for reactors. Thats why the world is in a slump.


----------



## ymu (Jan 26, 2012)

Kaka Tim said:


> Will still come nowhere near to supplying enough energy to replace hydro carbons, nor will even the very best case scenarios for renewables. And you also hit limits of raw material production very quickly for things like solar panels and uranium for reactors. Thats why the world is in a slump.


The world is in a slump because people no longer earn enough to buy what they make. Neoliberalism is self-defeating, but makes the tiny handful with the power to impose it so freaking rich they don't care.


----------



## Detroit City (Jan 26, 2012)

if you fuckers in the EU don't get your act together there will definitely be a double dip worldwide


----------



## ymu (Jan 26, 2012)

Tell the Germans. Not that the US is exactly blameless, banging the austerity drum so hard no one else can hear themselves think. The link between income inequality and global economic meltdown is pretty clear:


----------



## ska invita (Jan 26, 2012)

Detroit City said:


> if you fuckers in the EU don't get your act together there will definitely be a double dip worldwide


Too late, we're all going down together...


----------



## taffboy gwyrdd (Jan 26, 2012)

Latest Keiser Report as good as ever.

http://www.youtube.com/watch?v=16Dl3y-pR-4&feature=player_embedded


----------



## Falcon (Jan 26, 2012)

ymu said:


> High inflation was due to commodity prices, not QE.


Incorrect. Wealth is physical. Debt is an abstract proxy for wealth and its counterpart. Debt grows exponentially under the pressure of compound interest. The physical wealth it proxies cannot. Debt never dies. Physical assets wear out and fail. QE (printing money) is what you have to do when the gap becomes unendurable. Inflation is the result.

This stuff is like maths and reading - it requires whatever the energy equivalent is of numeracy and literacy. You can't just apply what you think you know about how the abstract debt system works to guess how the concrete physical one does. And you certainly can't do what most people do and ignore the physical system altogether and expect to have a coherent mental model.

This isn't a double dip recession, because this isn't a double dip energy deficit. You can't imagine there are any operations in the abstract debt system that make the slightest difference to the physical system

Speculating about how our ability to make digital cameras allows us to transcend physical reality, and how nuclear and renewables will solve everything without knowing (a) what the difference is between an energy _carrier_ like oil and and energy _source_ like the sun (b) how much energy 30 billion barrels a year of oil is (c) the things we do with oil that we can't do with electricity (d) how little net energy you get from nuclear after accounting for the energy costs of plant construction and operation, fuel acquisition and waste disposal and (e) how little net energy you get out of a solar panel and wind turbine in relation to the energy requirement of the infrastructure you need to make and operate and distribute it, is pointless.

If you haven't already, might I suggest the crash course or something similar?


----------



## ymu (Jan 26, 2012)

So how come high inflation preceded QE?





Your model is wrong. Unsurprisingly, as it is the one that crashed the global economy and is now pushing us into a sustained depression.

Useful article from Reuters on this debate.


----------



## Falcon (Jan 26, 2012)

ymu said:


> So how come high inflation preceded QE?



_*Oil constriction*_ -> inflation -> QE






Source: The Oil Crunch 2010, Fig 3.1

Saudi Arabia reached maximum production capacity on Ghawar in 2005. That eliminated global physical surplus oil production capacity for the first time in the oil era (there has been political constriction before, which is solvable). Demand drove the oil price up. Commodity price is a function of oil price, since oil is required in the production of all commodities. Energy and commodity price rises triggered the default on debt in the bottom tranche (low income mortgage holders couldn't afford petrol, energy, food AND mortgage repayment). Default cascade through the financial system triggered bank collapse (starting with Paribas). The Fed security graph you show was the efforts to stem further collapses and retain the liquidity of the system.

Note carefully the relative timing of the physical system and your abstract system. Physical preceded abstract. Your little graphs of abstractions (and conclusions) are meaningless without physical context.

Conventional Saudi crude costs $18 to produce. Unconventional (e.g. Canadian tar sand) crude costs $90. The conventional oil supply is halving every 7 years and is being replaced for the time being with unconventional oil, driving price up. Brent is now $110. You can grow economies with $40/barrel oil. You can't grow economies at $100. There are forecasts of $200 oil. The global economy has contracted to balance this higher price - this is the "recession". Depletion is a one way process - increasingly expensive replacement will drive the price to where the economy crashes again, or replacements will fail to maintain demand - and the economy will crash again. This is not, and never was, a "double dip" recession.

Krugman is a neoclassical economist. To a neoclassical economist, oil is a commodity. Since in reality oil is both the *prerequisite* for all commodities and inherently unsubstitutable, you can't be surprised that their musings are incoherent.


----------



## ymu (Jan 26, 2012)

Yeah - commodity prices are high because of peak oil, the knock on effect of oil prices on food costs, and speculation in food markets. Not because of QE. Expectations of runaway inflation due to QE never materialised - as Krugman correctly predicted.

All banked up with nowhere to go

Liquidity traps and Hawaiian shirts


----------



## Falcon (Jan 26, 2012)

ymu said:


> Yeah - commodity prices are high because of peak oil, the knock on effect of oil prices on food costs, and speculation in food markets. Not because of QE. Expectations of runaway inflation due to QE never materialised - as Krugman correctly predicted.


Inflation or deflation are operations in the abstract debt domain, and outcomes of policy decisions. You can inflate a crashing economy and you can deflate one. The only thing you can't do is grow one with policy - that requires energy.

QE is a symptom of the recession, and a product of policy, not a causal factor. You can conclude from QE that recession is ongoing. You cannot conclude anything about whether QE caused it. QE prolongs the moment before collapse, and intensifies the effects of collapse. That is as much as you can say. Krugman "predicted" the outcome in the same sense that you predict a coin toss.


ymu said:


> Your model is wrong. Unsurprisingly, as it is the one that crashed the global economy and is now pushing us into a sustained depression.


I don't think you have demonstrated your case yet, but I'm interested in how you sustain your view.


----------



## Kaka Tim (Jan 26, 2012)

The economic bubble burst in the first instance becasue of the collapse of the sub prime market, and this in turn exposed the weaknesses in other areas of the banking system and this then led to the undermining of national economies - like in the Euro zone - but the whole underlying driver looks to be global economic growth hitting the buffers of peak oil production. This is _exactly _what was predicted by the peak oil theorists (and the reason why I voted there would be a double dip).

The whole system is based on a belief in future growth, but that is fundemntally dependant on there being enough energy to fuel that growth.

So now economists and polticians are pulling levers trying to kick start/reboot the global economy but nothing is working. This is not like previous recessions where you have painful econhomic readjustment and then everything is tickity boo again.

Many many people have been saying for years that basing the whole social/economic system on constant growth is patently unsustainable because resousces are finite - and to then run that system at maximum capacity in order so that a tiny precentage of the population can accumualte an ever greater share of the wealth is as obsence as it is insane.

'Letting the wealth creators create wealth' was like putting 5 year olds in charge of the sweet shop - they've spunked the planets energy bounty on extra cars, mulitple homes, gizmos and tat whilst billions are born into poverty.

Well here we are. The cold bath of the second great depression.

There are still huge amounts of energy resources left, but we need to husband and share them fairly and sustainably (climate change has to be factored into this baleful equatiion as well) or we will end up in a dystopia of extreme poverty for billions whilst the super rich protect their ill gotten gains by violence.

Interesting times.


----------



## Falcon (Jan 26, 2012)

Kaka Tim said:


> 'Letting the wealth creators create wealth' was like putting 5 year olds in charge of the sweet shop


"Lunatics in charge of the asylum" is more apposite, I think, in a non-snarky way. With 5 year olds, there is always the appeal to rational thought, even if it takes longer, and we should not underestimate the natural wisdom that gets lost round about the time we enter the economic system as independent agents, and have out brain corrupted by marketing people with double-firsts in psychology.


----------



## littlebabyjesus (Jan 26, 2012)

Growth rates are strongly correlated with rises in energy consumption, but what is the causal link there? I would argue that the primary causal link is that energy consumption follows growth. It would be extraordinary indeed to see growth not correlated strongly to energy consumption, and at best there is a dialectical relationship between the two.

However, just as increasing the money supply does not necessarily cause inflation, increasing energy supply does not necessarily increase demand for energy. As much oil is pumped as there is demand for oil, basically.

As for QE causing inflation, I had a long argument with love detective over this, and he partially changed my mind - an increase in the money supply does not necessarily cause inflation, and Japan over the last 20 years is the case study for this. There is also nothing to say that increased debt levels a la Japan are not sustainable. For instance, overall debt in Japan is at 400 percent GDP: it represents four years' worth of labour value. But most pensions need debts that mature at a far longer rate than that, and indeed, if you look at the average maturity on these 400 percent debts, it is longer than four years. In other words, Japan is _not_ broke. It does not have a timebomb of unsustainable debt.

It's easy to mistake debt for something more than what it is - an arrangement between people. We have a rather bizarre model at the moment, in which GDP per capita in the UK is higher than it was 10 years ago, yet 10 years ago everyone thought we were doing fine and now we're 'broke'. This is, of course, nonsense. It is the model that is broke, a model that requires endless growth in order to provide returns to capital, which makes the rich ever richer and the rest of us stand still. With zero growth, the rich continue to get their returns and the rest of us get poorer.

That is what needs to be challenged. That is what needs to be changed. Nobody is 'broke'. We haven't sold the next generation down the river. It is not physically possible to borrow from the future. All that can be done is that promises that should not be made can be made. Well we need to break some of those promises: so far, it is the bankers whose promises are being kept; high time we started breaking their promises and keeping some of those made to the rest of us.


----------



## Kaka Tim (Jan 26, 2012)

littlebabyjesus said:


> However, just as increasing the money supply does not necessarily cause inflation, increasing energy supply does not necessarily increase demand for energy. As much oil is pumped as there is demand for oil, basically.



But now the demand for energy (mostly met by crude oil) has likely outstripped our capability to produce it. The evidence suggests that we are at, or just past, the peak of global oil production and other energy sources are far less abundant and less efficient and therefore more exspensive. Our abilty to turn the earths energy resources into 'wealth' has outstipped the earths ability to provide it. We've spunked millions of  years worth of stored sunlight (hydro carbons) in less than 300 years - and probably fucked the climate in the process.

Yes renewables will improve in efficiency and other hydro carbon sources will be become viable  - but thats because energy is now more expensive. We will increasingly struggle to meet global energy demand - probably for the next couple of decades. During that time we need to switch to a sustainble and more equitable social economic model or we are fucked. That transition is unlikely to be a smooth one.


----------



## littlebabyjesus (Jan 26, 2012)

Yes, I don't dispute that. However, we are not yet even beginning to take seriously the challenge of working out a post-fossil fuel future. And by 'take seriously', I mean thousands of billions of pounds' worth of investment worldwide. At the moment we're several orders of magnitude away from that. China leads the way in renewable R&D, but it's only in the lead because everyone else is so pathetic.

All I'm saying, really, is don't assume we're fucked before we've even tried to solve the problem.


----------



## Kaka Tim (Jan 26, 2012)

Well if they're was a ready alternative to crude oil we'd be using it. Even the best case scenarios for renewables (like covering the world with thousands and thousands  of wind farms) fall well short. The solution needs to be available now  - and it clearly isn't  - thats why we are in for a very bumpy ride for the next few decades.


----------



## Crispy (Jan 26, 2012)

All previous energy-source transtitions have happened well before the peak of the older resource, and have transitioned to a more useful resource. There is currently nothing in the world better than oil in terms of energy density, ease of storage and versatility.


----------



## London_Calling (Jan 26, 2012)

I'm still not overly comfortable with the question posed in the OP; this remains a managed position - it's the choice of the Etonians to keep approx. this balance between austerity and growth.

In my mind, 'a recession' isn't usually seen as a choice but something wider market forces force on a national economy.

Did anyone see Danny Alexander splutter last night when questioned on the Coalition's view that the euro crisis is hitting the UK economy; 'But latest figures show UK exports to the euro zone are increasing?' 'Emmm.. that's ...ahhh...well, what is hapening is...'. Tosser.


----------



## ymu (Jan 26, 2012)

Crispy said:


> All previous energy-source transtitions have happened well before the peak of the older resource, and have transitioned to a more useful resource. There is currently nothing in the world better than oil in terms of energy density, ease of storage and versatility.


Previous energy transitions didn't happen at a time when rapid technological change was the norm. And the global recession means massive excess capacity available for solving these problems. I'm not saying that the political will is there, yet - but it wasn't there for the New Deal/Post War Consensus in 1931 either. The 21st century version will include investment in energy technology and infrastructure because it is the only sane way forward. And sanity, for certain values of sanity, will prevail - eventually. Albeit with a high probability of some very nasty shit on the way.


----------



## kabbes (Jan 26, 2012)

For those interested in the constraints of growth, I HIGHLY recommend this talk that I went to this year.

It contains a lot of data, but also a lot of discussion about the implications of that data.  In particular, it focusses on the exponential growth of pretty much everything in the world that human's have touched and looks at where it may be constrained.

Oil is the 10-tonne gorilla of the talk, but there are other issues too.

It's interesting stuff!


----------



## kabbes (Jan 26, 2012)

For instance, these two graphs make for interesting reading about oil.  The former shows that although our oil production is still increasing, this is based on the exploitation of fields found some time ago, and that new fields really aren't being found the replace them.

The second graph looks at our oil use from a perspective not normally used, i.e. more of a geological timeframe.  It demonstrates that no matter how much we might want to quibble about whether the peak is in 10 years or 20 years or happened 2 years ago, the truth is that in anything other than the very short term, our use of it is doomed.


----------



## kabbes (Jan 26, 2012)

And this is the oil industry's own projection for future oil production.

Note how undiscovered future sites mysteriously _exactly _fill in the gap between what is known and what we currently produce, to happily end with a situation in which oil is not in decline.

Most of us were skeptical that they could actually achieve this miracle of mathematics!


----------



## kabbes (Jan 26, 2012)

And sorry for the bombardment, but these are the equivalent predictions made by the WEO going back to 2004.

Notice that every year, they have had to reduce their prediction of total future oil output.


----------



## kabbes (Jan 26, 2012)

Rather more contentious this, so I'll let it speak for itself.  The suggestion is that things are not as they were, so predicting growth based on history is a mistake:


----------



## Crispy (Jan 26, 2012)

kabbes said:


> For those interested in the constraints of growth, I HIGHLY recommend this talk that I went to this year.
> 
> It contains a lot of data, but also a lot of discussion about the implications of that data. In particular, it focusses on the exponential growth of pretty much everything in the world that human's have touched and looks at where it may be constrained.
> 
> ...



That's a decent summary of Limits to Growth. Always a sobering read


----------



## theCIA (Jan 26, 2012)

Falcon said:


> Well, there is the teensy inconvenience that 3 billion people got born in the last 100 years because we've been using a couple of hundred million years of sunlight to make plants grow faster, and that supply of energy carrier is now halving every 7 years.



its actually 4.5 billion in 50 years.


----------



## Falcon (Jan 26, 2012)

littlebabyjesus said:


> That is what needs to be challenged. That is what needs to be changed. Nobody is 'broke'. We haven't sold the next generation down the river. It is not physically possible to borrow from the future.


I take one of your sheep today and give you a sheep token. I tell you my son will pay your son a sheep. I eat the sheep, then die. An outbreak of scrapie occurs and all the other sheep die. Your son confronts my son with your sheep token.

I have borrowed from the future - I ate the sheep, neither your son nor my son have sheep.
My son and your son are broke. Yours has an inedible sheep token. My son has minus a sheep.
My son counterfeits a sheep token and gives it to yours.
Both your son and my son starve to death, yours clutching his tokens (now twice as abundant, therefore capable of purchasing only half a sheep each), both sold down the river.

You have confused the sheep tokens for the sheep. People who take their eye off the sheep do this all the time.

Replace sheep with oil, tokens with money, scrapie with depletion, token counterfeiting with QE. This is money 101.


ymu said:


> Previous energy transitions didn't happen at a time when rapid technological change was the norm.


Previous energy transitions have never happened when there has been no surplus energy. It is the availability of energy to enable technology, not the pace of technology, which is relevant.


----------



## littlebabyjesus (Jan 26, 2012)

You haven't borrowed from the future. You've used up resources in a way that is not sustainable. Now, yes, oil is like a sheep that's been eaten and not replaced.You've broken a promise.

But monetary debts don't change the scenario. The sheep token is useless as there are no sheep, so you write it off - throw it away. The promise is cancelled. What matters is what is happening in the real world to the real things whose value the tokens represent. And as I said, rash promises have been made. It is not possible to keep the promises to the banks and to the populace. So you break the promise to the banks. When two contradictory promises have been made, one of them has to be broken. But the day after a promise has been broken, the sun rises again.


----------



## Falcon (Jan 26, 2012)

littlebabyjesus said:


> When two contradictory promises have been made, one of them has to be broken. But the day after a promise has been broken, the sun rises again.


"Using up resources in a way that is not sustainable" as a substitute for "me using resource today that you would have used tomorrow" is a terminological inexactitude.

Weasel words.

"Breaking the promise to the bank" means "default on the debt that is required to fund the next generation's pension, health and social payments". You cannot simultaneously assert that you can break such a promise, and that you have not sold the next generation down the river.

Your argument is logically inconsistent.


----------



## ayatollah (Jan 26, 2012)

Falcon said:


> "Using up resources in a way that is not sustainable" as a substitute for "me using resource today that you would have used tomorrow" is a terminological inexactitude.
> 
> Weasel words.
> 
> ...



little baby jesus is of course quite correct, he (she?) has actually torn through the ideological veil ( or "complete bullshit" to coin a phrase) that deliberately conceals the reality behind resource usage and allocation and its direct relationship with the very unequal class-based ownership (and therefore rewards) structure of our capitalist society.

Falcon chooses to hide the massive systemic ROBBERY by the top 1% of the Capitalist elite of an extraordinary proportion of social production, behind his very own " weasel words" suggesting most "debt" relates to pensions and health and security payments. Undoubtedly quite a lot does - BUT the reality is that , as little baby jesus suggests, a rational society could simply cancel all existing debt as part of the seizure of the 1% 's class based unequal property ownership - and STILL provide perfectly good pensions and social security/health support for the rest of us ... because all this future resource allocation comes from CURRENT PRODUCTION, in the FUTURE. The only part of the "next generation" we definitely SHOULD "sell down the river" , "expropriate" , "wipe out as a class" etc etc -- is the parasitic super rich class, whose unlimited GREED has brought us to a world facing permanent recession, and even before the crash of 2008, condemned MOST of the world's population to hardship and poverty amidst plenty.

Sadly apologists for capitalism like Falcon simply can't see beyond their own ideological delusions , no doubt based on greedy self interest, to the real world beyond the class-based illusions of capitalist property relations.


----------



## littlebabyjesus (Jan 26, 2012)

They're not weasel words if you're trying to contextualise monetary debts.

With zero growth all debts can potentially be honoured. (I'm with Gessel here, btw, in that a promise/desire to defer consumption ought not automatically to lead to the investment growing - getting back the same value is itself a result.) Now we happen to have a system in which zero growth leads to the immiseration of the many and the enrichment of the few. But that is the fault of the system, and is not an inevitable result.

As for breaking promises to banks, that is very clearly a case of breaking promises to the few who continue to be enriched. It does not imply breaking promises to pensioners or the sick or the unemployed. The clearest example of this is QE. This goes to banks which use it to shore up their balance sheets. In other words, the money sits there and does nothing. There is an alternative.

Now I know you have been reading Steve Keen. Well he makes very clear that he distinguishes between 'good debt', which is creative and enables people to do things, and 'useless debt', which leads to asset bubbles and simply makes banks more and more money while enabling no economic activity at all. This useless debt funnels wealth upwards. It actually reduces the spending power of most people as they are saddled with ever-increasing mortgage payments or rent bills.

The proper place for 'good debt' to be administered is through the collective. German landesbanks are an example of this, and it is no coincidence that in Germany, housing is far more affordable and prices in shops are lower (one consequence of asset bubbles is that shop rents increase and the prices of goods and services go up). So when banks cannot keep their promises and come to the state for help, that help ought never to come in the form of assistance in propping up their failed businesses. It ought to come purely in the shape of a simple expropriation of the business. The state ought only to act as a guarantor of state-owned banks. Anything else is simply the socialisation of loss where profit remains privatised.

Keen also stresses that we should not be afraid of sovereign debt - it's the very best place for debt to be held. It is debts held at the level of the individual that are to be avoided, and in the UK today, personal debt is _still_ higher than sovereign debt. That is a situation that should never have been allowed to happen, and Keen's solution is an interesting one: give the money currently given to banks through QE directly to individuals, and mandate that they must use that money to pay down any debts if they have them. Essentially you create the money (print it, if you like) only for it to be immediately destroyed again. The banks' balance sheets are improved, but from the other direction.


----------



## ymu (Jan 26, 2012)

Absolutely! Why the fuck are private individuals paying interest rates of 6% (mortgages) to 250% (credit cards) to 2500% (payday lenders) when the government can borrow at 2% and pass the savings directly onto them? Same reason as we're paying 8% for PFI when it would be 2% if directly funded by government. Because it makes rich people richer at taxpayers expense.

Private banking is a fucking ridiculous idea. No sane democracy would allow it a monopoly.


----------



## littlebabyjesus (Jan 26, 2012)

ymu said:


> Absolutely! Why the fuck are private individuals paying interest rates of 6% (mortgages) to 250% (credit cards) to 2500% (payday lenders) when the government can borrow at 2% and pass the savings directly onto them? Same reason as we're paying 8% for PFI when it would be 2% if directly funded by government. Because it makes rich people richer at taxpayers expense.
> 
> Private banking is a fucking ridiculous idea. No sane democracy would allow it a monopoly.


Yep. And what I said about QE isn't quite right. At the moment it is being used to buy govt debt from banks - turning their lowest-interest loans into cash in the hope that they will lend at a higher rate of interest to individuals and businesses. What Keen's idea does is it leaves those low-interest govt debts in place, but it instead turns the banks' highest-interest loans into cash.

Banks would hate it. And as a general rule of thumb, what banks hate is generally good for the rest of us. 

btw Falcon, you are conflating two almost entirely separate things here: peak oil and the credit crunch. While it is noteworthy that the credit crunch was preceded by a spike in oil prices, and such spikes can indeed cause financial crises, this spike was not itself a result of peak oil, and the structural credit problems of the past 30 years are nothing to do with oil at all really.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> btw Falcon, you are conflating two almost entirely separate things here: peak oil and the credit crunch. While it is noteworthy that the credit crunch was preceded by a spike in oil prices, and such spikes can indeed cause financial crises, this spike was not itself a result of peak oil, and the structural credit problems of the past 30 years are nothing to do with oil at all really.


 I'm sorry, but there comes a point in any conversation where the gap in understanding is just too large to bridge. I don't actually mean to be rude. But this isn't really a matter of opinion, in the way that saying the response should be Keynesian or Monetarist would be, and there isn't a lot of room for debate. You simply don't know how money works yet and it is a notoriously treacherous area for armchair speculators.

Because you don't really understand what money is (a debt, secured against physical wealth), and how that debt has been created (against the physical wealth manufactured from oil), and what proportion of all current outstanding debt has been created in the expectation of future physical wealth (more than there is future physical wealth), you don't understand what the impact of peak oil (the rapid evaporation of the present and hypothesised future wealth) is on debt, and on the people in the future who's physical wealth we anticipated and appropriated. That is perfectly forgivable. Hubris - not so much. I can point you to a few accessible sources - try Chris Martenson's "Crash Course" for an accessible introduction.

But to give it one last shot. There are two completely different concepts. Because you have failed to grasp them, you are confused.

There is the system that comprises the exchange of sheep tokens. Within that system, there is SYSTEMIC ROBBERY, 1% CAPITALIST ELITE, GROTESQUE CONCENTRATION OF SHEEP TOKENS etc. Ayatollah can fill in the buzz words. It is all perfectly true and I agree with it 100%. That is not only what you are arguing about, but what you think is the only thing to argue about.

There is the system that corresponds to actual wealth. Physical stuff, in the precise sense of that which clothes you, feeds you, and keeps you warm in the winter.

The sheep token system is compelled to expand exponentially, because of certain sheep token operations ("interest"). The sheep system has maintained correspondence so far by *also* expanding exponentially. Sheep token systems *can* expand indefinitely, in the sense that there is nothing in their rules of operation that prevents it. Sheep systems cannot, in the sense that there are rules ("physics, ecology, etc") which prevent it. The substance which has permitted the sheep system to expand so far is oil, and that substance is depleting with no substitute. It has permitted it to expand so much that there are now very many more people who depend on sheep (not sheep tokens) to eat than there will be sheep when there is no oil. These, and your children, are the people you fondly hypothesise the sun rising on tomorrow after you do clever things with their sheep tokens.

The historical correspondence between sheep and sheep tokens is an accidental, not necessary, property. For as long as they grow at the same rate, correspondence is preserved. While correspondence is maintained, authentic (and now counterfeit) sheep tokens can still be exchanged for actual sheep -- just so long as not everyone wants a sheep. This creates the powerful illusion in your mind that sheep tokens ARE actual wealth. Differential growth inevitably erodes the correspondence. The sheep token system collapses. The reality that sheep tokens are not sheep rather brutally reimposes itself.

The preceding thread exchange consists entirely of speculation about operations between sheep tokens in the sheep token system. Sheep tokens cancel out other sheep tokens. Sheep token interest rates - 6%! OMG!! Quantitive Sheep Token Easing, etc.

You haven't grasped that issuing sheep tokens and issuing sheep are conceptually different. That the act of cancelling out two abstract sheep tokens doesn't cancel out the sheep. That moderating the sheep token interest rate doesn't generate any sheep. That you took those un-cancelled sheep from your children by consuming them today rather than leaving them tomorrow. And that when the sheep tokens cease to be exchangeable for wealth, however many of them 1%capitalisteliterobberbarons are holding ceases to be of any interest or relevance. (What you should be worrying about, dear ayatollah, is where the sheep are accumulating, not the sheep tokens, but since you can't distinguish it, you will find the next few years perplexing).

Please feel free to continue to hypothesise from the viewpoint of the sheep token system. But it is irrelevant to the matter in hand. You are arguing about the shadows on the cave wall. The recession is about the thing causing the shadows.


----------



## littlebabyjesus (Jan 27, 2012)

You've completely missed my point and started going on again about something irrelevant.

The credit crunch of 2007, preceded by an enormous growth in debt based on what were effectively ponzi schemes, was not caused by peak oil. This recession, which is real enough, is being caused by a breakdown in the money system - and that is having a real effect on the real system. Money doesn't exist for nothing, and when the system of money breaks down, that causes a seizure in the system. Again, nothing to do with peak oil.

You go tell a penniless person that the sheep token system doesn't matter. Of course it does. Get it wrong, and you fuck up the economy: people are not losing their jobs because of peak oil; people are not having their pay frozen because of peak oil; the national debt, private debt, business debt, the levels of taxation are NOT due to peak oil.

Peak oil is a serious problem, but it is utterly irrelevant to this discussion of the current recession.

You're right that the money system can expand in a way that does not match the real economy, that the two become detached. What you're describing there is the periodic boom and bust of capitalism. But that says nothing about the sustainability or not of the physical system. You seem to think that the debt crisis is due to unsustainable resource use. It really isn't.

To give you one indication of what I'm talking about, look at the way that wages have declined in relation to GDP over the last 30 years. Wages have been held down and people have been encouraged to borrow in order to fill the gap left by the shrinking wages and keep buying the goods they are making. But that is capital wanting to have its cake and eat it: wanting low wages but high consumption. So the debts are unrepayable, ultimately; and the only way to service them is ever-increasing loans. Then one day, confidence in the system is shaken, and those even larger loans are not approved. This ripples back through the system as loans are defaulted on and banks cannot cover their liabilities. So the ordinary worker, whose wage has been suppressed and has been forced to go into debt to get by, sees their assets (bought on credit, of course) seized from them by the very system that had been holding down their wage.

In short: recessions are caused by the system of tokens. That's capitalism, a process that you have entirely ignored in your analysis, and it would still happen if there were unlimited oil reserves.


----------



## Kaka Tim (Jan 27, 2012)

Falcon is right. The economy has real physical limits - unfortunately it has been run - and continues to be run - as if that is not the case.
That means growth is going to be - at best - severaly restricted for the forsseable future. it may be that in 30 years time energy efficiency and alternative energy sources improve to the point where growth can resume.

However the best case realistic scenario  - IMO  - is a world where consumption is reduced to sustainable levels but where everyone has their basic needs met and enjoys the  benefits of  technology (but on a sustainable basis)  - shorting working hours, car and technology sharing, less meat, recyling and repairing technology rather then throwing it away, more localised food and goods production, far fewer foriegn holidays - and this is only achievalbe if wealth inequality is tackled in a radical and meaningful way.

The worst case scenarios range from everyone but the very wealthy being thrown into poverty or where climate change meets peak oil in doomsday scenario - economic meltdown, mass starvation, collapse of industrial society.

For those who believe in an equal, free society it means we have to ram this point home becasue it kills dead the idea of capitalism as we know it. If there is no realistic prospect of sustained economic growth in the forseeable future - then all the guff about trickle down and wealth 'creation' is blown away. Yes humans have great skills of innovation - but history is littered with societies full of innovative people who's societies collapesed due to resource depletion or who never managed to progress beyond a basic level of technology because those resources were never there in the first place.

Humanity will need all its skills of innovation just to avoid a bad situation becoming catostrophic - vainly hopeing that we can magically go back to business as normal on the belief that some boffin somewhere will suddenly come up with a magic solution is not something I'm prepared to indulge in.

I first started reading about peak oil etc about 8 years ago, and the eveidecne has continued to stack up. All the counter arguments seem to be based on wishful thinking ('sceince will come up with something') based on no evidence whatsoever and/or dismissing it becasue the theory is being used to justify the arguments of the  neo-malthusians (like our very own Dr Jon) but thats like dissmissing darwin becasue his theories were used by eugenicists.

Since about 2006 I have found it very hard to motivate myself to plan for the future because this growing conviction that the world of consumer captialism is in its death throes - chocking on its own vomit but dragging us all down with it.

 I am not without hope but the seeming certanties of a world of sustained (if uneven and erratiic)  growth have evaporated (e.g. I see no point in having a pension - not that i'm in position to save much).

I sincerely wish that this was not the case (and i'm an optomist by nature)  and I would love to be convinced otherwise - but all the pro arugments seem to be based on hard science and the counter arguments are based on a combination of denial, ignorance and wishful thinking.


----------



## littlebabyjesus (Jan 27, 2012)

Kaka Tim said:


> Falcon is right. The economy has real physical limits - unfortunately it has been run - and continues to be run - as if that is not the case.


I'm not disputing that. That is not the reason for the debt crisis, though.


----------



## kabbes (Jan 27, 2012)

Indeed, the talk I linked to above noted that if

I = P x A x T

Where I = Impact, P = Population, A = Affluence (consumption per capita) and T= Technology (environmental impact per unit of consumption)

then...


----------



## Kaka Tim (Jan 27, 2012)

littlebabyjesus said:


> I'm not disputing that. That is not the reason for the debt crisis, though.



Im not sure - the peak oil theory were predicting an ecomomic slump right as we reach peak oil - and it comes along right on cue. The rise in comodity prices corresponded pretty much with the credit crunch. One argument I read  goes that we haven't had any _real_ economic growth for about 20 years and hence the switch to a debt based economy - i.e as a way of sidestepping the constraints of resource depletion/production limits. So yes it was a global ponzi scheme - but this came about preciseoly becasue of reaching the physical limits of growth.

Im not an economist - but the correlation of peak oil and ecnomic slump seems highly significent - esp as oil price and recession have been closely linked in the post war era.
Put it another way - if those boffins suddenly discovered that you could use sand to provide fuel and fertiliser the economy would take of like a rocket - credit crunch or no credit crunch.


----------



## littlebabyjesus (Jan 27, 2012)

The switch to a debt-based economy was essential if you wanted to hold down wages. Your analysis misses out the fact that wages have been steadily declining wrt GDP (real GDP - production of real things). That is not a result of resource depletion. It's the system by which the rich take an ever-increasing slice of the pie, and it can only happen if those whose wages are being suppressed are encouraged to borrow. It's an essential contradiction within the system - capital wanting to cut wages but increase spending.

What is needed to burst the bubble caused by this process is something to break confidence in the system. That something is often a spike in oil prices, and was in 2007 - irrc oil prices reached around $140 a barrel around the credit crunch. But if you look at the way that oil prices have fluctuated over the years, these huge fluctuations have essentially _political_ causes.

Also, if a cheap, clean, sustainable energy source were found, that would of course boost the economy. But we'd still have boom and bust. Other physical constraints on the economy would remain - water, land, food, etc. And the capitalist system of wage suppression/debt creation would continue.


----------



## ayatollah (Jan 27, 2012)

little baby jesus is COMPLETELY CORRECT , in his latest post, demolishing Falcon's Malthusian Straw Man yet again ! - I'm becoming a fan indeedy.

 Peak Oil is an eventually looming reality - at SOME point in the future - but the Malthusian "rigid limit on production - hence ideological justification for the impoverishment of the many TODAY" has so far ALWAYS proved to be a premature ideological position held for convenience by the capitalist ruling class. New oil discovery in the Arctic could easily shift the Peak Oil moment significantly into the future. This doesn't of course justify the current squandering of oil reserves TODAY. What is perfectly clear, as correctly stated by little baby jesus is that Peak OIL has ABSOLUTELY NOTHING to do with the current world economic crisis ... NOTHING at all. Capitalism is still pumping oil out of the ground as fast as it wants, it still has oil shale reserves to exploit . Capitalism operates on the short to medium term perspective - it, as a system, remains blithely unconcerned at some EVENTUAL end of oil reserves - this ISN'T factored into the current high price - which is simply inflated massively by pure parasitic speculative activity.

In a rational. planned society, "dead capital"  ie, money,  held  massively unequally as a reflection of the unequal resource ownership and power distribution of our social class based world would not be allowed to so skew PRODUCTION that so much of our renewable and finite resources were squandered on luxury goods ("Department 3" production for Marx) and military goods, whilst a large proportion of fellow humans on the planet starve. As Kaka tim also points out , even a non growing or static , but PLANNED, more equal, world economy would be perfectly capable of continuing to RAISE general living standards for MOST people. It is only the squandering of resources by the world kleptocratic elite which needs to be stopped to achieve this.


----------



## Crispy (Jan 27, 2012)

ayatollah said:


> New oil discovery in the Arctic could easily shift the Peak Oil moment *significantly* into the future.



No it couldn't.


----------



## littlebabyjesus (Jan 27, 2012)

Either way, ayatollah is right that capitalism as a system operates on the short term. The recession, whether double-dip or L-shaped, is not due to peak oil. It's due to all the same factors that caused Japan's L-shaped recession back in 1990. Conflating these two very important issues is a serious mistake.


----------



## Kaka Tim (Jan 27, 2012)

Arctic Oil and tar sands etc are only now being explioted because the cheap and easily available stuff is running out. And an abundance of cheap oil would enable humans to cope with other resource issues such as land and water - as it could provide fertiliser and power desalination plants.

And I dont see how peak oil is a convineint theory for capitalists as it kills their growth model stone dead.


----------



## littlebabyjesus (Jan 27, 2012)

Kaka Tim said:


> And I dont see how peak oil is a convineint theory for capitalists as it kills their growth model stone dead.



It could be a convenient scapegoat, though. Falcon is describing today's problems in terms of peak oil, as if today's recession were being caused by that, not by capitalism itself.


----------



## Crispy (Jan 27, 2012)

littlebabyjesus said:


> It could be a convenient scapegoat, though. Falcon is describing today's problems in terms of peak oil, as if today's recession were being caused by that, not by capitalism itself.


"Triggered" might a be a better way of putting it?


----------



## littlebabyjesus (Jan 27, 2012)

Crispy said:


> "Triggered" might a be a better way of putting it?


No. You can make a good case for saying that the crunch was triggered by a spike in oil prices, just as recessions have been before, but that spike was not a result of peak oil. The price of oil zoomed up to $140 a barrel. I don't know the causes of that - I'll go and have a look - but I'm willing to wager that they were political. After all, the price came right down again soon afterwards. And oil producers have for a long time managed production in order to manipulate prices.

ETA:

Prices hit their peak in the summer of 2008, after the credit crunch had begun, but coinciding with the beginning of the recessions in Europe. The cause: Libya threatening to cut output...

And then a little while later, Libya was invaded by foreign forces. No coincidence.


----------



## Kaka Tim (Jan 27, 2012)

littlebabyjesus said:


> What is needed to burst the bubble caused by this process is something to break confidence in the system. That something is often a spike in oil prices, and was in 2007 - irrc oil prices reached around $140 a barrel around the credit crunch. But if you look at the way that oil prices have fluctuated over the years, these huge fluctuations have essentially _political_ causes.
> 
> .



But these political casues had an big impact on oil prices because their effects could not be easily bypassed by the saudis (or others) simply turning on the taps - because they are already running at - or close to - maximum production.


----------



## littlebabyjesus (Jan 27, 2012)

Kaka Tim said:


> But these political casues had an big impact on oil prices because their effects could not be easily bypassed by the saudis (or others) simply turning on the taps - because they are already running at - or close to - maximum production.


I'm no expert in these things, but I would have thought that the best place to store your future reserves is in the ground. No point in pumping oil more quickly than demand, basically, so whatever the levels of oil consumption, oil production is not going to be much higher than that.


----------



## kabbes (Jan 27, 2012)

Arctic oil reserves aren't going to save us, for the simple reason that the energy it takes to get them out of the ground is close to the energy they give us by getting them out of the ground.  No point in getting a million barrels if you have used up 1.1 million barrels to get it.


----------



## Kaka Tim (Jan 27, 2012)

littlebabyjesus said:


> I'm no expert in these things, but I would have thought that the best place to store your future reserves is in the ground. No point in pumping oil more quickly than demand, basically, so whatever the levels of oil consumption, oil production is not going to be much higher than that.



But the price went up because supply could not keep up with the demand - there was no slack left in the system to cope with interruptions in supply - leading to an economic shock that popped the debt bubble. Exactly as the peak oil theorists predicted.
Now everytime the global economy starts to grow - commodity prices will shoot back up and the 'recovery' will splutter out.

To go back to the debt bubble - why were these sub prime mortages junk? Because the people borrowing the money could not earn enough to repay them, because of contractions in the labour market and wages not keeping up with the cost of living - becasue profits and prices were being hit by the cost of commodities and raw materials. The music stopped and the whole shebang went to shit.


----------



## littlebabyjesus (Jan 27, 2012)

Kaka Tim said:


> To go back to the debt bubble - why were these sub prime mortages junk? Because the people borrowing the money could not earn enough to repay them, because of contractions in the labour market and wages not keeping up with the cost of living - becasue profits and prices were being hit by the cost of commodities and raw materials. The music stopped and the whole shebang went to shit.



Wages had long been contracting as a percentage of GDP, to be replaced by an explosion of debt backed by an asset price bubble. Such debts can only be serviced by ever-increasing loans, and these ever-increasing loans depended on an ever-inflating asset bubble. An asset bubble depends entirely on _confidence_ - if enough people think asset prices will go up, they will go up, basically. It doesn't take much to destroy that confidence, and then you have the reverse situation - asset prices go down because enough people think they will go down.

But the way in which capitalism as a system asserted itself in the 1970s, destroying labour movements and suppressing wages, is absolutely crucial to understanding the credit crunch.


----------



## Kaka Tim (Jan 27, 2012)

Yes - and commodity price inflation (due to peak oil) was what destroyed that confidence.

And talking of the 70s - that was when we had the last oil shock, causing economic contraction and creating the dynamic for the attack on wages on labour movements.


----------



## kabbes (Jan 27, 2012)

I think you both capture something of the truth, tbh.  There's no reason why there can't be both short-term _and_ structural reasons for a problem.


----------



## littlebabyjesus (Jan 27, 2012)

The credit crunch was predicted by the likes of Steve Keen based on their analysis of debts and the way in which they were exploding. Something will - has to - come along to burst asset bubbles, for reasons Falcon alluded to: the money system has become disconnected from the real value system. That something is often oil price spikes (with political causes), but it doesn't have to be.

I can only repeat: the current recession is not due to peak oil. But saying that is not denying that the reality of peak oil and its massive consequences.

ETA:

I don't know if someone more knowledgeable than me can answer this question, but my guess is that maximum theoretical oil production capacity has never been much higher than oil demand. I see no reason why production capacity would ever race ahead of demand. Wells are only dug if it is anticipated that there will be a market for the oil, basically. If I'm right, then there has never been a large spare capacity in the system. If I'm wrong, then the recent spikes in oil prices may indeed partially be explicable by peak oil - peak oil plus politics, basically.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> In short: recessions are caused by the system of tokens. That's capitalism, a process that you have entirely ignored in your analysis, and it would still happen if there were unlimited oil reserves.


You've answered your own question.

If future reserves of oil were unlimited, then the behaviours that you have empirically observed taking place now under conditions of unlimited oil (recessions, capitalism, etc.) might reasonably be expected to endure.

Future reserves of oil are not unlimited.

Therefore the durability of the behaviours that you have empirically observed taking place now under conditions of unlimited oil is indeterminate.

My analysis pertains to the behaviours that can reasonably be expected in the future, when future reserves of oil are limited.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> I can only repeat: the current recession is not due to peak oil.






ayatollah said:


> Forget all the Malthusian "shortage of resources" stuff - it ISN'T the cause. The capitalist class' apologists are busy telling us that the crisis is due to all sorts of "our fault" reasons









I'm going to assert that you need to have a pretty powerful reality filter in place to maintain that assertion, given the strength of empirical contradictory evidence, and the coincidence of the timing. I missed out the "You are here" label on the postcard - I hope you can work it out.

Ayatollah - this exposes your inertia on this point. You need it NOT to be peak oil, to preserve the rationality of your argument that it is capitalism's fault. I can point out that this is not capitalisms fault without being an apologist for capitalism - what capitalism did with energy abundance while it lasted is an entirely different argument, and one in which we would probably find much common ground.


----------



## littlebabyjesus (Jan 27, 2012)

You're confusing me now a little. Is the current recession due to peak oil or not? If you think it is, I say that you are mistaken. The asset bubble was not caused by peak oil, and its bursting was simply inevitable. One cause or another was bound to come along.

ETA: Are you now saying that the recession was caused by fears of future oil production decline? Capitalism doesn't work like that: If investment X is likely to show a return within 2–5 years, it is a good investment, and to hell with the future – that's capitalism.

In the narrow sense of _Britain_'s current recession, its immediate cause is government stupidity/evilness.

The big thing lacking from every single one of your posts, from what I can tell, is an analysis of capitalism.


----------



## ayatollah (Jan 27, 2012)

Nope, as little baby jesus says, it just wasn't "triggered " by Peak Oil . It's a classic Long Wave , falling rate of profit capitalist crisis - "triggered" by the quite normal "end of Long Wave" speculative frenzy. Forget all the Malthusian "shortage of resources" stuff - it ISN'T the cause. The capitalist class' apologists are busy telling us that the crisis is due to all sorts of "our fault" reasons..... OUR soft featherbedded lifestyle of welfarism in the West, major shifts in the long term future of "The West" vis a vis "the EAST, an existential collapse in Western Morality, a shortage in oil , etc , etc. ANYTHING but a perfectly normal Long Wave cyclical systemic crisis of their capitalist system , which CAN be fought and transformed into a more rational social system by us the 95%. OR the capitalists can empty our pockets to keep their profits up as they seek a new long wave takeoff technology for their capitalist system


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> I don't know if someone more knowledgeable than me can answer this question, but my guess is that maximum theoretical oil production capacity has never been much higher than oil demand. I see no reason why production capacity would ever race ahead of demand. Wells are only dug if it is anticipated that there will be a market for the oil, basically. If I'm right, then there has never been a large spare capacity in the system. If I'm wrong, then the recent spikes in oil prices may indeed partially be explicable by peak oil - peak oil plus politics, basically.


For as long as there has been sufficient unmobilised resource in hand, you are correct. But the rate of discovery of new resource peaked in 1968 and has declined steadily. The bulk of today's production comes from reserves discovered 60 years ago

Put simply, you may choose for a while how quickly to sip from your beer glass. But the size of the beer glass tells you when you no longer have that choice. We no longer have that choice.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> The asset bubble was not caused by peak oil, and its bursting was simply inevitable


The asset bubble was explicitly caused by peak oil. It was the abundant cheap energy prior to peak that created the ultra cheap debt which removed any constraint on irrational investment in property. It was the expensive energy after affordable oil's peak which made the mortgages unaffordable.


----------



## littlebabyjesus (Jan 27, 2012)

I'm not denying the reality of peak oil, Falcon. I am saying that it is not the cause of the recent financial shitstorm.


----------



## littlebabyjesus (Jan 27, 2012)

Falcon said:


> The asset bubble was explicitly caused by peak oil. It was the abundant cheap energy prior to peak that created the ultra cheap debt which removed any constraint on irrational investment in property. It was the expensive energy after affordable oil's peak which made the mortgages unaffordable.


And the role of the capitalist system in suppressing wages and making the spare wealth due to wage suppression available to those same workers in the form of credit?

A critique of capitalism is crucial to this. By your reckoning, the whole world should suffer recessions at the same time. It doesn't. Britain is hitting the same debt contradictions now that Japan hit in 1990. Japan's slump was not caused by peak oil, and neither is Britain's.

The difference between Japan and Britain is that Japan's debt crisis was primarily the result of over-inflated business debt. Britain's crisis is primarily the result of over-inflated household debt. The big lie in all of this is that it is a sovereign debt crisis. It is not. It is a private debt crisis.


----------



## yield (Jan 27, 2012)

kabbes said:


> I think you both capture something of the truth, tbh. There's no reason why there can't be both short-term _and_ structural reasons for a problem.


What kabbes said. Strong demand with flat production plus financial speculation equals price spike.


----------



## littlebabyjesus (Jan 27, 2012)

yield said:


> What kabbes said. Strong demand with flat production plus financial speculation equals price spike.


That financial speculation has political causes, though. In the case of the recent spike, the political cause was grandstanding by Libya.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> And the role of the capitalist system in suppressing wages and making the spare wealth due to wage suppression available to those same workers in the form of credit? A critique of capitalism is crucial to this.


A critique of capitalism is crucial in understanding the historical suppression of the wages enabled by the historical massive draw down of fossil energy.

A critique of capitalism would be crucial in understanding the future suppression of the wages enabled by any future massive draw down of fossil energy.

A critique of capitalism is entirely orthogonal to any understanding the consequences of the failure of future massive drawdown of fossil energy.


----------



## littlebabyjesus (Jan 27, 2012)

Falcon said:


> A critique of capitalism is crucial in understanding the historical suppression of the wages enabled by the historical massive draw down of fossil energy..



Wages were suppressed primarily through the crushing of labour movements. In Britain, a crucial role in that crushing was played by the_ closing down_ of coal mines!

It was a battle, basically, and the workers lost. You could argue that capitalism also lost in that strong worker movements kept wages up and stopped the internal contradictions of asset bubbles from being created. The behaviour of the system as a whole - comprising as it does individuals all acting in their own perceived self-interests - can often act against that system's interests. Such is the case with capitalism: crush labour movements, suppress wages, use the increased profits to make loans to workers so that they continue consuming the products they make. Short-term this is very attractive; long-term it is catastrophic.


----------



## Crispy (Jan 27, 2012)

Falcon said:


> A critique of capitalism is crucial in understanding the historical suppression of the wages enabled by the historical massive draw down of fossil energy.
> 
> A critique of capitalism would be crucial in understanding the future of the wages enabled by any future massive draw down of fossil energy.
> 
> A critique of capitalism is entirely orthogonal to understanding the future unavailability of a massive drawdown of fossil energy.



I don't think any of us are denying this. When oil depletion really gets its boots on, all bets are off, new paradigm, burn your paper money to keep warm etc.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> I'm not denying the reality of peak oil, Falcon. I am saying that it is not the cause of the recent financial shitstorm.


You are inviting us to violate the principle of Occam's Razor and accept that, given an empirically likely explanation, and an alternative explanation that is not only less likely but specifically falsifiable by the empirical explanation, we should accept the the less likely one - and that the fact that the less likely one supports your political view is not a factor.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> The behaviour of the system as a whole - comprising as it does individuals all acting in their own perceived self-interests - can often act against that system's interests. Such is the case with capitalism.


All of which has as much relevance to the fact that the supply of oil failing as it does to the tide going out.

There is no political configuration or alternative distribution system that you could propose that could alter the fact that there was 2 trillion barrels of oil, we've used half, and the remaining half is so hard to access that a system fatally weakened by dependency on its easy access is failing.

While I refuse to engage in political debate, you can hardly point to anti-capitalist alternatives as evidence it might have been otherwise - the worst energy efficiency we ever achieved was under communist regimes.

The lithosphere doesn't care too much about your political preference.


----------



## Crispy (Jan 27, 2012)

I don't quite understand, falcon. One post you're saying that the two things (peak oil, capitilasim screwing itself up) bear no relevance to each other. The next, you're berating LBJ for saying that capitalism's recent self-destruction has nothing to do with peak oil.


----------



## littlebabyjesus (Jan 27, 2012)

Falcon, you're refusing to examine the workings of the capitalist system. This means that you have _no hope_ of understanding the recent credit crunch. I don't pretend that I fully understand it, but the internal contradictions of capitalism - suppressing wages but increasing consumption - are crucial. They are the reason for the explosion in credit. And this is not fanciful theory - it is backed up by the empirical data.


----------



## Falcon (Jan 27, 2012)

Crispy said:


> I don't quite understand, falcon. One post you're saying that the two things (peak oil, capitilasim screwing itself up) bear no relevance to each other. The next, you're berating LBJ for saying that capitalism's recent self-destruction has nothing to do with peak oil.


I'm rejecting the proposition that the current recession is accounted for by capitalism's self destruction. I reject it because it overlooks a second possibility: that both the recession and capitalism's destruction are accounted for by a third factor: peak oil. That is relevant because the conclusion that the recession is caused by capitalism leads to the (invalid) conclusion that there is some alternative political arrangement that can correct the recession. The conclusion that it is caused by peak oil leads to the conclusion that there is no alternative political arrangement that can correct the recession. To decide what to do, we need to know which is which.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> Falcon, you're refusing to examine the workings of the capitalist system. This means that you have _no hope_ of understanding the recent credit crunch.


My refusal to examine the workings of the capitalist system bears the same relation to my hope of understanding the recent credit crunch, as my refusal to examine the workings of the Titanic's deck chairs would have to my hope of understanding its collision with an iceberg. Since the credit crunch was caused by the escalating price of oil induced by irreversible supply constriction, not any of capitalisms many failings, and since capitalism doesn't function under conditions of supply constraint, there is no amount of examination of how capitalism used to work before supply was constrained that would help me understand the credit crunch.

It would help if you would acknowledge the question of how you preserve your belief that this is still a political/economic causal factor not a physical one, given the coincidence of the timing with a physical event and the relative timing of the physical cause and economic effect.


----------



## littlebabyjesus (Jan 27, 2012)

Falcon said:


> It would help if you would acknowledge the question of how you preserve your belief that this is still an economic causal factor not a physical one, given the coincidence of the timing with a physical event.



What? I have stated earlier that the spike in oil prices was quite probably a major contributor to the loss of systemic confidence, just as it has been before. And this had a _political_ cause, just as it had before.

Here's a long summary from wiki of the changes in oil prices between 2004 and 2008. Notice how the fluctuations all have political causes.


> After retreating for several months in late 2004 and early 2005, crude oil prices rose to new highs in March 2005. The price on NYMEX has been above the $50 per barrel since March 5, 2005. In June 2005, crude oil prices broke the psychological barrier of $60 per barrel. After the destruction of Hurricane Katrina in the United States, gasoline prices reached a record high during the first week of September 2005. The average retail price was, on average, $3.04 per U.S. gallon.[17] The average retail price of a liter of petrol in the United Kingdom was 86.4p on October 19, 2006, or $6.13 per gallon.[18] Oil production in Iraq continued to decline as result of the nation's ongoing conflict causing a decrease in production to 1 million barrels per day (160,000 m3/d).[19]
> In mid 2006, crude oil was traded for over USD 79 per barrel (bbl),[20] setting an all-time record. The run-up is attributed to a 1.9 increase in gasoline consumption, geopolitical tensions resulting from North Korea's missile launch. The ongoing Iraq war, as well as Israel and Lebanon going to war are also causative factors. The higher price of oil substantially cut growth of world oil demand in 2006, including a reduction in oil demand of the OECD.[21] After news of North Korea's successful nuclear test on October 9, 2006, oil prices rose past $60 a barrel, but fell back the next day.
> On October 19, 2007, U.S. light crude rose to $90.02 per barrel due to a combination of ongoing tensions in eastern Turkey and the reducing strength of the U.S. dollar.[22] Prices fell briefly on the expectation of increased U.S. crude oil stocks, however they quickly rose to a peak of $92.22 on October 26, 2007.[23]
> On January 2, 2008, U.S. light crude surpassed $100 per barrel before falling to $99.69 due to tensions on New Years Day in Nigeria, and on suspicion that U.S. crude stocks will have dropped for the seventh consecutive week. A BBC report from the following day stated a single trader bid up the price; Stephen Schork, a former floor trader on the New York Mercantile Exchange and the editor of an oil market newsletter, said one floor trader bought 1,000 barrels (160 m3), the smallest amount permitted, and immediately sold it for $99.40 at a $600 loss.[24] Oil fell back later in the week to $97.91 at the close of trading on Friday, January 4, in part due to a weak jobs report that showed unemployment had risen.[25]
> ...


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> What? I have stated earlier that the spike in oil prices was quite probably a major contributor to the loss of systemic confidence, just as it has been before. And this had a _political_ cause, just as it had before.


That is not the premise of this thread. If you believe this recession is political then you hold the possibility at least that this is a "double dip". If you believe it is physical, you don't. If you don't believe it is physical, what is the basis of your belief, given the empirical evidence?


----------



## littlebabyjesus (Jan 27, 2012)

I said that the spike in oil prices had a political cause. It undoubtedly did. Just look at the history of oil prices - they change hugely with the slightest incident: one attack on one Nigerian pipeline drove the price up by several dollars. This is to be expected where demand and production are very evenly matched - just a tiny drop in production produces a huge change in price, and even the hint that there might be a drop in production causes a speculative frenzy.

And I am _not_ denying the reality of peak oil.

But you are blind to the empirical evidence of the workings of capitalism.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> But you are blind to the empirical evidence of the workings of capitalism, so I'm going to leave you. We are talking past each other.


That's OK. You have accepted the reality of peak oil. If you believe capitalism functions under peak oil, then your argument is even more seriously flawed. If you believe capitalism doesn't function under peak oil, having accepted peak oil, then your argument that the workings of capitalism are relevant is incoherent.

That is why we are talking past each other.


----------



## littlebabyjesus (Jan 27, 2012)

Alright, one last go:

Explain to me the ups and downs of the price of oil over the last decade without reference to politics. Explain to me how the massive spike of 2008 was caused by peak oil, please. Humour me. Treat me as a slow person. And perhaps you can also explain why the price then halved in a matter of weeks.


----------



## Crispy (Jan 27, 2012)

You can't take the politics out of the equation.

eg. Terrorists in Nigeria bomb a pipeline. The price of oil goes up.

20 years ago, a similar disruption would not create a price spike, because Saudi can simply pump more on demand and everybody knows it. Nigerian authorites re-take the pipeline, production resumes, and Saudi turns off the emergency tap.

Today, after 5-10 years of flat production, there is no longer any confidence in Saudi to be that swing producer, able to smooth over the gaps caused by bumpy politics. That inability is caused by the geology.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> Alright, one last go:
> 
> Explain to me the ups and downs of the price of oil over the last decade without reference to politics. Explain to me how the massive spike of 2008 was caused by peak oil, please. Humour me. Treat me as a slow person. And perhaps you can also explain why the price then halved in a matter of weeks.


Sure. Price is determined by supply and demand. There are two factors controlling supply: political (governments switching it on and off) and physical (the planet draining).

Until 2005 there was always surplus supply capacity. That meant the Saudi's could regulate the price, and therefore their income, by turning a valve. Saudis needed to regulate their income because the House of Saud rests on a knife edge and they will be beheaded in the revolution if they don't. Sorry - not politics, colour.

Depletion of their reservoirs was such that spare capacity was eroded by 2005. They compensated by increasing water injection on the main reservoir - Ghawar. This is like red-lining your car when the oil light comes on, and has much the same functional effect - they damaged it. Irrespective, they lost the capacity to regulate price and it started to climb.

It climbed to the price at which the economy broke - specifically the weakest point in the economy, all the mortgage debt extended to people that could not afford it under any other circumstance than the dirt cheap petrol, electricity, heating and food afforded when Ghawar worked. They defaulted, that cascaded, banks failed. Failed banks stopped lending and businesses went broke under the combination of high (energy) operating cost and illiquidity. Demand dropped. Falling demand against a flat supply caused price to drop in a matter of weeks. It now sits at $100 not because some supply of oil was found but because the economy contracted to the demand consistent with $100 oil.

Falling oil supply and rising oil demand are the same. Pre-2005 growth hitting flat supply causing contraction, and falling supply causing contraction, are indistinguishable from a price perspective. This is a one way recession induced by physical factors, not a double dip recession induced by political or economic factors.

Have another look at that graph I gave you and read the notes.


----------



## littlebabyjesus (Jan 27, 2012)

Crispy said:


> You can't take the politics out of the equation.
> 
> eg. Terrorists in Nigeria bomb a pipeline. The price of oil goes up.
> 
> ...


The first Iraq war produced a massive price spike. Massive oil price volatility due to political crises has a long history - the revolution in Iran in 1979, for instance. Where oil production by any one of the major producers is threatened, the price goes through the roof. This is not a recent phenomenon.

You speak as though this huge price volatility were rational, Falcon. It isn't. Markets don't act rationally. They act like herds, periodically indulging in a mass stampede in one direction or the other. Sometimes, just a twitch can start them off.

The periodic spikes in this graph show what I mean, I think. The spikes of the past are not explicable by peak oil. The massive volatility dates back to the cranking up of production in the 60s - ever since the world has depended on oil, its price has been extremely volatile.


----------



## Crispy (Jan 27, 2012)

Some good links in today's Drumbeat from The Oil Drum, including this one that is particularly relavant to the current discussion: http://pdn.sciencedirect.com/scienc...37c7adce74d/1-s2.0-S0360544211003744-main.pdf

If that link doesn't work, go here: http://www.sciencedirect.com/science/journal/03605442/37/1 where it is article no.5. Free access.

Am reading it now.


----------



## Crispy (Jan 27, 2012)

Crispy said:


> Some good links in today's Drumbeat from The Oil Drum, including this one that is particularly relavant to the current discussion: http://pdn.sciencedirect.com/scienc...37c7adce74d/1-s2.0-S0360544211003744-main.pdf
> 
> If that link doesn't work, go here: http://www.sciencedirect.com/science/journal/03605442/37/1 where it is article no.5. Free access.
> 
> Am reading it now.



It has a gloomy conclusion:



> While we cannot know what the future will bring, the evidence
> would seemto suggest thatwe are reaching limits on the amount of
> oil that theworld can extract at a price OECD countries can afford to
> pay without causing serious recession. While there is a theoretical
> ...



And I find it hard to argue against.


----------



## ayatollah (Jan 27, 2012)

Falcon said:


> The asset bubble was explicitly caused by peak oil. It was the abundant cheap energy prior to peak that created the ultra cheap debt which removed any constraint on irrational investment in property. It was the expensive energy after affordable oil's peak which made the mortgages unaffordable.


 
I thought I was an monomaniac obsessive till I came across your Peak Oil stuff , Falcon !  Let's look at ANOTHER possible significant reason for the banking crisis which was the leading edge of the 2007/8 world capitalist crisis... namely that in the USA , but also in the UK and elswhere, HUGE amounts of mortgage lending in the deregulated banking sector were lent, (driven by the bonus culture ) as "NINJA" high interest sub prime loans. These No income, no job , no asset, borrowers, were NEVER going to be able to repay these loans, even if the US housing market had't finally run out of steam - it was simply a crazy TIME BOMB, driven by the end of the capitalist boom speculative frenzy that is a key feature of all final stage booms historically  under capitalism, This speculative frenzy was essentially IRRATIONAL for the overall system - BUT of course rational for the individuals getting the bonusses for this irrational lending. The system imploded because of crazy SPECULATION, and the falling rate of profit - Peak oil simply aint actually hit us yet as a system breaker.


----------



## Crispy (Jan 27, 2012)

ayatollah said:


> Peak oil simply aint actually hit us yet as a system breaker.



You may be right. However, constraints on oil supply are going to put constraints on economic recovery. And constraints on economic recovery put constraints on investment in measures to increase supply.


----------



## Kaka Tim (Jan 27, 2012)

ayatollah said:


> I thought I was an monomaniac obsessive till I came across your Peak Oil stuff , Falcon ! Let's look at ANOTHER possible significant reason for the banking crisis which was the leading edge of the 2007/8 world capitalist crisis... namely that in the USA , but also in the UK and elswhere, HUGE amounts of mortgage lending in the deregulated banking sector were lent, (driven by the bonus culture ) as "NINJA" high interest sub prime loans. These No income, no job , no asset, borrowers, were NEVER going to be able to repay these loans, even if the US housing market had't finally run out of steam - it was simply a crazy TIME BOMB, driven by the end of the capitalist boom speculative frenzy that is a key feature of all final stage booms historically under capitalism, This speculative frenzy was essentially IRRATIONAL for the overall system - BUT of course rational for the individuals getting the bonusses for this irrational lending. The system imploded because of crazy SPECULATION, and the falling rate of profit - Peak oil simply aint actually hit us yet as a system breaker.



Yes this was the weakest point of the debt economy - but wasn't it a case of the straw that broke the camels back?

Peak Oil was the stuctural weakness that exaplains why the collapse was - and continues to be - so catostophic.

I don't understand the hostility to Falcon's argument - it all stacks up as far as I can see.


----------



## magneze (Jan 27, 2012)

So the theory goes that peak oil halted the growth of the real economy thus causing the rise of the now failed debt economy to fuel growth?


----------



## Crispy (Jan 27, 2012)

magneze said:


> So the theory goes that peak oil halted the growth of the real economy thus causing the rise of the now failed debt economy to fuel growth?


Partly. The debt economy was also required to fuel growth in the absence of real-terms wage increases.


----------



## magneze (Jan 27, 2012)

Crispy said:


> Partly. The debt economy was also required to fuel growth in the absence of real-terms wage increases.


Ok. Makes sense. I'd not thought of the peak oil contribution to the current situation, but it does make sense.


----------



## ayatollah (Jan 27, 2012)

The Peak oil theory has two problems. Firstly it is simply WRONG. It is simply not a major contributory CAUSAL factor in the current capitalist crisis. The debt economy/property bubble (as a critical part of the general Reagon/thatcherite deregulation of particularly Finance Capital from the 1980's on) was required to substitute debt for wages as the increasing share of national income in the West taken by the top 5% or so accelerated from 1980 onwards - as capitalism staved off the falling rate of profit by robbing the rest of us. The speculative frenzy at the end of the century , up to the crash of 2008, was simply NOT driven or influenced in any significant way by shortages in oil supplies. Oil prices , as with all primary raw materials ALWAYS rocket up at the top of a capitalist boom, steel, grain, coal, wood, you name it, it's supply and demand economics in action - it's not because any of these are actually running out yet - and yes , OK, this price rise does help to choke off the boom, but it is in the Finance Sector that this, as with most long wave booms, came unstuck with the unregulated, casino speculation with dodgy/worthless financial instruments (a giant Ponzi scheme as many have said).

A BELIEF in the Peak Oil theory is essentially another Malthusian , "inevitable impoverishment", excuse for yet another man made , class based, economic and social crisis , that CAN be fought and defeated by mass political action and the creation of a better, socialist , way to run social production and distribution - shifting the blame for the crisis to an essentially unsolvable resource shortage . This false theory simply serves to demobilize struggle against the capitalist crisis, whilst the capitalist class keep busy trying to save their collapsing system at OUR expense.

By the way I am assuming that everyone is familiar with the "falling rate of profit"  "problem" within a capitalist economy - because this weakness within the capitalist growth cycle DOESN't require any Peak Oil type  finite resource problems to explain the  move to the debt economy from the 1980's onwards.  I won't bore you with it here , but it is worth looking up as a critical explanation for the capitalist Long Wave boom to bust cycle.


----------



## Crispy (Jan 27, 2012)

What are you on about? It's a finite resource and one day we have/are/will extract more of it that we will in any other day before or since, after which the production rate will decline. You cannot say that it's WRONG. It's like saying that gravity doesn't attract objects towards each other.

Regardless of what you think caused the 2008 oil price spike (and I subscribe a large part of the blame to the irrational behaviour of markets), the physical reality on and under the ground strongly suggests that that day is close in time to today. It matters not one bit if a capitalist society or one based on social justice and brotherly love is doing the extraction. In the here and now, energy supplies for a growing population are on the cusp of shrinking. This is a quite separate problem to the unequal division of wealth and labour (the solution of which, btw, would make the energy problem much easier to deal with.


----------



## ayatollah (Jan 27, 2012)

I KNOW it's finite ! So is the SUN's ENERGY ! The POINT is that it hasn't run out YET, and there isn't even a SHORTAGE YET, and the 2008 price spike was part of a generalise "peak of the boom" raw material price spike (Supplier economies  like Argentina and Chile, had never been so prosperous for generations). BUT although general  raw material costs HELPED to choke off the boom , this simply WASN't the central cause of the 2008 CRASH - this occurred in the Financial Sector. Forget Peak Oil for now - it's a real problem, in the FUTURE...but it simply isn't the critical reason why capitalism is in crisis NOW, and is finding it difficult to escape a LONG SLUMP.  ONLY a socialised, planned economy, can use the rest of the finite raw material resources of this planet fairly, efficiently,  and logically. Capitalism simply can't, as a system. Under capitalism we hoover it all up within a generation or two - game over. We better find a more rational way to run our planet's economy.


----------



## Crispy (Jan 27, 2012)

I agree with you - it is madness to entrust the world's resources to capitalism. But there are things that any modern civilisation takes for granted: electricity, warm homes, cheap food etc. that depend on physical systems that run on oil. The organisation of society is a secondary consideration, inasmuch that we cannot have a reasonable discussion about how to organise society, if its material basis collapses. Forget about the current financial crisis, and forget about the 2008 oil price spike. If the geology in the ground is to be believed, then we are about to live in a world of decreasing energy availability. This is not something that any previous civilisation has dealt with sanely. I believe a socialised planned economy is needed with the greatest urgency, with the primary aim of maintaining the phsycial basis of modern civilisation. Social justice and peace will be happy side-effects.


----------



## Bernie Gunther (Jan 27, 2012)

Wow. Lots of capital letters.


----------



## Falcon (Jan 27, 2012)

Kaka Tim said:


> I don't understand the hostility to Falcon's argument - it all stacks up as far as I can see.



cf.


ayatollah said:


> The Peak oil theory has two problems. Firstly it is simply WRONG.... capitalist crisis. ...Reagon/thatcherite ... ... capitalism ... robbing the rest of us. ... capitalist boom ... class based ... defeated by mass political action ... socialist ... social production and distribution ... capitalist crisis, ... capitalist class



I think I do. It's not that it IS wrong. It's that it would have to BE wrong, or else all that lovely fun stuff would be irrelevant.


----------



## Falcon (Jan 27, 2012)

littlebabyjesus said:


> The first Iraq war produced a massive price spike. Massive oil price volatility due to political crises has a long history - the revolution in Iran in 1979, for instance. Where oil production by any one of the major producers is threatened, the price goes through the roof. This is not a recent phenomenon.


Quite so. Politics causes spikes. Physical constriction causes spikes. And?


littlebabyjesus said:


> You speak as though this huge price volatility were rational, Falcon. It isn't. Markets don't act rationally. They act like herds, periodically indulging in a mass stampede in one direction or the other. Sometimes, just a twitch can start them off.


A twitch like, say, the oil supply flattening off and the price starting to rise? So if I understand your post correctly, the entire market chose this moment NOT to look at the flattening oil supply and rising demand, but irrationally stampeded in precisely the direction they would have if they HAD looked at it?


littlebabyjesus said:


> The periodic spikes in this graph show what I mean, I think. The spikes of the past are not explicable by peak oil. The massive volatility dates back to the cranking up of production in the 60s - ever since the world has depended on oil, its price has been extremely volatile.


The spikes in the past are not explicable by peak oil because oil didn't peak in the past. Politics makes it spike, supply constriction makes it spike. We are not discovering novel truths about the supply/price relationship in this post.

This is not your finest post. Again, I'd need you to explain why you think the fact that oil discovery peaked in 1968 is NOT relevant to your analysis.


----------



## Kaka Tim (Jan 27, 2012)

So its just a conincidence that we hit the biggest economic slump since the 1930s just as we hit peak oil production?

And to think otherwise makes you a neo-malthusian/captialist running dog or something? Becasue peak oil is not mentioned in Das Kapital? I thought Marx argued that captialism was inhernetly unsustainable pricisely because you cant have ever expanding profit - i.e. because it defies physical laws.

Of course captialism is to blame - running the world for maximum profit for the smallest number of people is exactly whats trashed both the economy and the resource base it rests on.

These cunts haven't 'created wealth' - they've transformed finite resources into personal riches at everyone elses expense.

And surely imminent resource depletion is just about as strong an argument for eradicating the cancer of captialism as you can get?


----------



## Falcon (Jan 27, 2012)

ayatollah said:


> ONLY a socialised, planned economy, can use the rest of the finite raw material resources of this planet fairly, efficiently, and logically



Umm - as I think I mentioned, two of the lowest energy efficiencies ever achieved by any society were the Soviet Union, and China, respectively, and the scale of planetary environmental devastation they achieved approaches that of science fiction terraforming. Had you ever actually read what Marx has to say about it, this should not surprise you.


----------



## Falcon (Jan 27, 2012)

Kaka Tim said:


> And surely imminent resource depletion is just about as strong an argument for eradicating the cancer of captialism as you can get?



This, Kaka Tim, is the huge and sweet irony of this argument that "it isn't peak oil, its capitalism stoopid".

Precisely.


----------



## Crispy (Jan 27, 2012)

Falcon said:


> Umm - as I think I mentioned, two of the lowest energy efficiencies ever achieved by any society were the Soviet Union, and China, respectively. Had you ever actually read what Marx has to say about it, this should not surprise you.



tbf, they were both busy cramming 100 years of industrial development into a couple of decades.

Which they managed! Not that it was neccesarily the right thing to aim for, of course.


----------



## Falcon (Jan 27, 2012)

Crispy said:


> tbf, they were both busy cramming 100 years of industrial development into a couple of decades.


Well, that and explicitly rejecting the idea that "the free gifts of nature" (as Marx put it) could have any value at all. The disastrous treatment of the environment by Marxist regimes that was common in the 20th Century wasn't an accident but a logical, necessary outgrowth of Marxist theory. Which makes ayatollah's earnest petition we put them in charge of what's left as we enter the last 60 months ever of climate stability terrifying and hilarious at the same time.


----------



## free spirit (Jan 28, 2012)

what happens in 61 months then?


----------



## Delroy Booth (Jan 28, 2012)

Falcon said:


> The disastrous treatment of the environment by Marxist regimes that was common in the 20th Century wasn't an accident but a logical, necessary outgrowth of Marxist theory



Could you provide some sort of evidence within the canon of Marxist theory to back this up, coz I know my Marxism pretty well I don't think I've ever come accross anything that makes it theoretically necessary for Marxist regimes to abuse the planet in the way you're suggesting.

Its also worth pointing out that I don't think Ayatollah is advocating a return to stalinist or maoist ideology, which I assume what you're referring to when you say "Marxist regimes that were common in the 20th century" so accusing him of wanting to re-introduce that kind of system is blatantly unfair.


----------



## littlebabyjesus (Jan 28, 2012)

Falcon said:


> The spikes in the past are not explicable by peak oil because oil didn't peak in the past. Politics makes it spike, supply constriction makes it spike. We are not discovering novel truths about the supply/price relationship in this post.



Politics makes it spike, yes. Massively, whenever any major producer's supply is threatened. And that has been the case for many years.

To make your case that peak oil caused the recent spikes, you need to demonstrate that political problems - which continue to be the immediate cause of spikes - are now significantly exacerbated by having reached peak oil. It has been asserted that pre-about 2005, Saudi Arabia could just 'turn on the taps' whenever there was a shortfall elsewhere in the system, and that this smoothed prices over. But this did not happen in the wake of the Iranian revolution. It did not happen during the first gulf war. Unrest in any major oil-producing country has caused massive spikes in oil price for decades. You need to demonstrate that the nature of the Saudis' ability to pick up the shortfall has changed - that there was ample excess capacity in the past, but is not now. You also need to explain how that excess capacity did not stop the massive spike due to the Iranian revolution.

Do you dispute the assertion that increased Saudi production in 2008 in fact saturated the market? That they were unable to sell all of it seems to suggest this was the case. In other words, in 2008 at least, we had not reached peak oil. And this leaves a problem for your analysis: you are saying that the short-term business decisions of capitalism seized up as a result of something that hadn't happened yet, indeed something that most capitalists are in denial about.

The most reasonable hypothesis on your part seems to be that as we near peak oil, spikes in price will become more common and be triggered by smaller and smaller events. I think that is very likely. Has that process already started? Very hard to tell, but given that the market was saturated in 2008, it seems reasonable to say that no there is no evidence that it has.  The overwhelming factor in oil price spikes appears to continue to be fears of an interruption of supply due to political reasons. The monster lurking over all of this is peak oil. But then it was lurking 10 years ago too.


----------



## Crispy (Jan 28, 2012)

Underneath the 2008 spike there is a clear rising trendy trend since2005 that is still ongoing. I think it's much harder to argue that this trend has nothing to do with the peak, than the spike.


----------



## Falcon (Jan 28, 2012)

free spirit said:


> what happens in 61 months then?


At current rate of investment in coal power generation, in 5 years we will have gone beyond the point where there is any action we can take that will prevent climate change, due to the persistence of capital. (IEA)


Delroy Booth said:


> Its also worth pointing out that I don't think Ayatollah is advocating a return to stalinist or maoist ideology


Perhaps, but Ayatollah is advocating that "_*ONLY*_ a socialised, planned economy, can use the rest of the finite raw material resources of this planet fairly, efficiently, and logically". Given that socialised planned economies have created the worst energy efficiencies and most appalling environmental catastrophes in our history, isn't a great argument. I presume he is playing the "this time it will be different" card?


littlebabyjesus said:


> To make your case that peak oil caused the recent spikes, you need to demonstrate that political problems - which continue to be the immediate cause of spikes - are now significantly exacerbated by having reached peak oil.


Are you asserting that the obverse i.e. "peak oil does *not* significantly exacerbate political problems" is true? Then proof by contradiction.


littlebabyjesus said:


> It has been asserted that pre-about 2005, Saudi Arabia could just 'turn on the taps' whenever there was a shortfall elsewhere in the system, and that this smoothed prices over. But this did not happen in the wake of the Iranian revolution.


It is asserted that spare capacity is a necessary, but not *sufficient*, condition for regulating price. Even with spare capacity, price can spike (e.g. blocking the strait of Hormuz). Evidence that some price spikes are political is not evidence that all price spikes are political.


littlebabyjesus said:


> You need to demonstrate that the nature of the Saudis' ability to pick up the shortfall has changed


Indeed. A good way might be to present data showing all the oil we have ever discovered, the fraction of the discovered oil we have consumed, and a trajectory of the path future consumption must take given the constraint we cannot produce more than we have discovered. Which I have done twice. Another good way might be to show the relationship between that context, and saudi production in relation to price revealing that price lagged supply rather than led it. Which I have done twice.


littlebabyjesus said:


> Do you dispute the assertion that increased Saudi production in 2008 in fact saturated the market? That they were unable to sell all of it seems to suggest this was the case.


In the 1990's, excess production from the UK North Sea saturated the market. Saturating the market drove the oil price to $14 per barrel. We know what saturation does to price. In 2008, the oil price was driven to $180 per barrel, three years after independent empirical evidence predicts global supply capacity was reached, contemporary supply data shows it flattening despite strong demand, and Saudi's last remaining swing production reached full output. Your assertion that $180 is evidence that Saudi could not sell surplus, rather than it having no surplus to sell, is contradicted by the evidence and, frankly, bizarre.


littlebabyjesus said:


> In other words, in 2008 at least, we had not reached peak oil. And this leaves a problem for your analysis


For this to be true, you would have to ignore the evidence from discovery data, the evidence from production data, the evidence from future production constrained by discovery, the evidence from Saudi production in relation to unsatisfied world demand, the evidence from price in relation to previous times of saturation, and the observation that physical peak oil explicitly accounts for all of the factors you ascribe to political/economic cause. Which you have done. I believe the problem with the analysis lies with you.


littlebabyjesus said:


> The monster lurking over all of this is peak oil. But then it was lurking 10 years ago too.


What was lurking 10 years ago was the monster that oil would peak in 10 years. I hate to keep pointing out self evident truths, but it is now 10 years later.


----------



## Delroy Booth (Jan 28, 2012)

Falcon said:


> Perhaps, but Ayatollah is advocating that "_*ONLY*_ a socialised, planned economy, can use the rest of the finite raw material resources of this planet fairly, efficiently, and logically". Given that socialised planned economies have created the worst energy efficiencies and most appalling environmental catastrophes in our history, isn't a great argument. I presume he is playing the "this time it will be different" card?



Well suppose that he is playing the "this time it will be different" card, have you got anything to actually counter that argument with at all? Is there any reason why, in principle, a planned econony should necessarily lead to environmental destruction? I've yet to hear you make the case that it should. I asked you this question once already and you ducked it, so I'll ask it again. You've given the example of the Soviet Union as if every socialist on earth views the Soviet Union as the model we should aspire towards for socialism in the future, when in actual fact very few people on the left, outside the CPGB-ML, wish to see that kind of socialism, if you can even call it that, repeated.

It's also worth noting that China's environmental degradation has steadily got _worse_ the more they have attempted to introduce capitalist reforms into the country. In China there's a direct correlation between the embracing of capitalism in the post-Deng era and in the increase in the destruction of the material environment. For example there's an excellent article in Foreign Affairs by Elizabeth C Economy from around 2008, I dont have a copy to hand but google it, who lists some of the environmental damage that's taking place in China as a _direct result_ of it's embrace of state capitalism over the last 20-30 years, you might wanna google it and have a read because it directly challenges some of your basic assumptions.


----------



## Falcon (Jan 28, 2012)

Delroy Booth said:


> I asked you this question once already and you ducked it, so I'll ask it again.


I think it is a little unfair to accuse me of ducking a question that is not relevant to a thread.

The argument of this thread - I suspect - is that a double dip recession is not inevitable because its cause is political, and therefore avoidable by political means. This argument is invalid because its premise - political cause - is invalid. Therefore speculation about political means is irrelevant and I will ask you to note that I have not advanced any view which can be interpreted as support for capitalism.

I simply point out that, even if the cause was political and the remedy political, a political system - socialised planned economy - which empirically yields low energy efficient and high environmental damage is not an obvious choice of candidate for a system which must yield high energy efficiency and low environmental damage.

In fact, I reject the 19th Century false choice of socialised/planned vs market-fundamentalism. I reject it because it is a narrative, fundamentally, about how to allocate surplus that is no longer rational, and denies the need for and possibility of entirely different arrangements rooted in how to manage scarcity.


----------



## Delroy Booth (Jan 28, 2012)

Falcon said:


> I think it is a little unfair to accuse me of ducking a question that is not relevant to a thread.



It's relevant to me, I'm interesting in taking you to task on this particular point even if it is on a tangent, because i've not seen you put forward any evidence to defend it. Besides I don't see why that means you shouldn't at least have a go at answering my question. Is there any reason why, in principle, a planned econony should necessarily lead to environmental destruction?



Falcon said:


> Advancing a political system which empirically yields low energy efficient and high environmental damage is not a convincing argument that it might now yield high energy efficiency and low environmental damage.



This is quite dis-indigenous. If Ayatollah was advocating a return a to an exact replica of Soviet Communism then you'd be correct, you'd have a historical example you could point to, but that isn't what he's saying, is it? He's not, in your words, "Advancing a political system which empirically yields low energy efficient and high environmental damage" by which I can only assume you mean the Soviet Union, he's advocating a democratically planned economy in a more general sense. You haven't said anything to counter that argument whatsoever that I can see.

You've also totally ignore the point I just made to you about China, where environmental degradation has become more serious the more it has embraced capitalism. Cherry picking your arguments like this is really weak man, come on surely you can do better.


----------



## Bernie Gunther (Jan 28, 2012)

Once you show that capitalism is a suicidally shitty way to allocate resources, you can infer the need for something different.

Nothing I can see implies that such a something automatically has to replicate Stalinist industrial blight. Why on earth would it?


----------



## littlebabyjesus (Jan 28, 2012)

Falcon said:


> The argument of this thread - I suspect - is that a double dip recession is not inevitable because its cause is political, and therefore avoidable by political means. This argument is invalid because its premise - political cause - is invalid.


You haven't demonstrated this. You really haven't. You simply assert it. You think you've discovered some greater truth that makes everyday politics a trivial irrelevance. But very little of what you say stands up.

On a narrow point of order, several European countries that went into recession at the same time as the UK - Belgium and Germany, for instance - are now out of recession, meaning that their economies are bigger now than they were before the recession started. They can't have a double-dip now.

Other parts of the world never entered recession - we should be careful not to be too West- or Euro-centric here.

But you don't seem interested in examining this. You've discovered your one truth, which explains everything, but you actually do the cause of proper discussion of peak oil no favours. You advance no political analysis - you're the man in the sandwich board announcing that the end is nigh.


----------



## Falcon (Jan 28, 2012)

littlebabyjesus said:


> You haven't demonstrated this. You really haven't. You simply assert it. You think you've discovered some greater truth that makes everyday politics a trivial irrelevance. But very little of what you say stands up.


Far from asserting it, I've presented a hypothesis, detailed empirical evidence to support it, and a coherent narrative that offers a plausible explanation of it.

The fact that you disagree with the argument is not evidence that it is not an argument, and your disagreement with it has to be based on more than simple assertion, which you fail to supply. To the extent that you have tried, you have deployed reasoning such as the conclusion that $180 oil price is evidence of excess supply, then failed to respond to reasonable challenge about it. Mostly, you simply ignore it.

I'm more than happy to accept your critique of the hypothesis, data and narrative. 'Liar, liar, pants on fire' - not so much.


littlebabyjesus said:


> On a narrow point of order, several European countries that went into recession at the same time as the UK - Belgium and Germany, for instance - are now out of recession, meaning that their economies are bigger now than they were before the recession started. They can't have a double-dip now.


Germany benefitted briefly from capital fleeing from the deepening crisis in other parts of Europe into what is perceived as the least unsafe economy remaining. Meanwhile, Germany is an export country. The countries it exports to are failing, and purchases of its exports are being financed by the creation of synthetic (i.e. non-value based) debt ("quantitative easing").

Growth produced by capital flight from the failing European states Germany depends on for exports, and exports sustained by printing money, is unsustainable. So of course it is no surprise that the German economy grew 3% in 2010, fell to zero in early 2011, and contracted in the final quarter (reference: Data shows German economy stalling, NYT 11 Jan 2012).

The point isn't narrow at all. The point reveals that you fundamentally don't understand what is going on. You don't know the difference between growth and metastasis, or value based growth and debt based growth. Since you don't understand what is going on, your political analysis of what is going on is meaningless. My disinclination to examine your political analysis beyond enquiry about its false premises has no bearing on the peak oil argument.


----------



## Falcon (Jan 28, 2012)

Bernie Gunther said:


> Once you show that capitalism is a suicidally shitty way to allocate resources, you can infer the need for something different. Nothing I can see implies that such a something automatically has to replicate Stalinist industrial blight. Why on earth would it?


Having inferred the need for something different, nothing I can see implies that we should reject that need and have another go at something that routinely seems to produce Stalinist blight, or that such a something automatically won't. Why on earth wouldn't it?


----------



## Falcon (Jan 28, 2012)

Delroy Booth said:


> This is quite dis-indigenous. If Ayatollah was advocating a return a to an exact replica of Soviet Communism then you'd be correct, you'd have a historical example you could point to, but that isn't what he's saying, is it? He's not, in your words, "Advancing a political system which empirically yields low energy efficient and high environmental damage" by which I can only assume you mean the Soviet Union, he's advocating a democratically planned economy in a more general sense.


Well, who knows what he is advocating. His last emission on the subject before vanishing was a sort of Tourette's syndrome confection of "The Peak oil theory has two problems. Firstly it is simply WRONG.... capitalist crisis. ...Reagon/thatcherite ... ... capitalism ... robbing the rest of us. ... capitalist boom ... class based ... defeated by mass political action ... socialist ... social production and distribution ... capitalist crisis, ... capitalist class" etc. Whatever he is advocating, I don't detect much flavour of him "advocating a democratically planned economy in a more general sense". It sounds more like he is advocating a riot. So I'm not above suspecting you of disingenuousness here, either.

So I'm left being challenged to argue with your suspect version of his unknown view in a thread which is fundamentally about paradigm, not the politics of a particular paradigm. Which leaves me a little disinclined.


----------



## Bernie Gunther (Jan 28, 2012)

I don't think you can actually reproduce the conditions that produced Stalinist industrial blight very easily.

Adopting central planning is certainly not a sufficient condition and I've yet to see a convincing case that it's even a necessary one. At least for the blight part ...


----------



## littlebabyjesus (Jan 28, 2012)

There is a wholly different narrative to this, one that pays attention to the debt crisis and its causes. That sees Europe and the US hitting recession in 2008, and other parts of the world, including BRIC countries, seeing a slow-down a year later as a result, followed by more strong growth. That growth is now being hit by the current Euro crisis. The Euro debt crisis is causing a global slowdown.

Falcon, I know you reject this as irrelevant, but this is the explanation of what is going on. As for oil, it is still the case that political crises cause price spikes, just as they always have done. People are not currently unemployed in Europe because there is not enough oil to fund their employment. That's simply not true. Nobody is disputing the fact that limits to oil capacity are limits to growth, but monomania concentrating on this one issue and ignoring everything else just makes you blind to what is really going on.

But tell me, what is there to do now? I've given plenty of ideas about what to do to bring the global economy out of seizure. You clearly don't think these can work because you think I've come up with the wrong reason for the recession. So tell me what to do.


----------



## ayatollah (Jan 28, 2012)

Well said littlebabyjesus !


----------



## littlebabyjesus (Jan 28, 2012)

Oh and the cause of the current recession in Britain, if indeed that is what we are in, is very simple. It is austerity. The private sector is cutting spending and jobs at a time when the private sector is busy paying down its debts. It doesn't take a genius to see what that's going to cause.


----------



## ayatollah (Jan 28, 2012)

Crispy said:


> I agree with you - it is madness to entrust the world's resources to capitalism. But there are things that any modern civilisation takes for granted: electricity, warm homes, cheap food etc. that depend on physical systems that run on oil. The organisation of society is a secondary consideration, inasmuch that we cannot have a reasonable discussion about how to organise society, if its material basis collapses. Forget about the current financial crisis, and forget about the 2008 oil price spike. If the geology in the ground is to be believed, then we are about to live in a world of decreasing energy availability. This is not something that any previous civilisation has dealt with sanely. I believe a socialised planned economy is needed with the greatest urgency, with the primary aim of maintaining the phsycial basis of modern civilisation. Social justice and peace will be happy side-effects.



ERmm... I don't think the "organisation of society" actually IS a  "secondary issue" , Crispy.   I think we ALL accept that the world's oil supply is reaching a critical downward turning point - and most of us accept that capitalism is squandering a huge amount of thisfinite  supply on arms production and luxury goods for the rich - so to use this finite supply efficiently, feed and house EVERYONE as well as possible, the human race needs to rid itself of the capitalist parasites and their system , and move to a rational, planned ,  one, which will eke out our resources better, AND seek high tech alternatives to oil for at least some of our needs . How can the "organisational structure of society" be secondary to this ?

As for Falcon... Ok, he thinks ALL socialised , planned, social systems HAVE to be a rerun of Stalinist regimes of the recent past. I accept so far the track record of  "Planned"  economies haven't been good (for which read "murderously catastrophic") - BUT I don't accept socialism turning into  stalinist totalitarianism IS inevitable  - any more than capitalist regimes will always model Nazi Germany - particular historical factors and their social and economic underdevelopment led Stalinist Russia and China to be the monstrosities they undoubtedly were.  Democratic Socialism simply doesn't have to be like that.

 But for you , Falcon, the future seems COMPLETELY HOPELESS - onwards to eventual total global societal collapse presumeably , as the oil runs out ? I'd rather hope for, and work for, Democratic Socialism, mate !


----------



## Falcon (Jan 28, 2012)

littlebabyjesus said:


> There is a wholly different narrative to this, one that pays attention to the debt crisis and its causes. That sees Europe and the US hitting recession in 2008, and other parts of the world, including BRIC countries, seeing a slow-down a year later as a result, followed by more strong growth. That growth is now being hit by the current Euro crisis. The Euro debt crisis is causing a global slowdown.


Yes of course there is. "Paying attention to X" often entails "Ignoring Y". Of course, if you ignore peak oil, energy surplus economic theory can be coerced into apparently explaining (selected) pieces of information about the economy. If you ignore orbital physics, astrology can be coerced into apparently explaining (selected) pieces of information about your life. The stronger you want something to be explanatory, the less coercion required.

One of the differences between your narrative and my narrative is that mine explicitly accounts for and is reinforced by yours. Yours explicitly ignores and is contradicted by mine. While I am paying attention to you, you are ignoring me. That makes them different kinds of argument.

In the absence of data about the oil supply, yours is a plausible explanation. In the presence of data about the oil supply, it is the least plausible explanation (I assert). So I'd need you to explain either (1) why the information about the oil supply is invalid or (2) if it is valid, why it could not account for the phenomena you describe and (3) if it can, why why your theory accounts for it better. Answer that, and you have yourself an argument I'd be genuinely interested in, and from which we could discuss political analysis.


----------



## Falcon (Jan 28, 2012)

ayatollah said:


> But for you , Falcon, the future seems COMPLETELY HOPELESS - onwards to eventual total global societal collapse presumeably , as the oil runs out ? I'd rather hope for, and work for, Democratic Socialism, mate !


In fact on this point your are entirely mistaken. As has been stated, I entirely agree that capitalism is an evil game and needs to be replaced. With the exception of the grisly transition from the industrial agriculture population to the non-industrial agriculture population size, I think there is an opportunity to create a very different and better kind of society. The only point of difference is whether we need to return to the failed old rhetoric of past centuries (your view) or should take this opportunity to consider a new one. I guess you believe that our great great grandfathers got it sussed and all we have to do is have yet another go at trying to get the details right. I take a slightly more optimistic view about our capabilities, that's all.


----------



## Falcon (Jan 28, 2012)

littlebabyjesus said:


> Oh and the cause of the current recession in Britain, if indeed that is what we are in, is very simple. It is austerity. The private sector is cutting spending and jobs at a time when the private sector is busy paying down its debts. It doesn't take a genius to see what that's going to cause.


Ah ok. So we have an economy that for 20 years has only balanced on the income from 6 million barrels a day of oil exports which will be zero in a decade, is structurally exposed to the cost inflation of a doubling of energy costs, a £4 trillion unfunded pension liability colliding with an ageing population, and an economy structurally dependent on the finance sector undergoing a global financial crises, dependent on the US economy with its $200 trillion public liability.

And the most plausible explanation of the recession is ... austerity?

And you have a view on the logic of extending public debt to fund public liability?


----------



## littlebabyjesus (Jan 28, 2012)

love detective has already dealt with your pension liability scare stories. Go back and reread his posts on this as you are simply dead wrong about it.


----------



## romeo2001 (Jan 28, 2012)

ayatollah said:


> ERmm... I don't think the "organisation of society" actually IS a "secondary issue" , Crispy. I think we ALL accept that the world's oil supply is reaching a critical downward turning point - and most of us accept that capitalism is squandering a huge amount of thisfinite supply on arms production and luxury goods for the rich - so to use this finite supply efficiently, feed and house EVERYONE as well as possible, the human race needs to rid itself of the capitalist parasites and their system , and move to a rational, planned , one, which will eke out our resources better, AND seek high tech alternatives to oil for at least some of our needs . How can the "organisational structure of society" be secondary to this ?
> 
> As for Falcon... Ok, he thinks ALL socialised , planned, social systems HAVE to be a rerun of Stalinist regimes of the recent past. I accept so far the track record of "Planned" economies haven't been good (for which read "murderously catastrophic") - BUT I don't accept socialism turning into stalinist totalitarianism IS inevitable - any more than capitalist regimes will always model Nazi Germany - particular historical factors and their social and economic underdevelopment led Stalinist Russia and China to be the monstrosities they undoubtedly were. Democratic Socialism simply doesn't have to be like that.
> 
> But for you , Falcon, the future seems COMPLETELY HOPELESS - onwards to eventual total global societal collapse presumeably , as the oil runs out ? I'd rather hope for, and work for, Democratic Socialism, mate !


How are you relating the nazi regime to capitalism - it was surely a planned conomy?


----------



## Blagsta (Jan 28, 2012)

romeo2001 said:


> How are you relating the nazi regime to capitalism - it was surely a planned conomy?



Are you about to argue that the Nazis were socialist? Excellent.


----------



## FridgeMagnet (Jan 28, 2012)

I wonder who this is.

Eta: actually to be fair it may not be who I initially thought


----------



## Captain Hurrah (Jan 28, 2012)

romeo2001 said:


> How are you relating the nazi regime to capitalism - it was surely a planned conomy?



You're a bit thick, aren't you.


----------



## Falcon (Jan 28, 2012)

littlebabyjesus said:


> love detective has already dealt with your pension liability scare stories. Go back and reread his posts on this as you are simply dead wrong about it.


I'm "wrong" for the same reason you think I'm wrong here. Pension liability is a direct function of the expected economic growth rate. If you ignore peak oil, you get one growth assumption and one liability. If you account for it, you get a contraction assumption and very different liability. Just getting the growth assumption wrong by 1 percentage point is trillions because of the demographics and impact of exponential growth (or lack of it) on the structural relationships between the cohorts. The $4 trillion doesn't even account for peak oil and economic contraction - it simply accounts for less growth than official estimates. Whether I'm "simply dead wrong" or not depends on whether peak oil has an effect on the economy over the period of inspection of 'love detective's analysis. Why don't we park that one, examine the rationale for your rejection of peak oil's effect on the economy, and revisit it in the light of that.

But just for the record - I note you are failing to respond to the contradiction that oil income, ageing, structural energy costs and financial sector income presents to your claim that 'austerity' accounts for the current recession, and predict that in a few pages you'll claim whatever we are discussing at that point is merely an assertion without context. That's OK.


----------



## Falcon (Jan 28, 2012)

ayatollah said:


> New oil discovery in the Arctic could easily shift the Peak Oil moment significantly into the future.





Crispy said:


> No it couldn't.


No, in fact it most certainly couldn't.
This graph shows the impact on the date of peak oil of discovering five 75GB discoveries every 5 years, starting from 5 years ago, and what it represents in terms of the required rate of change of discovery over its last 50 year trend. They think we might have Iraq at peak production in 14 years. This is five new Iraqs every five years. There are no more Iraqs.

*It extends peak by 14 years.*







They think there might be 90 GB in the arctic - about 3 years of supply (we consume 30 billion barrels a year). But the Arctic is closed to operations for 6 months of the year due to ice pack. Drilling operations can only take place a fraction of that (think Gulf of Mexico disaster plus icepack). The structures have to be built to withstand thousands of tonnes of ice accretion, and iceberg impact. We don't know how to do that. They are thousands of miles away from pipeline infrastructure, which has to be built. And the resulting oil price will push the economy into deeper recession. Etc. Etc. Even if it is there, we wouldn't see any oil from the Arctic for decades, by which time we will be back to the energy level of the 1940's with twice the earth's population.

I mention this because it helps calibrate just how poorly the challenge of peak oil is understood by people like ayatollah. More to the point, his attitude illustrates the lack of curiosity about where oil comes from. I'd claim that, given this level of knowledge, any speculation about political response is moot.


----------



## ayatollah (Jan 28, 2012)

Falcon said:


> In fact on this point your are entirely mistaken. As has been stated, I entirely agree that capitalism is an evil game and needs to be replaced. With the exception of the grisly transition from the industrial agriculture population to the non-industrial agriculture population size, I think there is an opportunity to create a very different and better kind of society. The only point of difference is whether we need to return to the failed old rhetoric of past centuries (your view) or should take this opportunity to consider a new one. I guess you believe that our great great grandfathers got it sussed and all we have to do is have yet another go at trying to get the details right. I take a slightly more optimistic view about our capabilities, that's all.



So Falcon , now I know you have steadfastly refused to discuss your politics (other than your obsession with Peak Oil, which is of course political in itself) but maybe you could share with us just what your "very different kind of society" unburdened "by the failed old rhetoric of centuries" might look like , in outline at least ? Frankly it sounds like empty, windy rhetoric, to me .. but go on prove me wrong . I'm already fascinated by your unexplained reference to the "grisly transition from an industrial agriculture population to a non industrial agriculture population size" Do I sense the gas chambers needing to be prepared to dispose of a sizeable "excess population problem" in your new exciting future system ?

At least it would give us a break from the Peak Oil Red Herring.


----------



## Crispy (Jan 28, 2012)

In a world of decreasing oil production, and therefore rising food prices, the "excess population problem" will "solve itself "


----------



## Falcon (Jan 28, 2012)

ayatollah said:


> Do I sense the gas chambers needing to be prepared to dispose of a sizeable "excess population problem" in your new exciting future system ?


No, you don't. But with that tedious example of tired old rhetoric and incivility, you have just disqualified yourself from adult conversation.


----------



## Blagsta (Jan 29, 2012)

Falcon's politics I suspect are to the right, judging by his opinions on the recent BA strike.


----------



## littlebabyjesus (Jan 29, 2012)

Falcon said:


> One of the differences between your narrative and my narrative is that *mine explicitly accounts for and is reinforced by yours*. Yours explicitly ignores and is contradicted by mine. While I am paying attention to you, you are ignoring me. That makes them different kinds of argument..


No it doesn't. And you have not demonstrated nearly as much as you think you have. So tell me, what is to be done?


----------



## littlebabyjesus (Jan 29, 2012)

> With the exception of the grisly transition from the industrial agriculture population to the non-industrial agriculture population size, I think there is an opportunity to create a very different and better kind of society.


Actually, don't bother. Ayatollah's right. You are a modern-day Malthusian. You have no answers.


----------



## Falcon (Jan 29, 2012)

Blagsta said:


> Falcon's politics I suspect are to the right, judging by his opinions on the recent BA strike.


Blagsta - great example - thanks. Of course you are mistaken, and for a simple fallacy of reasoning: some people who disagree with you are right wing. You conclude that all people who disagree with you are right wing. It's relevant to my point: since you can only conceive of the world in terms of left and right, you are prevented from thinking about it in any other terms.The left and right disqualify themselves because of the rigidity of their thought.

My opinion on the BA strike was fairly specific: BA makes money by using cheap fuel to push people who can afford it between functioning economies: since (a) cheap fuel is running out (b) the people who can afford it are getting fewer and (c) economies aren't functioning, the global aviation model is dead and there wasn't much the strikers could hope to achieve in the long run. Speculating on how surplus is most fairly allocated between management and worker is left/right, and I have views on that which are probably fairly similar to your own. Pointing out there was no surplus to allocate is something else. Cue another fallacy from you: managers oppose the workers; you disagree with the workers; therefore you support the managers. I see 13 year olds do better than this.

That's why a discussion about politics (in this thread at least) is unhelpful. I'd love to do it, but it takes a bit of maturity and civility which Urban's default setting of "I don't like you so you are a Malthusian right winger" denies.


littlebabyjesus said:


> No it doesn't. And you have not demonstrated nearly as much as you think you have.


A point that would be so much more convincing if you could say *why*. I even gave you a recipe for how to.


littlebabyjesus said:


> Actually, don't bother. Ayatollah's right. You are a modern-day Malthusian. You have no answers.


The intellectual full stop. When all else fails, deploy the ad-hominem ("gas chambers/right-wing/Malthusian/etc.) and exit stage left. No-one has any answers - no-one has ever succeeded in piloting a complex hyper-debt industrial society down a rapid energy decline slope. I have plenty of *thoughts* about it, mostly about adaptation, but they will make no sense to a man who has been compelled to cross out vast sections of reality simply because they don't fit with his political preference, so is there any point in sharing them?

It's always interesting. To deny peak oil is, effectively, to deny climate change. If it were not true that oil is peaking and true that the climate is changing because of oil, then further oil production will accelerate climate change. So by asserting or even assuming that continued oil production is desirable and possible, you are denying or ignoring climate change. Since both are so inconvenient to your politics, you are compelled to deny them just as much as capitalists are. Social theory attaches enormous value to the concept of labour, as it should. But it attaches so much that it is compelled to coerce everything else - including physical reality - into the framework. So when reality prevents blagsta's BA workers from working - deny reality, and burn everyone who mentions reality as a witch, to protect the core theory.

Which is more or less a response to Bernie Gunther's musing on whether it should follow that socialism must inevitably lead to climate catastrophe. The sterility of thought and inconvenience of reality certainly seems inevitably to lead to denial of reality, so I can't see how it can avoid it.


----------



## Blagsta (Jan 29, 2012)

Yep, definitely a right winger, far right, but a cowardly one.


----------



## ayatollah (Jan 29, 2012)

Falcon goes VERY QUIET when asked to explain his politics and his vision of a future society doesn't he. He is suddenly VERY indignant, and increasingly vague about his real views. Of course he is on the Far Right of the political spectrum, as his right wing views on pensions and strikes shows. Just how Far to the Right though ? He is some sort of neo-Malthusian. Of course anyone who posits an "alternative" to a future of either some variant of capitalism or a variant of socialism is talking bollocks. There is no other alternative system - other than a post nuclear or other global disaster return to some pre industrial primitive social system ..feudalism ?

Just to remind ourselves: Thomas Malthus 1766 - 1834 "proved conclusively" in his "Essay on the principles of population" that because human population ALWAYS increased in geometric proportion compared to agricultural production increasing in an arithmetic ratio , that starvation would always be the lot of the majority of humanity without radical birth control. This was a very convenient excuse of course for regular famine in Ireland and India -- "not our fault " say the capitalists, just a natural phenomenum. Of course the problem with Malthus' theory was that it was BOLLOCKS. The 19th century agricultural revolution enabled food production to explode in productivity , and populations to explode too - with very few people having to work on the land compared to pre industrial societies.

Falcon's neo Malthusian fixation on dwindling oil supplies is just another varient of this bogus ideology - with oil not food as the core finite resource. Except of course OIL isn't the core issue --- it is ENERGY, generated however it can be generated. So alongside the graph for diminishing new oil discoveries we need to superimpose a graph showing rising energy production from a whole host of sources eg, nuclear, geothermal, improved "carbon capture" coal , hydroelectric, renewables, electricity from sunlight /hydogen from sunlight electricity, wave power, new deep source oil/gas deposits, oil shales ,etc, etc, etc, and of course the almost definite EVENTUAL successful development of the now 50 year project to perfect FUSION based power. The alternative energy sources graph would be unimpressive so far, BUT it will rise fast this century - and even if we fail to abolish capitalism it still could be a major factor in capitalism reaching takeoff momentum again for another long wave of prosperity (for the capitalist class at least). NOT time to accept that most of the world's population has to die off because of energy and food shortages. The problem is a POLITICAL one , not at heart a technological or resource one.

I think we've all wasted quite enough time on Falcon's reactionery and totally WRONG theory. Let's move on to discussion on how to fight back against the current capitalist austerity offensive - as part of the longer term offensive against capitalism.


----------



## yield (Jan 29, 2012)

Falcon said:


> No-one has any answers - no-one has ever succeeded in piloting a complex hyper-debt industrial society down a rapid energy decline slope. I have plenty of *thoughts* about it, mostly about adaptation, but they will make no sense to a man who has been compelled to cross out vast sections of reality simply because they don't fit with his political preference, so is there any point in sharing them?


Go on then I'd like to hear your thoughts. If not here then on a new thread.

Personally I think the debt can all be written off. Then we should have a planned socialist economy.


----------



## Falcon (Jan 29, 2012)

ayatollah said:


> Falcon goes VERY QUIET when asked to explain his politics and his vision of a future society doesn't he. He is suddenly VERY indignant, and increasingly vague about his real views.


Umm - this betrays almost autistic levels of imagination about the effect your impulse has of labelling people you disagree with as advocates of gas chambers.


ayatollah said:


> Of course he is on the Far Right of the political spectrum, as his right wing views on pensions and strikes shows. Just how Far to the Right though ? He is some sort of neo-Malthusian. Of course anyone who posits an "alternative" to a future of either some variant of capitalism or a variant of socialism is talking bollocks. There is no other alternative system - other than a post nuclear or other global disaster return to some pre industrial primitive social system ..feudalism ?


Of course. The far right opposes pensions and strikes. Falcon doesn't agree with my views on pensions and strikes. Falcon is of the far right. How could it possibly be otherwise? And of course climate change deniers oppose peak oil. You deny peak oil ("bogus", I believe). So you are a climate change denier, right? For all its faults, logical fallacy does produce a convenient simplicity.


ayatollah said:


> Just to remind ourselves: Thomas Malthus 1766 - 1834 "proved conclusively" in his "Essay on the principles of population" that because human population ALWAYS increased in geometric proportion compared to agricultural production increasing in an arithmetic ratio , that starvation would always be the lot of the majority of humanity without radical birth control. This was a very convenient excuse of course for regular famine in Ireland and India -- "not our fault " say the capitalists, just a natural phenomenum. Of course the problem with Malthus' theory was that it was BOLLOCKS. The 19th century agricultural revolution enabled food production to explode in productivity , and populations to explode too - with very few people having to work on the land compared to pre industrial societies.


Perfectly correct. Malthus was both a politically motivated little shit, and did not anticipate the 19th Century revolutionary methods in _real time energy capture agriculture_ methods that allowed _real time_ energy capture to sustain more people than could be sustained without. And that number was about 2 billion. We now have 7 billion.


ayatollah said:


> Falcon's neo Malthusian fixation


...Anything to do with population discussion is Malthusian. Compare with the Catholic church's prohibition of Copernicus' thoughts on heliocentricity. Heliocentricity denies a world centred view, and therefore the Church's power. So Copernicus is a witch. It is not possible or permissible to discuss population in ayatollah's world view.


ayatollah said:


> on dwindling oil supplies is just another varient of this bogus ideology - with oil not food as the core finite resource. Except of course OIL isn't the core issue --- it is ENERGY, generated however it can be generated.


The agricultural revolution applied oil - the fossilised sunlight collected over millions of acres, and millions of years - to single acres of land in single years. It took agriculture out of _real time, _enabled _industrial agriculture methods_, quadrupling food yields. The population rose to 7 billion.

The core issue isn't energy, and the core problem is not difficult to understand. The core issue is _concentrated_ energy. Dividing an acre into two half acres, growing food on one half, capturing energy _in real time_ on the other half, and applying the captured energy to try and increase the food gives you less food because (1) you've halve the food growing area (2) you need energy to build and maintain the device and (3) the device is less efficient than the plant is at capturing energy. So the core problem is we are reverting from _industrial agricultural methods_ to _real time energy capture agriculture methods_. The last time we had those, the population was 2 billion. Let's have a look at the Arctic Ayatollah's views on this:


ayatollah said:


> So alongside the graph for diminishing new oil discoveries we need to superimpose a graph showing rising energy production from a whole host of sources eg, nuclear, geothermal, improved "carbon capture" coal , hydroelectric, renewables, electricity from sunlight /hydogen from sunlight electricity, wave power, new deep source oil/gas deposits, oil shales ,etc, etc, etc, and of course the almost definite EVENTUAL successful development of the now 50 year project to perfect FUSION based power.



Yes you would. Unfortunately, it has the thickness of a skin on a grape, and forgets that energy is currently effectively free and every alternative is unaffordable. This from a person who, 48 hours ago, thought that Arctic oil could extend peak oil. Do we really have a lot of confidence that he really grasps the thermodynamic implications of what he is proposing, how such a project might actually be undertaken from a position of hyper-debt, what the energy requirement of the capital equipment and infrastructure is, how much its construction and operation subtracts detracts from the industrial agricultural process and therefore food yield impact, etc. No - nuclear (and dumping the waste on our distant relatives - socialism's compulsive instinct to sacrifice the environment and our children to ideology rears its ugly head), and a basket of basket case technologies that are proving curious resistant to actually working out of the laboratory and in the real world, and that ultimate instrument of denial - some mythical technology which is indistinguishable from magic (because it is).

And the issue isn't whether this is doable our not. Might be. Might not. The issue is, that in the Arctic Ayatollah's world, we can't even discuss it because of the heresy taboo of Malthusianism he needs to impose to protect his core ideology. Instead, we have to cross our fingers and spout innumerate platitudes. Which isn't a fantastic basis for rational policy or politics.


ayatollah said:


> The alternative energy sources graph would be unimpressive so far


at last, a point of agreement.


ayatollah said:


> , BUT it will rise fast this century


Agreement is short lived. We must presume his confidence in this and in Arctic oil share the same basis - general ignorance, innumerate platitude, and denial


ayatollah said:


> - and even if we fail to abolish capitalism it still could be a major factor in capitalism reaching takeoff momentum again for another long wave of prosperity (for the capitalist class at least). NOT time to accept that most of the world's population has to die off because of energy and food shortages. The problem is a POLITICAL one , not at heart a technological or resource one.
> 
> I think we've all wasted quite enough time on Falcon's reactionery and totally WRONG theory. Let's move on to discussion on how to fight back against the current capitalist austerity offensive - as part of the longer term offensive against capitalism.


Well that's tedious reality dealt with. Let's get on with the interesting stuff.

D minus. Must try harder.


----------



## Crispy (Jan 29, 2012)

ayatollah said:


> So alongside the graph for diminishing new oil discoveries we need to superimpose a graph showing rising energy production from a whole host of sources eg, nuclear, geothermal, improved "carbon capture" coal , hydroelectric, renewables, electricity from sunlight /hydogen from sunlight electricity, wave power, new deep source oil/gas deposits, oil shales ,etc, etc, etc, and of course the almost definite EVENTUAL successful development of the now 50 year project to perfect FUSION based power. The alternative energy sources graph would be unimpressive so far, BUT it will rise fast this century



All the objective studies of this I have ever seen have concluded that all these replacements will not be able to be ramped up quickly enough to offset the decline in oil. When you consider the physical systems of mining, refining, manufacturing and distribution - which all run on oil/gas/coal - then you have some physical constraints on the speed of development of alternative energy sources. These constraints do not allow current energy consumption to continue.

There is nothing almost definite about fusion working out. The ITER project is costing more than any other single science machine in history, and the design they are building is incredibly complex and expensive. Even if they do manage to get the thing running, rolling the technology out at a commercial scale will take an even greater input of energy, labour and capital than any other alternative. Yes, the fuel may be effectively free, but with this technology, fuel is not the major cost.

Malthus put forward his theory before the advent of modern farming technology - the green revolution, which has allowed food production to keep pace with population. Decreasing energy supplies will decrease the power of that farming technology. More farming will be done by hand, less fertiliser will be available, yeilds will fall, people will go hungry. I don't understand why pointing this out makes someone a right-winger.


----------



## Crispy (Jan 29, 2012)

So - these things are going to happen, regardless of the political systems in place. Our future is one of adaption and contraction. In order to best manage that contraction with the least harm, an equitable political system is required. Call it socialism if you like.

However, I suspect the more common response from governments around the world will be authoritarian control of rationing systems for energy and food. More isolationism and nationalism, and resource wars. Thankfully, the ongoing energy crisis will prevent war on a 20th century scale.


----------



## Kaka Tim (Jan 29, 2012)

ayatollah said:


> Falcon goes VERY QUIET when asked to explain his politics and his vision of a future society doesn't he. He is suddenly VERY indignant, and increasingly vague about his real views. Of course he is on the Far Right of the political spectrum, as his right wing views on pensions and strikes shows. Just how Far to the Right though ? He is some sort of neo-Malthusian. Of course anyone who posits an "alternative" to a future of either some variant of capitalism or a variant of socialism is talking bollocks. There is no other alternative system - other than a post nuclear or other global disaster return to some pre industrial primitive social system ..feudalism ?
> 
> Just to remind ourselves: Thomas Malthus 1766 - 1834 "proved conclusively" in his "Essay on the principles of population" that because human population ALWAYS increased in geometric proportion compared to agricultural production increasing in an arithmetic ratio , that starvation would always be the lot of the majority of humanity without radical birth control. This was a very convenient excuse of course for regular famine in Ireland and India -- "not our fault " say the capitalists, just a natural phenomenum. Of course the problem with Malthus' theory was that it was BOLLOCKS. The 19th century agricultural revolution enabled food production to explode in productivity , and populations to explode too - with very few people having to work on the land compared to pre industrial societies.
> 
> ...



I agree with the first half but not the second. As stated before, even the very best case scenario for renewables comes nowhere near filling the energy gap left by a decline in oil production. Just becasue malthus was wrong about food production doesn't mean that the same will apply to energy depletion. There is no evidence of some technological fix for the energy gap happneing in the forseable future - jsut becasue technology has got society out of previous resources crunches in no way gaurantees it will do so again - and there are plently of examples of societies who failed to find a techno fix and collapsed.

I think the economic meltdown is the ineivtiable product of neo-liberalism meeting the energy crunch - the two are inextricably linked. I very much differ from falcon as seeing the politics of it as 'irrelevant'.

However this does not mean we are doomed to a malthusiasn 'solution' as Falcon seemingly hints at -
the energy crunch demands that finite reousrces are contorlled and distibuted by and for everyone on the planet because the captitalist constant, infinite, growth model is dead. That means breaking concentrations of wealth and power as the number one priority. Anything that empowers ordinary people against power should be supported (like striking BA workers).

Leaving the control of the resouces in the hands of the banks and corporations will gaurentee that the world continunes to be run for the short term enrichment of the few to the runiation of all of us.
Denial of the energy crunch allows the capitalists of the hook - they can argue that recovery is around the corner (after the necessarry belt tightening and autsterity) and a newly reformed capitalism will return us to prospertiy. Arguning that the system is irrevercoably broken fatally undermines the austerity argument becasuse people are not going to accept a steady decline in living standards if 5% of the worlds population plan on keeping their 80% of the wealth in the face of mass immisseariton for the many.


----------



## Falcon (Jan 29, 2012)

Kaka Tim said:


> I think the economic meltdown is the ineivtiable product of neo-liberalism meeting the energy crunch - the two are inextricably linked. I very much differ from falcon as seeing the politics of it as 'irrelevant'.


Kaka Tim - I totally agree with your analysis about the cause. But the signal to noise ratio in this thread is pretty poor and that has led to misunderstanding.

I'm not very quiet about politics, and I don't view politics as irrelevant. I AM very quiet about engaging in a style of political discussion that dismisses everyone it disagrees with as genocidal - wouldn't you be? And I regard the type of politics that can only be sustained by ignoring large sections of reality as irrelevant by definition. I think that ought to be fairly reasonable.

Politics is absolutely vital. The bulk of my efforts in this thread has been about establishing reality as a basis for politics, not of denying politics. I apologise if that isn't clear.

I don't 'hint' at anything and I don't propose a 'malthusian solution'. I am stating - fairly obviously - that there is a huge problem that any conception of politics that aspires to be realistic has to recognise explicitly and state how it will solve. Socialism has got itself into the hysterical belief state that even suggesting we look at the problem so we can figure out the response that has the biggest probability of success is indistinguishable from the proposal we gas everyone. It's childish, it's irresponsible, and if it is representative of how the problem would be tackled if they ever got into power then they ought to be resisted for the sake of the people who's lives they threaten.

Meanwhile, the huge quantity of _ad-hominem_ attack that gets thrown around in the fond hope that it might provide a smokescreen for the weaknesses of their argument only underscores the weaknesses of their argument.


Kaka Tim said:


> Denial of the energy crunch allows the capitalists of the hook


This is a brilliant insight, and reveals just how incoherent the socialist energy depletion denial argument is.


----------



## romeo2001 (Jan 29, 2012)

Captain Hurrah said:


> You're a bit thick, aren't you.


lol so tell me how the dictionary definition of a planned economy is not what happened in nazi germany ie state owned enterprises and co-operative enterprises directed by the state etc - or are you in undfer the impression that Hitler was actually a fairly broad minded chap who let his people do as they pleased?  Feel free to do it by pm as I definitely dont want to hijack this thread


----------



## romeo2001 (Jan 29, 2012)

Blagsta said:


> Are you about to argue that the Nazis were socialist? Excellent.


not quite as excellent as peple who argue that the nazis encouraged a free market


----------



## romeo2001 (Jan 29, 2012)

Blagsta said:


> Yep, definitely a right winger, far right, but a cowardly one.


godwins law anyone?


----------



## Falcon (Jan 29, 2012)

romeo2001 said:


> godwins law anyone?


Some individuals get very personal, very quickly on Urban75. It's very different from most other forums I use and I assume it reflects the culture and values of its political centre of gravity. It's harmless. I use it like the dash board 'fuel light' to warn me where they are in their argument.


----------



## Blagsta (Jan 29, 2012)

romeo2001 said:


> not quite as excellent as peple who argue that the nazis encouraged a free market


Who argues that?


----------



## Blagsta (Jan 29, 2012)

romeo2001 said:


> godwins law anyone?


Who did I call a Nazi?

You _are_ quite thick.


----------



## Blagsta (Jan 29, 2012)

Falcon said:


> Some individuals get very personal, very quickly on Urban75. It's very different from most other forums I use and I assume it reflects the culture and values of its political centre of gravity. It's harmless. I use it like the dash board 'fuel light' to warn me where they are in their argument.


The only political positions I've seen you argue are right wing ones. QED.


----------



## Crispy (Jan 29, 2012)

Blagsta said:


> The only political positions I've seen you argue are right wing ones. QED.


I didn't see that - honestly, what right-wing positions?


----------



## Blagsta (Jan 29, 2012)

Crispy said:


> I didn't see that - honestly, what right-wing positions?


Go read the thread about the BA strike. Plus the comment about left/right being outdated - I only ever see this from extreme right wingers or their fellow travellers such as Jazzz. It's reminiscent of a "third position" argument.


----------



## yield (Jan 29, 2012)

romeo2001 said:


> not quite as excellent as peple who argue that the nazis encouraged a free market


The Nazis destroyed the trade unions and working class parties. They received hundreds of millions of dollars of foreign investment.

IBM, General Motors, Ford, Kodak, DuPont, Texaco, Esso and others invested heavily in Fascist Germany, Italy and Spain.


----------



## Falcon (Jan 29, 2012)

Blagsta said:


> The only political positions I've seen you argue are right wing ones. QED.


Since you regard every view other than your own as right wing, exactly what other conclusion might you have arrived at? And in what way does that excuse incivility rather than discussion as a response?


Blagsta said:


> Plus the comment about left/right being outdated


In what way is regarding right wing being outdated evidence of being right wing?

This is getting quite interesting.


----------



## Blagsta (Jan 29, 2012)

Falcon said:


> Since you regard every view other than your own as right wing, exactly what other conclusion might you have arrived at?


Oh, a straw man. How dull.


----------



## romeo2001 (Jan 29, 2012)

Blagsta said:


> Who did I call a Nazi?
> 
> You _are_ quite thick.


so calling someone "right wing far right wing and a cowardly one to boot" was not indicating that they have nazi sympathies? and the other posters that inferred that he would be requiring a final solution as a natural consequence of the theories he was stating were'nt either.
Cos if you are saying that then you definitely think "I'm quite thick"
anyway like I say I dont want to hijack this thread so please respond in PM next time


----------



## Blagsta (Jan 29, 2012)

romeo2001 said:


> so calling someone "right wing far right wing and a cowardly one to boot" was not indicating that they have nazi sympathies? and the other posters that inferred that he would be requiring a final solution as a natural consequence of the theories he was stating were'nt either.
> Cos if you are saying that then you definitely think "I'm quite thick"
> anyway like I say I dont want to hijack this thread so please respond in PM next time


Nazism isn't necessarily equivalent to "far right".


----------



## romeo2001 (Jan 29, 2012)

Blagsta said:


> Nazism isn't necessarily equivalent to "far right".


surely you can do better than that?


----------



## romeo2001 (Jan 29, 2012)

Blagsta said:


> Oh, a straw man. How dull.


why dont you come up with some factual responses that challenge his theories- rather than dismissing it because conveniently and as godwins law predicts "hes far right wing?"
Is it because you cant?
seriously - read the thread over again with an open mind and research the explanations he gives about how the economy works   If nothing else Falcon has shown how to demolish an argument without resorting to personal abuse and has backed it up with statistics and theory.  I get the feeling that some of the contributors dont really understand the economics behind what he has said and so have decided to ignore his explanations a load of guff - it isnt.  And you are only making yourselves look spectacularly stupid by continuing to do so.
He's even told you how to argue against him!


----------



## Blagsta (Jan 29, 2012)

You think everyone on the far right is a  Nazi? Earlier you were arguing that Nazism is left wing.


----------



## romeo2001 (Jan 29, 2012)

Blagsta said:


> You think everyone on the far right is a Nazi? Earlier you were arguing that Nazism is left wing.


"Oh, a straw man. How dull"


----------



## Falcon (Jan 29, 2012)

Blagsta said:


> Oh, a straw man. How dull.


How about, just for once, you submit a reasoned argument, rather than emit reactionary invective, and actually explain yourself. Show me why I should find your conception of Socialism (I accept there may be many) appealing and founded in reasoned principle, rather than on suspicious intolerance of anything unfamiliar. Is this style of debate how you propose to convince an uncertain country your principles are suitable for governing them by?

I mean a reasoned argument for why you think my argument is unsound, not a reasoned argument for why you think I'm a right wing advocate of genocide. I'm anticipating that the distinction might not be obvious to you.


----------



## Captain Hurrah (Jan 29, 2012)

romeo2001 said:


> lol so tell me how the dictionary definition of a planned economy is not what happened in nazi germany ie state owned enterprises and co-operative enterprises directed by the state etc - or are you in undfer the impression that Hitler was actually a fairly broad minded chap who let his people do as they pleased? Feel free to do it by pm as I definitely dont want to hijack this thread



Yep, you're thick.


----------



## Blagsta (Jan 29, 2012)

romeo2001 said:


> "Oh, a straw man. How dull"


You could at least _attempt_ to construct an argument.


----------



## sleaterkinney (Jan 29, 2012)

If you're far enough left, everything else is right-wing.


----------



## Blagsta (Jan 29, 2012)

Falcon said:


> How about, just for once, you submit a reasoned argument, rather than emit reactionary invective, and actually explain yourself. Show me why I should find your conception of Socialism (I accept there may be many) appealing and founded in reasoned principle, rather than on suspicious intolerance of anything unfamiliar. Is this style of debate how you propose to convince an uncertain country your principles are suitable for governing them by?
> 
> I mean a reasoned argument for why you think my argument is unsound, not a reasoned argument for why you think I'm a right wing advocate of genocide. I'm anticipating that the distinction might not be obvious to you.



Where did I say anything about genocide? That's come from you, not me.


----------



## Blagsta (Jan 29, 2012)

sleaterkinney said:


> If you're far enough left, everything else is right-wing.


Is that what you think is going on here?


----------



## Falcon (Jan 29, 2012)

Blagsta said:


> Where did I say anything about genocide? That's come from you, not me.


I'll confess, the invective has started to blur. Perhaps I've confused your accusation that I am an extreme right winger with Ayatollah's accusation I was considering gassing people. Did you accuse me of cowardice? Being a neo-Malthusian? Talking bollocks? If it was reasoned debate I would feel compelled to check but since I can't (and don't have to) distinguish much between the various forms of incivility, I'm addressing you all as one to save time.


Blagsta said:


> Is that what you think is going on here?


Given the remarkable and extended absence of any substance from you, we don't have much else to go on. Hence my offer to allow you to expand a little on your philosophy, since my preference is for fact rather than suspicion.


----------



## sleaterkinney (Jan 29, 2012)

Blagsta said:


> Is that what you think is going on here?


Yep. Esp your 'outing' him as a far right-winger.


----------



## Falcon (Jan 29, 2012)

sleaterkinney said:


> Yep. Esp your 'outing' him as a far right-winger.


What whiffs of tragedy and farce here in equal measure is that I'm curious to find someone who will talk intelligently about Marxism and how its views on resource and the environment have either been misrepresented, or might be wrong but could be made to work, as a legitimate component of a response to peak oil. I think the people who can are as put off by the incivility as I am.


----------



## romeo2001 (Jan 29, 2012)

Falcon said:


> What whiffs of tragedy and farce here in equal measure is that I'm curious to find someone who will talk intelligently about Marxism and how its views on resource and the environment have either been misrepresented, or might be wrong but could be made to work, as a legitimate component of a response to peak oil. I think the people who can are as put off by the incivility as I am.


They are googling it as we speak dude - lets hope the results are better than their challenges to how QE doesnt produce inflation


----------



## Crispy (Jan 29, 2012)

Falcon said:


> I'll confess, the invective has started to blur. Perhaps I've confused your accusation that I am an extreme right winger with Ayatollah's accusation I was considering gassing people. Did you accuse me of cowardice? Being a neo-Malthusian? Talking bollocks? If it was reasoned debate I would feel compelled to check but since I can't (and don't have to) distinguish much between the various forms of incivility, I'm addressing you all as one to save time.



tbf, falcon, you were guilty of the same generalisation when you quoted Ayatollah's post, stripped out everything except that which you considered to be Marxist buzzwords, and then assumed that his position on resources/environment was the same as Marx, Soviet Russia or China.


----------



## Falcon (Jan 29, 2012)

romeo2001 said:


> They are googling it as we speak dude - lets hope the results are better than their challenges to how QE doesnt produce inflation


Or the assertion that $180 oil is evidence of oversupply, Arctic oil will stave off peak oil, staving off peak oil won't kill the climate, 30 billion barrels per year of oil can be replaced by devices emitting 200 milliwatts of power per square meter, and cancelling the debt that pays for your children's pension won't disadvantage your children. I can (and have) googled it, and even read Ahmed and Burkett on the matter - I need someone "who know's his shit", so to speak


----------



## Falcon (Jan 29, 2012)

Crispy said:


> tbf, falcon, you were guilty of the same generalisation when you quoted Ayatollah's post, stripped out everything except that which you considered to be Marxist buzzwords, and then assumed that his position on resources/environment was the same as Marx, Soviet Russia or China.


I think we can safely distinguish between me using his words, and me using my own words, can't we? But I'll accept your point. See? That's how it works.


----------



## littlebabyjesus (Jan 29, 2012)

You are spectacularly bad at guessing other people's views. You call me a climate change denier and accuse me of wanting to pretend there is no problem with oil. Neither if these things is true and I have not said either thing. In fact I have stated explicitly on this very thread that there is an immediate necessity to address the issue of fossil fuel replacement. 

Can you explain your comment about a post-industrial agriculture population please? Be explicit. Treat me like I'm a bit slow, and tell me exactly what you mean by that.


----------



## free spirit (Jan 29, 2012)

Crispy said:


> All the objective studies of this I have ever seen have concluded that all these replacements will not be able to be ramped up quickly enough to offset the decline in oil.


can you show me an objective study that predicted we'd have installed 800MW of solar PV in this country last year? For reference purposes, that's approximately 10 x the amount installed the previous year.

Even DECC are now predicting we'll have installed over 2GW of solar PV by the end of 2013-14 financial year - 2GW being the original target figure for 2020.

I doubt any would have predicted the installed cost of PV would have halved inside 2 years of the Feed In Tariff either, but it has. My prediction is that PV will have reached cost parity with offshore wind by 2015, and probably with Fossil fuel generated electricity shortly afterwards, and we'll have 15-20GWp installed by 2020 providing the government doesn't totally screw it all up (which I admit is a very real possibility).

IMO the authors of most of these studies mostly haven't got a clue about how fast renewable energy actually can be deployed once the bureaucratic barriers are removed and the finances stack up.


----------



## yield (Jan 29, 2012)

Falcon said:


> What whiffs of tragedy and farce here in equal measure is that I'm curious to find someone who will talk intelligently about Marxism and how its views on resource and the environment have either been misrepresented, or might be wrong but could be made to work, as a legitimate component of a response to peak oil. I think the people who can are as put off by the incivility as I am.


David Harvey: The Crisis Today: Marxism 2009 - on youtube only 25 minutes long.

He discusses production, technology and our relationship to nature.


----------



## Falcon (Jan 29, 2012)

littlebabyjesus said:


> You are spectacularly bad at guessing other people's views. You call me a climate change denier and accuse me of wanting to pretend there is no problem with oil. Neither if these things is true and I have not said either thing. In fact I have stated explicitly on this very thread that there is an immediate necessity to address the issue of fossil fuel replacement.


LBJ I'm specifically not guessing your views, and in fact am trying pretty hard to solicit them. Try and remember that while you are you, I'm dealing with three of you and a fair amount of unpleasantness. I point out to Blagsta that guessing I am right wing just because both right wing people and I disagree with him is as nuts as assuming that Ayatollah ("peak oil is bogus") denies climate change because climate change deniers and he deny peak oil. That said, I don't think ayatollah has thought too strongly about the implications of his beliefs, but that is a different point which I don't hold you to account for.


littlebabyjesus said:


> Can you explain your comment about a post-industrial agriculture population please? Be explicit. Treat me like I'm a bit slow, and tell me exactly what you mean by that.



The population, with oil intensified industrial agricultural methods, is 7 billion.

We are returning to pre-industrial agricultural methods. AKA "post-industrial".

The last time we had pre-industrial agricultural methods, the population was 2 billion.

One of industrial agriculture's methods is to sterilise the soil and supplement with oil. So we are returning to a lower base.

There is no sinister Malthusian plot. I'm simply pointing out that this might be worth thinking about a little stronger than "oh it will be fine, technology fixes everything", after reminding ourselves that the necessary factor in technology (surplus energy) is precisely the commodity we won't have (the fatal error in the renewables assumption). It certainly needs something a little more responsible than "talking about it is evidence of capitalist motive".


----------



## Falcon (Jan 29, 2012)

free spirit said:


> IMO the authors of most of these studies mostly haven't got a clue about how fast renewable energy actually can be deployed once the bureaucratic barriers are removed and the finances stack up.


Or indeed how fast its costs will increase once device and infrastructure (and infrastructure infrastructure) manufacturing and operating energy cost hits $200/bbl. Or economic recession deepens and payment ability collapses further. Factors I don't recall being accounted for in estimations of deployment speed.


----------



## free spirit (Jan 29, 2012)

Falcon said:


> Or indeed how fast its costs will increase once device and infrastructure (and infrastructure infrastructure) manufacturing and operating energy cost hits $200/bbl. Or economic recession deepens and payment ability collapses further. Factors I don't recall being accounted for in estimations of deployment speed.


as we've previously discovered, I disagree with your analysis of virtually everything, so it should come as no surprise to find that I disagree with you here. Perhaps you could explain which elements of the PV supply chain are so coupled to oil price as to cause the price to increase?

AFAIK oil is pretty much only used for transportation, which is a relatively small part of the overall cost of the equipment, which would probably explain why you've not found it causing the price to rise in any studies.

In terms of recession, well that only applies if you buy in to this current ridiculous viewpoint of austerity being needed to reduce budget deficits instead of keynesian style economic stimulus being used to pull us out of recession, create jobs, increase tax revenues, reduce government welfare expenditure and pay off the debts that way. Investment in renewable energy is exactly the sort of economic stimulus this country and the world requires now, especially as it will reduce our long term exposure to the fossil fuel price increases and shortages to come. There's actually fuckloads of capital out there looking for something to invest in with reasonable returns, so access to capital is the least of the problems here.


----------



## littlebabyjesus (Jan 29, 2012)

Yep. Good post fs. Recession equals inactivity - unemplyment and the squandering of human resources. And this is a time when all our resources are needed to meet the challenges of the immediate future. 

We need to be working, but working on the right things. Recession is not the result of some kind of natural law, causing us to sit by helplessly underemployed as disaster upon disaster befalls us.


----------



## Falcon (Jan 29, 2012)

free spirit said:


> as we've previously discovered, I disagree with your analysis of virtually everything, so it should come as no surprise to find that I disagree with you here


Indeed.


free spirit said:


> Perhaps you could explain which elements of the PV supply chain are so coupled to oil price as to cause the price to increase?


The trucks that mine the silicon (manufacturing and energy). The factories that make the trucks. The furnaces that smelt the silicon. The facilities that make the oxygen for the furnaces. The steel that makes the frames. The factories that make the steel. The factories that make the cement for the factories that make the steel. The hulls of the vessels that transport the raw materials. The oil that powers the vessels. The energy costs of data centres that process the shipping and export notices. The food costs of the people working in the silicon foundry. The heating costs of the people working in the fabrication facility. The ... OK - enough. The manufacture, retooling and operating energy costs of the global industrial manufacturing system without which you can't make a single PV powered pocket calculator. And the subsidies currently being funded by governments on the way to insolvency because of their economies' structural exposure to energy cost increases which are nowhere near fully realised yet. Apart from that, you are golden.

You'll argue that PV only utilises some fraction of the capacity of the system, and I'll remind you that PV is the least expensive of the renewables and can't possibility fill the demand created by oil depletion, they all require that infrastructure, so all you are in fact arguing is that net renewable costs will be even higher than are estimated.



free spirit said:


> keynesian style economic stimulus being used to pull us out of recession, create jobs, increase tax revenues, reduce government welfare expenditure and pay off the debts that way.


This is interesting. We have a debt to GDP ratio of 10, a £4 trillion public liability, collapsing oil export revenue, and a debt interest trajectory that takes us insolvent. Can you remind us how the logic of printing debt to fund liability and debt interest (and stimulus) works, again? I've forgotten.


free spirit said:


> There's actually fuckloads of capital out there looking for something to invest in with reasonable returns, so access to capital is the least of the problems here.


Yeah, we've kind of been there in this thread. There is fuck loads of *printed* debt. There is a $200 trillion public liability in the US. I'm guessing those folks might want paid first. The total quantity of outstanding debt exceeds the total quantity of available capital by a few orders of magnitude. I realise the difference isn't very clear to many.


----------



## littlebabyjesus (Jan 29, 2012)

Oh not this public liability rubbish again. 

What is needed to meet that liability is a functioning economy. There is also plenty of scope to raise taxes to meet it. That's the whole point about such 'unfunded' on-going commitments- they are paid for out of taxes. Always have been.


----------



## free spirit (Jan 29, 2012)

Falcon said:


> Indeed.
> The trucks that mine the silicon (manufacturing and energy). The factories that make the trucks. The furnaces that smelt the silicon. The facilities that make the oxygen for the furnaces. The steel that makes the frames. The factories that make the steel. The hulls of the vessels that transport the raw materials. The oil that powers the vessels. The energy costs of data centres that process the shipping and export notices. The food costs of the people working in the silicon foundry. The heating costs of the people working in the fabrication facility. The ... OK - enough. The energy costs of the global industrial manufacturing system without which you can't make a single PV powered pocket calculator. Apart from that, you are golden.


As I said, other than the transport, there's fuck all in the energy supply chain for PV manufacture that's fueled by oil. Electricity produced from coal and gas yes, oil no. Also, a major component in the energy invested in PV is aluminium for the frame and mounting equipment, and around 55% of aluminium is manufactured using hydro electricity.

You do seem to have an obsession with oil.



Falcon said:


> Yeah, we've kind of been there in this thread. There is fuck loads of *printed* debt. There is a $200 trillion public liability in the US. I'm guessing those folks might want paid first. The total quantity of outstanding debt exceeds the total quantity of available capital by a few orders of magnitude. I realise the difference isn't very clear to many.


if they just wanted to be paid back immediately then they'd not have invested it in the USA treasury in the first place would they? And even if they were paid back then there'd be $200 trillion of cash in investors bank accounts looking for somewhere to invest it, it wouldn't simply disappear.


----------



## Falcon (Jan 29, 2012)

free spirit said:


> As I said, other than the transport, there's fuck all in the energy supply chain for PV manufacture that's fueled by oil.


 So are you claiming that the global industrial manufacturing system can run on renewable energy? Or that PV can be made at global scale without a global industrial manufacturing system. If it's the former, have you figures which show energy available for society after the global industrial manufacturing system's requirements are netted off?


free spirit said:


> You do seem to have an obsession with oil..


You do seem to be rather unaware of its significance to your projects. I got the impression in our last conversation that you at least understood that there is no element of our current systems, including the manufacturing processes for your PV, which are capable of functioning without it. Since the affordable oil is halving every 7 years, it seems reasonable to keep an eye on it, don't you think?


free spirit said:


> if they just wanted to be paid back immediately then they'd not have invested it in the USA treasury in the first place would they? And even if they were paid back then there'd be $200 trillion of cash in investors bank accounts looking for somewhere to invest it, it wouldn't simply disappear.


Invested what in the Treasury? You do understand that the $200 trillion does not exist? That it's been promised, but not created? Tell me you don't think it's sitting in a bank somewhere waiting to be used?


littlebabyjesus said:


> Oh not this public liability rubbish again. What is needed to meet that liability is a functioning economy.


And what is needed for a functioning economy (specifically, an economy growing at 1.5% per annum for the next 30 years) is oil. Which you concede you won't have. The official public liability is estimated from a 1.5% economic growth rate. Are you saying you think the country can manage its own oil depletion, global energy cost increases, AND grow at 1.5% as it converts to an energy source of 10% of the EROI of the current one, by continuing to print money?


----------



## littlebabyjesus (Jan 29, 2012)

The economy does not need to grow to meet the public liability. Without growth, what is needed to meet it is to end the continuing enrichment of the richest at the expense of the rest of us.

For that we need a move away from the current capitalist model. Whether the overall size of the pie is growing or shrinking, capitalism works to increase the share of that pie that is in the hands of those that control capital. That's what 'profit' is.

On the one hand you are crticising those of us who are talking about the problems of capitalism and how they need to be changed. But on the other hand you describe the problems you foresee in capitalist terms, assuming the capitalist paradigm to be 'natural'. I'm not sure you realise you are doing this.


----------



## TruXta (Jan 29, 2012)

Seems to me that Falcon is arguing from a particular realist position in which it is assumed that the status quo ie capitalism will continue in its overall shape. That's neither right wing nor wrong although it might limit one's sociopolitical imagination somewhat, as in what non-capitalist solutions can be proposed.


----------



## free spirit (Jan 30, 2012)

Falcon said:


> So are you claiming that the global industrial manufacturing system can run on renewable energy? Or that PV can be made at global scale without a global industrial manufacturing system. If it's the former, have you figures which show energy available for society after the global system's requirements are netted off?


That's an entirely different point. The point I was addressing specifically was your assertion about the impact of $200/BBL oil price would have on PV costs.

My point, as would be clear from the post you quote if you'd not cut the relevant bits out, is merely to demonstrate why PV costs are not coupled in any significant way to the oil price, because the majority of the energy used in PV manufacture is electricity from coal, gas and hydro. Oil is a relatively small part of the energy input into PV manufacture, mainly only involved in the transport side of things a result of which is that the price of PV is only marginally impacted on by the price of oil.

If this were not the case then PV prices would not have been able to fall so significantly at a time of record high oil prices.



Falcon said:


> You really don't understand the system, do you? You understand that the $200 trillion does not exist? It's been promised, but not created? Tell me you don't think its sitting in a bank somewhere?


Am I seriously being lectured on this by someone who claimed that the investors would prefer to have their $200 trillion investment back before investments were made to cause the economy to grow?

And of course the US technically could pay it off, it'd simply need to print $200 trillion and hand it over to it's bond holders. Obviously this would be an utterly stupid thing to do, but then I'm not the one suggesting that they want paying back rather than to have the US economy grow. I was merely making the point that if in some unlikely scenario, this money were to be paid back, then it would still exist and be available for investment.



Falcon said:


> And what is needed for a functioning economy is oil. Which you concede you won't have.


no, what is needed for a functioning economy is energy, and the efficient use of that energy.



Falcon said:


> The official public liability is estimated from a 1.5% economic growth rate. Are you saying you think the country can manage its own oil depletion, global energy cost increases, AND grow at 1.5% as it converts to an energy source of 10% of the EROI of the current one?


of course it can. The cause of this double dip recession / depression is largely down to utterly mental government austerity policies at completely the wrong time in the economic cycle. Reverse these policies and focus on stimulating growth, and creating jobs partly through more rapid deployment of renewable energy technology, grid upgrades, insulation etc etc and the UK can reverse the current dire economic situation. BTW, EROEI is only one part of the equation. Renewable energy, particularly SSEGs, and energy efficiency measures result in far more jobs per MWp installed or saved than fossil fuel generation, and job creation is what gets countries out of recession and to the point where they can pay their debts off, not austerity measures.

BTW, I'm in no way denying that the loss of North Sea oil and gas production isn't a huge drag on the UK economy and balance of payments deficit, or that aspects of this and global peak oil didn't play a part in triggering the global recession in the first place (I'm fairly sure I was making these points before you were), but I do not accept at all that we've reached anything like the point where they actually prevent economic growth being possible, particularly so if that growth were to be created partially through investment in renewable energy and energy effiency technologies that will reduce our long term dependence on imported energy sources.

I also don't believe your assertions about the decline rate of global oil production in coming years. I'd be very very surprised if global oil production in 2020 wasn't within 5% of it's current levels, and it's certainly not currently dropping at all yet.


----------



## TruXta (Jan 30, 2012)

free spirit said:


> no, what is needed for a functioning economy is energy, and the efficient use of that energy.



Petroleum is much more than an energy source. Without petrochemicals large swaths of tech we take for granted now (not least agricultural tech) would simply cease to exist. PV and renewables are obviously goods, but don't pretend that oil isn't fundamental to the status quo and will remain so whether or not PV and renewables take a majority share of energy production.


----------



## littlebabyjesus (Jan 30, 2012)

True, truxta. All the more reason not to squander it on energy, though. I know different grades are used for different things, but I would also wonder how much research there is into using lower grades to make the things that require higher grades currently, given the ready market for lower grades as fuel. Maybe someone knows- if we were no longer using it for energy, how much oil would we need, and how realistic is it to find alternatives for these other uses if needed?


----------



## Falcon (Jan 30, 2012)

littlebabyjesus said:


> The economy does not need to grow to meet the public liability. Without growth, what is needed to meet it is to end the continuing enrichment of the richest at the expense of the rest of us. For that we need a move away from the current capitalist model. Whether the overall size of the pie is growing or shrinking, capitalism works to increase the share of that pie that is in the hands of those that control capital. That's what 'profit' is.


LBJ - the value of the money promised to people like you and me is £4 trillion. It just is. It's how much you would need to service the liability. (Actually, that is just the public pension liability - the private is even more) That money doesn't exist. It was promised to you and me on the assumption that the economy continued to grow at the 1.5% that it has grown for the say 30 years. It was the growth that was supposed to _create_ the money. If it doesn't, then there is no money to pay your pension and healthcare costs. There is no group you could tax or redistribute money from to service that amount of liability. There is no paradigm - capitalist or socialist - where that ceases to be true. Without grasping this essential point, there is no point in debating this with you any further.


----------



## TruXta (Jan 30, 2012)

littlebabyjesus said:


> True, truxta. All the more reason not to squander it on energy, though. I know different grades are used for different things, but I would also wonder how much research there is into using lower grades to make the things that require higher grades currently, given the ready market for lower grades as fuel. Maybe someone knows- if we were no longer using it for energy, how much oil would we need, and how realistic is it to find alternatives for these other uses if needed?



I found this graph showing oil demand by end use sector, but it's US only, and they use more (probably a fair bit more) of their oil on transportation (i.e. gasoline) than most other countries. Would be interesting to see comparisons with other economies. I imagine oil use by sector in India for example is quite different.






http://www.eia.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/demand_text.htm#U.S. Consumption by sector


----------



## littlebabyjesus (Jan 30, 2012)

That's simply not true, falcon. That is an ongoing liability. You might as well factor in public sector wages to that equation too. It no less arbitrary than talking about pensions - these are ongoing public sector commitments, that's all.

Be careful about patronising people on this, because you're very badly mistaken.

Btw, this is one of the reasons people are calling you right wing . It is exactly this line that the apologists of austerity trot out to scare people. And it is a misunderstanding at best, poisonous propaganda at worst.


----------



## TruXta (Jan 30, 2012)

Found one for the EU:





http://www.eea.europa.eu/data-and-m...sector-1/final-energy-consumption-by-sector-3

ETA I should point out that this takes into account all energy sources, so maybe not that good a comparators really.


----------



## free spirit (Jan 30, 2012)

TruXta said:


> Petroleum is much more than an energy source. Without petrochemicals large swaths of tech we take for granted now (not least agricultural tech) would simply cease to exist. PV and renewables are obviously goods, but don't pretend that oil isn't fundamental to the status quo and will remain so whether or not PV and renewables take a majority share of energy production.


yeah, but energy production is the primary use of oil, the rest are mostly byproducts that we've found a use for, and we don't need anything like the level of oil production we currently have to keep these byproducts in production. Most of them are also recyclable, so we don't need to constantly get as much from oil as we currently do to maintain supplies etc.

Much of the nutrient input for farming could also be replaced with much better nutrient recycling to the soils from our sewage system, and a hell of a lot of it is wasted anyway through over fertilisation, causing serious problems in our water courses etc. We could also not waste 50% of the food grown, then we'd maybe not need to grow as much of it / could use it to feed people elsewhere.

Basically we currently live in an age of massive waste of energy and resources. We can cope with decline in oil production without it destroying our economy and lifestyle if we act sensibly to reduce that wastage and view energy as a precious resource to be conserved and made as much use of as possible. I'm not sure many of our politicians really even recognise the problem though, and the end is nigh stuff really doesn't help the situation IMO.


----------



## TruXta (Jan 30, 2012)

free spirit said:


> yeah, but energy production is the primary use of oil, the rest are mostly byproducts that we've found a use for, and we don't need anything like the level of oil production we currently have to keep these byproducts in production. Most of them are also recyclable, so we don't need to constantly get as much from oil as we currently do to maintain supplies etc.
> 
> Much of the nutrient input for farming could also be replaced with much better nutrient recycling to the soils from our sewage system, and a hell of a lot of it is wasted anyway through over fertilisation, causing serious problems in our water courses etc. We could also not waste 50% of the food grown, then we'd maybe not need to grow as much of it / could use it to feed people elsewhere.
> 
> Basically we currently live in an age of massive waste of energy and resources. We can cope with decline in oil production without it destroying our economy and lifestyle if we act sensibly to reduce that wastage and view energy as a precious resource to be conserved and made as much use of as possible. I'm not sure many of our politicians really even recognise the problem though, and the end is nigh stuff really doesn't help the situation IMO.



I don't disagree with any of that, but when you write "sensibly" as in "acting sensible to reduce that wastage" I'm reading "wishful thinking". For better or worse we have a global system of production and consumption that is fundamentally reliant on inputs from petroleum products at all stages of the cycle and the sheer inertia of that means that peak shocks are more or less bound to happen.

I really really hope that we'll all be living in closed-loop Earthship type cities in 30 years time, but I see no reason to believe that will come true. Not that that should stop anyone from working to that end of course, but plan for the worst and hope for the best, innit.


----------



## Falcon (Jan 30, 2012)

free spirit said:


> Oil is a relatively small part of the energy input into PV manufacture,


 The entire construction, maintenance, retooling and operation of the manufacturing system is subsidised by oil. As we discussed, you can't assume its existence, and then account only for the bit of energy you use "assuming it is there" because shortly it won't and you can't run it on any combination of sunbeams, summer breezes and liquified peasant lunches and have any energy left over for us.


free spirit said:


> Am I seriously being lectured on this by someone who claimed that the investors would prefer to have their $200 trillion investment back before investments were made to cause the economy to grow? ... I also don't believe your assertions about the decline rate of global oil production in coming years. I'd be very very surprised if global oil production in 2020 wasn't within 5% of it's current levels, and it's certainly not currently dropping at all yet.



The $200 trillion is not investor money - it is the money that _would have had to exist_ to service the US pension, healthcare and social security liability _but doesn't_. I appear to be "lecturing" someone who has swapped the negative sign for a positive sign in front of the largest unfunded liability in the history of finance.

The only way it could have existed was if oil had continued to grow at 1.65%. How do we know? _Because that was the assumption they made when they incurred the liability_. We've discovered 2 trillion. We can only produce 2 trillion. The only way to get it to grow now is to discover more oil. How much? If we now discovered 5 Iraqs every 5 years for 25 years, we would extend peak 14 years. Thats the same discovery rate as the '40s. Discovery has halved every 14 years since the 60's.

There is no growth - the game now is to slow the rate of contraction. So there is no money to service the liability. Servicing it will collapse what's left of their financial system. So there is no investment money, and no surplus energy, so no growth. There is no discretionary change you can make to the political system to alter this - even socialism cannot create growth in the presence of energy depletion.

Your PV's depend entirely on an oil subsidised manufacturing system that does not function under contraction, because it depends on a financial system which does not function under contraction. A mental model that thinks there is some PV revolution that is going to safeguard growth is not supported by the evidence.


----------



## free spirit (Jan 30, 2012)

On the peak oil forecast thing, there was a lot of noise a while ago about how the IEA had been massively over optimistic on it's long term forecasts for oil production. To balance this out, here's a graph from a 2008 article on the Oil Drum with the authors predictions of how world liquids production (oil and other liquid fuels) would drop in coming years.

I've super imposed the actual figures onto it upto last year, and I think it's pretty obvious from this how far out these predictions are, with production currently slightly higher now than in 2008. This is why I simply don't believe Falcon's predictions of impending doom.


----------



## littlebabyjesus (Jan 30, 2012)

Total fuckng nonsense falcon. Of course the money doesn't exist yet to pay everyone's pension for the next thirty years. Stop this rubbish, please.


----------



## Falcon (Jan 30, 2012)

free spirit said:


> Much of the nutrient input for farming could also be replaced with much better nutrient recycling to the soils from our sewage system, and a hell of a lot of it is wasted anyway through over fertilisation, causing serious problems in our water courses etc. We could also not waste 50% of the food grown, then we'd maybe not need to grow as much of it / could use it to feed people elsewhere.


Under industrial agriculture, we have sterilised the soil in order to control the dosage of fertiliser and pesticides, and grubbed out the hedgerows that previously created reservoirs for supporting the natural pest control. So the soil will not support food yields even under optimistic assessments of non-hydrocarbon methods and we have no natural pest control, making crops vulnerable to systemic crop failure.


----------



## free spirit (Jan 30, 2012)

Falcon said:


> The entire manufacturing system is subsidised by oil
> 
> The $200 trillion doesn't exist. The only way it could have existed was if oil had continued to grow at 1.65%. We've discovered 2 trillion. We can only produce 2 trillion. The only way to get it to grow is to discover more oil. How much? If we now discovered 5 Iraqs every 5 years for 25 years, we would extend peak 14 years. There is no money to invest. There is no growth - the game now is to slow the rate of contraction. Your PV's depend entirely on an oil subsidised manufacturing system that does not function under contraction, because it depends on a financial system which does not function under contraction.


Oil currently makes up approximately 1/3 of the global primary energy supply, the majority of which is used for transportation. While 1/3 is a significant portion of our energy requirements, it's still only a third. Total world energy production rose by 4% in 2010, which is the important figure, not oil production alone (which also rose btw)

also, that graph you keep posting up - why are you using a graph from somewhere around 2003?

I'm betting that a graph using actual up to date data would look a hell of a lot different to one produced before the oil price had really risen, and mainly reflecting a period when oil prices had been at historic low levels for several decades, and investment in oil prospecting had dropped massively. I've got a friend who pilots one of the boats that's out scouring the sea beds for oil, so am well aware that in the late 90's those companies were all laying off huge numbers of staff, and mothballing their boats due to the low oil price, and have spent the last 10 years rehiring all their staff and working all their boats 24/7/365 because the higher oil price makes it economically viable for them to do so.

as an aside, renewables are now producing more energy in the USA than nuclear, and are at 75% of the domestic US oil production levels? [source]


----------



## Falcon (Jan 30, 2012)

littlebabyjesus said:


> Total fuckng nonsense falcon. Of course the money doesn't exist yet to pay everyone's pension for the next thirty years. Stop this rubbish, please.


"At no point over the next thirty years will the money exist to pay people's pension". Better?


----------



## Falcon (Jan 30, 2012)

free spirit said:


> also, that graph you keep posting up - why are you using a graph from somewhere around 2003? I'm betting that a graph using actual up to date data would look a hell of a lot different


I'll take the bet. I use the official IHS data because it is the one that even the peak oil denialist crowd have to accept. I can't use the updated one because it is commercial confidential data, and it shows a small bump of the order of the last one in the series, now declining.


free spirit said:


> as an aside, renewables are now producing more energy in the USA than nuclear, and are at 75% of the domestic US oil production levels? [source]


And US domestic oil is dropping like a stone, despite the greatest revolution in oilfield technology in the most applicable reservoirs in the most commercially appropriate, least taxed and regulated economy in the world. The oil industry likes to claim how technology will revolutionise discovery.


----------



## littlebabyjesus (Jan 30, 2012)

Falcon said:


> lol - at no point over the next thirty years will the money exist to pay people's pension. Better?


Fuck, we've got to pay for the education of millions of babies. They're going to be in school for more than a decade! Oh noes! And what about these newly qualified doctors? We've got to pay their wages for the next 40 years! Calamity. 

Deep breath. We can pay it a month at a time, and we'll be collecting taxes... Calm. Breathe. It's ok...


----------



## free spirit (Jan 30, 2012)

Falcon said:


> Under industrial agriculture, we have sterilised the soil in order to control the dosage of fertiliser and pesticides, and grubbed out the hedgerows that previously created reservoirs for supporting the natural pest control. So the soil will not support food yields even under optimistic assessments of non-hydrocarbon methods and we have no natural pest control, making crops vulnerable to systemic crop failure.


industrial agriculture methods themselves make crops increasingly vulnerable to systemic crop failure, over fertilisation of the land causes nitrates to kill off fish in our water courses, something in the industrial farming process is now killing off huge numbers of our bees.

A move away from the worst excesses of oil based industrial farming practices is long overdue IMO, and adding nutrients to the soil via organic matter is far better for the soil in the long run than just spraying some chemical fertiliser on it.


----------



## TruXta (Jan 30, 2012)

free spirit said:


> industrial agriculture methods themselves make crops increasingly vulnerable to systemic crop failure, over fertilisation of the land causes nitrates to kill off fish in our water courses, something in the industrial farming process is now killing off huge numbers of our bees.
> 
> A move away from the worst excesses of oil based industrial farming practices is long overdue IMO, and adding nutrients to the soil via organic matter is far better for the soil in the long run than just spraying some chemical fertiliser on it.



Nitrogen is nitrogen, doesn't matter whether it's from synthetic fertilizers or natural ones. Agreed on the rest though.


----------



## Falcon (Jan 30, 2012)

free spirit said:


> This is why I simply don't believe Falcon's predictions of impending doom.


The forecasts distinguish between conventional oil and unconventional oil. Conventional oil is the stuff you can make PV with. Unconventional is the stuff that is so expensive that the economy fails.

The yellow line is conventional plus unconventional. You'll recognise when it started to be significant - the Global Financial Crisis started, and we have never recovered. As the conventional supply drops (at 10% per annum - 7 hear halving) the balance, plus demand growth, is supplied by unconventional. Conventional is $15 a barrel, Canadian tar sand is $90. Two things happen - average price escalates, and required non-conventional demand rate reaches facility constraint rates (it's called unconventional for a reason - it is hard to produce at volume). Then price hits the economic fail rate and it is 2008 again, but without the Fed and ECB emergency liquidity reserves to maintain banking liquidity.

So the conventional trajectory is the one that predicts the fail time - conventional plus unconventional does not convey price and rate restrictions.


----------



## free spirit (Jan 30, 2012)

TruXta said:


> Nitrogen is nitrogen, doesn't matter whether it's from synthetic fertilizers or natural ones. Agreed on the rest though.


well, yes and no. It's the same stuff, but liquid nitrates will run off far faster than nitrates as part of solid composts / manure, and the rest of the organic matter helps to improve the soil structure and retain moisture as well.


----------



## Falcon (Jan 30, 2012)

TruXta said:


> Nitrogen is nitrogen, doesn't matter whether it's from synthetic fertilizers or natural ones. Agreed on the rest though.


I'm not arguing, but are you aware of phosphate and natural nitrogen sources at that rate?


----------



## Falcon (Jan 30, 2012)

littlebabyjesus said:


> That's simply not true, falcon. That is an ongoing liability. You might as well factor in public sector wages to that equation too. It no less arbitrary than talking about pensions - these are ongoing public sector commitments, that's all.


I'm not patronising. You say "that's all" as if it makes the money appear.

This is not an unfamiliar concept, or difficult. In the days when house prices used to rise, people used to get so-called "equity release" loans which were basically the bank giving you the money today that you expected to make on the profit of the house when you sold at it its higher price ten years later. If the house value went down, you were stuffed - the money did not exist to pay the loan back.

We've run the country's pension system on that basis. (We had to - it was the only way to get it started after the second world war). We did an equity release mortgage geared to an assumed rate of growth, and now the "house price" is falling instead of rising. The money does not exist to pay the "loan". This is a big deal, LBJ, and it's not right wing to point that out. It's only a "scare story" when people imagine there is some real money somewhere in the hands of the wrong people and the story is being told as a decoy. This isn't that story.


----------



## Falcon (Jan 30, 2012)

littlebabyjesus said:


> Fuck, we've got to pay for the education of millions of babies. They're going to be in school for more than a decade! Oh noes! And what about these newly qualified doctors? We've got to pay their wages for the next 40 years! Calamity. Deep breath. We can pay it a month at a time, and we'll be collecting taxes... Calm. Breathe. It's ok...


And you are aware that the birthrate exploded after the 2nd world war, then fell, so the ratio of retired to working people is spiralling. And that better health care means retired people are living longer than the pension estimates were based on, so consuming more pension and far more geriatric health care expenditure (please - no Malthisuan stuff, it's data), and the tax base is falling as the unemployment rate is rising, etc.


----------



## free spirit (Jan 30, 2012)

Falcon said:


> And you are aware that the birthrate exploded after the 2nd world war, then fell, so the ratio of retired to working people is spiralling. And that better health care means retired people are living longer than the pension estimates were based on, so consuming more pension and far more geriatric health care expenditure (please - no Malthisuan stuff, it's data), and the tax base is falling as the unemployment rate is rising, etc.


hence the need for economic stimulus to get as many people working as possible. Also, raising the retirement age should significantly help balance things out.


----------



## free spirit (Jan 30, 2012)

Falcon said:


> I'm not arguing, but are you aware of phosphate and natural nitrogen sources at that rate?


sewage.

http://lancaster.unl.edu/enviro/biosolids/research.shtml
http://www.phosphorus-recovery.tu-darmstadt.de/

eta and incidentally it can be treated in biodigestors to also produce biomethane as a useful byproduct, although I believe it basically only makes enough to power the sewage plant itself with little left for export. Still, every little helps.


----------



## Falcon (Jan 30, 2012)

Chaps this has been interesting, but I'm going to stop there. I think this is an important topic because the type of plan you make depends on the type of situation you are in, and making a plan that assumed growth will be disastrous under conditions of contraction. I've worked in and around oil most of my working career, and have a couple of Masters degrees in petroleum engineering and energy economics. I have to tell you I started exactly where you are now, but what I'm telling you here is pretty conventional understanding in those disciplines (although its not spoken of much in front of the shareholders, for obvious reasons). It's up to you whether you find it useful or interesting. Anyway, see you round the boards no doubt. Cheers.


----------



## Falcon (Jan 30, 2012)

free spirit said:


> hence the need for economic stimulus to get as many people working as possible. Also, raising the retirement age should significantly help balance things out.


Unfortunately, there isn't a single example in the whole of financial history of an economy - of any political persuasion - that has financed economic stimulus by printing money. It alway ends in needing wheel barrows of money to buy loaves of bread and some version of the Depression, and that was with oil growth ahead of us. And that is the only source of debt we have left. But I do expect to be working until 70, so it is nice to part on a note of agreement.


----------



## free spirit (Jan 30, 2012)

Falcon said:


> The forecasts distinguish between conventional oil and unconventional oil. Conventional oil is the stuff you can make PV with. Unconventional is the stuff that is so expensive that the economy fails.
> 
> The yellow line is conventional plus unconventional. You'll recognise when it started to be significant - the Global Financial Crisis started, and we have never recovered. As the conventional supply drops (at 10% per annum - 7 hear halving) the balance, plus demand growth, is supplied by unconventional. Conventional is $15 a barrel, Canadian tar sand is $90. Two things happen - average price escalates, and required non-conventional demand rate reaches facility constraint rates (it's called unconventional for a reason - it is hard to produce at volume). Then price hits the economic fail rate and it is 2008 again, but without the Fed and ECB emergency liquidity reserves to maintain banking liquidity.
> 
> So the conventional trajectory is the one that predicts the fail time - conventional plus unconventional does not convey price and rate restrictions.


tbf, I was comparing like with like, as the predictions shown in that graph were for total liquids, and the data I supplied was also for total liquids.

if you'd like to post up a graph of conventional oil production showing your 10% a year decline rate actually happening then it would perhaps help to back up your case.

btw, I don't doubt that we are at or around the peak of global conventional oil production, I just expect that we'll bump along around that peak for a few more years yet before the decline really starts to kick in, and that unconventional oil, biofuels etc will keep us bumping along the top for a while after that. I don't see there being any significant decline before 2020 or so, but admit that this is more based on gut feeling than empirical data. You obviously have the background in this field, but I've yet to see you produce anything particularly definitive to back up your assertions. I guess time will tell.


----------



## free spirit (Jan 30, 2012)

Falcon said:


> Unfortunately, there isn't a single example in the whole of financial history of an economy - of any political persuasion - that has financed economic stimulus by printing money. It alway ends in needing wheel barrows of money to buy loaves of bread and some version of the Depression, and that was with oil growth ahead of us. And that is the only source of debt we have left. But I do expect to be working until 70, so it is nice to part on a note of agreement.


who mentioned printing money?

as a country we could easily borrow what we needed to to finance any level of economic stimulus package providing that the people lending the money were confident enough in the actual plan that was being proposed. It's certainly a far more viable proposition than attempting to cut our way out of recession, which we still seem to be able to borrow billions of pounds to finance.


----------



## free spirit (Jan 30, 2012)

Falcon said:


> Chaps this has been interesting, but I'm going to stop there. I think this is an important topic because the type of plan you make depends on the type of situation you are in, and making a plan that assumed growth will be disastrous under conditions of contraction. I've worked in and around oil most of my working career, and have a couple of Masters degrees in petroleum engineering and energy economics. I have to tell you I started exactly where you are now, but what I'm telling you here is pretty conventional understanding in those disciplines (although its not spoken of much in front of the shareholders, for obvious reasons). It's up to you whether you find it useful or interesting. Anyway, see you round the boards no doubt. Cheers.


hence the oil obsession?

since we're waving credentials about - I've got a degree in environmental management, am trained in pretty much all aspects of renewable energy, run a solar installation company and an energy consultancy involving 2 professors of fuel and energy with 90 years of industry experience between them.

Oil production figures are not the be all and end all of everything, they are just one part of a much bigger picture, and you can't see the big picture by focusing solely on that one part alone.

and on that note I'd best go to bed.


----------



## Blagsta (Jan 30, 2012)

sleaterkinney said:


> Yep. Esp your 'outing' him as a far right-winger.


Right, so nothing to do with his pro-business, anti-working class stance on the BA strike?


----------



## Captain Hurrah (Jan 30, 2012)

romeo2001 said:


> lol so tell me how the dictionary definition of a planned economy is not what happened in nazi germany ie state owned enterprises and co-operative enterprises directed by the state etc - or are you in undfer the impression that Hitler was actually a fairly broad minded chap who let his people do as they pleased? Feel free to do it by pm as I definitely dont want to hijack this thread



Well, in response to your intelligent PM.

I don't see what _Befehlswirtschaf_t or _Gosplan _have to do with what ayatollah was referring to earlier. I could be wrong but I don't think he is so narrow as to believe the only possible conception and practice of 'socialism' involves a state-owned, centrally-planned military mobilisation, and one that is stuck in a 1930s time warp. Nor conflate the German variant of fascism with Stalinism, while acknowledging they share a few similarities. Do you believe that ayatollah's conception of socialism is that? While being vague about what it is for him, he explicitly said it was nothing of the sort mentioned above. Perhaps your understanding of things generally, is as two-dimensional as your classification of what socialism _is_, or what it can mean to other people.

For example, I like this earlier post. Vague on a certain ism, but still ...



Crispy said:


> So - these things are going to happen, regardless of the political systems in place. Our future is one of adaption and contraction. In order to best manage that contraction with the least harm, an equitable political system is required. Call it socialism if you like.
> 
> However, I suspect the more common response from governments around the world will be authoritarian control of rationing systems for energy and food. More isolationism and nationalism, and resource wars. Thankfully, the ongoing energy crisis will prevent war on a 20th century scale.


----------



## littlebabyjesus (Jan 30, 2012)

Falcon said:


> And you are aware that the birthrate exploded after the 2nd world war, then fell, so the ratio of retired to working people is spiralling. And that better health care means retired people are living longer than the pension estimates were based on, so consuming more pension and far more geriatric health care expenditure (please - no Malthisuan stuff, it's data), and the tax base is falling as the unemployment rate is rising, etc.


There you go again talking about recession as natural law - unemployment rising and nothing to be done. You have naturalised a whole load of capitalist assumptions into your thinking .


----------



## TruXta (Jan 30, 2012)

free spirit said:


> well, yes and no. It's the same stuff, but liquid nitrates will run off far faster than nitrates as part of solid composts / manure, and the rest of the organic matter helps to improve the soil structure and retain moisture as well.



True that, and tell a truth I was partly checking that you weren't in the chemicals = bad camp. Apologies, you don't really seem the sort. Agreed with the other point with the slight caveat that composts have a slightly greater chance of introducing pathogens and nasties, depending on provenance. Dumping the current effluvia from modern agri-business into the food-chain is, or should be, a no-go due to the amounts of hormones and antibiotics present, and humanure is for obvious reasons no better.


----------



## Crispy (Jan 30, 2012)

littlebabyjesus said:


> There you go again talking about recession as natural law - unemployment rising and nothing to be done. You have naturalised a whole load of capitalist assumptions into your thinking .


If you're talking about what ia going to happen to capitalism in the future, isn't that exactly what you should be considering?


----------



## FreddyB (Jan 30, 2012)

free spirit said:


> as a country we could easily borrow what we needed to to finance any level of economic stimulus package providing that the people lending the money were confident enough in the actual plan that was being proposed. It's certainly a far more viable proposition than attempting to cut our way out of recession, which we still seem to be able to borrow billions of pounds to finance.



Cutting the size of the state, depressing wages and pensions is a much better way out of a recession from the perspective of capital as a whole. It means more profit.


----------



## littlebabyjesus (Jan 30, 2012)

Crispy said:


> If you're talking about what ia going to happen to capitalism in the future, isn't that exactly what you should be considering?


Falcon has come up with a lot of 'what about x' and 'what about y' points, including the one about funding future pensions. He seems to think that we can't afford to fund pensions without growth. I hotly dispute this - the problem he identifies is one of wealth distribution, not wealth creation. Other things along the same vein are his dubious pronouncements about post-oil agriculture, which seem to imply the need for the worldwide human population to be reduced by over half. I only know a little about this, so I left it for others to criticise it, but it's a massively dubious statement. There are lots of things to be done to farm productively without oil.

And that's the point, ultimately. There are lots of things to be done to fund pensions, feed the world, etc. Falcon identifies challenges that we face now or will face imminently and pronounces that we will fail to meet those challenges. Moreover, he exaggerates the scale of the challenges in order to create an effect. And the reason he pronounces that we will fail is that he fails to see beyond the capitalist system - I don't think he realises that's what he's doing, though, hence he sees the iniquities and stupidities of capitalism as somehow natural law.

The frog lies calmly in its pot of water. The water gets hotter and hotter, but the frog does not notice the gradual change, and boils to death.

But we're not frogs. We can notice the change. We are not entirely helpless, passive victims of our own stupidity.


----------



## Crispy (Jan 30, 2012)

littlebabyjesus said:


> But we're not frogs. We can notice the change. We are not entirely helpless, passive victims of our own stupidity.



I wish I shared your optimism!

History is full of examples of civilisations that have faced existential threat, and done nothing but "more of the same" in the face of it. Given the woeful response so far to the threat of climate change, (which will IMO have an even greater effect on us in the long run) I find it hard to be optimistic about a sane response to the energy crisis. The two problems share common factors - they are long term in scope and are much more amenable to pre-emptive measures than they are to reactive ones. And we all know how adverse governments are to "jam tomorrow" policies, especially when it's "jam in 20 years' time".


----------



## ViolentPanda (Jan 30, 2012)

romeo2001 said:


> How are you relating the nazi regime to capitalism - it was surely a planned conomy?



It was a "mixed" economy. That is, elements were planned, but the Corporatism inherent to Hitler's Nazism made a fully-planned economy a possibility, hence the fact that rather than (as happened in true planned economies) the expropriation of the means of production, instead deals were made that left the means of production intact in the hands of their owners.


----------



## ViolentPanda (Jan 30, 2012)

Captain Hurrah said:


> You're a bit thick, aren't you.



TBF, if you skim the economic history of Nazi Germany it does give the appearance of a planned economy, but that's all it is - an appearance.


----------



## littlebabyjesus (Jan 30, 2012)

Crispy said:


> I wish I shared your optimism!
> 
> History is full of examples of civilisations that have faced existential threat, and done nothing but "more of the same" in the face of it. Given the woeful response so far to the threat of climate change, (which will IMO have an even greater effect on us in the long run) I find it hard to be optimistic about a sane response to the energy crisis. The two problems share common factors - they are long term in scope and are much more amenable to pre-emptive measures than they are to reactive ones. And we all know how adverse governments are to "jam tomorrow" policies, especially when it's "jam in 20 years' time".


It's not so much a question of optimism - although I'm not entirely pessimistic. It's more a question of not falling into the trap of thinking that we're necessarily doomed.

I agree that capitalism as a system tends to act like that frog, acting as if unaware of the long-term consequences of the short-term decisions. That can be changed, though.


----------



## yield (Jan 30, 2012)

littlebabyjesus said:


> The frog lies calmly in its pot of water. The water gets hotter and hotter, but the frog does not notice the gradual change, and boils to death.


Myth - frogboil on snopes </tangent>


----------



## littlebabyjesus (Jan 30, 2012)

analogy fail.

Or maybe analogy success - even frogs aren't that bloody stupid.


----------



## romeo2001 (Jan 30, 2012)

littlebabyjesus said:


> Falcon has come up with a lot of 'what about x' and 'what about y' points, including the one about funding future pensions. He seems to think that we can't afford to fund pensions without growth. I hotly dispute this - the problem he identifies is one of wealth distribution, not wealth creation. Other things along the same vein are his dubious pronouncements about post-oil agriculture, which seem to imply the need for the worldwide human population to be reduced by over half. I only know a little about this, so I left it for others to criticise it, but it's a massively dubious statement. There are lots of things to be done to farm productively without oil.
> 
> And that's the point, ultimately. There are lots of things to be done to fund pensions, feed the world, etc. Falcon identifies challenges that we face now or will face imminently and pronounces that we will fail to meet those challenges. Moreover, he exaggerates the scale of the challenges in order to create an effect. And the reason he pronounces that we will fail is that he fails to see beyond the capitalist system - I don't think he realises that's what he's doing, though, hence he sees the iniquities and stupidities of capitalism as somehow natural law.
> 
> ...



I think you've missed the point entirely.  Falcon has detailed, and backed up with evidence, several reasons why, if you agree with peak oil, it is game changer and so the old solutions and strategies will no longer work.

As he said lots of pages back the argument is whether peak oil is coming, here already or not an issue.  He has presented data to back up his arguments and you have presented none (or none that were'nt blown out of the water)

Your post contains phrases such as "hotly dispute" "dubious statements" "we are not entirely helpless" yet you offer no evidence to support it - certainly not in the detailed way that falcon has done.  Until you do so the phrases that you use make you come across as someone who has spent the majority of the thread doing the internet equivalent of sticking his fingers in his ears and singing I'm not listening, Im not listening"

He clearly has far more knowledge of everything he has posted about than you do (seriously tho the equation that qe causes inflation is the economics equivalent of 2+2) so saying something like "I don't think he realises he knows what he's doing" makes you seem delusional.

I have no axe to grind here - its just I have never seen a demolishing of someone (in fact several people) quite like it on the internet.


----------



## romeo2001 (Jan 30, 2012)

ViolentPanda said:


> TBF, if you skim the economic history of Nazi Germany it does give the appearance of a planned economy, but that's all it is - an appearance.


thanks - can you point me to a link at all - genuinely interested in that
and also - from your posts on another thread I get the impression that you are an anarchist or have those leanings? Its something I'm leaning towards and would like to know more - no worries if not tho


----------



## Blagsta (Jan 30, 2012)

romeo2001 said:


> not quite as excellent as peple who argue that the nazis encouraged a free market



I'm still curious as to who argued this?


----------



## ayatollah (Jan 30, 2012)

Falcon seems to have "left the building" - I say "thank the fuck", because his Neo Malthusian (YEP IT IS , he and his coterie of gloomy co-thinkers here don't like it - but you all are guys. sorry) pessimism just acts as a ideological justification for people NOT to fight back against the current capitalist offensive , because "it's hopeless" , ie the "private Fraser school of political analysis --- "we're all DOOOOOMMEEED !) Some people obviously love this state of mind , they wallow in it - it justifies lounging in the pub when you could be out engaging with your fellow citizens in political ACTION. And of course when placed on boards like this by Tory Trolls it helps to disrupt the ideological struggle against the cuts .

I hope everyone has noticed that despite being repeatedly challenged to do so, and despite VERY bad tempered protests at being outed as a Right Winger, Falcon never enlarged in any way on his very grand , airy fairy, claims to have some sort of "non-capitalist " vision for future society - but instead just seemed obsessed with a near future in which the world's population needs to mostly just DIE OFF. I think we can safely assume that someone who just happens to be obsessed with our ("apparantly unfundable") collective pension rights, and is so against strikes , just at a time when mass action against pension cuts is in play, is pursuing a right wing ideological agenda.

For those of you determined to believe that the only future is a descent into mass starvation and poverty, well, you'll obviously choose information which backs your gloomy view - and I'm not arguing that those of us who think a prosperous democratic socialist egalitarian future is possible don't also choose ,very different, information to reach our conclusions, but I know which sets of data I think makes more sense. I certainly think that posters like little baby jesus and free spirit have pretty firmly hammered the pessimistic neo Malthusian claims of the pessimists pretty firmly into the ground. Well done those men (or women) !

Lastly, those , perhaps of a Young Tory, persuasion, who seem to think that Nazi Germany was a "planned economy" in some "socialistic" sense - you gotta get a handle on the concept of a Mode of Production" guys . Now I know that to attract racist/nationalist workers Hitler put the "Socialist" in NSDAP, but really guys the big industrialists and (non Jewish) bankers of Germany didn't fund the Nazis to create a socialist state now did they ? Some of the Brownshirt SA did think the "socialist phase" of the Nazi revolution was coming next - but they got their answer in 1934 with the Night of the Long Knives ! I've noticed that Tories desperately want to believe that Hitler's Germany was socialist - but NO, sorry guys, a highly organised "planned" capitalist war economy aint socialism... good try.. No ,, the NAZIS were trying to SAVE capitalism, not supercede it.


----------



## littlebabyjesus (Jan 30, 2012)

Well I did ask falcon twice very explicitly ' what to do?' and he has provided nothing. The closest seems to be that a better future will be possible once five billion people have died. I presume he doesn't include himself or any of his family in the five billion who will need to die. Hmmmmm.


----------



## Crispy (Jan 30, 2012)

ayatollah said:


> Falcon seems to have "left the building" - I say "thank the fuck", because his Neo Malthusian (YEP IT IS , he and his coterie of gloomy co-thinkers here don't like it - but you all are guys. sorry)


I don't mind what you call it, as long as you agree with the facts on and under the ground. The world's current rate of population and agricultural growth has been enabled by growing oil supplies. When that supply growth doesn't just slow down, but turn around and reverse, then we will find things very hard going indeed. This is not a left or right wing position, just an analysis of the physical systems on which our civilization rests.


> pessimism just acts as a ideological justification for people NOT to fight back against the current capitalist offensive , because "it's hopeless" ,


Of course it's not hopeless - it's the only hope we have. It's just that, based on the history of human civilization so far, I don't think it's likely that the fight can be won before declining energy supplies present a far greater struggle than that against capitalism.


----------



## Crispy (Jan 30, 2012)

ayatollah said:


> For those of you determined to believe that the only future is a descent into mass starvation and poverty, well, you'll obviously choose information which backs your gloomy view.



No, it's the other way round. I am determined to believe in a prosperous democratic socialist egalitarian future, but the physical data makes me gloomy.



> I presume he doesn't include himself or any of his family in the five billion who will *need* to die. Hmmmmm.


Oh no you don't. Claiming that something is inevitable does not mean wishing it so.


----------



## littlebabyjesus (Jan 30, 2012)

Hold on. Population growth is due to oil? You need to justify that crispy. Presumably the rapid population growth in Britain in the 19th century was due to coal. 

Be very careful when talking about population growth. The most densely populated places are the rich world. Here. Those consuming unsustainably are here, where the population exploded many many years ago.


----------



## Crispy (Jan 30, 2012)

Modern agricultural methods, and food distribution around the world, were enabled by oil, yes.


----------



## littlebabyjesus (Jan 30, 2012)

Modern agricultural methods due to oil have led to the increase in population? Or they have led to the rich world being able to consume in ways that they could not before? Were it not for the vast monocultures degrading the land to service our needs, there would be far more land to produce for everyone else. Please do not do a falcon and analyse this without an analysis of the relationship between rich north and poor south.


----------



## toblerone3 (Jan 30, 2012)

But not modern sanitation and anti-biotics. They were not dependent upon oil.


----------



## sleaterkinney (Jan 30, 2012)

littlebabyjesus said:


> Hold on. Population growth is due to oil? You need to justify that crispy. Presumably the rapid population growth in Britain in the 19th century was due to coal.
> 
> Be very careful when talking about population growth. The most densely populated places are the rich world. Here. Those consuming unsustainably are here, where the population exploded many many years ago.


Actually there are plenty of developing countries with high population density - India, Bangladesh, the Philippines are all up there.


----------



## sleaterkinney (Jan 30, 2012)

toblerone3 said:


> But not modern sanitation and anti-biotics. They were not dependent upon oil.


Oil has been the enabler behind economic growth.


----------



## Idris2002 (Jan 30, 2012)

ViolentPanda said:


> It was a "mixed" economy. That is, elements were planned, but the Corporatism inherent to Hitler's Nazism made a fully-planned economy a possibility, hence the fact that rather than (as happened in true planned economies) the expropriation of the means of production, instead deals were made that left the means of production intact in the hands of their owners.



Not only that, but the "socialist" Nazis engaged in quite a bit of privatisation:

http://www.ub.edu/graap/nazi.pdf


----------



## littlebabyjesus (Jan 30, 2012)

The population is currently 7 billion and will probably rise to around 10 billion before peaking. That us the challenge, but the truth is that there are far fewer starving people now than there were in the past. The challenge is to find a way for all of us - US - to live on this planet. There is a fuckload of things that can be done to achieve that with dwindling oil, and most of those things need to be done by those who are living most unsustainably. Please don't blame the poor for the excesses of the rich


----------



## Idris2002 (Jan 30, 2012)

sleaterkinney said:


> Oil has been the enabler behind economic growth.



Mmmmm, yes, apart from all the economic growth that went on before oil became the dominant source of energy.


----------



## littlebabyjesus (Jan 30, 2012)

sleaterkinney said:


> Oil has been the enabler behind economic growth.



Economic growth in the rich north has come with stabilising population. Indeed, affluence has led many places to drop below replacement reproduction levels.


----------



## sleaterkinney (Jan 30, 2012)

Idris2002 said:


> Mmmmm, yes, apart from all the economic growth that went on before oil became the dominant source of energy.


It was pretty slow compared:


----------



## Idris2002 (Jan 30, 2012)

Yes, but the figures fro the mid-19th century include a world that was still largely pre-capitalist. In the emergent capitalism of Britain, and a little later the US, France and Germany, there was rapid growth, often of a dramatic nature - but without oil.


----------



## sleaterkinney (Jan 30, 2012)

littlebabyjesus said:


> Economic growth in the rich north has come with stabilising population.


What's that supposed to even mean?. A lot of the growth has come along because the population was expanding.


----------



## sleaterkinney (Jan 30, 2012)

Idris2002 said:


> Yes, but the figures fro the mid-19th century include a world that was still largely pre-capitalist. In the emergent capitalism of Britain, and a little later the US, France and Germany, there was rapid growth, often of a dramatic nature - but without oil.


Oil has been around since the mid-19th century, but you can substitute another fossil fuel in there if you want?


----------



## littlebabyjesus (Jan 30, 2012)

Crispy said:


> Oh no you don't. Claiming that something is inevitable does not mean wishing it so.


Get some political analysis, crispy. You are falling in with the apolitical (which necessarily means reactionary) malthusian doom-sayers.


----------



## Idris2002 (Jan 30, 2012)

And as the economic growth continued, and deepened, the countries that experienced that growth also experienced the Demographic Transition - the transition to small family size, low birth rates, and stable or declining population. Many argue that these two facts - the growth and the transition - were related.


----------



## Idris2002 (Jan 30, 2012)

sleaterkinney said:


> Oil has been around since the mid-19th century, but you can substitute another fossil fuel in there if you want?



Not all fossil fuels are the same.


----------



## Kaka Tim (Jan 30, 2012)

Food production is _hugely_ dependant on oil.

Economic growth and Global population growth over the last 200 years is down to increased use hyrdrocarbons (coal then crude oil) vastly more then anything else.

I'm not sure about falcons politics - he seems to offer no solutions and doesn't seem to have much of an understanding of the interplay politics, power and ideology.

However in his analysis of the role of oil in the global economy and the effects of the energy crunch he is spot on - he knows what he is talking about.

So how do those of us in the left respond to this?

As I said before denying the reality and effetcs of the energy crunch - seeomingly becasue it upsets the ideological apple cart - is letting the capitliasts of the hook. To me it makes the argument for the worlds wealth and resources being in the hands of all its peoples (rather then a tiny self interested minoirty) irrisistable.

Essentailly the energy crunch and global warming are the final crisis of captialism.

Its up to us weather that becomes the final crises of human civilisation.


----------



## sleaterkinney (Jan 30, 2012)

littlebabyjesus said:


> Get some political analysis, crispy. You are falling in with the apolitical (which necessarily means reactionary) malthusian doom-sayers.


ffs


----------



## littlebabyjesus (Jan 30, 2012)

sleaterkinney said:


> What's that supposed to even mean?. A lot of the growth has come along because the population was expanding.



No not at all in recent history. If you don't know what I mean about the exploitative relationship between north and south, well I'm not sure where to start. But have a look in your food cupboard. In fact just look around whichever room you are in. You live amid ample evidence of the relationship.


----------



## littlebabyjesus (Jan 30, 2012)

Whose food production is hugely dependent on oil


----------



## Kaka Tim (Jan 30, 2012)

Idris2002 said:


> Yes, but the figures fro the mid-19th century include a world that was still largely pre-capitalist. In the emergent capitalism of Britain, and a little later the US, France and Germany, there was rapid growth, often of a dramatic nature - but without oil.



No it was based on coal. That was one of the key reasons that britain was first nation to experience industrialisation - it practically made of the stuff. From about 1800 the technology was available to enhcnace the energy potential of coal. Coal was superseeded by crude oil as it is even more energy dense and versitile.

Modern industrial society (and by extention capitialism) would have been impossible without hydro carbons.


----------



## littlebabyjesus (Jan 30, 2012)

sleaterkinney said:


> ffs


You probably need to get some political analysis too, tbh. Try to think about whose lives are unsustainable , and who it is that controls the processes that produce wasteful patterns of production and consumption.


----------



## littlebabyjesus (Jan 30, 2012)

Let me try to hint at a positive aspect to population growth. In a few decades' time there may well be 10 billion brains nearly all interconnected by modern communication technology. That is an unprecedented human resource.


----------



## TruXta (Jan 30, 2012)

lbj, the Second Green revolution (Borlaug's revolution) was mainly down to two things, namely the development of new breeds of semi-dwarf or dwarf cereals, and the massive introduction of petroleum-based fertilizers and pesticides. Of course that didn't happen in a political vacuum, but it does mean that modern agriculture, relying as it does on petroleum-based fertilizers and pesticide, is oil-based. Take away cheap and plentiful oil, you get food shortages (already happening) in poorer countries, and chaos. Again you're not wrong to blame capitalism, but that doesn't take away the physical facts on the ground. We are dependent on oil.


----------



## littlebabyjesus (Jan 30, 2012)

We have built a model based on oil, yes. But that does not mean that there are not alternatives. It doesn't even mean that this is necessarily the most effective model. I'm not posting from a proper computer or I'd provide done links, but the idea that oil-based agriculture is necessarily the most productive is highly contested. Largely it's been done because it was what was easiest given the conditions of cheap oil.


----------



## TruXta (Jan 30, 2012)

littlebabyjesus said:


> We have built a model based on oil, yes. But that does not mean that there are not alternatives. It doesn't even mean that this is necessarily the most effective model. I'm not posting from a proper computer or I'd provide done links, but the idea that oil-based agriculture is necessarily the most productive is highly contested. Largely it's been done because it was what was easiest given the conditions of cheap oil.



And why did oil become cheap? Because it's one of the most energy-dense materials available to us given the tech we've had over the last 120-150 years. Plus its hydrocarbon composition means it's one of the most chemically fertile industrial compounds out there. On this one you can't simply ignore the chemistry and point to socioeconomics and political history.


----------



## littlebabyjesus (Jan 30, 2012)

I don't deny that. But a lot of the modern petrochemical farming practices are not well done. Sorry I can't provide links at the moment. I will try to when I can, because providing a sustainable agriculture for 10 billion people is going to be an enormous challenge. But it is not a challenge without concrete grounds for hope - and dare I say it optimism if we can get the right structures in place.


----------



## TruXta (Jan 30, 2012)

littlebabyjesus said:


> I don't deny that. But a lot of the modern petrochemical farming practices are not well done. Sorry I can't provide links at the moment. I will try to when I can, because providing a sustainable agriculture for 10 billion people is going to be an enormous challenge. But it is not a challenge without concrete grounds for hope - and dare I say it optimism if we can get the right structures in place.



I'm not denying that. My worry is how long is it gonna take to scale it? Is it scaleable at all? What might look dandy on paper can turn out a nightmare in reality.


----------



## Crispy (Jan 30, 2012)

littlebabyjesus said:


> Get some political analysis, crispy. You are falling in with the apolitical (which necessarily means reactionary) malthusian doom-sayers.


That's a rather unpleasantly patronising thing to say. I'm going to bed now, will make a considered reply in the morning.


----------



## littlebabyjesus (Jan 30, 2012)

It was unpleasant yes. Sorry. 

Population catastophists like falcon make me lose my temper sometimes. No need to take that out on you though. I apologise.


----------



## Kaka Tim (Jan 31, 2012)

But falcon has not (I think ) on this thread talked about over population - but an energy crunch caused by resource depletion.

The trouble with peak oil is that some people seem to think that becaue its an argument being used by neo-malthusians who see 'over population' as the problem (rather then over _consumption_) - they are dismissing it as agenda led.

Unfortuneately - much as I'd very much like it not to be the case - I firmly believe the evidence all stacks up in favour of peak oil ( and its baleful effects).

WRT food and oil price, food prices have shot up over the past five years partly as a reuslt of the rising cost of oil based fertilisers and agricultural fuel - but also becasue the rising cost of fuel has led to large amounts of arable land being given over to growing more profitalbe ( and supposedly 'green') bio-fuel crops.

Also although oil based farming provides a poor return energy wise (somehting ridiculous like 100 calories of energy put in for every 1 calorie of energy produced in food) - I understand that intenisve agriculutre has drained  so much nutirients from large areas of arable land that its become utterly dependant upon oil based fertilisers it to raise crops.

Yes there are more sustainable methods of food produciton - but even if they can produce equivalnet yields (can they?) switching global food prodcution from oil based to alternative methods will be a huge task that needs to be carried out in  a short space of time and relies on breaking the hold of global agribusiness corporations.


----------



## littlebabyjesus (Jan 31, 2012)

> With the exception of the grisly transition from the industrial agriculture population to the non-industrial agriculture population size, I think there is an opportunity to create a very different and better kind of society.



These are Falcon's politics, as far as he has explained them. Beyond this, he refuses to say.

If the above is not Malthusian, I really don't know what is.


----------



## TruXta (Jan 31, 2012)

It might be a Malthusian type projection, but that hardly means he wishes for it to happen.  Also as Crispy has mentioned, it wouldn't be the first time a civilisation has collapsed. That said I think a really fucked up pandemic is a stronger contender for a great leveller.


----------



## Crispy (Jan 31, 2012)

Kaka Tim said:


> Yes there are more sustainable methods of food produciton - but even if they can produce equivalnet yields (can they?)



I've read some pretty convincing reports that permaculture-style intensive mixed-use farming can be more productive per acre than industrial monoculture agriculture. However, it requires good soil and constant hands-on farming. Even if we chose somewhere between the two extremes, a _lot_ of people would have to become farmers.


----------



## TruXta (Jan 31, 2012)

Well, that's hardly a bad thing is it? It's not like we lack for idle hands these days. And farming is very much skilled labour if done properly.


----------



## Crispy (Jan 31, 2012)

TruXta said:


> Well, that's hardly a bad thing is it? It's not like we lack for idle hands these days. And farming is very much skilled labour if done properly.


Nothing wrong with the job. Very rewarding when done right, I'm sure  But take a look at the pattern of infrastructure and housing in this country and tell me how well suited it is to widespread labour-intensive farming. And then consider how best to change that situation in a time of permanent recession and energy shrinkage. It would be much easier to do now in terms of construction and planning, of course, but impossible to pull off:

"You. Office worker, for the good of the nation, you must become a farmer. We've allocated you 10 acres of Norfolk. Chop chop."

"What? Get to fuck, fascist!"

"You'll thank me in 20 years. Come on, no dawdling."


----------



## TruXta (Jan 31, 2012)

Reinstate national service - every able bodied person between 18 and 20 does their part. Skills AND a free workout.


----------



## littlebabyjesus (Jan 31, 2012)

There would be a fair few volunteers, I would have thought. How many people are there up and down the country right now bored shitless by their office jobs,  wibbling pointlessly on the internet?


----------



## littlebabyjesus (Jan 31, 2012)

TruXta said:


> Reinstate national service - every able bodied person between 18 and 20 does their part. Skills AND a free workout.


Yep, and that. And/or you spend one or two days a week on the farm. There are already farms springing up that do this - town dwellers commit to x-hours per month working the farm in return for a percentage of the produce. A nation of part-time farmers. I'd be up for it.


----------



## TruXta (Jan 31, 2012)

If they legalised weed as well...


----------



## Crispy (Jan 31, 2012)

I jest, really. But this sort of large scale change is coming, as an approximate mirror image of the change that happened when farming was industrialised.


----------



## Crispy (Jan 31, 2012)

littlebabyjesus said:


> Yep, and that. And/or you spend one or two days a week on the farm. There are already farms springing up that do this - town dwellers commit to x-hours per month working the farm in return for a percentage of the produce. A nation of part-time farmers. I'd be up for it.


Me too  (although all this additional traveling has to be accounted for)


----------



## TruXta (Jan 31, 2012)

Yeah, me too. But it would be a great thing if farming and growing stuff became a common place skill again, instead of being either the preserve of industrial professionals or those with allotments.


----------



## littlebabyjesus (Jan 31, 2012)

It's about time we moved away from the five-day week in most jobs anyway. During the three-day week in the 1970s, hours worked fell by 40% but productivity only fell by 16%. Most of us could do most of our work in far fewer days.


----------



## Crispy (Jan 31, 2012)

Only if was the same three days for everyone - I can easily do my week's work in 3 days (Exhibit A: Messages: 53,908), but have to be available all week to suit the timetable of all the other people we do business with.


----------



## Crispy (Jan 31, 2012)

Of course, the alternate point of view you can take from the productivity evidence presented by the 3-day week is that we're all a bunch of slackers who could be working much harder and that's why we're being beaten by China. Break out the whips.


----------



## TruXta (Jan 31, 2012)

It's tricky that. One could argue for more virtualisation of work, eg working from home, but there are many benefits to teamwork that have little to do with productivity.


----------



## Crispy (Jan 31, 2012)

The IT for me to work from home was figured out years ago. Utterly pointless when you can't put a piece of paper on a desk and have two people draw on it at the same time.


----------



## theCIA (Jan 31, 2012)

toblerone3 said:


> But not modern sanitation and anti-biotics. They were not dependent upon oil.



They are if you scale it up.


----------



## Kaka Tim (Jan 31, 2012)

I think its pretty naive to romanticise farm labour.
Without breaking the hold of the super rich and corporations we are talking about millions of people being forced into back breaking toil, long hours and shit wages/conditions. Third world sweatshop workers transformed into  agri-slaves.
Also the uk is a long long way from being self sufficient in arable food production - IIRC we've had to import food for about the last 100 years.


----------



## Kaka Tim (Jan 31, 2012)

theCIA said:


> They are if you scale it up.



Good point - hard to build a mass sewerage system without a plentiful source of energy - for the machinery, for manufacturting and trasnporting the machinary and building materials and for feeding, housing and transporting the workforce.


----------



## littlebabyjesus (Jan 31, 2012)

> Without breaking the hold of the super rich and corporations


I would agree that this is key to all discussions - to move away from the growth-based, demand-led, wealth-upwards-shifting economies that the current model demands.


----------



## ViolentPanda (Jan 31, 2012)

romeo2001 said:


> thanks - can you point me to a link at all - genuinely interested in that
> and also - from your posts on another thread I get the impression that you are an anarchist or have those leanings? Its something I'm leaning towards and would like to know more - no worries if not tho



Can't point you towards links, but for the last 5 years or so there's been an excellent (but rather long) book on the subject called "The Wages of Destruction" by Adam Tooze, which analyses the German economy during Nazism, and provides some excellent examples of how the Nazis mixed elements of a planned economy with capitalism. He also has a good bibliography which provides pointers for other reading.

As for your impressions, yep. I lean that way, but acknowledge that we live in a "parliamentary democracy" and that doing so shapes what can be done.


----------



## theCIA (Jan 31, 2012)

littlebabyjesus said:


> Whose food production is hugely dependent on oil



China for a start, you dont import 25m tons of corn from an allotment in dulwich.


----------



## ViolentPanda (Jan 31, 2012)

Blagsta said:


> I'm still curious as to who argued this?



I'm not aware on any credible author who *has* argued it.


----------



## ViolentPanda (Jan 31, 2012)

littlebabyjesus said:


> Modern agricultural methods due to oil have led to the increase in population? Or they have led to the rich world being able to consume in ways that they could not before?



Both.


----------



## butchersapron (Jan 31, 2012)

ViolentPanda said:


> Can't point you towards links, but for the last 5 years or so there's been an excellent (but rather long) book on the subject called "The Wages of Destruction" by Adam Tooze, which analyses the German economy during Nazism, and provides some excellent examples of how the Nazis mixed elements of a planned economy with capitalism. He also has a good bibliography which provides pointers for other reading.
> 
> As for your impressions, yep. I lean that way, but acknowledge that we live in a "parliamentary democracy" and that doing so shapes what can be done.


I would add to this by recommending Economy and Class Structure of German Fascism by Alfred Sohn-Rethel - and forgetting the fantasy of capitalism simply equally the 'anarchy of the market' (not you VP).


----------



## ViolentPanda (Jan 31, 2012)

sleaterkinney said:


> What's that supposed to even mean?. A lot of the growth has come along because the population was expanding.



Not necessarily. While that may be true for the 2nd half of the 20th century, prior to that a majority of growth was expansion of market ata greater rate than population expansion could account for.


----------



## ViolentPanda (Jan 31, 2012)

butchersapron said:


> I would add to this by recommending Economy and Class Structure of German Fascism by Alfred Sohn-Rethel - and forgetting the fantasy of capitalism simply equally the 'anarchy of the market' (not you VP).



Good point. Easier to find nowadays than it used to be, too.
I suppose that in part, because of how ubiquitous "mixed economies" became post-war, we tend to forget where the idea was first tested on a large scale.


----------



## ViolentPanda (Jan 31, 2012)

Idris2002 said:


> Not all fossil fuels are the same.



Nope, and coal production maps very closely to the expansion of industrialism in "the west", and was still high throughout the decades of transition from one fuel source to another.


----------



## Crispy (Jan 31, 2012)

littlebabyjesus said:


> I would agree that this is key to all discussions - to move away from the growth-based, demand-led, wealth-upwards-shifting economies that the current model demands.


And I think all that us "doomers" have been saying that our hand will be forced, faster than we can move it ourselves.


----------



## littlebabyjesus (Jan 31, 2012)

Regarding oil-based agriculture, I would suggest that a transition away from this could - assuming a sane political system! - be managed in quite a gradual manner. It is oil as energy source that is the urgent issue: both in terms of reducing carbon emissions and conserving remaining supplies for more important uses.

And this problem is primarily a problem of rich countries whose populations exploded many many decades ago, as this graph showing carbon emissions demonstrates. Even the large Chinese carbon footprint is largely accounted for by production for the rich world. In terms of environmental degradation, population growth in the poor world is largely a red herring - a distraction from the real problem.


----------



## TruXta (Jan 31, 2012)

Kaka Tim said:


> I think its pretty naive to romanticise farm labour.
> Without breaking the hold of the super rich and corporations we are talking about millions of people being forced into back breaking toil, long hours and shit wages/conditions. Third world sweatshop workers transformed into  agri-slaves.
> Also the uk is a long long way from being self sufficient in arable food production - IIRC we've had to import food for about the last 100 years.



True, but that masks huge swings over the last 100 years. Self-sufficiency was at it's lowest at the height of Empire, when beef in particular came almost solely from Argentina, Uruguay and Brazil's industrial slaughterhouses. Since the 80s it's varied between 60-70%. It would likely be higher if meat was removed from the equation.


----------



## littlebabyjesus (Jan 31, 2012)

Crispy said:


> And I think all that us "doomers" have been saying that our hand will be forced, faster than we can move it ourselves.


You 'doomers' aren't all the same, though. There is a difference between saying 'This is the problem, we cannot carry on as before, and these are the things that need to be done' and saying, as I'm afraid Falcon is, 'This is the problem, it is going to lead to the destruction of this civilisation, and only after that destruction, necessarily involving the deaths of billions of people, can a new, better society emerge.'

I reject the catastrophist view not only on moral and ideological grounds but also on practical ones. ifaic it is a failure of imagination.


----------



## romeo2001 (Feb 2, 2012)

littlebabyjesus said:


> You 'doomers' aren't all the same, though. There is a difference between saying 'This is the problem, we cannot carry on as before, and these are the things that need to be done' and saying, as I'm afraid Falcon is, 'This is the problem, it is going to lead to the destruction of this civilisation, and only after that destruction, necessarily involving the deaths of billions of people, can a new, better society emerge.'
> 
> I reject the catastrophist view not only on moral and ideological grounds but also on practical ones. ifaic it is a failure of imagination.



but in all probability its going to effect us on an unimaginable scale and therefore the solutions are in all probability going to be unimaginable

You seem to have a massive problem in seeing that actually there may be something we cant control or find a solution for....


----------



## romeo2001 (Feb 2, 2012)

littlebabyjesus said:


> Well I did ask falcon twice very explicitly ' what to do?' and he has provided nothing. The closest seems to be that a better future will be possible once five billion people have died. I presume he doesn't include himself or any of his family in the five billion who will need to die. Hmmmmm.


are you being deliberately obtuse? what he has said is that there will be less energy in the world which one of the effects will be a lot less food - which will have a rather obvious effect on the  population


----------



## littlebabyjesus (Feb 2, 2012)

romeo2001 said:


> but as in all probability its going to effect us on an unimaginable scale and therefore the solutions are in all probability going to be unimaginable


That's very hand-wavy.


----------



## TruXta (Feb 2, 2012)

And plain wrong. We have plenty of educated guess-work and modelling going on for a variety of scenarios.


----------



## littlebabyjesus (Feb 2, 2012)

romeo2001 said:


> are you being deliberately obtuse? what he has said is that there will be less energy in the world which one of the effects will be a lot less food - which will have a rather obvious effect on the population


Has free spirit been posting in vain? 

Thing is, there is pessimism and there is optimism. Both are valid. I would suspect that most people are like me and move between the two. But absolute pessimism - the belief that disaster is foreseeably inevitable - is just factually wrong. And it annoys me no end.


----------



## Balbi (Apr 25, 2012)

Just under an hour to go. Estimates between -0.1/-0.2 and +0.3. Brown trousers for Gideon.


----------



## toblerone3 (Apr 25, 2012)

Balbi said:


> Just under an hour to go. Estimates between -0.1/-0.2 and +0.3. Brown trousers for Gideon.


 
We've been bumping along in the doldrums for more than a year now. I wonder if this will be double dip day.


----------



## moonsi til (Apr 25, 2012)

My partner was finally made redundant last week after 18 months on a 5 hour day and 2 years of not knowing if he would be paid or not. He ended up losing 4 weeks pay and agreeing to work for free to get the last of the orders out. He has been looking for work throughout but there has been no jobs close enough to consider (printing) as he also has a young son to consider.

It has been a tough few years and we both just need to remain hopeful that he will secure employment. Doldrums is most certainly what it has been.


----------



## Balbi (Apr 25, 2012)

My workmate's husband was made redundant yesterday - they've got a 1 y/o and a mortgage - worrying times.


----------



## yardbird (Apr 25, 2012)

We are now in a double dip recession  - just told on bbc.


----------



## Balbi (Apr 25, 2012)

- 0.2 - No excuses Georgey Boy.


----------



## Fedayn (Apr 25, 2012)

Balbi said:


> My workmate's husband was made redundant yesterday - they've got a 1 y/o and a mortgage - worrying times.


 
I hope you told her to stop worrying and that we're all in this together and a spot of good old British stiff upper lip will solve it.


----------



## Fedayn (Apr 25, 2012)

Not to mention that we're now in the longest recessionary period in UK economic history....


----------



## Dan U (Apr 25, 2012)

i bet Jeremy Hunt just breathed a big sigh of relief


----------



## Louis MacNeice (Apr 25, 2012)

Dan U said:


> i bet Jeremy Hunt just breathed a big sigh of relief


 
Or he is really worried as he is something that Cameron can act on.

Cheers - Louis MacNeice


----------



## Dan U (Apr 25, 2012)

Louis MacNeice said:


> Or he is really worried as he is something that Cameron can act on.
> 
> Cheers - Louis MacNeice


 
point well made.

if Milliband doesn't cream this PMQ's then he may as well resign himself


----------



## Fedayn (Apr 25, 2012)

Louis MacNeice said:


> Or he is really worried as he is something that Cameron can act on.
> 
> Cheers - Louis MacNeice


 
Which takes the spotlight 'off' the econoimic figures if he sacks Hunt. Looks 'decisive' and his 'leadership' looks good as opposed to the recessionary figures....


----------



## g force (Apr 25, 2012)

Construction dip of 3% stands out...wonder if that will be revised, given previous mutterings around uncertainty around those figures.


----------



## Brixton Hatter (Apr 25, 2012)

Yes, its official, we are in recession.

http://www.bbc.co.uk/news/business-17836624


----------



## Kaka Tim (Apr 25, 2012)

Is this officially a depression now?

Flat cap and hunger march anyone?


----------



## Kaka Tim (Apr 25, 2012)

Ed Balls is filling his boots -



> David Cameron and George Osborne complacently boasted their austerity plan had taken our economy out of the danger zone, but their failed policies have plunged us back into recession.
> We consistently warned that their austerity plan was self-defeating and that cutting spending and raising taxes too far and too fast would badly backfire. David Cameron and George Osborne arrogantly and complacently dismissed people who warned of the risk of a double-dip recession and the country is now paying a very heavy price. Their economic credibility is now in tatters.
> 
> The reason why last month's budget is such a disaster for Britain is not just because it unfairly cut taxes for millionaires while clobbering families and pensioners, it also failed to come up with the plan for jobs and growth Britain desperately needs and we have been urging.
> ...


----------



## newharper (Apr 25, 2012)

Louis MacNeice said:


> Or he is really worried as he is something that Cameron can act on.
> 
> Cheers - Louis MacNeice


How many of these corrupt cxxxs does he have to sack before the media goes ERR!


----------



## purves grundy (Apr 25, 2012)

The only genuinely important figure is AAA, so no need to worry.


----------



## littlebabyjesus (Apr 25, 2012)

purves grundy said:


> The only genuinely important figure is AAA, so no need to worry.


Yep. It was an absolute disaster for Japan to lose its... oh wait


----------



## agricola (Apr 25, 2012)

Kaka Tim said:


> Ed Balls is filling his boots -


 
Balls can fuck off, he and his party are more responsible for this than Cameron and Osborne are. In fact the worst thing the Coalition has done is focus the cuts on the productive parts of the public sector, rather than tackling the real problems where vast majority of the waste occurs.


----------



## Roadkill (Apr 25, 2012)

Kaka Tim said:


> Ed Balls is filling his boots -


 
Good! 

*edit* Although agricola is absolutely right too.


----------



## Blagsta (Apr 25, 2012)

agricola said:


> Balls can fuck off, he and his party are *more responsible for this than Cameron and Osborne are*. In fact the worst thing the Coalition has done is focus the cuts on the productive parts of the public sector, rather than tackling the real problems where vast majority of the waste occurs.


 
How do you work that out?


----------



## agricola (Apr 25, 2012)

Blagsta said:


> How do you work that out?


 
Its not as if the Coalition came into power at a time that the economy was all tickety-boo.  Labour in 1997 had a much more benign inheritance that meant that it could have - if it had wished - recast the economy with very little pain, actually balanced the books and made this country a much fairer and much more economically productive one. 

Instead they crawled into bed with the big four accountancy firms and the rest of the banking mob.  The result was hundreds of billions of pounds borrowed, and almost as much pissed up against the wall on schemes which the coalition have largely copied.


----------



## littlebabyjesus (Apr 25, 2012)

agricola said:


> Balls can fuck off, he and his party are more responsible for this than Cameron and Osborne are. In fact the worst thing the Coalition has done is focus the cuts on the productive parts of the public sector, rather than tackling the real problems where vast majority of the waste occurs.


I disagree. Doesn't matter where the cuts were focussed, really. The result would have been this. Cutting spending and raising taxes at a time when the private sector is not investing is bound to lead to tears.


----------



## Blagsta (Apr 25, 2012)

agricola said:


> Its not as if the Coalition came into power at a time that the economy was all tickety-boo. Labour in 1997 had a much more benign inheritance that meant that it could have - if it had wished - recast the economy with very little pain, actually balanced the books and made this country a much fairer and much more economically productive one.
> 
> Instead they crawled into bed with the big four accountancy firms and the rest of the banking mob. The result was hundreds of billions of pounds borrowed, and almost as much pissed up against the wall on schemes which the coalition have largely copied.


 
I doubt Labour would have got into power at all if they hadn't re-invented themselves as a neo-liberal party.

I'm still not sure though how Labour caused a world wide recession.


----------



## agricola (Apr 25, 2012)

littlebabyjesus said:


> I disagree. Doesn't matter where the cuts were focussed, really. The result would have been this. Cutting spending and raising taxes at a time when the private sector is not investing is bound to lead to tears.


 
Not really.  For instance (and it is a favourite topic of mine, so please forgive me mentioning it again) they could have reformed the railway "privatization" (either renationalization or reform along the lines of the Overground in London) without it costing very much at all, and they would have saved an absolute fortune.


----------



## littlebabyjesus (Apr 25, 2012)

agricola said:


> Its not as if the Coalition came into power at a time that the economy was all tickety-boo. Labour in 1997 had a much more benign inheritance that meant that it could have - if it had wished - recast the economy with very little pain, actually balanced the books and made this country a much fairer and much more economically productive one.
> 
> Instead they crawled into bed with the big four accountancy firms and the rest of the banking mob. The result was hundreds of billions of pounds borrowed, and almost as much pissed up against the wall on schemes which the coalition have largely copied.


They borrowed during the early 2000s when they should have been raising taxes instead if they wanted to spend - it is legitimate to criticise that. But the spike in debt was caused by the credit crunch and bank bailout. Even with that spike, Britain was not 'broke' when the tories came in, despite their claims otherwise, but the folly of austerity is certainly taking it closer to broke.


----------



## agricola (Apr 25, 2012)

Blagsta said:


> I'm still not sure though how Labour caused a world wide recession.


 
I didnt say they did, all I said was that the state the country is in is far more Labours fault than it is the Coalitions.


----------



## littlebabyjesus (Apr 25, 2012)

agricola said:


> Not really. For instance (and it is a favourite topic of mine, so please forgive me mentioning it again) they could have reformed the railway "privatization" (either renationalization or reform along the lines of the Overground in London) without it costing very much at all, and they would have saved an absolute fortune.


Well I'm not going to disagree with you about the railways. And neither am I going to fall into the trap of defending the last Labour government, whose continuation of tory policies most certainly made the impact of the credit crunch much worse. But it is simply wrong to blame economic performance since the tories came in on the previous government. It's exactly the same trick that people try to use to blame the recession when Thatcher came in on what had gone on before.


----------



## ymu (Apr 25, 2012)

agricola said:


> Its not as if the Coalition came into power at a time that the economy was all tickety-boo. Labour in 1997 had a much more benign inheritance that meant that it could have - if it had wished - recast the economy with very little pain, actually balanced the books and made this country a much fairer and much more economically productive one.
> 
> Instead they crawled into bed with the big four accountancy firms and the rest of the banking mob. The result was hundreds of billions of pounds borrowed, and almost as much pissed up against the wall on schemes which the coalition have largely copied.


Where the fuck does this 'Labour spent too much' shit come from? It is not true, not true at all, and it's really, really easy to check:





They fucked up by not re-regulating the banks, and not making the rich pay their way. but they did not run bigger deficits than the Tories, despite cutting the top rate of income tax and corporation tax to the fucking bone compared to Thatcher.

Stop repeating these pro-austerity myths. These lies are part of what will bury us if people don't wake up to what these cunts are doing (and what Nu-Labour would be doing given half a chance).


----------



## littlebabyjesus (Apr 25, 2012)

They did increase the debt during the boom of the early 2000s, ymu, which was imo a mistake. Not just a mistake but a gutless decision as they wanted to increase spending but also wanted the housing boom to continue. Many Labour policies were directed towards inflating the housing bubble as much as possible. That will be a lasting negative legacy from those years.


----------



## BigTom (Apr 25, 2012)

It's also worth pointing out that Spain and Ireland ran surpluses right up to 2008 and had smaller debt:gdp ratios than the UK as well iirc, but they are in far, far worse trouble now.

The biggest failure of Labour was to not re-regulate the banking system. Though I agree they shouldn't have been running deficits from 2002.


----------



## Balbi (Apr 25, 2012)

Cameron ended very shouty and red faced at the end of Milibands questions. Oh dear.


----------



## agricola (Apr 25, 2012)

ymu said:


> Stop repeating these pro-austerity myths. These lies are part of what will bury us if people don't wake up to what these cunts are doing (and what Nu-Labour would be doing given half a chance).


 
Thats the thing though - what they spent the money on is not a myth, nor is the fact that borrowed money was (and is) used to pay for much of it.  Stuff like PFI and the rest needs to be cut.


----------



## Puddy_Tat (Apr 25, 2012)

BigTom said:


> The biggest failure of Labour was to not re-regulate the banking system.


 
I'm inclined to agree.

Although it's worth pointing out that the tories were, right up until the moment the shit hit the fan, calling for less regulation of the financial sector...


----------



## littlebabyjesus (Apr 25, 2012)

BigTom said:


> It's also worth pointing out that Spain and Ireland ran surpluses right up to 2008 and had smaller debt:gdp ratios than the UK as .


Indeed, that is very true and very worth pointing out. It's also worth pointing out that the financial crisis is a crisis of private debt, not public debt. Private debt is far higher still than public debt, and is far more damaging to the economy. Pointing at the public deficit and crying foul entirely misses the point of why that deficit is there - it is there because private debt grew so enormous that confidence collapsed and the private sector - both households and businesses - are motivated to pay down existing debt now rather than take out new debt. In such a situation, it is right, proper, and indeed absolutely necessary, for the government to run a budget deficit.


----------



## Dan U (Apr 25, 2012)

Balbi said:


> Cameron ended very shouty and red faced at the end of Milibands questions. Oh dear.


 
Milliband dropped the 'sleaze' bomb on him.

Shades of Major


----------



## Blagsta (Apr 25, 2012)

agricola said:


> I didnt say they did, all I said was that the state the country is in is far more Labours fault than it is the Coalitions.


 
That's really only 'cos it was Labour in power when the worldwide economy collapsed.


----------



## ymu (Apr 25, 2012)

littlebabyjesus said:


> *They did increase the debt during the boom of the early 2000s*, ymu, which was imo a mistake. Not just a mistake but a gutless decision as they wanted to increase spending but also wanted the housing boom to continue. Many Labour policies were directed towards inflating the housing bubble as much as possible. That will be a lasting negative legacy from those years.


Debt as a % of GDP went down during the boom of the early 2000s (see graph). Whilst I agree they should have taxed the boom more instead of relying on cheap credit to get us through recessions, like the Tories did, it's just not true to say that they increased the debt in the boom times. That is what the propagandists say, but the data say something quite different.


----------



## littlebabyjesus (Apr 25, 2012)

ymu said:


> Debt as a % of GDP went down during the boom of the early 2000s (see graph). Whilst I agree they should have taxed the boom more instead of relying on cheap credit to get us through recessions, like the Tories did, it's just not true to say that they increased the debt in the boom times. That is what the propagandists say, but the data say something quite different.


It went down in Labour's first term, then crept back up again in their second.

But I agree that this is marginal to the story. The really pertinent graph that's needed to explain the credit crunch is one showing levels of private debt as a % of GDP.


----------



## BigTom (Apr 25, 2012)

littlebabyjesus said:


> It went down in Labour's first term, then crept back up again in their second.
> 
> But I agree that this is marginal to the story. The really pertinent graph that's needed to explain the credit crunch is one showing levels of private debt as a % of GDP.


 
One like this? I remember seeing one which was a sectored bar chart which had govt. debt as well and compared across different countries but I can't find that yet
http://www.bbc.co.uk/news/in-pictures-16090055




edit: I'm not sure if this is per cent GDP, as the graph is titled, I didn't look at the Y axis..


----------



## littlebabyjesus (Apr 25, 2012)

Yep, exactly like that.  And that is exactly the shape I expected it to take. Just for some perspective, that starting point in 1987 is not low - just household debt on its own there is nearly as high as current govt debt.


----------



## BigTom (Apr 25, 2012)

Is the image I was looking for, if I find one which has a longer term view of private debt, I'll post it up.

I don't know what year it's from though, 2011 was the earliest I could see quickly

Edit: apparently came out in evidence to a congressional hearing in Dec 2011 about the European crisis, but the pdf is no longer avialable, see this thread.. http://www.restirred.com/forum/viewtopic.php?f=3&t=2131&start=30


----------



## ymu (Apr 25, 2012)

Nice one Tom.



littlebabyjesus said:


> It went down in Labour's first term, then crept back up again in their second.
> 
> But I agree that this is marginal to the story. The really pertinent graph that's needed to explain the credit crunch is one showing levels of private debt as a % of GDP.


That's the normal boom and bust of capitalism, although a large part of the reason it starts creeping up a little after 2002ish is the loss of revenue from North Sea Oil (free spirit has some good charts on this).


----------



## BigTom (Apr 25, 2012)

Found this graph which shows US Household debt back to 1950s. Although I have no idea how the absolute percentage levels would differ, I bet we'd see more or less the same shape of graph for the UK.. so although I'm still looking for another one, this is just to help illustrate LBJs point that 1987 had high levels of private sector debt historically. Crucially, if you are looking at the % levels, this is just household debt and does not include business or financial sector debt.






edit: there's also a graph here showing total US debt (govt and private) from aroudn 1910 I think http://offgridblogger.wordpress.com/2009/11/21/u-s-budget-death-spiral/ but I can't read the source on the image..
still spike around 1930 and then rising hugely since sometime in the 1970s... would expect see the same rough shape for a graph from the UK


----------



## jusali (Apr 25, 2012)

Now there's a graph that represents stagnation in wages! ^^^^^


----------



## ItWillNeverWork (Apr 25, 2012)

BigTom said:


> there's also a graph here showing total US debt (govt and private) from aroudn 1910 I think http://offgridblogger.wordpress.com/2009/11/21/u-s-budget-death-spiral/ but I can't read the source on the image..
> still spike around 1930 and then rising hugely since sometime in the 1970s... would expect see the same rough shape for a graph from the UK


 
Is this the one?






eta: here's an enlarged version of the one in the link you provided


----------



## rorymac (Apr 25, 2012)

Britain has been in recession for working class people for 30 fucking years and that's a fact !
Double dip talk is just economic bollocks talk !


----------



## ymu (Apr 25, 2012)

Too true, rory, too true.
http://www.taxresearch.org.uk/Blog/2011/12/05/theres-plenty-of-money-its-just-been-put-out-of-reach/


----------



## rorymac (Apr 25, 2012)

The most frustrating thing is that we are so fucked over now for so long and ruled by absolute cunts is that we all debate about fucking David Cameron or poxy Ed Milliband when we ought to be forming unions .. like your enemy is the very person who ought to be your friend.
They have it down to a fine art and so they should .. it's not simply random evolution. And it's a piece of piss when you are riding the crest of a wave.

Thick rich bastards forming policies that affect us all to our detriment and we do fuckall .. Jesus fucking Christ get your finger out of your arsehole you cunt !

I mean God like .. sorry for the religious aspect !


----------



## ymu (Apr 25, 2012)

Good graphic to show just how much direct responsibility this government has for the state of the economy. They took over at ~24 months on this graphic (see how the recovery flatlines after they took office, and specifically after the October spending review a few months later - the red line below).


----------



## ymu (Apr 25, 2012)

And here's how we stack up against the US and Germany, neither of whom have introduced austerity measures (although neither have provided as much stimulus as they should either):






Funny how they haven't flat-lined eh?


----------



## Kaka Tim (Apr 25, 2012)

ymu said:


>


 
Also worth bearing in mind is the fact that for the first four months of the coalition it was _labours_ policies that were affecting the economy. So the economy flatlines pretty much exactly the moment Osbourne starts to work his .. er ...  magic.


----------



## ymu (Apr 26, 2012)

Blimey, even the Telegraph is working it out:



> Embarrassingly for the Coalition, the present period of stagnation dates almost exactly to the start of its austerity programme. Before that, the economy was recovering, even if the bounce it was then enjoying had been turbo-charged by the fiscal stimulus of tax cuts and spending increases that led directly to the present mountain of debt.
> 
> This has given legs to the alternative economic narrative championed by Ed Balls. Incredible though it might seem for someone as tarnished by his association with Gordon Brown as the shadow chancellor, Mr Balls is starting to gain an audience. George Osborne, the Chancellor, believed he had largely won the political argument over deficit reduction. Economic stagnation has re-opened the debate.
> 
> ...


 
About fucking time, you stupid, stupid cunts.

_If industry won't spend, the government mustn't either!_ How did you think that was gonna work out?


----------



## Roadkill (Apr 26, 2012)

ymu said:


> Blimey, even the Telegraph is working it out:
> 
> 
> About fucking time, you stupid, stupid cunts.
> ...


 
More to the point, even Jeremy Warner, austerity cheerleader extraordinaire, is working it out, slowly.  It's been faintly amusing to watch him staging one tactical retreat after another over the last year or so - obviously without the good grace to admit that he - and George Osborne - got it all wrong!


----------



## Voley (Apr 26, 2012)

There was talk on the news last night by a charming venture capitalist chap of Cameron's austerity measures being 'too mild'. This was followed by some discussion of the poor figures coming from the construction world being partly due to the public sector not having any money to employ them any more. Strangely, there was no discussion of these two things being linked.


----------



## ymu (Apr 26, 2012)

This should strengthen the Keynesians in Labour. It's hard to work out where Balls is coming from a lot of the time, so much triangulating going on , but he's a Brownite and, for all his faults, Brown knew what he was talking about on recovery economics under capitalism.

There's a non-zero chance that the government will fall over this + Murdoch + everything else they're cocking up ...

I think the anti-cuts groups working on benefits issues might be wise to step up the pressure on Labour right now (with pegs on noses if need be). They cannot be allowed to think that screwing over the poorest (whilst spending on the middle) might remain a tenable policy for them if they return to power sooner than expected.

I suppose one place to start might be collecting quotes from Labour about what the Tories are doing to the most vulnerable, and use it to create a resource that activists can use in lobbying them? Worth starting a thread for that?


----------



## taffboy gwyrdd (Apr 26, 2012)

It's not a recession. It's a heist fuelled depression with the occasional positive looking blip.


----------



## taffboy gwyrdd (Apr 26, 2012)

Here is a list of Cokeboy Osborne's formal qualifications and prior experience in economics:

Thanks for reading the list. I would be grateful to anyone who cites anything I missed.


----------



## Superdupastupor (Apr 26, 2012)

I'm reading A.j.p Taylor's book on the origins of WWII first published in 1961 in it he scoffingly looks back at the leaders of countries during the great depression that were ignorant of Keynes policy "of course we all know now how to get countries out of a depression now" 



how did we get here again in 2012 ?


----------



## ymu (Apr 26, 2012)

Superdupastupor said:


> I'm reading A.j.p Taylor's book on the origins of WWII first published in 1961 in it he scoffingly looks back at the leaders of countries during the great depression that were ignorant of Keynes policy "of course we all know now how to get countries out of a depression now"
> 
> 
> 
> how did we get here again in 2012 ?


Krugman's been writing a lot of short histories of economics in the twentieth century to show exactly how it went wrong. I think this speech is one of the more comprehensive, and this article also (but was 2009 so less about the austerian kamikaze approach).


----------



## Superdupastupor (Apr 26, 2012)

Cheers reading now.

Austerian Kamikaze sounds like a terrible bastard from a comic book


----------



## Louis MacNeice (Apr 26, 2012)

Louis MacNeice said:


> Or he is really worried as he is something that Cameron can act on.
> 
> Cheers - Louis MacNeice


 
My mistake - Cameron holds on to Hunt to distract from the double dip. This is risky since both the chancellor and the pm are implicated in the whole being too close to the Murdoch's mess.

Cheers - Louis MacNeice


----------



## Smokeandsteam (Apr 26, 2012)

Superdupastupor said:


> I'm reading A.j.p Taylor's book on the origins of WWII first published in 1961 in it he scoffingly looks back at the leaders of countries during the great depression that were ignorant of Keynes policy "of course we all know now how to get countries out of a depression now"
> 
> 
> 
> how did we get here again in 2012 ?


 
3 points in reply to this:

1. Keynes 'solution' was a response to what were essentially national and not globalised economic questions.
2. The neo-liberal economic model has reached, or is reaching, its limits and so whilst a Keynesian solution might provide short term pain relief (and only minor pain relief at that) the patient will continue to die. 
3. In 2008 the global financial institutions needed to be bailed out by states. Now, we are seeing states themselves heading towards bankruptcy.

The notion that all that is needed is a shift to a Keynesian model is severely flawed to put it mildly.


----------



## Smokeandsteam (Apr 26, 2012)

ymu said:


> Too true, rory, too true.


 
Where is this from Ymu?


----------



## littlebabyjesus (Apr 26, 2012)

Smokeandsteam said:


> 1. Keynes 'solution' was a response to what were essentially national and not globalised economic questions..


You mean the Depression and post-WW2, presumably? You couldn't be more wrong. Both were globalised economic questions.


----------



## ymu (Apr 26, 2012)

Smokeandsteam said:


> 3 points in reply to this:
> 
> 1. Keynes 'solution' was a response to what were essentially national and not globalised economic questions.
> 2. The neo-liberal economic model has reached, or is reaching, its limits and so whilst a Keynesian solution might provide short term pain relief (and only minor pain relief at that) the patient will continue to die.
> ...


 
_Yeah, let's hold out for perfection, no matter how many die in the meantime. Fuck the NHS, fuck welfare recipients, fuck everyone else - my ideological halo will not be tarnished by real world problems that matter now._


----------



## ymu (Apr 26, 2012)

Smokeandsteam said:


> Where is this from Ymu?


Murphy, taxresearch.org.uk. There are several versions of the same plot floating around.

Forgot to put the link behind the picture. It's there now.

Original source:



> There are many people in the UK who wonder where the money’s gone.
> 
> Many more wonder why we are so much in debt.
> 
> ...


----------



## Smokeandsteam (Apr 26, 2012)

ymu said:


> Murphy, taxresearch.org.uk. There are several versions of the same plot floating around.


 
Ta.


----------



## Smokeandsteam (Apr 26, 2012)

ymu said:


> _Yeah, let's hold out for perfection, no matter how many die in the meantime. Fuck the NHS, fuck welfare recipients, fuck everyone else - my ideological halo will not be tarnished by real world problems that matter now._


 
If you think that those considerations - bar lip service about it - will play a role in determining the economic policy and approach of any of the 3 main parties then you are likely to be very disappointed.


----------



## littlebabyjesus (Apr 26, 2012)

Smokeandsteam said:


> The notion that all that is needed is a shift to a Keynesian model is severely flawed to put it mildly.


Depends how it is used, tbh. Keynesian stimulus works. It's been shown time and again. There are other challenges, such as Peak Oil and climate change, which require growth to be of a particular sustainable kind, but as free spirit pointed out on another thread, the kind of growth that was stimulated post-WW2 in Europe was the kind that provided improved health care, an improved built environment, improved education - not more ipods and foreign holidays.

This is the kind of growth that needs to be stimulated again, but not just this kind of growth. There is an urgent need for growth to be measured in terms of sustainability - reduction in carbon emissions, a transfer to clean energy, more efficient distribution of food. These kinds of growth, I would argue, can _only_ be provided in a Keynesian way. It is collective action that is taken because we can see that it needs to be taken, not because a profit motive determines that it is the right thing to do.


----------



## littlebabyjesus (Apr 26, 2012)

Smokeandsteam said:


> If you think that those considerations - bar lip service about it - will play a role in determining the economic policy and approach of any of the 3 main parties then you are likely to be very disappointed.


We'll see. Austerity is failing on its own terms, as lots of people said it would. They will be forced into an alternative by that fact.


----------



## Smokeandsteam (Apr 26, 2012)

littlebabyjesus said:


> Depends how it is used, tbh. Keynesian stimulus works. It's been shown time and again. There are other challenges, such as Peak Oil and climate change, which require growth to be of a particular sustainable kind, but as free spirit pointed out on another thread, the kind of growth that was stimulated post-WW2 in Europe was the kind that provided improved health care, an improved built environment, improved education - not more ipods and foreign holidays.
> 
> This is the kind of growth that needs to be stimulated again, but not just this kind of growth. There is an urgent need for growth to be measured in terms of sustainability - reduction in carbon emissions, a transfer to clean energy, more efficient distribution of food. These kinds of growth, I would argue, can _only_ be provided in a Keynesian way. It is collective action that is taken because we can see that it needs to be taken, not because a profit motive determines that it is the right thing to do.


 
That's kind of missing the point I was making . As Paul Mason puts it "‘If we get a double dip, then there is no more fiscal stimulus type ammo in the clip: countries will – and Britain as I say effectively already has – devalue in order to boost competitiveness. As all students of the Great Depression know, those who devalued first – by coming off the Gold Standard – escaped recession first.


----------



## Superdupastupor (Apr 26, 2012)

Smokeandsteam said:


> 3 points in reply to this:
> 
> 1. Keynes 'solution' was a response to what were essentially national and not globalised economic questions.
> 2. The neo-liberal economic model has reached, or is reaching, its limits and so whilst a Keynesian solution might provide short term pain relief (and only minor pain relief at that) the patient will continue to die.
> ...



trust me when I say that I'm no economist  

I know that I reject auserity as being about anything other than the retrenchment of wealth.

There is no lack of money- it's just not in the right place now.


----------



## Smokeandsteam (Apr 26, 2012)

littlebabyjesus said:


> You mean the Depression and post-WW2, presumably? You couldn't be more wrong. Both were globalised economic questions.


 
No it wasn't. Capital was largely held nationally and not globally like it is today. This is a fundamental point.


----------



## littlebabyjesus (Apr 26, 2012)

Or - as Japan has done, and the US did in the Depression - the state begins to invest directly in the economy.


----------



## Smokeandsteam (Apr 26, 2012)

Superdupastupor said:


> There is no lack of money- it's just not in the right place now.


 
I don't think anyone on here would disagree with your sentiment but the debate as I understand it is about what is likely to be the response and what would happen if, say, Labour took over tomorrow on the promise of a fiscal stimulus.


----------



## ymu (Apr 26, 2012)

Smokeandsteam said:


> If you think that those considerations - bar lip service about it - will play a role in determining the economic policy and approach of any of the 3 main parties then you are likely to be very disappointed.


Wut?

It's nothing to do with the three main parties. They are irrelevant - they will do as much as we let them get away with. I don't think there's a hope in hell of jumping straight from neoliberalism to something better than the Post War Consensus without first spelling out how neo-liberalism brought us to our knees, and it is getting pretty fucking urgent for millions of people that the austerians are stopped before the revolutionaries manage to get their act together.

_Economics are the method; the object is to change the soul_ - Thatcher

She succeeded. That has to be reversed first, and the huge amount of evidence for Keynesianism and against austerity is massively important, in my view, to getting people to understand just how badly, and how inevitably, capital screws us over. Refusal to discuss this because "it's all capitalism, man" is just pointless.


----------



## littlebabyjesus (Apr 26, 2012)

Smokeandsteam said:


> No it wasn't. Capital was largely held nationally and not globally like it is today. This is a fundamental point.


How globally is capital held today? Most UK debt is owned by UK individuals or institutions. Japan has expanded its public debt almost exclusively by borrowing from the Japanese themselves. Even Greek debt is mostly owed within the eurozone, which you can effectively treat as a federal state in a financial sense.

Looking at post-War Europe, a lot of debt was owed globally - to the US via the Marshall Plan.

The big exceptions would be China and the US, I would guess. But there is one quite likely solution to this, which is the opposite of devaluing to remain competitive - it is the revaluing of the Chinese renminbi upwards over the coming years, something that the Chinese have said they will do. This will wipe a whole load of value off their foreign reserves - they will effectively be ripping themselves off in a sense by writing down a whole load of past loans, notably of course loans to the US. But then, there was never any realistic chance of these loans ever being repaid in full, as the Chinese knew when they made them - they judged that it served their interests to loan out the money they were going to receive back in payment for exports in order to keep the external motor of growth going. I would think that long-term, they think they will no longer need to stay in this subservient position.


----------



## ymu (Apr 26, 2012)

Globalisation makes one key difference compared to the 1929 crash.

Keynes recognised that if you don't pay the workers enough to buy what they make, the economy cannot function, and that increasing income inequality was part of the reason for the crash. This is why the New Deal/PWC included unionisation, collective bargaining and welfare - all designed to keep wages above the minimum that bosses could screw people for.

This time, they don't need a local middle-class. They can help China, India and Brazil grow their own middle-classes and leave us to provide the sweatshops. This is the only way austerity can work with interest rates at the zero bound and high unemployment - sterling has to get cheap enough that we can export our way out of debt, whilst being unable to afford imports from richer countries. ie, exactly how we've been screwing over the rest of the world.

That's why I think it's urgent to make the Keynesian arguments, and make them well. I want global equality, I do not want the same old shit with different victims.


----------



## littlebabyjesus (Apr 26, 2012)

ymu said:


> Globalisation makes one key difference compared to the 1929 crash.
> 
> Keynes recognised that if you don't pay the workers enough to buy what they make, the economy cannot function, and that increasing income inequality was part of the reason for the crash. This is why the New Deal/PWC included unionisation, collective bargaining and welfare - all designed to keep wages above the minimum that bosses could screw people for.
> 
> This time, they don't need a local middle-class. They can help China, India and Brazil grow their own middle-classes and leave us to provide the sweatshops.


There are at least two aspects to that, it seems to me.

Those that move capital around the world to find the best way to exploit workers don't overly care about recession somewhere like the UK - at least in the short term. As we've seen recently, they're continuing to get richer as the rest of us get poorer.

But year-on-year near-zero growth in which the rich continue to get richer is unsustainable politically.

It is clearly in the interests of those that control capital to maintain political order. Even on their terms, something has to give, although of course, it will only give if and when the rest of us demand it.


----------



## frogwoman (Apr 26, 2012)

the thing is that keynseianism can only ever be a temporary solution though.


----------



## littlebabyjesus (Apr 26, 2012)

frogwoman said:


> the thing is that keynseianism can only ever be a temporary solution though.


Yes and no, I would say. The means of extracting yourself from the vicious circle of depression is to enact measures that are designed to be short-term, but as ymu says, the aim is to create a situation that is self-sustaining, which is also part of Keynesianism, really.

I would actually argue for a new kind of Keynesianism in which the means of producing money are nationalised for good. imo, we need to create a dynamic situation in which investment funds are available, but provided collectively. The terms by which private banks work out who to loan to are fundamentally wrong, and will continue to be so. A new set of terms needs to be established, and that set of terms needs to be administered collectively. The function of money creation is both far too important to be left to private banks, and far too trivial to be allowed to create vast wealth for those that do it.


----------



## frogwoman (Apr 26, 2012)

the post-war consensus is dead though. it isn't ever coming back. even in countries like sweden they're starting down the same road of neo-liberal policies. especially now there is not much in the way of serious resistance to it.


----------



## Smokeandsteam (Apr 26, 2012)

ymu said:


> Wut?
> 
> It's nothing to do with the three main parties. They are irrelevant - they will do as much as we let them get away with. I don't think there's a hope in hell of jumping straight from neoliberalism to something better than the Post War Consensus without first spelling out how neo-liberalism brought us to our knees, and it is getting pretty fucking urgent for millions of people that the austerians are stopped before the revolutionaries manage to get their act together.
> 
> ...


 
Given the current balance of forces, the social, political and economic reality of the past century and the current near bankruptcy of the state I wish you all the best with that.


----------



## littlebabyjesus (Apr 26, 2012)

frogwoman said:


> the post-war consensus is dead though. it isn't ever coming back. even in countries like sweden they're starting down the same road of neo-liberal policies. especially now there is not much in the way of serious resistance to it.


We'll see. When an economic model fails, it needs to be replaced, and space is opened up to improve upon it.


----------



## littlebabyjesus (Apr 26, 2012)

Smokeandsteam said:


> Given the current balance of forces, the social, political and economic reality of the past century and the current near bankruptcy of the state I wish you all the best with that.


Near-bankruptcy of which state?


----------



## ViolentPanda (Apr 26, 2012)

Balbi said:


> - 0.2 - No excuses Georgey Boy.


 
Or rather, same old excuses. "It's the fault of the last party in government".


----------



## frogwoman (Apr 26, 2012)

littlebabyjesus said:


> We'll see. When an economic model fails, it needs to be replaced, and space is opened up to improve upon it.


 
well, yes. i don't think a temporary sticking plaster - and one that's even more limited than that introduced post 45 - is really that "improvement" though.


----------



## elbows (Apr 26, 2012)

frogwoman said:


> the post-war consensus is dead though. it isn't ever coming back. even in countries like sweden they're starting down the same road of neo-liberal policies. especially now there is not much in the way of serious resistance to it.


 
Given time a new consensus can form. Not easy to go on about this much yet because the old dominant ideas are still in place, and alternatives don't have momentum, yet. But there is only so much time that the neolib ideas can weather the storm, they are at great risk in the medium term.


----------



## littlebabyjesus (Apr 26, 2012)

frogwoman said:


> well, yes. i don't think a temporary sticking plaster - and one that's even more limited than that introduced post 45 - is really that "improvement" though.


I would argue that the 'temporary sticking plaster' of post-WW2 was nothing of the kind. It was a genuine shift and a genuine improvement.


----------



## frogwoman (Apr 26, 2012)

littlebabyjesus said:


> I would argue that the 'temporary sticking plaster' of post-WW2 was nothing of the kind. It was a genuine shift and a genuine improvement.


I agree - and we have got to defend what 's left of it - but I don't think we're going to get that kind of thing from the r/c again, they're never going to see it as anything other than a temporary measures and they almost certainly won't introduce the kind of far-reaching reforms that happened after 45. Not voluntarily, anyway.


----------



## littlebabyjesus (Apr 26, 2012)

frogwoman said:


> I agree but I don't think we're going to get that kind of thing from the r/c again. Not voluntarily, anyway.


Well it isn't going to happen out of some sense of benevolence towards the less fortunate. But then it never has.

I'm going to give a hostage to fortune and make a prediction:

Within the next five years, the UK government will embark upon a significant programme of public spending, either through directly funding projects or making loans to others to carry out projects, and it will do this regardless of which political party is in power.


----------



## ViolentPanda (Apr 26, 2012)

Balbi said:


> Cameron ended very shouty and red faced at the end of Milibands questions. Oh dear.


 
He was like a petulant 5-yr old throwing a fucking strop, the sad cunt!


----------



## frogwoman (Apr 26, 2012)

littlebabyjesus said:


> Well it isn't going to happen out of some sense of benevolence towards the less fortunate. But then it never has.


 
My point being is that basically capitalism is the problem rather than different types of it and even if such a consensus was introduced again it would eventually degenerate as we're currently seeing now - without strong - and i mean strong - pressure in the other direction, and even then ...

i'm really not good at economics or at explaining this stuff but basically smokeandsteam has it right imo.


----------



## littlebabyjesus (Apr 26, 2012)

frogwoman said:


> My point being is that basically capitalism is the problem rather than different types of it and even if such a consensus was introduced again it would eventually degenerate as we're currently seeing now - without strong - and i mean strong - pressure in the other direction, and even then ...
> 
> i'm really not good at economics or at explaining this stuff but basically smokeandsteam has it right imo.


 
As Arthur Miller said, each generation must win its freedom anew.


----------



## trevhagl (Apr 26, 2012)

littlebabyjesus said:


> We'll see. Austerity is failing on its own terms, as lots of people said it would. They will be forced into an alternative by that fact.


 

how the fuck could anybody think otherwise about it failing? You cut jobs , less people have money , more benefits to pay out , less shops , less raised in business rates ..... how do these people get jobs in government?


----------



## trevhagl (Apr 26, 2012)

ViolentPanda said:


> He was like a petulant 5-yr old throwing a fucking strop, the sad cunt!


 
i cringe every time he comes on , Labour would be in BIG trouble if we didn't have the most hated government ever


----------



## littlebabyjesus (Apr 26, 2012)

trevhagl said:


> how the fuck could anybody think otherwise about it failing? You cut jobs , less people have money , more benefits to pay out , less shops , less raised in business rates ..... how do these people get jobs in government?


The private sector was going to step in. At a time when the private sector is over-indebted and as a collective trying to pay down those debts.

*magic* in other words. But there is no such thing as magic.


----------



## newharper (Apr 26, 2012)

littlebabyjesus said:


> Well it isn't going to happen out of some sense of benevolence towards the less fortunate. But then it never has.
> 
> I'm going to give a hostage to fortune and make a prediction:
> 
> Within the next five years, the UK government will embark upon a significant programme of public spending, either through directly funding projects or making loans to others to carry out projects, and it will do this regardless of which political party is in power.


 
The fear of the threat of violence has only ever been the motivating factor.


----------



## ymu (Apr 26, 2012)

littlebabyjesus said:


> There are at least two aspects to that, it seems to me.
> 
> Those that move capital around the world to find the best way to exploit workers don't overly care about recession somewhere like the UK - at least in the short term. As we've seen recently, they're continuing to get richer as the rest of us get poorer.
> 
> ...


It doesn't matter if it's unsustainable politically. These people have no national allegiances and no electorate. India's a democracy - is it sustainable politically? China is an authoritarian capitalist state - is it sustainable politically?

The rich no longer need to worry about the poor murdering them in their beds - the poor can't get anywhere near them any more. We are an irrelevance as far as they're concerned.


----------



## littlebabyjesus (Apr 26, 2012)

newharper said:


> The fear of the threat of violence has only ever been the motivating factor.


That and a wider perceived self-interest. At the time when Keynes's ideas held sway - and they held sway across all major political parties - there was a belief that in order to improve _your own_ profits, you had to improve the lot of your workers.


----------



## littlebabyjesus (Apr 26, 2012)

ymu said:


> It doesn't matter if it's unsustainable politically. .


 
It does matter if your favoured politicians can no longer get elected on a platform of supporting the policies you want.


----------



## ymu (Apr 26, 2012)

frogwoman said:


> My point being is that basically capitalism is the problem rather than different types of it and even if such a consensus was introduced again it would eventually degenerate as we're currently seeing now - without strong - and i mean strong - pressure in the other direction, and even then ...
> 
> i'm really not good at economics or at explaining this stuff but basically smokeandsteam has it right imo.


So lets just allow them to screw us as hard as possible in the meantime, because a slightly more liveable form of capitalism just isn't good enough for the vanguard? Who gives a shit about the poor - if they ain't revolutionaries of exactly the right ideological kind, we ain't interested?

Recipe for permanent defeat, IMO.


----------



## ViolentPanda (Apr 26, 2012)

littlebabyjesus said:


> We'll see. Austerity is failing on its own terms, as lots of people said it would. They will be forced into an alternative by that fact.


 
The crux of the matter being the need to be forced.
This current austerity clusterfuck will be adhered to as long as possible by the coalition, possibly longer than anywhere else in Europe.
Why? Because the spectre of austerity is the justification for many coalition policies. Without that spectre, or with that spectre being tackled, the assumed licence to ride roughshod over welfare provision etc becomes less valid, more problematic for them.


----------



## ViolentPanda (Apr 26, 2012)

frogwoman said:


> the thing is that keynseianism can only ever be a temporary solution though.


 
All solutions are temporary under capitalism, They can't not be temporary, given capitalism's ability to change.


----------



## Smokeandsteam (Apr 26, 2012)

littlebabyjesus said:


> How globally is capital held today? Most UK debt is owned by UK individuals or institutions. Japan has expanded its public debt almost exclusively by borrowing from the Japanese themselves. Even Greek debt is mostly owed within the eurozone, which you can effectively treat as a federal state in a financial sense.
> 
> Looking at post-War Europe, a lot of debt was owed globally - to the US via the Marshall Plan.
> 
> .


 
As you well know the model in force over the last 30 years has demanded that money should be allowed to flow to where it is most needed and at the best price. This was neither the theory nor the practise in the 40's. I also think you are deliberately confusing state owned debt with privately owned capital.

The strength of the globalised model is also what will kill it sooner or later. The subprime crisis in 2008 and the current Eurozone crisis demonstrate clearly how globalised capital and how it has become invested and traded differently. It also allows us to understand why it is unsutainable. 

However to return to your argument neither could have taken place in the 1940's because capital was structured differently and whilst some of it was no doubt international it was not global or inter-connected in the way that it is now.

The notion that what might replace neo-liberalism is more state owned debt to fuel growth is in my opinion not a starter.

Private sector led production (small manufacturing start ups, r&d etc) is the likely outcome. No doubt Government's will need to provide the correct conditions - and I suppose some state stimulus might be possible in such ciorcumstances - but certainly not in the manner or at the level in which you and YMU would wish to see or think economically desirable under a capitalist model.


----------



## littlebabyjesus (Apr 26, 2012)

Smokeandsteam said:


> The notion that what might replace neo-liberalism is * more state owned debt to fuel growth* is in my opinion not a starter.


Not that neo-liberalism has been replaced in Japan, but this is exactly what has happened in Japan. And there are striking similarities between the structure of debt in the UK in 2008 and that of Japan in 1990. There is no immediate prospect of a pick up in private-sector investment because the private sector is so over-indebted, just as it was in Japan in 1990. Taken as a collective, the private sector is trying to reduce its overall debt, not increase it. No amount of interest rate reduction or QE can change that. So what is left?


----------



## Smokeandsteam (Apr 26, 2012)

littlebabyjesus said:


> Within the next five years, the UK government will embark upon a significant programme of public spending, either through directly funding projects or making loans to others to carry out projects, and it will do this regardless of which political party is in power.


 
Totally agree that at some stage soon the UK Government (and others) will need to embark on a different strategy - what's at issue is what will it be.


----------



## love detective (Apr 26, 2012)

littlebabyjesus said:


> How globally is capital held today? Most UK debt is owned by UK individuals or institutions. Japan has expanded its public debt almost exclusively by borrowing from the Japanese themselves. Even Greek debt is mostly owed within the eurozone, which you can effectively treat as a federal state in a financial sense.


 
As you've correctly made the point before - a focus on public/state debt (which is predominantly domestically held) detracts from the bigger and more systematically instable picture of the complex & intricate holdings of private debt (both individual and corporate/financial), which is indeed a lot more global & interconnected in nature than it's ever been at any other point in time in history. This kind of thing simply didn't exist until the last thirty years or so. That's why crisis can no longer be contained to the areas where it first arises.

edit: wrote this post over an hour ago but forgot to click post - saw smokeandsteam has already made the point


----------



## littlebabyjesus (Apr 26, 2012)

Point taken, ld (and SandS).

Would you agree, however, that those who control this kind of globally mobile capital still have a very strong vested interest in the political stability of the places they do business in?


----------



## love detective (Apr 26, 2012)

one quick point on debt though - high debt in and off itself is not necessarily unsustainable, it's the lack of ability/avenues for profitable oppotunities to extract a suitable rate of profit that's the real killer - it's only when the later starts to happen does the high levels of debt become a problem (there is a circular impact here though i'll admit where high levels of capital sloshing around due to easy debt starts to exert a downwards influence on the rate of profit)

this is a significant difference between the analysis of the likes of Keen (who see's high debt in and off itself as a sign that crisis or a bubble bursting is near) and a Marxist analysis which takes into account both the levels of debt and the wider availability of avenues to extract an appropriate rate of profit giving a more nuanced and systematic view of what's going on


----------



## frogwoman (Apr 26, 2012)

ymu said:


> So lets just allow them to screw us as hard as possible in the meantime, because a slightly more liveable form of capitalism just isn't good enough for the vanguard? Who gives a shit about the poor - if they ain't revolutionaries of exactly the right ideological kind, we ain't interested?
> 
> Recipe for permanent defeat, IMO.


 
got nothing to do with that. the question is will it work. and i don't think that it will. the world has changed since then, it's not gonna go back to what it used to be.


----------



## frogwoman (Apr 26, 2012)

ymu said:


> So lets just allow them to screw us as hard as possible in the meantime, because a slightly more liveable form of capitalism just isn't good enough for the vanguard? Who gives a shit about the poor - if they ain't revolutionaries of exactly the right ideological kind, we ain't interested?
> 
> Recipe for permanent defeat, IMO.


 
You know that's not what I think. I specifically said that we should fight to maintain what's left of it. But as long as capitalism remains in place we're always going to be on the back foot.


----------



## littlebabyjesus (Apr 26, 2012)

frogwoman said:


> You know that's not what I think. I specifically said that we should fight to maintain what's left of it. But as long as capitalism remains in place we're always going to be on the back foot.


I don't want to somehow be an apologist for capital here, but there are different forms of capitalism, even now. The US model and the German model are still very different.


----------



## frogwoman (Apr 26, 2012)

littlebabyjesus said:


> I don't want to somehow be an apologist for capital here, but there are different forms of capitalism, even now. The US model and the German model are still very different.


 
I know there are different forms of capitalism but that's got nothing to do with what I said. _All_ the advanced capitalist economies are introducing some form of austerity type policy even if it's minor (for now) compared to here and the US. And what usually happens is that much of their wealth is subsidised by another "worse" form of capitalism somewhere else. For example Australia has been having a sort of economic boom the last few years and that's partly because of China having an economic boom and they do the bulk of their trade with china. I'm sure love detective etc can explain more but do you see what I am saying?


----------



## littlebabyjesus (Apr 26, 2012)

love detective said:


> one quick point on debt though - high debt in and off itself is not necessarily unsustainable, it's the lack of ability/avenues for profitable oppotunities to extract a suitable rate of profit that's the real killer - it's only when the later starts to happen does the high levels of debt become a problem (there is a circular impact here though i'll admit where high levels of capital sloshing around due to easy debt starts to exert a downwards influence on the rate of profit)
> 
> this is a significant difference between the analysis of the likes of Keen (who see's high debt in and off itself as a sign that crisis or a bubble bursting is near) and a Marxist analysis which takes into account both the levels of debt and the wider availability of avenues to extract an appropriate rate of profit giving a more nuanced and systematic view of what's going on


As you probably know, I find a lot of value in Keen. He makes a distinction between useful and useless debt. The latter is what causes bubbles and is unsustainable. He also makes a sharp distinction between public and private debt, seeing the former as more sustainable at higher levels.

I'm not sure Keen would disagree fundamentally with your analysis here. Aside perhaps from a more fundamental disagreement about the endogenous creation of money, I see his position and yours as differing more on the question of which factors to emphasise. One thing that you and he most certainly agree on, for instance, is the self-causing collapse of the subprime mortgage market.


----------



## love detective (Apr 26, 2012)

littlebabyjesus said:


> Point taken, ld (and SandS).
> 
> Would you agree, however, that those who control this kind of globally mobile capital still have a very strong vested interest in the political stability of the places they do business in?


 
I've not really been following the discussion about political stability - but I think there's a dichotomy that arises here between political stability and economic stability as far as capital is concerned. The political stability of the golden post war years in the UK for example delivered superior economic growth (far superior than anything achieved under neo-liberalism anyway), but that in itself presented a problem, in that the stability was achieved to a large extent though 'financial repression' i.e. keeping capital on a leash as much as was possible, capital controls etc. but while this delivered superior growth and profitable opportunities, it gave the domestic working class a target they could hit - it couldn't flee so it could be attacked far easier than it is now.

And that's the dichotomy for capital - liberalised capital is 'politically' strong (in terms of it having the whip hand) but economically unstable while ‘repressed’ capital is economically stable but politically vulnerable


----------



## littlebabyjesus (Apr 26, 2012)

love detective said:


> And that's the dichotomy for capital - liberalised capital is 'politically' strong (in terms of it having the whip hand) but economically unstable while ‘repressed’ capital is economically stable but politically vulnerable


Yes. I think that is very well put.

And of course, the two - political strength and economic strength - are not independent factors, so it's not simply a case of plumping for one or other and leaving it at that.

A question, though: As it sees economic instability reaching a point where it is causing political instability, which it is already doing in places like Greece, will there not be a growing number among those that control capital who decide that being reigned in is the sensible way to go now? They have seen that untrammelled capitalism doesn't in fact serve them well, that they are better served by being constrained. It's in their self-interest to seek out such constraint again, is it not? After all, an increasing number of mainstream capitalist economists are now turning to Marx (and the likes of Minsky) in an attempt to understand exactly this question.


----------



## Smokeandsteam (Apr 26, 2012)

love detective said:


> I've not really been following the discussion about political stability - but I think there's a dichotomy that arises here between political stability and economic stability as far as capital is concerned. The political stability of the golden post war years in the UK for example delivered superior economic growth (far superior than anything achieved under neo-liberalism anyway), but that in itself presented a problem, in that the stability was achieved to a large extent though 'financial repression' i.e. keeping capital on a leash as much as was possible, capital controls etc. but while this delivered superior growth and profitable opportunities, it gave the domestic working class a target they could hit - it couldn't flee so it could be attacked far easier than it is now.
> 
> And that's the dichotomy for capital - liberalised capital is 'politically' strong (in terms of it having the whip hand) but economically unstable while ‘repressed’ capital is economically stable but politically vulnerable


 
Spot on.

But to answer LBJ's point the answer, in my view, is yes. The management of the political hegemony - certainly for its key thinkers and advocates - is a significant concern.

And that is why what LD calls liberalised capital could, and in all probability will, reach the end of the road because at some stage it will arrive at a point where not only is it economically unstable (that point is reached already) but it will become politically weak. The two key questions are 'when' and 'what' is it replaced with.


----------



## Smokeandsteam (Apr 26, 2012)

littlebabyjesus said:


> Yes. I think that is very well put.
> 
> And of course, the two - political strength and economic strength - are not independent factors, so it's not simply a case of plumping for one or other and leaving it at that.
> 
> A question, though: As it sees economic instability reaching a point where it is causing political instability, which it is already doing in places like Greece, will there not be a growing number among those that control capital who decide that being reigned in is the sensible way to go now? They have seen that untrammelled capitalism doesn't in fact serve them well, that they are better served by being constrained. It's in their self-interest to seek out such constraint again, is it not? After all, an increasing number of mainstream capitalist economists are now turning to Marx (and the likes of Minsky) in an attempt to understand exactly this question.


 
Sorry LBJ, I replied to LD before reading this


----------



## elbows (Apr 26, 2012)

I would expect plenty of capitals managers would be ready to ditch many of the prominent ideals of the day if it looked like such steps were necessary to protect & nurture their capital. These 'strongly held' ideological beliefs are far more fragile than they may appear during times of prolonged stability.

We have already seen that certain forms of 'democratic cover' will be ditched in a heartbeat if thats what is deemed necessary (e.g. the technocrat governments we have seem imposed on some countries).

I don't think it would be too hard to envisage them doing a turnaround when it comes to government spending to boost the economy,and there is plenty of history of being able to justify such things within the existing ideological framework.

The area that I believe will be more difficult and interesting, is stuff to do with the power of markets. Meaningful attempts to take power away from markets would be taken by me as a sign of real and substantial change, and will give us good clues as to how far they are prepared to go. Until we reach that point, I do not want to get carried away, and I'll mostly remain in suspended animation waiting for a substantial change. The shine has gone off market ideologies already , but they will die hard, and its unclear how much civil unrest and turmoil will be tolerated to preserve such forces. Quite a lot I would think, especially given the potential stakes internationally from undoing such things, but there is a limit somewhere.


----------



## littlebabyjesus (Apr 26, 2012)

I think it may be possible that capitalism as we know it will die off in the coming decades with something of a quiet whimper. As the returns on investments dwindle, the incentive to invest will disappear. The incentive to be a capitalist will disappear. The kinds of growth that capitalism recognises may soon no longer be feasible.

The death of capitalism may be rather less dramatic than one would think. I agree with elbows that at the moment, a retreat from even the pretence of democracy is happening, and it may continue to happen for a while yet. But democracy is being subverted in order to implement policies that will not deliver, so something will have to come next after this.


----------



## elbows (Apr 26, 2012)

Maybe some aspects could fade with a quiet whimper, but I somehow struggle to imagine the thing as a whole going down quietly, but this depends on what you expect its successor to be.

One reason I wouldn't bet on a quiet whimper is that the loss of overall growth does not mean an end to growth for some who can position themselves well, they can still grow but only at someone else's expense, and I would expect this to generate a lot of noise.


----------



## littlebabyjesus (Apr 26, 2012)

elbows said:


> One reason I wouldn't bet on a quiet whimper is that the loss of overall growth does not mean an end to growth for some who can position themselves well, they can still grow but only at someone else's expense, and I would expect this to generate a lot of noise.


Indeed. But - ah futurology, I am leaving myself open to be made to look foolish in a few years - we will need to pull together globally to deal with climate change/Peak Oil. There will be no choice. This opens up many different new possible ways of organisation.

It seems counterintuitive that shortage might breed cooperation, but it can. It's no coincidence that Kropotkin formulated his ideas about mutual aid after studies of humans and other species surviving in Siberia. A study in a tropical rainforest might have produced a different result. Plenty produces competition. Scarcity _can_ produce cooperation.


----------



## elbows (Apr 26, 2012)

Indeed, which is one of the only reasons Im not quite top of the hopeless  brigade on the peak oil etc threads. There is potential for sane cooperation. And whilst the number of people who actually remember world war 2 diminishes, there is still a powerful lesson there about competition taken to extremes. We shall see, at a minimum I expect some with power will choose the wrong path, and so it will come down to the nature and scale of the backlash against such wrongness.


----------



## audiotech (Apr 26, 2012)

Those in power would bring down the roof above their heads if they thought it would pay. Gideon Osborne was crystal clear when Cameron and others risked letting him out in public on the odd occasion, prior to the election. At a meeting of business leaders Osborne stated categorically that he was going to 'unleash the market and deal radically with the welfare system' then in place, so there you have it.


----------



## elbows (Apr 26, 2012)

audiotech said:


> Those in power would bring down the roof above their heads if they thought it would pay. Gideon Osborne was crystal clear when Cameron and others risked letting him out in public on the odd occasion, prior to the election. At a meeting of business leaders Osborne stated categorically that he was going to 'unleash the market and deal radically with the welfare system' then in place, so there you have it.


 
Normally Id say that was slightly overstating how crudely risk and reward are balanced by those with power, but with the current crop of fools Im not so sure, foresight not looking like one of their strengths. They are militants with a lack of restraint from within, and so they must be restrained from without. Economic realities eventually constrained Thatcher to a certain degree on at least a couple of fronts, but I don't know how long we have to wait till this sort of backlash really kicks in against Osbornes policies. In some ways its already started and was in motion from the very onset of their cuts agenda, but it feels like we are missing some key example that blows up beyond expectations and forms a major front in the battle.

Trust the Tories to unleash the market at a time that the ideology of market has stated wheezing and spluttering. They want to party like its 1979 but the battlefield is different and someone may have swapped their ammo for some clown props. Or the tragic opposite will prove to be the case, depends how people react and struggle and whether they have any accidents with propping up the economic system. We can probably assume that the same pressures on and by capital will lead to a desire to push the people of this and other countries even further in the direction we have travelled since the 70s, and these underlying pressures may be even more intense now. So probably wrong to write the tory agenda of as only being overstretched market militant crock with no wider support beyond the Cameron core, but even so I think their timing, breadth, depth and presentation has been a poor servant of this agenda.


----------



## ymu (Apr 27, 2012)

Cameron's remarkable achievement
+
Krugman banging his head over some of the die-hard Austerians: The New Voodoo

This is how austerity has worked in Europe:







And The City is still trying to push it. Some useful links in those articles to the evidence on austerity and its self-defeating nature.


----------



## goldenecitrone (Apr 27, 2012)

That odious prick Chris Grayling on QT last night again comparing the UK economy to the average household. Not his households though, funnily enough. 

http://www.telegraph.co.uk/news/new...te-nearby-constituency-home-MPs-expenses.html


----------



## love detective (Apr 27, 2012)

littlebabyjesus said:


> A question, though: As it sees economic instability reaching a point where it is causing political instability, which it is already doing in places like Greece, will there not be a growing number among those that control capital who decide that being reigned in is the sensible way to go now? They have seen that untrammelled capitalism doesn't in fact serve them well, that they are better served by being constrained. It's in their self-interest to seek out such constraint again, is it not?


 
Very likely yes (although i dont' really like the phrase 'those who control capital') - however this is just another example of how contradictions within capital are never truly resolved, they are just displaced elsewhere, to another plain, to another time. If this does happen (which i think it will to some extent at least) then it will mean Capital fighting to get back to a place it's spent the last thirty years fighting to get out of. Capital is pretty much defined by the fact that what it does in one sphere always comes back to haunt it in another (and again this is where a more marxian analysis shines a better light on the situation and benefits over the likes of Keen, who in my opinion hasn't actually figured out what Capital is, and therefore can't grasp the internal contradictions inherent in its very concept)

There will almost definitely be a tendency towards what you say above, i think it's already starting to happen (Brazil, South Korea, Turkey, Switzerland for example) and what's significant is not so much that it's happening in these places, but the responses to it from capital and bodies like the IMF etc.. is one that pretty much accepts that this is what is required at the moment. There's also an acceptance that when (if?) the euro does start to break up and Greece etc start to leave it, then capital controls and other restrictions would have to be imposed by the exiting countries

In terms of implications of this - a more zero sum game, 'de-globalised' world of competing, state aligned 'national' capitals (along with an increasingly explicit discontent & disillusionment with the political mainstream within countries) has the potential to not be a pretty place at all. It presents opportunities for progressive forces to take advantage off but there's no guarantees the outcome will be any more progressive than the last 30 years have been.

There's a relevant IWCA article on this topic here called Deglobalisation?




			
				Introduction said:
			
		

> The current Eurozone crisis is only the spearhead of a wider crisis of globalisation. The neo-liberal economic model which has swept the world over the past thirty years has reached, or is reaching, its limits. Senior capitalist spokespeople are talking of the possibility of ‘deglobalisation’, and the need for a ‘rebalancing’ of the global economy. We are in the early stages of a transition to a post-neo-liberal era. What that era will look like is unknown, but there is no guarantee that it will be progressive.


 



			
				Conclusion said:
			
		

> The current crisis is a lose-lose situation for the capitalist class. Either the global economic system continues on its current track and implodes; or the current crisis is resolved through global co-operation on rebalancing and tighter regulation of the flow of capital, with major countries such as the UK and the US turning away from debt-fuelled growth and embracing more production-led economic strategies. The former would be grim for everyone; the latter runs the risk of allowing the working class to return to the political stage in many of the most advanced economies, and in the world as a whole. Some degree of ‘deglobalisation’ seems inevitable: how progressive it will be is up for grabs


----------



## ymu (Apr 27, 2012)




----------



## BigTom (May 3, 2012)

I wasn't sure where to post this, but this thread seems appropriate:

CBI predicts budget deficit will rise to £128.2bn in 12/13 

Osborne has predicted £120bn for this year, and the deficit  in 11/12  was £126bn (which itself was off target by a couple of billion iirc) .

Austerity failing in even its primary objective. How long can they sell this as a solution to the problem of the budget deficit? If the deficit actually rises (as opposed to just being reduced by a lot less than the amount being cut/increase in tax) will they be able to stick with it?


----------



## butchersapron (May 3, 2012)

Thatcher managed 2-3 years.


----------



## ymu (May 3, 2012)

Thatcher wasn't fighing on every conceivable political front simultaneously, and the Tories were a decade off being mired in sleaze. Plus, she had a 'new' economic theory with no evidence to point to - they are thirty years down the line and suffering from a severe lack of credible evidence that their policies are anything but destructive.


----------



## ymu (May 12, 2012)

Four charts show why history will judge us harshly



> When I'm asked in interview or articles to sum up concisely why I think the government should change course on fiscal policy, I usually say something like this:​"with long-term government borrowing as cheap as in living memory, with unemployed workers and plenty of spare capacity and with the UK suffering from both creaking infrastructure and a chronic lack of housing supply, now is the time for government to borrow and invest.  This is not just basic macroeconomics, it is common sense. "​


----------



## love detective (May 12, 2012)

He had a letter published in the FT the other day along the same lines

(fairly standard, narrow under consumptionist stuff mind)


----------



## littlebabyjesus (May 12, 2012)

love detective said:


> (fairly standard, narrow under consumptionist stuff mind)


 
What do you mean by that? That he identifies the problem as weak demand?

Good to see this bit being said. As austerity continues to fail, it's got to become obvious to more and more people, I'd have thought:



> What else does basic macroeconomics tell us? With long-term government borrowing as cheap as in living memory, with unemployed workers and plenty of spare capacity, and with the UK suffering from both creaking infrastructure and a chronic lack of housing supply, the answer is surely obvious.


----------



## ymu (May 12, 2012)

It's unrealistic to expect anything other than a narrow critique of neoliberalism to make it into the mainstream media. They'll explain the intellectual bankruptcy of the arguments, but not why people are being paid to push them anyway. It's just a few stupid apples, you see. Nothing to see here.


----------



## love detective (May 12, 2012)

littlebabyjesus said:


> What do you mean by that? That he identifies the problem as weak demand?


 
Yes (i'd say weak demand is more of a symptom)

This kind of left keynesian approach (which argues that slumps & crisis can be avoided by increasing the share of produced value that goes to labour) is predicated upon the assumption that what is good for capital is also good for labour, and vice versa, i.e. a win win situation for both capital & labour, rather than the zero sum game that the capital/labour relation is in reality

Inherent in this approach, and the logical extension of it, is a rejection of the need for a society based on socialism/communism, one that says capitalism tinkered with is what we need

This doesn't mean that we shouldn't struggle for redistribution and reform in the here & now and as an end in itself, just that they wont deliver this stable & rosy future that some seem to think they will - it's the difference between those who see capital for what it is (i.e. a contradiction) and those who don't

Don't get me wrong, i agree with what he says, just for different reasons than he does


----------



## ayatollah (May 12, 2012)

This thread has now reached the same point that the interesting discussion did on the "Should Ed Miliband call time on the outdated consensus ?" or something similar, thread. On THAT thread Love Detective (I think I recall) argued quite convincingly ( I recall against ymu's more "Keynsian" position ?) that IF the current capitalist crisis is, as many Marxists think, caused by the final coming to maturity of  the underlying Falling Rate of Profit  on a system-wide basis, then "Keynsian" solutions cannot buy time or reverse the deepening World Slump, because the only thing large scale  government spending would achieve is inflation - without restoring overall profitability to the system.

 To restore overall profitability would require capitalism to enter a new long term growth wave of expansion - based on a technology/set of technologies as yet undetermined. This assumes that the post 1945 growth wave , based on cheap oil, mass production/automation  , computerisation, etc, cannot maintain the profit rates of the early years of that particular cycle. (indeed it has been argued that the rate of profit was already under pressure in the 1970's, but the huge transfer of income from the majority of the population to the rich via neo-Liberalist economic structures, including the debt bubble,  during the last 30 years , staved off this crisis until the 2008 Crash.

In other words, Forget "Keynsian solutions" , Capitalism is fucked for a long time - and whilst it scrabbles around seeking a new "take-off" technological and organisational  "fix" for a new growth cycle , it is going to screw us all over right royally - unless we collectively REPLACE it with a rational socialist system of course.


----------



## ymu (May 12, 2012)

How many times do I have to say it? The point is not that Keynesian solutions can work long-term. The point is that they are pushing austerity in order to destroy enough capital to restore profitability. It is nigh on impossible to expose the intellectual bankruptcy of neoliberalism and its pro-austerity arguments without appealing to a century's worth of evidence from neo-classical economics that shows them to be (at best) fools and (at worst) blatant liars.

The mainstream media are starting to point out that they are fools. I don't think they'll ever go as far as exposing them as blatant liars. That's up to us, innit.


----------



## free spirit (May 12, 2012)

ayatollah said:


> unless we collectively REPLACE it with a rational socialist system of course.


to the barricades then?


----------



## ayatollah (May 12, 2012)

free spirit said:


> to the barricades then?


 
I think the Greeks and Spaniards might be heading that way... in Blighty ... Hmmmm .. maybe a nice cuppa whilst we think about it awhile.


----------



## ayatollah (May 12, 2012)

ymu said:


> How many times do I have to say it? The point is not that Keynesian solutions can work long-term. The point is that they are pushing austerity in order to destroy enough capital to restore profitability. It is nigh on impossible to expose the intellectual bankruptcy of neoliberalism and its pro-austerity arguments without appealing to a century's worth of evidence from neo-classical economics that shows them to be (at best) fools and (at worst) blatant liars.
> 
> The mainstream media are starting to point out that they are fools. I don't think they'll ever go as far as exposing them as blatant liars. That's up to us, innit.


 
I DO see where you are coming from ymu .. it certainly screams "this is madness" to the person facing unemployment , reduced wages, destruction of welfare services, that factories are standing idle, and human resources and skills are going unused , just because of a " banking crisis". I think it is perfectly good politics to point this out as a propaganda tool to encourage people to fight "austerity" and hence the capitalist system. I also realise that , in a perverse way, the "Falling rate of profit" analysis which says that "Keynsian" measures to get the wheels of industry turning again CAN'T actually significantly sort out the fundamental capitalist problem behind the new Great Depression, do seem to echo the conservative critique of growth strategies , ie, that it would simply create hyper inflation ! However at the end of the day the "Keynsian" growth argument , powerful as it is as a weapon against austerity measures, is at root reformist in nature, whereas the Marxist  Falling rate of profit" analysis says that only socialist transformation can avoid world capitalism spiralling into a VERY LONG period of economic decline in which totalitarian regimes and mass impoverishment will become the norm.

I think socialist propaganda and campaigning and action  has to find the right mix of encouraging resistance against austerity , highlighting the crazy waste and irrationality of capitalism, whilst not suggesting that growth strategies  can SOLVE the capitalist crisis.


----------



## ymu (May 12, 2012)

I completely agree about finding the right mix. I'm not suggesting adopting pro-capitalist reformism as an end in itself. I am suggesting that refusing to engage _on principle_ with Keynesian arguments against austerity is throwing the baby out with the bathwater. Partly because it doesn't allow you to do much more than saying "all capitalism is bad" without having much in the way of concrete alternatives which aren't hopelessly utopian/authoritarian/primitivist to offer. And partly because it allows the pro-capitalist reformists to monopolise (and diminish) the most powerful argument we have right now: that neoliberalism demonstrably makes things worse for the vast majority and that its proponents are self-serving liars in the pay of capitalist bandits wrong but making an honest mistake in the circumstances.


I need to do some more reading on this to work out exactly where the argument comes from, but I also think that the argument that Keynesian approaches cannot work _at all_ in the current economic circumstances is a misapplication of standard arguments about the long-term viability of Keynesianism in taming capitalism. Part of the reason the mainstream media are starting to change their tune is precisely because there is so much _new_ (from the 2010s rather than the 1930s) evidence that austerity is self-defeating and that the kind of half-hearted Keynesian policies used early on (and still in half-hearted effect in countries like the US and Germany) averted a much greater crisis. A lot of pundits are now trying to make a 'less austerity' argument instead of an outright Keynesian one (I think at least some of the time this is because they just aren't up for an outright fight with the austerity propagandists and their ridiculously stupid yet plausible sounding claims, which are not being ridiculed as they should be by the mainstream media).


----------



## Bernie Gunther (May 13, 2012)

ayatollah said:


> This thread has now reached the same point that the interesting discussion did on the "Should Ed Miliband call time on the outdated consensus ?" or something similar, thread. On THAT thread Love Detective (I think I recall) argued quite convincingly ( I recall against ymu's more "Keynsian" position ?) that IF the current capitalist crisis is, as many Marxists think, caused by the final coming to maturity of the underlying Falling Rate of Profit on a system-wide basis, then "Keynsian" solutions cannot buy time or reverse the deepening World Slump, because the only thing large scale government spending would achieve is inflation - without restoring overall profitability to the system.
> 
> To restore overall profitability would require capitalism to enter a new long term growth wave of expansion <snip>


 Couldn't it also do it by massive capital destruction, a mega depression followed by several decades of really destructive global war or similar?

Sure, we might be most of the way back to feudalism by the end of it, but the rate of profit would recover and that's the important thing, right?


----------



## littlebabyjesus (May 13, 2012)

That's the bit I'm unsure of. If a lower rate of profit but a greater mass of profit, as ld put it, is possible, an adaptation to a permanently lower rate of profit, given the alternative, could be seen to be the thing to go for. A lower rate of profit is better than no rate of profit - 1 percent of 1000 is better than 10 percent of 50.

I don't say that because I hope capitalism can adapt and survive. I don't. But I put it as a possibility. I would even put as a possibility an increased substitution of state investment for capitalist investment as rates of profit fall, not so much as a Keynesian attempt to stimulate the capitalist system, but as a substitute for that system.


----------



## ayatollah (May 13, 2012)

I certainly buy into ymu's argument that Marxists MUSN'T  be seen as opposing anti austerity, pro expansionery, struggles , as this , as he says, gives the initiative to the reformists - even NuLabour with their "lets impoverish you SLOWER - with a wee attempt at some growth"  argument (also known as the "how to boil the frog without it jumping out the pan" strategy). To me its a bit like going up to a picket line and saying to workers on strike for higher wages .. "you're wasting your time, wage labour is slavery - you've got to overthrow capitalism  NOW !"    ie,  theoretically correct, but completely barmy as a means of assisting/encouraging  workers in struggle !

Your raising of the rate of profit, versus a greater MASS of profit , derived from existing capitalist production forms/technologies  , but AFTER  a lot of capital has been destroyed in a long Slump/wars/Libya uprising -style  urban destruction, is a poser , little baby jesus. I too suspect it might well produce a period of capitalist growth in the reconstruction phase - WITHOUT capitalism having to find a new technological "fix" comparable to  automation/mass production/computerisation, which fed the last long expansion cycle. Unfortunately this takes me beyond MY grasp of Marxist economics. A view anyone ?


----------



## butchersapron (May 13, 2012)

Lot of stuff getting missed in the weeks since may - states and capitals do thing _for class reasons_. That is reasons not only economic. That's a wider, global point - and it's far more pertinent than this mad insistent emphasis on crisis-theory. The thread ayatollah mentions was a classic example of top-down economics becoming effectively apolitical. What was missing from it? Why did the state develop a measure of autonomy?

We destroyed this, don't build it up again.


----------



## ayatollah (May 13, 2012)

butchersapron said:


> Lot of stuff getting missed in the weeks since may - states and capitals do thing _for class reasons_. That is reasons not only economic. That's a wider, global point - and it's far more pertinent than this mad insistent emphasis on crisis-theory. The thread ayatollah mentions was a classic example of top-down economics becoming effectively apolitical. What was missing from it? Why did the state develop a measure of autonomy?
> 
> We destroyed this, don't build it up again.


 

Hmmmm.. I think your post needs a bit of editing . The points its making aren't clear at all , to me at least.  Are you suggesting the current crisis is NOT caused by an underlying decline in the capitalist rate of profit ? Are you suggesting it is not the world economic profitability crisis driving "austerity politics" and the major actions of each and every capitalist state and capitalist class ?

Given that there are umpteen threads tackling every aspect of the current capitalist crisis - including a whole section on direct action initiatives .. I don't think one or two threads on theories about the underlying nature and likely future direction of the current politico/economic crisis is unreasonable. I don't really "get" the reference to "top-down economics" either.. that old saying.."Without revolutionery theory there can be no revolutionery practice" is as true now as ever. Those who despise theory are doomed to fall under the hegemony of the dominant ideology of the age, ie, capitalist ideology.


----------



## butchersapron (May 13, 2012)

What on earth do you think is driving any decline in the rate of profit? Because, on your objectivist reading it sure as hell isn't and cannot be class struggle can it. Just the objective laws of capital grinding by themselves. 

That view is _exactly_ what i mean by top-down economics - a view of capital acting like a machine and you take the top off and can have a nice objective look at it. 

Theory? You really think this crude stuff is theory?


----------



## ymu (May 13, 2012)

It very obviously is class struggle driving down the rate of profit, which is why they need economies to switch places. The former rich consumer economies to provide the sweatshops and the former sweatshop economies to provide (pockets of) consumerism.

That's why they're pushing austerity, and why I think we should mebbe try to stop them.

I'm not sure what you mean by 'top down economics'. You might not be able to separate politics from economics, but you also cannot magic up economic effects via processes which bear no relationship to the real world. Austerity in a recession is self-defeating (if you want economic growth) no matter what you believe about how the world should be organised, and at least some of those who are pushing austerity know this.


----------



## butchersapron (May 13, 2012)

I





ymu said:


> It very obviously is class struggle driving down the rate of profit, which is why they need economies to switch places. The former rich consumer economies to provide the sweatshops and the former sweatshop economies to provide (pockets of) consumerism.
> 
> That's why they're pushing austerity, and why I think we should mebbe try to stop them.
> 
> I'm not sure what you mean by 'top down economics'. You might not be able to separate politics from economics, but you also cannot magic up economic effects via processes which bear no relationship to the real world. Austerity in a recession is self-defeating (if you want economic growth) no matter what you believe about how the world should be organised, and at least some of those who are pushing austerity know this.


|I've just made a  post highlighting the need to separate politics from economics, and how that works in the concrete world. Krugman/oligarchs/chest/prod/i'll tell you how to talk to people


----------



## butchersapron (May 13, 2012)

ymu said:


> It very obviously is class struggle driving down the rate of profit, which is why they need economies to switch places. The former rich consumer economies to provide the sweatshops and the former sweatshop economies to provide (pockets of) consumerism.
> 
> That's why they're pushing austerity, and why I think we should mebbe try to stop them.
> 
> I'm not sure what you mean by 'top down economics'. You might not be able to separate politics from economics, but you also cannot magic up economic effects via processes which bear no relationship to the real world. Austerity in a recession is self-defeating (if you want economic growth) no matter what you believe about how the world should be organised, and at least some of those who are pushing austerity know this.


Mebbe we should make another moral choice! Krugaman oligarchs.


----------



## ayatollah (May 13, 2012)

butchersapron said:


> What on earth do you think is driving any decline in the rate of profit? Because, on your objectivist reading it sure as hell isn't and cannot be class struggle can it. Just the objective laws of capital grinding by themselves.
> 
> That view is _exactly_ what i mean by top-down economics - a view of capital acting like a machine and you take the top off and can have a nice objective look at it.
> 
> Theory? You really think this crude stuff is theory?


 
" class struggle" is one aspect of the range of factors which impact on the overall rate of profit in a capitalist economy. For instance the recent ability of Chinese workers to generally push up their wage rates because of both labour shortages and their heroic own  attempts at collective bargaining , and similar actions by workers across the "emerging "industrialised nations, has undoubtedly hit the previous profit rates both internal and external investors/capitalists have been able to secure in these markets. The ABSENCE of  "class struggle" over the last 30 years in Europe and the USA, has led to extraordinary transfers of income from the working class to the capitalist class - such as to postpone the decline in the rate of profit from destabilizing the world capitalist system, until the bursting of the "debt bubble" during the speculative frenzy that occurred in 2008. Beyond these  important factors however  the Rate of Profit in a capitalist system is prone AUTOMATICALLY to decline over time within each specific cycle  because  as more dead labour is combined with live human labour power increasingly the rate of surplus value extracted from the process declines (according to Marxist theory that is).  So  economic and social processes are a combination of underlying tendancies INDEPENDENT of  intentional human activity, and the human activities  represented by class struggle and "political" action generally.

I find it somewhat ironic that someone who has NEVER even attempted to string any sort of theory together to explain the world crisis feels able to describe the Marxist theory of economic cycles "crude". (of course my, and others representation of it may well be "crude", but then  space is limited on a thread post). Pray give us the benefit of YOUR analysis Butchers ! Hiding behind a "cor blimey.. all this poncey crude theory is crap.. what about the workers ?"  jibes, is just a means to hide your own political, and theoretical bankrupcy"

PS. PLEASE don't point me, or anyone else to that disjointed, incomprehensible, "stuff" on the IWCA website, as your "riposte" to prove YOU do have "theory" - try to give us a sample YOURSELF.. here.


----------



## butchersapron (May 13, 2012)

ayatollah said:


> I find it somewhat ironic that someone who has NEVER even attempted to string any sort of theory together to explain the world crisis feels able to describe the Marxist theory of economic cycles "crude". (of course my, and others representation of it may well be "crude", but then space is limited on a thread post). Pray give us the benefit of YOUR analysis Butchers ! Hiding behind a "cor blimey.. all this poncey crude theory is crap.. what about the workers ?" jibes, is just a means to hide your own political, and theoretical bankrupcy"
> 
> PS. PLEASE don't point me, or anyone else to that disjointed, incomprehensible, "stuff" on the IWCA website, as your "riposte" to prove YOU do have "theory" - try to give us a sample YOURSELF.. here.


 
You're in trouble two ways. You are in trouble many ways actually.

ayatollah - what have you strung together? You don't understand





> the Marxist theory of economic cycles


 as there is no such thing.What have you ATTEMPTED to string together? What, and i mean WHAT are you offering me.

I await your total destruction.


----------



## butchersapron (May 13, 2012)

And sorry, that pathetic response to what drives capital above is worthless. Worthless.


----------



## elbows (May 13, 2012)

And now for an important message from William Hague. Don't bitch, get in your jet and look for exports. And don't dare get in the way of our sacred quest to dust off the old 'work ethic' and make it shine anew.

http://www.telegraph.co.uk/news/pol.../Work-harder-William-Hague-tells-Britons.html




> He says of complaining business leaders: “I think they should be getting on with the task of creating more of those jobs and more of those exports, rather than complaining about it.”
> Mr Hague warns that Britain has suffered from decades of declining work ethic, when people were persuaded they could “live on expanded debt forever, rather than having to earn what we spend”. The country’s work ethic needs to be rescued “in the nick of time”, he says.
> The “work harder” message is understood to be a key plan of the Government’s political fightback, which is aimed at appealing to “strivers” and hard-pressed families.


----------



## ItWillNeverWork (May 14, 2012)

elbows said:


> And now for an important message from William Hague. Don't bitch, get in your jet and look for exports. And don't dare get in the way of our sacred quest to dust off the old 'work ethic' and make it shine anew.
> 
> http://www.telegraph.co.uk/news/pol.../Work-harder-William-Hague-tells-Britons.html


 
Yeah I saw that. Apparently the recession is caused by people 'not trying hard enough'. It's kind of hard to have work ethic when there's no work on offer, no? What a plonker.


----------



## ymu (May 14, 2012)

Yes, the problem is that we all decided to work part-time because we could borrow money instead of earning it. 

The good news is that he's using IDS's line against the workers and turning it into an attack on businesses who are criticising Tory economic policy. Coming from a member of a cabinet that has barely ever had a proper job between them, this is brilliantly stupid.


----------



## ayatollah (May 14, 2012)

butchersapron said:


> And sorry, that pathetic response to what drives capital above is worthless. Worthless.


 
But WHY is that Butchers ? Because YOU say so ? no EXPLANATION needed ?

 Your ignorance of marxist theory is only exceeded by your arrogance Butchers. Rather than offering up unlimited empty bluster try offering up some sort of  CRITIQUE of the Marxist theory of of the "falling rate of profit" and its underlying role in the cyclical nature of capitalism

If all you can do is offer empty abuse, but are NEVER prepared to offer ANY theory or analysis yourself , why don't you simply AVOID a thread that is ABOUT  the "double dip recession" and therefore implicitly the discussion of  theories relating to that phenomenum ? Or do you think "Lumpen White Chauvinist Workerism" is  ALL that is required in the way of "theory" ?


----------



## butchersapron (May 14, 2012)

ayatollah said:


> But WHY is that Butchers ? Because YOU say so ? no EXPLANATION needed ?
> 
> Your ignorance of marxist theory is only exceeded by your arrogance Butchers. Rather than offering up unlimited empty bluster try offering up some sort of CRITIQUE of the Marxist theory of of the "falling rate of profit" and its underlying role in the cyclical nature of capitalism
> 
> If all you can do is offer empty abuse, but are NEVER prepared to offer ANY theory or analysis yourself , why don't you simply AVOID a thread that is ABOUT the "double dip recession" and therefore implicitly the discussion of theories relating to that phenomenum ? Or do you think "Lumpen White Chauvinist Workerism" is ALL that is required in the way of "theory" ?


Why is what Ayatollah? 

My ignorance of marxist theory? You spoil me Mr Bond. Tell you what - if you can square your Grossman derived law of the falling rate of profit (not that you'd know this is where you picked it up from) with why the ratio of organic composition of capital leads to it then we can start. I gave you a little clue in that post above - marx did it too in capital one. (chapter 15 _ It would be possible to write a whole history of the inventions made since 1830 for the sole purpose of providing capital with weapons against working-class revolt)_. 

For the record, parroting theories is not doing theory. Neither is it doing analysis.


----------



## butchersapron (May 14, 2012)

Note tollahs's '_the_ Marxist theory of of the "falling rate of profit"'  (my italics) - i wonder if he knows the counter-arguments from within marxism? Do you TOLLAH?


----------



## butchersapron (May 14, 2012)

ayatollah said:


> Or do you think "Lumpen White Chauvinist Workerism" is ALL that is required in the way of "theory" ?


 
Wow, just wow.


----------



## love detective (May 14, 2012)

you touch on something I was going to pick him up on in this phrase of his below:-



> the Rate of Profit in a capitalist system is prone AUTOMATICALLY to decline over time


 
but to be fair to him, his use of the word 'tendencies' later on in the post suggested a somewhat more nuanced/subtle view than what is quoted above, and at least an implicit recognition of the counteracting influences 

the above sentence on its own though is somewhat crude and not representative of marx's falling rate of profit (in fact theres an argument that says if there was an empirically observable long run decline in the rate of profit this would disprove not support marx's overall theory of the tendency of the rate of profit to fall)


----------



## ayatollah (May 14, 2012)

Yep , I should have emphasised the word "tendancy". Guilty as charged. However I hardly think my occasionally clumsy short-form formulation of Marx's complex theory is the determinant of its validity or otherwise. For a FULL explanation, see Vos 1 to 3 of Capital.


----------



## BigTom (May 14, 2012)

elbows said:


> And now for an important message from William Hague. Don't bitch, get in your jet and look for exports. And don't dare get in the way of our sacred quest to dust off the old 'work ethic' and make it shine anew.
> 
> http://www.telegraph.co.uk/news/pol.../Work-harder-William-Hague-tells-Britons.html


 
I know it's aimed at businesses more than workers, but it's also another case of ideology clouding the facts.. 
http://www.guardian.co.uk/news/datablog/2011/dec/08/europe-working-hours

UK has 3rd highest number of hours worked in Europe.  The paragon of economic success, Greece, has equal highest (with austria).  Germany, who are doing so badly is well below the UK.
Meanwhile the UK has productivity higher than the EU average as well.

So yeah, lets work harder, cos that is clearly the problem here.


----------



## butchersapron (May 14, 2012)

ayatollah said:


> Yep , I should have emphasised the word "tendancy". Guilty as charged. However I hardly think my occasionally clumsy short-form formulation of Marx's complex theory is the determinant of its validity or otherwise. For a FULL explanation, see Vos 1 to 3 of Capital.


Please do point out where Marx _argued_ for any such thing in those volumes.


----------



## ayatollah (May 14, 2012)

butchersapron said:


> Why is what Ayatollah?
> 
> My ignorance of marxist theory? You spoil me Mr Bond. Tell you what - if you can square your Grossman derived law of the falling rate of profit (not that you'd know this is where you picked it up from) with why the ratio of organic composition of capital leads to it then we can start. I gave you a little clue in that post above - marx did it too in capital one. (chapter 15 _It would be possible to write a whole history of the inventions made since 1830 for the sole purpose of providing capital with weapons against working-class revolt)_.
> 
> For the record, parroting theories is not doing theory. Neither is it doing analysis.


 

MORE completeempty  BLUSTER, Butchers. Now let's assume you are a Guru on the entire Marxist ouvre of economic theory for the sake of argument. Why don't you USE some of your theoretical knowledge (and I'm not assuming you AGREE with the overall Marxist position, or positions, at all, or even wish to use such a frame of reference in an analysis)  to offer up an ANALYSIS of the reasons for the 2008 Crash and where it is going ? That IS the general topic of this particular thread.

Showing off with economic terminology without relating it directly  to an analysis or argument is just pointless. So you think you are simply TOO clever and "clued up" about Marxist theory to come down and debate at our sad, crude , levels ? WE have to pass a Marxist comprehension test before you'll share your wisdom with us ?

TRY to apply yourself to providing an actual analysis of some kind.. please.. how many times can I request this ?


----------



## ayatollah (May 14, 2012)

butchersapron said:


> Please do point out where Marx _argued_ for any such thing in those volumes.


 
The progressive tendency of the general rate of profit to fall is, therefore, just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labour. This does not mean to say that the rate of profit may not fall temporarily for other reasons. But proceeding from the nature of the capitalist mode of production, it is thereby proved a logical necessity that in its development the general average rate of surplus-value must express itself in a falling general rate of profit. Since the mass of the employed living labour is continually on the decline as compared to the mass of materialised labour set in motion by it, i.e., to the productively consumed means of production, it follows that the portion of living labour, unpaid and congealed in surplus-value, must also be continually on the decrease compared to the amount of value represented by the invested total capital. Since the ratio of the mass of surplus-value to the value of the invested total capital forms the rate of profit, this rate must constantly fall. (Karl Marx, _Capital_, vol. 3, chapter 13 [4]


----------



## butchersapron (May 14, 2012)

ayatollah said:


> MORE completeempty BLUSTER, Butchers. Now let's assume you are a Guru on the entire Marxist ouvre of economic theory for the sake of argument. Why don't you USE some of your theoretical knowledge (and I'm not assuming you AGREE with the overall Marxist position, or positions, at all, or even wish to use such a frame of reference in an analysis) to offer up an ANALYSIS of the reasons for the 2008 Crash and where it is going ? That IS the general topic of this particular thread.
> 
> Showing off with economic terminology without relating it directly to an analysis or argument is just pointless. So you think you are simply TOO clever and "clued up" about Marxist theory to come down and debate at our sad, crude , levels ? WE have to pass a Marxist comprehension test before you'll share your wisdom with us ?
> 
> TRY to apply yourself to providing an actual analysis of some kind.. please.. how many times can I request this ?


 
YOU can request it all you want. Do you honestly think that you've done what you've requested of me here? Really? I've asked YOU before (BNP thread) what analysis you think that YOU'VE offered. Silence deafening. And for the record, my posts on 'the crisis' are all here - they say what they say, they note the move into finacialistion post-1973 (chased by labour, the rise of personal credit to combat wage stagnation, the use of asset bubbles to keep afloat and the shift from directly surplus-value producing labour to a service providing role in the global market). Maybe YOU were asleep.


----------



## butchersapron (May 14, 2012)

ayatollah said:


> The progressive tendency of the general rate of profit to fall is, therefore, just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labour. This does not mean to say that the rate of profit may not fall temporarily for other reasons. But proceeding from the nature of the capitalist mode of production, it is thereby proved a logical necessity that in its development the general average rate of surplus-value must express itself in a falling general rate of profit. Since the mass of the employed living labour is continually on the decline as compared to the mass of materialised labour set in motion by it, i.e., to the productively consumed means of production, it follows that the portion of living labour, unpaid and congealed in surplus-value, must also be continually on the decrease compared to the amount of value represented by the invested total capital. Since the ratio of the mass of surplus-value to the value of the invested total capital forms the rate of profit, this rate must constantly fall. (Karl Marx, _Capital_, vol. 3, chapter 13 [4]


Right, now what else did he say about this _tendency and the countervailing tendencies? _

 And over 2000 pages you'll find him going on about this right? Other than an Engels edited attempt? Won't you?


----------



## ymu (May 14, 2012)

ayatollah said:


> Yep , I should have emphasised the word "tendancy". Guilty as charged. However I hardly think my occasionally clumsy short-form formulation of Marx's complex theory is the determinant of its validity or otherwise. For a FULL explanation, see Vos 1 to 3 of Capital.


I don't know if you genuinely think that BA doesn't know his Marx, but if you do, you are very wrong. He's not a fan of explaining himself at all clearly, but he does know what he's talking about. Don't continue this line - you are embarrassing yourself.


----------



## ViolentPanda (May 14, 2012)

ItWillNeverWork said:


> Yeah I saw that. Apparently the recession is caused by people 'not trying hard enough'. It's kind of hard to have work ethic when there's no work on offer, no? What a plonker.


 
TBF, the fucker knows fuck-all about the real world. The only "real" job he ever did was acting as a roundsman's mate on one of daddy's brewery trucks, the self-satified cunt.


----------



## ymu (May 14, 2012)




----------



## discokermit (May 14, 2012)

ayatollah said:


> Or do you think "Lumpen White Chauvinist Workerism" is ALL that is required in the way of "theory" ?


 


ayatollah said:


> So you think you are simply TOO clever and "clued up" about Marxist theory to come down and debate at our sad, crude , levels ? WE have to pass a Marxist comprehension test before you'll share your wisdom with us ?


can i give you some comradely advice? when attempting to cunt someone off, try not to directly contradict yourself within the space of two posts. it looks silly. as does the caps thing you got going on there.


----------



## ExtraRefined (May 24, 2012)

It gets worse

http://www.telegraph.co.uk/finance/...-expected-on-fall-in-construction-output.html


----------



## littlebabyjesus (May 24, 2012)

Cheap credit available to government, housing shortage and masses of unemployed builders/architects.


----------



## ExtraRefined (May 24, 2012)

littlebabyjesus said:


> Cheap credit available to government, housing shortage and masses of unemployed builders/architects.


 
We couldn't have more houses being built, imagine the effect it would have on prices!


----------



## littlebabyjesus (May 24, 2012)

ExtraRefined said:


> We couldn't have more houses being built, imagine the effect it would have on prices!


And rents!

This is why there is a housing shortage in the first place - it is in the interests of landowners to maintain a shortage in order to maximise their income from owning the land. The shortage can only ever be remedied by direct state investment.


----------



## ExtraRefined (May 24, 2012)

littlebabyjesus said:


> The shortage can only ever be remedied by direct state investment.


 
Or just abolishing/relaxing planning permission


----------



## Greebo (May 24, 2012)

littlebabyjesus said:


> And rents!
> 
> This is why there is a housing shortage in the first place - it is in the interests of landowners to maintain a shortage in order to maximise their income from owning the land. The shortage can only ever be remedied by direct state investment.


Which is why the current lot won't do it.


----------



## ExtraRefined (May 24, 2012)

Greebo said:


> Which is why the current lot won't do it.


 
I'm sorry I must have missed the millions of houses built in Labour's 13 years.


----------



## Greebo (May 24, 2012)

ExtraRefined said:


> I'm sorry I must have missed the millions of houses built in Labour's 13 years.


Not affordable, and not enough of the right size or accessibility standard.


----------



## Balbi (Jun 29, 2012)

OECD figures show we've dropped by 0.7% in the last two quarters instead of 0.6% - 0.1% taken from Q4.

If Q2 ends up being another negative number, well...fuck 

In fact, if there's another negative - that'll equal the number of Q's of negative growth Labour held over during the actual crisis. Labour got 5 in a row, Tories will have had 5 spread out over 8 quarters.


----------



## toblerone3 (Jul 12, 2012)

Double Drip Recession.

-0.2% for Q2. They are blaming it on the Jubilee this year. 

http://www.lse.co.uk/FinanceNews.as...=UK_economy_shrank_by_02_percent_in_Q2__NIESR


----------



## littlebabyjesus (Jul 12, 2012)

Right. Cue the weather as the cause of the Q3 contraction. And then, um, fallout from the Olympics for the Q4 contraction, perhaps.

Interesting article about the cause of recession at the end of last year.



> *In Q4 2011, business investment fell by 2.8 per cent (taking 0.4 percentage points off growth),* compensation of employees was cut by 0.3 per cent and there was a big fall in inventory building, taking 0.5 percentage points off growth.


 
Not eurozone - exports still up. Not govt cuts - govt spending still up. Not even consumer spending falls. But lack of confidence about the future in the private sector, resulting in falls in private sector investment.

I would be surprised if the picture has changed at all. This is the private sector that was supposed to magically step in and replace public sector jobs. But as predicted by many, public sector cuts have simply led to private sector pessimism, and hence lack of private sector investment.


----------



## Falcon (Jul 12, 2012)

An economy that contracts another 0.2% after £375 billion of synthetic money has been injected into it over 5 years isn't going to enjoy any kind of recovery (the premise of the term "dip"). It's on life support - the chest is going up and down, and the heart is beating - but there is no brain function. It is in permanent contraction, and will collapse at the point when it cannot absorb any more synthetic money.


----------



## littlebabyjesus (Jul 12, 2012)

We could be seeing a terminal decline in the capitalist model of private sector investment. That means that other ways to invest will need to be found. It's not as though there isn't work to be done. There is loads to be done - meaning that this kind of recession, involving rising unemployment and fewer things being done, is a purely human-made folly. It is evidence of a failing system - a failure of organisation.

In that sense, the term 'austerity' for current policy is a misnomer. Austerity implies the redirection of resources away from personal consumption towards a different aim - rebuilding after a war, for instance. In this case, no such thing is happening. This is just cuts - cuts in the amount being done in a desperate attempt to restore rates of profit, perhaps. It's hard to see why else it is being done, but it isn't restoring rates of profit either at the moment. It would appear that profits are being maintained largely through reduction in real wages. But that causes chronic lack of demand. It's a vicious circle, and I would think that one thing is pretty certain about the coming years: any economic recovery is not going to be private sector-led.


----------



## ayatollah (Jul 12, 2012)

littlebabyjesus said:


> We could be seeing a terminal decline in the capitalist model of private sector investment. That means that other ways to invest will need to be found. It's not as though there isn't work to be done. There is loads to be done - meaning that this kind of recession, involving rising unemployment and fewer things being done, is a purely human-made folly. It is evidence of a failing system - a failure of organisation.
> 
> In that sense, the term 'austerity' for current policy is a misnomer. Austerity implies the redirection of resources away from personal consumption towards a different aim - rebuilding after a war, for instance. In this case, no such thing is happening. This is just cuts - cuts in the amount being done in a desperate attempt to restore rates of profit, perhaps. It's hard to see why else it is being done, but it isn't restoring rates of profit either at the moment. It would appear that profits are being maintained largely through reduction in real wages. But that causes chronic lack of demand. It's a vicious circle, and I would think that one thing is pretty certain about the coming years: any economic recovery is not going to be private sector-led.


 
It's very strange how , certainly in the UK, Spain, Greece, France (depending on what Hollande actually does next), the political class seem determined to rerun the disastrous economic austerity strategies of the 30's... deeper and deeper into demand contraction, more and more money pumped, fruitlessly to the banks, to hoard. In the 30's this vicious spiral was broken by arms spending for and during WWII, (and of course by the massive destruction  and rebuilding opportunities after WWII), but today there seems  no obvious way out of this death spiral, within the existing political system anyway.   Now I'm not a Keynsian, but surely there must be at least some  Bourgeois politicians who have read the man, and see it offers at least some promise of breaking out of the downward death dive. NuLabour certainly seem to be followers of Stanley Baldwin economics to a man and woman (even if they want to go over the abyss slower than the Tories- with slower cuts, the destination is the same).

I'm sure historians in the future will be just as surprised at the suicidal austerity strategy "groupthink" afflicting the world's economic/political elites, as we are when looking back at the 1930's... it's seriously  strange behaviour. Mind you, delve into the green ink  writers postings on , for instance, the Daily Telegraph's discussion threads and its amazing how many people are in serious denial that any economic harm at all can come about from sacking the entire public sector - the idea of resulting " negative consumer demand effects" being viewed as some sort of Marxist sophistry !


----------



## littlebabyjesus (Jul 12, 2012)

As I understand it, the money-pumping has an ulterior motive, though, at least in the form of QE, in that it reduces the cost of government borrowing. At some point the central banks will have to try to sell government bonds, pushing prices back up, but short-term it keeps governments solvent.


----------



## BigTom (Jul 12, 2012)

littlebabyjesus said:


> Right. Cue the weather as the cause of the Q3 contraction. And then, um, fallout from the Olympics for the Q4 contraction, perhaps.
> 
> Interesting article about the cause of recession at the end of last year.
> 
> ...


 
This isn't true, unless you are referring to quarter by quarter?.  Govt. current account spending has risen mostly as a result of rising welfare  and debt repayments, but investment spending has fallen massively. 
http://www.ippr.org/?p=782&option=com_wordpress&Itemid=17#.T8Dlu2YdS_M.twitter
http://blogs.independent.co.uk/2012/03/29/cuts-what-cuts-these-cuts-mr-redwood/

It'd be interesting to get further breakdown of those figures to see which sectors investment had fallen most in - the construction industry has been shrinking rapidly, probably the most susceptible sector to recession generally but particularly to falling invesment spending - Gove cancelling £55bn of spending on Building Schools for Future program (which was PFI shit so would have been no loss if it had been replaced with a sensible invesment scheme, but I don't think it was).

Anyway, I agree with what you say about businesses being nervous and the construction industry will suffer when other sectors decide not to invest (no shopfits, no other refits, property companies not building new offices etc...) so that could explain why it's been doing so badly this year.


----------



## ayatollah (Jul 12, 2012)

littlebabyjesus said:


> As I understand it, the money-pumping has an ulterior motive, though, at least in the form of QE, in that it reduces the cost of government borrowing. At some point the central banks will have to try to sell government bonds, pushing prices back up, but short-term it keeps governments solvent.


 
Yes, I understand that that is so , but  it also seems to be the only economic "instrument" this government feels ideologically comfortable using - because it still leaves actual economic action to the private sector to deliver ... hence nowts happened - the banks don't lend, and most companies are too worried about the future to borrow !  

 I understand that the UK government can borrow from the Money Markets so cheaply and for so long a term at present that they could, for instance , initiate the biggest public housing programme since the war, employ  hundreds of thousands, end the housing shortage, etc, at astonishingly historically bargain basement  cost. Mind you that would end the housing shortage that is keeping the private housing market from crashing....... and it is just too damned "interventionist" for a government idologically trapped in the belief that the free market alone can deliver .


----------



## littlebabyjesus (Jul 12, 2012)

I was just talking about that particular quarter. The article goes through other possible causes of recession, and it is reduced private sector investment that was the credible cause in that quarter.

I haven't seen the figures, but I'd strongly suspect a similar story now. Tbh, the idea that one extra bank holiday caused a 0.4 contraction in gdp - as the article above claimed - is laughable. If that were the case, you would expect significant downturns every summer as people take the bulk of their annual leave. But that doesn't happen.


----------



## toblerone3 (Jul 12, 2012)

I find it very surprising that Q2 GDP figures were not reported in any mainstream media outlet. I know its only a quarter's figures. But still.


----------



## littlebabyjesus (Jul 12, 2012)

The biggest housing programme since the war is of course an obvious thing to do. And it's not just left-leaning people saying this now. Even the business editor of the Evening Standard is saying it.


----------



## toblerone3 (Jul 12, 2012)

Its very embarrassing for the government to say the least. Hits at the heart of their credibility.


----------



## toblerone3 (Jul 12, 2012)

littlebabyjesus said:


> The biggest housing programme since the war is of course an obvious thing to do. And it's not just left-leaning people saying this now. Even the business editor of the Evening Standard is saying it.


 
That and a big "Green New Deal" No big housing programme on greenfield sites please.


----------



## littlebabyjesus (Jul 12, 2012)

toblerone3 said:


> That and a big "Green New Deal" No big housing programme on greenfield sites please.


New housing built to the highest energy-efficiency standards. Not cheap housing thrown up in a panic.

But yes, it's only one thing to do. Large infrastructure projects to change towards sustainable development is of course urgently needed, and can only be funded publicly. Large- and small-scale. One of the first things this govt did, of course, was kick any idea of a Severn barrier into the long grass.


----------



## BigTom (Jul 13, 2012)

It would be interesting to see a plan for a housing programme that looked at refitting existing housing stock and bringing empty properties back into use as a core component.


----------



## Falcon (Jul 13, 2012)

BigTom said:


> It would be interesting to see a plan for a housing programme that looked at refitting existing housing stock and bringing empty properties back into use as a core component.


An even more interesting one would be to see them bulldozing the existing housing stock, standardising two or three designs around, say, the German zero energy "passivhaus" standard, ramping up mass production around those designs to drive down unit cost, and training then employing tens of thousands to build them. Benefits:

a real economic sector to absorb government investment, with export potential (I had to get the Germans to build mine)
a substantial contribution to emission reduction targets
a substantial contribution to relieving energy poverty
a substantial reduction in the increase in excess winter deaths (currently 30,000-60,000 per year at peak oil ref)
diversion of household savings from energy bills back into the economy
a solution to the coming energy rationing crisis at a fraction of the cost of substituting the 25% of generating capacity to be retired in the next decade with unachievable/unaffordable/unmaintainable hypercomplex "renewable" generating technologies
insulation of a major segment of the economy (domestic) from increases in international energy prices
a nice place to live for everyone 
It will be sad, in a month's time, to imagine how much of that we might have made progress towards instead of holding an egg and spoon race in the pissing rain in the middle of London.


----------



## littlebabyjesus (Jul 13, 2012)

Yep, that's exactly the kind of ambition we need, Falcon. There is absolutely no reason it can't be done, either. None at all.


----------



## BigTom (Jul 13, 2012)

Falcon said:


> An even more interesting one would be to see them bulldozing the existing housing stock, standardising two or three designs around, say, the German zero energy "passivhaus" standard, ramping up mass production around those designs to drive down unit cost, and training then employing tens of thousands to build them. Benefits:
> 
> a real economic sector to absorb government investment, with export potential (I had to get the Germans to build mine)
> a substantial contribution to emission reduction targets
> ...


 
Is it clear that it's better to demolish decent but not sustainable housing rather than retrofitting - at least stuff like external insulation? Obviously it would need to happen at some point but is it better to demolish and replace when it's coming to the end of its natural life or as soon as possible?
I have no doubt of the benefits of new build housing, I think it's mad that this government can't see something so obvious, but then I think they are mad when it comes to economics and the environment and pretty much everything else really.

e2a:

9. Reduction in the cost of housing benefit
10. More affordable living for many people, like 5. transferring money from private landlords back into the rest of the economy.
11. Investment which stimulates construction which has shrunk rapidly in the last couple of years rather than further inflating a bubble somewhere else


----------



## littlebabyjesus (Jul 13, 2012)

BigTom said:


> Is it clear that it's better to demolish decent but not sustainable housing rather than retrofitting - at least stuff like external insulation? Obviously it would need to happen at some point but is it better to demolish and replace when it's coming to the end of its natural life or as soon as possible?


We can argue about the details, but I think we all agree on the principle.


----------



## Falcon (Jul 13, 2012)

BigTom said:


> Is it clear that it's better to demolish decent but not sustainable housing rather than retrofitting - at least stuff like external insulation?


I guess I'm idealising. But my view is heavily influenced by MacKay's experience of trying to retrofit to his standard post-war terraced semi. If a bloke who was really motivated and was prepared to invest a load of time and money only achieved 50% of the performance of new-build, there isn't a lot of potential in the existing stock (in my view). It might be cheaper to bulldoze IF we can get unit cost down sufficiently.


----------



## Crispy (Jul 13, 2012)

I agree with falcon, although it would be politically impossible. Excuse me sir/madam, you see that desirable Victorian terrace with the high ceilings, sash windows and attractively weathered brick walls you live in? Well it's not very energy efficient so we're going to knock it down and build a modern timber framed European modernist house for you instead. Look it even has its own vegetable garden. What do you mean I can fuck off back to Brussels? Sir, if you'd just let me explain...


----------



## free spirit (Jul 13, 2012)

Crispy said:


> I agree with falcon, although it would be politically impossible. Excuse me sir/madam, you see that desirable Victorian terrace with the high ceilings, sash windows and attractively weathered brick walls you live in? Well it's not very energy efficient so we're going to knock it down and build a modern timber framed European modernist house for you instead. Look it even has its own vegetable garden. What do you mean I can fuck off back to Brussels? Sir, if you'd just let me explain...


it's also not sustainable, in that we have several decades of experience of this sort of thinking that clearly shows that doing this absolutely destroys the communities involved, and sustainability can't just be about the environment alone (or even the environment and economics while destroying the social fabric of the area).

I'm also not convinced about the environmental arguments of destroying housing that's built to last, and replacing it with stuff that relies on taped membranes, mechanical ventilation etc and has a 30 year design life, as I believe is the case with much of the passif hous stuff (or at least it's unproven so far for longer than that). This is more gut instinct though than actually running the numbers.

I'm not saying that new builds shouldn't be built to passif haus standards btw, just I don't agree with knocking everything old down and starting again.


----------



## littlebabyjesus (Jul 14, 2012)

Yeah, fs is right. I also am not keen on the idea of buildings that have a limited lifespan. We have to be building to last. There also has to be a big discussion about the kind of new communities we want. The high-rises of the post-war era mostly failed. We need to learn from those mistakes, but also to aspire to some of the things they aspired to, including the integrating of communal spaces into every housing estate. I don't want to see endless sprawling atomised suburbs extending ever further from any communal centres. Why don't we build squares any more? There's been an awful failure of imagination in new housing estates in the past decades, and that has to do with a lot more than saving energy, although of course it has to include that.


----------



## Falcon (Jul 14, 2012)

I said it was interesting but I didn't mean to suggest it was politically possible. You would need the emergency powers mandated by public recognition of clear and present danger that accompanied WW II. The danger is certainly clear and present, but we (as a society, not the luminaries in this forum) are too drugged by X Factor, techno fantasy and the disinformation campaigns of special interests to see it and, without that sense, we'll still be thrilling over the prospects of a new Heathrow runway and whole classes of renewable energy pseudo technologies when they start shovelling old people into community centres to try and prevent them from freezing to death. It will be too late then to do that comparative evaluation of the aesthetic merits of sash windows versus (possibly our own) excess winter mortality.

The timing of the warning signals generated by resource depletion and climate destabilisation (specifically, their decadal cause/effect lags) are incompatible with democratic political processes. Any perception of time is an illusion created by those lags. I don't mean to argue with FS and LBJ, but I don't believe we have the luxury of sufficient time to engage in yet more speculation, conversation, lesson learning, and thought about this. The time for that was the 70's, and time's up. There is a timescale to all of this which is imposed by physical reality, and physical reality is not negotiable. Churchill thought that, in the timescale imposed by the Germans, an imperfect plan, violently executed, was far better than getting violently executed while formulating the perfect plan. Hard to disagree. War time Britain wasn't a democracy, and circumstances dictated that fact.

That said, the more I look at it, the more I realise how much was done in the 70's, largely in the US. It was a period of enormous experimentation and learning, a lot of which got captured in the pre-internet newsletters and self help bulletins of the time and then forgotten (ironically because of the glut of hydrocarbon dumped on them by the last major conventional oil provinces - North Sea and Alaska). You can still find xeroxed pamphlets on how to build your own wind turbine (an approach which sacrifices performance for the merit of ensuring you can still have the benefit of it using salvaged washing machine motors long after the international supply chain has collapsed), insulate your home, and grow bunnies. And much of THAT concentrated on retro-fit to post-war suburban housing stock, on the very pragmatic grounds that it was already there and that was all many would be able to afford.

There has been quite a lot of effort recently to recover and digitise this information (such as this improbably named but excellent book). But they were solving problems such as how to make a home comfortable in high humidity 100F without air-conditioning, and how to make the much larger average US suburban house plot yield enough food to survive on. And it took them decades to figure some things out, during a period of rapid energy and financial expansion. Our wet, windy and wintery Tesco-and-cheap-gas dependent island at the 60th parallel has different problems to solve, under conditions of rapid financial and energy contraction.

So I suppose my view is that you could create the highest (and possibly even sufficient) degree of change with a radical, mandatory approach, and won't get anywhere near it in the time available with an incremental, voluntary one, but the latter is probably all that is conceivable, given political reality. None would be more delighted than I to be proved wrong.


----------



## BigTom (Jul 14, 2012)

Yeah, I don't know enough about housing to feel that I can answer this question.  My instinct is that it's better to mend something than to throw it away and so that's where I start from.  



free spirit said:


> it's also not sustainable, in that we have several decades of experience of this sort of thinking that clearly shows that doing this absolutely destroys the communities involved, and sustainability can't just be about the environment alone (or even the environment and economics while destroying the social fabric of the area).
> 
> I'm also not convinced about the environmental arguments of destroying housing that's built to last, and replacing it with stuff that relies on taped membranes, mechanical ventilation etc and has a 30 year design life, as I believe is the case with much of the passif hous stuff (or at least it's unproven so far for longer than that). This is more gut instinct though than actually running the numbers.
> 
> I'm not saying that new builds shouldn't be built to passif haus standards btw, just I don't agree with knocking everything old down and starting again.


 
So what fs says here is really how I feel, hence I'd like to see a plan which included a serious element of upgrading the decent (in terms of build quality etc) housing stock that does exist, that would give us a better idea.  I'll look at the link Falcon provided earlier to the guy who only got 50% performance, and I'm sure there must have been a fair amount of research and experimentation into this.

I think there's also another question with improving existing stock and that's about the fact that even if we had the political will for the kind of undertaking that I think we'd all like to see, if it was decided to completely demolish and rebuild, it wouldn't all happen overnight.  You'd start by tearing down the worst housing, and leave the best until last.  Therefore it might be worthwhile upgrading the best of the housing stock you're eventually going to take down..
Again, instinctively, this seems like the kind of thing that is just down to number crunching, working out how much energy is used to upgrade the house and if that's less than will be saved over the remaining lifetime of the house then it's worth doing (other factors excepting of course).


----------



## Kaka Tim (Jul 25, 2012)

Latest GDP data 'far worse than expected'.
http://www.guardian.co.uk/business/2012/jul/25/eurozone-crisis-uk-gdp-recession

Worse double dip recession for 50 years. Must have been the Jubilee Hoiliday and the rain. And the football. And the rain. And the hot weather in March. I imagine the Olympics will return us to the sunny uplands though! (before its blamed for the next contraction).


----------



## ViolentPanda (Jul 25, 2012)

Kaka Tim said:


> Latest GDP data 'far worse than expected'.
> http://www.guardian.co.uk/business/2012/jul/25/eurozone-crisis-uk-gdp-recession
> 
> Worse double dip recession for 50 years. Must have been the Jubilee Hoiliday and the rain. And the football. And the rain. And the hot weather in March. I imagine the Olympics will return us to the sunny uplands though! (before its blamed for the next contraction).


 
Anything but Osborne's woeful attempts at economic management will be blamed.


----------



## ayatollah (Jul 25, 2012)

Did anyone spot the utterly pathetic coverage by the BBC's Stephanie Flanders on themain  BBC news last night - on precisely the "why don't we kickstart the UK economy with a major housebuilding programme like they did in the 1930's ?" topic which has just been discussed here. A completely ludicrous  spin  taken by the BBC item on the issue predictably. Turns out it can't be done ! Why not ?   "too much red tape and greenbelt protection of land" apparently. Vast land banks held by the big building companies NOT raised. Ability of the government (and local government if allowed to) to raise money at gobsmackingly low rates currently, NOT raised. Wot a pile of shit. Still, interesting the BEEB felt the need to raise, misrepresent, and dismiss, the issue at all.


----------



## butchersapron (Jul 25, 2012)

So a 10% drop in construction over the last two quarters. Anyone know what proportion stems from state spending squeezes?


----------



## taffboy gwyrdd (Jul 25, 2012)

Just to re-itereate, it's not a recession "double dip" or otherwise. It's a historic depression with the odd blip. Just as accurately, it's the largest robbery in history.


----------



## love detective (Jul 25, 2012)

butchersapron said:


> So a 10% drop in construction over the last two quarters. Anyone know what proportion stems from state spending squeezes?


 
Public housing construction and infrastructure construction are both down nearly 25% each on a year on year basis (latest detailed figures are as at end of May)

Private sector construction is pretty much flat year on year meaning all of the drop is due to cut backs in public spending (of which the majority of planned cuts are yet to come)


----------



## Kaka Tim (Jul 25, 2012)

ayatollah said:


> Did anyone spot the utterly pathetic coverage by the BBC's Stephanie Flanders on themain BBC news last night - on precisely the "why don't we kickstart the UK economy with a major housebuilding programme like they did in the 1930's ?" topic which has just been discussed here. A completely ludicrous spin taken by the BBC item on the issue predictably. Turns out it can't be done ! Why not ? "too much red tape and greenbelt protection of land" apparently. Vast land banks held by the big building companies NOT raised. Ability of the government (and local government if allowed to) to raise money at gobsmackingly low rates currently, NOT raised. Wot a pile of shit. Still, interesting the BEEB felt the need to raise, misrepresent, and dismiss, the issue at all.


 
No mention of brownfield sites, or the large numbers of empty buildings either then?

About 80 council flats were demolished on my estate a few years ago. The ground is sitting their empty. The planned new build hasn't taken place becasue the PFI investors pulled out. Im sure there are loads of similar stories all over the country.

But interesting that the issues has reached the discussion stage. A huge state investment in housing is such an obvioulsy good (and popular) idea and one the labour party could easily champion - I really cant work out why they dont.


----------



## ViolentPanda (Jul 25, 2012)

Kaka Tim said:


> No mention of brownfield sites, or the large numbers of empty buildings either then?
> 
> About 80 council flats were demolished on my estate a few years ago. The ground is sitting their empty. The planned new build hasn't taken place becasue the PFI investors pulled out. Im sure there are loads of similar stories all over the country.
> 
> But interesting that the issues has reached the discussion stage. A huge state investment in housing is such an obvioulsy good (and popular) idea and one the labour party could easily champion - I really cant work out why they dont.


 
Because the appeal of such a programme still mostly resides with people in whom Labour have little interest. They're still chasing the swing voters and taking the heartlands for granted, whatever Ed's rhetoric conveys otherwise.


----------



## Blagsta (Jul 26, 2012)

Kaka Tim said:


> No mention of brownfield sites, or the large numbers of empty buildings either then?
> 
> About 80 council flats were demolished on my estate a few years ago. The ground is sitting their empty. The planned new build hasn't taken place becasue the PFI investors pulled out. Im sure there are loads of similar stories all over the country.
> 
> But interesting that the issues has reached the discussion stage. A huge state investment in housing is such an obvioulsy good (and popular) idea and one the labour party could easily champion - I really cant work out why they dont.


Similar in Birmingham. There's loads of disused land and half cleared sites, both in the city centre and suburbs. The contrast to London is stark.


----------



## ViolentPanda (Jul 26, 2012)

Blagsta said:


> Similar in Birmingham. There's loads of disused land and half cleared sites, both in the city centre and suburbs. The contrast to London is stark.


 
Just as long as any building programme isn't just about throwing up some Barratt Boxes, but about building to a decent (non-minimum) standard.


----------



## yield (Oct 2, 2012)

UK at risk of downgrade, Fitch warns 
Telegraph 28 Sep 2012


> “The likelihood of a downgrade has increased,” Fitch said as it reconfirmed the UK’s “negative outlook” but slashed its forecast for 0.8pc growth this year to a 0.3pc decline and warned that national debt will hit almost 100pc of GDP.
> 
> The Chancellor will also miss one of his two cast-iron fiscal rules, the ratings agency added, but it did not call for more austerity measures to plug the gap.
> 
> Fitch’s decision to tolerate a breach of the debt reduction target without immediately downgrading the UK amounted to an implicit green light for the Chancellor to abandon the rule. It echoed comments this week by Sir Mervyn King, Bank of England Governor, who said that breaking the pledge would be “acceptable” if it was due to the global downturn.


Still not sure why the three big credit agencies hold such clout?


----------



## love detective (Oct 2, 2012)

i'm not sure they do  - look how much yields on US state debt have decreased (as opposed to increasing) since they were downgraded by S&P last year

plus everything is relative, if everything is downgraded then everyone is back in pretty much the same position as they were before the downgrade


----------



## yield (Oct 2, 2012)

You're right there love detective.


----------



## littlebabyjesus (Oct 2, 2012)

Yields in Japan are under 1 percent now. They were downgraded from AAA ages ago.


----------



## love detective (Oct 25, 2012)

scene is now set for a triple dip recession


----------



## 8115 (Oct 25, 2012)

It was on the news this morning that the economy has grown by 1%, although they think it may be the Olympics affect.  I was so angry, I felt really bad that I desperately wanted the economy to be tanking.


----------



## love detective (Oct 25, 2012)

when all the one off effects are taken out, olympics ticket sales, unwinding of jubilee effect etc.(and the forward looking surveys are taken into account), it's not looking that rosy at all


----------



## 8115 (Oct 25, 2012)

love detective said:


> when all the one off effects are taken out, olympics ticket sales, depressed 2nd quarter due to jubilee etc.(and the forward looking surveys are taken into account), it's not looking that rosy at all


 
I know, but that's not how it's being spun by the government.


----------



## love detective (Oct 25, 2012)

getaway!


----------



## ayatollah (Oct 25, 2012)

The Coalition and their press and media pals hyping up the supposed "end of recession" would be funny if it wasn't so tragic. Better longer term indicators of what is really happening economically is the announced closures of the Ford plants in Southamptom and Dagenham, the sudden downturn in the German economy, and the severe emerging downturn in the European car market - particularly exemplified by Renault's problems. Even Mercedes Benz has had to issue a "profits warning" . And of course the 12th month on the run that the Chinese economy has experienced an economic slowdown - now feeding into their raw material supplier economic "BRIC" partners in places like Brazil and Argentina.

The world recession is very, very, far from over. There'll be the odd upward statistical "blip" , as there has been in the UK just now, but the competitive "austerity" strategy being pursued worldwide can only tip the world deeper into the long Slump. The Tories and their press are just "whistling in the dark" to keep their spirits up, and justify their "austerity" programme to destroy our welfare services.

The long term rise in UK and Eurozone unemployment and the long but accelerating process of privatising/destroying the NHS and the Welfare State generally will soon disabuse the general public of the lie that posh Dave and his Lord Snooty pals have cracked the economic slump, regardless of the media propaganda barrage at any "good" economic news !


----------



## Captain Hurrah (Oct 25, 2012)

love detective said:


> getaway!


----------



## littlebabyjesus (Oct 25, 2012)

tbf growth in China is still a massive 7.5%. Not sure that can count as an economic slowdown, really, just a slowing of the acceleration.


----------



## ska invita (Oct 25, 2012)

ayatollah said:


> The Coalition and their press and media pals hyping up the supposed "end of recession" would be funny if it wasn't so tragic.









I'll go double or nothing on the triple


----------



## Mr.Bishie (Oct 25, 2012)

The BBC were banging on about it this morning, & Radio 2 banging on about it all fucking day. 

"The UK is out of recession - the economy has grown by a massive 1% - Tory policies are working."

Fuck off.


----------



## 8115 (Oct 25, 2012)

Mr.Bishie said:


> The BBC were banging on about it this morning, & Radio 2 banging on about it all fucking day.
> 
> "The UK is out of recession - the economy has grown by a massive 1% - Tory policies are working."
> 
> Fuck off.


 
The BBC news channel this morning was a bit, ho hum about it.  I'm pretty sure they were thinking, yeah right.


----------



## BigTom (Oct 25, 2012)

One thing  that stood out to me was that construction shrunk by 2.5% which is never a good sign. this is also just July and August data I think so it'll be interesting to see how it gets adjusted when September gets taken into account.
Also, I think we should need two quarters of growth to be out of recession, just like we need two quarters of shrinking to be in recession so as far as I'm concerned we are still in recession


----------



## Pickman's model (Oct 25, 2012)

Mr.Bishie said:


> The BBC were banging on about it this morning, & Radio 2 banging on about it all fucking day.
> 
> "The UK is out of recession - the economy has grown by a massive 1% - Tory policies are working."
> 
> Fuck off.


they're just setting us up for another banking crisis


----------



## Mr.Bishie (Oct 25, 2012)

BBC news at 6 & they're at it again, this time with added Cameron! 

"We're on the right track" - the only track you should be on is Clapham fucking Junction!


----------



## Quartz (Oct 25, 2012)

BigTom said:


> Also, I think we should need two quarters of growth to be out of recession, just like we need two quarters of shrinking to be in recession so as far as I'm concerned we are still in recession


 
Agreed.


----------



## Delroy Booth (Oct 25, 2012)

Apparently there was an unexpectedly high rise in service sector work, as well as an increase temporary and part-time jobs. There's lots of people who had 1 full-time job now doing 2 part-time jobs. In short working harder, but on less money overall. This has helped restore the rate of profit in otherwise dire economic circumstances. But there's only so far that can go, and I'd suspect that type of economic "rebalancing" would make the economy and workforce more vulnerable to future crises (ie Israeli strike on Iran leading to temporary increase in oil prices, or a Greek exit from the Eurozone causing a panic etc)

Increases in temportary/part time work and service sector work happen every summer, foreign workers coming to do menial summer jobs, a million or so students getting jobs for the summer etc and in this case is amplified by the impact of the Olympic.

You could easily strip 0.5% straight off that figure if you were an honest journalist trying to give an accurate assessment of the true state of the economy.


----------



## where to (Oct 25, 2012)

Anecdotally, the construction sector has done a bit better prob for a while now, maybe since q2.

I work in sector and would agree, although med to large housebuilding still dead, and imo its small private projects that are driving any growth.

However, imo this is simply because people are choosing to build over spring / summer rather than winter, esp given poor weather in recent winters, and crucially, because builders are so quiet they can choose when to build.

Either way, the economy was never going to show persistent decline, but immediate recession and a long term picture of stagnation and malaise. That's what we said in 2010 and we were, and remain, correct.


----------



## ayatollah (Oct 25, 2012)

littlebabyjesus said:


> tbf growth in China is still a massive 7.5%. Not sure that can count as an economic slowdown, really, just a slowing of the acceleration.


 
I understand that most external economists have viewed the economic figures produced by the Chinese government with considerable suspicion for years. Economists trying to gauge the amount of unoccupied office space in the major cities have been reduced to driving around trying to make assessments in the evenings by the lit or unlit office windows ! Electricity supply figures have also been  researched to try and get behind the dubious  GDP figures produced by the Chinese.. not hugely successfully.. but casting doubt again on the government figures.

The fact that China is dotted with speculatively built but unoccupied new appartment cities and half-built new leisure facilities tells us a lot about the lack of profitable outlets domestically for reinvested profits , and the lack of adequate internal consumer demand . And it's also significant the amount of money that has been wasted on projects like these that will never realise  an investment return. The undoubted slowdown in the Chinese economic engine is reported to be starting to impact on previously booming basic raw material suppliers in the BRIC economies like  Brazil. Argentina and India, eg, demand for steel. If the Chinese economy was really performing to 7.5% real growth none of these observable realities would actually be happening.


----------



## ayatollah (Oct 26, 2012)

The starter of this thread, toblerone3, needs to amend it now to include a vote on the likelihood of a Triple Dip Recession. Put me down for a "yes" ... probably early in 2013. To which inevitable occurrence the Chancellor will no doubt say "this shows once again that our austerity programme is absolutely essential".

Edit. Better scrub that. Someone on another thread has just pointed out we had the "triple dip" weeks ago. OK it'll have to be the likelihood of a quadruple dip recession then...... oh fuck, forget it ......we ALL know things are really getting better all the time... all together now....


----------



## yield (Nov 14, 2012)

love detective said:


> scene is now set for a triple dip recession


UK risks triple-dip recession, Mervyn King warns
guardian.co.uk, Wednesday 14 November 2012


> The UK economy emerged from a double-dip recession in the third quarter of this year, when the economy grew by 1%, but King warned that this was driven by one-off factors. "Continuing the recent zig-zag pattern, output growth is likely to fall back sharply in the fourth quarter as the boost from the Olympics in the summer is reversed – indeed output may shrink a little this quarter," he said. If that period of contraction continues into 2013, the UK could drop into a triple-dip recession.


No surprise.


----------



## ayatollah (Nov 14, 2012)

But..but...but...but the BBC and mass media generally promised that from now on it was "happy days are here again" so very, very,  recently.  It's just soooooooo disappointing.... That Mervyn's such a pessimist...

I'm sure that nice Mr Osborne will see things much more optimistically... The BBC has already found a positive spin for the unemployment figures on the rolling news after all, by focussing on the at first sight surprisingly large number of "new jobs" apparently created recently. So anyone who points out that most of the new jobs which have been created recently are shit part time ones, mostly in wine bars in London..... and that long term unemployment continues its unrelenting rise...is an unpatriotic scoundrel.


----------



## BlackArab (Nov 14, 2012)

ayatollah said:


> But..but...but...but the BBC and mass media generally promised that from now on it was "happy days are here again" so very, very, recently. It's just soooooooo disappointing.... That Mervyn's such a pessimist...
> 
> I'm sure that nice Mr Osborne will see things much more optimistically... The BBC has already found a positive spin for the unemployment figures on the rolling news after all, by focussing on the at first sight surprisingly large number of "new jobs" apparently created recently. So anyone who points out that most of the new jobs which have been created recently are shit part time ones, mostly in wine bars in London..... and that long term unemployment continues its unrelenting rise...is an unpatriotic scoundrel.


 
These new jobs created, would they have anything to do with the fact that Christmas seasonal workers are being recruited atm?


----------



## ayatollah (Nov 14, 2012)

BlackArab said:


> These new jobs created, would they have anything to do with the fact that Christmas seasonal workers are being recruited atm?


 
There's always one isn't there !  That possibility was NOT discussed  on the BBC rolling news, NO. Just the sort of negativity to be expected from Urban75...  Well possibly the recruitment of sundry crap part time , short life, Christmas joblets might have a teensy role to play --  But overall, IT's ALL GOOD NEWS.. hold that thought. The phrase "Triple Dip Recession" is from now on the be a banned set of words -- similar to the ban on "Olympic" words and symbols  during those great games which totally rebuilt our economy and lifted us forever out of recession those short few weeks ago.


----------



## BlackArab (Nov 14, 2012)

Just wait till all the santas get the push on Christmas Eve


----------



## littlebabyjesus (Nov 15, 2012)

The trend has been flat for the last two years, and looks set to continue to be flat. Government spending cuts at a time when the private sector is overindebted and so reluctant to borrow, and a general squeeze on wages. It can't be any other way really.


----------



## free spirit (Nov 15, 2012)

at what point are they going to remember that this marvelous handlestickflatbladediggingthing they've got in their hands is actually called a spade?

let's face it, we're in a depression - if was a big recession, then the tories turned it into a depression through the complete idiocy of their economic ideology.


----------



## ferrelhadley (Jan 4, 2013)

UK economy likely in recession* in Q4 2012

Service sector contracted.



> The UK services sector suffered its first contraction in two years in December, suggesting the economy as a whole slipped back into recession in the last quarter of 2012.
> Markit's purchasing managers' index shows the service sector fell below the 50 mark which separates growth from contraction last month, registering 48.9, down from 50.2 in November and below the 50.5 that had been forecast.
> The service sector accounts for three quarters of the British productivity, and a decline in conditions has major repercussions for the economy.


 
*Edited perhaps that should have been 'contraction' rather than 'recession' which, for the UK, is two consecutive quarters of contraction.


----------



## ymu (Jan 4, 2013)

Has this been posted on the thread yet?

The IMF have worked out that austerity is self-defeating now, just like others did in the 1930s.  This is a nice breakdown of their recent report:



> The IMF and the end of austerity
> 
> MF economists have finally acknowledged what politicians have long denied. They have shown that austerity policies implemented by politicians and demanded by financial markets are severely damaging to what economists define as ‘growth’. Ultimately, argues the IMF, these policies are self-defeating. As most thinking people now recognise, rather than repairing the broken and bankrupt economies of the world, austerity is making matters worse.
> 
> ...


 
Osborne is ignoring it, of course. But it's going to keep getting harder to maintain the fiction, especially when the Tory base are hurting because of it.


----------



## Quartz (Jan 5, 2013)

ymu said:


> The IMF have worked out that austerity is self-defeating now, just like others did in the 1930s.  This is a nice breakdown of their recent report:


 
Help me out here: I'm no economist but that analysis seems to be shoddy. Firstly, it's only the government that's practising austerity - the rest of us can do as we please. Secondly, there may or may not be higher spending on benefits - the government can cut spending on those benefits. Indeed, it is cutting benefits. Then it goes on to say:



> We may infer that roughly the same ratios would apply in reverse for any _decrease _in national income and government expenditure.




without any justification. It may be correct, but they need to justify it. The article also asserts the benefits of an increase in expenditure while ignoring where the money is coming from. If the money is borrowed, that borrowing has a cost - and we have to find someone willing to lend us the money at a rate we can afford to pay. If the money is simply printed, that too has a cost in the form of inflation - see Weimar Germany and Zimbabwe for extreme examples.

Or maybe it's just too late in the day for me.


----------



## Wolveryeti (Jan 5, 2013)

Quartz said:


> Help me out here: I'm no economist but that analysis seems to be shoddy. Firstly, it's only the government that's practising austerity - the rest of us can do as we please. Secondly, there may or may not be higher spending on benefits - the government can cut spending on those benefits. Indeed, it is cutting benefits. Then it goes on to say:
> 
> 
> 
> ...


The dynamics of households and firms are either positive or negative reinforcement. That is to say, that high-spending households encourage firms to hire more people - and vice versa. 

Right now the problem is that businesses are mostly predicting doom and gloom and therefore hiring fewer workers. Households are similarly pessimistic, and are spending less. This is a self-fulfilling prophesy - unless government steps in to change the incentives.

It could do this by committing to a policy of continuously expanding the money supply - as then households would have less incentives to save (strongly negative real interest rates). This would encourage hiring, which would increase demand - positive reinforcement would start again. 

Basically, money costs almost nothing to print - if it gets unemployed people working again that's a free lunch. The time to worry about inflation is when the economy is near full employment.


----------



## ymu (Jan 5, 2013)

We can borrow at zero real interest rates at the moment. It's crazy not to spend free money. When no one else is spending the government has to or the economy just flatlines, which is precisely what we've seen happen since 2010 and Osborne's October spending review:











This is precisely what the IMF model predicts. It is also precisely what is happening to the weaker Eurozone countries, but they cannot get out of it by printing money so they have punitive interest rates on borrowing. We do not.


----------



## ymu (Jan 5, 2013)

Notice how different the recession of the 1970s looks compared to the others. That is because it was caused by the oil shocks of the 1970s, rather than financial mismanagement. The shocks that were used to deliver us monetarism and its manufactured crises. Notice how there are no recessions between 1934 and 1973 and average GDP growth was higher:






Thatcher only had theory to justify her policies, now we have the evidence. It does not work.


----------



## littlebabyjesus (Jan 5, 2013)

Quartz said:


> Help me out here: I'm no economist but that analysis seems to be shoddy. Firstly, it's only the government that's practising austerity - the rest of us can do as we please. Secondly, there may or may not be higher spending on benefits - the government can cut spending on those benefits. Indeed, it is cutting benefits. Then it goes on to say:


This is not fundamentally a public debt problem. It is fundamentally a private debt problem, and for a long time the private sector will as a whole be keen on repaying debt, not taking out new debt - in other words, reducing the money supply. I agree broadly with what wolveryeti says above, but it's not just incentives that govt needs to provide, it is investment. And investment is just a term for borrowing/lending. The case needs to be made for government borrowing as a positive thing that is needed at this time when the private sector is not borrowing. We're running a public sector deficit - and quite right too.


----------



## ymu (Jan 5, 2013)

Companies are swimming in cash. They're just not willing to spend it.


----------



## littlebabyjesus (Jan 5, 2013)

Private sector debt - companies plus households - is huge in the uk. Depending on which bits of banking you include, it's something like four or five times the size of public debt. Taken as a whole, the private sector is not borrowing, nor is it likely to for a long time. This has been the experience of Japan over the last 20 years, and is what has started happening here. What money the private sector does get, it is very keen to invest in buying public sector debt.


----------



## ymu (Jan 5, 2013)

This is what the OBR estimated would happen to private and public sector debt under Osborne's April 2011 budget, relative to no policy change:




(click pic for link)


----------



## love detective (Jan 5, 2013)

Very misleading article/graph that - the majority of the change in forecast household debt was a result of methodology changes by the OBR between the two forecast dates

That comparison of changes in household debt in that graph was not derived from an analysis of what was predicted to happen under Osborne's June 2010 budget relative to no changes, it was taken by comparing an older OBR forecast that forecast under the old methodology to a newer one which forecast it under the new methodology

Attributing the impact of those changes to 'Osborne's plans' in such a direct way is at best careless and at worst politically dishonest/crass opportunism

The politics of austerity can be attacked quite easily without resorting to the kind of lazy shrill crap that all to often characterises anti-cuts propaganda - this ultimately only serves to discredit anti-cuts arguments when they are shown up to be an unreliable source of information


----------



## Quartz (Jan 5, 2013)

Wolveryeti said:


> The time to worry about inflation is when the economy is near full employment.


 
Zimbabweans would disagree with you.



littlebabyjesus said:


> This is not fundamentally a public debt problem. It is fundamentally a private debt problem


 
I thought it was both. Certainly, thanks to Blair, Brown, and Balls, public debt had grown to an unsustainable amount. And it is the public debt which concerns that article.



> , and for a long time the private sector will as a whole be keen on repaying debt, not taking out new debt - in other words, reducing the money supply. I agree broadly with what wolveryeti says above, but it's not just incentives that govt needs to provide, it is investment. And investment is just a term for borrowing/lending. The case needs to be made for government borrowing as a positive thing that is needed at this time when the private sector is not borrowing. We're running a public sector deficit - and quite right too.


 
Could there be a third way apart from taking on extra debt or inducing inflation? Might reintroducing MIRAS be a good start? Bailing out those with mortgages rather than the banks directly.


----------



## BigTom (Jan 5, 2013)

Quartz said:


> Zimbabweans would disagree with you.
> 
> 
> 
> ...


 
sweet.. I get to beat Ymu to posting the graph she made of public debt levels. Are you aware that the national debt was lower the day before Northern Rock went bust (35% of GDP iirc) than when Labour came in to power (42% iirc)?
That it was the collapse of the banks and the recession that was generated the pushed up debt levels to a hardly unsustainable amount of around 60% of GDP (iirc) and it's now around 70% (iirc).
Do you suggest that any party would have done any differently when the banks collapsed? If not, why blame Labour rather than the banking system (or at least blame Labour correctly for their part in deregulating the banking system)


----------



## ViolentPanda (Jan 5, 2013)

BigTom said:


> sweet.. I get to beat Ymu to posting the graph she made of public debt levels. Are you aware that the national debt was lower the day before Northern Rock went bust (35% of GDP iirc) than when Labour came in to power (42% iirc)?
> That it was the collapse of the banks and the recession that was generated the pushed up debt levels to a hardly unsustainable amount of around 60% of GDP (iirc) and it's now around 70% (iirc).
> Do you suggest that any party would have done any differently when the banks collapsed? If not, why blame Labour rather than the banking system (or at least blame Labour correctly for their part in deregulating the banking system)


 
Quartz won't listen. All this has been pointed out to him before, and he ignores it in favour of playing a partisan blame game.


----------



## littlebabyjesus (Jan 5, 2013)

Quartz said:


> Could there be a third way apart from taking on extra debt or inducing inflation? Might reintroducing MIRAS be a good start? Bailing out those with mortgages rather than the banks directly.


Yes, a debt jubilee. Steve Keen's Debtwatch website is worth exploring on these issues. He outlines a way to do this.


----------



## littlebabyjesus (Jan 5, 2013)

That graph does reveal some of New Labour's mistakes, though. National debt dribbled upwards between 2002 and 2007, which were the years of the most destructive bubble inflation. In other words, during a time when private sector debt was exploding, Blair/Brown decided to increase spending on, for instance, the NHS not through tax increases that would have dampened down private borrowing, but through increased public debt. They combined this with expansion of policies such as part-rent/part-buy - a public subsidy for the private housing market that ensured a continued supply of first-time buyers - that fuelled the boom. It was the worst kind of populism, cheering on the boom. It was a bad, avoidable mistake.


----------



## BigTom (Jan 5, 2013)

littlebabyjesus said:


> That graph does reveal some of New Labour's mistakes, though. National debt dribbled upwards between 2002 and 2007, which were the years of the most destructive bubble inflation. In other words, during a time when private sector debt was exploding, Blair/Brown decided to increase spending on, for instance, the NHS not through tax increases that would have dampened down private borrowing, but through increased public debt. They combined this with expansion of policies such as part-rent/part-buy - a public subsidy for the private housing market that ensured a continued supply of first-time buyers - that fuelled the boom. It was the worst kind of populism, cheering on the boom. It was a bad, avoidable mistake.


 
Certainly - 2002 is a possible exception with the dotcom bubble bursting and 9/11, a small deficit may well have been the right course at the time. Beyond that though they should have been running surpluses. Not being keynesian of course they wouldn't do this, as far as neo-liberal economics is concerned government should be spending in boom times (because that's when they have the most income) and saving in bust times (when they don't) and as long as govt. debt is below 40% of gdp (seemed to be the usual kind of number I remember being given as an "acceptable" level of govt debt by r/w econometric types) then it's fine to spend and borrow.
The tories of course follow the same base economic ideology, had they been in power they may have done things differently, maybe they would have run a surplus at the time and we could have had lower debt in 2008, just like Ireland and Spain did... 






Either way they still would have bailed out the banks, still had the recession cos they wouldn't have regulated the banks, still be in the same position we are now more or less...


----------



## Roadkill (Jan 5, 2013)

Quartz said:


> I thought it was both. Certainly, thanks to Blair, Brown, and Balls, public debt had grown to an unsustainable amount. And it is the public debt which concerns that article.


 
UK public debt since 1700, as a percentage of GDP:






http://www.ukpublicspending.co.uk/spending_chart_1700_2015UKp_12c1li111mcn_G0t

Even now, more than three years into the financial crisis, UK public debt is not large by historic standards.



littlebabyjesus said:


> That graph does reveal some of New Labour's mistakes, though. National debt dribbled upwards between 2002 and 2007, which were the years of the most destructive bubble inflation. In other words, during a time when private sector debt was exploding, Blair/Brown decided to increase spending on, for instance, the NHS not through tax increases that would have dampened down private borrowing, but through increased public debt. They combined this with expansion of policies such as part-rent/part-buy - a public subsidy for the private housing market that ensured a continued supply of first-time buyers - that fuelled the boom. It was the worst kind of populism, cheering on the boom. It was a bad, avoidable mistake.


 
True. Labour were running a deficit in most years from 2001 IIRC. Not sensible, given that a small deficit in a boom turns into a big one into a recession. It's symptomatic of one of New Labour's biggest failings: it lacked the ideological conviction and political courage to make the case for higher taxes and improved public services, and as a result ended up borrowing a lot of the money, and spending it badly as well.


----------



## littlebabyjesus (Jan 5, 2013)

ymu said:


> Has this been posted on the thread yet?
> 
> The IMF have worked out that austerity is self-defeating now, just like others did in the 1930s.  This is a nice breakdown of their recent report:
> 
> ...


Ironic that that is posted on a Guardian site. The Guardian was as guilty as many others in declaring austerity a necessity two years ago. irrc, this was their official leader writers' position.

tbh this bit



> But influential IMF economists have now taken decisive action to warn against the dangers of austerity. Their stand is courageous and we owe them our profound gratitude.


 
is ludicrous.


----------



## Quartz (Jan 5, 2013)

BigTom said:


> That it was the collapse of the banks and the recession that was generated the pushed up debt levels to a hardly unsustainable amount of around 60% of GDP (iirc) and it's now around 70% (iirc).


 
Absolutely. Labour still made us take on a huge amount of debt by bailing out the banks. That debt still has to be paid off.



> Do you suggest that any party would have done any differently when the banks collapsed?


 
I doubt the Tories or Lib Dems would have done differently: they too are in the pocket of the banks. I hesitate to think what the BNP would have done.



> If not, why blame Labour rather than the banking system (or at least blame Labour correctly for their part in deregulating the banking system)


 
I'm not blaming them; I'm holding them responsible. There's a difference. Because they were in charge at the time. Because they took the decision to assume the massive debt. It's as simple as that. If the Tories had been in charge, I'd be holding them responsible. As I will hold them responsible for the state of the country the next time I get a vote.


----------



## littlebabyjesus (Jan 5, 2013)

What is it about the current national debt that concerns you, Quartz? As interest rates are so low, servicing the debt actually still, even now after the crisis, costs a smaller percentage of UK gdp than servicing the debt cost at any point in the Thatcher years. It is the enormous private sector debt that should be worrying you - dealing only with public sector debt without looking also at private sector debt is meaningless.


----------



## Roadkill (Jan 5, 2013)

Quartz said:


> It's as simple as that.


 
No, it really isn't.


----------



## free spirit (Jan 5, 2013)

littlebabyjesus said:


> What is it about the current national debt that concerns you, Quartz? As interest rates are so low, servicing the debt actually still, even now after the crisis, costs a smaller percentage of UK gdp than servicing the debt cost at any point in the Thatcher years. It is the enormous private sector debt that should be worrying you - dealing only with public sector debt without looking also at private sector debt is meaningless.


what concerns me about our national debt situation now is that we're running the debt up pretty much as fast as we would have been if we'd been operating a sensible keynesianborrowing based plan to boost the economy through investment in infrastructure and other job creation schemes, but it's just being spent on servicing our current problems and making the problem worse rather than as any sort of a co-ordinated plan to boost the economy.

I worry that by the time we actually do manage to get anyone with anything even close to keynesian thinking on the case that 5 years of Osbournes relentless borrowing and cuts will have actually managed to build our debts up, and bring the economy down to a level where the financial markets actually do start to be concerned and our borrowing rates do go up to 4,5,6% which then would start to make it much more difficult to do what actually needs doing to get growth and jobs back into the economy.

I just hope that it proves worth it in the long run if it destroys any vague semblance of credibility that this neoliberal austerity nonsense has, and we can be rid of it entirely for the rest of my life at least.

I'm just not really sure who's out there who's going to be able to play the Keynes role in this.


----------



## Quartz (Jan 5, 2013)

littlebabyjesus said:


> What is it about the current national debt that concerns you, Quartz? As interest rates are so low, servicing the debt actually still, even now after the crisis, costs a smaller percentage of UK gdp than servicing the debt cost at any point in the Thatcher years.


 
And Thatcher made a point of reducing the debt - to the point that the budget was in surplus and there was a debt reduction. But it's the effect on spending overall. To quote Dickens' Mr Micawber, "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." and we're seeing that with the cuts to pensions, police, the military, central and local government services, the cuntery of ATOS, etc. (Actually, I'll take that last back: I think ATOS would be cunts anyway.)



> It is the enormous private sector debt that should be worrying you - dealing only with public sector debt without looking also at private sector debt is meaningless.


 
You presume it doesn't worry me; your presumption is erroneous. I know part of the problem first-hand.


----------



## littlebabyjesus (Jan 5, 2013)

Quartz said:


> And Thatcher made a point of reducing the debt.


No she did not. She ran almost the whole of her time in govt with a budget deficit. Tiny surpluses right near the end of her time, then the recession and big deficits again as she was leaving.






And that at a time when windfalls from privatisations and North Sea oil money were rolling in. And as a result of all the privatisations, the govt's current debt is actually less secure as the collectively held wealth of the nation is so much smaller. Thatcher was an economic disaster for this country. Bungling incompetence.


----------



## Roadkill (Jan 5, 2013)

free spirit said:


> what concerns me about our national debt situation now is that we're running the debt up pretty much as fast as we would have been if we'd been operating a sensible keynesianborrowing based plan to boost the economy through investment in infrastructure and other job creation schemes, but it's just being spent on servicing our current problems and making the problem worse rather than as any sort of a co-ordinated plan to boost the economy.
> 
> I worry that by the time we actually do manage to get anyone with anything even close to keynesian thinking on the case that 5 years of Osbournes relentless borrowing and cuts will have actually managed to build our debts up, and bring the economy down to a level where the financial markets actually do start to be concerned and our borrowing rates do go up to 4,5,6% which then would start to make it much more difficult to do what actually needs doing to get growth and jobs back into the economy.


 
I think you may very well be right there, actually.  



Quartz said:


> And Thatcher made a point of reducing the debt - to the point that the budget was in surplus and there was a debt reduction.


 
Do you understand the difference between debt and deficit?


----------



## littlebabyjesus (Jan 5, 2013)

Note also that govt running at a surplus is often a sign of an impending crash. If govt is reducing its borrowing, that must mean that the private sector is increasing its borrowing significantly. It's a sign that bubbles may well be forming.


----------



## free spirit (Jan 5, 2013)

littlebabyjesus said:


> Note also that govt running at a surplus is often a sign of an impending crash. If govt is reducing its borrowing, that must mean that the private sector is increasing its borrowing significantly. It's a sign that bubbles may well be forming.


I'd be intrigued if you could supply any evidence to support that.

last time the UK was in surplus was the late 90s, and the crash took 10 years to come after that.


----------



## BigTom (Jan 5, 2013)

Quartz said:


> Absolutely. Labour still made us take on a huge amount of debt by bailing out the banks. That debt still has to be paid off.
> 
> 
> 
> ...



who are you going to vote for?

like roadkill said, it's not that simple. By saying "labour spent recklessly and racked up an unsustainable national debt" you add to a narrative which says government spending is the problem, that's why we're in this mess, damn you labour.
Even if you specify that you are talking about the bank bail out you blame labour not the banks and support the narrative that the tories push that it's all labour's fault for spending recklessly like they'd have done any different.
Every time you do this you also explicitly support the narrative that we have to reduce the debt and because you blame labour overspending you at least implicitly identify spending as the problem and thus give austerity as the solution.

By misidentifying the real issue (capitalism really but on the surface structural setup of financial sector and its importance to or economy, plus the neo liberal framework of politics) you head to a solution that is failing to achieve what you want. By seeking to hold labour in the way you did responsible you support a set of narratives that got us in this hole in the first place.


Out of interest, would you have let the banks collapse?

E2a it wasn't just the bank bailout that increased the debt, it was also the attendant recession which increased unemployment and benefit spending and decreased tax income. I have a vague feeling that the drop in tax income is greater than th e amount the banks got but I'm struggling to check that on my phone.


----------



## littlebabyjesus (Jan 5, 2013)

free spirit said:


> I'd be intrigued if you could supply any evidence to support that.
> 
> last time the UK was in surplus was the late 90s, and the crash took 10 years to come after that.


The recession of the late 80s. Spain/Ireland. The UK really should have had a crash around 2002, and many people expected one. Instead, we had the madness of 2002-07 in which interbank lending tripled, govt debt also started rising again, and debt spiralled. All previous rules to do with lending went out of the window.

Japan 1990 too:







If the government is paying down its debt, ie destroying money, that will only be taking place under conditions in which the private sector is taking out debt furiously, ie creating money. Otherwise reducing the money supply like that would stall the economy.

As I said, the last credit crunch is the anomaly. The crash didn't happen when it should have.


----------



## free spirit (Jan 5, 2013)

seems a bit simplistic to me.

Surely it depends on who the government is replaying the debt to, and what they then go on to do with the money the government has just repaid - if this money itself then boosts banks cash balance sheets and enables them to loan more into the private sector then it ought to have a stimulus effect, especially if the surplus isn't caused by a reduction in spending.

If the debt is effectively just owed from the government to the bank of england, or the NI pot or something then I can see that your point would stand, but I don't really see it outside of those circumstances.


----------



## Quartz (Jan 5, 2013)

littlebabyjesus said:


> No she did not. She ran almost the whole of her time in govt with a budget deficit. Tiny surpluses right near the end of her time, then the recession and big deficits again as she was leaving.


 
Umm... that graph proves me right - look at the reducing deficit from 1984 onwards. Major and Lamont were in as PM and Chancellor from 1990. And, of course, they cocked it up.


----------



## junglevip (Jan 5, 2013)

Try triple


----------



## littlebabyjesus (Jan 5, 2013)

Quartz said:


> Umm... that graph proves me right - look at the reducing deficit from 1984 onwards. Major and Lamont were in as PM and Chancellor from 1990. And, of course, they cocked it up.


Reducing deficit means increasing debt, remember, just the debt is increasing more slowly.


----------



## Quartz (Jan 5, 2013)

littlebabyjesus said:


> Reducing deficit means increasing debt, remember, just the debt is increasing more slowly.


 
Absolutely right.


----------



## littlebabyjesus (Jan 5, 2013)

Quartz said:


> Absolutely right.


I can't find good figures for the 70s, but overall debt reduced a bit over that period, so Thatcher wasn't reversing some trend with her spending in the 80s. It was the normal pattern - you run a deficit during recovery from recession, then you reduce the deficit and perhaps move into small surplus as the economy overheats.

For all Thatcher's bluster, she still followed that pattern. But she also managed to make big cuts in many people's services too, lead Britain's manufacturing into horrible decline, increase inequality, massively increase unemployment, and generally fuck up anything she got her hands on.


----------



## ymu (Jan 5, 2013)

love detective said:


> Very misleading article/graph that - the majority of the change in forecast household debt was a result of methodology changes by the OBR between the two forecast dates
> 
> That comparison of changes in household debt in that graph was not derived from an analysis of what was predicted to happen under Osborne's June 2010 budget relative to no changes, it was taken by comparing an older OBR forecast that forecast under the old methodology to a newer one which forecast it under the new methodology
> 
> ...


Thanks. I can't find any discussion of how they estimate these numbers; they're provided as supplementary tables rather than as part of the main report. Have you got a reference for the change in methods?

This blog first highlighted the corrected figures. They aren't very different from the ones estimated in November 2010 (which are available as a spreadsheet download here), but they're very different from those published in August 2010 (see blog link), so the change presumably happened in between the two.


----------



## love detective (Jan 5, 2013)

it's covered in this OBR report here

So the original False Economy claim (and related graph showing increase in household debt of £245bn) was this:-



These numbers are correctly lifted from the various OBR reports, however the reasons for the increases have been ignored, and instead incorrectly attributed all to budget policy changes

So extract from the OBR report below shows the £1,718bn originally forecast for 2014 and then the revised March 2011 forecast for 2014 of £1,963bn, the difference being the £245bn False Economy refer to as being 'as a result of Osborne's policies'


However, the OBR numbers themselves show that the impact of the June 2010 budget only had a 'direct' impact on forecast debt in 2014 from £1,718bn to £1,735bn, an uplift of £17bn. The rest of the increase to £1,963bn in 2014 and £2,126bn in 2015 is explained as:-



and:-




None of this changes the fact that household debt (according to the OBR) is forecast to rise by more than it previously had been, however the drivers of that change are not what False Economy originally claimed (and to a certain extent the reason for the rise are 'good' things like increasing house prices off the back of a recovery in the economy, which in turn will bring about a rise in mortgage debt - not saying this is good or right, but it gives a more clearer picture than the false economy hyperbole on this). Also i'm not making any claim on whether the OBR figures are realistic or not, just pointing out the basis of them, and how they have been misinterpreted.


----------



## ferrelhadley (Jan 18, 2013)

Retail down. Q4 in negative GDP looks almost nailed to the mast.
http://www.guardian.co.uk/business/2013/jan/18/uk-retail-sales-december

Triple dip now hangs on Q1 2013.


----------



## jusali (Jan 18, 2013)

mmmmm doesn't look good does it?


----------



## brogdale (Jan 18, 2013)

ferrelhadley said:


> Retail down. Q4 in negative GDP looks almost nailed to the mast.
> http://www.guardian.co.uk/business/2013/jan/18/uk-retail-sales-december
> 
> Triple dip now hangs on Q1 2013.


 
I call it triple dip, whatever.
All that arbitrary, made-up econobull about needing 2 consecutive quarters for a recession, but only one for the recoveh....do these people not walk up and down our highstreets ffs.
The capitalist party can't even manage 'capitalism'.


----------



## Balbi (Jan 18, 2013)

jusali said:


> mmmmm doesn't look good does it?


 
Snow, again.


----------



## Balbi (Jan 25, 2013)

-0.3%

Tory on my twitter grasps desperately...



> Every cloud has a silver lining; We avoided a triple dip, thanks to the Olympics. #*GDP* #*Growth*


----------



## brogdale (Jan 25, 2013)

Balbi said:


> -0.3%
> 
> Tory on my twitter grasps desperately...


 
Delayed, maybe.


> Post-WW1 & WW2 #GDP fell at double-digits rates. Those aside, 2008-12 fall was bigger than any since before Victoria ascended the throne.​— RBS Economic Insight (@RBS_Economics) January 25, 2013​​


​


----------



## BigTom (Jan 25, 2013)

and now clegg saying that cutting infrastrcture spending was a mistake http://www.newstatesman.com/politic...tions-infrastructure-spending-cut-was-mistake

continuing to pave the way for a u-turn on spending/austerity perhaps. and Balbi your tory has it wrong, without the olympics we'd still be in the double-dip recession, the triple dip recession has only been made possible by the single quarter of growth last year.


----------



## BigTom (Jan 25, 2013)

interestingly, construction was up 0.3% last quarter - it's been falling fast previously, so that's quite a big turnaround and may indicate something positive happening. No idea why though, and whether this is something to do with christmas (ie: temporary shopfits, christmas markets etc). Need to have a look back at previous years and see if this quarter usually has growth and it's just a seasonal thing or not.


----------



## Balbi (Jan 25, 2013)

Clegg's admission is in relation to the increase in spending I believe planned into the coalitions budget now - so yeah, he says they fucked up - but only because there's more announcements of contritition.

They're never getting back in government.


----------



## Kaka Tim (Jan 25, 2013)

The huge local government and benefit cuts scheduled for April 2013 will deliver another massive kick in the balls to the economy. We are in a slump with no recovery on the horizon.


----------



## junglevip (Jan 25, 2013)

This on daily politics today. We're screwed!



unpleasant facts on economy


----------



## Falcon (Jan 26, 2013)

BigTom said:


> E2a it wasn't just the bank bailout that increased the debt, it was also the attendant recession which increased unemployment and benefit spending and decreased tax income.


The piece that is missing from the narrative for me is the failure to distinguish between (or even recognise, most of the time) the primary, secondary and tertiary economies, and to be clear which one we are talking about when we are talking about "deficit".

The primary economy is the natural world, and the one which produces 75% of all the goods and services we depend on for survival. The secondary economy, which depends on the primary, is the resources extracted from the primary, and the labour and the capital equipment to process them, and generates only 25% of all the goods and services we depend on for survival (despite occupying 100% of the attention of those who love labour and capital theories). The tertiary economy is the system of social processes that emerge from the primary and secondary, the most visible of which is "money".

Our failure to be clear about this gets us into all sorts of intellectual pickles, like imagining that the only domains of interest are the least important tertiary and secondary economies, and that by increasing "debt" in the tertiary economy (i.e. the quantity of a number of abstract tokens) and building "infrastructure" in the secondary economy we can affect a growing deficit in the primary economy.

It doesn't work like that, unfortunately.

The deficit - the liabilities in excess of income in the goods and services we depend on for survival - that is mounting is in the *primary* economy. The liabilities that are increasing are for services like food, water, shelter, warmth, light and sanitation. The income that is falling is the mechanism by which we have recently provided those services - stored energy from earlier epochs. That is having an impact on the operations in the secondary and tertiary economies, but the operation in the tertiary and secondary economies can't address that. How can they - they are the *product* of the primary economy. Terms like "Keynsian economics" are from an era when there was some sort of correspondence between the primary, secondary, and tertiary economies, maintained by a temporarily infinite-acting energy supply, in which the illusion that the tertiary economy controlled the primary economy could be sustained.

All that's happening here is that the primary economy is asserting itself. That's leaving a lot of confused folks who speculate pointlessly about what Mr Marx, Mr Keynes etc. might have to say about it. We're now like the stone age Cargo Cult followers of the Pacific islands who emerged after the second world war after the US Airforce left their islands, who built air traffic control towers out palm trees and radio headsets out of coconuts to summon the sky gods and their chocolate, because they didn't really understand what the US Airforce was, and the nature of the operations by which they had received chocolate.

We need a new language to describe these things.


----------



## free spirit (Jan 26, 2013)

Balbi said:


> -0.3%
> 
> Tory on my twitter grasps desperately...


he can't even get that right.

without the olympics there wouldn't be any chance of a triple dip as we'd have still been in the dip of the double dip after an entire year of recession - which is the truth of the matter for the vast majority of the country that had no benefit from the olympics.

tbh though we're not in a triple dip, we're in a sodding depression that's lasting longer than in the 1930's due to this government's extreme levels of economic illiteracy. How is it that the most capitalist of parties has so little understanding of how capitalism actually works?


----------



## ymu (Jan 26, 2013)

It's not economic illiteracy. Some of those who support it are clueless, but no way does Osborne not know what he's doing. No chancellor that genuinely wants to reduce the deficit cuts jobs at HMRC. You don't have to look any further than that to know that this is deliberate. He may not have expected it to be so blatantly fucking obvious before the 2015 election, but there's no way that he doesn't know austerity in a downturn kills the economy.

The only way that austerity can work when interest rates are near zero and unemployment is already high is to depreciate the currency and boost exports. Essentially for the markets to say "blimey, these fuckers are economically incompetent, that currency is worthless". That's a tough thing to achieve when everyone else is trying to devalue to boost exports, which is why it ain't working very well.

The aim is to kill the welfare state, and thus the middle-class, sending wages to the rock bottom, whilst capital flees to Asia which is rapidly developing its middle-class for precisely the same reasons as we are destroying ours. They don't care where the middle-class is any more than they care where the sweatshops are.


----------



## free spirit (Jan 26, 2013)

I'm afraid that's crediting Osbourne with far too much intelligence for me to find believable.

I'm pretty sure that he's actually swallowed the bullshit about a smaller state being the best way to promote economic growth, and is genuinely clueless about Keynesian economics.

I really do think that they view the economy as being like a household of business budget, and they actually are as stupid as they seem - this afterall has been economic authodoxy for the IMF, World bank etc for 20 years, and I strongly suspect that this is precisely what has been getting taught on the PPE courses at oxbridge etc. Not that he even did those course, he was a modern history student, so basically has no formal economics education whatsoever.

Essentially he is about as unqualified as it's possible to get to be in charge of this countries economy, he's a clueless buffoon who through dint of birth, schooling, and membership of the right clubs somehow managed to blag his way into being Chancellor.

ps the cutting jobs at HMRC thing - he doesn't believe in cutting the deficit through increasing tax income does he, he thinks he can do it by cutting government red tape and government spending, so cutting jobs at HMRC is entirely in line with that viewpoint.

IMO we have a clueless, petulant spoilt brat in charge of our economy, which is why we're in the mess we're in now.


----------



## littlebabyjesus (Jan 26, 2013)

I'm with fs on this one. While others behind Osbourne and Cameron may very well know what they're doing, I doubt those two have the first idea.


----------



## Falcon (Jan 26, 2013)

ymu said:


> It's not economic illiteracy. Some of those who support it are clueless, but no way does Osborne not know what he's doing.





free spirit said:


> I'm afraid that's crediting Osbourne with far too much intelligence for me to find believable.


I agree with you both, and neither. I suspect Osborne understands perfectly well that we are heading for sovereign default - that is a simple spreadsheet and well within the capability of the Treasury and Department of Energy. So Keynesian economics are impossible, austerity is a necessary measure. To that extent, he knows what he is doing.

On the other hand, he doesn't understand that the situation demands an entirely different species of economics. To that extent, he doesn't know what he is doing.

I realise that, by an affirmation of the consequent fallacy, you probably think I'm a conservative who favours the smaller state, and that's OK. I'm not - conservatives start from here and get to smaller state. We realise the state will be smaller because of overriding dynamics in the primary economy, and work back from there. The point of difference is that some think there is some discretion about this (i.e. political preference) when there isn't


----------



## Pickman's model (Jan 26, 2013)

I was thinking of something starting with c anyway


----------



## free spirit (Jan 26, 2013)

Falcon said:


> I agree with you both, and neither. I suspect Osborne understands perfectly well that we are heading for sovereign default - that is a simple spreadsheet and well within the capability of the Treasury and Department of Energy. So Keynesian economics are impossible, austerity is a necessary measure. To that extent, he knows what he is doing.
> 
> On the other hand, he doesn't understand that the situation demands an entirely different species of economics. To that extent, he doesn't know what he is doing.
> 
> I realise that, by an affirmation of the consequent fallacy, you probably think I'm a conservative who favours the smaller state, and that's OK. I'm not - conservatives start from here and get to smaller state. We realise the state will be smaller because of overriding dynamics in the primary economy, and work back from there. The point of difference is that some think there is some discretion about this (i.e. political preference) when there isn't


thing is though, that before you discovered your current justification for wanting a small state, you previously also were a small state kinda guy anyway, you just found some new method of justifying your previous position, both of which are wrong anyway.

We're currently miles away from a sovereign default, though current economic policies are significantly increasing the prospect that we might end up there if they somehow did carry on and actually go for broke with them after the next election. North sea oil and gas output reductions undoubtedly have been and will continue to be a serious drag on the UK economy that the establishment only seems to have begun to notice belatedly fairly recently, but with the right economic and energy policies there's no reason at all why we couldn't overcome that economic drag.


----------



## Falcon (Jan 26, 2013)

free spirit said:


> thing is though, that before you discovered your current justification for wanting a small state, you previously also were a small state kinda guy anyway, you just found some knew method of justifying your previous position, both of which are wrong anyway.


The thing is? I want a large state. I choose to live in Norway precisely because it taxes me enormously and provides one. The difference is, they don't fuck it up. I'm not a small state kinda guy. I'm an anti-fucked up big state kind a guy. Big difference. You are as wrong on this as you are on so many of your other claims.


----------



## ymu (Jan 26, 2013)

Keynesian economics are impossible? When we can borrow at zero real interest rates, and likely negative rates if higher inflation is targeted, as seems likely.

Germany has been full on Keynesian, boosting spending. No austerity in France. The US has been Keynesian at Federal level. Italy had austerity imposed. The UK chose it:








And look at when the UK recovery flatlines. Q3 2010. Osborne's strategic spending review and his first chance to implement his policies.

No way does he not know this. But I agree, he is ignorant enough to have been fooled by better minds. Paul Krugman's history of what went wrong is fucking brilliant on this by the way. A really important read if you want to understand what the Austerians think, and why so few seem to get the basics of Keynes' ideas. Also, that the New Keynesians are essentially old monetarists, with Friedmans old disciples having moved to a much farther extreme. A mirror of what happened in US politics happened in economic academia.

Borrowing will not increase interest rates and neither monetary nor fiscal stimulus produce inflation when interest rates are at the zero lower bound. Keynes' model predicts both of these, the Austerian model predicts the opposite. This is why the IMF went back and did their homework. There is no way the basics are not understood by the more intelligent Austerians by now, but their interests have never been aligned with our interests anyway, so they do not care.

Dismantling the welfare state is the aim, so they can pick up the high rate of profit available in developing countries whilst destroying our capital until we provide the best sweatshops known to capitalism and a nice high rate of profit for them selling to higher paid consumers elsewhere. (Well-educated Marxists, please correct my use of language here, I'm still getting my head around these terms).


----------



## ymu (Jan 26, 2013)

Sovereign default will not happen in any country with its own currency (unless they are run by people who care about the people, in which case they'd do an Iceland and bail out the debtors whilst imprisoning the bankers too).

That's why interest rates are low. It's a prediction of a dismal economic performance by the markets. Things won't be booming any time soon is what they're saying.

PIIGS are in trouble because they can't print their own currency and Germany will not countenance higher inflation to bail out their debt. Doesn't apply to anywhere else; this is why Argentina broke the dollar peg (and then defaulted). Borrowing in someone else's currency is a Very Bad Idea.


----------



## Falcon (Jan 26, 2013)

ymu said:


> Keynesian economics are impossible? When we can borrow at zero real interest rates, and likely negative rates if higher inflation is targeted, as seems likely.


If you can tell me which bit of this post you disagree with, I'll know how to answer you. You are describing operations in the abstract tertiary economy. Our problems are in the physical primary economy. The primary affects the tertiary, but the tertiary cannot affect the primary once you no longer have an infinite acting energy supply. Borrow what? From whom? What would the collateral be for the debt so created (hint - needs to be something physical)? How would it be repaid (hint - the quantity of all physical things is now diminishing)? etc. etc.


----------



## ferrelhadley (Jan 26, 2013)

ymu said:


> The aim is to kill the welfare state, and thus the middle-class,


Tory policy in the 80s was all about expanding the group of people who considered themselves middle class. They actually have to win elections other than the last one. Conspiracy theories that they are trying to 'kill the middle class' don't stand up to any kind of electoral scrutiny.


----------



## ymu (Jan 26, 2013)

Falcon said:


> If you can tell me which bit of this post you disagree with, I'll know how to answer you. You are describing operations in the abstract tertiary economy. Our problems are in the physical primary economy. The primary affects the tertiary, but the tertiary cannot affect the primary once you no longer have an infinite acting energy supply. Borrow what? From whom? What would the collateral be for the debt so created (hint - needs to be something physical)? How would it be repaid (hint - the quantity of all physical things is now diminishing)? etc. etc.


I'm not talking about long-term solutions. Capitalism has none. I am talking about what they are trying to achieve with these bonkers economic policies.



ferrelhadley said:


> Tory policy in the 80s was all about expanding the group of people who considered themselves middle class. They actually have to win elections other than the last one. Conspiracy theories that they are trying to 'kill the middle class' don't stand up to any kind of electoral scrutiny.


Things have moved a long way beyond Friedman. Obama is to the right of Reagan, economically. The spoils are to be had in Asia, South America and Africa. Not here, not  any more.


----------



## free spirit (Jan 26, 2013)

Falcon said:


> The thing is? I want a large state. I choose to live in Norway precisely because it taxes me enormously and provides one. The difference is, they don't fuck it up. I'm not a small state kinda guy. I'm an anti-fucked up big state kind a guy. Big difference. You are as wrong on this as you are on so many of your other claims.


I may be mistaken on this, but I thought you'd stated somewhere on here that you used to be pretty economically right wing, neoliberalist prior to sometime in the mid 2000s when you started to change tack based largely on the peak oil situation, climate change concerns etc.

If I've got that wrong then I apologise for that.


----------



## ymu (Jan 26, 2013)

This summary from Krugman's history of schlock economics is very pertinent here:



> And Friedman certainly never bought into the idea that mass unemployment represents a voluntary reduction in work effort or the idea that recessions are actually good for the economy. Yet the current generation of freshwater economists has been making both arguments. Thus Chicago’s Casey Mulligan suggests that unemployment is so high because many workers are choosing not to take jobs: “Employees face financial incentives that encourage them not to work . . . decreased employment is explained more by reductions in the supply of labor (the willingness of people to work) and less by the demand for labor (the number of workers that employers need to hire).” Mulligan has suggested, in particular, that workers are choosing to remain unemployed because that improves their odds of receiving mortgage relief. And Cochrane declares that high unemployment is actually good: “We should have a recession. People who spend their lives pounding nails in Nevada need something else to do.”
> 
> Personally, I think this is crazy. Why should it take mass unemployment across the whole nation to get carpenters to move out of Nevada? Can anyone seriously claim that we’ve lost 6.7 million jobs because fewer Americans want to work? But it was inevitable that freshwater economists would find themselves trapped in this cul-de-sac: if you start from the assumption that people are perfectly rational and markets are perfectly efficient, you have to conclude that unemployment is voluntary and recessions are desirable.
> 
> http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?pagewanted=all&_r=0


_Mass unemployment represents a voluntary reduction in work effort and recessions are actually good for the economy._

Sound familiar?


----------



## Falcon (Jan 26, 2013)

free spirit said:


> I may be mistaken on this, but I thought you'd stated somewhere on here that you used to be pretty economically right wing, neoliberalist prior to sometime in the mid 2000s when you started to change tack based largely on the peak oil situation, climate change concerns etc.


Indeed. But your statement that I want a small state has been wrong for a quarter of my life.


----------



## free spirit (Jan 26, 2013)

Falcon said:


> The primary economy is the natural world, and the one which produces 75% of all the goods and services we depend on for survival. The secondary economy, which depends on the primary, is the resources extracted from the primary, and the labour and the capital equipment to process them, and generates only 25% of all the goods and services we depend on for survival (despite occupying 100% of the attention of those who love labour and capital theories). The tertiary economy is the system of social processes that emerge from the primary and secondary, the most visible of which is "money".


 
What are those figures related to?


They're certainly nothing like the standard way of working those figures out for the UK, as shown below.


----------



## ferrelhadley (Jan 26, 2013)

ymu said:


> Things have moved a long way beyond Friedman. Obama is to the right of Reagan, economically. The spoils are to be had in Asia, South America and Africa. Not here, not any more.


The conservative party is a UK political party. It needs to get elected in the UK.


----------



## free spirit (Jan 26, 2013)

Falcon said:


> Indeed. But your statement that I want a small state has been wrong for a quarter of my life.


right sorry, I'll rephrase.

Before you came to the conclusion that the answer to the current situation has to be a smaller state even though you don't want it to be, you had previously spent much of your life being of the opinion that the answer to the previous situation was a smaller state and you were actually quite in favour of that at that time.

What I'm getting at here, is that IMO you're more likely to be predisposed to accept the arguments in favour of a small state being necessary now if you'd already previously spent a long period of your life being in favor of a smaller state, so it's not that much of a surprise that you might leap to that conclusion now.


----------



## ymu (Jan 26, 2013)

ferrelhadley said:


> The conservative party is a UK political party. It needs to get elected in the UK.


And which other party of government is offering anything different, bar a slower sell-off?


----------



## Fez909 (Jan 26, 2013)

Falcon

You talk about the near-limitless energy supply which meant we could have things like Keynesian economics etc in the past, but you fail to realise that it wasn't limitless, but that we do have actual limitless energy sources available to us should we wish to harness them.

With nuclear, solar, wind, tidal, we have in all practical respects, limitless energy available to us.  This is untapped primary industry. It will be exploited eventually.

Do you think we just won't do it in time?


----------



## free spirit (Jan 26, 2013)

would you like a tin opener for that can of worms?


----------



## Fez909 (Jan 26, 2013)

free spirit said:


> would you like a tin opener for that can of worms?


 
If you're talking about how renewables could never make up the energy we get from oil due to its energy density and EROI and how many million miles of the world we'd have to cover in turbines to get anywhere near it, blah blah blah, then yeah, fair enough.

But I've included nuclear there. That includes nuclear technologies we're not yet using, like thorium, which looks and sounds pretty exciting.

However, whether we do these things or not, does not matter, because Falcon's point is not that we aren't using the resources available to us (is it?) but that the resources are not there to be used, so we're irrevocably fucked.


----------



## ymu (Jan 26, 2013)

Nah. free spirit agrees with you, as do I. It's Falcon who will hijack the thread.


----------



## BigTom (Jan 26, 2013)

yeah, tbf there's the peak oil thread where this is and has been discussed, and if you want to talk about it, probably best to head over there.. I would say read the thread first but it's been going for nearly 10 years, 100 odd pages... 
http://www.urban75.net/forums/threads/peak-oil-was-petroleum-geologist-explains-us-war-policy.1506/


----------



## Fez909 (Jan 26, 2013)

BigTom said:


> yeah, tbf there's the peak oil thread where this is and has been discussed, and if you want to talk about it, probably best to head over there.. I would say read the thread first but it's been going for nearly 10 years, 100 odd pages...
> http://www.urban75.net/forums/threads/peak-oil-was-petroleum-geologist-explains-us-war-policy.1506/


 
I occasionally read bits of that thread, which is how I know of Falcon's central tenet, but there's no way I could go through it all and find his view on this particular point. I just meant to address it in the terms he uses on this thread, whereby primary industry is declining due to natural shortages, when there's only a shortage in one part of what could be used for energy.

But yeah, this isn't the thread for it.

edit: I actually thought you meant the Financial Implosion thread, but my comment would have been the same anyway, so...


----------



## free spirit (Jan 26, 2013)

tbh, I'm thinking I'd prefer an entirely different thread to discuss the potential of renewable and other energy technologies on rather than that thread that's dominated by pessimistic peak oil obsessives.


----------



## BigTom (Jan 26, 2013)

Fez909 said:


> I occasionally read bits of that thread, which is how I know of Falcon's central tenet, but there's no way I could go through it all and find his view on this particular point. I just meant to address it in the terms he uses on this thread, whereby primary industry is declining due to natural shortages, when there's only a shortage in one part of what could be used for energy.
> 
> But yeah, this isn't the thread for it.


 
I actually don't think he was meaning the primary/secondary/tertiary industries when he made that post (though I haven't gone back and re-read it).
He said we needed to find a new language so I think to be fair to him you need to give him some leeway on terminology, though probably the terminology he wants already exists.

So by primary I think he means natural resources, secondary he means the physical economy (including primary production, secondary manufacturing and tertiary services) and by tertiary he means the representation of the physical economy in money.

I'm not sure if energy would come under primary or secondary but I suspect it would be secondary. I just ignored the % tbh, I didn't have the time or feeling to get into a discussion about where his figures had come from.


----------



## Fez909 (Jan 26, 2013)

BigTom said:


> I actually don't think he was meaning the primary/secondary/tertiary industries when he made that post (though I haven't gone back and re-read it).
> He said we needed to find a new language so I think to be fair to him you need to give him some leeway on terminology, though probably the terminology he wants already exists.
> 
> So by primary I think he means natural resources, secondary he means the physical economy (including primary production, secondary manufacturing and tertiary services) and by tertiary he means the representation of the physical economy in money.
> ...


 
I agree with his terms, roughly, but I think I'd put energy in the first category.  Unless we're talking about only those things for pure survival in the first category (and to be fair, he does hint at that - he lists the things from the very bottom of Maslow's hierarchy), then abundant energy is needed to have anything like a functional society, never mind producing the overwhelming majority of its goods.


----------



## free spirit (Jan 26, 2013)

BigTom said:


> I actually don't think he was meaning the primary/secondary/tertiary industries when he made that post (though I haven't gone back and re-read it).
> He said we needed to find a new language so I think to be fair to him you need to give him some leeway on terminology, though probably the terminology he wants already exists.
> 
> So by primary I think he means natural resources, secondary he means the physical economy (including primary production, secondary manufacturing and tertiary services) and by tertiary he means the representation of the physical economy in money.
> ...


so you reckon he's decided to use terms that are already in use with well defined meanings to mean something entirely different?

sounds about right.


----------



## Falcon (Jan 26, 2013)

free spirit said:


> What I'm getting at here, is that IMO you're more likely to be predisposed to accept the arguments in favour of a small state being necessary now if you'd already previously spent a long period of your life being in favor of a smaller state, so it's not that much of a surprise that you might leap to that conclusion now.


Well, I think I'm intelligent enough to distinguish between the Conservative government's argument for the smaller state, and mine. I don't feel predisposed. And I've hardly "leapt" to the conclusion - I've thought about it for 10 years, gained two separate masters in the subject to find out more, moved countries, and entirely changed the sustainability of my life.

I also disagree with the term "small state". A small state does not imply the absence of state - there are other structures that can can occupy the space vacated by "the state".


----------



## Falcon (Jan 26, 2013)

ymu said:


> Nah. free spirit agrees with you, as do I. It's Falcon who will hijack the thread.


I won't hijack the thread. I simply point out that a description of operations in the financial world as prescriptions for remedies in the physical world is meaningless, since the two are no longer related. But that won't stop people describing them here.


----------



## Fez909 (Jan 26, 2013)

Falcon said:


> Well, I think I'm intelligent enough to distinguish between the Conservative government's argument for the smaller state, and mine. I don't feel predisposed. And I've hardly "leapt" to the conclusion - I've thought about it for 10 years, gained two separate masters in the subject to find out more, moved countries, and entirely changed the sustainability of my life.
> 
> I also disagree with the term "small state". A small state does not imply the absence of state - community fills the void.


 
Here you're using state to mean something entirely different to how most people would use it.

State is not a substitute for community, nor its opposite.


----------



## BigTom (Jan 26, 2013)

Fez909 said:


> I agree with his terms, roughly, but I think I'd put energy in the first category. Unless we're talking about only those things for pure survival in the first category (and to be fair, he does hint at that - he lists the things from the very bottom of Maslow's hierarchy), then abundant energy is needed to have anything like a functional society, never mind producing the overwhelming majority of its goods.


 
Thing is that there is energy out there in nature (whether we mean coal or wind or whatever) but until we process it in some way, it isn't useful to us.
I think that once energy is turned into electricity it is then in the physical economy part of it, rather than being a natural resource. I'm only guessing though - and partly because I know Falcon has the view that energy is everything and the financial side of our economy at least is just a proxy for that, so I'd be inclined to think he'd put energy into the natural resource / primary categorisation but that is simply because he has given that such a heavy weighting in terms of importance.


----------



## ferrelhadley (Jan 26, 2013)

Demographics and the fact that so many are now headed for retirement (i.e. saving rather than spending), so much of what we consume in now built elsewhere so Keynian spending is of only limited value, that the worlds liquid energy supply is not growing so any growth globally will mean the more people chasing the same energy (i.e. inflation), that the UKs domestic oil and gas is now in such strong decline and we are an oil and gas importer when energy prices are going through the roof, that world wide food inflation is now a real issue, how prices now exclude a generation from ownership and they now have less disposable income due to high rents, tax free off shoring of profits and on and on. The problems of the UK economy are many, deep and structural. They are shared by much\ most of the developed world (other countries have had significant property corrections). The whole global model looks broken to me. 

We may actually avoid the triple dip this quarter. But the so called 'great moderation' is well and truly over. I dont think anyone seems to really be able to take in so many variables, and I doubt many see much more than their pre-existing opinions reflected back at them from the global economy, but we are going to need something much more substantial in terms of change than we have heard from anyone so far.


----------



## Falcon (Jan 26, 2013)

Fez909 said:


> Here you're using state to mean something entirely different to how most people would use it.
> 
> State is not a substitute for community, nor its opposite.


Indeed. But then, doing the same thing twice and expecting a different outcome is one of the clinical tests of madness. So, since the state model has failed, that's a good thing, right?


----------



## littlebabyjesus (Jan 26, 2013)

Falcon said:


> I also disagree with the term "small state". A small state does not imply the absence of state - there are other structures that can can occupy the space vacated by "the state".


A 'Big Society', as it were?


----------



## Fez909 (Jan 26, 2013)

Falcon said:


> Indeed. But then, doing the same thing twice and expecting a different outcome is one of the clinical tests of madness. So, since the state model has failed, that's a good thing, right?


 
That's actually an Einstein quip, and there's no medical definition of "madness" that can be tested for, however:

The state model has not failed.  And if it has, then why are you advocating a smaller state, and not no state?


----------



## Fez909 (Jan 26, 2013)

Fez909 said:


> That's actually an Einstein quip, and there's no medical definition of "madness" that can be tested for, however:
> 
> The state model has not failed. And if it has, then why are you advocating a smaller state, and not no state?


 
edit: apologies, it seems you are suggesting no state.

edit: this wasn't an edit


----------



## Falcon (Jan 26, 2013)

littlebabyjesus said:


> A 'Big Society', as it were?


Not in the sense you would like me to mean.  But I see what you did there.





Fez909 said:


> The state model has not failed. And if it has, then why are you advocating a smaller state, and not no state?


Yes, it really has. The fact that is is being sustained by injections of synthetic debt should not be mistaken for signs of neural function. It's on life support. And I'm advocating nothing - I'm stating what we are getting.


----------



## ymu (Jan 26, 2013)

Agreed. But we can't replace the current infrastructure with sustainable infrastructure without supporting our universities to develop the technology and train people to apply it and manufacturers to maintain the skills required to build it. Wot Asia and South America and (China in) Africa are doing and we are dismantling.


----------



## Fez909 (Jan 26, 2013)

I think you're mixing up terms again here.

The economy is being artificially propped up with debt, yes, but that doesn't have any implications for "state" as a model of organising society. Only the current economic system used by the state. And it depends what you mean by failed.

More people were lifting out of poverty last year than in any other year in history. And this is at a time of crisis in the current system?


----------



## Falcon (Jan 26, 2013)

Fez909 said:


> More people were lifting out of poverty last year than in any other year in history. And this is at a time of crisis in the current system?


With what? When you inspect where that credit came from to reduce their poverty, you'll observe it was by extending the poverty of their children and grand children - already the most impoverished generations in history. It was a forward transfer of future debt, not a generation of current wealth. That is what is maintaining the supposed viability of the "state". And that is why the state has failed.


----------



## littlebabyjesus (Jan 26, 2013)

It's also important not to confuse a problem with the system of processing the symbol - money and debt - with a problem with that which the symbol represents - the real value produced by people doing stuff. It can be tricky to unpick the two sometimes, but I think Falcon makes the error quite often of mistaking the symbol for that which the symbol represents. Debt is simply an arrangement - a system of promises. It's an obvious point, but one that can be easily forgotten, that the sum total of all the debt in the world is precisely 0. Debt is a political problem, not a geological one.


----------



## Falcon (Jan 26, 2013)

littlebabyjesus said:


> It's also important not to confuse a problem with the system of processing the symbol - money and debt - with a problem with that which the symbol represents - the real value produced by people doing stuff. It can be tricky to unpick the two sometimes, but I think Falcon makes the error quite often of mistaking the symbol for that which the symbol represents. Debt is simply an arrangement - a system of promises. It's an obvious point, but one that can be easily forgotten that the sum total of all the debt in the world is precisely 0. Debt is a political problem, not a geological one.


This is simply nonsense. It omits intergenerational debt. You pay your parents pension. People not yet born pay yours. The wealth (in the sense of the physical assets, requiring energy and materials to produce) necessary to finance your debt has not yet been created, and now never will. The sum of all debt in the world is very, very much greater than zero.


----------



## littlebabyjesus (Jan 26, 2013)

It is impossible to borrow from the future. What can happen is arrangements can be made that will be difficult to keep as made. Things need renegotiating. Yes, of course, those in work pay for the pensions of those not in work. And if I ever retire, those in work then will be paying my pension. That does not mean that it's possible to borrow from the future. It is not.

It is possible to use up resources in unsustainable ways. But that's a totally different question from monetary debt. A larger and more serious question, because that is indeed a geological question. But it should not be confused with the various monetary debt crises around the world, which are political crises that potentially have political solutions.


----------



## littlebabyjesus (Jan 26, 2013)

A quick example: something like 30% of the UK's national debt is owed to UK pension funds. The state will be paying this debt back over the coming decades, and paying that debt back will help pay for people's pensions. The state pays the debt by taxing people in work.

Here we have the situation you describe - a sustainable situation in which the workers of today pay for the pensioners of today through their taxes. Here we have national debt functioning to serve a social need.

I think you've got the idea of debt all wrong, Falcon.


----------



## Falcon (Jan 26, 2013)

littlebabyjesus said:


> It is impossible to borrow from the future.


Again, simply wrong. This isn't a subject that rewards guessing.

An equity release pays you money now, backed by an assumed future growth in your house value. You repay the debt in later years from the growth in house value. The money does not exist at the moment of payout to you - the house has not yet increased in price. You have borrowed from the future.

A pension pays you money now, backed by an assumed future growth in the economy. The debt servicing your pension is repaid in later years from the growth in the economy. The money does not exist at the moment of payout to you - the economy has not yet grown. You have borrowed from the future.

If the house has not increased in value, or the economy not grown, the money created years previously does not exist and has diluted the value of the money which did exist at the time. Eventually, the integrity of the money system fails.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> A quick example: something like 30% of the UK's national debt is owed to UK pension funds. The state will be paying this debt back over the coming decades, and paying that debt back will help pay for people's pensions. The state pays the debt by taxing people in work.
> 
> Here we have the situation you describe - a sustainable situation in which the workers of today pay for the pensioners of today through their taxes. Here we have national debt functioning to serve a social need.
> 
> I think you've got the idea of debt all wrong, Falcon.


Umm. If the UK economy grows at 2% per annum for the next 30 years, the deficit in the UK pension system - the difference between liabilities and the means to service those liabilities - is £2 trillion.

If the UK economy doesn't grow in the next 30 years, the deficit is £4 trillion.

If it shrinks, the deficit is some very large number I've not estimated.

There is not enough tax to service such a debt. This is at a time when the proportion of untaxed pensioners is increasing, and taxable workers is falling, caused by the post war baby boom and slump. The UK pension system is functionally insolvent.

I think I have a pretty good handle on the idea of debt. But that is Distinctions in advanced degrees on the subject for you.


----------



## littlebabyjesus (Jan 27, 2013)

Falcon said:


> A pension pays you money now, backed by an assumed future growth in the economy.


 
Nope. A pension pays you money now from repayment of investments made by your pension plan as you were paying it. Your pension is paid for  by the real work being done by real people now. Real things - the things you use the money to buy - exist now. You can't travel into the future, get them made for you, then travel back with them.

The crises happen, as we've seen, when the anticipated growth that unwise loans were predicated on doesn't materialise.  In such a situation, not all the promises can be met. But systems of unwise promises do not equal borrowing from the future.


----------



## littlebabyjesus (Jan 27, 2013)

The old pension liability chestnut. Explain to me what exactly you mean by that, please. This is one of the most dishonest ploys used by debt scaremongers out there. It is an ongoing liability. Public-sector pensions are 'unfunded' because they are paid for from ongoing taxes. Do you understand how that works? You don't appear to.

Just have a think about what you're saying here. You are suggesting that an economy can grow continually and yet its ability to provide everyone with a decent living will continually decrease. And this isn't a politically solvable problem? In 30 years time, the economy can be twice the size it is now - twice as many resources per person as there are now - and it won't be able to give everyone a living, and this isn't a politically solvable problem? Do you not see how fundamentally idiotic that position is?

I can't explain the pension liability fallacy as well as I would like to be able to explain it. I might try to dig out a better explanation.


----------



## littlebabyjesus (Jan 27, 2013)

Here we go, courtesy of love detective:



> the annual payments that the '4 trillion' represents, amount to something between roughly 1.2% to 1.8% of annual GDP (for at least the next 50 years or so)​​
> 
> 
> ​and the future income streams that will pay that 1.2% to 1.8% of GDP cost are tax receipts of the state​​this is why, in answer to A dashing blade's last post, the cash flows in relation to the 'unfunded' public pension schemes (public sector and state pensions) are equal & opposite. As whatever is required to pay out is paid out from tax receipts (yes i know there's a deficit at the moment which requires borrowing to fund it, but this is not particularly material over the period talked about). It's not like a private sector defined benefit scheme where you have to rely on contributions and investment returns to fund payouts which could then result in a potential deficit/gap between liability and assets and inflows & outflows of the ringfenced scheme. In the case of the public sector 'unfunded' pension schemes, there is no gap, what is paid out is funded from tax receipts - so the future income stream that meets the pension liabilities is exactly the same as the future payments for those liabilities​​Which brings us back to the initial point - if a change in the discount rate is applied to the future payments which increases the liability by 1.8 trillion - then that discount rate when applied to the future tax receipts that will pay those pensions, will also lead to an increase of 1.8 trillion in the value of the capitalised asset which represents those future tax receipts​


 
Try to get your head around that last paragraph. It's rather important.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> Nope. A pension pays you money now from repayment of investments made by your pension plan as you were paying it. Your pension is paid for by the real work being done by real people now. Real things - the things you use the money to buy - exist now. You can't travel into the future, get them made for you, then travel back with them.


I'm so sorry, but this is not true, and easily verifiably so. There isn't a lot of point in pursuing this. You need to do more research.


----------



## littlebabyjesus (Jan 27, 2013)

All you're saying there is that pension funds are ongoing financial businesses. Instead of patronising me, try engaging. I think you're really very badly wrong about a lot of this stuff. And that isn't because I'm ignorant.

Oh, and the pension liability deficit thing. You're just wrong about that. Simply wrong. Misunderstanding the situation completely.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> The old pension liability chestnut. Explain to me what exactly you mean by that, please. This is one of the most dishonest ploys used by debt scaremongers out there. It is an ongoing liability. Public-sector pensions are 'unfunded' because they are paid for from ongoing taxes. Do you understand how that works? You don't appear to.


Yes. And as the ratio of pensioners to workers rises, the ability to sustain that relationship fails. Which is precisely what is happening as the post war baby boomers retire, and the falling number of their children pay them and their ballooning health care costs.


littlebabyjesus said:


> Just have a think about what you're saying here.


Yes please.


littlebabyjesus said:


> You are suggesting that an economy can grow continually


No, you are. I am stating that the economy must now contract, because the energy sustaining it must now contract.


littlebabyjesus said:


> and yet its ability to provide everyone with a decent living will continually decrease.


Yes. If the economy is contracting, then the tax base must contract - the basis you claim pays pensions. Yet pension payments must rise because of baby boom demographics.


littlebabyjesus said:


> And this isn't a politically solvable problem? In 30 years time, the economy can be twice the size it is now - twice as many resources per person as there are now - and it won't be able to give everyone a living, and


Discovery of oil peaked in 1968 and declined at 15% per annum. Installed production capacity is halving every 7 years. There isn't the capital or resource in the world to maintain supply, much less double it. You can't double people's resources using sunbeams and summer breezes. Oh, and about 5 billion of the 9 billion who were supposed to be around in 30 years needed to eat hydrocarbon - it's how we quadruple carbohydrate and protein yield through fertiliser, irrigation and pesticides.


littlebabyjesus said:


> this isn't a politically solvable problem? Do you not see how fundamentally idiotic that position is?


No. Not really.


----------



## littlebabyjesus (Jan 27, 2013)

Ok. Take a flat economy. Take that 4 trillion figure to be right. So perhaps 4% of tax receipts will be spent funding state pensions. This is eminently sustainable.

Sorry, but by bringing up state pension liabilities as some kind of massive problem, you're exposing an ignorance about how things work.

And yes, if the economy continually contracts, we have big problems. Capitalism is fucked if that happens. All kinds of other ways of doing things will need to happen. That's a big conversation for all of us to have.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> Ok. Take a flat economy. Take that 4 trillion figure to be right. So perhaps 4% of tax receipts will be spent funding state pensions.


You beg the question.

What tax receipts, in an economy crippled by energy prices driven by fuel contraction?

You need to have a think about the implications of this:





The dotted line heading off to 60 is what oil production was needed (and expected) to be to maintain pension fund growth assumptions.

The thick red line is what we'll get from the production we've discovered.

The dashed stuff doesn't exist.

This is one of those phenomena that starts speeding up shortly.


----------



## free spirit (Jan 27, 2013)

I should have had a bet on how long it would take.

You really are absolutely certain that you've got this entire situation sussed, and everyone else is just too blind to see aren't you Falcon.


----------



## Fez909 (Jan 27, 2013)

Falcon you didn't answer my question about alternative energy sources.  Why can't thorium plug the energy gap left by oil?


----------



## free spirit (Jan 27, 2013)

Fez909 said:


> Falcon you didn't answer my question about alternative energy sources. Why can't thorium plug the energy gap left by oil?


give him an easy one why don't you?

2 reasons for that particularly question...

1 - Thorium won't be developed in anything like the timeframe needed to actually replace oil before we're well on the downward curve of oil production - 2025-2030 is about the earliest for any thing bigger than a pilot plant to be built, and commercial scale roll is very unlikely to start before 2030, and even if it does ramp up rapidly, it's going to be 2050 before it's anything like significant.

2 - For oil replacement, it's never going to be viable directly for anything other than maybe shipping, which would mean it would have to be powering electric vehicles, so that's another factor that would have to grow from virtually nothing to being a sizable portion of the vehicle fleet, which is unlikely to occur to any great extent before oil starts declining IMO.

ps I have actually explored these timescales with a retired member of the research team from the last working thorium test plant - they assume that the current chinese funded effort is actually successful by 2020 or so, and ramps up pretty much immediately to building a commercial scale pilot etc.


----------



## Fez909 (Jan 27, 2013)

free spirit said:


> give him an easy one why don't you?
> 
> 2 reasons for that particularly question...
> 
> ...


 
I'm not saying this is ideal (and it is so far unproven), but it is one of the ways we can use Thorium energy to power cars and other vehicles, as well as reach areas which are off grid. Who knows what will exist by the time large scale Thorium deployment happens.

The time frame thing is a political problem, not a fundamental problem.


----------



## free spirit (Jan 27, 2013)

Fez909 said:


> I'm not saying this is ideal (and it is so far unproven), but it is one of the ways we can use Thorium energy to power cars and other vehicles, as well as reach areas which are off grid. Who knows what will exist by the time large scale Thorium deployment happens.


I don't really follow. Are you imagining that thorium could be used to power cars directly? I suppose never say never, but let's just say that it's not going to be happening before the oil starts declining.

Thorium is really a potential energy replacement for coal and gas, and conventional nuclear in the electricity generation sector rather than a likely replacement for oil - though maybe displaced gas could then power vehicles.



Fez909 said:


> The time frame thing is a political problem, not a fundamental problem.


the timescale given was best case scenario, if politics continues to intervene to slow it down then it will take longer to deploy. I suppose it's vaguely possible for countries like china to ramp it up faster than that if they chose to as they'll actually determine the policy, then fund the building of the factories required to build it, and training of engineers needed to build and operate the plants in one go - ie far far more cost effective and time effective methods of deploying a new energy technology, and then they'll export it to the rest of us.

so yes they probably will achieve this faster than we possibly could with our ridiculous privatised energy system.

Long term thorium MSR are IMO the main cause for optimism that we could have the ability to power something akin to current generation society / economy, combined with all other renewables and low carbon option, plus a small level of fossil fuels, but they're not really going to be an oil replacement.


----------



## Fez909 (Jan 27, 2013)

free spirit said:


> I don't really follow. Are you imagining that thorium could be used to power cars directly? I suppose never say never, but let's just say that it's not going to be happening before the oil starts declining.
> 
> Thorium is really a potential energy replacement for coal and gas, and conventional nuclear in the electricity generation sector rather than a likely replacement for oil - though maybe displaced gas could then power vehicles.
> 
> ...


 
Not power cars directly, but if the claims about thorium being so cheap and effectively limitless (yeah, I know we've heard this before with the original nuclear claims ) then we can afford to use it in ways which aren't necessarily efficient, but are immensely useful. Like generating petrol to use in cars or whatever else we currently run on petrol.

If that was to happen, then we'd make our oil last longer (assuming there's any left by then) so we can use it for fertiliser, instead of burning it.

Obviously all this is massively optimistic, and dependent on a lot of technologies being invented, perfected and put to wide scale use.  But that's what we do init!  And what is the alternative?


----------



## free spirit (Jan 27, 2013)

Fez909 said:


> Not power cars directly, but if the claims about thorium being so cheap and effectively limitless (yeah, I know we've heard this before with the original nuclear claims ) then we can afford to use it in ways which aren't necessarily efficient, but are immensely useful. Like generating petrol to use in cars or whatever else we currently run on petrol.
> 
> If that was to happen, then we'd make our oil last longer (assuming there's any left by then) so we can use it for fertiliser, instead of burning it.
> 
> Obviously all this is massively optimistic, and dependent on a lot of technologies being invented, perfected and put to wide scale use. But that's what we do init! And what is the alternative?


Thorium is relatively abundant, not limitless, and a back of the envelope calculation I did a while back for petrol manufacture came out at about 2% overall conversion efficiency IIRC. It's better for methanol, which you can run cars on, but still not great.

I admire your optimism, but prefer it tainted with a reasonable dash of realism as well.


----------



## BigTom (Jan 27, 2013)

ferrelhadley said:


> Demographics and the fact that so many are now headed for retirement (i.e. saving rather than spending), so much of what we consume in now built elsewhere so Keynian spending is of only limited value, that the worlds liquid energy supply is not growing so any growth globally will mean the more people chasing the same energy (i.e. inflation), that the UKs domestic oil and gas is now in such strong decline and we are an oil and gas importer when energy prices are going through the roof, that world wide food inflation is now a real issue, how prices now exclude a generation from ownership and they now have less disposable income due to high rents, tax free off shoring of profits and on and on. The problems of the UK economy are many, deep and structural. They are shared by much\ most of the developed world (other countries have had significant property corrections). The whole global model looks broken to me.
> 
> We may actually avoid the triple dip this quarter. But the so called 'great moderation' is well and truly over. I dont think anyone seems to really be able to take in so many variables, and I doubt many see much more than their pre-existing opinions reflected back at them from the global economy, but we are going to need something much more substantial in terms of change than we have heard from anyone so far.



I totally agree with the last paragraph, but i think the first misses something which is that growth simply means more economic activity. Whilst this will necessarily consume energy, it can be directed towards doing things which act to either decrease ongoing energy demands (eg new passiv housing) or increase the energy supply (eg building the severn barrage)

There's a whole load of things we need to do to have any hope of getting past climate change/peak oil and doing those things creates growth.

There's an inherent issue in just calling for growth because we have to change our way of thinking about the economy, but growth in itself doesn't necessarily mean more competition for the energy supply.


----------



## Falcon (Jan 27, 2013)

free spirit said:


> I should have had a bet on how long it would take. You really are absolutely certain that you've got this entire situation sussed, and everyone else is just too blind to see aren't you Falcon.


It's difficult to know what to say. When someone makes a statement which simply isn't consistent with physical reality, what do you do?

I think we can make a distinction between this topic and, say, the choice between Conservatives and Labour. The latter is a matter of judgement and discretion and, were one to keep stating one's arbitrary preference, it would serve no purpose (a nicety to which, of course, many Urban75 denizens are oblivious.)

But restating the physical properties of our energy system seems no different, to me, from restating the fact that 2+2=4, in a conversation where some people are proceeding on the assumption it equals 40.

That matters because the types of solution that are available to us depend on a realistic analysis of what is going on. Physical reality is the best place to begin finding out what is going on, since it is the non-negotiable part.

It is simply the case that the discussion about whether this economy is likely to face a double/triple/quadruple recession, in the face of permanent irreversible contraction of its unsubstitutable energy supply, is like an enquiry into the disposition of the deck chairs on the Titanic.

In this instance, LBJ's fond hope of a steady stream of tax receipts to fund the doubling of a bankrupt pension system, in an economy with a demographically driven rising pension burden and an energy cost driven contracting tax base is eye wateringly disconnected from physical reality.


----------



## Falcon (Jan 27, 2013)

Fez909 said:


> Falcon you didn't answer my question about alternative energy sources. Why can't thorium plug the energy gap left by oil?


I don't mean to ignore your question, but this has been fairly comprehensively thrashed to death on other threads and all we would do is hijack this one. The most critical safety component in any nuclear system is a stable society to ensure things like fulfilment of long term fuel and maintenance contracts, waste processing and storage, education and training, payment of workers, rule of law, etc. Precisely the components that can't be guaranteed in any nuclear technology time scale in a society undergoing permanent and rapid contraction of its primary fuel type.


----------



## Falcon (Jan 27, 2013)

free spirit said:


> What are those figures related to?


It has nothing to do with your econometric decomposition of UK Industry. And your assertion that "primary", "secondary", and "tertiary" can only be used when describing minor decompositions of UK Industry, and is confusing when used anywhere else, betrays a certain lack of mental flexibility, don't you think?

Your data describes what I have labelled the secondary economy - that economy that extracts resources and transforms them with capital and labour into goods and services. It contributes only 25% of all the goods and services we require. Without a primary economy to supply resources - including energy - it cannot exist.

For avoidance of doubt, reading the thread above, energy belongs very firmly in the primary economy. It cannot be manufactured from other resources, and it certainly can't be created from money tokens. It is the resource that allows manufacture to take place, and money tokens to exist. It's also swirling out of our primary economy like the water out of your washing up bowl, taking the secondary and tertiary economies with it, and that's relevant to speculations about various apparitions in the secondary and tertiary economies such as "renewable (i.e. manufactured) energy" and "Keynesian stimulus".

(BigTom/Fez909 - judging from your comments, you might find "Wealth of Nature" an interesting read. It explores the dynamics between the primary, secondary and tertiary economies in a way which, I think, explains much and presents some interesting solutions which are very different to "business as usual" nonsense.)


----------



## BigTom (Jan 27, 2013)

Falcon said:


> It has nothing to do with your econometric decomposition of UK Industry. And your assertion that "primary", "secondary", and "tertiary" can only be used when describing minor decompositions of UK Industry, and is confusing when used anywhere else, betrays a certain lack of mental flexibility, don't you think?


 
I do wonder if terminology already exists for these things - I called them them "natural resources", "the physical economy" and "the financial economy" to clarify what I thought you meant, but I just made these up. It seems like a fairly obvious way to divide the economic world so I'm thinking it must have been done in the past, and labels already exist for them. I know marx made distinctions between productive capital and finance capital which I think is along the lines of the secondary/tertiary divide you are looking for (though obviously focused on the capital side of things rather than a wider view).



> Your data describes what I have labelled the secondary economy - that economy that extracts resources and transforms them with capital and labour into goods and services. It contributes only 25% of all the goods and services we require. Without a primary economy to supply resources - including energy - it cannot exist.
> 
> For avoidance of doubt, reading the thread above, energy belongs very firmly in the primary economy. It cannot be manufactured from other resources, and it certainly can't be created from money tokens. It is the resource that allows manufacture to take place, and money tokens to exist. It's also swirling out of our primary economy like the water out of your washing up bowl, taking the secondary and tertiary economies with it, and that's relevant to speculations about various apparitions in the secondary and tertiary economies such as "renewable (i.e. manufactured) energy" and "Keynesian stimulus".
> 
> (BigTom/Fez909 - judging from your comments, you might find "Wealth of Nature" an interesting read. It explores the dynamics between the primary, secondary and tertiary economies in a way which, I think, explains much and presents some interesting solutions which are very different to "business as usual" nonsense.)


 
Yeah, I thought that you'd put energy in the primary sector, wasn't certain though so thanks for clarifying & explaining your reasoning.

I'll have a look to see if I can find a copy of that book, got a couple of others to read through first though. Does that book label the sectors as primary/secondary/tertiary?


----------



## Falcon (Jan 27, 2013)

BigTom said:


> I do wonder if terminology already exists for these things - I called them them "natural resources", "the physical economy" and "the financial economy" to clarify what I thought you meant, but I just made these up. It seems like a fairly obvious way to divide the economic world so I'm thinking it must have been done in the past, and labels already exist for them. I know marx made distinctions between productive capital and finance capital which I think is along the lines of the secondary/tertiary divide you are looking for (though obviously focused on the capital side of things rather than a wider view).


It was E.F Schumacher who analysed the economy into primary, secondary and tertiary - "Small is Beautiful" is a classic you must read and is almost like a manual for our times. Greer writes very penetrating books that combine economics, ecology and history to provide a viewpoint which I have found transformational. He is also very accessible, in a sometimes quite inaccessible area, so that's a plus. He summarises Schumacher well - if you read his July 2009 blog entries, you'd get the gist - they are spectacularly clear.

The terminology is worth being careful about. The problem with familiar labels like "natural" and "physical" is that we import all the conceptual baggage with them, and find ourselves back where we started. The dynamics are very different, and startling.

And your reference to Marx is significant. He wrote so impenetrably that anyone can construct anything they want from it. Certainly, in his most obvious readings, now totally useless, he treated the primary economy as a limitless store of stuff and a bottomless pit to throw trash into - he was all about the secondary economy and the exploitation of an assumed infinite world for the benefit of the proletariat. There are attempts going on, however, to extract a more useful view, in which he apparently did have more sophisticated things to say about it. So sophisticated, apparently, that they afford a real opportunity to construct a workable program. Ahmed pursues this in A User's Guide to the Crisis of Civilization, which is another excellent guide to what's going on.


----------



## littlebabyjesus (Jan 27, 2013)

Falcon said:


> In this instance, LBJ's fond hope of a steady stream of tax receipts to fund the doubling of a bankrupt pension system, in an economy with a demographically driven rising pension burden and an energy cost driven contracting tax base is eye wateringly disconnected from physical reality.


 
That's a misrepresentation. I was countering the tired old canard of the unfunded pension deficit that you had raised. It is something that the pro-austerity propaganda often trots out.

You muddle up arguments to do with the financial system with arguments to do with the physical system, jumping from one to the other and back again without even realising it. You don't appear to be able to see it when you make mistakes, and you go from your worries about energy and peak oil to conclude that austerity is necessary by taking a series of false steps.

As for your confident futurology, I'm tired of it. I'm not going to comment on it any more. No futurology should ever be as confident as yours is. We don't have the necessary information to have that level of confidence, and the fact that you don't recognise this either is also symptomatic of your bad thinking.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> No futurology should ever be as confident as yours is.We don't have the necessary information to have that level of confidence, and the fact that you don't recognise this either is also symptomatic of your bad thinking.


If you know the volume of air in a submarine, and the number of submariners, you can engage in some quite specific futurology to work out how long they will last while you think up a plan. The fact that you are not familiar with the volumes is not evidence that the volumes are not familiar. You would prefer in that situation to base your plans on assuming the submarine had enough air to allow you to do what ever you thought up - hardly a sound basis for action.

I'm sorry you don't consider the possibility that what looks like bad thinking may be novel information - the foundational habit of a growing mind. But I'm happy not to exchange more pleasantries - it is tiring for me, too.


----------



## free spirit (Jan 27, 2013)

Falcon said:


> It has nothing to do with your econometric decomposition of UK Industry. And your assertion that "primary", "secondary", and "tertiary" can only be used when describing minor decompositions of UK Industry, and is confusing when used anywhere else, betrays a certain lack of mental flexibility, don't you think?
> 
> Your data describes what I have labelled the secondary economy - that economy that extracts resources and transforms them with capital and labour into goods and services. It contributes only 25% of all the goods and services we require. Without a primary economy to supply resources - including energy - it cannot exist.


you what?

Your description of primary, secondary and tertiary economic sectors is the same as the standard description, it's just that your figures are miles out from the commonly accepted figures for the UK.

This is the standard description of the primary sector, which matches pretty much exactly what you're saying.



> The primary sector of the economy extracts or harvests products from the earth. The primary sector includes the production of raw material and basic foods. Activities associated with the primary sector include agriculture (both subsistence and commercial), mining, forestry, farming, grazing, hunting and gathering, fishing, and quarrying. The packaging and processing of the raw material associated with this sector is also considered to be part of this sector.


so I'll ask again, what did your figures relate to, as they do not bear any resemblance at all to the UK economy.

It's a simple enough question is it not?

If the figures related to the world economy, then fair enough, but being as this is a specifically UK thread then you really should mention that fact or it gives a seriously false impression.

eta - about the only potential disagreement on what falls into the primary sector that I can see is around whether electricity generation should be primary or secondary. I can't 100% remember, but I think it's more usually classified in the primary sector still, but some figures may classify it as secondary due to the work needed in turning the raw fuel into electricity.


----------



## free spirit (Jan 27, 2013)

Falcon said:


> If you know the volume of air in a submarine, and the number of submariners, you can engage in some quite specific futurology to work out how long they will last while you think up a plan. The fact that you are not familiar with the volumes is not evidence that the volumes are not familiar. You would prefer in that situation to base your plans on assuming the submarine had enough air to allow you to do what ever you thought up - hardly a sound basis for action.
> 
> I'm sorry you don't consider the possibility that what looks like bad thinking may be novel information - the foundational habit of a growing mind. But I'm happy not to exchange more pleasantries - it is tiring for me, too.


But all your assumptions are based on other assumptions such as the key one, that economic growth is entirely dependent on increasing energy supply.

This in itself should introduce huge levels of uncertainty into your predictions of future doom, as it's merely a hypothesis, not a stone cold fact. My core contention on this is based around the idea that this hypothesis is false, and therefore so are all other predictions that are predicated on that hypothesis.


----------



## free spirit (Jan 27, 2013)

ferrelhadley said:


> They are shared by much\ most of the developed world (other countries have had significant property corrections). The whole global model looks broken to me.


Is the answer to this problem not staring you in the face in this statement?

ie all we actually need to do is to investigate what the differences are between those economies that are failing, and those that are prospering, then move our economic set up towards that of the countries that are prospering and away from our own failed model.

Essentially IMO the model that's failed is the neoliberal capitalist free trade model, particularly so in this country because we've applied the model to a far greater extent than virtually any other country on the planet.

We've happily allowed the majority of our key utilities and infrastructure companies to become foreign owned (several by foreign state owned companies), and we ruthlessly apply competition laws in such a way as to disadvantage our own industries.

The other key factor being the insistence over the last 20 years of all 3 main parties of government on the use of private finance instead of public debt to finance major projects. This is exactly why bombadier couldn't compete with Siemens, because Siemens are AAA rated company, able to raise finance at very similar rates to the UK state, whereas Bombadier would probably have been getting charged 4-5%.

Similarly with all the PFI stuff, it basically means that only the biggest companies can compete for government development contracts, and even then it's far more expensive than if the state had borrowed directly to finance the projects.

Essentially the lie about the efficiency of the markets vs state owned and financed projects needs to be exposed, and the benefits of preferential treatment for UK companies (or at least levelling the playing field by supplying the finance directly) instead of the major infrastructure spending going to foreign firms, and the benefits of keeping UK firms being UK owned... well they're the starting points from which we can rebuild the UK economy from the mess of the last 20 years.


----------



## Falcon (Jan 27, 2013)

free spirit said:


> Your description of primary, secondary and tertiary economic sectors is the same as the standard description, it's just that your figures are miles out from the commonly accepted figures for the UK.


Dear chap. A certain sort of econometric decomposition of the UK economy uses the labels "primary", "secondary" and "tertiary" in its analysis. It is one of many minor analyses, many of which use those labels to refer to their parts, none of which intend any correspondence between coincidentally co-named parts.

Now, in his seminal 1993 analysis of real economics, "Small Is Beautiful", E.F Schumacher identified the three fundamental elements of the whole economic system (i.e. not just the tiny bit you are talking about), referring to them as "primary", "secondary" and tertiary. There is no correspondence between the two, there was never any intention for there to be, and there never will.

Because you don't know the foundational literature, you don't know that, and assume I am talking about the only ones you do know about.

I don't care that you don't know: what I care about is the aggression with which you pursue your ignorance.

Now, you suggested we stopped corresponding: I shall.


----------



## Falcon (Jan 27, 2013)

free spirit said:


> it's merely a hypothesis, not a stone cold fact. My core contention on this is based around the idea that this hypothesis is false, and therefore so are all other predictions that are predicated on that hypothesis.


Umm. Are you suggesting a revision to thermodynamics?

Let me rephrase that: are you aware that your statement is contradicted by thermodynamics?

Let me rephrase that. What do you know about thermodynamics?


----------



## Falcon (Jan 27, 2013)

Actually, no. I apologise. This had been done to death elsewhere, and will hijack this thread.

That's nice.


----------



## littlebabyjesus (Jan 27, 2013)

A certain factory processes glass, melting it down and making bottles. It uses a machine powered by oil. The machine can make 1000 bottles for every gallon of oil.

A new machine is invented that can make 2000 bottles for a gallon of oil. It's a better, more efficient machine.

Using the same amount of energy - a gallon of oil's worth - the output of bottles is doubled by the invention of the new machine.

This simple fact - that whatever the state of technology is today, it can be improved upon tomorrow - is totally absent from your analysis.

An obvious example of this kind of development is the computer. The computational power that can be made using the same amount of energy has increased exponentially over the last 40 years.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> This simple fact - that whatever the state of technology is today, it can be improved upon tomorrow - is totally absent from your analysis.


The simple fact that every improvement in technology you will ever mention has required surplus energy and been implemented under conditions of monotonically increasing energy supply, that your hypothesis that it can continue to do so under conditions of energy deficit and contraction has never been observed, and is fundamentally contradicted by theories rooted in falsifiable physical sciences, are totally absent from yours.

The simple fact is that, when the time comes, we will be forced to allocate dwindling energy resource between competing demands on the basis of highest utility. Feeding ourselves will trump building your machine, and it will never get built. Technology is the product of surplus energy. Surplus energy is not the product of technology.

But what's a minor detail between friends.


----------



## littlebabyjesus (Jan 27, 2013)

Of course you need to use energy to develop improvements that will save energy. But that doesn't contradict the point - that the net result is improved production using the same amount of energy.


----------



## littlebabyjesus (Jan 27, 2013)

Again with the jump straight to apocalyptic conditions. We're nowhere near that kind of position yet. Yes, a foolish mismanagement of resources will produce disaster. But that's a trite truism - if we do all the wrong things, it will turn out badly. Well bugger me.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> The net result is improved production using the same amount of energy.


You won't have the energy to develop the improvement - the improvement will have lower utility than the activity you have had to forgo to obtain it. Your point is contradicted.


----------



## littlebabyjesus (Jan 27, 2013)

Falcon said:


> Technology is the product of surplus energy. Surplus energy is not the product of technology.


 
That line sounds good, but it's not true. Planning for the future and wisely allocating energy now to technology that will save energy in the future can at the end of the process produce a situation in which new technology allows the same things to be done using less energy, even allowing for the initial investment in research.


----------



## littlebabyjesus (Jan 27, 2013)

Falcon said:


> the improvement will have lower utility than the activity you have had to forgo to obtain it.


That doesn't follow. Long-term the greatest utility may easily be investment in the improvement.

This would be a genuinely useful austerity. After WW2, austerity measures were enacted to enable rebuilding to be done. Everyone was to forego certain things today as resources were diverted to activities whose benefits would only be seen in the future. The same kind of thing could potentially be done in a situation of energy contraction - energy rationing to ensure that enough energy is devoted to the important improvements in efficiency that will produce a sustainable future.


----------



## Falcon (Jan 27, 2013)

littlebabyjesus said:


> That line sounds good, but it's not true. Planning for the future and wisely allocating energy now to technology that will save energy in the future can at the end of the process produce a situation in which new technology allows the same things to be done using less energy, even allowing for the initial investment in research.


Look, this is pointless. There are a dozen seminal papers which demonstrate why the perpetual motion machine you envisage doesn't work, from diminishing returns, rising complexity cost, theshold EROI floors, ore thermodynamic horizons, synchronous failure in non-linear systems, and the works. You won't read them and, even if you did, understanding this issue is not what this is about, but rather clinging to the flotsam of techno-fantasy.

So I'll not derail the thread.


----------



## littlebabyjesus (Jan 27, 2013)

Just to be clear about what you're saying here:

The new machine costs 1000 units of energy to develop and build. Over its lifetime, it uses 20000 units of energy less than the machine it replaces to do the same thing. And this is not an example of doing the same thing using less energy?

Real-life example: The new generation of light bulb, around 400 % more efficient than the light bulbs they replaced. These new inventions will never recoup their development costs. We're not in the long run going to be producing light for less energy than would have happened if they hadn't been developed.


----------



## free spirit (Jan 27, 2013)

Falcon said:


> Because you don't know the foundational literature, you don't know that, and assume I am talking about the only ones you do know about.


fuck off with this shite.

I was studying Schumacher in the mid 90s, being taught about his ideas among others that followed on from it in a critical manor rather than a fawning acceptance of every word mind. It's like you're saying about Marx earlier - it's a 40 year old piece of work, and while it's a seminal piece of work and the jist of it still holds, it's not faultless either.


----------



## free spirit (Jan 27, 2013)

Falcon said:


> Umm. Are you suggesting a revision to thermodynamics?
> 
> Let me rephrase that: are you aware that your statement is contradicted by thermodynamics?
> 
> Let me rephrase that. What do you know about thermodynamics?


no, not at all, it's perfectly within the laws of thermodynamics to be able to reduce the amount of energy required to produce the same results via efficiency improvements, reductions in U values etc.*


*up to certain theoretical maximum limits of course, which in most fields we're nowhere near to approaching yet.


----------



## free spirit (Jan 27, 2013)

ps why the fuck are you incapable of answering a very simple question?

What specifically did your figures refer to, as they do not refer to the UK economy?

it's really not a complex or unreasonable question to ask of someone who's just posted up some figures that are completely at odds with official figures measuring the same thing.


----------



## Falcon (Jan 28, 2013)

littlebabyjesus said:


> Just to be clear about what you're saying here:


The energy cost associated with the increasing complexity of the industrial manufacturing system (which you imagine runs on sunbeams and summer breezes) necessary to make your more efficient machine (and extract its raw materials, and provide its power, and feed its maintainers and etc. etc.) rises geometrically, while efficiency gains increase linearly. Geometrically increasing quantities double in fixed intervals and overwhelm linear processes in small doubling intervals. Diminishing returns - the fundamental problem in all economic processes - creates an irreducible efficiency floor. All these questions of yours, and about a dozen really important ones that you will not think of, have been considered very deeply because - guess what - this stuff really matters, and some people with some very smart brains have crawled all over it to figure out if there is a way through it.


free spirit said:


> ps why the fuck are you incapable of answering a very simple question?


My numbers refer to the total system (a.k.a "the world"). Your numbers refer to a tiny part of a tiny part of that system ("the secondary economy, in the UK"). Your habit of considering only tiny bits of systems is the single greatest failure of your argument.

Now be a good chap and take it to another thread. I won't answer any more here.


----------



## littlebabyjesus (Jan 28, 2013)

Falcon said:


> The energy cost associated with the increasing complexity of the industrial manufacturing system (which you imagine runs on sunbeams and summer breezes) necessary to make your more efficient machine (and extract its raw materials, and provide its power, and feed its maintainers and etc. etc.) rises geometrically, while efficiency gains increase linearly. Geometrically increasing quantities double in fixed intervals and overwhelm linear processes in small doubling intervals. Diminishing returns - the fundamental problem in all economic processes - creates an irreducible efficiency floor. All these questions of yours, and about a dozen really important ones that you will not think of, have been considered very deeply because - guess what - this stuff really matters, and some people with some very smart brains have crawled all over it to figure out if there is a way through it.


 
Stop patronising people and answer their questions directly without appeal to authority, please. Because I can only assume from your answers that you've read a load of stuff and misunderstood it. I want you to explain to me in your own words why it is not possible to invest in r&D into energy efficiency in a way that will save energy.

Actually, better than that, please crunch some numbers for me. Show me how the invention of the energy-saving lightbulb means we have used more energy than we would have used had we continued with the incandescent bulb.


----------



## Falcon (Jan 28, 2013)

littlebabyjesus said:


> I want you to explain to me in your own words why it is not possible to invest in r&D into energy efficiency in a way that will save energy.


I believe I just did. That investment necessitates an increase in complexity (of the industrial manufacturing system), the energy cost of which increases faster than the energy reduction it is intended to provide. You tell me what you don't understand about that and I can help you. 

But not in this thread.


----------



## littlebabyjesus (Jan 28, 2013)

So we should have stuck with the incandescent light bulb?

I don't think this is a derail. It's central to questions about how future growth might be achieved and what that growth might look like.


----------



## Falcon (Jan 28, 2013)

littlebabyjesus said:


> So we should have stuck with the incandescent light bulb?


I can't say. I can say that developing the mining, transportation, manufacturing and distribution capability that allowed its replacements was provided by hydrocarbon and that, at that time, hydrocarbon existed in sufficient surplus that you didn't have to decide which bit of the industrial food manufacturing system and other higher utility energy end use services to switch off to develop it. What we should have done, and what we are constrained by physical reality to do now, are different questions.


----------



## littlebabyjesus (Jan 28, 2013)

Yes, but that goes to the heart of what I said above. We're not at that stage yet. There are plenty of non-essential bits of the manufacturing system that can be switched off in order to divert resources towards making things more efficient. That's what I meant by directed austerity above. It's very much not what is being done with the current absurd self-defeating version of austerity.


----------



## ymu (Jan 28, 2013)

Take this to another thread please.


----------



## love detective (Jan 28, 2013)

Falcon said:


> And your reference to Marx is significant. He wrote so impenetrably that anyone can construct anything they want from it. Certainly, in his most obvious readings, now totally useless, *he treated the primary economy as a limitless store of stuff and a bottomless pit to throw trash into* - he was all about the secondary economy *and the exploitation of an assumed infinite world* for the benefit of the proletariat.


 
You are clearly talking about something you know nothing about:-




			
				Marx-CapitalVol1-Ch15 said:
			
		

> Capitalist production, by collecting the population in great centres, and causing an ever-increasing preponderance of town population, on the one hand concentrates the historical motive power of society; on the other hand, it disturbs the circulation of matter between man and the soil, i.e., prevents the return to the soil of its elements consumed by man in the form of food and clothing; it therefore violates the conditions necessary to lasting fertility of the soil.


 



			
				Marx-CapitalVol1-Ch15 said:
			
		

> Moreover, all progress in capitalistic agriculture is a progress in the art, not only of robbing the labourer, but of robbing the soil; all progress in increasing the fertility of the soil for a given time, is a progress towards ruining the lasting sources of that fertility.
> 
> The more a country starts its development on the foundation of modern industry, like the United States, for example, the more rapid is this process of destruction. *Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth — the soil and the labourer.*


 
I've bolded the last bit in case the parts prior to it were too impenetrable for you.

Although since you've clearly read him (going on your authoritative account of his work above), can you point me to the parts where he _'__treats the primary economy as a limitless store of stuff and a bottomless pit to throw trash into'_ as i'd be quite interested in that, having read a fair bit of Marx myself yet never having come across such a thing.


----------



## littlebabyjesus (Jan 28, 2013)

ymu said:


> Take this to another thread please.


Falcon has come out with a few things here that I think it is worth questioning. It's far from irrelevant to the question of how to get out of the current slump.

He has defended austerity as necessary. He thinks the national debt means that the country is on the verge of bankruptcy, that the unfunded state pension system is bankrupt, and that research into efficiency savings can never pay dividends.


----------



## littlebabyjesus (Jan 28, 2013)

Very prescient, those quotes from Marx. Perhaps Falcon is mistaking Marx's description of the way capitalism works for Marx advocating that process.


----------



## TruXta (Jan 28, 2013)

littlebabyjesus said:


> Very prescient, those quotes from Marx.


 
Not really, he wrote that at the start of the modern/Western environmentalist movement, where people like John Ruskin and others too were concerned with pollution, overconsumption and so on.

Anyway, as you were.


----------



## littlebabyjesus (Jan 28, 2013)

TruXta said:


> Not really, he wrote that at the start of the modern/Western environmentalist movement, where people like John Ruskin and others too were concerned with pollution, overconsumption and so on.
> 
> Anyway, as you were.


I don't know much about Ruskin, but I would have thought that perhaps the novel contribution from Marx was to analyse why capitalism is necessarily exploitative in this way - how the logic of capitalism demands it.


----------



## TruXta (Jan 28, 2013)

littlebabyjesus said:


> I don't know much about Ruskin, but I would have thought that perhaps the novel contribution from Marx was to analyse why capitalism is necessarily exploitative in this way - how the logic of capitalism demands it.


The latter bit, quite possibly. Although (I'm speculating) it must've been obvious to many that industrialism (and so capitalism) was hugely damaging to the environment and people's health (initially, it's got somewhat better wrt health at least).


----------



## free spirit (Jan 28, 2013)

Falcon said:


> My numbers refer to the total system (a.k.a "the world"). Your numbers refer to a tiny part of a tiny part of that system ("the secondary economy, in the UK"). Your habit of considering only tiny bits of systems is the single greatest failure of your argument.
> 
> Now be a good chap and take it to another thread. I won't answer any more here.


thank you. Was that really so hard?

why did you have to come out with all that waffle about it, and attempts to belittle me for daring to query this, when all you needed to say was that your figures related to the world economy, not the UK economy - as I'd already suggested was probably the case?

It's a perfectly reasonable question to ask when the figures are posted on a specifically UK thread without any explanation that they are global not UK specific figures.

eta - and your repeated failure to be clear about what specifically your figures actually relate to, or clarify this when asked is what causes the majority of my issues with you. If you'd just give a straight answer to a straight question the first time it's posed instead of going around the houses for several pages before eventually letting on that I was right to query your stats, then we'd have a hell of a lot less pointless bickering between us.


----------



## free spirit (Jan 28, 2013)

Falcon said:


> I believe I just did. That investment necessitates an increase in complexity (of the industrial manufacturing system), the energy cost of which increases faster than the energy reduction it is intended to provide. You tell me what you don't understand about that and I can help you.
> 
> But not in this thread.


So by that logic we should stick with an open cycle gas turbine plant at 40% thermal efficiency rather than building 63% efficient combined cycle gas turbine plants because CCGT plants are more complex than OCGT plants?

ok, at some point what you state above will apply, but we're nowhere near to that point in a lot of areas of energy use, or production yet.

To be realistic you'd also have to factor in energy economies of scale in production, and the fact that most energy saving devices are replacing energy wasting equivalents at the point they fail, so one way or another they'd already be getting replaced with either another energy wasteful simple device, or a slightly more complex but more energy efficient device.


----------



## Falcon (Jan 29, 2013)

free spirit said:


> To be realistic you'd also have to factor in energy economies of scale in production, and the fact that most energy saving devices are replacing energy wasting equivalents at the point they fail, so one way or another they'd already be getting replaced with either another energy wasteful simple device, or a slightly more complex but more energy efficient device.


Just as you would have to factor in that just to get the 80% of the world who don't enjoy your standard of living to just half of yours will require doubling our energy consumption in 20 years - an increase your energy efficiency measures couldn't possibly match. By which time there will be another billion people around.

And they don't just want your shitty little light bulbs. The energy saved by you substituting your incandescent bulb for LED is absolutely dwarfed by the billions who want their first LED bulb. And for it to light up. And they want roads, and cars, and air conditioning, and meat.

You have absolutely no concept of how inconsequential your energy efficiency projects are in relation to demand, in a system with an uninvested depletion half time of 7 years and a debt saturated global financial system.


----------



## littlebabyjesus (Jan 29, 2013)

ok good. That's now something like an argument. When you widen a road, you don't ease congestion, you increase the amount of traffic.


----------



## free spirit (Jan 29, 2013)

Falcon said:


> Just as you would have to factor in that just to get the 80% of the world who don't enjoy your standard of living to just half of yours will require doubling our energy consumption in 20 years - an increase your energy efficiency measures couldn't possibly match. By which time there will be another billion people around.
> 
> And they don't want your shitty little light bulbs. The energy saved by you substituting your incandescent bulb for LED is absolutely dwarfed by the billions who want their first LED bulb. And for it to light up. And they want roads, and cars, and air conditioning, and meat.
> 
> You have absolutely no concept of how inconsequential your energy efficiency projects are in relation to demand, in a system with an uninvested depletion half time of 7 years and a debt saturated global financial system.


so you've just switched your argument entirely then.

Good skills there Falcon, a moving target is harder to hit eh.

and I've no concept of..... yeah pull the other one. Let's see how inconsequential would you think the replacement of the entire global car fleet with a fleet with double the fuel efficiency would be? (US fuel efficiency is increasing at 6% a year, so well above the 2.7% needed to achieve the IEA 50/50 target) And what if you then factor in a significant reduction in the milage being driven by all those cars, particularly weighted to the least fuel efficient cars?

And I'm not going to get into an argument with you on this again, I'm merely going to point out that we will not be facing that uninvested depletion rate because the oil industry is investing heavily in reducing that depletion rate.

tbh, I agree with YMU, it'd be good if a passing mod would split this argument out from this thread into a new thread.


----------



## Falcon (Jan 29, 2013)

free spirit said:


> so you've just switched your argument entirely then.


Er, no. I 've responded to your request to simplify it and feed it to you in slices to relieve you of the burden of reading the papers where the argument is laid out in full. If it's too complex, you don't understand it. If I simplify it, you accuse it of being too simple. This is not an interesting process for me.


free spirit said:


> Let's see how inconsequential would you think the replacement of the entire global car fleet with a fleet with double the fuel efficiency would be? (US fuel efficiency is increasing at 6% a year, so well above the 2.7% needed to achieve the IEA 50/50 target) And what if you then factor in a significant reduction in the milage being driven by all those cars, particularly weighted to the least fuel efficient cars?


REPLACE the fleet? You mean rebuild all the cars? What with - the liquids we are currently creating by converting our food supply into fuels? Why would we want to do that, exactly?

The ENTIRE global car fleet? You mean the current entire fleet, or the fleet after the Chinese have built 400 million more to get to European car ownership levels?

The milage being driven by those cars on the CURRENT road network? Or the road network the Chinese and Indians are building so those hundreds of millions of new cars have somewhere to go?

You were arguing, if I might remind you, that energy efficiency would drive *total* energy consumption down. The argument that it drives energy *intensity* down is interesting, but irrelevant.


----------



## ymu (Jan 30, 2013)

Osborne looking fucking desperate to hide behind Cameron's dissembling on PMQs.


----------



## littlebabyjesus (Jan 30, 2013)

Falcon said:


> Er, no. I 've responded to your request to simplify it and feed it to you in slices to relieve you of the burden of reading the papers where the argument is laid out in full. If it's too complex, you don't understand it. If I simplify it, you accuse it of being too simple. This is not an interesting process for me.
> 
> REPLACE the fleet? You mean rebuild all the cars? What with - the liquids we are currently creating by converting our food supply into fuels? Why would we want to do that, exactly?
> 
> ...


 
What you are describing has a name. It is called 'growth'. Now if the conditions exist in which this kind of growth can no longer happen due to physical constraints, we have options. Either we just stop working and innovating, or we keep working and innovate in different ways to deal with the problem. There is a point here - a question to do with the capitalist model of investment, which doesn't appear to have the tools necessary to deal with this situation: rates of profit diminish, investment slows and economies stagnate.

As I said earlier, this raises a wide range of questions about how to replace capitalist investment when capitalists no longer want to invest. These questions need to include a reappraisal of growth and how to measure it, and a reappraisal of the mechanisms we use to drive innovation to ensure that the innovation is for the long-term good.


----------



## ymu (Feb 7, 2013)

Richard Murphy saying sensible things about QE and the bogus argument for austerity.


----------



## ymu (Feb 9, 2013)

> Looking for Mr Goodpain
> 
> In recent columns, I’ve argued that worries about the deficit are, in fact, greatly exaggerated — and have documented the increasingly desperate efforts of the deficit scolds to keep fear alive. Today, however, I’d like to talk about a different but related kind of desperation: the frantic effort to find some example, somewhere, of austerity policies that succeeded. For the advocates of fiscal austerity — the austerians — made promises as well as threats: austerity, they claimed, would both avert crisis and lead to prosperity.
> 
> ...


----------



## yield (Feb 12, 2013)

No one really understands what’s going on in our economy
Does anyone properly understand what’s happening in the UK economy anymore?
Telegraph. 11 Feb 2013


> Mind you, the data as they stand would be enough to paralyse even the most sure-footed of policymakers into inaction. Can it really be true that an economy which has created more than a million private sector jobs over the past two and a half years is showing no growth at all?


This might explain a few hundred thousand of those jobs?
Work advisers 'pushing jobless into self-employment'
BBC 5 live. 3 February 2013


> Some people on the government's welfare-to-work scheme are being inappropriately pushed towards self-employment, the BBC has learned.
> 
> It found they were being encouraged off unemployment benefit, so they can claim more money from working tax credits.


----------



## free spirit (Feb 12, 2013)

yield said:


> No one really understands what’s going on in our economy
> Does anyone properly understand what’s happening in the UK economy anymore?
> Telegraph. 11 Feb 2013


my response to that headline.


> It's fairly simple to understand.
> The economy is stagnating as a direct response to this government's decision to cut huge swathes of capital expenditure and government jobs at a point in the economic cycle when anyone with half a braincell knows that governments should be increasing infrastructure spending to stimulate further growth.
> Also attempting to stimulate the economy through QE that just puts money into the pockets of the rich who then leave it in the bank, and takes it from the pockets of pensioners and savers who would have been spending it in the economy.... and then what little major infrastructure spending projects there are get given to German companies because we insist on the companies financing the costs themselves at a time when the UK government could have borrowed to directly finance a UK company to do the work at historically low borrowing rates.
> By doing this they've created the longest recovery in the last 100 years, with no real signs that things are getting better any time soon, which also makes it impossible for us to actually get into a position where we can start paying the debt off rather than just slightly reducing the deficit.
> It's direct cause and effect, there is very little mystery to it at all, though I'm not surprised the telegraph don't get it given that you spent the last few years cheerleading for this austerity nonsense.


----------



## yield (Feb 12, 2013)

It's clear who the government are interested in saving.
Britain's richest 5% gained most from quantitative easing – Bank of England
The Guardian, Thursday 23 August 2012


> The richest 10% of households in Britain have seen the value of their assets increase by up to £322,000 as a result of the Bank of England's attempts to use electronic money creation to lift the economy out of its deepest post-war slump.





> Threadneedle Street said that wealthy families had been the biggest beneficiaries of its £375bn quantitative-easing (QE) programme, under which it has been buying government gilts for cash since early 2009.


----------



## toblerone3 (Feb 12, 2013)

Yes some green new deal quantitative easing might work.


----------



## BigTom (Feb 12, 2013)

Yeah, I don't get why some economists seem so perplexed by the rise in employment not getting through to growth when these the factors are evident:

1) as already mentioned around 150k are not in work but on unpaid training/workfare placements, an increase of around 50k in the past two years iirc

2) massive rise in self employment, much of which is likely to be people pushed into it to claim tax credits not jsa or having a go out of desperation and not really earning any money

3) massive rise in part time work

4) wage stagnation

Unemployment/employment levels are only a proxy for how much money people have to spend. Previously this has worked pretty well but the increased flexibility of the market place has detached the measure from the reality.
It's really not hard to see why though and imo any head scratching comes from those who support austerity desperately trying to cling to one measure that looks favorable rather than admit things are going wrong


----------



## Kaka Tim (Feb 12, 2013)

BigTom said:


> 2) massive rise in self employment, much of which is likely to be people pushed into it to claim tax credits not jsa or having a go out of desperation and not really earning any money


 
Yep - thats my situation to a tee. I've worked about 2 days in he past two months and im classed as 'self employed' - and I know plenty of other people in the same situation.


----------



## BigTom (Feb 12, 2013)

Kaka Tim said:


> Yep - thats my situation to a tee. I've worked about 2 days in he past two months and im classed as 'self employed' - and I know plenty of other people in the same situation.


 
Ditto, self-underemployed here too. When Universal Credit comes in I might not decide it's worth it anymore and become unemployed and I do wonder how many other people will do the same and whether the unemployment figures will jump back up. At the moment I earn just enough to make it worth not getting as much in WTC as I would with JSA to avoid conditionality/hassle.


----------



## free spirit (Feb 13, 2013)

ye gods, the telegraph comments section is a weird place, populated by a lot of very confused people searching for answers as the reality of their austerity model failing seems to be taking hold, unfortunately there's a nasty undercurrent of blaming it all on imigrants, the welfare state and the EU going on there.


----------



## ferrelhadley (Feb 15, 2013)

Retail was down for January. Seems touch and go on the triple dip.


----------



## ayatollah (Feb 15, 2013)

free spirit said:


> ye gods, the telegraph comments section is a weird place, populated by a lot of very confused people searching for answers as the reality of their austerity model failing seems to be taking hold, unfortunately there's a nasty undercurrent of blaming it all on imigrants, the welfare state and the EU going on there.


 
Yep indeedy. Although its not healthy for ones own mind to dip into the fetid waters of the Telegraph's "readers comments" too often, it is a good place to grasp first hand just how utterly crazed and filled with atavistic hatred for those they see as their "social inferiors" the middle classes can be when their extraordinarily ideological "mind model" of the outer world comes under pressure from reality. Easy , when reading the comments, to suddenly grasp much more clearly how in 1930's Germany the middle classes just suddenly went bonkers and bought in to the paranoid fantasy world of Nazism. Anything other than grasping the real nature of their falling living standards, and their objective mutual interests with the despised "working class". I always assume that at least some of the , particularly US sourced, crazy stuff is actually generated by permanent, paid, "blogging crews" funded by US billionaire ideologues. But most undoubtedly derive from crazed, frightened, hate -filled, middle class people, who in most cases will actually also be suffering from falling living standards at the moment, particularly from investment income, but also salaries, and who are mostly just as vulnerable to the collapse of the NHS as the rest of us. Such is the power of capitalist ideological hegemony.


----------



## free spirit (Feb 15, 2013)

ferrelhadley said:


> Retail was down for January. Seems touch and go on the triple dip.


construction's been badly hit by the weather - as an example, we'll have soon been waiting a month for a roof to get put on a new build house so we can install solar panels on it, and have another couple of jobs ourselves that we've been unable to work on.

I'd assume must of the rest of the construction world must be having similar issues, though I guess we might catch up by the end of the quarter if the weather behaves.


----------



## barney_pig (Feb 28, 2013)

Bankrupt republic stores have been bought by sport direct; which explains why yesterday 16 year old part timers in the reading store were ordered to sign off work and go to the republic store and take photos.
 Bbc reporting that this secures several thousand jobs... I don't think so.


----------



## chilango (Feb 28, 2013)

barney_pig said:


> Bankrupt republic stores have been bought by sport direct; which explains why yesterday 16 year old part timers in the reading store were ordered to sign off work and go to the republic store and take photos.
> Bbc reporting that this secures several thousand jobs... I don't think so.



Republic is in the oracle isn't it? I'm noticing more and more vacant units in there now...


----------



## barney_pig (Feb 28, 2013)

Fcuk disappeared and they blocked the entire unit up like inquisition walling up a heretic priest.


----------



## ferrelhadley (Feb 28, 2013)

We are in safe hands (tempted to make it a thread of its own)


----------



## thedockerslad (Feb 28, 2013)

We are probably way beyond double dip or whatever terms they like to attach to their current mess. Why are we still letting them screw us?

Tell me that


----------



## chilango (Mar 1, 2013)

barney_pig said:


> Fcuk disappeared and they blocked the entire unit up like inquisition walling up a heretic priest.



They do that.

They don't leave the empty units in full view for very long.

I like how they even gave a space to Reading FC to try and cover it up.


----------



## ymu (Mar 11, 2013)

> I ran my own version of their simulations for a hypothetical country — call it Osbornia — which starts with debt at 100 percent of GDP and a budget deficit that would, left to itself, be consistent with a stable debt ratio thanks to 2 percent growth and 2 percent inflation. On this economy I impose 5 years of tightening at the rate of 1 percent of potential GDP each year, with a multiplier of 1.3 (which is about where recent estimates have been converging). Output ends up 6.5 percent below the baseline; debt looks like this:
> 
> 
> 
> ...


----------



## Balbi (Mar 12, 2013)

http://www.guardian.co.uk/business/2013/mar/12/eurozone-crisis-live-greek-pm-troika-crunch-talks

Industry output down.


----------



## yield (Mar 13, 2013)

TUC: UK workers suffer sharpest wage fall of any developed country as business leaders warn the pain is far from over
Daily Mail. 7 March 2013






Budget 2013: fears rise as cost of living soars four times faster than earnings 
Telegraph. March 13th, 2013

Budget 2013: Radical options for the UK economy
BBC News. 12 March 2013


> Negative interest rates
> Promising to stoke inflation
> Helicopter money
> Old-school public works schemes
> ...


If the middle class are being squeezed Parliament should be worried.

The working class have choose between eating or heating their homes but when was the last time the elected representatives cared about them.

British banks may have £30bn hidden losses
Telegraph. 12 Mar 2013


> British banks may be harbouring a black hole of as much as £50bn in undeclared losses that do not show up in their accounts but hamper their efforts to lend, a shareholder group has warned.


Even with taxpayer bailouts and interest rates below inflation they can't keep their balance sheets in order.

What other skeletons are in the cupboard?


----------



## Nylock (Mar 13, 2013)

How long before the clown car disintegrates in spectacular fashion?


----------



## ferrelhadley (Mar 23, 2013)

This weather cant be good for avoiding the triple dip.


----------



## junglevip (Mar 26, 2013)

ferrelhadley said:


> This weather cant be good for avoiding the triple dip.


 
"Cold weather makes triple-dip recession more likely, economists fear" - www.guardian.co.uk

http://www.guardian.co.uk/business/2013/mar/25/cold-weather-triple-dip-recession


----------



## ymu (Mar 26, 2013)

"Cold weather will be a handy excuse for Osborne yet again because, mysteriously, all these GDP-damaging events completely cancel output instead of shifting it into a different quarter,."


----------



## Balbi (Apr 24, 2013)

Watch Cameron at PMQ's. He gave the post-Olympics bounce in GDP last year with 'and the good news will keep on coming', because he gets the data 24hrs in advance.

We may have an idea if Triple Dip is on by 12:30.


----------



## brogdale (Apr 24, 2013)

Balbi said:


> Watch Cameron at PMQ's. He gave the post-Olympics bounce in GDP last year with 'and the good news will keep on coming', because he gets the data 24hrs in advance.
> 
> We may have an idea if Triple Dip is on by 12:30.


 
I know what you mean about the smug fecker....but at the risk of being dull and repetitive, I'll say what I said in January..


> *I call it triple dip, whatever.*
> All that arbitrary, made-up econobull about needing 2 consecutive quarters for a recession, but only one for the recoveh....do these people not walk up and down our highstreets ffs.
> The capitalist party can't even manage 'capitalism'.


----------



## magneze (Apr 24, 2013)

Balbi said:


> Watch Cameron at PMQ's. He gave the post-Olympics bounce in GDP last year with 'and the good news will keep on coming', because he gets the data 24hrs in advance.
> 
> We may have an idea if Triple Dip is on by 12:30.


 
What was the verdict then?


----------



## Balbi (Apr 24, 2013)

Nothing. He avoided it like the plague - so read it either way - could be horrendous, or he could just be trying to to get a reputation for leaking the info. No score.


----------



## brogdale (Apr 24, 2013)

magneze said:


> What was the verdict then?


 
FWIW I thought there was quite alot of the "difficult times" references, "but we've done blah, blah..."

just a hunch, but could be seen as an indicator of less than good news tomorrow?


----------



## Balbi (Apr 25, 2013)

0.3% growth. Margin of error 0.4%. Construction down 2.5%, only Service Sector pushed it up.


----------



## xslavearcx (Apr 25, 2013)

when does a double dip/triple dip recession become a L shaped recession??


----------



## brogdale (Apr 25, 2013)

Balbi said:


> 0.3% growth. Margin of error 0.4%. Construction down 2.5%, only Service Sector pushed it up.


 
Politically very important for the tory party, but for the rest of us who live in the real economy...


> In Q1 2013 it was estimated that GDP was *2.6% below the peak in Q1 2008*.


----------



## rosecore (Apr 25, 2013)

Fox News would be proud of this Sky graph.


----------



## Balbi (Apr 25, 2013)

So, another £15 billion to cut - the deficit still to tackle - and 0.7% growth in 3 years. Grand.


----------



## nino_savatte (Apr 25, 2013)

The economy grew by 0.3%... is that something to be pleased about? It says nothing.


----------



## brogdale (Apr 25, 2013)

nino_savatte said:


> The economy grew by 0.3%... is that something to pleased about? It says nothing.


 
Exactly...

<iframe src="http://s3.datawrapper.de/f7I4K/" frameborder="0" allowtransparency="true" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen width="460" height="400"></iframe>

Sorry, embed didn't work out like i thought it would, but the blue bit still takes you there.


----------



## Quartz (Apr 26, 2013)

Balbi said:


> 0.3% growth. *Margin of error 0.4%.*


 
Bolding mine. So it's really meaningless. 



Nylock said:


> How long before the clown car disintegrates in spectacular fashion?


 
With Osborne at the wheel and Cameron and Clegg as back-seat drivers, it'll be soon enough.


----------



## butchersapron (Apr 30, 2013)

This is what a free market looks like:



> The British economy is becoming more dependent on the state. This is revealed in the latest preliminary data for GDP in the 1st quarter of 2013.


----------



## ymu (Apr 30, 2013)

xslavearcx said:


> when does a double dip/triple dip recession become a L shaped recession??


Definitions vary, but a recession is a U-shaped thing, a depression is an L-shaped thing.

Osborne pretty much put us into what might reasonably be called depression on Day 1, as the NIESR charts have been making increasingly obvious over time:






Saw this whilst grabbing that:



> *The deficit is falling..*
> 
> 
> *[Updated 17.00 with HMT response: see end]*
> ...


----------



## yield (Jun 13, 2013)

Families suffer ‘lost decade’ as gains from boom years wiped out
Telegraph. 13 Jun 2013


> Average incomes plunged by more than seven per cent in real terms in the last two years, in what economists said amounted to the biggest knock to living standards since the Second World War.





> charities argued that the findings showed that low wages rather than unemployment are now the biggest problem facing families in the UK.
> 
> Overall the figures showed that a freeze on wages or a series of below-inflation pay rises and steep increases in fuel and food prices over the last few years have effectively wiped out improvements in living standards in the first decade of the 21st century.
> 
> ...


And yet the stock markets were back up to levels last seen in 2001. A statistical recovery because of the human recession?


----------



## brogdale (Jun 13, 2013)

yield said:


> Families suffer ‘lost decade’ as gains from boom years wiped out
> Telegraph. 13 Jun 2013
> 
> And yet the stock markets were back up to levels last seen in 2001. A statistical recovery because of the human recession?


 
With labour costs, on average, 6% lower in real terms, and 15% lower than they would have been if rates had kept pace with pre-2008 levels...why wouldn't these capitalists be bigging up the 'value' of their corporations?


----------



## taffboy gwyrdd (Jun 13, 2013)

A Tory tells it like it is.

http://stevedrant.wordpress.com/2013/06/13/driving-the-poor-into-caves/


----------



## butchersapron (Jun 13, 2013)

Oh god.


----------



## ViolentPanda (Jun 13, 2013)

butchersapron said:


> Oh god.


 

You called, my son?


----------



## yield (Jul 24, 2013)

Vince Cable compares Bank of England policymakers to Taliban.
Independent. Wednesday 24 July 2013


> The Business Secretary believes that its demands that banks must boost the levels of capital they hold to protect against future financial shocks is deterring small business lending and holding back recovery.
> 
> Mr Cable told the Financial Times: "One of the anxieties in the business community is that the so-called 'capital Taliban' in the Bank of England are imposing restrictions which at this delicate stage of recovery actually make it more difficult for companies to operate and expand."





> While official figures tomorrow are expected to show that growth improved to around 0.6% for the second quarter, many economists believe the recovery remains fragile, and gross domestic product is well below its pre-recession peak.


Or could it be that the too-big-to-fail banks gambled peoples money and lost?

This is because of the lack of regulation and now you want to create another bubble?

Taliban lol


----------



## yield (Feb 1, 2014)

Official data shows longest fall in living standards for 50 years
The Guardian, Friday 31 January 2014


> A report from the Office for National Statistics found that real wages have been falling consistently since 2010, the longest such period since at least 1964, when comparable records began.





> The ONS also highlighted different inflation rates between what is produced in Britain and what is consumed, helping to explain the divergence between productivity and real wage growth since 2010. In other words, the rate of inflation experienced by workers spending their pay was not the same as the rate of inflation in the goods their employers were selling.


Food, gas and electricity are up 20 or 30% in last five years.


----------



## nino_savatte (Feb 1, 2014)

taffboy gwyrdd said:


> A Tory tells it like it is.
> 
> http://stevedrant.wordpress.com/2013/06/13/driving-the-poor-into-caves/


Holy fucking shit! That guy's serious! 

Oh hang on, it's supposed to be a satirical blog.


> The Conservative Party has been conclusively shown to work directly on behalf of global finance fraudsters, and when an un-elected Lord and Trade Minister previously presided over money laundering for Al Qaeda and mass-murder Mexican drug cartels, with no personal consequence, the point doesn’t have to be outlined much further, even if it would be easy to do so.
> http://stevedrant.wordpress.com/2013/10/20/a-killing-tendency-and-its-opponents/


----------



## ferrelhadley (Dec 23, 2014)

UK economic growth revised down



> Also, the UK's current account deficit widened in the third quarter to £27bn.
> 
> That put the difference between the country's export and import of goods and services at a record 6% of GDP.
> 
> ...








http://uk.reuters.com/article/2014/12/23/uk-britain-economy-idUKKBN0K10N220141223


> Household spending rose 0.9 percent from the April-June period, picking up speed from the second quarter, and was the main driver of growth.
> 
> *The data showed consumers dug into their savings*. Household disposable income, after tax and inflation, fell 0.1 percent on the quarter and was up only 1.0 percent on the year, reflecting weak pay growth that has raised questions about the durability of the economic recovery.
> 
> ...





> Simon Wells, an economist at HSBC, said the size of the deficit did not seem to be a problem for now but underscored how much Britain relied on foreign investors to buy its debt.
> 
> "If the UK falls out of favour with international investors for any reason, the economy might be forced to rebalance the hard way, i.e. with a combination of currency depreciation to make exports more competitive and lower domestic demand to suck in fewer imports," he said.



"Growth" driven by spending your savings, importing more than you export and hoping that oil does not go up to bone crunching levels when the production drops being forced by Saudi keeping the taps open to kill ultra deep water and Bakken tight oil. 

2016/17 could be a couple of pretty bleak years.


----------



## Quartz (Dec 23, 2014)

ferrelhadley said:


> "Growth" driven by spending your savings, importing more than you export and hoping that oil does not go up to bone crunching levels when the production drops being forced by Saudi keeping the taps open to kill ultra deep water and Bakken tight oil.



I rather suspect they want to bankrupt the companies involved then take them over so they can continue to profit once their own oil reserves are depleted.


----------



## J Ed (Dec 23, 2014)

ferrelhadley said:


> 2016/17 could be a couple of pretty bleak years.



It's already pretty bleak for most.


----------



## Coolfonz (Dec 23, 2014)

Quartz said:


> I rather suspect they want to bankrupt the companies involved then take them over so they can continue to profit once their own oil reserves are depleted.


They are doing nothing of the sort. They are protecting their market share. Perfectly reasonable. Has anyone asked the US or Norway or Russia to cut output? Shale companies in the US will consolidate, not evaporate into thin air. Why should the Saudis cut output to enable other countries to do the opposite with higher prices? As for their reserves being depleted...they added ~1mn b/d in the last five years or so...


----------

