Tuesday, Jul 07, 2009
MPC say they don't know what they are doing
BBC Newsnight: We could have forecasted recession sooner
Retiring MPC member David Blanchflower has said fellow members of the MPC could have forecast the recession earlier, but misread the data.
Posted by powerofnow @ 08:28 AM (591 views) Add Comment
7 Comments
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1. paul said...
I agree. If his fellow MPC members kept an eye on Blanchflower's voting record (almost exclusively "cut rates") they should have been able to recognise the credit boom Blanchflower was stoking and predicted the consequent credit bust.
2. paranoia blue said...
..he has also, always, consistently misread, the solution!
3. mander said...
Oh yes, we all sat back and enjoyed the property porn. It was an economic miracle.
4. alan said...
I don't think it was the data - we have been in the business of not taking hard decisions for the last 12 years (or more). It's been a case of keeping the electorate happy and not becoming unpopular.
The simple answer was "borrow more".
On the subject of Interest Rates, I think that the UK is so indebted that interst rates must rise soon. Foreign investors will demand higher rates for lending to us to adjust for risk. Ray Boulger writing today in the Telegraph, thinks that rates will stay low for years because the economy is in a mess (earlier post).
If rates rise by a couple of percent, its going to cause a lot of pain to all those on SVRs of 3.5% at present. What do I advise my mates (they bought houses to live in several years ago)?
5. uncle tom said...
We did - they didn't..
6. it_is_going_with_a_bang said...
I think it is well known what Blanchflower's opinions are.
Keep lowering the interest rates until they are zero then hand it over to someone else to deal with.
Then claim there is only a problem because they weren't lowered quick enough.
Idiot.
7. paranoia blue said...
IIGWAB Spot on, mate!