Wednesday, Sep 09, 2009
Muppet calls Muppets Muppets
BBC: Former rate-setter turns on Bank
"A former Bank of England rate-setter has criticised it for not spotting the recession and then not acting decisively enough to avoid it."
Well done Mr B - you managed to spot the recession coming at the same time as my car mechanic and the half of the population that has an IQ above 100 - in August 2008 - a full 12 months after Wogan started talking about sub-prime. Just because you're slightly less retarded than King doesn't make you the Emperor.
Posted by phdinbubbles @ 09:11 PM (588 views) Add Comment
12 Comments
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1. crash bandicoot said...
Spotted the recession? More like caused it. If we'd cut rates when he wanted it would be even worse now.
2. phdinbubbles said...
@1
True, but what riles me is that he's being made out to be some kind of sage by the BBC: "Mr Blanchflower, made a CBE in the Birthday Honours list, correctly predicted the recession in the UK. " In the Summer of last year did King and the rest of them really not think there was going to be a recession? - I find that incredible.
3. crash bandicoot said...
phd, I used to marvel at the BBC's services but after reading the views of other on this site I look at it through different eyes. Tonight on TV we had a repeat of a documentary on the 1929 crash and a dramatisaiton on the fall of Lehman Brothers. Are they trying to tell us something?
4. paul said...
Oh good lord. If Blanchflower doesn't shut up, someone at the Bank of England could land him deeply in hot water.
His voting record shows an appalling inability to see the credit boom he was stoking through his own decisions.
5. clockslinger said...
Haven’t bothered reading article because if it is Blanchflower the answer is always interest rate cut, bigger and earlier, whatever the problem was. The mans policies on rates were in no small part responsible for rampant HPI and all that follows.
6. inflation is eating my savings said...
It might just be possible that Blanchflower saw what was coming and wanted to act in advance?
Remember interest rates take a year or so before their effects are fully felt?
Just a thought.
I am not sure how 5.75% (as it was pre NR) could really have had a huge effect (save on the value of the pound) on borrowing. Even the chavs were maxed out. Blanchflower will line his own nest, like the rest, and we hated him, but I suspect he had his finger on the pulse more than most here. I am not "smiling" in disguise, but if the job is to avoid a depression (besides one of the 7 plagues, what could be worse) maybe, just maybe he was trying to do the right thing.
England seemed to have called in loan from Croatia tonight.
Brazil chucked the final in 1998, so blooming obvious..........
7. inflation is eating my savings said...
Sorry was it 10 plagues?
And lo the money will stoppeth.
8. phdinbubbles said...
To be fair to him, most of the damage had already been done before he joined in 2006 - wasn't it obvious by 2002-2003 that house prices were in a bubble waiting to burst (well it seemed obvious to me when prices round my way went up by 100% in just over a year) yet the MPC sat back and did nothing to take the heat out of it - that was the time to act.
@crash bandicoot
"Mr Blanchflower, made a CBE in the Birthday Honours list, correctly predicted the recession in the UK.
He argued for lower interest rates in the months running up to the downturn."
Isn't it just dumbing down by the BBC? Did he predict it when nobody else saw it coming (well apparently nobody on the MPC saw it coming!). How big did he think the recession was going to be - and how long? What did he think the underlying problems were? Why did he think cuts were required? Why didn't the other members think there was going to be a recession (were they on drugs?)? Instead of reporting his role in the situation and placing it in context, there's simply the statement "correctly predicted the recession in the UK".
9. crash bandicoot said...
iiems, in 2005 the crash should have started. It did not because interest rates were cut instead of raised. Do you really believe that Blanchflower wanted to continue to cut rates to prevent a recessison in 2009? At the time they (the MPC) were tasked with keeping fbelow 2%. Are you suggesting that they ignored their remit in an attempt to keep us out of recession - although the unforseeable Northern Rock failure was caused by their failure to follow it .
10. crash bandicoot said...
phd, the galling thing is that the policy of low rates and QE have not even yet been proved to be the correct path to take.
As for dumbing down by the BBC you should try Radio One newsbeat...
11. mark wadsworth said...
"Muppet calls Muppets Muppets"
Yup, that sums it up.
12. inflation is eating my savings said...
CB- I'm not an economic seer, by any stretch of the imagination- nor should we necessarily assume we know more than "they". They knew what was coming, I am assuming. What could they realistically have done? IRs at 8%? That might have had other, perhaps worse effects- what would be the effects of sterling at $2.50? Regarding the cut in 2005. I'm not sure it was the cut that made the change. A quarter of a percent isn't much on a 100k mortgage at 5%. What changed was the amount they were willing to pump out? Again, I don't know. Anyway, these are but details, there was a system failure. The majority wanted it to continue. If you say stop- what happens to you? Vilified? No lucrative job in the City as a kickback? Worse? Maybe everyone thinks you caused the crash?
I still have some optimism. I think that these guys (like probably the bulk of the civil service, academia etc) like everyone to think they are great, have made sacrifices, but are ultimately trying to do the best thing (whatever that actually is). If they were out purely for themselves, they would be much richer by now. Or they are just not very smart.