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House Price Crash Forum


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Everything posted by Cogs

  1. We are temporarily benefitting from cheap imports, in much the same way we'd temporarily benefit from 'dumped' goods or the beginning druggie benefits from free heroin. The problem is that these aren't more efficiently produced goods, they are merely cheaper. Given that this isn't about opportunity cost, its quite likely we could wind up in the situation where we simply have nothing to sell, this is very different from Ricardo's view: "a nation, like a person, gains from the trade by exporting the goods or services in which it has its greatest comparative advantage in productivity and importing those in which it has the least comparative advantage." In Ricardo's model, we all benefit. France sells us champagne, we sell France pork pies, we can both produce these goods more cheaply than the other and so we both benefit from trade. If France starts making pork pies with cheap labour, the only gain in this relationship goes to France, we only benefit as long as we can borrow money (because we no longer have a source of income) to pay for champagne and pork pies. To be clear here, the problem isn't really cheap labour, thats just what the labour market will stand. The problem is the mobility of capital.
  2. I think there should be a very radical rebalancing of capital! However, in a situation of mobile capital and wage arbitrage, I see no reason for it happen. Neither would Adam Smith or David Ricardo, there is no 'socialist card' being played. As soon as you allow the construction of trade flows that aren't mutually beneficial, all that stuff goes out of the window. We're at least back to mercantilism, if not worse.
  3. But there is no need for any of this to take place. There is no level to find and no reason for capital to equalize anything, in fact quite opposite, the motivation is all about piling into the cheapest markets and keeping them cheap, the mechanism of the 'invisible hand' isn't present. The argument you are using is of course relevant in cases of comparative advantage fair enough, but not here. More practically, there is absolutely no reason why organised labour in China should be any more effective in their actions than the miners here in 1980s. That your argument strays outside economics into social forces is a clue I think that there is a problem here in economic terms; why would social forces overpower economic forces in China, but social forces cannot overpower economic forces in the west to erect trade barriers?
  4. So the other guy accepts 99p, the next guy 98p.. this is just downward bidding which is why I call it the pain test. This may be, in a certain limited way 'competition' but it doesn't, amongst other things, support free trade. The mistake you may be making is an old one, which is to equate wages with labour efficiencies. The problem with labour arbitrage is that it kicks the legs out from under free trade as it is now people to construct flows of trade that are not mutually beneficial (the cheap TVs would soon become more expensive because their relative cheapness is not the result of relative gearing of opportunity costs as per Ricardo). Another example of a trade flow that is not mutually beneficial would be if, say, I dumped goods in a foreign country at below their cost of production to destroy domestic producers. In one view this is just 'competition' as well but its probably more obvious why people feel justified in erecting barriers to it.
  5. No, that isn't global competition. There is no basis for competition, it is mere arbitrage (ie. the pain test) without comparative advantage. This is the economics of the City trader, not the person who works for a living or the entrepreneur. The political economists were all pretty clear on this point.
  6. Your generation invented consumerism. What do you think your Beatles, Stones, Mary Quant, Biba, etc were really about? What is interesting about boomers is that their parents looked down on them in much the same way their children do now and for much the same reasons. Recycling the arguments isn't going to work.
  7. Make it illegal for widescreen TVs and Sky boxes to be powered in other way, that would sort things. Then again, it would just encourage a certain sort of person to push out more kids...one for Coronation Street, one for the One Show, two for the football (in case of extra time) etc.
  8. All that said, quite a few going to be wearing the brown trousers on this news. Wondering how the Mail and Express will go. Everyone knows they hate 'benefit cheats' but on the other hand, most of the people I know who take it under retirement age are a bit Arfur Daley and while they are happy to criticise scroungers I bet their own tax affairs wouldn't stand much scrutiny and possibly they haven't updated whoever re: a change in status, that kind of thing. I wonder which way their editors will lurch.
  9. If we were prepared to carry out reforms that were just as radical this would be no problem at all. Leaving people to pay for their own bumwiping and healthcare in retirement would create these circumstances with the stroke of a pen. The notion that faced with terrible economic hardship the only ideas the current government have are to ramp up the provision of medical services to the economically unproductive says it all. When the boomers were in their peak earning years they were only too happy to see their own parent's generation deprived in exchange for low low taxes. All of a sudden we're sacrificing services for children for services for old farts, something is going on isn't it.
  10. "Negative growth" ahoy! Prices only go up...in a downward manner.
  11. I had one two. What is funny is that I currently rent two furnished flats and split my time equally. They can't decide if I owe everyone full council tax, or owe nobody full council tax. Apparently if you can't sign to say you have one primary residence where you spend more than half your time, it upsets the computer. The form threatens you with prosecution if you lie, so I can't sign it which has unfortunately kicked the legs out from under the dynamic duo dealing with my enquiry! They have suggested I just pick one and sign the form. I've asked for this advice in writing. Apparently they can't do this, so I'm not doing anything. Don't really care how it pans out, its only for a month, but its funny to hear the gears crunching. Edit: I asked them what they normally do with MPs in this situation. In fairness to the grim faced bureaucrats, they did actually laugh at this.
  12. It has always been thus, look at the figures for white collar vs. chav crime. If we were acting entirely rationally from an economic point of view (although this ignores quality of life which is far too rational frankly) every cop in the country would be investigating white collar fraud instead of wasting their time uneconomically on busting people for nicking batteries from Aldi or whatever.
  13. db, I take your point but you'll have to look very hard here to find anyone who thinks you should be giving money to younger generations. I think you have to ask yourself how the circumstances have arisen that this should be considered necessary, and think what that actually really means, how bad things have really become: your generation has created the circumstances where hard working younger people jumping through all the hoops set out for them still can't become self-sufficient as adults. It sounds shocking because it is shocking.
  14. i still think in Japan more of them would have done the decent thing and gone to join their ancestors rather than whine.
  15. But they failed in the efficient allocation of capital. They lent money to people who couldn't pay it back. They misvalued assets. They got their models wrong. They are failures. In Japan they'd have taken the honourable way out, in Britain they just award themselves a nice bonus for the hard time they've had being in terms of being failures. Thus a failing sector, filled with failures, is rewarded for failure.
  16. Heres a bracing true story for you. My grandparents worked as a housekeeper and gardener for someone who had the same job title I currently have so a fair like-to-like comparison can be made.=. They were provided with tied housing. Today, the house he lived in is 33 times my income(!), the tied house he let my grandparents have as part of working for him is 10 times my income and would be well outside my ability to take on a rental basis. Two generations ago you owned the big house on the hill, today you can't even live in the smallest house in the village as a renting tenant. This is progress apparently.
  17. Bennett is quite sneaky with the rhetoric. She doesn't actually disagree, she criticises the form of the argument for lacking reference to ideology and politics which is quite crafty even if its ultimately empty. Thing is, this isn't a new point, it was made in Generation X 20+ years ago, if I had the textfile I could quote the main paragraph and it is being born first, pulling up the ladder and eating up the wealth of their parents and now their children in one long party. Selfishness doesn't need a coherent theoretical framework behind it, its just what people do because they can.
  18. No, we should look after the kids regardless of how they came into this world. However, if you manage to breed nine offspring without an income, you are clearly irresponsible and unfit to have them and they should be taken into care. Unfortunately all this cloying sentimentality about the fameelee means stuff like this may even get worse under the present government than better.
  19. "Kids, stop moaning and just leave the baby-boomers alone" says Catherine Bennett, who scathingly criticises 'Generation Debt' for being feckless and lazy. http://www.guardian....-boomer-bashing "How the baby boomers blew it" says Frances Beckett, and quite interestingly draws a connection between the selfishness and greed of the 'cradle to grave' generation and New Labour. http://www.guardian....boomers-blew-it Bum-wiping, or at least commode use, gets a mention from both. This issue seems to be gathering steam now even if its old hat in these here parts. Boomerism that is, not the toilet habits of the elderly.
  20. I don't need any money from the taxpayer. I'd be quite happy to be paid a percentage of income. Unfortunately you couldn't really afford it and the mass removal of subsidies like that would cause fees to rocket out the reach of most British students. I suggest you stick with the present system and don't assume everyone is as greedy and cynical as you are. In my position working for nothing would be the greedy position, ask around, I'm sure someone can explain to you how this works.
  21. Most them do actually but anyhow. Its a serious enough question, why do private sector zealots whine when we provide services well under the cost of what they cost to provide and indeed several times under what the market will take?
  22. 20 people want every place I can provide, perhaps I should be paid more, what do you think?
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