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When The Free Market Fails

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We can lower our costs.

Yep and house prices can still go up....

I always thought that this globalisation crap was a way of reducing living standards, it just didn't make any sense especially the knowledged based crap, you sweat whilst we think.

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To such an extent that £2 a day is a liveable wage?

Well that depends on the purchasing power of a £.

If houses were only £5 and a fillet steak only cost 1p £2 an day would make you a rich man.

Now, before you rush in and lambast me for making this outrageous claim think for a second, it's true. Those in zimbabwe are on millions of $'s per day but their currency is worthless.

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Well that depends on the purchasing power of a £.

If houses were only £5 and a fillet steak only cost 1p £2 an day would make you a rich man.

Now, before you rush in and lambast me for making this outrageous claim think for a second, it's true. Those in zimbabwe are on millions of $'s per day but their currency is worthless.

And how do you propose the pound achieves the enormous rise in purchasing power needed?

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By lowering costs.

Lowering costs must equate to elbowing the minimum wage. Then, outside of illegals, no-one would be dull enough to work for, say, £2 per hour when there's SS available that will pay them more for not taking a job, so withdrawing welfare for those who refuse to take a job that in all likelihood would mean that they wouldn't be able to feed/house themselves would inevitably lead to an explosion in petty crime because of necessity, maybe civil unrest on an organised scale.

Or did you mean saving a few bob on paperclips will be Blighty's salvation?

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http://www.telegraph.co.uk/sport/football/world-cup-2010/7803428/World-Cup-replica-balls-made-on-less-than-2-a-day.html

How do Western nations prevent jobs disappearing to ultra low wage economies? People are scornful of protectionist measures, but what alternatives do we have?

Would you prefer these guys lost their jobs to machines and had even less money to buy food?

Not saying its a nice situation, but what exactly are you trying to say?

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Lowering costs must equate to elbowing the minimum wage. Then, outside of illegals, no-one would be dull enough to work for, say, £2 per hour when there's SS available that will pay them more for not taking a job, so withdrawing welfare for those who refuse to take a job that in all likelihood would mean that they wouldn't be able to feed/house themselves would inevitably lead to an explosion in petty crime because of necessity, maybe civil unrest on an organised scale.

Or did you mean saving a few bob on paperclips will be Blighty's salvation?

Wages are only one part of the cost of production, there are also; profits/interest, rent and taxes that all take their fair share.

I say squeeze out the land costs by rejigging the tax system.

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but what alternatives do we have?

Put 1000% tariffs on all goods coming from countries that do not let their currencies float freely.

Floating currencies should have made Asian countries' goods and services more expensive (to a point), facilitating our re-adjustments to globalisation. On top of that we wouldn't have been drowned by the tsunami of extra cash turned into fresh bank loans that resulted from their currency manipulation exercises.

The b*stards should pay us damages for what they've done. That we let them do it for so long shows how corrupt our governments are.

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How do Western nations prevent jobs disappearing to ultra low wage economies? People are scornful of protectionist measures, but what alternatives do we have?

Why is jobs "disappearing" a bad thing? Millions of jobs "disappeared" during the agricultural, industrial and information revolutions, but people found or invented other things to do, and other things to sell. So long as there are problems of life to be solved there will be jobs to be had solving them.

Jobs disappearing is the basis of our prosperity, otherwise we would still be scratching a living from the earth.

When someone "loses" their job to overseas it does at least two good things.

1. It makes what they were doing cheaper for everyone else to buy - which is a benefit to society.

2. It makes that person available to do something else, so there are new goods and services to buy - which is also a benefit to society.

What we have to do is make the transition as easy as possible - which is a hard thing to do, but what we can't do is to stand still and try to protect ourselves from the market, you would have more success holding back the tide.

Edit -1000% tariffs would only make people in this country poorer. Which I would not consider a good thing.

Edited by LJAR

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Put 1000% tariffs on all goods coming from countries that do not let their currencies float freely.

Floating currencies should have made Asian countries' goods and services more expensive (to a point), facilitating our re-adjustments to globalisation. On top of that we wouldn't have been drowned by the tsunami of extra cash turned into fresh bank loans that resulted from their currency manipulation exercises.

The b*stards should pay us damages for what they've done. That we let them do it for so long shows how corrupt our governments are.

Of itself this policy would have been fine. We could have sat back for a few years and put our feet up, safe in the knowledge that the Chinese government were hampering their own workers by manipulating the currency.

But instead of doing that we decided to trap each other under a mountian of debt by speculating in housing.

It's not the Chinese's fault that we can't run our own economy!

Edited by Chef

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Why is jobs "disappearing" a bad thing? Millions of jobs "disappeared" during the agricultural, industrial and information revolutions, but people found or invented other things to do, and other things to sell. So long as there are problems of life to be solved there will be jobs to be had solving them.

Jobs disappearing is the basis of our prosperity, otherwise we would still be scratching a living from the earth.

When someone "loses" their job to overseas it does at least two good things.

1. It makes what they were doing cheaper for everyone else to buy - which is a benefit to society.

2. It makes that person available to do something else, so there are new goods and services to buy - which is also a benefit to society.

What we have to do is make the transition as easy as possible - which is a hard thing to do, but what we can't do is to stand still and try to protect ourselves from the market, you would have more success holding back the tide.

Edit -1000% tariffs would only make people in this country poorer. Which I would not consider a good thing.

100% correct. Well said.

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Why is jobs "disappearing" a bad thing? Millions of jobs "disappeared" during the agricultural, industrial and information revolutions, but people found or invented other things to do, and other things to sell. So long as there are problems of life to be solved there will be jobs to be had solving them.

Jobs disappearing is the basis of our prosperity, otherwise we would still be scratching a living from the earth.

When someone "loses" their job to overseas it does at least two good things.

1. It makes what they were doing cheaper for everyone else to buy - which is a benefit to society.

2. It makes that person available to do something else, so there are new goods and services to buy - which is also a benefit to society.

What we have to do is make the transition as easy as possible - which is a hard thing to do, but what we can't do is to stand still and try to protect ourselves from the market, you would have more success holding back the tide.

Edit -1000% tariffs would only make people in this country poorer. Which I would not consider a good thing.

What new manufacturing paradigm can we corner the market in? Your argument is based upon racism and exceptionalism; we provide the brain power, and the Chinese provide the worker bees.

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What new manufacturing paradigm can we corner the market in? Your argument is based upon racism and exceptionalism; we provide the brain power, and the Chinese provide the worker bees.

Deary me, when will you lefties get off your high horse and deal with the academic arguments rather than whittling everything down to the moral.

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Of itself this policy would have been fine. We could have sat back for a few years and put our feet up, safe in the knowledge that the Chinese government were hampering their own workers by manipulating the currency.

But instead of doing that we decided to trap each other under a mountian of debt by speculating in housing.

It's not the Chinese's fault that we can't run our own economy!

It's a toughie. True that the Chines Yuan is tied to the USD and therefore has been artificially held down. This has let the trade from there continue unabated without the rise in price which would naturally have come from an appreciated currency. Then we let them lend us and the USA a large proportion of the money to buy their goods. Wel, we obviously know how to cut our own b..ls off.

We cannot just 'cut costs'. We can become more competitive gradually and actually manufacture and export like Germany does so well. We have the talent but often don't use it and stand about supporting companies which are bust. We need to shrink the public sector to about 30% (from 52% now, up from 37% in 1997) of our economy and stop pretending that public spending is good economics.

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Deary me, when will you lefties get off your high horse and deal with the academic arguments rather than whittling everything down to the moral.

When will losers like you accept that we don't want Europeans digging around on landfill sites to find 5 aluminium cans a day to earn a "living"?

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Deary me, when will you lefties get off your high horse and deal with the academic arguments rather than whittling everything down to the moral.

No, those are the facts. The belief that outsourcing to low wage economies poses no threat to Western economies in predicated upon the belief that the Chinese will just do the grunt work. This is the fundamental article of faith of the neoliberal movement.

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No, those are the facts. The belief that outsourcing to low wage economies poses no threat to Western economies in predicated upon the belief that the Chinese will just do the grunt work. This is the fundamental article of faith of the neoliberal movement.

Oh I don;'t think it is.

I think that's what they say when cornered, but what they want is everyone else to be landless serfs while they carry on controlling all the important resources, land and capital in the west and we all work for ****** all.

A free market it isn't btw. Although I'm probably just going to invent more terminology at some point rather than try and salvage the term.

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It's a toughie. True that the Chines Yuan is tied to the USD and therefore has been artificially held down. This has let the trade from there continue unabated without the rise in price which would naturally have come from an appreciated currency. Then we let them lend us and the USA a large proportion of the money to buy their goods. Wel, we obviously know how to cut our own b..ls off.

We cannot just 'cut costs'. We can become more competitive gradually and actually manufacture and export like Germany does so well. We have the talent but often don't use it and stand about supporting companies which are bust. We need to shrink the public sector to about 30% (from 52% now, up from 37% in 1997) of our economy and stop pretending that public spending is good economics.

Instead of using Chinese labour for what it was, a gift from the Chinese, we used our newly created surplus income as a tool to bid up the price of housing.

We can blame the Chinese currency manipulators, but that would seem a little strange considering that they have absolutely nothing to do with British fiscal policy.

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Instead of using Chinese labour for what it was, a gift from the Chinese, we used our newly created surplus income as a tool to bid up the price of housing.

We can blame the Chinese currency manipulators, but that would seem a little strange considering that they have absolutely nothing to do with British fiscal policy.

Houses went up because banks pretended to have money they didn't really have - and this was enabled by the advent of the ATM, which meant that banks didn't need to use as much cash as previously and could therefore lie more and get away with it.

As this meant that large parts of the population were apparently being paid for doing ****** via HPI all they stopped working and wanted higher wages to maintain their interest, which lead to all the jobs going abroad, so slaves in china.

Now HPI is over, the jobs are gone and the banks are doomed, we will have to rebuild after the system has finally finished dying and the current banking elite and political class either mamage to change their minds about what is important or have been removed from power one way or another.

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We can blame the Chinese currency manipulators, but that would seem a little strange considering that they have absolutely nothing to do with British fiscal policy.

??????

These aren't answers. Are you just writing words?

Can't blame Chinese currency manipulation because the UK ran budget deficits?

There's a subject that's recently become fashionable in the blogosphere called 'accounting identities'. I suggest you have a look.

Just Googled the phrase to check what you would come a cross and saw a page from the always excellent Michael Pettis of 'China Financial Markets':

http://mpettis.com/2010/04/the-rmb-and-the-magic-of-accounting-identities/

I suggest you read his posts of the last 12 months to familiarise yourself with the subject.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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