This Is My Summary

[Bubble Pricker]

I have posted this on David Smith's board earlier today (http://www.economicsuk.com/blog/000523.html)

It is my summary of what Gordon Brown has done for this country.

Gordon Brown's record as a chancellor is atrocious. He has overseen 10 years in which the followings has happened:

• A massive inflation of credit, money supply and house prices, creating the illusion of wealth
  
• A consumer spending boom based on this illusion of wealth, financed by credit and for products mostly manufactured outside of the UK
  
• The corresponding decline of the UK manufacturing industry
  
• The fiddling of inflation figures by weighting the "basket" that measures inflation towards cheap products imported from Asia, most prominently consumer electronics. This is a laughable measure of inflation, because it measures the price of discretionary spending, as opposed to necessities. How many TV sets, DVD players and mobile phones did you buy last month?
  
• "Real" inflation of the price of necessities (rent/mortgage payments, utilities, council tax, food, public transport) is running at 15% or more per annum
  
• Wage inflation has not kept pace with the real inflation of the price of necessities, due to deflationary wage pressures from Asia and Eastern Europe
  

As a result, despite all the illusionary wealth created by house price and other asset inflation, the people of Britain are worse off in terms of real spending power. If everything is so well with the British economy, why is then that young families are struggling to make ends meet? Why are students in debt by tens of thousands of pounds? Why are personal insolvencies rising at record rates? Why are standards of living falling? Why does a family now require two earners, when previously a single earner's salary could support a whole family?

Anyone with their eyes open can see it is based on the creation of illusionary wealth, whilst real incomes and standards of living are falling. This era is now coming to an end, and the British public are will waking up to the fact that they have been "duped". However, I suspect Gordon Brown will not carry the blame. His successor is inheriting a poisoned chalice.

[Realistbear]

I agree with all of your points but I would add to them the dreadful social cost of his miracle years:

1. Divided families driven out of home towns by unaffordable housing.

2. Bankruptcy, divorce, depression and other symptoms of a debt ridden culture.

3. Financial enslavement of masses.

4. Loss of hope causing thousands to leave family and friends to risk a new life abroad.

5. Endangerment of towns and villages caused by pricing out esssential workers such as nurses, firemen etc.

6. A pervading sense of bitterness and resentment causing social divisions between the OOs and the rest.

[THE BALD MAN]

I have posted this on David Smith's board earlier today (http://www.economicsuk.com/blog/000523.html)

It is my summary of what Gordon Brown has done for this country.

Gordon Brown's record as a chancellor is atrocious. He has overseen 10 years in which the followings has happened:

• A massive inflation of credit, money supply and house prices, creating the illusion of wealth

• A consumer spending boom based on this illusion of wealth, financed by credit and for products mostly manufactured outside of the UK

• The corresponding decline of the UK manufacturing industry

• The fiddling of inflation figures by weighting the "basket" that measures inflation towards cheap products imported from Asia, most prominently consumer electronics. This is a laughable measure of inflation, because it measures the price of discretionary spending, as opposed to necessities. How many TV sets, DVD players and mobile phones did you buy last month?

• "Real" inflation of the price of necessities (rent/mortgage payments, utilities, council tax, food, public transport) is running at 15% or more per annum

• Wage inflation has not kept pace with the real inflation of the price of necessities, due to deflationary wage pressures from Asia and Eastern Europe

As a result, despite all the illusionary wealth created by house price and other asset inflation, the people of Britain are worse off in terms of real spending power. If everything is so well with the British economy, why is then that young families are struggling to make ends meet? Why are students in debt by tens of thousands of pounds? Why are personal insolvencies rising at record rates? Why are standards of living falling? Why does a family now require two earners, when previously a single earner's salary could support a whole family?

Anyone with their eyes open can see it is based on the creation of illusionary wealth, whilst real incomes and standards of living are falling. This era is now coming to an end, and the British public are will waking up to the fact that they have been "duped". However, I suspect Gordon Brown will not carry the blame. His successor is inheriting a poisoned chalice.

What about stealth taxes and the destruction of pensions? Increased council tax charges by changing grant allocations? Taxes at their highest level ever!

Why is there no creditable opposition that can point out the disaster that is Gordan and Tony's legacy? Is there just too much VI?

[LargelyIgnorant]

When Brown first, at Bankers' command

Arose from out the azure main;

This became the charter of the land,

And guardian angels sung this strain:

Rue, Britannia! Britannia, rues the day!

Britons ever, ever, ever shall be debt slaves!

[Guest Farticus]

He's succeeded in one thing very well

Convincing a huge number of people that the economy is doing great

A bit like one of those Ocean Finance maggots

"Get the holiday/conservatory/kitchen a mug like you deserves!

"

[Guest Charlie The Tramp]

Why are personal insolvencies rising at record rates?

Simply because many unemployed are spending much more than their received benefits. Check the Gazette ( My Link ) to count the number of unemployed among the 200 Bankruptcies published daily, the numbers are shocking.

[polionamen]

I have posted this on David Smith's board earlier today (http://www.economicsuk.com/blog/000523.html)

It is my summary of what Gordon Brown has done for this country.

Gordon Brown's record as a chancellor is atrocious. He has overseen 10 years in which the followings has happened:

• A massive inflation of credit, money supply and house prices, creating the illusion of wealth

• A consumer spending boom based on this illusion of wealth, financed by credit and for products mostly manufactured outside of the UK

• The corresponding decline of the UK manufacturing industry

• The fiddling of inflation figures by weighting the "basket" that measures inflation towards cheap products imported from Asia, most prominently consumer electronics. This is a laughable measure of inflation, because it measures the price of discretionary spending, as opposed to necessities. How many TV sets, DVD players and mobile phones did you buy last month?

• "Real" inflation of the price of necessities (rent/mortgage payments, utilities, council tax, food, public transport) is running at 15% or more per annum

• Wage inflation has not kept pace with the real inflation of the price of necessities, due to deflationary wage pressures from Asia and Eastern Europe

As a result, despite all the illusionary wealth created by house price and other asset inflation, the people of Britain are worse off in terms of real spending power. If everything is so well with the British economy, why is then that young families are struggling to make ends meet? Why are students in debt by tens of thousands of pounds? Why are personal insolvencies rising at record rates? Why are standards of living falling? Why does a family now require two earners, when previously a single earner's salary could support a whole family?

Anyone with their eyes open can see it is based on the creation of illusionary wealth, whilst real incomes and standards of living are falling. This era is now coming to an end, and the British public are will waking up to the fact that they have been "duped". However, I suspect Gordon Brown will not carry the blame. His successor is inheriting a poisoned chalice.

1) Monetary loosening happened everywhere in the world. The worst was in the US, under the Master Greenspan. The UK loosening helped preventing recession in 2001 to 2003.

2) The consumer spending boom helped boosting the economic growth, creating 2m jobs in 10 years

3) The UK never had a strong manufacturing industry. Try to cite 5 names of big UK industrial companies (matching the likes of Siemens?) This economy is mainly based on services. There, the UK is doing very well, thanks

4) Inflation baskets are a big debate. But all the chavs and even myself are buying flat screen TVs, laptops, cars, Ipods, etc. These items have seen a sharp price reduction. It is justified they enter the basket as a bigger proportion as they make more of your purchases

5) Real inflation depends on your profile. 10% is more a normal number. But these is still not 100% of your outgoings!

6) Wage inflation has been strong, above inflation, which means the country is better off. The debate is on the distribution of wealth. It is not surprising that in a more globalised world, the worse-off people have a similar profile : manufacturing/ low level in services jobs, little higher education, etc.

I am no GB enthusiast.

What I can praise was his decision to give the independence to the BoE and restoring the confidence that Labour can govern.

Your constructive criticisms must be :

- he has been fiddling a lot with the duration of his business cycle so he did not reduce public spending as needed. This was politically driven, so he lacks courage

- despite being fairly leftist, he did not put enough weight to counter balance the drive of NuL towards very market-friendly policies.

- it is unclear what he can do so close to general elections not to ruin his chances.

The rest is just angry criticism showing a lack of understanding of the economy

Edited June 25, 2007 by polionamen

[Guest happy?]

1) Monetary loosening happened everywhere in the world. The worst was in the US, under the Master Greenspan. The UK loosening helped preventing recession in 2001 to 2003.

2) The consumer spending boom helped boosting the economic growth, creating 2m jobs in 10 years

3) The UK never had a strong manufacturing industry. Try to cite 5 names of big UK industrial companies (matching the likes of Siemens?) This economy is mainly based on services. There, the UK is doing very well, thanks

4) Inflation baskets are a big debate. But all the chavs and even myself are buying flat screen TVs, laptops, cars, Ipods, etc. These items have seen a sharp price reduction. It is justified they enter the basket as a bigger proportion as they make more of your purchases

5) Real inflation depends on your profile. 10% is more a normal number. But these is still not 100% of your outgoings!

6) Wage inflation has been strong, above inflation, which means the country is better off. The debate is on the distribution of wealth. It is not surprising that in a more globalised world, the worse-off people have a similar profile : manufacturing/ low level in services jobs, little higher education, etc.

I am no GB enthusiast.

What I can praise was his decision to give the independence to the BoE and restoring the confidence that Labour can govern.

Your constructive criticisms must be :

- he has been fiddling a lot with the duration of his business cycle so he did not reduce public spending as needed. This was politically driven, so he lacks courage

- despite being fairly leftist, he did not put enough weight to counter balance the drive of NuL towards very market-friendly policies.

- it is unclear what he can do so close to general elections not to ruin his chances.

The rest is just angry criticism showing a lack of understanding of the economy

Much of the criticism here could equally have been levelled at any UK Chancellor in the last 25 years. The one that stands least examination is the criticism that the credit-boom is solely the responsibility of the Chancellor - I've never heard such mealy-mouthed twaddle in my life - at what point does personal responsibility kick-in?

Nobody has forced anyone into buying consumer-goods on credit cards, MEW to buy some un-needed but desirable 4x4, or other unnecessary trapping of a lifestyle which is unsustainable. We live in a country where no-one need starve, and a world where children die in other countries because they have no access to fresh water.

Housing policy is a real problem in the UK but some people have no perspective on just how fortunate they are, and how much their own financial decisions affect their own outcomes.

[Bubble Pricker]

The one that stands least examination is the criticism that the credit-boom is solely the responsibility of the Chancellor - I've never heard such mealy-mouthed twaddle in my life - at what point does personal responsibility kick-in?

Nobody has forced anyone into buying consumer-goods on credit cards, MEW to buy some un-needed but desirable 4x4, or other unnecessary trapping of a lifestyle which is unsustainable.

True, but Gordon Brown has overseen this development and has, at least by inertia, tolerated it. My contention is he has done so because the illusionary wealth creted by the consumer credit boom has to date reflected well on his "managing" of the economy. There are things that could have been done to prevent, stop or at least dampen the credit boom, such as introducing tighter regulation of credit. If almost everything is regulated to great detail in this societey, why are the banks allowed to engage in credit excesses without constraint?

[LargelyIgnorant]

Much of the criticism here could equally have been levelled at any UK Chancellor in the last 25 years. The one that stands least examination is the criticism that the credit-boom is solely the responsibility of the Chancellor - I've never heard such mealy-mouthed twaddle in my life - at what point does personal responsibility kick-in?

That's a bit of a straw man argument - nobody says it is his sole responsability; largely.... perhaps:

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

The Chancellor of the Exchequer is the title held by the British Cabinet minister responsible for all economic and financial matters.

http://news.bbc.co.uk/1/hi/business/3804449.stm

On Tuesday, Gordon Brown becomes the UK's longest continuously serving Chancellor of the Exchequer since the 1820s, overtaking David Lloyd George who served for seven years and 43 days between 1908 and 1915.

HPCers could hardly stand accused of not blaming the 'sheeple' as well!

[Guest mattsta1964]

My summary of Gordon Brown

A

Deceitful

Incompetent

Sinister

Arrogant

Sociopathic

Totalitarian

Evil

Ratbag

[Guest happy?]

That's a bit of a straw man argument - nobody says it is his sole responsability; largely.... perhaps:

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

http://news.bbc.co.uk/1/hi/business/3804449.stm

HPCers could hardly stand accused of not blaming the 'sheeple' as well!

No credit-boom would exist without people deciding to take-on credit. Just as there are those who make such financial decisions on a reasoned, rational basis, e.g. I need a car for work and can afford model X, there are many, many more who have MEWed and MEWed again to get this year's model.

Much of the credit boom is based upon personal fantasy, the desire for fulfillment through consumerism, and taking massive financial risks which bears no rational consideration. It's about time someone stood up and said 'This is my financial error, I am responsible for what I've done.'

The constant process of annually replacing consumer goods because there's a new model in the shops is a nonsense, is damaging the economy, and damaging the environment.

These are personal decisions, anyone can opt out of consumerism and use only what's necessary, saying 'no' to the debt economy. Time for personal responsibility.

[MarkG]

No credit-boom would exist without people deciding to take-on credit.

And no credit boom would have existed without historically low interest rates.

Who has control over interest rates in the UK?

Ah, the Fat Scotsman.

Don't blame the victims for the actions of one politician who could have brought the artificial boom to an end at any time.

[LargelyIgnorant]

No credit-boom would exist without people deciding to take-on credit. Just as there are those who make such financial decisions on a reasoned, rational basis, e.g. I need a car for work and can afford model X, there are many, many more who have MEWed and MEWed again to get this year's model.

Much of the credit boom is based upon personal fantasy, the desire for fulfillment through consumerism, and taking massive financial risks which bears no rational consideration. It's about time someone stood up and said 'This is my financial error, I am responsible for what I've done.'

The constant process of annually replacing consumer goods because there's a new model in the shops is a nonsense, is damaging the economy, and damaging the environment.

These are personal decisions, anyone can opt out of consumerism and use only what's necessary, saying 'no' to the debt economy. Time for personal responsibility.

GordEnron has been responsible for directing the economy, for longer than anyone in UK history.

Whilst presiding over the biggest debt (not credit) boom in history, he completely and utterly failed to direct the debt boom.

He failed in his promise for 'no more boom and bust'.

He failed in his promise not to let house prices run away (and in doing so, made the UK globally uncompetitive)

A good director would have chanelled our component of the global debt boom into productive, wealth enhancing capital.

GordEnron directed the global debt boom into non-productive, wealth draining non productive assets - a housing bubble.

He was, and is, an utterly hopeless director of the economy. An incompetant Stalinist, centralist manager.

Time for personal responsibility for the person responsible for the UK's financial and economic matters.

====

edit: removed references to the insidious bankers' term 'credit boom' - it is a 'debt boom' for everyone apart from the banks.

Edited June 25, 2007 by LargelyIgnorant

[GAL BEAR]

EXCLLENT POST

Lets hope Joe Public starts to see this soon.......

[Thunderbird 900]

It seems the Nu Labour Trolls have been let loose again ...

[Guest Winnie]

GordEnron has been responsible for directing the economy, for longer than anyone in UK history.

Whilst presiding over the biggest debt (not credit) boom in history, he completely and utterly failed to direct the debt boom.

He failed in his promise for 'no more boom and bust'.

He failed in his promise not to let house prices run away (and in doing so, made the UK globally uncompetitive)

A good director would have chanelled our component of the global debt boom into productive, wealth enhancing capital.

GordEnron directed the global debt boom into non-productive, wealth draining non productive assets - a housing bubble.

He was, and is, an utterly hopeless director of the economy. An incompetant Stalinist, centralist manager.

Time for personal responsibility for the person responsible for the UK's financial and economic matters.

====

edit: removed references to the insidious bankers' term 'credit boom' - it is a 'debt boom' for everyone apart from the banks.

The whole thing about making the BoE """"independent""""" was the first ubercynical stunt he did....set up your scapegoat and then control their EVERY move...... but the sheeple don't get that nuance....and they are the voting majority :angry:

[Guest happy?]

And no credit boom would have existed without historically low interest rates.

Who has control over interest rates in the UK?

Ah, the Fat Scotsman.

Don't blame the victims for the actions of one politician who could have brought the artificial boom to an end at any time.

You're absolutely right of course. I can still remember that long, dark, wintry night in 2002 when he personally kicked-in my front door and made me sign the credit-card agreement. I didn't want the credit and I've never watched that 42" plasma TV I was compelled to take (complete with useless PPI).

Is there no-one to stop these NuLabour b*st*rds?

Oh the inhumanity of it all.

Will no-one think of the children?

etc ad nauseum

[Thunderbird 900]

Amazing! The NuLabour Trolls all seem to be new members. Coincidence or what?

[LargelyIgnorant]

You're absolutely right of course. I can still remember that long, dark, wintry night in 2002 when he personally kicked-in my front door and made me sign the credit-card agreement. I didn't want the credit and I've never watched that 42" plasma TV I was compelled to take (complete with useless PPI).

Is there no-one to stop these NuLabour b*st*rds?

Oh the inhumanity of it all.

Will no-one think of the children?

etc ad nauseum

OK, let's draw an analogy at the micro level.

GordEnron is the financial director of Widgets Inc.

Widgets Inc was the recipient of a massive amount of borrowed money. As financial director of the company, GordEnron had 2 choices:

(1) Create the fiscal framework in the company that encouraged spending on machinery, innovation, etc, improving the future income stream of the company and ensuring it's continued viability.

(2) Implement directives that encourage employees to sell all the machinery and use the money to buy everyone who works for Widgets Inc a new 6 series BMW.

He chose to implement (2).

As financial director, you set the framework/economic environment in which your employees operate. That's the point of being a director.

[Guest happy?]

OK, let's draw an analogy at the micro level.

GordEnron is the financial director of Widgets Inc.

Widgets Inc was the recipient of a massive amount of borrowed money. As financial director of the company, GordEnron had 2 choices:

(1) Create the fiscal framework in the company that encouraged spending on machinery, innovation, etc, improving the future income stream of the company and ensuring it's continued viability.

(2) Implement directives that encourage employees to sell all the machinery and use the money to buy everyone who works for Widgets Inc a new 6 series BMW.

He chose to implement (2).

As financial director, you set the framework/economic environment in which your employees operate. That's the point of being a director.

Except we're not employees, and we live in a world where we can make personal choices. The notion that because politicians set an economic agenda and that we each, individually, must slavishly follow it is daft - which presumably is why we have STRs on this site as well as potential FTBs patiently waiting for a crash.

Many of us looked at what was going on several years ago and said no thanks.

To use a less contrived analogy than yours: - just because someone offers you drinks at a party it doesn't mean they're responsible for your hangover.

[LargelyIgnorant]

Except we're not employees, and we live in a world where we can make personal choices. The notion that because politicians set an economic agenda and that we each, individually, must slavishly follow it is daft

You're saying that the fiscal/tax environment implemented by the government has no bearing on the economic decisions made by UK subjects.

This is wrong. The Chancellor of the Exchequer, the person responsible for all economic and financial matters, sets the framework in which people operate.

The government grabs almost 50% of people's income - all he had to do was slightly adjust taxation so that it encouraged wealth generation, rather than sitting on his ar5e whilst the UK became the most indebted country in the world.

To use a less contrived analogy than yours: - just because someone offers you drinks at a party it doesn't mean they're responsible for your hangover.

Err... No. Why do you think the government taxes alcohol?

[Nicholas Cage]

Except we're not employees, and we live in a world where we can make personal choices. The notion that because politicians set an economic agenda and that we each, individually, must slavishly follow it is daft - which presumably is why we have STRs on this site as well as potential FTBs patiently waiting for a crash.

Many of us looked at what was going on several years ago and said no thanks.

To use a less contrived analogy than yours: - just because someone offers you drinks at a party it doesn't mean they're responsible for your hangover.

What about Private Equity, because you can pay 5-10% tax instead of 40%. The AA lost 1/3 of it's 10,000 workforce, the company was bought for £1.8bn and £1.3bn of that was on credit. It's making double the profit it used to but they haven't started servicing any of the debt, it's all "pay nothing for 3 years". And they are borrowing more on top of the original loan.

I'm sure none of those people wanted to take on huge amounts of debt because of the tax system.

[laurejon]

BBC 1 programme on right now, it comes as no suprise that Brown the Socialist Dictator has been fidling more than just the books.

[Guest happy?]

What about Private Equity, because you can pay 5-10% tax instead of 40%. The AA lost 1/3 of it's 10,000 workforce, the company was bought for £1.8bn and £1.3bn of that was on credit. It's making double the profit it used to but they haven't started servicing any of the debt, it's all "pay nothing for 3 years". And they are borrowing more on top of the original loan.

I'm sure none of those people wanted to take on huge amounts of debt because of the tax system.

All of which suggests that Private Equity is deeply unpopular now and may well be a target for Brown's chancellor sometime in the near future.

No-one who's posted here seems either willing or able to address my central point - the role of the individual and their responsibility for their own financial actions. This is an idea which simply seems to have passed out of circulation. What surprises me most is those who whinge about a compensation culture seem first to whine about 'Broon's respsnsible for my financial woes'.

One wonders for the future of the development of oppositional ideas in the UK if the level of debate which is mustered consists of 'Gordenron' - about as politically incisive as 'Fatcher's Brittin'.