Monday, June 13, 2011

House of cards falling down ?

Growth - it ain't happening

I think that this just about covers everything that has been talked about here for the last three years, though I'd be interested to see everyones thoughts ..........

Posted by tudorian @ 09:30 AM (1486 views)
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5 thoughts on “House of cards falling down ?

  • A long and tedious ramble cum rant..

    ..next!

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  • What a long rant. Some good points, but plenty of muddled thinking too. His proposals are a mixed bag too:

    “A move away from debt-based to dividend-generating and equity-based financial instruments, as advocated notably by Islamic economists…”
    – Yes, generally a good idea. We need to end the tax-deductibility of interest for companies; so that they raise cash with equity, not debt. But he doesn’t explicitly mention tax-deductibility of interest, so I’ll class that under “wishy-washy ideals”.

    “Gold or silver-backed national currencies whereby money’s ethereal quality is given once more a sense of the real”
    – Ain’t gonna happen. The resulting deflation would cripple the economy. The world supply of gold is essentially fixed; whereas the world’s population and economy is growing. That means heavy price deflation. Nobody will borrow to invest, or even borrow to buy a house, if they expect their salary to fall by 5% a year because of deflation.

    “the adoption of more truthful indices – indices for example which reflect more accurately the real inflation rate or which consider human welfare in terms more subtle than blunt economic throughput”
    Such indices are available – lots of economics research companies issue their own cost-of-living indices and happiness indices. The question is how they are used. Only CPI and RPI are officially used – one as the BoE’s target, the other as the payment rate on index-linked bonds, pensions, and some other government payments. If you want to make increased happiness the official government target, then good luck; but don’t be surprised when they start adding Prozac to the water. Happiness is incredibly difficult to measure. The French are allegedly the least happy nation in Europe, despite having allegedly the best weather (not too hot/cold/wet/dry), the best food, the best wine, the best culture, a decent economy, etc.
    Again, it’s a wishy-washy ideal.

    “the introduction of local currencies”
    How does that tie in with your wish for gold-backed currency? Muddled thinking.

    “de-specialisation in industry”
    Yay, let’s all return to the pre-industrial era. Very bad idea.

    “restrictions on the export of the nation’s capital”
    Some top economists have called for the re-introduction of capital controls. There’s definitely a case to be made, but it’s a whole argument in itself.

    “Now while it would be impossible in so short a space to do justice to the various proposals touched upon above…”
    This is the longest article I’ve ever read on an online newspaper. Hardly a short space!

    There’s far too much muddled thinking, too many wishy-washy ideals and too few concrete proposals. No mention of LVT or of liberalising the planning regime, which would address quite a few of his ideals.

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  • Cornishtinmine says:

    I got bored after the first few sentences…

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  • All the growth is going to the banks, what does one expect.

    ~ Why don’t my carrots grow. Your picking them too early mate. Simples.

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  • thought it summed up a lot of the issues nicely

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