Comments on: City doubts about the Bank of England http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/ Conservative Party Member of Parliament for Wokingham Sun, 12 Oct 2008 12:14:29 +0000 http://wordpress.org/?v=2.6.2 By: JamesG http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-6558 JamesG Mon, 24 Sep 2007 09:48:24 +0000 http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-6558 Up to now, Conservatives have been foursquare in saying that Britain's apparent prosperity came principally from reforms made by previous Conservative governments. Now that there is a sniff of trouble it's clearly all Brown's fault and this prosperity is apparently an illusion. How opportune! Brown will no doubt now follow the well-worn Conservative line in blaming a worldwide recession for the coming UK bust. How easy life becomes when you can take credit for a boom and avoid blame for the inevitable following bust. Some of us actually understand that a boom based purely on debt has to end in a bust, however some others seem only to have this wisdom in hindsight. This latter group seems to include every mainstream economist, the city of London and the entire world banking industry. Are you in the first or the second group? Brown's main mistake was in believing those who continually try to convince us that wealth can actually be created just from moving money or selling debt and not from actually adding value to raw materials. Thus he, Blair and the rest of the clowns indeed did follow the Conservative doctrine in allowing the erosion of manufacturing industry, heralding the service industry economy and even applauding the transfer of jobs from UK to China. Where will this end up leaving the Western economy pray tell us? Also, if we are about clearing up the falsity of economic indicators shall we also get back to a proper accounting of unemployed? Reply: We agree about the failure to include many out of work in the unemployment figures. I have highlighted that on this blog many times, and my colleagues have highlighted it elsewhere. I do not agree that all wealth comes from adding value to physical commodities, although that is import.It can also come from services. Up to now, Conservatives have been foursquare in saying that Britain’s apparent prosperity came principally from reforms made by previous Conservative governments. Now that there is a sniff of trouble it’s clearly all Brown’s fault and this prosperity is apparently an illusion. How opportune! Brown will no doubt now follow the well-worn Conservative line in blaming a worldwide recession for the coming UK bust. How easy life becomes when you can take credit for a boom and avoid blame for the inevitable following bust.

Some of us actually understand that a boom based purely on debt has to end in a bust, however some others seem only to have this wisdom in hindsight. This latter group seems to include every mainstream economist, the city of London and the entire world banking industry. Are you in the first or the second group?

Brown’s main mistake was in believing those who continually try to convince us that wealth can actually be created just from moving money or selling debt and not from actually adding value to raw materials. Thus he, Blair and the rest of the clowns indeed did follow the Conservative doctrine in allowing the erosion of manufacturing industry, heralding the service industry economy and even applauding the transfer of jobs from UK to China. Where will this end up leaving the Western economy pray tell us?

Also, if we are about clearing up the falsity of economic indicators shall we also get back to a proper accounting of unemployed?

Reply: We agree about the failure to include many out of work in the unemployment figures. I have highlighted that on this blog many times, and my colleagues have highlighted it elsewhere. I do not agree that all wealth comes from adding value to physical commodities, although that is import.It can also come from services.

]]> By: UK Debt Blog » City doubts about the Bank of England http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-6185 UK Debt Blog » City doubts about the Bank of England Mon, 17 Sep 2007 15:15:25 +0000 http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-6185 [...] admin wrote an interesting post today onHere’s a quick excerptIt is fashionable today to blame private sector market participants for being too inventive in the over borrowed debt vehicles they designed in the easy money years. Maybe we should blame the UK government too, for their elaborate … [...] [...] admin wrote an interesting post today onHere’s a quick excerptIt is fashionable today to blame private sector market participants for being too inventive in the over borrowed debt vehicles they designed in the easy money years. Maybe we should blame the UK government too, for their elaborate … [...]

]]> By: Tony Makara http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5828 Tony Makara Mon, 10 Sep 2007 12:51:29 +0000 http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5828 Excellent article John. I have always been opposed to the 'independence' of the Bank of England on the grounds of accountability. Gordon Brown already has an opt-out clause written into the BOE's remit, which he is sure to enact if ever the decisions of the BOE run counter Gordon Brown's political plans. We certainly need to get a more accurate reading on inflation. Labour have clearly moved the goalposts. I read recently that some financial experts believe UK inflation to be a high as 7% and about to climb. More must be done to expose Gordon Brown's ersatz-economy. Reply: Thank you. Yes, inflation has been running well above Brown's CPI measurement, which disguised it from some of the pundits but not from the public going shopping. I think now inflation is going to come down on both sides of the Atlantic. Excellent article John. I have always been opposed to the ‘independence’ of the Bank of England on the grounds of accountability. Gordon Brown already has an opt-out clause written into the BOE’s remit, which he is sure to enact if ever the decisions of the BOE run counter Gordon Brown’s political plans. We certainly need to get a more accurate reading on inflation. Labour have clearly moved the goalposts. I read recently that some financial experts believe UK inflation to be a high as 7% and about to climb. More must be done to expose Gordon Brown’s ersatz-economy.

Reply: Thank you. Yes, inflation has been running well above Brown’s CPI measurement, which disguised it from some of the pundits but not from the public going shopping. I think now inflation is going to come down on both sides of the Atlantic.

]]> By: Brian http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5822 Brian Mon, 10 Sep 2007 11:07:32 +0000 http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5822 I hope that you will permit me a second post. When Gordon Brown was in Oppostion and the Conservatives began to use PFI in a modest way he described it as "a cynical distortion of the public finances". I wonder what he would call it now?! Reply: I wonder. I would like to turn this into a newspaper article, but the newspapers are not very willing to rpint this kind of piece. I hope that you will permit me a second post.
When Gordon Brown was in Oppostion and the Conservatives began to use PFI in a modest way he described it as “a cynical distortion of the public finances”. I wonder what he would call it now?!

Reply: I wonder. I would like to turn this into a newspaper article, but the newspapers are not very willing to rpint this kind of piece.

]]> By: Brian http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5820 Brian Mon, 10 Sep 2007 10:52:27 +0000 http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5820 As usual, an interesting and insightful post. May I suggest that you make this into an article for a newspaper. Most journalists don't look beyond the spin. As usual, an interesting and insightful post. May I suggest that you make this into an article for a newspaper. Most journalists don’t look beyond the spin.

]]> By: Brian Tomkinson http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5815 Brian Tomkinson Mon, 10 Sep 2007 07:45:49 +0000 http://www.johnredwoodsdiary.com/2007/09/10/city-doubts-about-the-bank-of-england/#comment-5815 That's more like it! Now please attempt to get Cameron and Osborne to follow your lead and put their heads above the parapet and show that they aren't afraid of this dreadful Brown but will highlight day after day the damage this man has inflicted on this country and, as you have done, illustrate the solutions to the problems he has created. That’s more like it! Now please attempt to get Cameron and Osborne to follow your lead and put their heads above the parapet and show that they aren’t afraid of this dreadful Brown but will highlight day after day the damage this man has inflicted on this country and, as you have done, illustrate the solutions to the problems he has created.

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