New Labour architects of their own downfall

[sasguru]

ah, the usual tactic, why not consider the following instead?

Do you think this Government has made any attempt to control house price inflation before say, a year or two ago?

Do you think the level of debt fuelling and demanded by the boom is not affecting the economy?

Do you think some labour voters have not benefitted from the boom and now want a low tax governement?

#

Point 1: No because they're economically incompetent
Point 2: Makes no grammatical sense
Point 3: The polls show a massive, almost unprecedented, swing to Tories. These are not people who have got rich under Labour, but who are hurting under them. Those who made some money couldn't care less who gets in. everyone knows the Tories won't lower taxes - they've said so.

[Bagpuss]

The government did have house price inflation under control: they were encouraging it! This is one of the main techniques (i.e. the perceived wealth effect) for maintaining their hold on power. The British people fell for it hook, line and sinker; as the nuLieBore bastards knew they would.

I agree to a point, percieved wealth for single residence home owners yes, who probably still consider themselves wealthy if falsely. I talking about those with cashed in equity from BTL, they are the new rich, the new Tories and probably many of the percieved wealthy too. Even if the wealth is an illusion it changes perceptions.

[Bagpuss]

#

Point 1: No because they're economically incompetent

Point 3: The polls show a massive, almost unprecedented, swing to Tories. These are not people who have got rich under Labour, but who are hurting under them. Those who made some money couldn't care less who gets in. everyone knows the Tories won't lower taxes - they've said so.

1/ I think although initially taken by surprise, they engineered it to last another several years, it's been longer than any house boom in recent history and could quite easily of fizzled out in 03/04 with proper monetary policy, however think of all that lovely stamp duty!

2/Do you think the level of debt which fueled the boom is not now affecting the economy?

3/I know that, but the public expect it.

[Moose423956]

I can't think of a single thing Labour have done right

Wasn't the decision to allow the Bank of England to raise and lower the base rate a good thing? I don't really know, I'm economically ignorant.

Edit: I feel sick, it reads like I'm defending NL. Oh God!

[sasguru]

1/ I think although initially taken by surprise, they engineered it to last another several years, it's been longer than any house boom in recent history and could quite easily of fizzled out in 03/04 with proper monetary policy, however think of all that lovely stamp duty!

2/Do you think the level of debt which fueled the boom is not now affecting the economy?

3/I know that, but the public expect it.

Hang on, I thought your initial post was defending Labour. Have you changed your mind? Yes add to Labour's Legacy the fuelling of an artificial boom based on debt.

[sasguru]

Wasn't the decision to allow the Bank of England to raise and lower the base rate a good thing? I don't really know, I'm economically ignorant.

Edit: I feel sick, it reads like I'm defending NL. Oh God!

I'll grant you - that was a good a thing.

[HairyArsedBloke]

On the face of it, making the BoE independent was a good thing to do. However, prior to the nuLieBore victory, the Conservatives had artificially kept rates too low and everyone knew that they had to rise. By making the BoE independent, Brown avoided the blame for the rise; cowardice from day one. The BoE is only pseudo-independent as the MPC has a large number of treasury members on it and the independent members are appointed by the government.

[Marina]

Guys, I agree with what everyone has been saying here (all the correct bits anyway).

But let's play devil's advocate for a moment. Given that the Yanks have been pursuing hell for leather an expansionary economic policy for ten years, how much leeway did GB really have if the City and the UK as a whole wasn't to be left floundering in the US wake and left irretrievably miles behind.

The question is whether it is better to throw caution to the wind and aim for 2 or 3 % per annum growth for years, even if there's bound to be a reaction (depsite GB's absurd conceited claim to have abolished boom and bust), or go for a more cautious 1 or 2 % annual growth?

In short, what's best: 2 steps forward and one step back, or 1 step forward and 1/4 step back?

We all know the Government is severely limited in tax rises it can impose on city firms and workers, because they'll simply hoof it off to somewhere the tax regime is more liberal.

But isn't the same pretty much true of financial regulation generally? Investors and speculators are bound to migrate where the rules are least onerous.

So in other words, how much could the Government really do without cooking the goose that laid the golden eggs?

[BrilloPad]

Guys, I agree with what everyone has been saying here (all the correct bits anyway).

But let's play devil's advocate for a moment. Given that the Yanks have been pursuing hell for leather an expansionary economic policy for ten years, how much leeway did GB really have if the City and the UK as a whole wasn't to be left floundering in the US wake and left irretrievably miles behind.

The question is whether it is better to throw caution to the wind and aim for 2 or 3 % per annum growth for years, even if there's bound to be a reaction (depsite GB's absurd conceited claim to have abolished boom and bust), or go for a more cautious 1 or 2 % annual growth?

In short, what's best: 2 steps forward and one step back, or 1 step forward and 1/4 step back?

We all know the Government is severely limited in tax rises it can impose on city firms and workers, because they'll simply hoof it somewhere the tax regime is more liberal.

But doesn't the same pretty much true of financial regulation generally? Investors and speculators are bound to migrate where the rules are least onerous.

So in other words, how much could the Government really do without cooking the goose that laid the golden eggs?

The government needs all the tax it can get. So presumably to get the growth you need to drop interest rates or print money and lower taxes.

But it looks like food and oil prices will remain high for years.

So inflation will be forced up both ways.

FWIW I think Gordon will try to engineer this scenario - just not sure how he would do it.

Then his successors would be left with high personal (and government) borrowing and a devalued currency. Hey ho.

[Lockhouse]

social mobility was probably greater than under Thatcher

Au contraire, no other Government has done more to reduce social mobility; By giving people incentives to stay poor via the benefits system, by removing incentives for entrepreneurs and small businesses, by removing grammar schools, by making sure that all graduates finish university in debt etc etc. Making sure that people with brains from poor backgrounds cannot succeed.

Labour and their minions depend on a lumpen proletariat mass in order to justify their cause. It's in their best interests to keep the poor just that - poor. Socialism is inherently evil.

I need a lie down.