Politics Thread!

[(o)(o)]

Incendiary speech the other day by Neil Kinnock comparing CON LIES to 1930s era Germany.

Some broad truths spoken - the CONS nefariously propagating outrageous lies through a compliant media for the purposes of mass control.

I wouldn't go so far as to say Labour "saved the world".



Loved the love letter to the Tories from "100 business leaders" in the Telegraph this week.

Osbourne said it's an unprecedented intervention in British democracy!

I totally agree. What a thoroughly disgusting display of cronyism

[pogo]

He’s on good form isn’t he. The problem is he’s utterly wrong; the global financial crisis was global, and many countries experienced crashes, which required bank bailouts and rescues and so massive injections of cash. To be fair though they didn’t save the world they did take the lead in tackling the banking crisis, so we got ours out of the way very quickly, before the Tories came to power. The recession too was short and ended in early 2010.

The government though also inherited a large deficit. Some of this was cyclical and so would (and has) come down as the economy recovered. But a large part of it was structural, caused by spending exceeding revenue by tens of billions of pounds in the years before the recession. The combination of the cyclical deficit (due to the recession) and structural deficit (due to excess spending and borrowing) caused the total deficit to reach 11% in 09/10, higher than any other country, even Greece.

If the deficit were just cyclical then it would have fallen and been eliminated as the economy recovered. But with there being a large structural deficit, and with the total deficit being so large, there was a need to tackle the deficit in 2010 and 2011 whoever won the election. The Tories and Lib-Dems signed up to this, and Labour would have done the same if elected, and it’s dishonest of them to suggest otherwise (when they e.g. lay into Tory cuts).

So the Tories are right to blame Labour. They did not cause the recession but their borrowing and spending made the deficit much larger and so the cuts needed to be larger. The only good thing is as spending rose under Labour productivity didn’t, and in fact much of the money was wasted. This has meant it’s been relatively easy for the government to make savings by boosting productivity and cutting waste and overspending, without impacting services.

[gravy]

So the Tories are right to blame Labour. They did not cause the recession but their borrowing and spending made the deficit much larger and so the cuts needed to be larger. The only good thing is as spending rose under Labour productivity didn’t, and in fact much of the money was wasted. This has meant it’s been relatively easy for the government to make savings by boosting productivity and cutting waste and overspending, without impacting services.

What would a government that truly believed the problem was borrowing too much and spending too much when it wasn't neccessary do.

If they were in government for five years?

Hugely reduce governmental spending and borrowing or just reduce it a few percentage points?

[gravy]

Gah, got to nip out BUT this is pretty interesting.

On an absolute scale (not as a % of GDP) hasn't governmental spending and borrowing increased under the coalition?

And it's GDP movement that's had the biggest effect when you look at both as a percentage of GDP?

And much like the economic crisis GDP increase is a global effect right now.

Not got time to google it to shit but wouldn't that mean fixing borrowing / spending at Labour's 2010 levels would put us in better position right now?

[Dio]

So the Tories are right to blame Labour. They did not cause the recession but their borrowing and spending made the deficit much larger and so the cuts needed to be larger.

But if that's the case, then aren't Labour also right to note that the Tories actually followed something closer to the Labour spending plan rather than their own stated one of 2010?

The only good thing is as spending rose under Labour productivity didn’t, and in fact much of the money was wasted. This has meant it’s been relatively easy for the government to make savings by boosting productivity and cutting waste and overspending, without impacting services.

No, that's absolutely not the case as the ONS figures show. This government has the weakest productivity record since WW2.

[VNVObit]

Gah, got to nip out BUT this is pretty interesting.

On an absolute scale (not as a % of GDP) hasn't governmental spending and borrowing increased under the coalition?

And it's GDP movement that's had the biggest effect when you look at both as a percentage of GDP?

And much like the economic crisis GDP increase is a global effect right now.

Not got time to google it to shit but wouldn't that mean fixing borrowing / spending at Labour's 2010 levels would put us in better position right now?

Sadly none of the parties seem interested in giving absolute figures. The fact it'd increase transparency and trust seems to be lost on them

[merman]

The Torygraph is having a bad week.

Business leaders are now back-peddling on the letter, including the CEO of AstraZeneca.

Now it prints an unsubstantiated comment supposedly saying Nicola Sturgeon of the SNP "preferred" David Cameron. The minutes of the meeting say no such thing.

But it's funny how Nicola did so well in the debate and suddenly a Tory newspaper prints a story that
A) puts Cameron in a positive light
B) plays to Tory fears on a Labour-SNP coalition

Why won't Cameron answer the question on a possible Tory-UKIP alliance?

[pogo]

On an absolute scale (not as a % of GDP) hasn't governmental spending and borrowing increased under the coalition?

There are probably ways to measure it that make it look more like it. For one we had very high inflation at the start of the recession, so anything index linked would have increased in nominal terms, such as pensions and many benefits. And spending on benefits also went up due to the recession, though mostly before this government came to power.

But these will only be effects at the margins, affecting only part of government spending. Overall the deficit, the main measure of the government’s borrowing requirement, has fallen significantly during this parliament, whether measured in £ or as a % of GDP. Spending has been cut significantly too; about a million less people work for the government, while pay has fallen in real terms for those remaining.

No, that's absolutely not the case as the ONS figures show. This government has the weakest productivity record since WW2.

There are good reasons for that though; wage growth has been very muted for a long time, and this has a direct relation to productivity. They are a last growing again it should boost productivity. But it was right to focus on getting the economy in order and boosting employment first. Trying to boost wages, by hiking the minimum wage or govt spending creating jobs would have been counterproductive.

But I wasn’t thinking of the productivity growth of the whole economy, but just the public sector. This lagged under Labour, but has been much stronger under the coalition. This has let them achieve real cuts without impacting services.

[Dio]

The ones that middle class people use at least.

That's quite an interesting argument though. You're suggesting that over the lifetime of this coalition, the public sector has dramatically improved in productivity: doesn't that imply a significant private sector decline in efficiency? Seems an odd thing to happen during a recession; classical economic theory states that recessions improve efficiency in the private sector too because the businesses that fail are the inefficient or unproductive ones?

[pogo]

I don’t think that follows, as I don‘t think public sector productivity contributes to total economic productivity in that way: the outputs of the public sector aren’t things we can sell.

It’s certainly true private sector productivity growth stalled, and that for a while puzzled economists; it even got a name, the “productivity puzzle”. But I think now there is a better understanding of it. Firms haven’t reacted with large layoffs, which would force them to be more productive, but have kept people on, limiting wage growth and investment instead. Unemployment did not fall too much, and has since recovered, but wage growth overall has been restrained, at least until very recently.

The last point is key as we are now in a very strong position, economically, with low unemployment and low inflation. Productivity should continue to improve as firms are forced to pay more to hire people, and invest more in them to justify their increased wages.

[Dio]

I don’t think that follows, as I don‘t think public sector productivity contributes to total economic productivity in that way: the outputs of the public sector aren’t things we can sell.

I think that's relying on a very confused understanding of GDP. (I'm not arguing I have a sufficiently better one to be able to argue the detail with you, but I'm pretty sure that's wrong).

[pogo]

I don’t think that follows, as I don‘t think public sector productivity contributes to total economic productivity in that way: the outputs of the public sector aren’t things we can sell.

I think that's relying on a very confused understanding of GDP. (I'm not arguing I have a sufficiently better one to be able to argue the detail with you, but I'm pretty sure that's wrong).

Not sure I can explain it better than this:

http://us2.campaign-archive2.com/?u=b8d ... fc9b2cf1b8

Measuring private sector productivity is relatively straightforward: markets set the value of output produced and inputs used. Assessing productivity for public services is much more difficult. Full markets in healthcare, education, social services and policing do not exist, so there is limited price information. That’s why until 2005, the Office for National Statistics (ONS) assumed public service outputs were the same as public service inputs – e.g. a GP appointment is both an input and an output – so productivity was thought to be constant over time.

But with increasing resources directed at the public sector between 1997 and 2010, this assumption was clearly unsatisfactory. So in recent years the ONS has, rightly, made a renewed effort to attempt to come to calculate more accurate measures.

The ONS has been been measuring public sector productivity since then, and it’s those figures that public sector productivity static and even falling under Labour but picking up under the coalition.

[Dio]

Should we note that according to the ONS stats productivity is flat, and the figures that purport to show otherwise are manufactured by a Tory think-tank? Hardly an unbiased source.

[pogo]

Should we note that according to the ONS stats productivity is flat, and the figures that purport to show otherwise are manufactured by a Tory think-tank? Hardly an unbiased source.

Up until 2010. Since then it has picked up, according to the ONS:



source

[VNVObit]

Should we note that according to the ONS stats productivity is flat, and the figures that purport to show otherwise are manufactured by a Tory think-tank? Hardly an unbiased source.

Up until 2010. Since then it has picked up, according to the ONS:



source

Up until 2010 the public sector was coping with an increase in spending year on year, the efficiency of which would be hard to control in any organisation (public or private). The stats suggest that productivity has increased but am unconvinced it accounts for quality in the same way as the level of service received has gone down in recent times albeit nominally the services are still being provided. I have witnessed this in care where contracts have been won with an apparent 15% saving but the end result is a service which is considerably inferior than the previous one (think adults under effective lockdown as it's cheaper to provide care if people cannot go outside). In terms of outputs the same number of adults are being provided care/support for less money but they are not getting the same level of care/support.