the rejection of Keynesian economics

[keelansgrandad 6,679]

Referring to the OP, economics must be fluid enough, just like a  needle, on water, to rise and fall. We have to accept crises and excesses, to occur and an economy should be able to cope. Keynes believed that each would react accordingly and that, for instance, if prices rose, then wages would rise automatically and Governments would merely borrow.

Thatcher believed in monetarism whereas Callaghan had just gone to the IMF everytime. So has monetarism worked? Doesn't seem it did for long. And now monetarism means borrowing to ensure a supply.

So whatever we think of Keynes and whether we should adhere to it, a new Labour government will have to accept Keynes whether they like it or not. Monetarism has collapsed twice in the last 15 years and no matter SKS desire to be another Blair/Cameron, he is out of luck. The Tories have shown they can collapse in 3 years and the same will apply to SKS if he abandons Keynes altogether.

Edited August 31, 2023 by keelansgrandad

[Worthy Nigelton 1,077]

On 30/08/2023 at 13:22, Naturalcynic said:

If the Conservatives lose, which they probably will, it will be due to the utter shambles they’ve made of everything since 2016.  It will have nothing whatever to do with Sunak’s ethnicity despite your divisive and race-baiting suggestion that it will.

He's right though. Tommy Robinson and a lot of his ilk either joined the Conservatives in 2019 or urged their followers to do so. You think lovely old Tommy Boy will show the same support for Rishi? Telling the truth about racism doesn't mean you're a racist. John Barnes talks about this sort stuff brilliantly.

[Worthy Nigelton 1,077]

On 30/08/2023 at 08:37, littleyellowbirdie said:

The way I look at it, he who pays the piper calls the tune. All countries who are hugely in debt and running steady deficits, like us, are completely dependent on market perceptions to keep paying the bills. Liz Truss proved that: She did something, markets said no, she went. So democracy is largely irrelevant as far as economics is concerned.

Keynesianism is dependent on running surpluses to be able to afford stimulus packages when times are hard; we haven't run a surplus since 2001, and supposedly we were doing well economically from 2001-2008 until the crash, but where were the surpluses?

This is not true. The birth of Keynesian thinking was post-WWII when this country had the highest deficit ever. The point of Keynesian economics is you can't cut your way to growth and a country's finances don't work like a household, nothing to do with surpluses. It's about spending to drive growth, even if you can't 'afford' it. Its basically the exact opposite of Thatcherism and on virtually every metric it is proven to be a superior way of doing things.

[keelansgrandad 6,679]

14 minutes ago, Worthy Nigelton said:

This is not true. The birth of Keynesian thinking was post-WWII when this country had the highest deficit ever. The point of Keynesian economics is you can't cut your way to growth and a country's finances don't work like a household, nothing to do with surpluses. It's about spending to drive growth, even if you can't 'afford' it. Its basically the exact opposite of Thatcherism and on virtually every metric it is proven to be a superior way of doing things.

You are right. Keynesian economics was based on the premise that if you made a loss rather than  a surplus, the state would step in and minimise or eradicate the losses.

[littleyellowbirdie 2,604]

1 hour ago, Worthy Nigelton said:

He's right though. Tommy Robinson and a lot of his ilk either joined the Conservatives in 2019 or urged their followers to do so. You think lovely old Tommy Boy will show the same support for Rishi? Telling the truth about racism doesn't mean you're a racist. John Barnes talks about this sort stuff brilliantly.

That's a spectacularly ignorant comment on your part to reduce Tommy Robinson's outlook to being about 'brown people'. Sunak himself is Hindu; the tensions between hinduism and Islam are well-known, and Robinson's focus has never departed from Islamic fundamentalism.

An interview by a Hindu lady with Tommy Robinson after violent unrest between Hindus and Muslims in Leicester.

 

Edited September 2, 2023 by littleyellowbirdie

[littleyellowbirdie 2,604]

1 hour ago, Worthy Nigelton said:

This is not true. The birth of Keynesian thinking was post-WWII when this country had the highest deficit ever. The point of Keynesian economics is you can't cut your way to growth and a country's finances don't work like a household, nothing to do with surpluses. It's about spending to drive growth, even if you can't 'afford' it. Its basically the exact opposite of Thatcherism and on virtually every metric it is proven to be a superior way of doing things.

You cannot run persistent and indefinite deficits and not expect things to break. Sooner or later your creditors will lose confidence and there will be collapse, as the UK experienced in the 70s and Greece has experienced more recently.

If Keynesianism can't grow you into a position where you can get to surplus, then discussions of Keynesianism are a sideshow to more fundamental problems.

[Barbe bleu 833]

The whole Tommy Robinson thing was dead and buried years ago.  Why try to resurrect it?

[littleyellowbirdie 2,604]

10 minutes ago, Barbe bleu said:

The whole Tommy Robinson thing was dead and buried years ago.  Why try to resurrect it?

It's only dead when the left says it is...

[Barbe bleu 833]

29 minutes ago, littleyellowbirdie said:

It's only dead when the left says it is...

Can we all agree not to mention thet name again then.  Nothing good comes of resurrecting these demagogues

[Worthy Nigelton 1,077]

42 minutes ago, littleyellowbirdie said:

You cannot run persistent and indefinite deficits and not expect things to break. Sooner or later your creditors will lose confidence and there will be collapse, as the UK experienced in the 70s and Greece has experienced more recently.

If Keynesianism can't grow you into a position where you can get to surplus, then discussions of Keynesianism are a sideshow to more fundamental problems.

We could go round and round on this. Read The Deficit Myth by Stephanie Kelton as to why what you're saying doesn't stack up. You don't need a surplus if you are a currency issuer. In fact a surplus makes you poorer. Greece isn't a currency issuer and us in the 70s was about uncontrolled inflation not the tired 'balance the books' argument. Country finances are not like a households.

[Worthy Nigelton 1,077]

1 hour ago, littleyellowbirdie said:

That's a spectacularly ignorant comment on your part to reduce Tommy Robinson's outlook to being about 'brown people'. Sunak himself is Hindu; the tensions between hinduism and Islam are well-known, and Robinson's focus has never departed from Islamic fundamentalism.

An interview by a Hindu lady with Tommy Robinson after violent unrest between Hindus and Muslims in Leicester.

 

That's what he says... you're the one being ignorant. First they came for the communists and all that...

[littleyellowbirdie 2,604]

10 minutes ago, Worthy Nigelton said:

That's what he says... you're the one being ignorant. First they came for the communists and all that...

So you agree it's what he says. There's also nothing to contradict it, and plenty of constructive engagement on his part with moderate Muslims, Sikhs, Hindus and others.  So what the hell is your, by your own assessment, informed view that he just generally hates all brown people based on?

Edited September 2, 2023 by littleyellowbirdie

[littleyellowbirdie 2,604]

24 minutes ago, Worthy Nigelton said:

We could go round and round on this. Read The Deficit Myth by Stephanie Kelton as to why what you're saying doesn't stack up. You don't need a surplus if you are a currency issuer. In fact a surplus makes you poorer. Greece isn't a currency issuer and us in the 70s was about uncontrolled inflation not the tired 'balance the books' argument. Country finances are not like a households.

So are you telling me that the 1976 sterling crisis didn't happen? We'd been shrinking our debt at that stage, but loss of confidence in the pound still sent us looking for money from the IMF.

That theory might work for the US with the de facto global reserve currency, but not for anyone else. Note that Stephanie Kelton is American.

Edited September 2, 2023 by littleyellowbirdie

[keelansgrandad 6,679]

56 minutes ago, littleyellowbirdie said:

You cannot run persistent and indefinite deficits and not expect things to break. Sooner or later your creditors will lose confidence and there will be collapse, as the UK experienced in the 70s and Greece has experienced more recently.

If Keynesianism can't grow you into a position where you can get to surplus, then discussions of Keynesianism are a sideshow to more fundamental problems.

That of course is a risk just like any other economic model. Monetarism runs an even greater risk as Chinas entrance as maybe the major player has shown.

I always remember talking to Tony Benn when we were considering a shop floor buyout of our company. "can you exist as an oasis in capitalist desert?" he asked me. I said that would depend not only on our ability to produce a good product but our ability to expand and grow so we weren't reliant on existing customers only. He said, "well if you succeed you may well become a target. You will need to awaken those who want you only to make money while your ambitions may not have money making as the first priority".

In other words, under Keynesian beliefs, we could grow and expand without having to worry about money because of help we could expect. Of course, that isn't endless and success includes financial gains and security. But certainly for smaller businesses and even national economies, the knowledge that growth is the main focus initially before profit seems to me to win hands down over monetarism.

I never read up on Friedman who was the main instigator in the late 60s of monetarist policies. And of course it is right that there should be study into any and all alternatives. But not accept them just for the sake of progress must take precedence over logic.

[Worthy Nigelton 1,077]

25 minutes ago, littleyellowbirdie said:

So are you telling me that the 1976 sterling crisis didn't happen? We'd been shrinking our debt at that stage, but loss of confidence in the pound still sent us looking for money from the IMF.

That theory might work for the US with the de facto global reserve currency, but not for anyone else. Note that Stephanie Kelton is American.

The 1976 crisis was a crisis primarily of inflation. Not deficit. You're ignoring the facts.

All currency issuers are in the same boat. Its about controlling inflation, never deficits.

[Worthy Nigelton 1,077]

33 minutes ago, littleyellowbirdie said:

So you agree it's what he says. There's also nothing to contradict it, and plenty of constructive engagement on his part with moderate Muslims, Sikhs, Hindus and others.  So what the hell is your, by your own assessment, informed view that he just generally hates all brown people based on?

I think he's lying. I don't believe or trust him and if you do that says a lot about you.

[littleyellowbirdie 2,604]

6 minutes ago, Worthy Nigelton said:

I think he's lying. I don't believe or trust him and if you do that says a lot about you.

You think he's lying based on nothing and will enthusiastically attack him based on nothing. That says everything about you.

Edited September 2, 2023 by littleyellowbirdie

[Worthy Nigelton 1,077]

18 minutes ago, littleyellowbirdie said:

You think he's lying based on nothing and will enthusiastically attack him based on nothing. That says everything about you.

I think he's lying based on his past convictions for violence, stalking, financial and immigration frauds, drug possession and public order offences. Not to mention his membership of the BNP. You do you though pal.

[littleyellowbirdie 2,604]

25 minutes ago, Worthy Nigelton said:

The 1976 crisis was a crisis primarily of inflation. Not deficit. You're ignoring the facts.

All currency issuers are in the same boat. Its about controlling inflation, never deficits.

They play into each other. Devaluation of currency means your debt to your creditors devalues which means they lose on what they've invested in you, which means lending to you stops being attractive, which compounds the perceived loss of value of the currency. Nor can you simply print your way out of trouble because of the inflationary nature of printing money. If you could, you wouldn't have to have government bonds at all.

 

Edited September 2, 2023 by littleyellowbirdie

[Worthy Nigelton 1,077]

Just now, littleyellowbirdie said:

They play into each other. Devaluation of currency means your debt to your creditors devalues which means they lose on what they've invested in you, which means lending to you stops being attractive. Nor can you simply print your way out of trouble because of the inflationary nature of printing money. If you could, you wouldn't have to have government bonds at all.

 

No they don't necessarily. Our debt vs GDP was vastly larger post-war than 1976 (multiples) and actually its been larger at many other points.

[littleyellowbirdie 2,604]

22 minutes ago, Worthy Nigelton said:

I think he's lying based on his past convictions for violence, stalking, financial and immigration frauds, drug possession and public order offences. Not to mention his membership of the BNP. You do you though pal.

None of that suggests he has an inate prejudice against anyone on race grounds. There are plenty of drug takers and violent people who aren't racist.The financial and immigration fraud were simply trying to get around sanctions on him that shouldn't have rightfully been there in the first place but for wilful efforts to shut down his legitimate arguments.

There's an actually an awful lot of snobbery in the character attacks against him. If the same arguments were made by someone from the Home Counties with an RP accent and no criminal record there'd be nothing to complain about.

16 minutes ago, Worthy Nigelton said:

No they don't necessarily. Our debt vs GDP was vastly larger post-war than 1976 (multiples) and actually its been larger at many other points.

It's not about the size of the debt, it's about the perceived ability to service it, which was fatally undermined by the currency devaluation, which underlines what's not accounted for in Stephanie Kelton's argument.

Without the debt though, the crisis wouldn't have been such a big issue.

Edited September 2, 2023 by littleyellowbirdie

[Worthy Nigelton 1,077]

12 minutes ago, littleyellowbirdie said:

None of that suggests he has an inate prejudice against anyone on race grounds. There are plenty of drug takers and violent people who aren't racist.The financial and immigration fraud were simply trying to get around sanctions on him that shouldn't have rightfully been there in the first place but for wilful efforts to shut down his legitimate arguments.

There's an actually an awful lot of snobbery in the character attacks against him. If the same arguments were made by someone from the Home Counties with an RP accent and no criminal record there'd be nothing to complain about.

It's not about the size of the debt, it's about the perceived ability to service it, which was fatally undermined by the currency devaluation, which underlines what's not accounted for in Stephanie Kelton's argument.

Without the debt though, the crisis wouldn't have been such a big issue.

Being a BNP member doesn't suggest he has a prejudice against people on race grounds? Have a day off pal. He's a racist, violent, lying, criminal, thug. End of. I'm not arguing about this nonsense anymore or your limited grasp of economics. Laters.

[Barbe bleu 833]

1 hour ago, Worthy Nigelton said:

The 1976 crisis was a crisis primarily of inflation. Not deficit. You're ignoring the facts.

All currency issuers are in the same boat. Its about controlling inflation, never deficits.

I'm genuinely lost

I think you might have a point bit I can't follow your argument.

I think you are saying that a currency issuer can never get into a crisis as it can always print more money to cover the debt.  That would make sense

But surely if you keep on printing money to pay debt you will cause inflation?  So in your example you say that the 70s crisis was one of inflation and not debt. That may be true but wouldn't one have caused the other? Your argument seems logical but it seems to rely on an impossible logic that you can print and print and print to pay debt but still control inflation

And what about external debt?  The bank of England can't 'print its way' out of dollar debt (as Yellow Fever and his swimming pool of dollar bills is perhaps evidence)

I'm not grandstanding here, I'm genuinely interested in this model of governance. It was put in the bin in the 80s but maybe it needs to be taken out and washed down before it goes to the incinerator for good.

Edited September 2, 2023 by Barbe bleu

[Barbe bleu 833]

1 hour ago, Worthy Nigelton said:

 I'm not arguing about this nonsense anymore or.

Good. Please stop reminding people that these attention seekers exist

Edited September 2, 2023 by Barbe bleu

[littleyellowbirdie 2,604]

23 minutes ago, Worthy Nigelton said:

Being a BNP member doesn't suggest he has a prejudice against people on race grounds? Have a day off pal. He's a racist, violent, lying, criminal, thug. End of. I'm not arguing about this nonsense anymore or your limited grasp of economics. Laters.

He left it citing concerns over extremism. He then left the EDL when it became clear it had attracted extremists. He's made bad choices in his life. So have many people. People like you have made him a cause celebre for extremists that he never sought to be because of your determination to paint him as something else to suit yourself.

Islamic fundamentalism remains the number one terror threat to the UK. That's a fact. Part of the reason for that is how the roots of extremism are tolerated in the wider Muslim community, as illustrated by the business over the Green Lane mosque in Birmingham recently, which is allowed to continue because any criticism is shut down by accusations of racism.

In addition to the 76 sovereign debt crisis though, the market reaction to Truss underlines that the only myth is that states aren't slaves to their debt to markets and that was categorically 100% a government bond issue, reinforcing what utter rot it is to suggest states can blithely ignore spending beyond their means.

https://edition.cnn.com/2022/10/14/investing/uk-market-credibility-truss/index.html

Edited September 2, 2023 by littleyellowbirdie

[Worthy Nigelton 1,077]

7 minutes ago, Barbe bleu said:

I'm genuinely lost

I think you might have a point bit I can't follow your argument.

I think you are saying that a currency issuer can never get into a crisis as it can always print more money to cover the debt.  That would make sense

But surely if you keep on printing money to pay debt you will cause inflation?  So in your example you say that the 70s crisis was one of inflation and not debt. That may be true but wouldn't one have caused the other? Your argument seems logical but it seems to rely on an impossible logic that you can print and print and print to pay debt but still control inflation

And what about external debt?  The bank of England can't 'print its way' out of dollar debt (as Yellow Fever and his swimming pool of dollar bills is perhaps evidence)

I'm not grandstanding here, I'm genuinely interested in this model of governance. It was put in the bin in the 80s but maybe it needs to be taken out and washed down before it goes to the incinerator for good.

Correct in that you don't just print money if you have inflationary pressures. The way to control that is through tax and not spending cuts to balance the books... you do need to take money out of the economy but the focus should never be on reducing the deficit. The deficit is largely irrelevant.

The book can explain much better than I ever could and it was about three years ago I read it so my memory is a little hazy.

[Herman 9,838]

Sticking up for Tommy Robinson now. Seriously?? Stick to economics.

[keelansgrandad 6,679]

3 hours ago, littleyellowbirdie said:

He left it citing concerns over extremism. He then left the EDL when it became clear it had attracted extremists. He's made bad choices in his life. So have many people. People like you have made him a cause celebre for extremists that he never sought to be because of your determination to paint him as something else to suit yourself.

Islamic fundamentalism remains the number one terror threat to the UK. That's a fact. Part of the reason for that is how the roots of extremism are tolerated in the wider Muslim community, as illustrated by the business over the Green Lane mosque in Birmingham recently, which is allowed to continue because any criticism is shut down by accusations of racism.

In addition to the 76 sovereign debt crisis though, the market reaction to Truss underlines that the only myth is that states aren't slaves to their debt to markets and that was categorically 100% a government bond issue, reinforcing what utter rot it is to suggest states can blithely ignore spending beyond their means.

https://edition.cnn.com/2022/10/14/investing/uk-market-credibility-truss/index.html

He left those organisations not just because of extremism by some of its members. He was happy for the extremists to put him in the news and on the front pages. He also left because he couldn't make money out of those organisations anymore.

I, like him, was appalled that the authorities allowed a Muslim based crowd to shout murderers and baby killers at the Anglians march through Luton. I think most of us would have been outraged.

But Yaxley is not stupid and his real purpose is Trump like and the purpose is to benefit himself. That he has been imprisoned for fraud and misuse of funds does back up the idea that he is not only a complete racist (he told Griffin he didn't think it was right that the BNP had non white members) but the rise of Muslim extremism in the UK focussed his anger perfectly, but a common criminal as well.

He has no redemption for his thoughts or deeds. 

[littleyellowbirdie 2,604]

3 hours ago, Herman said:

Sticking up for Tommy Robinson now. Seriously?? Stick to economics.

Someone should do. We have an establishment that depends on good relations with the Middle East, hence the absurd soft-pedalling of tackling Islamic extremism in the UK and how it is fostered by attitudes in the more mainstream parts of Islam in the UK.

He's an inconvenience who has been suppressed from making a valid point precisely because he's a run of the mill pleb speaking up about it who people could relate to. When he got involved, he was simply a small business owner protesting something. Over time, he has been cornered into only pursuing this because he has been so ostracised that there's nothing else he can do.

All the talk of his criminal record is massively overblown. Mortgage fraud akin to that of Peter Mandelson, who had nothing like the degree of fuss, reacting against yet another journalist trying to further discredit him, a few violent incidents of a trivial nature. Nothing that remotely justifies pillorying him to such an extent to distract from what he's arguing.

I didn't bring him into this and no idea why he was brought into it either. The man has been brutally victimised for the sake of diplomatic relations with the Middle East.

[king canary 7,680]

I'm sorry are we seriously debating 'is Tommy Robinson racist?'

What next, is Pope Catholic?