Βι¶ΉΤΌΕΔ

Hi Stephanie

I heard Jim O'Neill talking his book this morning...decoupling, BRICs, N11...yada yada. Please..this man still thinks Man Utd haven't rolled over in to a terminal decline yet!

The only decoupling we should be thinking about is the ending of the dollar as the world's reserve currency. Even central banker's like Zoellick get slapped down for trying to raise the debate. Why aren't you talking about this? If it isn't managed well it will be very serious for everybody.

The G20 will come out with its usual platitudes about working together to avoid this and that. Timmy will be sent packing (quite rightly, as he has been shown to be diplomatically incompetent). And the emerging markets will go on quietly transfering their dollars into Euros/Gold/African Mines etc. until the tipping point.

All foreign trade to be settled in gold. Then we will find out who is swimming naked.

Until some international agreement is made on the banks nothing will change. Severe penalties are needed. Jail time for the individuals in charge and repayment to account losses, to the individuals not some grand scheme where the bank ends up with the money. With no consequences there are no restraints. The different countries have been impacted in different degrees. Each country needs to protect itself against these international banking cabals. Although the governments have abdicated all responsbility to their citizens they may wish to review the solutions they initiated and the lack of impact they have had. Simply reducing debt, i.e., paying off the loans to the banks of money given to them by the taxpayers, is needed, without nations developing better economic planning the problems will simply continue. Banks do not make an economy....they make a mess of economies for their own interest. History has shown that bankers continued to provide funding to beligerent states right up until hostilities began. Always remember bankers are amoral....another term for self interest and self interest only.

Germany
Some might say their success might also have a tiny bit to do with sharing an exchange rate with the likes of Portugal and Greece.
..................

Some might think that their success was due to the fact that their economic models and system was set up for them at the end of WW2 by Britain, France and the USA ... and the Germans never made any/full war reparations to the UK and other countries .. and have cost us British taxpayers billions and billions of pounds over the years and even now are still costing us a few billion quid a year now with British troops still stationed in Germany... and Britain itself only just paid off its own WW2 main debts last year (? I recall reading somewhere)

Perhaps the Germans still owe a few favours?

I am not understanding any of this - what is wrong with import tax ? We joined the 'common market' to trade freely with our friends and so far it has worked well - Europe can produce most things for itself but lacks raw materials - we can trade for raw materials with manufactured goods if not we have to apply our brains to finding another way (and I don't mean war),but why are we importing manufactured goods that we can make in Europe without imposing duties that level the playing field. Asia is a big big market with plenty of scope for the Chinese etc. to develop their economies without destroying ours

I'll be semi sort of half-interested to hear what the 'final communique' says. But something buzzing around in my head says luncheon may well be a rather dry selection of caveats, aspirations, good intentions and exceptions sandwiched between wafer-thin waffle about everyone's good intentions toward everyone else, and where the responsibility for making real hard decisions has been postponed and transferred to others, pending the next crisis. For some reason I feel that the status quo will prevail i.e. fear, greed, rumour and plenty of bubbly. But.....surprise me.

5 - import taxes increase the cost of goods for everyone, they also lead to reciprocal action and make it harder for exporters. Rather that trying to shut ourselves away from the world we should embrace it. We should not be bitter about other peoples' success just because they are foreign. We have no God given right to be successful.

We need to look at ourselves objectively and seek to produce goods and services that people want. It is not a case of cost but of value. There are things that some people make that we will always be cheaper than we can produce it for, but in the case of products like BMW people will pay for quality.

The EU has more to do with politics than trade. Many of its actions are anti trade, such as the CAP.

To all those who think that a Gold Standard or pegged exchange rates are a good idea: Prof William Mitchell does a good analysis of why this would be a disaster for us:

Entitled "World Bank boss has a brain attack"


Kind Regards

If anything is agreed it wont be implemented. The Chinese will just be polite but what is in it for them to agree to export jobs back to the USA (and UK). Just how much must the dollar depreciate to facilitate an equivalent competitive edge with the Chinese/Indians/ It is the combination of hi tech manufacturing with low wages in a command and control economy. Would the Chinese Renminbi have to double against the US dollar to equal things. I suspect much of PRC's production would still be competitive although not in relation to other state sponsored sweat shop economies. This is all a red herring and the west's thrashing about reflects that they are still wedded to monetarism and free trade while China says thank you very much.

The trade imbalance between UK and China has come about not only because the Chinese have learnt how to make manufactured goods at very high quality and very low cost but also because we have failed to move up the value chain adequately whilst they have been doing this. The same is true of the US. Too much of our resources and too many of our brightest individuals have gone into the financial services sector, pursuing quick bucks ponzi wealth schemes. Germany and other developed countries (Scandinavia, Netherlands, Switzerland) have maintained the brain input into manufacturing and design and so now have products that the emerging economies such as China want to buy from them. We have much less to sell them that they want to buy compared to Germany et al.

It doesn't have to remain this way. We have some research led currently small areas where with investment we can lead the world in the technologies of tomorrow such as biotechnology, alternative energy, the arts, music, film and entertainment. However, we have to look further than next quarter's or next year's profit in our investment choices in order to turn the ship around.

If we fail to this we will see over the next generation that we become a nation like India with a very wealthy minority and a very poor majority.

The rising price of commodities will tip the balance back in favour of local manufacture though along with high inflation in BRIC countries.

7 truths33k3r:

'....people will pay for quality.'

Yes. People do. And they come back again, which is the whole basis of a future. Something which appears to have been forgotten.

Stephano - are you sure about this?

8 Charles who is "us"

The gold standard would be disaster to the over-leveraged, the chancers, the money manipulators, the inflationists, the Keynesians, the liar loan chiselers.

I am none of these, there is no "us"

13 truths...
It would be a disaster for the unemployed....which in turn would be a disaster for future GDP growth (due to structural unemployment)....which would be a disaster to businesses everywhere (as growth in sales would get slower-and-slower)....which would be a disaster to everyones' pension funds....etc etc

Yes, 'us'...we are all connected.

14 Charles

GDP growth in fiat currency is just a number. Inflation robs the poor to bail out the indebted. Low interest rates make savers bail out the over-levereged.

We cannot live in blissful isolation, printing our coloured coupons and expecting everyone around the world to still exchange goods and services for them indefinitely.

The party is over and it is time to pay the piper.

Off topic but...

but 3 cheers to the demo against student fees

result

keep going

15 truths..
"Low interest rates make savers bail out the over-levereged."

I agree that savers should not have to pay, the banks should pay, as they are the ones who mis-sold the loans in the first place. Given that is not going to happen, a better option for savers is to shop around, forcing banks to raise their savings rates to compete with eachother. I believe that there are campaigns around trying to get savers to do precisely that.

In the meantime, rates should stay reasonably low (though not necessarily 0.5% low) so that more mortgage holders do not default - though in reality the low rates are really for the benefit of the banks (so they can rebuild their balance sheets).

A gold standard will not change anything for savers though, it will just exacerbate the problem, as GS will throw us back into recession, which will keep interest rates lower for longer.

16 Richard
"but 3 cheers to the demo against student fees"

Agreed....the sleeping giant awakes!!

15. At 10:35pm on 11 Nov 2010, truths33k3r wrote:
and others
----------------------------
If you don't read about history, learn from it and understand the implications, you will be doomed to repeat the mistakes of history.

The Gold Standard and all other fixed exchange rate systems have failed. They did this for good reasons [remember the ERM debacle and Norman Lamont]. The current system may well have its faults and be sub-optimal, but a return to the past will wreck our economy. Please do take off your your rose tinted spectacles; we may need a different system - it involves having politicians and economists who actual know and understand how a fiat currency system actually works. The evidence indicates the current crop of leaders are poorly equipped to run an economy like ours - they keep taking decisions that lead to the wrong outcome.

17 Charles

Sorry to break it to you but the recession is still going. We QE'd billions just to make the "GDP" number grow a bit. I'm not buying it. We are teetering on depression unless the debt issue is resolved.

Savers can shop around all they like, their paper will be eaten away by bigger inflation. Those who denigrate sound money discourage people from protecting their wealth, however the number of people who are seeing through the bankers' shell game is growing.

16. At 10:52pm on 11 Nov 2010, Richard Dingle wrote:
--------------------------
Cheering for a riot?

Absolutely no way should you support rioters. I have to totally disagree and abhor your post. Protest by all means, disagree with the policy but riot? NEVER

I urge you to change your mind.

19. At 11:04pm on 11 Nov 2010, SleepyDormouse wrote:
15. At 10:35pm on 11 Nov 2010, truths33k3r wrote:
and others
----------------------------
If you don't read about history, learn from it and understand the implications, you will be doomed to repeat the mistakes of history.

The Gold Standard and all other fixed exchange rate systems have failed. They did this for good reasons [remember the ERM debacle and Norman Lamont]. The current system may well have its faults and be sub-optimal, but a return to the past will wreck our economy. Please do take off your your rose tinted spectacles; we may need a different system - it involves having politicians and economists who actual know and understand how a fiat currency system actually works. The evidence indicates the current crop of leaders are poorly equipped to run an economy like ours - they keep taking decisions that lead to the wrong outcome.

Agreed.

Move forward - join the Euro.

There are some often stated but erroneous statements being made here tonight.

Truths and windrip appear to agree that people will always buy quality. Well that has been proved beyond doubt to be erroneous. People will buy when the price delivers values that are important to them. That value may or may not be associated with material or technological quality.

If you understand anything about pricing then you would understand that costs are about money whilst prices are about value.

21. At 11:15pm on 11 Nov 2010, SleepyDormouse wrote:
16. At 10:52pm on 11 Nov 2010, Richard Dingle wrote:
--------------------------
Cheering for a riot?

Absolutely no way should you support rioters. I have to totally disagree and abhor your post. Protest by all means, disagree with the policy but riot? NEVER

I urge you to change your mind.

No absolutely not.

Some things are worth fighting for.

I can never understand the argument of people like you. I would describe you as effete, liberal and confused.

Explain the alternative. The ballot box ?

Well it doesn't work does it. The thousands who voted for Clegg in May now realise that.

Riots ? I call it well organised protest.

Democratic avenues should always be explored first (and I really mean that) but if they are sterile we need to explore other avenues.

Today in Northern Ireland we have power sharing and equal rights for Catholics.

Democratic avenues were incapable of achieving this.

To give you a target to aim for Sleepy (in name as well as thought) I totally condone and celebrate the IRA iniatives of the past 40 years.

No regrets.

Result.

23. At 11:46pm on 11 Nov 2010, foredeckdave wrote:
There are some often stated but erroneous statements being made here tonight.

Truths and windrip appear to agree that people will always buy quality. Well that has been proved beyond doubt to be erroneous. People will buy when the price delivers values that are important to them. That value may or may not be associated with material or technological quality.


Is this not a rather long winded way of saying that quality is relative.

I crossed student picket lines when I was a student - Ruining one's own education and that of others and breaking the law in pursuit of political causes serves no useful purpose.

The violent student rioters and law breakers should be denied any student tuition fees in punishment for their crimes.

The trouble makers at the Millbank Tower are some of the ones protesting at the last G20 meeting summit i.e. trouble makers?

#25 Richard Dingle

Certainly not. It is a very short way of trying to engender some understanding of the true nature of prices.

Back to economics.

The minimum that the G20 leaders should be coming away with is a commitment on agreeing how to measure economic issues and performance i.e. a NSI (national sustainability index).

I'm reluctant to admit that there would appear to be some very good work being done by EU related bureacrats, see the following website:

EPC (European Policy Centre)



The following is a quote on the same website:-

'Launched on the eve of the European Council meeting, this European Economic Sustainability Index (EESI) has been designed by Fabian Zuleeg to enable a comparison of the long term economic sustainability of EU Member States. Each EU country is simultaneously assessed according to six criteria (deficits, national debt, growth, competitiveness, governance/ corruption and cost of ageing) and then ranked against the other 26. The 2010 data show that Scandinavian countries, plus Estonia, perform best, and northern/central European countries such as the Netherlands and Germany also perform well. Greece comes out bottom, closely followed by Italy with Portugal also performing badly'.

.......................

Britain is shown as a 'middle ranking' member state ... the index is limited on criteria and I think does not assess the most appropriate criteria but even with its limited/partial data does (as at July 2010) seem to provide an accurate European picture of 'economic health' that is obviously far more meaningful than just looking at GDP alone.

Q1) Is such as index a collosal amount of work?

A) No because most/all of the data is alreday collected by national governments and very little is done with all of the data collected.

Q2) Would such an index have predicted the financial/credit crunch crisis?

A) Yes ... I think so, if one had been avaialable in 2005-2007 and had been properly constructed as showing private and public debt levels

Q3) Would such an index be of benefit to global trade?

A) Yes ... it can /should enable unfair trade practices, protectionsism and imblances to be highlighted ( if constructed properly) and enable governments to make propoals on fair trade levels and e.g. the need for sanctions and import tariffs wher there are damaging trade excesses.

So all of those assembled in Seoul will achieve virtually nothing as going 'round and round in circles' on non-sensical growth and GDP discussions and as without using the same measuring techniques and terminology on underlying sustainability issues.

True sustainable globalisaation means e.g. China and Germany 'helping out' other countries with such matters as e.g. currency adjustment and knowledge transfer, respectively.

A global NSI agreement would highlight where countries need to help each other and co-operate and /or apply sanctions to 'those not playing ball'.

Due to the time lag effect on data Ireland would now be at the bottom with Greece ... and with the UK's Β£4.8 trillion in national debt ... Britain would now be lower in the table than as shown in July 2010.

#26 nautonier,

The sad fact is that even if you mobilised the full student body and had them march through London without any incident it would not have achieved nore than a passing refernce on the 6 o clock news. It would certainly have not even registered with the ConDem government.

It was not until protest turned to riot that Thatcher finally realised that her Poll Tax proposals would not be accepted.

Better get yourself prepared. These cuts have not yet bitten. When they do we really will see violence on the streets.

Well, it looks like the dollar may last until the next G20 after all, and maybe it will be then that China finally decides to put the USA on the map as a 3rd world country, but things aren't finished yet, so it could still happen this time around.

Why has this happened? It's all very simple really. After the enlightenment when Europe surged forward in technology, a lot of people got rich, but went against the natural path of selection and decided that at all costs they must remain rich and hold power, even if that stunts the natural selection process of evolving technologies and concepts. Britain, Europe, and all of the expatriated European nations like the USA, have allowed themselves to become a plethora of smart talkers rather than hard workers. Many people have gotten excruciatingly rich holding onto values that are now crazily irrelevant, and squandered masses of technological and manufacturing opportunities, such as solar energy, electric cars, the list goes on and on.

The Europeans and the European-esque knew about these new developments when I was a small child, but did nothing about it because those with capital had the power, and they decided to do what was best for their profit margins rather than what was best for humanity - see "capitalism".

In Europe, we are not in quite as much bother as the US, as our money is not Monopoly money like the dollar, which has not had any derived and secured value for the better part of a century since the FedRes took over. But this time, the big shove down on the pump of quantative easing will have no effect, other than maybe paying China's interest until the next G20, and what we now witness is a US economy in freefall without any parachute. I believe Barack Obama is a good man, good to the very core of his soul, but he is also a politician, which actually makes him entirely powerless in this situation because he has to pray that a manufacturing miracle comes from somewhere within his countrys borders. Will that happen? It's possible so long as they took very good care of their education system over the last 35 years or so. Hmmmm, doesn't look good does it?

Why is this of any relevance to Blighty? Take a closer look at what happened at Millbank. Debt ridden students will in five years time have no choice but to look for work in the highest paying jobs, the financial sector. Their destiny to become the innovators of forward thinking British technology cannot be fulfilled because the industries that they should have gone into do not exist; Thatcherite thinking destroyed every national institute, simply because if the unions had been allowed a voice, the status quo of who was doing well in life would have been threatened, and so they brought, from manifestation to life, every conceivable act to preserve their preferred social model - see "Conservatism". The Labour party's perceived incompetence during their last term was little to do with them, as what they were trying to do was akin to giving chemotherapy to a cancer patient whilst the priest reads the last rites; the killing blow was dealt when that evil baroness woman came to power back when I was a baby.

"Some might say their success might also have a tiny bit to do with sharing an exchange rate with the likes of Portugal and Greece"

A silly comment.

You can do better than that I would have thought, Ms Flanders.

German exporting success pre-dates the Eurozone crisis, it pre-dates the Euro, it even pre-dates the EU.

You could write an interesting piece of how an appreciating DM failed to dent German exports. I seem to recall 11DM / Β£1 in 1963 to 3DM / Β£1 in 1989; though a large part of this is due to the demise of sterling.

Also, as you know only too well, a depreciating currency makes imports more expensive and Germany imports most of its raw materials.


Perhaps the Germans should be asked to dumb down so everyone else can catch up.

28. At 00:55am on 12 Nov 2010, nautonier wrote:

If we ever get your index I think it should be called NIX, for Nautonier IndeX.

Rock on.

I find it hard to give any credence to the current criticism of Germany or China. They have set about making stuff and selling it and saving the proceeds. The fact that others, not least the USA and UK, bought more than they could afford is not the fault of the vendor.

The root of the problem, and our ability to buy more than we could afford, lies in the availability of cheap consumer credit: and the falsehood that borrowing creates money. If I borrow Β£100 then I have Β£100 and the lender can write it up as an asset worth Β£100 + interest: and, hey presto, there we are with Β£200+ out of nothing.

(Economists might like to pass this idea on to cosmologists who are struggling to explain how the universe came into existence when you can't get something from nothing. Maybe the whole thing was borrowed?)

Borrowing to invest (to create future income to cover the borrowing) is one thing. Consumer borrowing, which is a drain on future income is another. This borrowing has simply used up future income to fund current consumption and enrich lenders.

Which brings me, in a roundabout way to the student debt issue. I personally think it is a disgrace that we are now asking young people to mortgage their future in order to get a degree.

Leave aside how quickly the Β£6,000 cap becomes a floor, and using round numbers, a student living away from home (and funding his/herself) would leave university with debts of c.Β£50,000.

Much is being made of the fact that this will not need to be paid off until they start earning Β£21,000 (and what's the betting that this figure is not index linked): but I seem to recall that the interest on these loans will run from the date of graduation and the interest rate is going to be higher (did I see 2% above inflation?)

All the fine words about how the blow has been softened will very quickly come to dust.

#24 Richard Dingle
Democratic avenues should always be explored first (and I really mean that) but if they are sterile we need to explore other avenues.

Presumably you also approve of Al Qaeda ? They have explored democracy in countries with Islamist parties.

It didn't work for them

Incidentally, democracy is all that worked for the IRA. Their campaign of violence was a complete failure. It was not until Sinn Fein made some electoral gains that the republicans got anywhere near government.

...and then they had to destroy their weapons.

Now Martin McGuinness calls the Real IRA 'traitors'.

Do you support the Real IRA ? They are after all striving for that which they could not achieve at the ballot box.

Oh and I will assume a certain level of invective in your response, given your line to SleepyDormouse I can never understand the argument of people like you. I would describe you as effete, liberal and confused.. It seems to be your style.

It demonstrates the intellectual poverty of your argument that you have to resort to that stuff.

Still behind the curve, Herr Dingle?

The idolised EU/ECB bureacrats are already using sustainability indexation to make sense (and advise EU foreign ministers) of economic data and such indexation is/is probably already used behind the scenes by the EU, BOE, HM Treasury, rating agencies etc.

The fact that sustainability index reporting is not used for UK government reporting in public is purely a political decision so that our politicians can continue with 'GDP up/down nonsense' and the BOE monthly MPC fiasco can continue to give a confused economic outlook and give our politicians some breathing and QE 'fiddle diddle space'.

I wonder what kind of economoic reporting might you prefer ... the full big picture or the manipulated politicians/Whitehall limited 'spin' picture?

The only surprise is why there isn't more interest in our feeble UK national economic reporting when an NSI would make it clear on the direction of govt policy/direction.

The NSI would immediately show the striking real differences between e.g. the UK and China/Germany ... and although the Chinese would never supply the data for e.g. the G20 on a sustainability index model... that does not matter ... we should provide then with ou view of their economic data and construct import tariffs accordingly.

Its real economic analysis instead of 'BS'.

29. At 01:18am on 12 Nov 2010, foredeckdave wrote:

#26 nautonier,

Those students who are guilty of criminal violent behaviour this week, do not deserve to be funded by the British taxpayer at British colleges or Universities.

#10 - "the Chinese have learnt how to make manufactured goods at very high quality and very low cost but also because we have failed to move up the value chain adequately whilst they have been doing this."

I think it is impossible to move up this chain at a speed that maintains the premium we want to charge for our labour. After all, emerging economies do not need to innovate in order to advance quickly. They just need to catch up.

And isn't it a question of whether there is any further up the chain left to move for industrialised countries? Surely there comes a time when everyone goes to school 16 years before they start working - which isn't free in economic terms - that the return on education peters out.

What you get from there on is knowledge mostly embedded in technology and in organisations, not individuals. Which means that innovation happens in institutions, and belongs to institutions. This innovation machine is capital, it needs highly skilled workers to "press the buttons", but capital is mobile and it will move to where these workers are cheapest - even the skilled ones.

The exchange rate has nothing to do with it. Asian workers are cheaper because they are poorer - not "dollar" poor but poorer in real terms. And what we thought were our superior skills and education that allowed us to be richer than them, this technology actually belongs to institutions, not us. Emerging economies are not "stealing" it, it is moving their way because they will charge less for pressing the buttons.

Paul Krugman article 7 November 2010: "Yet the Pain Caucus β€” my term for those who have opposed every effort to break out of our economic trap β€” is going wild.
This time, much of the noise is coming from foreign governments, many of which are complaining vociferously that the Fed’s actions have weakened the dollar. All I can say about this line of criticism is that the hypocrisy is so thick you could cut it with a knife.
After all, you have China, which is engaged in currency manipulation on a scale unprecedented in world history β€” and hurting the rest of the world by doing so β€” attacking America for trying to put its own house in order. You have Germany, whose economy is kept afloat by a huge trade surplus, criticizing America for running trade deficits β€” then lashing out at a policy that might, by weakening the dollar, actually do something to reduce those deficits.
As a practical matter, however, this foreign criticism doesn’t matter much. The real damage is being done by our domestic inflationistas — the people who have spent every step of our march toward Japan-style deflation warning about runaway inflation just around the corner. They’re doing it again — and they may already have succeeded in emasculating the Fed’s new policy."

34. At 07:55am on 12 Nov 2010, Clive Hill wrote:
and others
----------------------
Richard Dingle has shown his true thoughts and feelings in his posts. It shows the background to his economic commentary. He has a right to his views, providing he does not act on those tending to violence; it part of democracy.

His views demonstrate the potential damage that can be done to our democratic way of life by ill-thought out actions of politicians and their executive. It should be a warning to us all. The far left and the far right have common cause in violence, they don't care about the result. For society to exclude anyone risks this conjunction and provides the breeding ground needed by extremism; exclusion, in the end, benefits no-one, it diminishes us all and impoverishes our society.

Please may I make a plea to all to get back to economic discussion. His trip into supporting violence has lasted long enough.

In today's world economic exclusion, or it potential for it, should not be tolerated. [IDS please re-think, it will provide a breeding ground after you are out of office. If this is the best sanction you can think of, I suggest you think again as it is driving society in the wrong direction].

37. At 08:25am on 12 Nov 2010, Chris B wrote:

-------------------------------
Your post is thought-provoking and the end result is bleak for the west.

The future you paint comes out of the globalisation ideal allowing such free movement as we have now. I have always been worried by the end result of globalisation; maybe you have summarized it as a not very pretty picture.

#23. , foredeckdave wrote:

If you understand anything about pricing then you would understand that costs are about money whilst prices are about value.

----

True in isolation, but one man's costs are another man's prices. Thats why its called a value chain. And why after 150 years or so people still argue about about labour vs. marginal theory of value.

39. At 10:55am on 12 Nov 2010, SleepyDormouse wrote:

Please may I make a plea to all to get back to economic discussion. His trip into supporting violence has lasted long enough.

Sleepy, I was merely pointing out the importance of a rich and dynamic democratic process and the dangers if it fails to work.

The social contract at present is not working.

Presumably you would not have had a problem with the French resistance in WW2.

34. At 07:55am on 12 Nov 2010, Clive Hill wrote:
#24 Richard Dingle
Democratic avenues should always be explored first (and I really mean that) but if they are sterile we need to explore other avenues.

Presumably you also approve of Al Qaeda ?

No. Religious fanatiscism is not me.

Now Martin McGuinness calls the Real IRA 'traitors'.

And i agree. You have to a political program they have nothing.

Incidentally, democracy is all that worked for the IRA. Their campaign of violence was a complete failure. It was not until Sinn Fein made some electoral gains that the republicans got anywhere near government.

I would say a bit of both.

Oh and I will assume a certain level of invective in your response, given your line to SleepyDormouse

I agree. Apologies to Sleepy.

#43 Richard Dingle
>>CH>>Presumably you also approve of Al Qaeda ?

>>RD>>No. Religious fanatiscism is not me.

>>CH>>Now Martin McGuinness calls the Real IRA 'traitors'.

>>RD>>And i agree. You have to a political program they have nothing.

>>CH>>Incidentally, democracy is all that worked for the IRA. Their campaign of violence was a complete failure. It was not until Sinn Fein made some electoral gains that the republicans got anywhere near government.

>>RD>>I would say a bit of both.

I believe you would be wrong to say 'a bit of both'. The UK govt tried talking to the IRA behind the scenes several times. It failed miserably until they said that the 'armed struggle' was behind them. Not because the UK were not duplicitous enough but because the other parties in Northern Ireland would not accept it.

I would say that the 'armed struggle' actually delayed political progress in Northern Ireland. After the civil rights protests, the UK govt could see the open discrimination against the Nationalist community and despite the Tories relationship with the Unionists, I believe there was a bipartisan view in London that it had to stop.

Then the IRA started up - possibly because of graffiti saying 'IRA = I Ran Away' on a wall and other provocations - and all of the UK parties were unified against them.

Now the govt appears to be trying to talk to the Real IRA and no doubt the whole cycle will be repeated with deaths to punctuate the process.

#42 Richard Dingle
Presumably you would not have had a problem with the French resistance in WW2.

Which democratically elected government did they oppose ?

44. At 12:37pm on 12 Nov 2010, Clive Hill wrote:

#42 Richard Dingle
Presumably you would not have had a problem with the French resistance in WW2.

Which democratically elected government did they oppose ?

Are you missing the point here.

Democratic avenues should always be explored first.

It is debatable whether the Catholic majority in NI had democratic options. I would say they did not.

It should concern us that we are trending (moving) to a similar position in the UK though we are still a long way from that point.

The rich in this country are getting richer and seem immune to downturns that they were instrumental in creating. The burden of rectifying the situation falls on the non-rich in the form of cut services and higher taxes.

There is something fundamentally wrong about an 'arrangement', 'social contract', call it what you will, whereby a country is unable to adequately house or educate its populace.

A hedge fund founder (his name was Cohen, I believe) warned Blair of the growing gulf over 4 years ago. NuLabor had of course completely sold out by then.

So the gulf gets wider.

The rich retreat behind the ever more numerous gated communities. Private security companies do a roaring trade.

Political parties fail to connect.

Law and order gradually breaks down.

And so on.

Understand history and use your imagination.

I am actually a massive fan of civil disobedience and agree with FDD who pointed out a peaceful anodine demo would have almost gone unnoticed.

I am also reasonably well off so please no Tory Boy taunts about envy.

#40 - "I have always been worried by the end result of globalisation; maybe you have summarized it as a not very pretty picture. "

It depends on your point of view - it is certainly not a bad picture for the majority of the world, who are looking for a way out of relative poverty, and doing it through working, not selling off their natural resources cheap.

It is perhaps not nice for us, because we may have to take a step back while the rest catch up - but let's face it, this is because we have had a wonderful age of growth, and we are simply not accustomed to not getting wealthier every year.

46. At 1:19pm on 12 Nov 2010, Chris B wrote:
#40 - "I have always been worried by the end result of globalisation; maybe you have summarized it as a not very pretty picture. "

It depends on your point of view - it is certainly not a bad picture for the majority of the world, who are looking for a way out of relative poverty, and doing it through working, not selling off their natural resources cheap.


Agreed. It has been a major factor in the rise of the BRICS. It will gradually lift the world out of poverty and instill pressure for democracy. The pressure is already there in China.

We have to climb the added-value pole.

The Germans do this very well (look at export volumes but more specifically look at what they export).

Education Investment R&D

German education is free (all of it).

Student riots very timely.

The world does not owe us a living.

Globalisation GOOD
Protectionism BAD

#45 Richard Dingle
>>RD>>Presumably you would not have had a problem with the French resistance in WW2.

>>CH>>Which democratically elected government did they oppose ?

>>RD>>Are you missing the point here.

>>RD>>Democratic avenues should always be explored first.

>>RD>>It is debatable whether the Catholic majority in NI had democratic options. I would say they did not.

The 'Catholics' are not and were not ever a majority in Northern Ireland, unless you mean the majority of the 'Catholic' community ? The reason I put Catholic in quotes is that my cousin's family are Catholic and Nationalist by birth and history but they vote Unionist. They do not think of Sinn Fein or even the SDLP as a viable way forward. Even counting such voters as Nationalist, the Nationalist community is and always has been smaller than the Unionist community.

It should concern us that we are trending (moving) to a similar position in the UK though we are still a long way from that point.

The rich in this country are getting richer and seem immune to downturns that they were instrumental in creating. The burden of rectifying the situation falls on the non-rich in the form of cut services and higher taxes.

There is something fundamentally wrong about an 'arrangement', 'social contract', call it what you will, whereby a country is unable to adequately house or educate its populace.

A hedge fund founder (his name was Cohen, I believe) warned Blair of the growing gulf over 4 years ago. NuLabor had of course completely sold out by then.

So the gulf gets wider.

The rich retreat behind the ever more numerous gated communities. Private security companies do a roaring trade.

Political parties fail to connect.

Law and order gradually breaks down.

And so on.

Understand history and use your imagination.

I am actually a massive fan of civil disobedience and agree with FDD who pointed out a peaceful anodine demo would have almost gone unnoticed.

I am also reasonably well off so please no Tory Boy taunts about envy.

I believe the scenario you paint is a serious exaggeration. Do you have any evidence for any of it ? for instance, of the growth of 'gated communities' ?

You also suggest that the government is unable to adequately house or educate its populace. You will have to offer evidence for that as well.

I'm afraid this and other Βι¶ΉΤΌΕΔ sites are fraught with posters who make insupportable assertions.

You could make a case with evidence, for instance, that the gap between rich and poor has widened. The problem with that case is that it appears to have no bearing on our social fabric.

By the way, I am no Tory Boy. My mother was a cleaner, my father a labourer. I grew up in a one-bedroomed flat with my parents, brother and sister. I was educated thanks to the Catholic grammar school system - in what would today be called a 'direct grant' school.

I feel strongly for the poor and disadvantaged, That includes few students - and those mostly from overseas. I also feel bitter about the distraction represented by the politics of envy and the corrosive stupidity of violence.

48. At 1:51pm on 12 Nov 2010, Clive Hill wrote:
I believe the scenario you paint is a serious exaggeration. Do you have any evidence for any of it ? for instance, of the growth of 'gated communities' ?

You also suggest that the government is unable to adequately house or educate its populace. You will have to offer evidence for that as well.

It is a marked trend - trouble with trends, a bit hard to turn round.

Evidence. Only a fragment. I dont have all day.



Also my own anacdotal experience of Notting Hill where I spent a lot of time over the past 40 years.

Education and housing. I would suggest the evidence is all around.

I tend to take broad range of newspapers and travel a lot.

#49 cont

a better link



Scandinavian countries noted for their egalitarianism have very few gated communities.

The trend in the UK is away from egalitarianism.

#48 Richard Dingle
Also my own anacdotal experience of Notting Hill where I spent a lot of time over the past 40 years.

Education and housing. I would suggest the evidence is all around.

I tend to take broad range of newspapers and travel a lot.

Thank you for the evidence on gated communities. I had no idea but - I would suggest - it is still in its infancy - as is, say, . That piece suggests that gated communities do not necessarily represent the socially deprived vs. the rich. He quotes on American gated communities Moreover, gated communities are not enclaves for the rich. Once renters are included, the lowest income quintile displays the greatest proportion of gated-community residents.

On education - you really think UK education is deprived ? I believe our education system's crap but that's not the same thing. It comes from an ethos that believes academic achievement is superior to, say, plumbing. In my view, they're equal. They probably are in terms of reward as well.

This suggests that homelessness has been coming down since 2007, having risen throughout Labour's period in power- strangely enough.

Even stranger is that during the Margaret Thatcher years it was practically non-existent. Before you say the figures were massaged, I do recall significant programs on homelessness in the eighties.

#47 Richard Dingle "We have to climb the added-value pole.

The Germans do this very well (look at export volumes but more specifically look at what they export)."

I happen to think that the German example is only valid in the short/medium term. Those rich enough to import luxury goods will go for German cars, Italian fashion (produced in Indonesia) and Scottish whisky (presumably still produced in Scotland). "Germany" in this context is a brand - one of quality and engineering.

To some extent this is a true reflection of cultural values in the German workforce, but for a large part it is embedded in technology and knowing how to organise it, in other words it is part of German companies as much as German people.

And companies will retain their brands and their technology, but not necessarily their workforce, if they can teach a much cheaper workforce how to do things "the German way". Not unlike the way Volvo/Geely is going. And in a reverse sense, not unlike how "Japanese" cars are manufactured in the West, but using Japanese techniques for quality management and lean production. The main thing that might counter this trend in Germany, is partial state ownership of several car manufacturers, having responsibility both for jobs and profit.

As for the Chinese, the German brand has the advantage of being high quality, but "not Japan". Europe isn't the only place with history. And they will learn to trust German cars built in China, just like Britain learned to trust British produced cars, as long as they were Japanese.

52. At 7:00pm on 12 Nov 2010, Chris B wrote:

Some good points. Some not so good.

I happen to think that the German example is only valid in the short/medium term. Those rich enough to import luxury goods will go for German cars

I think if you were to look at the list of items made in Germany you will find many items that will always be in demand. Examples are optics, specialist chemicals, niche steels and (a growing area) nano-technology, and of course machine tools. I would associate the UK not Germany with luxury items (Aston Martin, Bentley, etc).

And companies will retain their brands and their technology, but not necessarily their workforce, if they can teach a much cheaper workforce how to do things "the German way".

Already happening, with mutual benefits. German cars are made in eastern Europe and Mexico. Part of car manufacture is low added value - move those jobs abroad.

The main thing that might counter this trend in Germany, is partial state ownership of several car manufacturers, having responsibility both for jobs and profit.

No. A fatal mistake.


but "not Japan". Europe isn't the only place with history.

Good point. Agreed.

Climbing the value-added ladder is a continous process. Today's high added value is tomorrows low added value.

Exporting low added value jobs to emerging economies is, I agree not nice for those who lose their jobs, but good for their children who will benefit from the higher added value jobs replacing the ones lost. It is also good for the emerging countries who over time increase their spending power in the developed countries.

It does not always work as smoothly as that but the alternative is far worse.

"I think if you were to look at the list of items made in Germany you will find many items that will always be in demand."

Always in demand, but not necessarily always made in Germany.

"Climbing the value-added ladder is a continous process. Today's high added value is tomorrows low added value.

Exporting low added value jobs to emerging economies is, I agree not nice for those who lose their jobs, but good for their children who will benefit from the higher added value jobs replacing the ones lost"

My point was that the speed at which emerging economies can climb the "lower end" of this ladder is much higher than the speed at which we can continue up over the top, basically because at the high end you need real innovation to get further.

And, as much innovation is also low added value "leg-work", I can't see why emerging economies will not also be able to compete here. Hence I am less convinced that the children of developed economies will inherit the high value added jobs as a "birth-right" - they will need to compete hard for them.

54. At 09:37am on 13 Nov 2010, Chris B wrote:
Hence I am less convinced that the children of developed economies will inherit the high value added jobs as a "birth-right" - they will need to compete hard for them.

Of course. The world does not owe us a living.

Innovation will help us to stand still. Red Queen Theory.

I can't believe I'm still answering this thread ;) I had to look up Red Queen Theory, in my mind it doesn't apply in this case. Evolutionary and arms-race innovation relates to competing for a fixed resource - zero sum, I win you loose, and we waste a lot of effort competing for it.

Technology innovation combined with trade is something which makes the cake bigger. Normally this is win-win. But in this case, the majority has a much smaller part of the cake to start with, and only recently entered the game for real. Their win is big (starting from a low base), ours might be loss at first (since we evolved separately for some time, growing fat and lazy ;)

56. At 6:18pm on 13 Nov 2010, Chris B wrote:
I can't believe I'm still answering this thread ;)



"In Lewis Carroll's classic Through the Looking-Glass, the Red Queen, a living chess piece that Alice meets, has to run in place as quickly as she can to simply stay in the same place. In order to get anywhere else, she says, you must run twice as fast." (ISCID Encyclopedia of Science and Philosophy)

In my context I am really saying the mature economies will need to expend a lot effort just to stand still.