DEM not gonna CON dis NATION: Rolling UK politics in the short-lived post-Murdoch era

LOL

DM, saying what we're all thinking

So much for that AAA rating by which we were to judge Osborne

http://www.bbc.co.uk/news/business-21554311
fucking fucking fuck...

one of us, oooonnnneee offff usssssssss

disturbed that the tories are already attempting to have this parsed as, 'the aaa rating isn't important, but we're losing it because we're not shifting debt quick enough' rather than 'the aaa rating isn't important, but osborne's policies will guarantee that the economy doesn't grow'. the issue shouldn't be osborne's humiliation, delicious though that is, but the fact that austerity isn't working and should be discontinued forthwith.

reading these articles makes me realise i don't know what "credit ratings" or "bond yields" or indeed "growth" actually mean

The Bank has so far pumped £375bn into the financial system, creating money to buy-back government bonds.

this is just gibberish to me

i can't actually back up a single one of my left-wing beliefs with economic arguments, which probably proves what every RWer thinks about lefties

Relax, most RW types use the totally spurious housewife-o-meter to 'splain economics to the public, so...

yeah but i can't even counter THOSE arguments

tbh i still don't get why a household's economy isn't analogous to a country's economy, conceptualising it like that is the only way it begins to make the tiniest amount of sense to me

Don't worry - nobody gets it, politics usually takes over. If people's pockets are empty for long enough then maybe violence might be on the cards.

This has been in the cards since xmas even if not before, no surprises.

disturbed that the tories are already attempting to have this parsed as, 'the aaa rating isn't important, but we're losing it because we're not shifting debt quick enough' rather than 'the aaa rating isn't important, but osborne's policies will guarantee that the economy doesn't grow'.

Don't be disturbed, its par for the course.

I think it'll be even further humiliation if Osborne were to make a U-turn. There'll be a carrot or two dangled that might signal an A- plan in the budget next month, otherwise can't see the cuts not continuing till the next election. He can make the case that unemployment is coming down and so is the debt but mainly they don't have any other ideas.

In fact no one has very many ideas on how to deal with the debt...

so much of the complexities of economics are tied into explaining or defending the foibles of the existing economic system that i think you can safely not worry too much about it. it's a science for debating the best arrangement of deckchairs on the Titanic. your left wing beliefs don't really hang on whether endless economic growth is a good or viable way for humanity to organise itself.

(not advocating total ignorance, just saying that the struggle to save ourselves as a species and to create a world where genuine equality of opportunity and maximisation of human potential exists has got fuck all to do with the world of credit ratings)

Losing their AAA rating hasn't affected France or the US too badly, although both are in better positions economically than the UK. So Osborne is probably right when he's saying it's not the end of the world. But preserving the UK's AAA rating has been the government's reason for all this austerity in the first place. And if the credit rating isn't that important than hmmm maybe he had some other goal in mind?

I thought when we lost our AAA rating we'd as well to start eating horsemeat and talking Greek, wasn't the scenario painted by Cameron + Osborne to win them the last election, which they didn't win? Still, they can always count on the staunch support of their Liberal Democrat colleagues when it comes to fucking us over.

Also yeah insert some stuff about the ratings agencies failing the world economy in the build up to the crash in the first place.

My guess is that this combined with a defeat in Eastleigh combined with Osborne being forced to get up and admit that the deficit has actually widened in the last year will be disastrous for the coalition. People will only really accept austerity if it's seen to be working, especially given that the effects of austerity are only just becoming visible.

Overestimating the windfall from 4G spectrum by like a billion probably hasn't helped either.

I thought when we lost our AAA rating we'd as well to start eating horsemeat and talking Greek

Hey we've got the first bit sorted.

I'm somehow reminded of Gordon Brown's "End to boom and bust" howler

Rating dip seems more symbolic, but citing the lack of debt reduction as a reason for it means Osbourne at least feels he should do more austerity. The practical downside is that a lot of pension funds/401ks etc will have to get out of the British Government bond game, right?

the only cause i've seen cited for the rating dip has been lack of growth in the UK economy which if anything is a result of the austerity measures i thought

obv the Gov will lie like crazy about this but

the only cause i've seen cited for the rating dip has been lack of growth in the UK economy which if anything is a result of the austerity measures i thought

You and I might think that, but Moody's geniuses say one of the factors that might make them cut the rating further is "reduced political commitment to fiscal consolidation".

Also yeah insert some stuff about the ratings agencies failing the world economy in the build up to the crash in the first place.

^this

What does "fiscal consolidation" mean though? If it means "just cutting more shit" then yeah that will embolden Osborne, if it means "actually reducing the deficit" then it won't. What we're seeing play out is that cutting in itself doesn't actually reduce the deficit.

Keynesianism 101 innit.

you just said a swear

I think the word "commitment" suggests it's the former, Matt.

There's also the inherent... childishness of allowing markets to dictate policy. I mean it's not like they're going to stop lending the British government money, government bonds are still a safer investment than pretty much anything else.

I'm thinking about Labour here really, it's not like appeasing bond market investors is the Tories' core reason for slashing public spending.

government bonds are still a safer investment than pretty much anything else

They become worth (a lot?) less at a lower credit rating don't they?

they become more expensive for governments to sell, because interest rates go up when they are deemed more risky to buy.

that was it, thanks Neil.

what ARE govt bonds?

basically they're a loan sold by the government on a market, and the interest rate (and hence expense of paying them back) is determined by the risk as monitored by credit rating agencies.

so governments will say "we need to raise £1bn for short to medium term spending, what rate will you lend us that money?" The problem for Italy and Spain recently was the cost of borrowing this money started to creep up until defaulting on the loan became a possibility, which would be economically disastrous as no lender would then stump up cash,

my mind just runs into a brick wall when i try to understand the concept of selling a loan

problem is as mentioned upthread, credit rating agencies are tools of the corporate man and wedded to neoliberal ideological norms that meant they were blind to the causes of the crisis. So why "the market" should give them credibility is an open question, I suppose it's because if everyone stopped believing in this stuff then certain people would stop making large amounts of money. Gramsci-ite neoliberal hegemony therefore rules.

Hm, I'm not sure I agree with everyone saying "it's okay, nobody understands economics". I'm not an economics expert by any stretch, but it is kind of important to have a handle on what's going on and why.

However, that's a general principle, and if in a particular case it is beyond you, that doesn't necessarily condemn you to a life of political dilettantism - there are many many other reasons to despise the right-wing in the UK. For one thing, you can see the effects of economic policy very clearly. I've never been a believer in the trope of "if you can't suggest something better then don't criticise" -> even if you are not a highly-trained policy-maker, you can still stand up and be counted re: institutional ableism, racism, sexism, class warfare, removal of basic services, etc...

None of this is going to be news to anyone itt, obviously. tl;dr: economics is important, but not essential to the layperson.

He can make the case that unemployment is coming down and so is the debt but mainly they don't have any other ideas.

The debt certainly isn't coming down, the deficit might be (but probably isn't)

for a good explanation of a lot of this stuff, I'd recommend John Lanchester's Whoops!, which also has the virtue of being well written. His articles in the LRB are also very readable.

probably an important hurdle wrt understanding economics is realising that it's basically a self-perpetuating sham doing a reasonable job of masquerading as a science. full communism now.

^^^ OTM

Unemployment isn't coming down either - de facto jobseekers being counted as employed when on workfare schemes, ex-claimants going self-employed at the behest of people with 'targets', people employed casually or on zero-hours contracts being underemployed...

While this is all true the figures say otherwise and unless Osborne is personally driving a fiddle that is about to be uncovered he will tell people unemployment is coming down. Not only that he will shamelessly say there are more people in work than ever! The guy has the highly dubious gift in telling lies so convincingly to make enough people want to believe in that...

Same for the finances: they are in a terrible state but he'll take any bit of 'improvement'.

The problem is not that the markets said GB debt was too high or deficit not reducing enough -- it's allowing Osborne to spin that into "ergo more cuts required".

The other, better, way to reduce your debt is to increase your income. Yes stimulus means a short-term increase in your debt, but it's like a household taking out a loan to start a business.

This might have been a better plan when the cost of GB debt was at all-time lows, but it's still the better option now.

probably an important hurdle wrt understanding economics is realising that it's basically a self-perpetuating sham doing a reasonable job of masquerading as a science.

that is more or less what i said tbf. maybe it's good to understand mystification, but identifying it as such will do.

I can think of an economist or two who had quite a bit to do with Communism. Still, the government would like you to think of economic forces as being essentially uncontrollable forces of nature, rather than the cumulative effects of decisions made by individuals. Although obviously other factors, ie availability of natural resources, also come into play.

As far as I understand it the British economy IS actually creating jobs but they're mostly poorly-paid and part time, which isn't sustainable in the longer term, especially taking into the account the withdrawal of public spending.

Can't see much happening other than more cuts, a triple-dip and an economic spiral now though. What joy.

the 'voodoo economics is pleonasm because it is all voodoo!' thing has a very early 19th century proto-anarchist crank feel to it

They become worth (a lot?) less at a lower credit rating don't they?

― fizzles tics (Fizzles), Saturday, February 23, 2013 2:45 PM (Yesterday) Bookmark Flag Post Permalink

they become more expensive for governments to sell, because interest rates go up when they are deemed more risky to buy.

― Neil S, Saturday, February 23, 2013 2:53 PM (Yesterday) Bookmark Flag Post Permalink

you'd think, but this doesn't happen in practice. the "uncertainty" makes investors want to buy the safest asset they can think of, which turned out to be japanese bonds, french bonds, and us bonds, respectively, when each of those countries got downgraded. oh je.