Sunday, 7 December 2014

Good-bye GB Drugdealer.

The news that Gordon Brown is stepping down at the next election caused nary a ripple at Lola Towers. He's been gone since he did that silly grandstanding walk down Downing Street.

Much time has been wasted on the interweb dissecting his record, so here is my ten pennorth.

GB (in fact New Labour generally) modelled his/their whole economics/buying votes scheme on the narcotics business.  It worked like this.

1. Booming consumption equals euphoria. Like a drug fix.
2. To make consumption boom we need more money in peoples hands
3. To do that we need to make more of the stuff and distribute it.
4. To do that we need to control money in all its aspects from production to distribution.
5. As this is likely to be challengeable by people who know that unsound money is bad, we need to control the money police.
6. So we'll need some legislation that eviscerates the police.
7. Ah ha! We can get the LSE and the Fabians to look at this and draft an Act.
8. This Act will destroy the money police powers, enable the massive expansion of money and credit, weaken the banks capital ratios and encourage indebtedness.
9. We will triple money supply, halve its price and halve it quality.
10.  We then need pushers.  To make them good pushers we also need to make them addicts.  So we will give all this money to the banks.
11. The banks will need users.  We will encourage the banks to increase the number of users and the size of their habit, and make the whole thing such a high that the users keep on taking bigger and bigger fixes.
12.  Since we now control the whole process of money and debt, what could possibly go wrong?
13. 2008. Oh shit!


Mark Wadsworth said...

Seems fair enough.

Rich Tee said...

My opinion:

Labour is supposed to be the party that intervenes to curb the excesses of the free market.

But GB didn't intervene to cool down one of the most important markets of all, the housing market.

So GB failed even on his own terms, as far as I'm concerned.

Lola said...

@RT. GB didn't 'fail to cool down the housing market '. He deliberately increased our addiction to it. That is the point I was trying to make.

Lola said...
This comment has been removed by the author.
Pablo said...

LOL: Heard you the 1st time! :-)

Mark Wadsworth said...

I suppose, the clever bit about Home-Owner-Ism is that one group of people (landowners and bankers) go on a binge, and it's others (younger people, recent purchasers) who wake up with the hangover.

So the Homeys in Chief have to fine tune the propaganda a bit by increasing old age pensions and blaming everything on foreigners, and somehow miraculously younger people and recent purchasers.

DBC Reed said...

It is OTT to call merely reflating the economy in the normal manner drug-pushing.God knows what you would have called Macmillan who gave Chancellors the elbow for not pushing enough money out .He had Schedule A (viz income tax on house price increases !)in his day though.
Quite honestly you seem to believe that no increases in the money supply at all is the norm
and that Keynesian stimulus is a dangerous interference in the arrangements laid down by God and Nature
You also imply that the Credit Crunch was all Brown's fault, starting in the UK. Nobody with any sense believes that Big Lie propaganda from Dr Noballs Osborne.
Thank God for Gordon Brown for saving the world by not applying the emergency Austerity measures that the other world leader prats ,like Merkel, would have been itching to impose. Look how tight money has transformed Europe!!Good job Gordon kept us out of the Eurozone as well.

Lola said...

OK. Here we go.

Bo-one 'knows' what the money supply 'should' or 'needs' to be. In the same way that no-one knows what the baked bean supply needs or should be. And no-one 'knows' what the price of money 'should' be since it is one of the last bastions of socialist central planning and we all know that there is no possibility of any economic calculation under socialism. That's the whole problem. Centrally planned money has failed, especially when bastardised by the likes of Brown et al. And that means that Keynesian Stimulus Spending is not only wrong, but stupid and dangerous. You can't cure a problem with more of the problem. This is not homeopathy.

I did not say that Brown was the cause of the global financial crisis. I did say, and I hold to, that his entirely flawed policies (well him and Balls et al) were largely what precipitated the crisis in the UK. (FWIW I don't think it was a 'crisis'. I think it was the market telling Brown et al that they'd made huge errors. It was markets finally succeeding).

The Merkel/Euro debacle has different roots, but the same issues - the massive and unwarranted increase in money and credit that now has to unwind. Money pumping will fail.

And many people do know that Brown et al (including the US, the EU etc. etc.) that this is the fault of failed governments.

Anyway the government not spending money it does not have on things it can't afford because it's reached max Laffer is not 'austerity'. Taxing the beejesus out of the real economy to keep the party going is austerity.

I am afraid that you are living in the past old son. All those Keynesian or socialist nostrums have failed. End of.

DBC Reed said...

All that wasted effort over the years, and all over the world, varying interest rates to keep the creation of money by the banks at a steady pitch to maintain production near capacity.If they'd only known how brutally simple it all is.
(As for Keynes: his problem was plagiarising Gesell but not the land bit which G derived from Henry George.LVT's great merit is in stopping Keynesian demand stimulus disappearing into the inelastic supply of land. A lot of the rest of it is pretty bogus.)

Lola said...

Para 1 Irony?

Para 2. Bit muddled, but I think I get your drift. Perhaps that just one of LVT's great merits, dealing with the nonsense of K's.'demand stimulus'?

Bayard said...

"All that wasted effort over the years,"

Think how much effort has been put into prayer over the centuries, for no demonstrable effect, or more recently, all the money and effort that has been poured into trying to stop the world heating up (with the rather surprising result that it did stop heating up around the millenium and now the people who wanted to stop it heating up are trying to say it hasn't stopped and hence the early efforts were a failure, but that shouldn't stop us continuing with them).

PS Is there a global warming version of Godwin's Law?

DBC Reed said...

@B In Lolaland "no one knows what the money supply should or needs to be". Concepts like deflation, reflation or even inflation have no meaning therefore.What the Monetary Policy Committee is doing using interest rates to keep to a 2.5% inflation rate is as pointless as prayer according to the trendy right wing opinion which now dominates the chattering classes.There is no such thing as monetary policy or the State even .And they called the Communists economic illiterates!