Paul Robinson — Moronic speech of the day

That would be a speech by George Osborne on Syria made in the British House of Commons.

I registered as a British overseas voter in order to vote in the Brexit referendum. That means I will get a vote in the next general election (in East Hull). For the first time in my life, I will vote Labour – not because of the mass of Labour MPs, most of whom remain committed interventionists, but because in Corbyn they have a leader who actually realizes how counterproductive British policy has been. I disagree with just about everything else Corbyn stands for, but at least he’s right on this. It makes me understand why Americans voted Trump.

Irrussianality
Moronic speech of the day
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

George Osborne — Mais Lecture - A New Economic Model

1. Confidence fairy
2. Reinhart & Rogoff
3. Inflation targeting
4. Fiscal sustainability

How did that work for you?

SayIt — Conservative Party Speeches
George Osborne: Mais Lecture - A New Economic Model

Feb. 24, 2010

ht Brad DeLong

Mica Rosenberg — Top U.S. officials rejected push to prosecute HSBC: lawmakers' report

Senior U.S. Department of Justice officials overruled internal recommendations to prosecute global bank HSBC Holdings Plc for money-laundering violations because of concerns about the stability of the financial system, according to a congressional report released on Monday.…

Business Insider
Top U.S. officials rejected push to prosecute HSBC: lawmakers' report
Mica Rosenberg | Reuters

WTF??? Osborne says tax hikes and spending cuts needed to "offset the shock" of Brexit! !@#$%^&

I'm not even going to say, "Can you believe this?" because, how many times have we seen these morons fuck themselves? Over and over and over.

Tax rises and spending cuts will be needed to deal with the "shock" to the UK economy caused by leaving the EU, Chancellor George Osborne has said. Read more.

There you go. Complete moron.

The only hope is, that the next Prime Minister won't listen to him, but that's a low probability because it'll likely be one of the conservatives and they're all over the "fiscal responsibility" bullshit.

The whole Brexit thing for them was about immigration.

Alexander Douglas — The Theoretical Underpinnings of Osborne’s Budget

In sum: the budget draws upon empirical research that is conducted with no sensitivity to an enormous institutional difference. It misrepresents that research, for instance by treating averages as universals. It makes no attempt to understand how financing actually works for a government that spends in its own currency. The authors may not have even read the research they cite.

Origin of Specious
The Theoretical Underpinnings of Osborne’s Budget

Alexander Douglas | Lecturer in Philosophy at Heythrop College, London

ht Random in the comments

See also

How to Sell an Idea – Wisdom from Abba Lerner

Telegraph — George Osborne spearheads assault to stop Greece 'suicide'

Elite freak out underway as Sampson Syriza pulls down the pillars. Shades of Lehman looming.

George Osborne on Monday led attempts to strong-arm Greece into voting for a bail-out package as he warned that a Greek exit would threaten Britain’s financial stability.
Britain joined Germany, France, Italy and the European Commission in telling the Greek people that refusing austerity measures in next Sunday’s referendum would catapult them “from the eurozone and from Europe".

Jean-Claude Juncker, the European Commission president, warned the Greeks – who are on Tuesday night expected to default on a €1.5 billion (£1.1 billion) loan from the International Monetary Fund (IMF) – not to “commit suicide” by rejecting the proposed €12 billion loans-for-reforms package. The threat comes despite voters being asked only whether they support the bail-out.

Some £36 billion was wiped off the value of major British companies on the FTSE 100 as markets slid around the world, while Greeks queued in their thousands at cash machines, petrol stations and supermarkets for a third day....

Hold strong Syriza. Democracy is working.

Best line:

Greece on Monday published the ballot paper for Sunday’s vote, with No, or Oxi, at the top. The word carries powerful resonance in Greece from the day in October 1940 when it refused Mussolini’s ultimatum.

If this weren't so pitiful, I'd be laughing. The eurocrats are getting what they deserve. And no, they are still not willing to compromise one inch. That's the real neoliberalism on display. It's like catching a monkey by putting a banana in pot. The monkey grasps the banana and won't let go, so it is caught by its own greed.

The Telegraph
George Osborne spearheads assault to stop Greece 'suicide'

Matthew Holehouse, Brussels, Ambrose Evans-Pritchard, Justin Huggler, Berlin and Steven Swinford

Origin of Specious — Misunderestimating Osborne

In trying to pass legislation to force governments to constantly maintain an environment of financial instability and inevitable crisis, Osborne is looking after his class interests quite well. His class interests are summed up thus: ‘It is not enough that we are rich; others must be poor’. He lacks decency, not economic competence.

Origin of Specious
Misunderestimating Osborne

ht Neil Wilson

Robert Skidelsky — Speech on the Autumn Statement, in the House of Lords, 4th December 2014

I concentrate on one point: the Chancellor’s failure to meet his budgetary targets.…

Ever since I started writing and speaking about these matters in 2010, I have been predicting that the Chancellor would not meet his budget targets. 

The reason I gave was that the pursuit of those targets in itself slows down the economic growth on which their achievement depends.

Why? Because it slows down the rate of spending in the economy, and growth depends on spending. The cuts have hit the spending, and the spending has hit growth.…

So why has the British economy been growing at all? The answer is very largely because there are more people. The population was 62.3 million in 2010, today there are 64.1m, 2 million more, virtually all of them of working age. And more people are coming. 

Any economy will grow if has more people to do the work. The only relevant welfare measure –the measure by which the government should be judged –is GDP per head. GDP grew by 4.1%, between 2010 and 2013, but GDP per head has grown by only 2.3%, and the typical earner is £1600 a year worse off. 

So we are left with the prospect of another round of brutal spending cuts with the rolling five year programme rolling ever further into the future.

It sometimes helps if people running economic policy know some Keynesian economics.

Speech on the Autumn Statement, in the House of Lords, 4th December 2014
Robert Skidelsky

h/t Brad DeLong

John Hull — Lean and Mean: How obsessive cost-cutting destroyed job security

The message is proliferating:

“I’m afraid to tell you there’s no money left.” (Liam Byrne)

For there to be austerity, there must be no money. But for a state with its own central bank and its own sovereign currency to have no money, there must be a complete misunderstanding – or misrepresentation – of what money is and how it is created.

The definitive reference point for this fiction – the last two words used unreflectively by lobbyists, journalists, and politicians – is Margaret Thatcher’s declaration: “There is no such thing as public money. There is only taxpayers’ money.” In Thatcher’s macro-economic model, individuals first earn money from which the state then borrows or takes through taxation to provide public spending. This image of the scrounger filching your earnings and leeching from your savings to spend on what it cannot afford was brilliantly constructed to justify and enable the shrinking of the state. Governments since Thatcher have thus cast themselves in the role of Prudence: guardians of the taxpayers’ money, determined to cut taxes and cut spending.

Beneficiaries of state expenditure such as civil servants, public employees, and recipients of social security have been cast by implication as scroungers; and public roles (in government, health, education, welfare, environment, transport) recast as costs, and never investment. In contrast private sector providers in receipt of state subsidies have been cast as “wealth creators”, and those providing what were previously public services as fellow guardians of “taxpayers’ money”, creating “real” jobs while cutting costs to “the taxpayer”. In the words of Chancellor George Osborne,

“[Our policy is] an economy where the state does not take almost half of all our national income, crowding out private endeavour.”

With the state reduced to a system for taking from the earner and giving to the non-productive, recipients of social security can be transformed into victims of the state, dependent on other individuals’ money: and the moral imperative becomes saving them by removing the state and their benefits, and forcing them into paid labour. Taxation is itself reduced to the immoral act of seizing one person’s property to subsidize another’s dependency, and a moral justification for tax avoidance or evasion – or even ending taxation – constructed....


The first institutional logic of a neoliberal state is to re-regulate to promote “the market” as the optimal device for organizing human activities....


As the neoliberal state continues on its mission to cut government spending, it has entered into a positive feedback loop with business on a mission to cut costs. The neoliberal state deregulates and cut taxes, and fails to collect taxes: all of which cut the costs of doing business. The neoliberal state ceases supervision of business, while increasing supervision of being poor or ordinary: all of which cut the costs of doing business. The neoliberal state reassigns its penal apparatus to imprison the poor, but leave the white collar criminal untouched: all which liberates business. The neoliberal state can privatize public services, creating almost unlimited opportunity for rentiers.

Together, the neoliberal state, its finance sector, and its corporations progress through what Professor William Black calls the “three Ds”: deregulation, de-supervision, and de-facto decriminalization....

Misinformed or mendacious, in a world dominated by what Black calls, theoclassical economics, the Thatcher narrative of “taxpayers’ money” is canonical. It’s also a complete fiction, as a recent article issued by the Bank of England about the role of money shows. (Almost all) money is created out of nothing by commercial banks creating loans. A central bank with a sovereign currency can create money (as the Bank of England had to do when commercial banks stopped lending in the most recent financial crash). It is why the Bank of England was created over 300 years ago. As Borges writes, “A fictitious past occupies in our memories the place of another, a past of which we know nothing with certainty – not even that it is false.”

The truth is difficult to find, as the dominant and pervasive theoclassical economics neglects money and the monetary system, preferring to treat money as neutral ether in which economic transactions are done. But the truth is startling and important:

“Money and monetary systems… are social constructs, and can and must be managed, mobilised and deployed to serve the wider interests of society and the ecosystem … We know it can be done, because in our recent history, after the 1929 financial crash, society succeeded in wrenching control of the monetary system back from a reckless and greedy wealthy elite.”

Under the onslaught of neoliberalism it is necessary to identify a prerequisite, a necessary response, to stem that onslaught and initiate its retreat. That prerequisite is the understanding that money and monetary systems are constructed by society. The response is to restore money and monetary systems into society’s democratic control. From there, regulation and supervision of finance and markets can be re-imposed. Social value, dignity, and security can then be restored to employment.

DiscoverSociety
Lean and Mean: How obsessive cost-cutting destroyed job security
John Hully | IT Service Manager with a special interest in Governance
(h/t Andy Blatchford)

Marshall Auerback — George Osborne Is Right: Scotland Under Sterling Is Not Truly Independent

How about talking about currency independence being necessary for national independence instead of currency sovereignty being necessary for national sovereignty? 

"Independence" seems to me to be more forceful emotionally than "sovereignty."

Macrobits
George Osborne Is Right: Scotland Under Sterling Is Not Truly Independent
Marshall Auerback

Kerry-anne Mendoza — Osborne To Axe Welfare State With £25Bn Of New Cuts. What’s He Coming For Next?

George Osborne used his first speech of 2014 today to warn that a further £25bn of cuts in public spending is required after the 2015 general election. £12bn in Welfare cuts will be made in the first two years of the next government.

According to the Financial Times: “The chancellor’s comments are intended to frame the political debate leading into the 2015 election, as he tries to portray the Tories as the only party capable of taking tough decisions on the deficit.” Austerity isn’t necessary of temporary, it’s ideological and permanent so long as these people are in charge.

Austerity is Ideological

On arrival in government, the Conservative section of the Coalition government were keen to present austerity as temporary, necessary and purely practical. Back in 2010, Cameron claimed that he “didn’t come into politics to make cuts”[1], and that austerity was simply temporary spending restraint based on a necessary effort to cut the deficit, not “some ideological zeal”.[2]

What we can now see, is that ‘Austerity’ is delivering the half century long ambition of the Conservative party: to revoke the post-war social contract of the United Kingdom.
The modern welfare state: decent pensions, affordable and decent social housing, a publicly funded and managed healthcare system, a reliable and low cost transport system, the guarantee of a decent education regardless of circumstances of birth. This was the social contract the UK public signed up to in the post war period. Why? Because these generations had lived through the horrific consequences of unrestrained capitalism; enormous inequality, widespread poverty and destitution, starving and malnourished children, an entrenched class system, the benefits of the hard work of the many enjoyed by a privileged and undeserving few.

David Cameron is taking the country back to those dark days….

Scriptonite Daily

Osborne To Axe Welfare State With £25Bn Of New Cuts. What’s He Coming For Next?

Kerry-anne Mendoza

Menzie Chinn — British Economic Triumphalism in Perspective

Econbrowser

British Economic Triumphalism in Perspective
Menzie Chinn

Dig a deep hole with "expansionary fiscal austerity" and then declare victory when you start to climb out of it with selected data to prove it.

Social-hari-kiri. Is that ritually stabbing your country in the Middle Class?

Commentary by Roger Erickson

Let's hope that we're witnessing the height of idiocy, before it sinks humans even further. "Erble" illogic has jumped the pond, and infected feeble wits in the land of Keynes. Can it be contained, and quarantined? Is there a cognitive vaccine against this group-brain-eating disease?

Make operational sense of the following pairing, if you can.

Osborne Pledges Tories Would [Start Depleting Net Private Savings] by 2020
"Chancellor of the Exchequer George Osborne pledged to [have the UK fiat currency issuer shrink the UK population's currency supply, by taking back more currency than it issues. When? By] 2020 to help bring down U.K. government [nominal] debt if his Conservative Party is re-elected in 2015."

   [Wow! Better run out & vote for the robber's platform, right away.]

But wait! There's more!!!

UK to Spend Hundreds of Millions on Cyber Attack Capability
"The U.K. will spend hundreds of millions of pounds hiring hundreds of computer experts to allow the nation to launch cyber attacks if necessary."

No problem! Just keep beating Middle Classes into CyberWarShares?

Words fail me. 

What could one possibly say to Mr. Osborne, if one did get a chance to perform a Turing test on the bloke?

After detecting such a huge dysfunction in the farce, the ghost of Wynn Godley may be attempting quantum mechanics to tunnel to a more intelligent sector ... out of pure shame & frustration. It's as though millions of pea brain erble-intellects suddenly cried out in ignorance, and started committing default hari-kiri. Truly, the farce can have a self-destructive effect on the lame brained.

Perhaps these little erbles might do better investing a tad in upgrading their own operating paradigm - and specifically in their ability to adjust it sooner than 80 years after their context changes?

Ya think?

Before deciding, read this whole sequence, on the economic consequences of the Gold Std in the UK. It's more than rather reminiscent of today.  And yes, Winston Churchill was a clueless weasel. Osborne could aspire to a bit higher ambition, at least when it comes to Policy Space and Policy Agility.

Social-hari-kiri. It really does involve ritually stabbing your country in the Middle Class. It's a horrifying consequence of the erble-illogic social prion semantic infection. The only known social vaccine is mandatory education in logic.

George Osborne promises a surplus

Here’s our serious plan for a grown-up country. First, sound money. The bedrock of any sustained recovery and improved living standards is economic stability.

That is what the hard work and sacrifice of the last three years has all been about.
In that time we have brought the deficit down by a third. And the British public know that whoever is elected will face some very hard choices.

Let me tell you the principles I bring to that task. Our country’s problem is not that it taxes too little.

It is that its government spends too much. So while no responsible Chancellor ever rules out tax changes, I think it can be done by reducing spending and capping welfare, not by raising taxes.

That’s my plan. And surely the lesson of the last decade is that it’s not enough to clean up the mess after it’s happened?

You’ve got to take action before it happens. It should be obvious to anyone that in the years running up to the crash this country should have been running a budget surplus.

That’s what we mean when we say they didn’t fix the roof when the sun was shining. Let us never make that same mistake again.

Never again should anyone doing my job be so foolish, so deluded, as to believe that they have abolished the age-old cycle of boom and bust.

So I can tell you today that when we’ve dealt with Labour’s deficit, we will have a surplus in good times as insurance against difficult times ahead.

Provided the recovery is sustained, our goal is to achieve that surplus in the next Parliament. 

That will bear down on our debts and prepare us for the next rainy day. That is going to require discipline and spending control.

For if we want to protect those things we care about, like generous pensions and decent healthcare, and buy the best equipment for the brave men and women who fight in our armed forces, all of us are going to have confront the costs of modern government – and cap working age welfare bills.

And only if we properly control public expenditure will we be able to keep lowering taxes for hardworking people in a way that lasts.

I’ve never been for tax cuts that are borrowed. I want low taxes that are paid for.
We also want to go on investing in the essential infrastructure of our country - the roads and railways and science and communications that are the backbone of the future economy.

So we should commit, alongside running a surplus and capping welfare, to grow our capital spending at least in line with our national income.

 He doesn't see that this is contradictory.

These principles will form the foundation of our public finance policy and I will set out the details next year.

And for those who ask: Is this necessary?I say: What is the alternative? To run a deficit for ever? To leave our children with our debts? To leave Britain perilously exposed to the next storm that comes?

This crisis took us to the brink. If we don’t reduce our debts, the next could push us over.
Let us learn from the mistakes that got Britain into this mess. Let us vow: never again
This time we’re going to run a surplus. This time we’re going to fix the roof when the sun is shining.

Much more nonsense. Read the whole speech.

This plan is based on wage suppression and increasing exports to run a fiscal surplus by offsetting domestic consumption by growing the export industry in an attempt to emulate Germany, Japan, and China as surplus countries.  It's the same old mercantilist "beggar-thy-neighbor" stance that made Britain of old a colonial, imperialist power.

politics.co.uk
George Osborne's conference speech in full
(h/t Ralph Musgrave via email)

Guest Post: Ralph Musgrave — Britain’s finance minister and central bank chief at loggerheads

Britain’s finance minister and central bank chief at loggerheads.


George Osborne, Britain’s finance minister introduced a scheme to boost house purchases called “Help to Buy”. And not content with that house price bubble inflating stroke of genius, he introduced another scheme called “Funding for Lending” which aims to encourage lending in general, but which in fact is being exploited on a large scale by landlords wishing to purchase new properties.

Net result: a rapidly inflating house price bubble.

Funding for Lending

But all is not lost:

Mark Carney, the new Bank of England chief says he is ready to stamp on any house price bubble.

So now you know the definition of the phrase “public official”. It’s someone who spends their time nullifying the activities of another public official, with you paying the salary of both.

But more seriously, whence this strange desire to get commercial banks to lend, especially when we’ve just had a credit crunch followed by five years of disgracefully high unemployment and all sparked off by excessive and irresponsible lending?

Well it’s all down to something MMTers understand, but which few of those in power understand (especially Rogoff, Reinhart, and the IMF and OECD). It’s the fact that deficits and national debts are nothing to worry about. Or in the words of Keynes: “Look after unemployment, and the budget will look after itself”.

So those in power are desperate to find a form of stimulus which doesn’t increase the deficit, and commercial bank lending fits the bill, as does QE. As to the fact that excessive lending results in house price bubbles and possibly another crunch, well who cares? And as for the fact that QE enriches the rich and destabilises developing economies, well s*d that. The only important consideration is getting that dreaded deficit down.

Ralph Musgrave

Frances Coppola — The real meaning of Fitch's downgrade

The biggest risk to the UK economy, and therefore to the safety of UK sovereign debt, is the clowns running our political system. Heaven help Mark Carney. He has a simply horrible job to do.

Coppola Comment
The real meaning of Fitch's downgrade
Frances Coppola

Getting behind Fitch's reasoning of possible default of a currency sovereign. Is it the Lisbon Treaty?

Randy Wray — Why We’re Screwed, Two: The Love Of Money

Radio interview.

Economonitor — Great Leap Forward
Why We’re Screwed, Two: The Love Of Money
L. Randall Wray |Professor of Economics, UMKC

Osborne's folly — get rid of automatic stabilizers to control deficits

It’s impossible to arrive at the right treatment if your diagnosis is itself pathologically crazy. Starting in a few years’ time, [George Osborne] wants to get rid of AME [floating section of budget], or rather to create a new management framework that permits of setting a cash limit on it, and Ed Conway, as a good Very Serious Person and News International employee*, has already started with the talking points – note the title of his blog post. “Uncontrolled spending” anyone?

A Fistful Of Euros
The End of the Automatic Stabilisers
Alex Harrowell

(h/t Kevin Fathi via email)

Harrowell correctly calls this "pathologically crazy."

Bill Mitchell — Ratings firm plays the sucker card … again

Bill excoriates Moody's for the UK downgrade and George Osborne for lying about it. Reinhart and Rogoff come in for criticism too.

Bill Mitchell — billy blog
Ratings firm plays the sucker card … again
Bill Mitchell

George Osborne looks a Gift Hearse in the Hoof in Mouth!

commentary by Roger Erickson

George Osborne rejects IMF call for Plan B

'He said at the World Economic Forum in Davos that Britain had built up credibility with harsh measure to reduce its massive deficit which allowed him to borrow [fiat] from markets at the lowest rate "perhaps of any Chancellor before me".'

Borrow fiat? Lowest rate?

The only real thing that's lower about this Chancellor is his functional IQ. Word's completely fail me. It's the foundation of ignorance.

'Hop in boys. The rear view mirror's broken, but this thing really flies in reverse! Watch while I stomp on us!!'

There should be a museum for all to see how dumb George Osborne is.

There aren't enough people left in Britain to bear adequate witness to he who is witless.

"Through the floor!!!"

Who on earth elected this piker?

Up against the wall UK teachers! This time you've really blown it.