Ö÷²¥´óÐã

Did not Odysseus take the precaution of stopping up the ears of his crew with wax? With Osborne lashed to the mast and the LibDems just being lashed who is prepared to listen to anything?

The chancellor is a prisoner of his own arrogance, his ideology and insensitivity to the consequences of his actions. Lashed to the mast of a ship that is drifting into becalmed back waters is a more appropriate metaphorical description.

please do not use the royal 'we' when expressing opinions (as used in lines 4-5) . "I" have not forgotten the awful financial mess left by Ed Balls and G Brown. Obviously "we" already have and are having to be brainwashed by the media into only being jogged into memory about "opinions" expressed in the last nine months!
Please more constructive commentary especially BEFORE the events.

'Lashing himself to the mast worked out well for Odysseus.'

Thought he was a fictional character.

I do love a classical allusion. And to further mix those metaphors further, will Osborne go down with the ship? And as RW49 rightly states, will perhaps the Libdems take the wax out of their ears and listen to the sirens singing so beautifully and enticingly?

@1. At 11:30am on 23rd Mar 2011, RW49 wrote:
Did not Odysseus take the precaution of stopping up the ears of his crew with wax?

Wax in ears? We've moved on. MSM fulfils that role nowadays.

Not entirely sure what the point of that post was as like most economists you seem to come to no conclusion....so no plan A never mind a B yourself.

As for a Plan B...do you really think he has no other course of action planned if events unfold in an unexpected manner?
He is hardly likely to say he is just waiting for his policies to fail.....that is Balls' territory and one that you seem happy to reiterate ad nauseum.

That, and that America is doing brilliantly well by pumping in billions in stimulus....er except it isn’t:

‘The United States is on a fiscal path towards insolvency and policymakers are at a "tipping point," a Federal Reserve official said on Tuesday.

"If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when," Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt. "The short-term negotiations are very important, I look at this as a tipping point."
I think we are at the beginning of the process and it's going to be very painful," he added.’


Hope they have a plan B.

And why does the Ö÷²¥´óÐã emphasise that the budget will give a tax saving of ’only £45....after inflation’. A budget handout that pays for the rise in inflation and leaves you with cash in your pocket must be a good thing.....if you didn’t have that extra cash that pays for inflation from the Treasury you would have to go cap in hand to your boss for a pay rise.

To keep characterising the tax saving as almost worthless is untrue and dishonest.

With these "spending cuts" why are we borrowing even more money than we were before? Spending is higher now than it was at the peak of Gordon Brown term.

Osborne comes over as an arrogant ineffectual person to be in charge of finances of the uk. He caves into multi national pressure for tax relief whilst caning the pensioners with a derisory CPi increase and suppressing interest rates vis king his agent at BOE. i reckon if there was a General Election now teh Tories wouldbe hammered into the background as they show no sensitivity to the plight of ordinary people. Tax and more tax is all they know. As for growth, well theyhave killed it stone dead with endless tax rises that have people only spending on the essentials. Luxeries are well out of play and travel reduced to a minimum. Surely this will feed through to lack of cars being sold etc. soon and teh government will squeal then.

"why he has allowed Ed Balls and other opponents to define "Plan B" as pretty much anything that was not in last year's Budget plans."

That is indeed fortunate for Ed.Balls who has occupied a multitude of positions on the deficit and national debt over the last year or so! Has his position changed yet again today?

Last seen flip-flopping Ed was calling for a cut in fuel duty, yes the same fuel duty the government of which he was part of raised for 13 years with Ed Balls claiming how green it was...

The Chancellor may be pursuing the right overall strategy, but there are always alternatives in the options used in pursuit of a strategy.

One problem at the moment is poltical game playing of the opposition in only disrespecting the overall strategy. Four more years of this game playing will not serve the opposition or country well. I would welcome the opposition simply qualifying all their remarks with "whilst we diagagree with your Plan A, we recognise that is what you are doing and therefore ..." We could all then benefit from debate within the overall Plan A, with no need to actually accept it. For example, specific debate on the economic rather than political rationale for some enterprise zones, a debate on the pros/cons of helping first time buyers (propping not popping a bubble), a debate on how local authorities should respond, a debate on simplifying the tax structure, localism vs NIMBYism, ringfencing or not. These and no doubt others are worth discussing in detail, and whilst the opposition simply dis Plan A the media and thus country cannot progress to discussing the options within Plan A. [Politically the opposition have the chance to both say - we disagree with Plan A, but nevertheless to try to improve the outcomes of Plan A.]

@startsmall

No, don't worry "I" for one haven't forgotten that some deluded individuals still blame the previous government for what was infact a "world recession". But don't worry I'm sure the Sun/Times and the Mail will help you reminisce and point fingers till your hearts content.

On a darker note, I can't believe how many people, knowing full well through what we know thanks to panarama, dispatches and 38 degree campaigns, are ok with Osborne being in control of this countries budget?!?

Mr Osborne has had my full support, and yet doubts about his polices have begun to

surface.Although progress (of sorts) at reducing the nations debts have started, the

options for improving the long term employment has slowed to a stop.Braking out

of this ..stalemate where reducing debt goes hand-in-hand with a shrinking

economy ..needs radical action to stop this cycle of slow decline.I believe it's called

THINKING OUTSIDE THE BOX ( rather than being boxed in ) going nowhere..

Boxed-in, and self-imposed?

You make our Chancellor sound less like Odysseus and more like Harry Houdini.

So yes, I'm sure he'll get himself out of is little bind, and we'll all marvel at how very clever he is...

But surely... it's all JUST AN ILLUSION???

"we forget that the lack of wiggle room is self-imposed."
You may have forgotten (and thus not be doing your job properly), but those of us who have lost jobs and support such as disability services while paying more for the basics have not. Our lives are already harder and looking to get much worse, so being told that we don't realise that these changes are purely political ideology put into practice is annoying to put it mildly.

Macro-economically I think the BoE will have to raise base rates. Look at the trajectory of RPI. It is now like the initial stages of the 1970's when you look at the period 1948 to 2011 by graphing data from the ONS website.

If they don't raise interest rates the value of any accumulated wealth will be impaired. Most people are going to have to work with whatever they get anyway in terms of current and near term future spending, and if someone has borrowed so much they are near the edge it's more than likely they will crash at some point anyway. It might actually be a relief and a chance to start again. Acknowledging this is very painful though.

It will be interesting to see how the micro-economic measures work. I hope they encourage some form of wealth redistribution and wealth use by the richest in our society. I think the income and wealth inequality we have in our society is retrogressive.

I've been watching Niall Ferguson's programme on civilisation and it struck me how the idea of debentures and wide spread property ownership was one of the factors that led to the emergence of the US and West as an economic power. Obviously you can't distribute land now but you could do it with wealth and/or other forms of assets.

In future I think this concept needs to be applied to businesses. Ordinary workers will if they have a choice work for organisations where profits are shared widely and equitably and perhaps where service builds up a share in the company. Also rewards and perks of executives will need to be far more transparent. I almost think this will involve some form of contract between the leaders/owners and those who work for them. This might seem like a pipe dream but if new businesses develop like this they will probably surpass existing ones where a winner takes all practice exists because it is devisive. It seems to fundamentally link back to one of the reasons for the success of the west.

>At 11:39am on 23rd Mar 2011, Arthur Daley wrote:
>'Lashing himself to the mast worked out well for Odysseus.'
>Thought he was a fictional character.

Can we please all take a moment to appreciate the irony of this comment coming from someone calling himself "Arthur Daley".

Wiggle room.

That's what juvenile journalists say in America. Why do educated, intelligent journalists in this country imitate follow these American vogues?

Go on Stephanie, you can say it: Room for manoeuvre! See! We understand!

The UK's options:
a) spends to boost domestic well-being, and then have speculators attack Sterling, devaluing it, and thus raising CPI
b) implement cuts to stave off speculators, thus reducing GDP and causing recession

The only long term way out is to promote direct private investment in government bonds.

12

`....some deluded individuals still blame the previous government for what was infact a "world recession".

But didn't Gordon Brown, who I understand held rather important positions in the previous government, tell us that they had abolished `boom and bust'?

You can't have it both ways.

Its all a case or re-arranging the deck chairs on the Titanic. Demand in the economy has fallen off a cliff. Inflation, a significant cause of which is debacement of the dollar has reduced people's spare income, and the transfer of wealth from the masses to the rich are the key causes. With peak oil on the horizon, growth, a necessary requirement for capitalism to avoid crisis, is not going to happen, and a death spiral of the economy is inevitable. Its time to face up to the fact that we live on a planet with finite resources and we now desperately need an economic model that factors in reality.

"3. At 11:36am on 23rd Mar 2011, startsmall wrote:
please do not use the royal 'we' when expressing opinions (as used in lines 4-5) . "I" have not forgotten the awful financial mess left by Ed Balls and G Brown. Obviously "we" already have and are having to be brainwashed by the media into only being jogged into memory about "opinions" expressed in the last nine months!
Please more constructive commentary especially BEFORE the events.
"

Labour/Tory/Lib Dems... Political parties are just a sop used by the banking industry to keep us bickering amongst ourselves and not fighting against the forces that are really undermining us - the banking industry and the system of imparity it defends.

20. At 12:46pm on 23rd Mar 2011, stanilic wrote:
12

`....some deluded individuals still blame the previous government for what was infact a "world recession".

But didn't Gordon Brown, who I understand held rather important positions in the previous government, tell us that they had abolished `boom and bust'?

You can't have it both ways.

............
Surely you didn't believe GB's spin? All politicians are the same. When it goes to pot they blame someone else, and when its going well the claim "it was us that done it". Politicians are nothing but pawns for the corporate businesses interests that run the economy.

I never trusted Osbourne before the election, certainly not now. Why doesn't this Tory government (see how I leave out the LibDems as they are wholly ineffectual power seekers) come out with the truth behind it all ... as in all previous Tory governments, high unemployment is the only way they know of forming an economic policy. We're back in the 19th Century, poor and working class being ruled and told waht to do by public schooled millionaires who are so removed from real peoples lives and experiences.

This budget will do nothing for most of us and certainly nothing to help growth, help for 10,000 first time buyers is a drop in the ocean, as is the £45 tax benefit we're proposed to get. Petrol/diesel rises in the next few weeks will wipe that out. Small businesses have never had it so tough under a Tory government .... and yes Laboutr bear some of the blame but it's not all down to them. I wonder how this government would have performed in 2008/09?

17 errornose:

>'Lashing himself to the mast worked out well for Odysseus.'
>Thought he was a fictional character.

Can we please all take a moment to appreciate the irony of this comment coming from someone calling himself "Arthur Daley".

Tut tut. You never heard of deed poll then guv'nr. Economics and the golden fleece, commonly known as stealth taxation policy.

So far the budget looks more helpful to bigger business, which will mean more minimum wage jobs, thus more benefit claimants.

We have to break out of the low pay more profit ideology, it just means a shrinking economy if we don't, ie: instead of a third of the population without a living wage, we'll move towards half the population, a recipe for depression.

"9. At 11:53am on 23rd Mar 2011, Oldhenry wrote:
Osborne comes over as an arrogant ineffectual person to be in charge of finances of the uk. He caves into multi national pressure for tax relief whilst caning the pensioners with a derisory CPi increase and suppressing interest rates vis king his agent at BOE. i reckon if there was a General Election now teh Tories wouldbe hammered into the background as they show no sensitivity to the plight of ordinary people. Tax and more tax is all they know. As for growth, well theyhave killed it stone dead with endless tax rises that have people only spending on the essentials. Luxeries are well out of play and travel reduced to a minimum. Surely this will feed through to lack of cars being sold etc. soon and teh government will squeal then."

Not sure you've been awake for the last few years - but assuming you have what are your Solutions.... what would you do in the budget.... assuming you've just inherited a large debt and everyone who has money to lend is pretty nervous about lending it to you...... (we don't have the euro zone to back stop us)... but keep it realistic

He is hardly Odyssey. My message:
'As for Scylla, the father of gods and men would not let her get further sight of me- otherwise I should have certainly been lost'. With war mongering and pursuance of insane domestic and foreign policies Gods are not likely to hold back on Osborne.

20 stanilic:

'You can't have it both ways.'

"Politics is the entertainment branch of industry". Frank Zappa

You can have whatever somebody else wants Stanilic

16 roberto

Yes obviously the answer is to find a continent and take it forcibly from an indigenous people. Then share it out to newbies. I give up.

I think you have to accept that the undead one will be seriously inflexible, but that could just be the rigor mortis. As we keep getting reminded there would appear to be no plan B. Like other commentators I'm intrigued to see that despite massive cuts borrowing has increased. Mind you when you look at the cost of a few days of trying to enforce the no fly zone in Libya you can see why. These machines and missiles don't come cheap. It makes you wonder if politicians will ever learn that if you make people unemployed they have less money to spend and the economy suffers, and if there are no jobs for them then the economy suffers even more. It's the same old story of the new govt. blaming the old one for the state of the public purse and trying to convince us that their way is best. I still don't get how the public sector caused the recession though, perhaps a banker could enlighten me.

Bosch's 'Ship of Fools'?

The Powell-Joseph-Thatcher Tories are so certian that stagflation ended all Keynesian economics that the only thing they have left to deal with economic problems identical to the 1930s is...well, nothing.

Krugman blog March 21 2011:

"But in retrospect, it’s quite clear: Lucas and Sargent declared final victory over all things Keynesian in the 1970s, and the closed minds of their followers were such that they didn’t even notice the revival of Keynesianism that took place over the three decades that followed. And Brad is right: if you’ve reached the point where you don’t pay attention to anything that might disturb your orthodoxy, you’re not doing science, you’re not even pursuing a discipline. All you’re doing is perpetuating a smug, closed-minded sect."

Stephanie - please don't type your blog while Robert is talking! - I can hear you tippy tappy away in the background.....

I think you're putting Hugh Pym off.

23 AverageJoe

Trade must be slow today as you are reduced to picking over the bones of other people's humour.

I would suggest that it is all corporate interests that dominate the political agenda in this country so to just focus on the greed of business indicates a poor analysis. When subverting the system it serves to be focussed but not selective.

"Boxed in", or unable or unwilling to tackle the real problem, as climb out of the box?
Slow growth and a record-breaking deficit mean that one absolutely must recognize the REAL problem, and the REAL problem is with the financial sector, not the business sector.
The lack of wiggle room is self-imposed.
The chancellor could announce today that he was sharply raising his public investment plans for the next few years, to support the recovery, without loosening his fiscal strategy at all. And in due course this plan would fail.
There will be no change, no deviation - even if the deviation is actually consistent with his overall mandate. Many economists would say this is a Chancellor strength: you get your market credibility precisely by binding yourself to the mast, so you can be sure of resisting those siren calls when things get rough, or you can go down with the ship.
The Government's cost of borrowing is high because the Chancellor (or whomever) have not taken on the investment banks/casinos, have not instituted real reform over nefarious financial probducts like nakeds derivatives or CDOs, and have been unable or unwilling to split investment from retail banking.
It is also why even those sceptical of the chancellor's approach - like the FT - have said he has no alternative, now, but to press ahead.
WRONG.
HE DOES HAVE AN ALTERNATIVE.
Mr Osborne's lack of flexibility is his greatest weakness. It makes it easier for him to hold the line against squealing backbenchers. It makes it unnecessary for him to tackle the REAL financial problems with the investment banks.
Lashing himself to the mast will take Osborne and Britain down with the ship.
To resolve the British deficit, I suggest:
1. split retail and investment banks
2. impose a 5% financial transaction tax on all financial transactions eminating from investment banks, which will establish an audit trail on such devastating financial products as derivatives and CDOs, and make it easy to identify these nefarious trading practives and therefore pursue an appropriate course of action (may be even through the Courts).
You will find reail banking will suffice for retail business, the cost of borrowing will decline, and the investment banks will scream all the way to Belgium.

"30. At 13:54pm on 23rd Mar 2011, Arthur Daley wrote:
16 roberto

Yes obviously the answer is to find a continent and take it forcibly from an indigenous people. Then share it out to newbies. I give up."

Don't forget to sell the land to a high bidder who then finds cheap labour to make their huge amount of land productive.

35. At 14:09pm on 23rd Mar 2011, BluesBerry

Seconded

Listening to Stephanie quizzing Danny Alexander after the budget about why, as our borrowing is lower than expected, more was not used to "invest", she obviously endorses the "labour" school of economics where overborrowing was not the reason for us being in the financial mess we are in as a country. "Borrowing to invest" has never been a credible long term strategy and at some point we need to live within our means. Surely an economist should understand this?

@ 24: right, right, and right again.

In my humble opinion, this current administration is one of the most naive and ideologically driven that this country has ever suffered.

29 Arthur

I have often observed that when I have something another covets that they endeavour to do me down. I leave it to their conscience to deal with the difficulties which then inevitably ensue.

Why they covet their neighbours goods I never understand, as all that anyone needs is enough. If they need what I have and are civil about it then we can share, it is no problem. But to demand leads only to a refusal on principle. As I explained to the foolish lad wearing a hood on a warm day who demanded a quid from me in the car park not so long ago, allegedly for his bus fare, do what I do and work to get what you need. If he had asked politely for help he would have been welcome to a lift if that was what he really wanted.

Why does our culture encourage people to demand? Have you noticed, the assertive rich and the self-declared poor are always shouting the odds. I usually cock a deaf'un as it is all my eye and Betty Martin. Rich or poor alike, there is nothing like good manners and a bit of respect.

Why have ciggies have gone up... again :(

End of the World in 2012 so I'm not worrying too much :)

35. At 14:09pm on 23rd Mar 2011, BluesBerry wrote:

"2. impose a 5% financial transaction tax on all financial transactions eminating from investment banks, which will establish an audit trail on such devastating financial products as derivatives and CDOs, and make it easy to identify these nefarious trading practives and therefore pursue an appropriate course of action (may be even through the Courts).

You will find reail banking will suffice for retail business, the cost of borrowing will decline, and the investment banks will scream all the way to Belgium."

Hmmm... I think it was the retail banking sector which caused most of the mess. The Investment banks just spread it all around a bit more (which is just aswell for the likes of the US).

"Hmmm... I think it was the retail banking sector which caused most of the mess. The Investment banks just spread it all around a bit more (which is just aswell for the likes of the US).
"

You mean the investment banks multiplied the mess.

"43. At 17:32pm on 23rd Mar 2011, United Dreamer wrote:

You mean the investment banks multiplied the mess."

Maybe but let's not forget that irresponsible lending and of course borrowing kicked it all off in the first place. It was only possible because the central bank interest rates were so low, capital ratios were inadequate and leverage was too high.

The bail out was mainly for the retail sector (including building societies) not the investment banking sector (RBS, LLoyds, Northern Rock and hundreds of retail banks in the US).

I think the main part the Investment Banks played was drying up the liquidity because nobody knew the true value of all the derivatives they sold and thus who it was safe to to lend to.

At least that's the conclusion I came to but am happy to be corrected if I've gone wrong somewhere.

44 sigmar

Valued at circa 7 cents in the dollar before the crash - hence problems

My comment was misuderstood. Ok obviously throught out history land has been fought over and the victors have exploited the people they beat and their land to profit. People land still get exploited, people are still corruptable. Humans haven't fundamental changed. But the concept of all employees working for a period and then be given a share of a company as part of thier employment contract is an excellent motivator.

What I was getting at was if a new 'stakeholder / employee' model for companies is really implemented where rewards are really shared equitably they will surpass existing companies where rewards are shared unfairly between the leaders and the workers. ie All workers recieve profit share, all workers become part owners of a business. This already happens in some companies but I was thinking about how it could work if it was taken a step further. Just imagine how motivating it would be for the majority. Ok it probably wouldn't always work but I think the ones who do it first and experiments with it now are more likely to be the winners.

Was the lack of flexibilty unforced or not - the next budget could be if they keep making the wrong decisions as they will need to do something drastic to preserve our triple AAA rating. In opposition, Osborne made soundbites based on a political rather than an economic policy especially during the finanical downturn. It is rather worrying to me he is now following the same path...

@ 23

Whatever else Gordon did or didn't do; he did abolish "boom and bust" - it is no more.

It's bust only now.

Sigmar said -I think the main part the Investment Banks played was drying up the liquidity because nobody knew the true value of all the derivatives they sold and thus who it was safe to to lend to.

I'm not sure they know the value now. That's one reason the base rate is so low; it supports the banks just as much as it supports TC Mits with a mortgage.