Re Occupy the Stock Exchange
Comments
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We've run out of money. As has the entire Western world. Printing more isn't going to solve the problem, more like creating a bigger problem further down the line. There has been living beyond means on a massive scale for far too long and now reality is kicking in. What this will mean for the average guy on the street is a sustained period of austerity, and the widening of social divides. I expect the "solution" that the protesters haven't clearly defined yet will be a new wave of socialism - so passe in this country, but ultimately the need to redistribute wealth and create a fairer society becomes greater the less wealth there is available.
What would be nice would be if there could be an organised, organic move towards this rather than a period of civil unrest and increased bickering amongst the politicians.0 -
Sketchley wrote:But several people who know more about this stuff than me, some of whom are elected representatives have come up with a solution which they have put in place, in doing this I would expect them to have looked at the options (all of them) modelled them and then decided on the best solution.
Perhaps I misunderstand you, but if you're suggesting that policy makers know what they're doing at the moment, you are sadly mistaken. They are generally dumbfounded by the behaviour of the global economy - a system whose behaviour we have worryingly little ability to predict.
A fairly good analogy would be an 18th century doctor faced by an unfamiliar, but life threatening, illness. All you can do is try a few crude and simple measures, and do more of them if they seem to be working.0 -
Yes, sadly politics and economics are not sciences. Crude modelling may be possible, but the system is far too complex and information too imperfect to create reliable predictions. Politicians and economists, just like the rest of us, operate in myriad of ideologies, ideas, influences and pressures and will be hugely influenced by what surrounds them. There's no such thing as a perfect solution, but we must do our best to ensure that the environment in which policy makers work is as conducive as possible to good decision making. This includes encouraging the debate of various economic models and possibilities adequately rather than accepting the dominant ideology of the times, and ensuring that nobody has a disproportionate influence on policy.Bike lover and part-time cyclist.0
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ooermissus wrote:Sketchley wrote:But several people who know more about this stuff than me, some of whom are elected representatives have come up with a solution which they have put in place, in doing this I would expect them to have looked at the options (all of them) modelled them and then decided on the best solution.
Perhaps I misunderstand you, but if you're suggesting that policy makers know what they're doing at the moment, you are sadly mistaken. They are generally dumbfounded by the behaviour of the global economy - a system whose behaviour we have worryingly little ability to predict.
A fairly good analogy would be an 18th century doctor faced by an unfamiliar, but life threatening, illness. All you can do is try a few crude and simple measures, and do more of them if they seem to be working.
No if look at all of that post I'm suggesting I would take their solution over that of someone who only presents an Anti view. I also do not for one minute think Cameroon or Osbourne knows exactly how the global financial system works what I would expect them to do is consult people (the treasury employ a few as do the Bank of England) who do before making a decision. I suspect they get conflicting reports and have to make a judgement. As you say if it works great do more if it doesn't do less.--
Chris
Genesis Equilibrium - FCN 3/4/50 -
AidanR wrote:Yes, sadly politics and economics are not sciences. Crude modelling may be possible, but the system is far too complex and information too imperfect to create reliable predictions. Politicians and economists, just like the rest of us, operate in myriad of ideologies, ideas, influences and pressures and will be hugely influenced by what surrounds them. There's no such thing as a perfect solution, but we must do our best to ensure that the environment in which policy makers work is as conducive as possible to good decision making. This includes encouraging the debate of various economic models and possibilities adequately rather than accepting the dominant ideology of the times, and ensuring that nobody has a disproportionate influence on policy.
Crude modelling is easily possible, complex modelling is also possible. I have friends that write that kind of software, it's quite amazing what it can do. I would expect the Treasury and BoE to have access to this kind of technology as well as the major financial institutions.
And Economics is a science. http://en.wikipedia.org/wiki/Economics--
Chris
Genesis Equilibrium - FCN 3/4/50 -
I appreciate modelling is possible and perhaps desirable, but it's limited and prone to being disastrously wrong. Case in point - the risk modelling performed by banks. And that's just modelling a specific financial instrument, let alone entire economies.
And I understand that economics likes to view itself as a science, but frankly I disagree. It also implies a level of objective rationality and precision that I don't believe is warranted. That's not to say, of course, that it's not a deeply important area of academic endeavour.Bike lover and part-time cyclist.0 -
Only in the same way sociology is...Sketchley wrote:And Economics is a science. http://en.wikipedia.org/wiki/Economics0 -
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AidanR wrote:I appreciate modelling is possible and perhaps desirable, but it's limited and prone to being disastrously wrong. Case in point - the risk modelling performed by banks. And that's just modelling a specific financial instrument, let alone entire economies.
And I understand that economics likes to view itself as a science, but frankly I disagree. It also implies a level of objective rationality and precision that I don't believe is warranted. That's not to say, of course, that it's not a deeply important area of academic endeavour.
As I said before you'll be surprised what is possible today with the computer power available and most of theory work already done. It may seem to you like an impossible system to predict but it isn't.
What makes it difficult is that you have one sector in the Governments trying to stabilise the markets so are likely to take a certain course of action, modelling in the big banks tells them this is likely and what will happen as a result so they then adjust there game to allow for this which in turn affect the governments game. I would be gob smacked as most of this theory work was done 30 years ago and is constantly updated if both side were not running endless scenarios to work out which course of action has best chance of successful outcome.--
Chris
Genesis Equilibrium - FCN 3/4/50 -
I have no doubt that modelling based on our current economic theories is a very powerful tool. It does, however, rely rather heavily on the theories being right. And like all modelling, it is limited by the fact it's a model. Even with infinite computing power there's simply no way we can have all the necessary information to perform perfect analyses. Don't get me wrong, I'd love it if we could genuinely figure everything out on a computer first, but I just don't think it's possible*. These sophisticated models have been used in the recent past, and have got things spectacularly wrong. I'm not going to throw the baby out with the bathwater and say all models are useless, but they must be treated with caution.
*In fact, quantum physics implies that it wouldn't be possible with perfect information.Bike lover and part-time cyclist.0 -
Ok. I think we've done modelling to death so let's get back on topic.
Who would you trust more, the people with the ability to run the models however flawed, who have access to lots of information information and the analyst time to digest it. Or a group of people chanting its time for something different while camped out in St Paul's?
However much I may sympathise with the position of the protesters they are not able to come up with a viable alternatives. Until they do I will take my chances with what we have however flawed it is.--
Chris
Genesis Equilibrium - FCN 3/4/50 -
Modelling is just a tool. It is based on underlying assumptions and ideologies. Economic policies are not coldly rational facts, and there is not one right answer. Like I said, treat economics as a science at your peril.
Our economic choices should be open to debate. The current system has benefited certain sectors of the population at the expense of others. The people it has benefited have often been those (or close to those) who have the influenced and designed the system. So do I trust bankers etc. to come up with our economic policies? Well... I appreciate that there are certain people who have expertise, and it's good to utilise that expertise. But they may also have too much invested in the status quo to affect the changes that are needed (see Europe) or to make decisions that are fair for the majority. Would I go for an economic system proposed by a random protestor at the demo (even if it was me?!)? No. But I think it's imperative that there are people out there to remind policy makers to act in the interests of the 99%, not the 1%.Bike lover and part-time cyclist.0 -
Sketchley wrote:However much I may sympathise with the position of the protesters they are not able to come up with a viable alternatives. Until they do I will take my chances with what we have however flawed it is.
What makes you say there are no alternatives?
Some of the Political rhetoric spouted on this forum is worse than the from the politicians themselves..."That's it! You people have stood in my way long enough. I'm going to clown college! " - Homer0 -
MaxwellBygraves wrote:Sketchley wrote:However much I may sympathise with the position of the protesters they are not able to come up with a viable alternatives. Until they do I will take my chances with what we have however flawed it is.
What makes you say there are no alternatives?
Some of the Political rhetoric spouted on this forum is worse than the from the politicians themselves...
Way harsh.0 -
Rick Chasey wrote:MaxwellBygraves wrote:Sketchley wrote:However much I may sympathise with the position of the protesters they are not able to come up with a viable alternatives. Until they do I will take my chances with what we have however flawed it is.
What makes you say there are no alternatives?
Some of the Political rhetoric spouted on this forum is worse than the from the politicians themselves...
Way harsh.
No.
We could be doing things differently. Said it yourself a few posts back, not exactly going swimmingly is it?"That's it! You people have stood in my way long enough. I'm going to clown college! " - Homer0 -
Ooo, we opening this up again? In that case, I'd like to respond to Greg properly.Greg66 wrote:Without wishing to sound (overly?) brutal, I read this and all I see is a woolly idealistic monologue. Zero concrete.
I had a crack at this: My economic solution
It's on Facebook so you'll need to log in, but I made it public so hopefully everyone can read it.Bike lover and part-time cyclist.0 -
MaxwellBygraves wrote:Rick Chasey wrote:MaxwellBygraves wrote:Sketchley wrote:However much I may sympathise with the position of the protesters they are not able to come up with a viable alternatives. Until they do I will take my chances with what we have however flawed it is.
What makes you say there are no alternatives?
Some of the Political rhetoric spouted on this forum is worse than the from the politicians themselves...
Way harsh.
No.
We could be doing things differently. Said it yourself a few posts back, not exactly going swimmingly is it?
Sometimes pop culture references don't work online.0 -
Rick Chasey wrote:MaxwellBygraves wrote:Rick Chasey wrote:MaxwellBygraves wrote:Sketchley wrote:However much I may sympathise with the position of the protesters they are not able to come up with a viable alternatives. Until they do I will take my chances with what we have however flawed it is.
What makes you say there are no alternatives?
Some of the Political rhetoric spouted on this forum is worse than the from the politicians themselves...
Way harsh.
No.
We could be doing things differently. Said it yourself a few posts back, not exactly going swimmingly is it?
Sometimes pop culture references don't work online.
I am unable to see what you posted, so whoooosh for me 8)"That's it! You people have stood in my way long enough. I'm going to clown college! " - Homer0 -
AidanR wrote:Ooo, we opening this up again? In that case, I'd like to respond to Greg properly.Greg66 wrote:Without wishing to sound (overly?) brutal, I read this and all I see is a woolly idealistic monologue. Zero concrete.
I had a crack at this: My economic solution
It's on Facebook so you'll need to log in, but I made it public so hopefully everyone can read it.
I can't currently read your post but I look forward to giving it a read later."That's it! You people have stood in my way long enough. I'm going to clown college! " - Homer0 -
AidanR wrote:Letting the rich grow richer hasn't worked. So perhaps it's time we took that money back off them ... there are a myriad of smaller, smarter policy changes we could enact that would reverse the tide of inequality and get the rich to pay their way.
Let me fix that for you.Letting the rich grow richer hasn't worked. So perhaps it's time we took that money from them. ... there are a myriad of smaller, smarter policy changes we could enact that would reverse the tide of inequality and get the rich to pay our way.
You can repackage the turd that was old-style Soviet socialism as much as you like. You'll still end up with a turd in a box.0 -
Greg66 wrote:AidanR wrote:Letting the rich grow richer hasn't worked. So perhaps it's time we took that money back off them ... there are a myriad of smaller, smarter policy changes we could enact that would reverse the tide of inequality and get the rich to pay their way.
Let me fix that for you.Letting the rich grow richer hasn't worked. So perhaps it's time we took that money from them. ... there are a myriad of smaller, smarter policy changes we could enact that would reverse the tide of inequality and get the rich to pay our way.
You can repackage the turd that was old-style Soviet socialism as much as you like. You'll still end up with a turd in a box.
You can base the economy on a free market model and still intervene when the market gets it wrong.
Every country in Europe and the US does it already. You just should do it a little smarter, and more widely.
That's not being Soviet.0 -
I'm going to rip this straight from one of my comments I posted about this kind of thing. It's basically saying that it's not about pure capitalism vs. pure communism. The whole world operates on mixed market economies (with the possible exception of N Korea & Cuba). Hopefully it's still very relevant to your point:
I think the fallout from the collapse of communism has polarised a lot of economic debate - planned economies failed, free market economies won. The "end of history". But there is no such thing as a free market, and there is no such thing as a capitalist economy.
OK, that might sound a little controversial. But take the labour market -deregulate it, turn it into a free market. You can take away welfare, you can take away rules on firing people, redundancy pay etc. A bit extreme but doable. Next, you need to scrap immigration controls and allow completely free movement of labour worldwide. Still not done though... now you have to bring back child labour too.
As for capitalism, all states have some form of planning. There are public companies and institutions (including the government itself, the justice system, regulatory bodies etc.). Then there are companies themselves. Large corporations are highly planned systems. They may work within markets, but they don't have free markets within themselves.
So planning isn't going anywhere. Communist-style total state planning has been discredited, but this was always a very extreme economic system. Where we've got close to such an extreme economic *capitalist* system, that's tended not to work well either. Mixed economies have been and will be the more successful ones. It's just a matter of what the mixture is.
Some government planning, if well designed, can be very beneficial. The Asian Tigers were a good example of this, as is France. Also, crises are more common in economies that are less managed. Of course poor planning and excessive planning can be very bad, but we need to get out of the mindset that all planning is bad, and that we don't already live in an economy that isn't partly planned.Bike lover and part-time cyclist.0 -
Rick Chasey wrote:You can base the economy on a free market model and still intervene when the market gets it wrong.
Every country in Europe and the US does it already. You just should do it a little smarter, and more widely.
That's not being Soviet.
Let's not kid outselves that the seed idea here is anything more than expropriation and redistribution of corporate and personal wealth to the masses.
"Intervention when the market gets it wrong", it ain't.0 -
"Expropriation and redistribution of corporate and personal wealth to the masses" happens all the time, it's just a matter of degree. But you forget that the rest of the current system tilts the balance of power in favour of corporations and the rich far more than it used to. Which is why inequality has grown.Bike lover and part-time cyclist.0
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Greg66 wrote:Rick Chasey wrote:You can base the economy on a free market model and still intervene when the market gets it wrong.
Every country in Europe and the US does it already. You just should do it a little smarter, and more widely.
That's not being Soviet.
Let's not kid outselves that the seed idea here is anything more than expropriation and redistribution of corporate and personal wealth to the masses.
"Intervention when the market gets it wrong", it ain't.
It isn't, what? Wrong?
It's well established that very large income discrepancies cause social problems.
If you want a better all round society, for EVERYONE, you need to do a bit of redistribution, enough, to avoid the social problems, but not so much you reduce economic incentives to work.
It's more than that though. Laissez faire economics in the 19th Century caused huge boom and busts. Violent economic cycles cause many more social problems then more sustainable growth.
The same can be said of the laissez faire light touch banking regulation up to '08.
It's no coincidence the quality of life surveys I mention to you from time to time always put the more equal of the developed nations (so no, not Soviet) at the top.
You won't see rioting & looting like you see in London in Copenhagen, that's for sure.0 -
This crash makes the laissez faire argument look pretty silly, in the same way the Eurozone crisis is making europhiles (like me) look totally wrong.0
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"Expropriation and redistribution of corporate and personal wealth to the masses"
Isn't quantitative easing effectively the reverse of this? I mean there were clearly some people who made a great deal of money out of the the system prior to the crash, and who will once again be making money out of the system now that there has been QE? So we have money flowing from the government (the masses) into corporations and indirectly into a tiny minority who profit from the financial sector.
Or am I being naive?0 -
Rick Chasey wrote:but not so much you reduce economic incentives to work.
Here's an idea.
It's not a problem of intra country wealth re-distribution that's the problem. The inter country wealth migration.
Let's say we all drink the Cool Aid and go down an even more socialist tax and spend path (we will assume that spending more money than you have didn't get us into this mess for a moment (no it wasn't the banks - etc))
anyway.
A relatively High tax regime is adopted and we tax both people and corporations "more"
Now I have let's say 500 quid of my newly acquired "wealth" given to me by the government and i want to invest it.
Where do i put it? I imagine I'm looking for something that gives me the best rate of return...
are you following me here?
So....
I imagine a firm / fund that earns most - achieves highest profits will be likely targets for me . . .
Firms that are taxed at high rates achieve lower profits - have lower stock price - invest less. Don't get my money.
This fund though makes loads - it's not taxed as high for a start . .
So - suddenly - investment dries up - "our" firms profits are lower - money goes to other firms in other countries with lower tax rates.
You don't think this is true?
Look at the personal and business tax rates of the UK in the good old 70s . . . when the country was in the absolute crapper. High tax regimes are unattractive to capital -to business and money is like water it flows to profit and you can't stop it.
It's the global flight of capital that is the crippler - if there's no money here you can't re-distibute it.
If you think we live in a low tax regime you are nuts.Fixed gear for wet weather / hairy roadie for posing in the sun.
What would Thora Hurd do?0 -
Greg, that's largely correct.
You're assuming that taxed money goes into thin air, which it doesn't. It can be invested elsewhere - in areas the market won't touch - public infrastructure, utilities, education, health, etc etc.
I'm talking more broadly than just Robin Hood taxes. Other types of intervention, legislation (like the Tier 1 Capital ratios that are demanded on IBs now), etc.
Corporates can be trusted to make money, which is good. They can't always be trusted to consider the externalities involved in that profit-making. That side needs to be more heavily addressed. Not necessarily by purely taxation. There are many ways to intervene.
There are so many examples - the banks and the energy companies are the most relevant examples where better state intervention is needed to make it better for society generally.
How do you explain the success of the Nordic Model?0
