Economy is worse under us, says Cable

[denphone]

Vince Cable has admitted the 'brutal reality' that Britain's economy is in a worse state than it was when Labour was in power

Vince Cable has admitted the 'brutal reality' that Britain's economy is in a worse state than it was when Labour was in power

He admitted ministers had failed to foresee the current economic problems, blaming a 'major crisis' in Britain's export markets and the sharp increase in energy prices for the flatlining economy.

'Clearly the economy is poorer than it was a couple of years ago, and that is the brutal reality,' he said. 'We knew it would be difficult and unpopular, but we didn't know that there would be a major crisis in our export markets and that energy prices would shoot up.'

http://www.dailymail.co.uk/news/arti...recession.html

[Pierre]

Originally Posted by denphone

Vince Cable has admitted the 'brutal reality' that Britain's economy is in a worse state than it was when Labour was in power

I think that's obvious, just think how bad it would be if Labour was still in power.

[denphone]

Originally Posted by Pierre

I think that's obvious, just think how bad it would be if Labour was still in power.

l think the fact remains whether it was the Labour government or the Coalition they are not doing a very good job with our economy and perhaps a new economic strategy needs to be thought out because the current stategy is quite clearly not working.

[Welshchris]

I still think that to much blame is put on labour.

OK yes they did do some silly things but a lot was also down to the world wide recession and for that they cannot be blamed it would have happened whoever was in power.

But they can be blamed for putting the country into so much debt that when the recession hit, we were so badly affected.

"End to boom and bust" was the phrase used, I believe.....

[denphone]

Originally Posted by Hugh

But they can be blamed for putting the country into so much debt that when the recession hit, we were so badly affected.

"End to boom and bust" was the phrase used, I believe.....

l am afraid the phrase "boom and bust" applies to both parties as if you look back at the economic cycles of the last 40 years as we seem to make the same mistakes economically time after time.

I love Vince. Truly the very definition of a loose cannon.

He's right, things are in a parlours state. The pertinent questions, however, are:

1. Would things be any better under Labour's plan?
- hard to say, seeing as nobody, least of all Labour, seems to know what that plan is.
2. Would things be any better had Labour not spent the good times urinating tax revenues up the wall instead of shoring up the national finances and ensuring we were prepared for a rainy day?
- almost certainly, though as Gordo seems to have really believed he had personally put an end to the economic cycle, it's not very surprising that he didn't.

[Traduk]

Who could possibly have known that if you adopt the completely wrong policies at totally the wrong time in global financial history that you make matters worse.

It was obvious in the pre-election discussions that if they adopted the Canadian austerity model (1993 to 1999) in a global downturn rather than the global boom that Canada were fortunate enough to pick, that we were in for serious problems.

The writing has been on the wall for the Western economies to which we export since 2007 and commodity prices have been in an up trend for years.

Against such a back drop it was lunacy to expect growth in the private sector to mitigate contraction in the public sector.

Soon we will see the worst of both world's with ongoing contraction in global marketplaces which will place downward pressure on growth, costs will continue to rise and the public sector job losses will compound the government expenses going out (benefit payments) with a simultaneous reduction in tax take.

Doing the simplistic right thing at the wrong time can as is being proven and will haunt us horribly make a bad situation much worse. Thatcher was accused of using "handbag economics" but this government set on a path akin to paying down a credit card so as to avoid interest charges against a back drop of reducing income with which to pay back. A reasonable idea to begin with but becomes problems on steroids without growth.

The measure of the robustness of a financial model is the ability to withstand shocks. We have been put in a position whereby we could not be much weaker and there is potential for plenty of shocks to come our way from Europe. Greece is the current wild card which unlikely to have have positive long term outcome. Sarkosy and Merkel are having almost weekly summits to plan the planning of the plan and as their agenda appears more political than financial I can see the money men calling time on the talking shop.

Having experienced the 70's and 80's I had hoped never to see the like again but I strongly suspect that this lot will be substantially worse. We the boomers had three parts of nothing through the 60's and were used to fairly low expectations which in part allowed for a great deal of tolerance to the decade+ long financial problems of the 70's.

The cohort that are our children have known no such difficulties but I suspect they will endure a period of difficulty which will be difficult if not nigh on impossible to bear. Collectively they are are a generation of "I want it all and now". How they will respond to going backwards at the speed of light doesn't bear thinking about but I think in time it could become ugly, Greek style.

In another thread the intergenerational group think that older people should be encouraged to sell large house to release stock. My wife and I retain ours as a bolt hole of last resort for our children and grandchildren. Three generations under one roof doesn't work but if things get bad enough and needs must we can protect our own which is satisfying for us and an insurance policy for them.

The phrases "too far, too fast" and absence of "plan B" are indicative of the young guns in a hurry and as supremely ironic as it may be , the only party that showed credibility at the last election was Labour albeit they would have needed a new leader and not the one they currently have.

Originally Posted by Traduk

The phrases "too far, too fast" and absence of "plan B" are indicative of the young guns in a hurry and as supremely ironic as it may be , the only party that showed credibility at the last election was Labour albeit they would have needed a new leader and not the one they currently have.

I would question your definition of credibility given that they didn't have a new leader prior to the election and it has since transpired that the new leader the party favoured turned out not to be the one you think they should have had. With their leadership prospects so royally screwed, from whence comes the credibility of which you speak?

As for the rest of it, I think we are still a long, long way from Greek-style protests on our streets. Greece barely has the money to pay anyone's wages, leading to a round of belt tightening the likes of which we've never seen, nor are ever likely to. It's not surprising they're all out on the streets. Here in the uk were just going to have to get used to the idea that was taken for granted in your generation: credt is for massive purchases you can't reasonably afford at the time, like a car or a house, not things you can't be bothered to wait for, like a TV or handset upgrade.

Originally Posted by denphone

l am afraid the phrase "boom and bust" applies to both parties as if you look back at the economic cycles of the last 40 years as we seem to make the same mistakes economically time after time.

Once again, "point", "have", "missed", "the", "you" - please rearrange the words....

Only one party's Chancellor claimed to have ended the cycle.

I don't think anyone really has a concrete plan to turn the Economy around. It's not something governments have total control over, they can only aim to help change it's direction with policy.

That said critics of Labour, including this government, were demanding swift action of when Labour in power so they are open to the same criticism themselves. It's still too early to judge the current government by the state of the economy but their economic policies have been in force for a while and before long people will be expecting signs of them working.

[denphone]

And as Mr Cable says it ain't working as it currently stands so maybe they need to think about a change in policy sooner rather then later or many people fear that this economic crisis could go on for a generation before we see improvement.

[chris9991]

Originally Posted by Traduk

Who could possibly have known that if you adopt the completely wrong policies at totally the wrong time in global financial history that you make matters worse.........

Good, well written post.


Personally, I can't see how things can get any better sometime soon

Originally Posted by denphone

And as Mr Cable says it ain't working as it currently stands so maybe they need to think about a change in policy sooner rather then later or many people fear that this economic crisis could go on for a generation before we see improvement.

But a change in policy could lead to the UK's credit rating being downgraded, which would mean the interest rates on all the money we, as a country are still borrowing to pay for current spending plans, would rise, leading to higher debts and probably more cutbacks.

We can't carry on, as a country, spending money we don't have.

[Traduk]

Originally Posted by Chris

I would question your definition of credibility given that they didn't have a new leader prior to the election and it has since transpired that the new leader the party favoured turned out not to be the one you think they should have had. With their leadership prospects so royally screwed, from whence comes the credibility of which you speak?

My credibility remark is\was relative to the totally wrong headed approach by both the Conservatives and Libdems. The Canadian plan was\is a recipe for disaster and they both wanted to pursue that policy whether literally or in principle.

I did not want to vote at all which would have been a first in my adult life and the reason was that none of the parties had a clue on what to do but the pay down your debts which found resonance with the electorate. Labour portrayed a slow as she goes approach to austerity which if managed well could have been a dynamic approach as opposed to a dictatorial mandate devoid of flexibility.

As for leaders there are none in any party in whom I see the hopes of leadership. We will have to hope that as time progresses and things get worse, somebody will emerge.

As for the rest of it, I think we are still a long, long way from Greek-style protests on our streets. Greece barely has the money to pay anyone's wages, leading to a round of belt tightening the likes of which we've never seen, nor are ever likely to. It's not surprising they're all out on the streets. Here in the uk were just going to have to get used to the idea that was taken for granted in your generation: credt is for massive purchases you can't reasonably afford at the time, like a car or a house, not things you can't be bothered to wait for, like a TV or handset upgrade.

The nature of the events currently swirling around the world is that nothing much happens for months or years and then the dominoes fall as crisis builds on crisis. Situations change fast when they truly start to go wrong and something which was unthinkable just weeks earlier can become reality very quickly. If you had lived through the 70's you would know how fast things get worse.