Harry’s Place

Bush’s policy is wrong, you’re policy is wrong, Obama’s policy will probably take liberally from the worst elements of both.

In any case, within a two decades (optimistically) the Federal government will have no choice but to default on its payments or inflate its way out of the problem. Either way, we’re fucked. (Roughly similar prognosis for Britain, though if the Tories win by a huge majority they may have the balls to ameliorate the problem somewhat, probably not though).

Here’s a brief explanation from one of the few sane Republicans still around.
http://hotair.com/archives/2008/12/02/video-fred-on-the-economy/

Here’s something more on your level.
http://www.reason.tv/roughcut/show/604.html

Further,
“More disturbing to some (but not me), he also advocates an increase in the minimum wage and making it less difficult for workers to organize unions.”

Quick quiz: boosting wages during a depression does what?

Boosting wages in a recession can cause inflation (or counter deflation). It can also put money in people’s pockets, which they will spend, boosting the economy. I guess the answer you’re looking for is ‘it causes unemployment’ but, at the level Obama is proposing, this does not seem an especially large risk.

Here’s something more on your level.
http://www.reason.tv/roughcut/show/604.html

That cartoon raises a couple of questions in my mind:

–How exactly did Scrooge McDuck earn his fortune? I suspect some of his methods were at least as dubious as using a money-duplicating ray gun.

–Why doesn’t Mr. McDuck invest or spend his money in ways that help the general economy, instead of keeping it in a giant vault and periodically diving into it?

Gene.
They need to do both.

The halving of the price of oil in the last several months is a wonderful stimulus. Thanks, Barack!

Middle class tax cuts? sure. But I stand with George McGovern in support of secret ballots in union elections.

Most importantly, let the Big Three go into Chapter 7.

If we were really serious about infrastructure jobs, we would commence the Barack Obama National Subway System. But like everything else, that would take at least a year or two to get going, and the main crisis will have passed.

Most importantly, let the Big Three go into Chapter 7.

ACK! Not with my 50 shares of GM, you don’t! :D

“How exactly did Scrooge McDuck earn earn his fortune? I suspect some of his methods were at least as dubious as using a money-duplicating ray gun.”
Who cares? This is about the perils of inflation of the money supply, not morality.

“Why doesn’t Mr. McDuck invest or spend his money in ways that help the general economy, instead of keeping it in a giant vault and periodically diving into it?”
Indeed, Gene, what he should have done is blow it all on unsustainable consumption, got into debt then demanded a bailout, like a good citizen.

“Indeed, Gene, what he should have done is blow it all on unsustainable consumption, got into debt then demanded a bailout, like a good citizen.”

It’s also a good time to point out that Mr. McDuck is a character in a medium which values caricature and visual hyperbole. He would lose much of his “panache” were he to leap about in great mounds of Merryl Lynch quarterly statements.

Giving money to the general population is supposed to stimulate the economy because they are supposed to spend it. But in the circumstances if you did that they would all save it.

Maybe you could give them all discount coupons that expire by Jan 31st so they have to put them in the economy.

It might get so bad that they will be left with Change they will HAVE to believe in.

Futures? Have we got one? War/s costing $1,000,000 every 5 minutes? Is it true? Is/was that figure true? That’d be about $3 for every US citizen every 5 minutes…quite a tidy sum. Where’s all that lucre gonna come from?

“Futures? Have we got one? War/s costing $1,000,000 every 5 minutes? Is it true? Is/was that figure true? That’d be about $3 for every US citizen every 5 minutes…quite a tidy sum.”

Tidy, indeed. But 1,000,000 divided by 300,000,000 does not quite equal five.

or three, for that matter.

Mesquito; In 2 years time the main crisis will have passed? How sure are you about that?

we have been somewhere like this before in 2001. But this I think is worse, the collapse of equity in terms if house prices is way more significant than the collapse of the stock market for consumers (unless they are close to retiring) since you generally buy stocks outright whereas you borrow to buy your house.

Whats happening is a general deleveraging of the financial system - across consumers and business. As importantly its global (the Chinese will slow to 8% or lower growth and are already seeing migration back to the countryside as factorys close. The Chinese government is clearly worried hence the huge cut in rates).

But there is no magic bullet. Indeed much of the problem now is caused by the response to the tech bubble and how expansionary monetary policy was allowed to be. So the answer to the question why is nothing appearing to work is probably, it is working. But the deleveraging has to happen, and we really don’t need citi to go bust.

Its important to remember though that recovery will come. The carry trade will return.

“Mesquito; In 2 years time the main crisis will have passed? How sure are you about that?”

There’s no certitude, of course. But so long as Barack Delano Obama does nothing to prolong and worsen the downturn, I’ll keep to my rosy, Chauncy Gardener Forcast. 94% of Americans who want to work do so, and a higher percentage of home mortgages are healthy and fully paid.

The market’s judgement on our Government’s strategy is clear from the value of the pound. Meanwhile, Broon keeps uttering more and more ridiculous remarks - he will have a real dog’s dinner of his own words by next year, and this fourth Labour government will give us the biggest crash of all. Take it away, Crash Gordon with Oh, what a lovely recession.

That “collapse in equity” goes by another name: affordable housing.

A commenter on LGF posted a link to an article which I found interesting:

Here’s a true insider’s view of just how the market went unbelievably wrong. It’s very long, and it’s like a train wreck in slow motion. Or maybe a Horror movie where nobody will listen to the truth.

Seriously, you NEED to read this article to understand the true depth of the wreckage the SubPrime thing has made of our financial system.

http://www.portfolio.com

I was going to make a point about how if we ever want to return to a reasonably sustainable system that “holding it instead of lending it” is something we can worry about after we’ve stopped them lending out so much that they don’t have.

However, I remembered that you sensible centrist types usually just respond to that by snorting. Perhaps you’re right and the modern banking system - in which banks not only lend out money they don’t have, but lend out money that never existed and would be worthless if it did - that we need to support our western welfare-”market” economic model is fundamentally healthy.

I don’t pretend to understand the totality of what’s going on, or even a small portion of that totality.

Oh come off it! Since when did lack of knowledge and understanding stop either you or any other blogger, including myself, sounding off about something? What you identify is part of a wider phenomenon - I would argue a malaise: large swathes of those who describe themselves as belonging to the left are completely obsessed with foreign affairs and combine this with an almost complete disinterest in domestic policy. The latter lacks drama perhaps? Too many shades of grey to facilitate the stand beloved of the modern day radical? For whatever reason, this tendency represents a very serious problem for the left because it is the problem of irrelevance to the concerns of ordinary working class people.

Let’s be clear, about what “government borrowing” means. It means the PM is putting a lien upon us. They are putting your house, your savings, your productivity, your land, on the line, as if it was theirs.

First of all, they aren’t borrowing it off us. They aren’t sellling War Bonds, or National Emergency Bonds. So who is handing them the money, and what do they want in return? Whatever it is, and whoever they are, we don’t know do we? We are not told about that.

The politicians, are borrowing money to spend on the stuff they want, and they are using, as collateral, all the money that you, your children, and your grandchildren, haven’t even earned yet. Long after he ceases to be Prime Minister, you will be working for money you don’t get, because he already spent it on his friends. And soon he will escape clean away.

If your MP was fixing to send your kids down a coal mine to feather his nest, you would go spare.

It makes you a serf, doesn’t it?

“Since when did lack of knowledge and understanding stop either you or any other blogger, including myself, sounding off about something?”

All I know is, while it make take years and years of study to be an economist or a U.S Senator, any idiot can be taught to pour a slab, raise a wall, or grade a road in a day or two. Right? Just decree that it shall be so, and it shall be done. Lose yer job at Citibank? Here’s yer tool bags and yer dozer, sport.

Oh come off it! Since when did lack of knowledge and understanding stop either you or any other blogger, including myself, sounding off about something? What you identify is part of a wider phenomenon - I would argue a malaise: large swathes of those who describe themselves as belonging to the left are completely obsessed with foreign affairs and combine this with an almost complete disinterest in domestic policy. The latter lacks drama perhaps? Too many shades of grey to facilitate the stand beloved of the modern day radical? For whatever reason, this tendency represents a very serious problem for the left because it is the problem of irrelevance to the concerns of ordinary working class people.

Doesn’t seem to be a problem for at least one Trotskyist. He’s one of the instant experts I was talking about. He hasn’t let any shades of gray get in the way of constant and endless posts about the situation. He’s got it all figured out.

I guess that’s one of the perennial differences between “radicals” and liberals.

All I know is, while it make take years and years of study to be an economist or a U.S Senator, any idiot can be taught to pour a slab, raise a wall, or grade a road in a day or two. Right? Just decree that it shall be so, and it shall be done. Lose yer job at Citibank? Here’s yer tool bags and yer dozer, sport.

Who suggested it’s going to work like that? The infrastructure spending will help put unemployed or underemployed experienced construction workers to work and, I assume, create more openings for apprentices to learn the trades. Of course it will mean more work for construction-related businesses. More money in the pockets of those workers will help give the rest of the economy a boost.

Here’s another LGF comment from someone who claims to be a Trader:

Pittrader1988 12/01/08 5:17:17 pm

cash is the wrong thing to be in. In an inflationary environment, hard commodities like oil, land, and even (ugh)……gold. I hate telling people to put money in gold! To invest in commodities, invest in a broad based fund. These things have been massacred over the past 6 months. Once the dollar depreciates, they will rally.

Traunches of capital are not assets that can be resold. It is cash or equity held on a balance sheet (or in some cases off balance sheet) that are used to satisfy the liabilities of the firm. In the case of the I-banks, they are bankrupt. If you take their stage 1-3 capital, and compare it to ALL their liabilities-a “current ratio” if you will, they are negative.

Sayonara to them. They cannot survive at all in the structure that they have, valiantly as they are trying (even co-opting the Treasury secy)

This is not just a US problem. Japanese banks are sort of healthy (they had a real estate crisis in 1990). Chinese banks are in trouble. They have loans on their books that are absolute crap. Never forget, they are communist. Communism doesn’t allow for efficient allocation of capital-no matter what the official line is over there.

Only way to overcome it is through economic activity. Essentially, lower marginal rates, less unions, less government spending on things that don’t matter, stuff that is not popular now. The government SHOULD spend on defense of course, but domestically on big road and bridge projects. They should spend on re-education of the work force. Great editorial in the WSJ today by Louis Gertner. We need more engineers and scientists (and mathematicians), less touchy feely bull crap.

Only way to overcome it is through economic activity. Essentially, lower marginal rates, less unions, less government spending on things that don’t matter, stuff that is not popular now.

Ah, “less unions,” the answer to everything.

Ah, “less unions,” the answer to everything.

Well less union intransigence would certainly be nice. Really, Gene. If you had little or no prospect of finding similar employment conditions, wouldn’t you take a pay cut to keep your job?

I don’t see why the ordinary punter shouldn’t have a go at this subject, given the mess the experts have made of it.

Less unions? No fewer unions - let’s at least get the grammar right.

I think the crisis has been very interesting (in a Chinese curse kind of way). It has rather exposed the crud power lines of the economy and induced a kind of instructive cynicism. What is money exactly? What is productivity exactly? Isn’t it telling how hardly any one country is escaping the effects of the recession? How can governments suddenly find hundreds of billions of dollars and pounds to shore up the economy but have had problems with the odd million here and there?

This is a chance at least to reflect on the economic journey and ask do we really want to be travelling this way.

Some thoughts:-

1. Clearly property booms can be lethal. Surely by now after Japan’s previous recession and this current disaster we’ve learnt to read the signs.

2. So looking at 1 what does it tell us? That land is not a productive element in the economy but a claim on economic production, in the same way that money itself is?

3. This is an opportunity to rethink our long term approach to the economy. Just as previously there has been emphasis on creating a property owning democracy, in the sense of landed property, I would like to see the creation of a wealth owning democracy. We need to revive and encourage the co-operative ideals and methods. It is instructive that co-operative institutions like the Nationwide Building Society have weathered this storm far better than their capitalist neighbours.

4. We should aim to build personal wealth through workers’ shareholdings, co-operatives, investment funds, and the creation of a benign, much greener energy infrastructure. If I have a solar panel on my roof, come recession, come downturn, nothing can take that away from me. That is real wealth - it is providing the energy I need to warm and power my home - whether I’m in a job or out of one. So let us concentrate on those real wealth initiatives.

5. We need to revive the movement for a shorter working week .

I’ve been struggling for a phrase to capture what I’m on about but Real Wealth I think maybe does.

Let’s have a Real Wealth movement: develop our own, people-owned energy infrastructure, work fewer hours, have more access to leisure activities, and be investors, not creditors.

As a blue-collar dude, I have to admit this stock market stuff has me a little confused. Just out of curiosity, I withdrew $200 from my meager savings and opened an investment account with my bank. Pretty much as a gag, I buy 50 shares of General Motors for $195 (including commission). Two weeks later, they’re worth $230. I didn’t do jack shit to earn that money except fuck around on the computer for 15 minutes. Imagine if I’d invested $10K. It’s no wonder people get sucked up into it.

“there is no magic bullet. Indeed much of the problem now is caused by the response to the tech bubble and how expansionary monetary policy was allowed to be. So the answer to the question why is nothing appearing to work is probably, it is working. But the deleveraging has to happen, and we really don’t need citi to go bust.”

That’s right.

mesquito,
A new word in the American vocabulary for 2008 is ‘bankster’.
I was tired last night. Here’s a wideawake correction. The war is costing each American a mere $1 a day. Or a typical family of 4 $120 a month. Peanuts in USA terms. A fortune in Africa.

Doesn’t seem to be a problem for at least one Trotskyist. He’s one of the instant experts I was talking about. He hasn’t let any shades of gray get in the way of constant and endless posts about the situation. He’s got it all figured out.

I am bereft a rib. Of course, I could ironise about your own writings on Chavez, Iraq, or any number of topics. But if you can set aside your uncharitable disposition for just a second, perhaps it will occur to you that it is normal for politically committed people to have a determined opinion on a matter of enormous significance. And then you might consider, Gene, that me having written about it endlessly is an indication that I find it immediately, personally interesting. It isn’t some sort of bizarre psychological defect. Of course, this leaves me as susceptible to error, misunderstanding and oversimplification as any other amateur trying to discuss the economy. This is quite normal, and needn’t frighten you. All you have to do is consider whether or not you agree with what’s being said and, if you like, point out where you disagree and why. This is also quite normal.

lenin channels Benji

Gene and G

On the lighter side, Scrooge, in one issue of the comics did give Donald and the kids a ton of money to “splurge” on a cross-country trip as his money-bin was getting too full. Donald and the kids stayed at the fanciest hotels, bought the priciest clothes, constantly bought the most outlandishly priced top of the line autos every few hundred miles or so when the got tired of the color, etc. in a display of “unsustainable comsumption” that G recommended for Scrooge–but to no avail. When Donald and the kids had returned from their splurge Scrooge was mad as hell–turns out he owned all the car companies Donald bought the cars from; all the hotels, clothing stores, etc, so he ended up with more money than he had when they began the trip!

Monty -

My understanding is the government sells bonds to various individuals and institutions around the world - that’s how they borrow the money and in these days of dodgy banks, people are only to happy to invest it would appear.

However, I agree with you that this government has been criminal in putting future generations in hock, not only through this current massive increase in borrowing but in all the PFI projects which are just mortgaging the future - robbing our children so we can have a nice life now.

It’s a great big con perpetrated by the “Moralist of the Manse”.

I think in the UK we just need to concentrate much more on real productivity and real investment. These are the sources of real wealth.
I don’t mean just manufactures, though that is important.

But I think we have become too dependent on the financial sector - which can evaporate overnight and the global economy.

Things are changing. Technology is now making a policy of internal development possible for even “small” countries like Britain.

We need to do a lot of things that will make us more productive and create real wealth. We certainly need to develop our energy infrastructure, which will be a marvellous boost to domestic employment. We need to grow more food in this country (but not necessarily on farmland - you can grow food anywhere with hydroponic agriculture and artificial lighting - and you can grow it organically, free of pests). We need to reclaim land from the sea. We need to build decent housing.

All these things will enrich us.

There was an absolutely brilliant documentary about the Crash of 2008 on american public network radio, earlier this year, which I will try and find a link for. They start at the beginning and interview various players including bankers, mortgage brokers, blue collar americans, everyone caught up in the pyramid. It sets it all out in wonderful detail, I could bore you for hours about Chinese investment, sub prime mortgages, financial derivatives.

It all started with international sovereign funds looking for a good place to invest their money and alighting upon US mortgages. The US banking system met the demand by creating ever more mortgages until the whole thing crashed. Bankers there and here, convinced themselves that by putting the mortgages into financial derivatives they somehow reduced the risk on the large numbers of dodgy mortgages lent to met the demand for more mortgages to invest in.

But the financial derivatives which were supposed to spread the risk turned out to be just a sleight of hand to conceal the risk. The other key factor is the hedge funds short selling all over the place which started by bringing down badly run businesses and then found they could bring down viable ones too if they hunted in packs.

Hedge funds were such an easy way to make serious money that everyone wanted one and they got seriously embedded into the financial market and not in a good way - even major banks run their own. (Did you know by the way that the UK Inland Revenue real estate portfolio, which was sold to some off shore fund, is now partly owned by a New York hedge fund).

And hedge funds are relevant to the mess because not only can they bring down solvent companies they also speculate in commodities. It seems pretty clear that the high price of oil was due to speculators and has come down as hedge funds have closed out their positions in the current debacle.

And to raise the money to support all this pyramid of debt and speculation, investment banks and the investment arms of high street banks, banks leveraged up to 33 times their reserves and invested in hedge fund and derivatives which have turned out to be worthless. It was probably the US government letting Leman Brothers go to the wall which finally brought down the whole edifice.

But central bankers are also to blame as they encouraged the levels of leverage which enabled banks to lend such huge multiples of money they did not have. And everyone was so busy scrambling over themselves to make money that noone seems to have stopped to ask how, for example, Icelandic banks and companies could have so much money available.

Now the money that sovereign funds was investing has been withdrawn, and the derivatives have been exposed as the smoke and mirrors they always were, everyone is revealed as a snake oil salesman. So no bank will lend as they do not trust each other and probably don’t really know how much they are in for let alone how much other banks are in for.

The banks regard the state money used to bail them out as as money to keep them trading, reduce their leverage and restock their reserves. They are not about to lend it out as they do not trust each other while they do not know what each other’s exposure really is. Viable business who are finding their credit lines cut just when they need them. (This reduction of credit lines does not show up in the figures banks use to claim continued high levels of lending to small businesses. Also of course a number of players, like the Icelandic banks are not out of the market, further reducing the pool of money available.)

And you also need to ask, if the government is still borrowing, where is it borrowing from - from the banks it is bailing out perhaps?

The implications are also not good for the UK. Gordon’s flawed strategy is discussed elsewhere. But clearly the private sector is taking most of the hit - private pensions are being hit, jobs are being hit, house prices are being hit it.

Labour has recklessly expanded both the public sector and the promoted immigration on an assumption of continued growth. Now we have large numbers of people out of work at both ends of the spectrum from bankers to factory floor workers.

What is clear is that light touch regulation of the banking industry does not work. Alan Greenspan said he thought the banks own self interest would prevent them from self destructing. He was wrong.

Has anyone here noticed that Obama’s plan to add 2.5 million public works jobs in “infrastructure” in 24 months is impossible? According to the LA Times:

One detail of the recovery plan that may not emerge until closer to Inauguration Day is how the money will be disbursed for infrastructure projects. Such undertakings often require long lead times to prepare engineering studies and environmental surveys and address other technical issues, possibly delaying their stimulative effect.

Consider the Big Dig in the heart of Blue State America, Boston. This 3.5 mile freeway tunnel was conceived in the 1970s, officially proposed in 1982, got federal funding in 1987, and the first dirt was turned in 1991. By the end of 2003 it was more or less usable and by the end of 2004, it was reportedly 95% finished. Then, it started leaking. It supposedly cost about $14 or $15 billion (assuming it’s done, which it probably isn’t), up from an initial estimate of $4 billion in today’s dollars.

Now, here’s an interesting number: at its peak, the Big Dig employed about 5,000 construction workers. That’s a lot of construction workers relative to most big projects. But it’s a tiny number compared to Obama’s 2.5 million number. So, Obama is proposing, in effect, to have 500 Big Digs going full blast in 24 months.

In contrast to infrastructure jobs, Obama will eventually realize, makework office jobs are relatively cheap and easy to create. To employ people to administer programs aimed at, say, enhancing outcomes among our troubled youths, you don’t need an environmental impact statement. You don’t need to buy a bulldozer for a new worker, just a computer, a desk, and a chair. (Eventually, you’ll need guys with jackhammers to come build another office building for all the new staffers, but you can squeeze them in for awhile.) And every bureaucracy already has lots of existing plans on file to hire more staffers to help them do whatever it is they do.

And Obama’s kind of people like office jobs administering social work programs a lot more than they like jackhammer jobs. So, it’s a win-win proposition!

Therefore, expect to hear the term “human infrastructure” a lot this winter as the Obama Administration starts to realize that actual infrastructure projects aren’t going to make much of a dent in the unemployment rate before the 2010 elections, but hiring a ton of people to staff, say, innovative programs to foster excellence in public schools are an easy way to provide jobs for the boys (and girls).

“What is clear is that light touch regulation of the banking industry does not work. Alan Greenspan said he thought the banks own self interest would prevent them from self destructing. He was wrong.”

What is clear is that the principle of central banking is unmitigated bullshit designed purely to facilitate fraud, which politicians use in order to create short-term phony economic “growth” in order to win elections.

In Greenspan’s youth he knew that, then he went native.

N.B. Obama has not promised to “create” 2.5 mill jobs, he has promised to “save” them. Unless the unemployment rate rises to 98% he will succeed in this goal.

Seeing as some people already think he’s the greatest President since 1787 because he, ummm, got elected and, ummm, he’s black and, umm, he uses children’s slogans to tolerable rhetorical effect, before he has even got into the Whitehouse, no doubt he will go down in the history books as an economic wizard who fulfilled his promises.

According to the BBC website:

US President-elect Barack Obama says he wants his economic team to find ways to generate 2.5 million new jobs during his first two years in office. In a weekly address on the internet, Mr Obama said he wanted to sign the plan soon after taking office on 20 January.

It’s hard to have sympathy for anyone in this mess. The whole thing was so utterly, utterly predictable. I do feel sorry for people whose pensions have been trashed because they thought the people running their pensions companies had the faintest clue what they were doing. I haven’t paid into a pension for several years since they lost money for me every year I had it.

I inherited a couple of tens of thousands two years ago. My parents told me to buy a house, the internet told me to put it in an index tracker and the money pages told me to put it in a high interest Icelandic e-bank. 4.5% in an ordinary high street savings account isn’t looking so stupid now…

We’re all learning a bit of economics from this crisis.

One thing I’ve learnt:

Banks aren’t like other companies.

With companies that make things or provide non-money related services, there is a natural limit to risk. Firms that exceed the limit don’t get an edge on their competitors - they quickly become unprofitable as their risky attempts to crack new markets will necessarily fail more often than not.

With banks in a growing economy, that doesn’t apply to banks. The more risk they took on the more the money flooded in. There is almost a law of nature that says money will flow to where it can earn the most and banks can take advantage of that at a flick of a switch - not like a car manufacturer who has to invest hundreds of millions of dollars in developing a new model.

G. -

Clearly the Obama learnt the “p*ss easy pledges” trick from New Labour. “We promise not to sell off the NHS to BUPA and we promise to increase spending on health care by at least £1.”

So the banks got into a cycle of competitive risk taking.

Then the real economy faltered, confidence was shaken and the effects were immediate and extremely damaging.

Field:

“I think in the UK we just need to concentrate much more on real productivity and real investment. These are the sources of real wealth.
I don’t mean just manufactures, though that is important.

But I think we have become too dependent on the financial sector - which can evaporate overnight and the global economy.”

I agree. We do.

But there is one other aspect to it. We have to become much more savvy about controlling our financial institutions, and our governments. Especially in light of the potential dominance of markets based on insubstantial notions. They are starting to build a market in the trading of carbon credits. There is no real asset being traded, it all depends on the willpower of governments, and their preparedness to enforce protocols on their own industrial sectors. And if it becomes politically unsound to do that at some time in the future- it will all fall apart. Then we will find that the banks and treasuries were gambling on the value of these credits increasing, and oh look the money’s all vanished again.

Yes - we’ve already seen that with local authorities treating landfill trading allowances (a similar idea) as “assets”.

I believe the Scottish scheme has recently been suspended in effect, rendering the allowances pretty much valueless.

As you say governments can change their minds overnight on this sort of thing. It would only take a series of cold winters for everyone to decide that the global warming - carbon link was bogus and the political pressure to abandon the scheme would grow.

I think we should rebalance our economy by doing things which avoid overdependence on imports (I’m not against world trade - but there are clear dangers in being an economy based on financial services, retail expansion, credit and imports - it’s basically a thin air economy that can vanish if the all important confidence evaporates).

Certainly aiming for energy independence is top of my list. “They can’t take that away from you” as the song says - once the renewable energy infrastructure is there, we benefit from it come what may. And it is the sort of industry that relies on domestic workers and firms.

Expanding UK food production makes both economic sense and moral sense. The idea that all this food has to be grown in the countryside in fields is old fashioned. We should be in the forefront of growing healthy hydroponic food, in large warehouses, maybe close to wind farms.

We should certainly be looking to revitalise manufacturing industry, although there will be natural limits to what we can do in a global economy.

We should be developing a financial services industry that serves the people of the UK - creating co-operatives, employee share holding schemes and savings investment funds. There may well need to be government intervention here to create the statutory framework for all that.

Field:

“Yes - we’ve already seen that with local authorities treating landfill trading allowances (a similar idea) as “assets”.”

The landfill restrictions are something imposed upon us by the EU. There is no shortage of landfill space in the UK. And the technology exists to tap the methane they produce.

And I reckon ultimately we will get confirmation that AGW has been a colossal hoax.

But I do support the building of new power generation infrastructure. The national interest demands we must become more self-sufficient. And that would include a fairly diverse mix, but nuclear stations would have to be in there.

Monty -

Ah well, it was nice agreeing with you…for a few seconds.

But nuclear energy is a dead end - and another example of immorally bequeathing problems to future generations.

I think a large nuclear power industry is inconsistent with an open democratic state.