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Friday, 1st August 2008

We're hurtling over the economic precipice

Fraser Nelson 6:42pm

Like the Road Runner’s Coyote speeding off a cliff, it will take some time before Britain looks down and realises that Brown has led us over an economic precipice. The CPI target of 2% inflation will be a joke – from now until about 2010. We’re likely to hit 5% by Christmas and stay there for a good chunk of next year. It will, quite literally, be the biggest overshoot anywhere in the world now – not just currently, but in the history of inflation targeting outside of Africa. Even the Bank of England is coming to terms with this, so we can forget a rate cut next week.

Citibank thinks we’re already in recession and forecasts growth of 0.3% next year and 0.9% in 2010. Yes, you read both of those figures correctly. Consumer confidence is the lowest since Callaghan was in power. The rate of companies going bust is already almost a fifth higher than last year, and recent data shows their cash reserves are now shrinking at the fastest rate since 1980.

If John Major presided over a moribund housing market, there is no word to describe today’s – the number of mortgage approvals for home purchases is a calamitous 44% below its low in the 1990s. Sterling’s plunge is probably responsible for a third of the British Gas price increase, and much of our inflation.

The political drama has been great these past two weeks, although it is but a soap opera compared to the real life crisis unfolding. The bursting of the Brown Bubble is going to be long and painful for all of us. And this process has, alas, only just begun.

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Cynical Voter

August 1st, 2008 6:58pm Report this comment

Things can only get better......remember the theme tune ?

TGF UKIP

August 1st, 2008 7:30pm Report this comment

And please direct us, Fraser, to where your friend Sleazy Gideon has drawn the dotted line between Gordon's overborrowed, overtaxed and over-regulated economy and the slide in sterling. Indeed, please direct us to any media interview when any Tory has made the charge of economic mismanagement stick given that as soon as Marr, Humphrys, Paxman make the point that the Tories have promised to match Labour spending, answer comes there none.

Bruce Robertson

August 1st, 2008 7:50pm Report this comment

Could someone tell your colleague (of the female persuasion) over at The Trading Floor? She seems to think property is going to zoom away from 2010 on...

Yusuf Public

August 1st, 2008 9:01pm Report this comment

Dear Mother

It's a bastard.

ken from glos

August 1st, 2008 9:12pm Report this comment

Good. I dont care as long as it destroys New (Old) Labour

Elizabeth Elliot-Pyle

August 1st, 2008 9:36pm Report this comment

God help us all.
There is much much worse to come....

Ray

August 1st, 2008 9:46pm Report this comment

...And this economic dystopia - more so than any of McBean's character defects or lack of a human touch - is the real reason why he will go down in history as Britain's most disastrous Chancellor and Prime Minister.

Austin Barry

August 1st, 2008 10:54pm Report this comment

How does Brown sleep at night presiding over this mess for which he is in large part responsible? What does he do in the early hours when the demons come? Is there any vestige of guilt or regret? One thing: he will never quit, his whole cheerless, monomanical life has been directed towards being PM and the sour ashes of realized ambition will not be enough to see him resign. So there he'll hang, twisting in the gibbet of his vanity, while the rest of us go to buggeration. What a piece of work: an unelected, gloomy control freak in a tan-jacket and Hollywood teeth leading our descent into Dystopia. And what is his rallying call to the nation? Oh, yeah, "I'm on the job", said without any appreciation of its Carry On connotations. We didn't deserve this, did we?

will j

August 2nd, 2008 12:15am Report this comment

Give Austin Barry a blog.

Frank Pulley

August 2nd, 2008 12:16am Report this comment

Austin Barry

"We didn't deserve this, did we?"

Of course "we" deserved this. "We" allowed them to take power; "we" voted them back in -twice! "We" spend our time exercising 'democracy' by huffing and puffing on a blog, rather than dragging the thieving treacherous bastards from their corridors of power and burning them at the stake for: failing to honour their oaths of office; failing to keep their promises to the electorate; diverting our income by extortionate taxation for nefarious projects aimed to keep themselves in power and feather their nests; Gerrymandering; ceding our sovereignty in quest of the Socialist Internationale; opening our borders and letting in the enemy; destroying our institutional heritage; allowing
a dim representative of the wimminhood to occupy the Home Office; appointing a twat as Foreign Secretary and a very long list of other commissions and omissions that would take me three hours to type. Add your own! "We" are a democracy, ergo "we" are cattled until at least 2010, at which point "we" might, but only might, wake up and, in exercising our 'democratic rights' kick this lot out and vote another lot of treacherous, lying, thieving bastards in. So it goes. But at least it keeps you fingers in trim.

Loved your post until the last line!

sharad

August 2nd, 2008 3:01am Report this comment

simon..more grist to the mill

Brita

August 2nd, 2008 4:21am Report this comment

Thank you Frank!! Otherwise, I'd keep thinking "we" have all forgotten about the Traitor's Treachery. But....... When and how are we going to do what about it? I mean, better our own 'treacherous' etceteras than the devils we don't know.

By the by - about 'dim ... wimminhood' - I gather you mean a 'bright' light would have been OK?

Hysteria

August 2nd, 2008 6:37am Report this comment

um - what policies do team DC have that will start to fix this mess? And when will they wake up and smell the coffee? Surely they have to ditch the promise on spending plans sometime - right?

Fraser Nelson

August 2nd, 2008 7:00am Report this comment

Will J, I hope Austin Barry never gets a blog. His comments are excellent for traffic here at CoffeeHouse - keep them coming, Austin! Bruce, things do point to 2010 floor in housing. Personally, i think the recover will be quite slow in residential property. TGF, remember Osborne is pledged to follow Brown's spending to March 2010 only. This point is often misunderstood. As each month passes, and the con trick of the Brown Bubble becomes more apparent, the Tories will be less inclined to sustain the destructive policies of Brown and realise it was (as I like to say) a reign of error at the Treasury. But I accept it is far from clear now what the Tories would do better. This is why I want Brown to stay longer because it's his policies, not the man himself, that Britain needs rid of.

James Hannam

August 2nd, 2008 9:03am Report this comment

Fraser,

It's a highly esoteric point, but Wile E Coyote does not fall because he has noticed he is standing in mid-air. He falls because he has stopped.

Chuck Jones, director of the Roadrunner cartoons, probably never read Aristotle’s Physica but he did manage to model Aristotelian dynamics nevertheless. The Physica was the main source of natural science in Christian Europe's universities during the Middle Ages until the seventeenth century. According to Aristotle, there are two kinds of motion – forced and natural. Natural motion means falling under gravity. Forced motion is anything else, for instance when you throw a ball. Now Aristotle believed that the two kinds of motion could not exist in the same object at the same time. A ball cannot move under the influence of gravity and the motion you impart by throwing it simultaneously. Thus, according to Aristotle, when you throw a ball, it travels in the direction you propelled it, gradually slowing down due to air resistance. At some point the air resistance means that it will stop. Then, gravity will take hold and the ball will drop straight down to the ground. So, only when forward momentum is used up does gravity come into effect. This is exactly what happens to the unfortunate Wile E. Coyote.

I think this shows Aristotle's dynamics had a curious internal logic that makes sense from an instinctive point of view.

OK, I know. But somebody might be interested.

http://jameshannam.com

Adrian Drummond

August 2nd, 2008 9:07am Report this comment

Well said Frank. You beat me to it.

cuffleyburgers

August 2nd, 2008 9:59am Report this comment

Frankly burnigng at the stake is too good for them, besides we could barely afford the gas.

But I approve of the sentiment.

Roger Thornhill

August 2nd, 2008 10:53am Report this comment

Frank et al, we will keep getting this while we have a system that is in denial about vote buying, which is precisely what occurs today and that Labour have used time and time again.

Before 1911, IIRC, those who gained their income from the State could not vote. It still has residual echoes in Parliament today (the Chiltern Hundreds etc) to keep those voting away from "the state" who might influence their decisions. Why was that concept cast away for the electorate? It was foolish IMHO and has caused many problems and the Welfare State compounds it day after day.

It is an ugly reality, but well requires facing up to.

Teledu

August 2nd, 2008 1:28pm Report this comment

I Share your anger Frank - but "we" - " as in we voters in England" - cast more votes for the Conservatives than zaNuLabour. Our electoral system allowed the jocks to foist this lot on us.

Kevyn Bodman

August 2nd, 2008 2:49pm Report this comment

@James Hannam: I am interested. Thank you.

@ Roger Thornhill:would you go as far as 'No reprersantation without taxation'?
It would have to modified somehow because we pay tax when we buy things, but you probably get the point of the question.

mckenzie

August 2nd, 2008 5:34pm Report this comment

We need much more suffering, much more, before people will wake up. It sounds harsh but I see no other way to rid us of this filth. And even then, it's dubious as to what the effect will be.
We have become a nation of brain-washed morons, and we deserve what we get I suppose, so whatever the outcome, it will be on merit.

TGF UKIP

August 2nd, 2008 8:10pm Report this comment

Fraser, if my figures are right spending is slated to have climbed by 2010 to £674 bn - double what it was in 1997 and about £27K per household And Osborne thinks that about right does he?

Do you not find it curious that even when polling attitudes on tax and spend are running well to the right of the Cameron Tory Party your friends still cannot bring themselves to argue a conservative case. Liitle wonder really that the public perceive them to be conviction free lightweights.

Frank Pulley

August 3rd, 2008 1:14am Report this comment

What happened to my reply to teledu Fraser?

Roger Thornhill

August 3rd, 2008 9:50am Report this comment

@Kevyn Bodman, no, not as far as that IMHO. The core issue for clean government to me is about influence and vote buying. It is not as difficult as thought, as in my view all hospitals and schools should no longer be state run but (initially) independent not-for-profit, so even Teachers and Nurses will not be paid by the State so can continue to vote.

Tax should be on consumption, not income. Harder to avoid, and fairer on the poor (as essentials like food, fuel, rent will be tax free). Income Tax (£140bln of £500bln revenue) could be abolished if we cut back on QANGOs and made things more efficient.

The rich pay more because they have more for the State to protect in terms of law and order and defence. They have more by spending more, and that is where the tax is levied.

If voting is from taxing, you then are at risk of high taxpayers demanding more/proportional influence and so you will get an Oligarchy.

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