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Full Version: Low Wage Growth + Wealth Inequality = Corbyn Surge
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Seems there's a strong correlation with interest rates suppression and the huge growth in 'zombie companies' in Advanced Economies (AEs).

Suppressed interest rates kill economies. Suppressed interest rates / QE and the asset price inflation (wealth inequality) they create are major reasons for the Corbyn Surge.

We're reaping the whirlwind of debt, and our failure to deal with it. I'm not sure what diseased mind could think more debt is the answer.

[Image: DETplvbXcAElf7U.jpg]
We are reaping the whirlwind of cutting public services which is now becoming apparent to everyone. When you have West Mids police commissioner saying they are struggling to offer a decent service and then witness 4 fatal stabbings over the weekend, or you see non-medical staff cutting mobility to clearly disabled people via a tick box exercise, or libraries closed then that will push people towards Corbyn.

Your solutions would create civil unrest on an unprecedented scale imo. Currently it wouldn't take much for society to fracture given one of the main factors that bind it together is ideologically under threat.
The solution I'm suggesting in this case is to increase interest rates, slowly but steadily, and to normalise monetary policy.

Given the widening wealth inequality suppressed interest rates have encouraged I'm intrigiued as to why you think there'll be civil unrest? Will bondholders & buy to let investors really take to the streets?
(07-10-2017, 12:30 PM)Protheroe Wrote: [ -> ]The solution I'm suggesting in this case is to increase interest rates, slowly but steadily, and to normalise monetary policy.

Given the widening wealth inequality suppressed interest rates have encouraged I'm intrigiued as to why you think there'll be civil unrest? Will bondholders & buy to let investors really take to the streets?
If we hadn't of done austerity and done standard fiscal stimulus then interest rates would naturally have risen, we would be at full employment with wage growth and the zombie companies would have closed down.

The problem is we live in Wayne's world where economic logic is completely absent:

https://youtu.be/5wdRDAe__yI
Except we didn't do austerity.
(07-10-2017, 06:11 PM)Protheroe Wrote: [ -> ]Except we didn't do austerity.

So you would have cut more services?
(07-10-2017, 06:11 PM)Protheroe Wrote: [ -> ]Except we didn't do austerity.

Err, yes we did. You are obviously in Wayne's World. 

Btw, would be interesting to know the number of zombie companies. I don't think it is wise to say that zombie companies are the main causal factor for low productivity.
(07-10-2017, 11:24 AM)Derek Hardballs Wrote: [ -> ]We are reaping the whirlwind of cutting public services which is now becoming apparent to everyone. When you have West Mids police commissioner saying they are struggling to offer a decent service and then witness 4 fatal stabbings over the weekend, or you see non-medical staff cutting mobility to clearly disabled people via a tick box exercise, or libraries closed then that will push people towards Corbyn.

Your solutions would create civil unrest on an unprecedented scale imo. Currently it wouldn't take much for society to fracture given one of the main factors that bind it together is ideologically under threat.

(07-10-2017, 12:30 PM)Protheroe Wrote: [ -> ]The solution I'm suggesting in this case is to increase interest rates, slowly but steadily, and to normalise monetary policy.

Given the widening wealth inequality suppressed interest rates have encouraged I'm intrigiued as to why you think there'll be civil unrest? Will bondholders & buy to let investors really take to the streets?

Just to clarify I was offering a slightly more rounded view of the reasons people have been pushed towards Corbyn based on your ideological belief that a small public sector is in some way good for society. 

Also don't higher interest rates potentially push those JAMs St Theresa talks about into unmanageable debt?
You can see the austerity in this graph from 2010. Note how the size of the state is slashed. If fiscal policy had continued to be expansionary then it would have stimulated growth (as it had done from 2008-10) and then allowed interest rates to rise. The economy would have recovered, the zombie firms killed off and then there could have been a fiscal consolidation to ease the public finances. The irony is that if Cameron and Osborne had followed textbook Keynesian depression economics then they would both still be in power and Corbyn would be insignificant.

The message is clear - you do not do fiscal consolidation when you are in a depression and interest rates are at the zero-lower bound.

 [Image: united-kingdom-government-spending-to-gd...2=20171231]
Is correct.
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