Greece Watch...

vtsnowedin · Post by **vtsnowedin** » 28 Jul 2015, 23:17

peaceful_life wrote:
There's no shortage of useful work needing done.

Totally agree with that. Problem is to get the leadership to direct the work in ways that are not wasteful and also getting people motivated to show up and actually do the work at a fair price.

Post by **kenneal - lagger** » 29 Jul 2015, 01:31

Most of the work is done nowadays by machines using fossil energy. The human input is very small and is generally just pointing the machine so the cost of the human input is a small proportion of the work actually done although it is still critical to the work being done. That is why some economists say that everyone should get a wage no matter whether they work or not.

vtsnowedin · Post by **vtsnowedin** » 29 Jul 2015, 03:24

kenneal - lagger wrote:Most of the work is done nowadays by machines using fossil energy. The human input is very small and is generally just pointing the machine so the cost of the human input is a small proportion of the work actually done although it is still critical to the work being done. That is why some economists say that everyone should get a wage no matter whether they work or not.

Yes and No.
I work in the construction industry and certainly there are large machines that do the days work of dozens of men with each bucket full, but there remains much work that can only be done by human hands and the laborers that show up today seem to see no need to advance the work in order to deserve their pay.

Post by **kenneal - lagger** » 29 Jul 2015, 05:47

Yes, there are jobs which entail a high degree of human input but averaged over the whole economy the amount of the human labour input is very small, just think of the fossil energy input into the winning and manufacture of timber and other building materials.

johnhemming2 · Post by **johnhemming2** » 29 Jul 2015, 08:29

There are a range of jobs that are to a greater or lesser extent automated. Many also make use of a lot of energy (which is mainly fossil energy). The trend is towards greater automation, but not necessarily towards greater energy use or indeed fossil energy use.

On a global scale, however, more energy is being used, but not massive percentages each year.

Post by **kenneal - lagger** » 29 Jul 2015, 14:41

johnhemming2 wrote:On a global scale, however, more energy is being used, but not massive percentages each year.

And there lies the economic problem! Growth has always followed increased energy use, indeed growth relies on increased energy use. In a time where more energy is difficult to win growth will be difficult to achieve. For the environment it isn't a problem but for economies addicted to unsustainable growth it is.

Greece with is massive debt will be in trouble for years because it can't afford to import the energy needed to fuel its growth. It may go down the drilling and fracking route instead which will be devastating for their environment and ours as well.

johnhemming2 · Post by **johnhemming2** » 29 Jul 2015, 16:09

kenneal - lagger wrote: In a time where more energy is difficult to win growth will be difficult to achieve.

Which is why sensible governments need to work to bring their public finances into balance.

Post by **kenneal - lagger** » 29 Jul 2015, 16:34

George has been remarkably flexible on this so far but there are more ways to bring the finances into balance than just cutting expenditure, some of which is also cutting receipts by slowing the economy. If the government printed money for a capital expenditure injection into the building sector in the form of more Housing Association houses they could raise their tax revenue considerably, reduce the expenditure on housing benefit as private rental costs would reduce with increased competition, and increase VAT receipts as ordinary people had more money to spend. The same could be said for a National Insulation Scheme and here

It's all very well giving the rich more money but they can only spend so much. They're not investing the extra they have in manufacturing because they don't get the same return that they can get from property, CDOs or other bits of worthless paper. All that money is just blowing up bubbles!

biffvernon · Post by **biffvernon** » 29 Jul 2015, 16:39

"public finances into balance"

How does that work between London and Darlington, Germany and Greece?
Isn't there a need for a global surplus recycling mechanism?

johnhemming2 · Post by **johnhemming2** » 29 Jul 2015, 16:52

biffvernon wrote:"public finances into balance"

How does that work between London and Darlington, Germany and Greece?
Isn't there a need for a global surplus recycling mechanism?

That is a separate question. However, the fact that resource depletion leads limits on growth and limits on growth lead to a need to control public finances is not really in question. The question if any is one of timing.

In any event it is not Greece, but Latvia and Bulgaria we should be concerned about.

UndercoverElephant · Post by **UndercoverElephant** » 29 Jul 2015, 16:56

The "public finances" are in a mess because the banks were bailed out with public money. The people who are responsible for the state of the public finances (bankers, regulators, Gordon Brown) have got off scot free. Now a big, fat lie is being peddled that the problem was caused by excessive public spending.

The ordinary people in this country would be a lot more willing to accept "austerity" if they saw that the wealthy were taking their fair shair of the pain. What they actually see is the wealthy getting wealthier.

And they see politicians like you not caring, and helping to spread the lies.

Post by **kenneal - lagger** » 29 Jul 2015, 17:13

I sent this to my MP on the subject and he wasn't amused! Even though it was written by a Professor of Political Economics.

Post by **kenneal - lagger** » 29 Jul 2015, 17:21

John, you have avoided the point about capital investment by the government to increase their revenues to cut the deficit. They seem quite happy to invest in new roads to satisfy the road haulage lobby but not in rail or housing. Would this be because those areas don't have a financial return for the political parties backers?

Would this be another case of The Prostitute State as espoused by your former colleague, Donnachadh McCarthy?

johnhemming2 · Post by **johnhemming2** » 29 Jul 2015, 17:41

Nationalising and part nationalising the banks (the correct description of the bailout) has increased debt by an amount (temporarily), but has had no direct effect on the deficit. (There is an indirect effect as a result of increased interest payments). Some of the banking assets obtained by the government have been sold at a profit - Lloyds bank, for example, is being sold at a profit as we debate the issue.

My own view is that government should hold onto RBS until they can sell it at a profit.

The financial crisis was affected by four main factors
a) The toxic debt issue and a failure to regulate the systemic risk.
b) A spike in the oil price cauised by the peak in conventional oil
c) The regular overvaluing of property that happens from time to time
g) Government over spending in the UK. I have linked to the stats on this.

GDP requires energy whether it arises from governmental capital spending or not. Hence the limits on growth are real limits on growth. I believe it is possible to tease out some growth from greater energy efficiency, but there is a limit on this.

I can provide sources to justify the above rather than a random quote without any sources or argument.

biffvernon · Post by **biffvernon** » 29 Jul 2015, 22:27

johnhemming2 wrote:Nationalising and part nationalising the banks (the correct description of the bailout) has increased debt by an amount (temporarily), but has had no direct effect on the deficit.

And what of the Geithner-Summers Plan and the European Financial Stability Mechanism? What happened to the banks was a far cry from nationalising or even part-nationalising.