h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Most of you are missing the point here. I'll try one more time.

The UK can't afford its public sector pensions liabilities. We barely could before this crash. It's absolutely impossible now. These 5 million people, or however many there actually are, can't be paid according to their finally salaries. That's all there is to it.

If a single part pushes the reform through, they're toast. But it might not be like that. The politicians might go this route of a National Government, and force it all through without a party label. It will be wider than pensions, of course. It needs to be wholesale reform of the NHS, of education, of the entire public sector. They'll have to move the balance of the economy to something productive, see? Manufacturing, commercial services, agriculture, major public infrastructure projects, and of course global financial services providing it can be saved (still our best chance of future prosperity, in spite of everything.

Let me say again, I'm not advocating any of this. It seems to me a likely scenario, given the position. I posted here in the hope that people might discuss this possible future, and alternatives.

>Now that I've said that of course, Vladimir Putin will no doubt single-handedly rescue the world economy merely by waving his penis at it.<

Yet another of your oh so cryptic remarks, bouncy....So it's cheap shots at Russia, with no developed argument.

Anyone who has studied Russian history for even 5 clucking seconds would know that the Russian situation, for hundreds and hundreds of years has been caught between fear of the invading hoards from the East, and south, and fear of Europe, from the west. Look how weirdly most Russians view Peter the Great with his experimental 'Italian' designed city, compared to the ancient capital in Moscow. Many of Russian culture, (books, films etc), deal with this whole issue. The merchant class didn't become powerful like it did in Europe. It was essentially a peasant economy and a tiny aristocracy headed by the tsar. The same tradition followed after the Communist revolution. It is an utterly different context from our own.

If you want to make a clear reasoned specific argument about the Russian position why don't you try explicating it properly in terms of that specific context. Then it might actually be possible to have a proper discussion about what you are meaning. I haven't a clue from that remark.

I agree what you are postulating is one sensible scenario Pinniped, but I can't see any of our political parties seeing beyond the noses on the end of their faces to consider it.

The only way to distract voters away from such massive and necessary changes would be to throw a war, a big one.

Actually I think if you read again you'll find it has very little to do with Russia and more to do with the supposed need for strong leaders, who I think are more likely to make a bigger mess in this case than to fix anything. Putin being the media darling/villain (depending upon who you ask) strong leader archetype of the moment.

I didn't think it was that cryptic at the time .

What an interesting thought, Pin. Far stranger and more improbable things have happened.

>> They'll have to move the balance of the economy to something productive, see?

Such as? We are Golgafrinchans. All the real work's being done in sweatshops, call centres and software houses east of Suez.

B

Thanks Ben

Our economy's based on financial services, of course. As an engineer, I hate to admit it, but from a time even before the Industrial Revolution the essence of British Enterprise has been trading acumen. Facilitating commerce is what we're best at.

Bit of a problem, now that we're stuck with anti-banks and equity freefall, but we'll sort it. We have to. Millions of the unwashed and ungrateful are relying on us to do so.

They stuck Eeek-onomics (remember that one?) in the Post this week, as if it was fresh-written for the present crisis. Funny that.

Anyhow, I hope you're keeping well and as sharp as ever

(It's my thread. I can go off-topic if I want to)

I am and I am, thanks, Pin. I wondered if they'd re-run the money and belief entry too. Whatever happened to that?

I've never managed more than the first chapter of The Heart of Darkness, but the idea is such a strong one - the city that's at the heart of a great empire which used to be on the edge of the world and which will one day be on the edge of the world again.

Good to see you're still agitating.

B

Am I one of the 'most'? This could turn out to be really interesting.

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I basically agree. None of the things mentioned are implausible individually, but a national govt caused by the threat of public sector pensions seems as likely as snow in July*, so I don't think it's at *all* probable. Also, Labour *represents* people like those whose pensions would be devalued, so it would be far more likely that the Tories would put it through than them and Labour would form a natinal govt to do it. Another argument against.

There's also the point that what you're talking about is a re-distribution of existing or expected future wealth. To expect Labour to vote for taking wealth away from their core supporters is a bit daft IMO. Pinniped is ignoring the fact that the distribution of current and future wealth is a political decision as much as an economic one. Labour's the party to promulgate this, not dismantle it. It's a political decision, how to value public sector workers, not just an economic one. Some people might disagree with your (implied/inferred) valuation of public sector workers, and say that they actually deserve a decent pension.

You also ignore the fact that pensions are part of wages, and that real wages are growing very slowly these days. You're really arguing for lower public sector pay (there are lots of arguments for and against this, and I'm sure there are bits I'd agree with for each side). It's not fact who's right. I'm pretty sure that realy wages have been pretty stagnant in the US for about 30 years, and I think Europe is about the same, or a bit better. Deciding that this wealth ratio should be maintained or changed is political, and you shouldn't be surprised if others disagree (I *probably* would, but this kinda thing depends on the figures, and I don't know what they are). Given that you're talking about one of Labour's main constituencies, I think that's another argument against.




*in Spain, not in Scotland

I'm not arguing for anything Pedro. I don't seek to make relative value judgements of public and private sectors. I'm trying to work out what's going to happen as a result of economic imperatives.

Labour are traditionally more in favour of the redistribution of wealth than are the Tories. Nobody will dispute the fact, though, that wealth is generated within a subset of the whole economy. If less wealth is generated, then less is going to be redistributed, whoever's in power.

There are a lot of people in Britain (maybe you're one. I wouldn't know) who think that they enjoy a right to work and that a personal return for their preparedness to contribute to the economy is guaranteed. It isn't, though. In the event of an extreme economic slowdown, there simply wouldn't be enough money to pay everyone. Some people would have to be prioritised, no matter how unpalatable. They would be the still-active wealth-creators and the providers of essential services. That much is pretty well a no-brainer. And the last thing any government would pay out is the marginal money in public sector pensions relative to private sector norms.

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Last year's concept, isn't it? There's only economics now. In fact there's only ever been economics, as any true political philosopher from Mill through Marx has always espoused. Social reform is what you do when the economic climate is benign enough to accommodate the niceties of moral judgement.

So I fear you've missed the point here. I think you should think carefully, and ready yourself. I've personally accepted the likelihood that in the months and years to come, all my ideals may have to be put on hold. In all probability, it's going to be very tough. Politicians are going to be making some very difficult choices on my behalf, and some of them I will resent and some will hurt me and those I care about. I think it will be the same for you. I think it will be the same for us all.

I think what you are proposing is possible, Pin. I can see a straight line from here to there. Dunno if it's likely or will happen, but it's certainly possible.

The key thing here is that the rules have changed fundamentally, but at the moment very few people have the nerve to look at the implications without blinking. I haven't, and I'm a cynical cow who likes trying to out-staring the sun.

As I said, stranger things have happened. Hindsight bias is ludicrously powerful, but I remember that even in the mid-1980s the fall of communism seemed entirely implausible.

My problem is that I've been expecting it so long that I can't get as worked up or worried as I should be. I'm just surprised by everyone else's surprise.

This feels to me like the first autumn of the first world war or the minutes between the first plane and the second plane on September 11th. At the moment I'm disconnected enough to feel privileged to live though such an interesting time. I also feel a thread of fear at my own naievete.

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I know you're basically wanting to discuss the scenario you've spelled out. I don't think it's likely for the reasons given above*. My point about the political aspects and value judgements is that such important decisions influence society as a whole and are therefore inherently political.


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Hmm. For me economics is about making decisions and predicting consequences. So there's a problem with pension liabilities, and we need to do something. If there are 2 options which give the same net (cash) outcome but have different effects on different groups of people, then choosing between them is a political rather economic choice. Although maybe that's just semantics.

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The welfare state was brought into being after Britain was pretty much bankrupted after WW2. Doesn't really support that statement.


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I thought I was just disagreeing with the point. Seriously though, if I am, tell me where?


*"Predictions are always difficult, especially about the future"

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But surely what's happened here is a marked decrease in expected future wealth (future returns on investments)? Wealth has *already* been transferred from poorer to richer sections of society, but the change had been masked by future expectations of growth. Now it's not.

Noggin

>This feels to me like the first autumn of the first world war or the minutes between the first plane and the second plane on September 11th.<

I love those two analogies, Ben; brilliant!

>expectations of growth.<

Yes Nog. And I just don't this idea that we should be aiming for perpetual increases in growth in the west. I find that bizarre.

I remember hearing someone say ages ago, (can't remember who it was, or where), that were the whole population of earth to have the same standard of living as the 'average' American, (not to pick on the yanks, we in the UK are no different, being a first world highly developed economy), it would take the natural resources of at least 5 planets to sustain it, given our present methods of energy extraction and usage.

Hi Noggin.

I was being relatively specific, namely that Labour lowering pensions for public sector workers is basically a huge pay cut, which I don't think they'd do.

I'm not really sure what you mean, to be honest.

It was unthinkable that Britain would become a Socialist state with nationalised banks 12 months ago.

The fix isn't working because the public has lost faith in the system - one answer would be to increase public sector workers by bringing back in house many of the outsourced tasks like cleaning.

Another would be to apply a punitive tax on exporting jobs, like the banks have done moving all their call centres to the far east.

Pin, I've got an allied question.

Take a look at the pictures here: http://news.bbc.co.uk/1/hi/business/7644238.stm

If the UK and the US are pouring (our) money in to these holes, what will the governments not be spending it on?

Goodbye state pensions, farewell the NHS?

That's the point you're making, isn't it?

The other question that I have is if we are in for a long cold fiscal winter, how easy will we be to kick when we're down? I'm thinking about recovery from a really well placed terrorist attack. Say the New Orleans levees were burst by bombs instead of arrogance?

Cheerful cow, aren't I?

B

I don't think it's inevitable, Ben, but yes, that's the prospect we all ought to be thinking about and working together to avoid.

Instead, the reflex is to blame the very sector that's the main source of our prosperity, and to detach ourselves from the consequences.

I don't fear terrorism though, at least not terrorism of the usual demonised foreign fanatic kind. It might even be a positive spur right now, having some common external enemy to blame.

Cheerful cow? I don't know about your demeanour, but I doubt you've turned bovine.

If you really want to depress and needle people in equal measure, you could try suggesting that even though Americans left Ugly George unmolested through eight years of decline and disgrace, they'll in all probability murder President Obama within a twelve-month.

Now that's what I'd call terrorism. Bin Laden's a pussy by comparison.

I just see all this as a healthy wake up call, as to where we want our priorities to lie. Less emphasis on ridiculous endless growth of the economy, that basically benefits the relatively young, fit and able in the short term. More emphasis on a strong structure that will provide for a basic but doable safety net for old people and disabled; ie the whole of our society/community.

If it finally knocks on the head this obsession with continued 'growth' of king capitalism in more pure form, and that has to be a good thing long term; (The final end of the Thatcherite *dream*.. It's basically having to face 'reality' at last. Always a good thing. Yes I've found all this pretty scary. I still do, but less so today since it seems like there is a bit more of a unified and realistic response from the western economies.

(One other rather insignificant pay-off might be that we hear less of a deafening whine from those north of the border about England and London centricness, since the vast majority of the £billions just paid out, went to bailing out the Scots. Though knowing them, they'll still find something to wail about).

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Two banks HQed in Scotland, you mean? Or do the people of Yorkshire get some of Hbos's money?