Clifton CC

Anybody else depressed by the prospect of the UK goverment joining its neighbours in committing a huge chunk of our tax money to supporting a bunch of hopeless whingers? Sorry, car manufacturers.

In boom times you can sell hot air and still make money (ask a life coach...). One of the few benefits of a recession is that it shakes out the dead wood of badly managed, unproductive industries and in doing so frees up resources for more useful activiites.

Car manufacturers whose recent innovations include the monstrous Audi Q7 and who continue to improve their occupants' safety at the expense of other road users, deserve to wither. I own and use a car, and I'm sure most cliftonites do too, but that doesn't mean we need to give their producers subsidies any more than paint manufacturers, telephone companies, shoemakers or anybody else whose products we use. If people don't want to buy as many cars as the carmakers want to make at the price they can offer, then I suggest the car makers need to scale down or make something we really do want.

I don't object to increased government spending in a recession either: it makes good sense. But spend it on something socially useful, like cycle paths, opening new train routes, or buying everyone new double-glazing. Don't piddle it away on propping up dinosaurs with influence.

Write to your MP, or maybe Lance Armstrong.

A slightly more technical view of the issue is at http://blogs.ft.com/maverecon/2008/12/c ... he-sector/

Does anyone take anything Willem Buiter says seriously? His constant misunderstanding of the science of climate change but ability to witter on regardless makes me doubt the rest of what he says.

e.g. http://blogs.ft.com/maverecon/2007/12/i ... lf-cohtml/

is the sort of 'here's a bunch of graphs from wikipedia that I don't understand the implication of' cut'n'paste job that wouldn't be a pass in A level science.

Sorry. Pet rant of mine.

By chance, I read this

http://www.theregister.co.uk/2009/01/08/us_losing_wood/

just after reading your post.

I take your point Tomf - but I think the governments fear is the impact of several thousand well-paid (& high profile) manufacturing jobs (plus suppliers & many other dependent businesses) disappearing in one big, fell, newsworthy swoop. Most of the other big employers going bust are spread around the country, but these plants employ lots of people in one small area and shutting them down damages the local economy and looks really really bad in the opinion polls....

cath wrote:...but these plants employ lots of people in one small area and shutting them down damages the local economy....

Agreed, but then that means if I pile up enough inefficient bloat in one place I can hold government to ransom by saying "I'm a monstrosity - bail me out of here!" and keep going forever. (In fact, half the time they pocket the handout and then quietly shut down the factory a couple of years later...)

I'm sure if I were a steelmaker I'd be hoping for a bailout; but best to resist blackmail, and use some of the money to retrain people for jobs with a future.

Isn't that what the banks are doing ?
We have made huge mistakes but you can't let us go down else we will take you with us.

Helen

Well, Tom - you're on fairly safe ground as most on here will agree with your general sentiment: most think cars are, at best, a necessary evil (some an unnecessary evil); not many petrol-heads on here.

As some have posted though, there's a problem with being consistent, and while its fun to joust, I for one am glad I don't have to be held accountable for decisions on this stuff.

There's a hole range of "failing" industries which we can chose to support or otherwise. I'm not sure many have Helen's bravery to let the banking system fall. Steel has been mentioned. Closer to home for us cyclists is agriculture of course - it's on the opposite side of the emotional divide to the car industry - we like to see the countryside managed and have had CAP in place for decades. Should we not just let "failing" farmers go bust? Or we could pay Nissan to "set aside" the Sunderland plant to "lie fallow" for a couple of years?

It will be interesting to look back in 10 years time won't it?

Blimey the rise of debates in the Clifton CC continues. At this rate it'll be pistols drawn at the Square in a few months

The question is where does the money come from for these bail outs?
The taxpayer ?
Fewer taxpayers being expected to pay more tax, leaving less income to buy goods ,leaving more firms to fail, leading to fewer tax payers.
The boom was funded by credit and underpinned by the lowering of production costs mainly by re-location rather than improvements.
Pumping money into banks will not solve the problem. They are not putting it back in to the economy. Availability of credit remains very limited.
If the state spends our money it should look to enviromental,infrastructure
and education projects.
Not all banks are in trouble some such as the CO-OP are fine because they limited their risks. The government needs to answer for the failure of its regulation of the industry. Until it can prove it has an effective regime in place,like Australia, it shouldn't be putting money into banks.

Helen

Rob wrote:There's a hole range of "failing" industries which we can chose to support or otherwise.

Definitely. Some things really are too important to fail, and banks are a case in point, however distasteful it is to admit it. There are 101 ways to prop up a bank, but if you really let a high street bank fail (ie cease to operate), you immediately remove access to funds and payments from hundreds of thousands of people and businesses, and probably precipitate a wave of further banking failures. An immediate national emergency isn't hard to imagine.

Car factories are different; it's no fun for people losing their jobs, but no national crisis follows.

Farms are different again. The country views we enjoy are an 'externality' - a benefit or cost which falls on people who aren't part of the deal. We don't have to buy the farmer's crops to enjoy the view, and s/he can't charge us for it. And that's the case for stewardship subsidies. (Car exhaust is another externality - it messes up your air but you can't charge the driver for the trouble!)

However, production subsidies are a true evil. They make our food more expensive as well as condemning third-world farmers to poverty because they cannot compete with the EU's subsidised exports or sell their products here. An enormous harm at an enormous cost, with an extraordinary proportion of the benefit going to the richest farmers.

The most depressing thing is it is all entirely predictable. If you lend more to a person than they can realistially pay back in their lifetime, either the debtor goes bankrupt and the creditor loses his money, or you have to engineer hyperinflation, which bails out the debtors and creditors at the expense of everybody else.

The root cause is the Clinton/Blairite 3rd way which was to implement shorterm aspects of capitalist and socialist policy at the same time. We will soon be experiencing the long-term problems of both at the same time. There are plenty of ways out of it, these will require some hardship, and a reduction of living standards. However, I can't see any of our cynical careerist politicians implementing them. Anybody fancy starting a new political party?

rickshaw wrote:The most depressing thing is it is all entirely predictable. If you lend more to a person than they can realistially pay back in their lifetime, either the debtor goes bankrupt and the creditor loses his money, or you have to engineer hyperinflation, which bails out the debtors and creditors at the expense of everybody else.

The root cause is the Clinton/Blairite 3rd way which was to implement shorterm aspects of capitalist and socialist policy at the same time. We will soon be experiencing the long-term problems of both at the same time. There are plenty of ways out of it, these will require some hardship, and a reduction of living standards. However, I can't see any of our cynical careerist politicians implementing them. Anybody fancy starting a new political party?

Any new party that actually told people the truth will get..........precisely nowhere. Only religion seems to be effective in getting people to happily accept hardship and that 'you reap what you sow', you have to earn what you want' etc . Unfortunately religion is a crock of shite too so where does that leave us?

Oh dear. This is getting a bit like one of those endless training discussions where nobody actually listens to each other and just quotes what they've read today on www.lactate.com or the Torygraph. Back to work for me I think.

...although the physiology pages of the Torygraph aren't what they used to be. I find the Daily Mail Sport Science supplement much more informative.

I've never been able to take the Mail seriously since they blamed falling house prices on the widespread use of recovery drinks.