Monday, 16 November 2015

A trilogy of economic tales!


There has been a rich vein of material published recently, all of which is worth sharing, I hope that you find this informative.

I have three articles to share that feel as if they cascade down in scale, so that is how I have introduced them.

Firstly at the international level, is a report from a EU think tank, highlighting the challenges to the current capitalist model, but also focusing on social cohesion and the potentially severe impacts from inaction or weak policy around these issues.

What is really interesting about this, is that it comes to a similar conclusion about ‘Keynesian economics’ as did the MIT model run in the mid seventies on the old IBM mainframe. Whilst they use slightly different criteria (one being based on more quantitative data and the other analysis of evidence), it is remarkable that they both draw a similar conclusion!

The EU report clearly states that a business as usual approach to capitalism could effectively see it replaced by another model. Obviously the report is taking the view that some form of capitalist growth model could be maintained, I don’t really believe that so much, but the message is the same.

It also puts a clear focus on social cohesion, which is something that governments and trades unions alike need to consider. In a more individual World, governance will become much more tenuous, it is important that collectivism can still function effectively!

Second up and at the national scale is an article from The Economist, featuring areport from Adair Turner a former banking regulator.

He sets out in very clear terms why regulation is required and how free markets failed when he came into office and how they are likely to fail again!

He outlines how the flaky recovery has been founded upon past boom and bust practices and how the current recovery is fuelling the housing asset bubble.

Given that he has headed up the British Retail Consortium, amongst his roles, it is quite a refreshing surprise to find that he aligns with some of the current left wing economic policies proposed by Corbyn and his advisors. He is clearly in favour of regulatory control on debt creation and he is also an advocate for ‘peoples quantitative easing’!

Lastly and by no means least, is great local example of ‘playing by the rules’, in this instance also with esoteric objective!

Crickhowell a picturesque market town nestling at the foot of the Brecon’s has become the latest player in a game of Avoid the Tax Man!

Fed up with hearing about large corporations not paying tax in the UK, the towns independent traders got together with the local council to do something about it! They employed the same tax advisors as the likes of Starbucks and Google and went off-shore!!! Yes, they are now also depriving the Treasury/HMRC of income in the same way that large corporations do. They aren’t doing this in a spiteful way, they are doing it to try and get the loophole closed. A number of other authorities have now shown an interest, so there could become an obvious imperative to stem the offs-shore flow!!

It will be interesting to see how this pans out, but it is great to know that innovation and alternatives are gaining ground, even amongst those you might not suspect, hope lives eternal!!

Links to published articles provide additional and interesting information published by the journalists as credited.