Britain's Economy Is a Disaster and Nobody Is Entirely Sure Why

[KRonn]

Third, the government needs to create more competition in domestic banking, as the Vickers Commission has bluntly and rightly advocated. The current British banking oligopoly creates distortions—for the world's eighth largest economy to have essentially only five domestic lenders (plus one very large mutual doing mortgage loans) is extraordinary and, as liberal economics would tell you, distortionary and inefficient. 

This truly seems bizarre, to have so few lending institutions. How could things have gotten to that point?

http://en.wikipedia.org/wiki/Thatcherism

Interesting read, thanks.   

[mongers]

Third, the government needs to create more competition in domestic banking, as the Vickers Commission has bluntly and rightly advocated. The current British banking oligopoly creates distortions—for the world's eighth largest economy to have essentially only five domestic lenders (plus one very large mutual doing mortgage loans) is extraordinary and, as liberal economics would tell you, distortionary and inefficient. 

This truly seems bizarre, to have so few lending institutions. How could things have gotten to that point?

http://en.wikipedia.org/wiki/Thatcherism

Interesting read, thanks.   

Well I'm not saying it's the sole cause, but it's a major factor in many of the economic and political changes in the UK over the last 30 years . 

And it represents something some Americans might find distasteful, an avowedly idealogical campaign to change the foundations of a society.

[MadImmortalMan]

Wow, that article says both Thatcher and Reagan were neoliberal.


I highly doubt either of them would agree.

[Razgovory]

Wow, that article says both Thatcher and Reagan were neoliberal.


I highly doubt either of them would agree.

Oh I don't know, I imagine that Thatcher would agree to pretty much anything you said to her now a days.

[MadImmortalMan]

Wow, that article says both Thatcher and Reagan were neoliberal.


I highly doubt either of them would agree.

Oh I don't know, I imagine that Thatcher would agree to pretty much anything you said to her now a days.

She would disagree with me on most everything. 


Edit: We would agree on our admiration for Yes, Minister. Even the right wingers can agree on that. 

[Razgovory]

Probably not.  She's senile now.  You can probably get her to say anything.

[Josquius]

1930 and 2008 look too like on the graph

It's no accident this era of zero growth has coincided with an era of austerity. Despite entering office with borrowing costs at 50-year lows, the Cameron coalition decided the government deficit, and not the growth deficit, was the chief threat to future prosperity. It raised taxes and cut the growth of spending, but did so with little regard for what constituted smart cuts and what did not.

Just mayyybeeeeee a small part of the reason could be here ne?

[Gups]

I don't understand the contention that there are only a handful of lending institutions in the UK. There are literally hundreds of institutions that lend money to businesses and individuals. Does it mean something other than that?

[Tamas]

Just watched the Hannan video. The leaps of logic he undertakes at the end are cringe worthy. If somebody used that argument over here they'd be shot down so fast that you wouldn't be able to rescue the wreckage.

the stock exchange bombing thing? yes. Otherwise, he made some very good points, good enough to not grumbler them away by only mentioning the end

[Tamas]

I have no idea who he is.  What is the problem with him?

He's a Tory MEP and blogger for the Telegraph's blogs (as Private Eye described them 'sheltered housing for the incurably insane'). He makes a very good argument - he's very Oxford union - but basically he's a bit mad, and EU-obsessed, politically.

He'd be on the far-right of the Republican party on most issues. But it's like if you gave Michele Bachmann his accent and style of education she'd probably sound relatively convincing

so  he is a religious fundamentalist, being against gays, light drugs, and general personal freedom? wow!

[The Larch]

Just watched the Hannan video. The leaps of logic he undertakes at the end are cringe worthy. If somebody used that argument over here they'd be shot down so fast that you wouldn't be able to rescue the wreckage.

the stock exchange bombing thing? yes. Otherwise, he made some very good points, good enough to not grumbler them away by only mentioning the end

That was the worst part, yes, but not the only one that I'd object to. Talking off the top of my head (I watched the video yesterday and can't watch it again right now to go over his exact words), I find it slightly ridiculous his claim that it was excessive regulation that forced out smaller financial companies and created the "too big to fail" banks that created the whole mess. And to boast now about being right regarding the bank bailouts is abusing hindsight, and yet he treats bank failings as if it was small potatoes.

[Tamas]

IDK about small banks, but you can't really deny, that big banks turned the markets into casinos precisely because they knew they had nothing to lose. that should stop. It should have stopped in 2008.

But the point I agree the most is how this whole shit is used to discredit the free market, where as, regardless of how good an idea a truly free market would be, the crisis did not happen under a truly free market, and the bailouts sure as hell were not free market actions.

[Valmy]

I have no idea who he is.  What is the problem with him?

He's a Tory MEP and blogger for the Telegraph's blogs (as Private Eye described them 'sheltered housing for the incurably insane'). He makes a very good argument - he's very Oxford union - but basically he's a bit mad, and EU-obsessed, politically.

He'd be on the far-right of the Republican party on most issues. But it's like if you gave Michele Bachmann his accent and style of education she'd probably sound relatively convincing

so  he is a religious fundamentalist, being against gays, light drugs, and general personal freedom? wow!

Yeah unless he is praying the gay away I call BS on Sheilbh's Bachmann comparison.  He may be a little nutty on the EU stuff I don't know but that is hardly a fair comparison.

[Valmy]

That was the worst part, yes, but not the only one that I'd object to. Talking off the top of my head (I watched the video yesterday and can't watch it again right now to go over his exact words), I find it slightly ridiculous his claim that it was excessive regulation that forced out smaller financial companies and created the "too big to fail" banks that created the whole mess. And to boast now about being right regarding the bank bailouts is abusing hindsight, and yet he treats bank failings as if it was small potatoes.

Um what he was saying is it SHOULD be small (well...smaller) potatoes when some banks fail, instead of an existential threat to an economy like it is right now in the UK.  And how is it ridiculous that excessive regulation makes it tougher for the little guy?  Of course it does, compliance is not cheap to say the least.  That does not necessarily mean that is the only reason but to say it is ridiculous seems to go against what is plainly obvious.  Surely it is not a suprise increasing the costs of doing business does indeed increase the costs of doing business.

[Valmy]

Edit: We would agree on our admiration for Yes, Minister. Even the right wingers can agree on that. 

What do you mean even right wingers agree with that?  That show basically confirms all their ideological biases.

Anyway everybody knows Thatcherism =  Not having a pathological and self destructive love of coal mines.