Re: Clegg and the economy : Fri Jan 25, 2013 8:48 pm  

SaintsFan wrote:

:lol:

What a delightfully Christian response.

Care to tax your brain by actually coming up with a reasoned explanation of why those comments are so risible?

Re: Clegg and the economy : Fri Jan 25, 2013 10:34 pm  

Mintball wrote: What a delightfully Christian response. Care to tax your brain by actually coming up with a reasoned explanation of why those comments are so risible? They all appear to reprising the Anne Elk sketch

Mintball wrote: What a delightfully Christian response. Care to tax your brain by actually coming up with a reasoned explanation of why those comments are so risible? They all appear to reprising the Anne Elk sketch

Re: : Fri Jan 25, 2013 10:59 pm  

Andy Gilder wrote:

Goalposts on wheels. Neat trick.

So are you confident that the Q1 2013 growth figures will positive, yes or no? Otherwise we will be in a triple dip, despite your insistence that we're not.

It will be due to "one off factors" - the snow.

And Osborne will say the triple dip means its even more crucial than ever to stick to his plan.

Re: Clegg and the economy : Fri Jan 25, 2013 11:11 pm  

Danny Alexander on Daily Politics A graphic example of the Anne Elk effect

Danny Alexander on Daily Politics A graphic example of the Anne Elk effect

Re: Clegg and the economy : Sat Jan 26, 2013 7:38 am  

cod'ead wrote: Danny Alexander on Daily Politics A graphic example of the Anne Elk effect Excellent, its always someone elses fault. Neil actually asks the question that I raised last night - "You knew what the problems were when you formed the coalition..." The answer ? "We relied on forecasts by economists which were wrong" Not, "We're making this up as we go along but really there is only this one idea of what to do" And of course you can always rely on "We inherited the biggest ...." Still they struggle for ways to explain that as fresh faced graduates who haven't even started to shave yet they shouldn't have applied for the job in the first place, but hey, its good money...

cod'ead wrote: Danny Alexander on Daily Politics A graphic example of the Anne Elk effect Excellent, its always someone elses fault. Neil actually asks the question that I raised last night - "You knew what the problems were when you formed the coalition..." The answer ? "We relied on forecasts by economists which were wrong" Not, "We're making this up as we go along but really there is only this one idea of what to do" And of course you can always rely on "We inherited the biggest ...." Still they struggle for ways to explain that as fresh faced graduates who haven't even started to shave yet they shouldn't have applied for the job in the first place, but hey, its good money...

Re: Clegg and the economy : Sat Jan 26, 2013 7:45 am  

"Do you accept that the deficit will be higher this year than last ?"

"Its all the OBR's fault..."

"Why don't you fire the OBR ?"

Re: Clegg and the economy : Sat Jan 26, 2013 1:59 pm  

JerryChicken wrote:

Excellent, its always someone elses fault.

Neil actually asks the question that I raised last night - "You knew what the problems were when you formed the coalition..."

The answer ? "We relied on forecasts by economists which were wrong"

Not, "We're making this up as we go along but really there is only this one idea of what to do"

And of course you can always rely on "We inherited the biggest ...."


Still they struggle for ways to explain that as fresh faced graduates who haven't even started to shave yet they shouldn't have applied for the job in the first place, but hey, its good money...

The one good thing Osborne has done IMO is bringing in the OBR to be an independent body that makes economic forecasts. However, the line of "well the forecast was wrong" is a cheap one because you have to understand any economic forecast of the future in the context it is made: it is based on making a model out of past information, with all the information available to the forecasters at the time. You know there will be events in the future ('random shocks') that you can't foresee, that will affect the economy for better or for worse - so a forecast aims to make it so the prediction isn't biased either on the upside or the downside, ie there is as much chance of a positive random shock, as a negative random shock.

If a forecaster is doing their job well, then over time, they should get it wrong as much by overestimating, as by underestimating. If they are persistently overestimating, then they aren't estimating accurately, there is something wrong in their model.

But also some people have unrealistic expectations of an economic forecast. You can no more see into the future than Mystic Meg - all you can do is give a best projection based on all the information available at the current time, so that it can guide policymakers. Firms do the same when they forecast their sales and margins through the year - if a firm was to forecast £10 million profits for the year, and then two months down the line, a scandal breaks where their product is shown to be unsafe, their profits will be smashed....but there would be no point blaming the forecasters for getting it wrong, they should blame the product control unit.

The OBR made its first forecast in June 2010 just after the election, and their view in the light of all the information available at the time, was that the UK economy would grow 2.6% in 2011 and 2.8% in 2012. The actual growth rates were 0.9% in 2011 and 0.0% in 2012.

The government's spin can be "well the forecasters got it wrong" but if they actually believe the OBR to be unfit for purpose they should close it down and stop spending tax payers money on it. The alternative explanation is that, the UK's performance should have been more in line with that forecast by the OBR in 2010, and the government's policy decisions are related to why it has been so disappointing.

Re: Clegg and the economy : Sat Jan 26, 2013 3:02 pm  

sally cinnamon wrote:

The one good thing Osborne has done IMO is bringing in the OBR to be an independent body that makes economic forecasts. However, the line of "well the forecast was wrong" is a cheap one because you have to understand any economic forecast of the future in the context it is made: it is based on making a model out of past information, with all the information available to the forecasters at the time. You know there will be events in the future ('random shocks') that you can't foresee, that will affect the economy for better or for worse - so a forecast aims to make it so the prediction isn't biased either on the upside or the downside, ie there is as much chance of a positive random shock, as a negative random shock.

If a forecaster is doing their job well, then over time, they should get it wrong as much by overestimating, as by underestimating. If they are persistently overestimating, then they aren't estimating accurately, there is something wrong in their model.

But also some people have unrealistic expectations of an economic forecast. You can no more see into the future than Mystic Meg - all you can do is give a best projection based on all the information available at the current time, so that it can guide policymakers. Firms do the same when they forecast their sales and margins through the year - if a firm was to forecast £10 million profits for the year, and then two months down the line, a scandal breaks where their product is shown to be unsafe, their profits will be smashed....but there would be no point blaming the forecasters for getting it wrong, they should blame the product control unit.

The OBR made its first forecast in June 2010 just after the election, and their view in the light of all the information available at the time, was that the UK economy would grow 2.6% in 2011 and 2.8% in 2012. The actual growth rates were 0.9% in 2011 and 0.0% in 2012.

The government's spin can be "well the forecasters got it wrong" but if they actually believe the OBR to be unfit for purpose they should close it down and stop spending tax payers money on it. The alternative explanation is that, the UK's performance should have been more in line with that forecast by the OBR in 2010, and the government's policy decisions are related to why it has been so disappointing.

Possibly the most sensible post I've read on here.....Adding to it, you can use the farmer's field analogy to the situation.

If somebody is given a large empty field and a large bag of seeds with the potential to grow 2,000 cabbages, then its entirely acceptable that a forecaster, taking in factors like weather and overall management, can make a prediction that the farmer should be able to grow 2,000 cabbages - If 12 months down the line, the farmer only harvests 1,000 cabbages then, of course, he can try to make excuses like bad weather or bad growing conditions, but the one thing he can't blame is the original forecast.

I think what's quite apparent at present is that the Government really haven't the foggiest how to kickstart the economy, without doing a complete U-turn on their 'austerity' policy - Sadly, no politician seems to have the balls to stand up and admit they are wrong and to begin afresh with a new policy.

Re: Clegg and the economy : Sat Jan 26, 2013 3:31 pm  

Yes that analogy is exactly right. Another observation from underachieving on those forecasts is that it shows the problem is one of demand in the economy and not supply. Those forecasts were based on an estimate of the 'output gap', ie what the UK economy is currently producing and consuming, compared to what it could produce and consume if all its resources were being used. If the problem was one of supply, ie we were not able to produce enough to meet the things people demanded, then you would see high inflation, as all the firms trying to meet the demand were fighting over having enough workers, access to capital, land etc and would be bidding each other up and driving up the prices of all those input resources. But inflation has this last year been fairly low, 2.7%. The reality is we could easily absorb a stimulus to demand and start producing more just by using unutilised resources. But its a chicken and egg situation: firms see consumers aren't spending so they are worried about investing to expand production, in case there isn't enough demand for their products. Even if they do want to take the risk and expand production, they probably need access to finance and the banks see the situation the same way and are anxious about lending. Once there was a kickstart to the economy though it becomes self-maintaining as those problems would be released once firms saw evidence of some demand. This is where government can make a difference as the first mover - some carefully targeted infrastructure spends that would increase demand for private sector goods and services, would start giving the economy some momentum. Also note that Jim O'Neill from Goldman Sachs has come out and said Osborne faces sending the UK into a lost decade. Note - not a left wing commentator, but a senior investment banker: http://www.guardian.co.uk/politics/2013 ... -austerity

Yes that analogy is exactly right. Another observation from underachieving on those forecasts is that it shows the problem is one of demand in the economy and not supply. Those forecasts were based on an estimate of the 'output gap', ie what the UK economy is currently producing and consuming, compared to what it could produce and consume if all its resources were being used. If the problem was one of supply, ie we were not able to produce enough to meet the things people demanded, then you would see high inflation, as all the firms trying to meet the demand were fighting over having enough workers, access to capital, land etc and would be bidding each other up and driving up the prices of all those input resources. But inflation has this last year been fairly low, 2.7%. The reality is we could easily absorb a stimulus to demand and start producing more just by using unutilised resources. But its a chicken and egg situation: firms see consumers aren't spending so they are worried about investing to expand production, in case there isn't enough demand for their products. Even if they do want to take the risk and expand production, they probably need access to finance and the banks see the situation the same way and are anxious about lending. Once there was a kickstart to the economy though it becomes self-maintaining as those problems would be released once firms saw evidence of some demand. This is where government can make a difference as the first mover - some carefully targeted infrastructure spends that would increase demand for private sector goods and services, would start giving the economy some momentum. Also note that Jim O'Neill from Goldman Sachs has come out and said Osborne faces sending the UK into a lost decade. Note - not a left wing commentator, but a senior investment banker: http://www.guardian.co.uk/politics/2013 ... -austerity

Re: Clegg and the economy : Sat Jan 26, 2013 5:47 pm  

sally cinnamon wrote: Yes that analogy is exactly right. Another observation from underachieving on those forecasts is that it shows the problem is one of demand in the economy and not supply. Those forecasts were based on an estimate of the 'output gap', ie what the UK economy is currently producing and consuming, compared to what it could produce and consume if all its resources were being used. If the problem was one of supply, ie we were not able to produce enough to meet the things people demanded, then you would see high inflation, as all the firms trying to meet the demand were fighting over having enough workers, access to capital, land etc and would be bidding each other up and driving up the prices of all those input resources. But inflation has this last year been fairly low, 2.7%. The reality is we could easily absorb a stimulus to demand and start producing more just by using unutilised resources. But its a chicken and egg situation: firms see consumers aren't spending so they are worried about investing to expand production, in case there isn't enough demand for their products. Even if they do want to take the risk and expand production, they probably need access to finance and the banks see the situation the same way and are anxious about lending. Once there was a kickstart to the economy though it becomes self-maintaining as those problems would be released once firms saw evidence of some demand. This is where government can make a difference as the first mover - some carefully targeted infrastructure spends that would increase demand for private sector goods and services, would start giving the economy some momentum. Also note that Jim O'Neill from Goldman Sachs has come out and said Osborne faces sending the UK into a lost decade. Note - not a left wing commentator, but a senior investment banker: http://www.guardian.co.uk/politics/2013 ... -austerity What would you suggest to be a suitable infrastructure projects? please don't say build some houses or roads!!

sally cinnamon wrote: Yes that analogy is exactly right. Another observation from underachieving on those forecasts is that it shows the problem is one of demand in the economy and not supply. Those forecasts were based on an estimate of the 'output gap', ie what the UK economy is currently producing and consuming, compared to what it could produce and consume if all its resources were being used. If the problem was one of supply, ie we were not able to produce enough to meet the things people demanded, then you would see high inflation, as all the firms trying to meet the demand were fighting over having enough workers, access to capital, land etc and would be bidding each other up and driving up the prices of all those input resources. But inflation has this last year been fairly low, 2.7%. The reality is we could easily absorb a stimulus to demand and start producing more just by using unutilised resources. But its a chicken and egg situation: firms see consumers aren't spending so they are worried about investing to expand production, in case there isn't enough demand for their products. Even if they do want to take the risk and expand production, they probably need access to finance and the banks see the situation the same way and are anxious about lending. Once there was a kickstart to the economy though it becomes self-maintaining as those problems would be released once firms saw evidence of some demand. This is where government can make a difference as the first mover - some carefully targeted infrastructure spends that would increase demand for private sector goods and services, would start giving the economy some momentum. Also note that Jim O'Neill from Goldman Sachs has come out and said Osborne faces sending the UK into a lost decade. Note - not a left wing commentator, but a senior investment banker: http://www.guardian.co.uk/politics/2013 ... -austerity What would you suggest to be a suitable infrastructure projects? please don't say build some houses or roads!!