7 thoughts on “The financial crisis saw the UK become more equal. That was nothing to celebrate”

  1. Posted 18/11/2014 at 16:17 | Permalink

    Is the income of the top 10% in your article before or after tax avoidance ?

  2. Posted 18/11/2014 at 17:23 | Permalink

    How interesting.

    Since 2007 the poor are said to have lost £1600 pa due to the disparity between the growth of inflation and the flatlining of wages. Where I wonder has that £11200 gone, I wonder.

    House prices and the stock exchange have risen dramatically since 2007. I wonder where all that wealth has come from.

    But the statistics show there has been no transfer of wealth from the poor to the rich. Well, that’s all right then, isn’t it?

  3. Posted 19/11/2014 at 11:01 | Permalink

    waramess – I think you are confusing income and wealth. Wages have flatlined as has productivity. That is a loss of income for everybody concerned (though, of course, not those on benefits necessarily, including pensioners) and is very bad news compared with the alternative of productivity continuing to rise. Wealth – the stock – may have increaed (though whether artificially due to QE or not is for debate). Many middle class people may have suffered a fall in real incomes but seen their wealth increase (which, after stagnant share prices for many years if they have DC pensions may have been a relief).

  4. Posted 19/11/2014 at 15:54 | Permalink

    Philip
    I do understand where you are coming from but that does not hide the fact that asset inflation is not something that magically appears. It comes from another sector of society losing.

    The neat definition between wealth and income blurs when you consider one sector of society losing income through failing to keep pace with inflation and another sector of society gaining through inflating assets because, one mans assets are another mans income.

    Forget statistics because they are now so manipulated to what the politicians want you to believe: smell the coffee.

    There is no such thing as a free lunch, period. One mans gain is anothers loss, end of story

  5. Posted 19/11/2014 at 17:36 | Permalink

    that is only true if the rise in value of assets (especially shares) does not reflect higher productivity. If it does not, somebody else does lose (the people who have to buy assets at higher prices later). However, if QE does what it is supposed to do we also avoid what many feared which was a 1930s US-style catastrophe. I am not arguing about which of those things are true, merely trying to establish who gainers and losers might be. But there are not always losers when there are gainers.

  6. Posted 20/11/2014 at 16:39 | Permalink

    Philip, of course a rise in prices resulting from a productivity gain is a benefit but, if not a rise in productivity, instead an expansion of the money supply, then there are no benefits.

    A rise in house prices will result in a rise in rents which will fall on, lets call them the less well off.

    A rise in the stock market prices will result in malinvestment, particularly by lending banks. Just consider the transfer of wealth that has taken place by the many having to support the malinvestments of the banks last time.

    There is nothing benign about “wealth” brought about by the expansion of the money supply and it is a Monetarists delusion that it has avoided depression akin to 1930. It has done no more than deferred the depression.

    Milton Friedman was wrong. It was not the tight monetary policy of the Fed that caused the depression it was principally the transfer of wealth from the poor to the rich. And here we go again.

  7. Posted 21/11/2014 at 01:52 | Permalink

    An effective alternative to QE which is also fair is ‘Helicopter Money’

    Printing money for tax cuts, investment and distribution without increasing the deficit.

    QE is just theft by the rich, the banks and foreign ‘investors’

    These papers explain how Helicopter money works:

    http://willembuiter.com/helifinal.pdf

    http://www.economonitor.com/blog/2013/12/helicopter-drops-and-quantitative-easing-are-different/

    http://mainlymacro.blogspot.co.uk/2014/10/helicopter-money.html?m=1

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