Tuesday, November 25, 2008

Darling's Pre-Budget Fiasco

The pre-budget report is the most ill-thought through, botched and misguided piece of economic mumbo jumbo, I have ever seen. It will fail on every count. It also ignores completely the natural corrective forces of free markets.

When demand crashes, cash-flow becomes king and profit is for another day. To survive stocks must be moved almost at any cost to keep the cash flowing. This leads to a natural reduction on prices to a level that re-ignites consumer interest and increases demand. That is the beginning of a revival.

The government should have concentrated on measures designed to reduce costs to business like a reduction in fuel costs that impact throughout the economy, making goods cheaper and therefore improving profit margins.

The only other thing it had to do was stabalise the banks and make them lend.

Tax cuts funded by higher debt make no sense at all. There is not an ounce of savoir faire or common sense in anything Mr. Darling announced today. All he has achieved is more pain tomorrow. Pathetic

Saturday, November 22, 2008

Why Poverty Matters

On a sugar plantation in Brazil a worker gets approximately £5/day for cutting 4 tons of cane in hot, suffocating, humid, snake infested conditions. This is slave labour in all but name and there are millions working long hours for less all over the World.

Who amongst us could work in these conditions and who would want to for such meagre reward?

If one wants to increase global demand and boost economic growth, then the first thing one needs to do, is start paying a fair price for labour, thereby increasing the purchasing power of the poor.