Neoliberalism, Brexit (and Bernie)

boing
42

I cannot believe my eyes are reading this. Are you serious? Is s/he serious? I do think they are and will continue to take votes from labour but let’s not forget their great and glorious leader’s student days - Nigel Farage schooldays letter reveals concerns over fascism – Channel 4 News

I agree with charles stross…

I’ve been saying a while that when fascism comes to Britain it will be wearing a tweed jacket and a cheeky grin, holding a pint of beer in one hand and a noose in the other.

http://www.antipope.org/charlie/blog-static/2016/06/the-unspeakable-truth.html

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43

Several observations.

First an experiment.

Take out some paper. Write on it the following.

I. Humbabella, owe Humballa 1 trillion dollars, signed Humbabella.

There you are, you are a trillionaine. You have an assets worth lots of money.

Same as the CPP, the UK NI fund, US SS. They are very rich. The governments owe themselves the money, and that makes the ‘assets’ valuable. Just as you are a trillionaire.

What’s the issue? You select the boundary of the system and exclude the bits that don’t your point. Just assets, ignore the debt. The big picture is different.

Now lets carry on, assume that its real money. 30 bn for the UK. 90 bn spending a year. Hmm, assets gone in under 4 months.Not looking like enough cash since there are 18 year olds who will be claiming a pension in 100 years.

So what numbers do you need? There are four.

First two are income and expense. They are available in the UK to the nearest pound. No problem with those in terms of accuracy.

Next two, assets and liabilities are the balance sheet.

You’ve given the assets and they are ball park correct given the asumption you can loan to yourself and make something valuable.

So where’s the other number? The liabilities. GAAP or FRS102 the account standard number is fine.

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I’ve been wondering about this… a universal income is one thing that’s really bubbled up as a workable solution to our collective problems. Interestingly, plenty of libertarians and even the godfather of neo-liberalism, Milton Friedman was on board with this thing, which you’d think they’d be against. But is this because it would make sure we all are able to keep ourselves afloat, while the state continues to be dismantled or if it’s about shoring up the consumer economy? the benefits seem obvious to us all, but I wonder if there are some drawbacks that we’re not understanding quite yet. Will this work, for example, without a solid regime of economic regulation of some kind on things like food, clothing, healthcare, and housing, which restricts the costs of what you rightly point out are human rights? What happens if the costs of housing/food/etc spiral out of control, even with a basic income - does the basic income continue to rise and does this put a strain on the tax base? Are the people promoting this also in favor of wide-scale deregulation or do they see both as part of the solution? Why not widespread access to the things we consider human rights rather than to $$$$ itself?

Honestly, we’re only going to see how it works when we get a wide-scale experiment. Switzerland just voted that down, so we’ll have to see how some of these other instances of trying this out actually work out in the real world. It’s pretty theoretical at this point.

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45

“None of the scenarios depict have to come to pass.”

It’s been all of 4 days, and the UK hasn’t yet actually started the process to leave the EU so none of the actual things that will cause these problems have taken place yet. And the pound has still dropped to its lowest value vs the dollar in 30 years. British stocks are plummeting, and the effects are being felt even in the US. While some of that is clearly panic in the financial sector, the effects are already real. And as I noted the effects won’t just be economic. There are far more concrete, practical political and diplomatic effects. The status of the border between Northern Ireland and the Republic, as well as all of those cooperative programs that ran via the EU are in question. The disposition of Gibraltar and the agreements that have control split are in question. Scotland is very likely to leave should they bring it to a Vote on Independence. And there are real consequences to 1/3 of your landmass and a huge chunk of your population leaving your nation en mass. There are thousands of UK citizens living abroad who now cannot plan, or even know if they can or how they can stay (and the reverse for EU citizens in the UK). Hate crimes have spiked in the UK. There will be actual, real, human costs here. Apart from whatever else your hearing about.

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46

Yup. This is one of the most disturbing aspects of the whole clusterfuck, it seems to be open season on immigrants or basically anyone of non-white skin. The rock has been lifted and all the cockroaches are scurrying out.

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47

Okay, you actually don’t understand how pensions work.

First of all, I didn’t ignore debts, I refuted your bizarre claim that they have zero assets. I have an asset (a house) and a debt (a mortgage). The fact that I have a roof over my head at night means they don’t just cancel out.

Second, let’s not forget your point was that interest rates didn’t matter because they had zero assets:

But the same easily googlable sites that told me the assets held by a few national pension plans also told me how much interest they were earning. Check it out: CPPIB.

Look at the pie chart. 13.2% of those assets are real estate. That’s $36.8B in real estate.

If I could write myself an IOU for $1T and earn 6.8% on it, I’d be writing it out quite quickly. If I could write myself an IOU for $1T and end up with 13.2% of that in real estate I’d be right on it.

I didn’t say they were solvent. In fact, above, when I said they were ponzi schemes I think I very directly stated that I did not think they were viable in the long term. But how viable they are depends on the interest rate. You tried to deny that and you were wrong.

I believe CPP’s unfunded liability is getting close to $1T. They still own real estate and they still earn interest on it.

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48

Yeah, this is why libertarians like the idea of basic income. They think it would be better if, rather than creating a single-paying medical system, the government just gave everyone the money they would have spent doing that and let the market provide the solution. Of course for them the point is to not have other social programs.

I’m mixed on the idea of basic income. It has to be part of a larger policy. When people have done trials it seemed like just giving homeless people money so they can get a place to live is the most cost effective housing plan. But we still live in a society where the greatest accomplishment is to be able to lord it over someone who is poorer than yourself. We’ll just find other ways of making some people low so we can feel big.

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49

The Utah solution of giving the homeless housing also seemed to work.

But yeah… on the surface, this seems like a great solution to our current set of problems, but then if you think about the complexity of the problems we’re facing (regarding homelessness, access to healthcare, food, clothing, etc), I’m not sure a basic income alone is going to cut it.

[ETA] We have, through superior forms of consumption - not just nicer stuff, but healthier, more ethical, more environmental consumption… Such as:

2004-10-19-cg0214dogood.gif720×522 59.4 KB

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50

I think the public sector should keep doing what the public sector does well (which is a lot of things). But right now we have a lot of wealth to go around and we have a system of laws that allows some people to exercise control over that wealth for some reason. To work within the libertarian framework, why the hell would I, as a democratic citizen, agree to a law that says I can’t kill rich people and take their stuff unless they are giving me something in return? It’s pretty obvious that law is considerably better for them than it is for me.

Well I only partially buy that. If I blame other people for doing what they can afford to do then I’m being a smug asshole, but if I decide to allocate purchasing power to something like reducing agony experienced by animals then I don’t see how that’s especially propping up consumption. To reduce consumption you might not drive, but you can’t not eat.

Sure, it’s taking the power allocated to me by a society that thinking pushing papers around ought to be more rewarded than caring for children and deciding to use it for an end that I think is worthy. I feel very uncomfortable being told by my paycheck that my opinion is worth more than other people’s.

Still, I think that argument made by that comic buys into neo-liberal everyone for themselves thinking. The idea that a person only buys ethical things to make them feel good. They could have spent $5 on beef and instead they spent $10, so they must have gotten a full $5 of personal satisfaction out of it or they wouldn’t have done it. It’s the same reasoning that justifies paying those childcare professionals less - and all caring professions less. People do things for a lot of reasons. Crass personal gain is one factor but not the only one, but people really do things to be kind or generous.

I mean, what if instead of spending the extra money on more expensive meat, you gave that money to a charity? You’re just buying yourself that same satisfaction. Give it to a homeless person? Still it’s all about you. So you’re no better than a hedge fund manager buying himself a gold plated yacht. I’m not willing to completely give up on my ability to discern kindness from selfishness.

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51

I suppose you could argue that part of it might not have happened if Brexit had been predicated on lefty isolationist tendencies ala Bernie. But that sort of ignores the long standing existence of a racist authoritarian far right in the UK. And shit, people have been warning about that (and effectively what’s just happened) for decades. So I think that’s a situation of “less” rather than it not happening or going away with a leftward swing.

A lot of the rest of it is completely out of anyones control. In regards to Ireland’s economic ties. If the UK leaves those get borked, one way or the other. There’s been talk of bi-lateral bridge deals or special agreements in the press. But on the face of it that’s not possible, economic and trade relations for EU countries go through the EU as a whole. There’s no mechanism for bi-lateral deals between outside nations and a single member, and moves like that would sort of defeat the purpose of the thing. The border stuff is, again, entirely based on both nations being EU members, EU law, and agreements. Take those away and you absolutely have to start over, and an isolationist UK is unlikely to want it to remain an open border with freedom of movement and so on and so forth. Regardless of why you leave the UK or what you do after all those farm and development subsidies from the EU go away, and you can’t some how negotiate for them to remain. So they go away, until or unless the UK decides to offer something similar. In the past they’ve been unwilling or unable to do so. Especially where Northern Ireland And Scotland are concerned.

These aren’t issues you can ignore, they happen one way or another and there will be damage and uncertainty even if there’s a 1-1 replacement from within.

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52

So… when precisely did we start calling libtertarianism neoliberalism?

53

Since Ayn Rand and Milton Friedman?

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54

Oh I do.

First lets take how both funded and unfunded pensions work.

Step 1

Mr X pays the pension scheme 10K. If the pension scheme prices that correctly, then the pension scheme has an asset of 10K, the cash, and a liability, the pension of 10K.

Anything incorrect so far? That applies to both funded and unfunded.

Step 2

Now lets concentrate on those state pension set ups.

The state spends the cash. For most of the time, they just used it to pay people they didn’t owe. The result is that the asset goes to zero, the debt still stays. Mr X is still owed a pension. That’s been going on for tens of years, and you seem to be saying, nope, there are no liabilities.

I believe CPP’s unfunded liability is getting close to $1T.

On what basis? Assets don’t affect the liabilites. Completely separate calculation.

So for CPP, where’s a link to the balance sheet with liabilities and assets. Interested because all the other socialists ponzi’s leave them off.

It’s back to the booking. When you spend the cash, what’s on the other side? Hmm, can’t be an asset, can’t be the liability. Answer its tax payer’s equity and its negative. Big time negative.

If I could write myself an IOU for $1T and earn 6.8% on it,

You can’t

myself an IOU for $1T and end up with 13.2% of that in real estate I’d be right on it.

You can’t.

Same as the state.

I didn’t say they were solvent. In fact, above, when I said they were ponzi schemes I think I very directly stated that I did not think they were viable in the long term.

At least you aren’t making that error.

Nope, they are ponzi’s, socialist ponzi’s because they redistributed the cash. Can’t be capitalist.

So what information do you need to know to tell if a scheme is solvent or not?

What information to tell if its substainable?

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I planning on running in the general election with the intention of causing the breakup of both entities. Let those areas who want out of the EU leave and those who don’t want out to stay in.

There is not a unified England or United Kingdom anymore, It’s time to put them out of their misery.

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56

Neoliberalism isn’t libertarianism though. It very specifically refers to an economic model. Effectively it’s a shifty way of referring to modern forms of laissez faire capitalism. So as not to bring up disturbing connotations of child labor and Pinkerton’s smashing union heads. If there’s a major difference there it’s that the neoliberal position is that there should be government involvement in the market. But only in so far as it exclusively benefits big business and the finance sector. Who will then magically shower wealth on those boot strap pulling poors. Because reasons?

While modern right wing libertarianism has completely embraced (and seems mostly concerned with) the neoliberal economic model. The two aren’t synonymous. Libertarianism covers a lot more topics than just economics, and neoliberalism is really only concerned with non-ecconomic topics in so far as they might effect the bottom line.

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57

I don’t know offhand, and it’s not important to me to do the research today. However, if you try to calculate the present value of future benefits for past contributions only, you get a big fat error because math doesn’t work that way.

It sounds like it’s important to you to prove that programs that lift seniors out of poverty are bad and doomed and useless. In fact, while opponents like to wail about how Social Security is on the brink of bankruptcy, the actual situation is that if nothing changes, the system will be forced to cut benefits by about 30%, forty years from now. Again, if nothing changes. I am willing to bet my retirement that in the next 40 years (actually more like 15 for me) a government will be elected that will adjust things to prevent even that rather mild crisis.

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(I’m tired and cranky and after reading my post, I’m apparently in a ranting sort of mood, don’t take my rant as a rebuttal :smile:)
Yesterday, I went to see “Independance day 2”, (yes, this is relevant to the point I want to make). In it, 20 years have passed since the world defeated the aliens and the future is bright, no more hunger, no more war… And everybody has enough money!

That’s when I knew the movie was going to be crap.
There are people in this world who have more money than they could spend in two lifetimes and they still don’t have enough money.
There is never enough money for anybody, let alone everybody .

If Iphones are currently subsidized in part by cheap Chinese labor, does giving a US resident a living wage also mean giving a Chinese factory worker an unfair wage?
Or does a universal income come with a no iPhone clause?

I do think the current system can get better, but it can’t possibly become fair if it’s fueled by inequality, and the current financial system in place was built, piece by piece, to handle scarcity. The law of supply and demand needs scarcity to be as fair as possible. Otherwise, people starving and dying because they lack money and not because food and medicine are scarce (and money is the arbitrary metric used to ration those resources) is just plain psychopathic.

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However, if you try to calculate the present value of future benefits for past contributions only, you get a big fat error because math doesn’t work that way.

===================

That’s exactly how you calculate the actuarial value.

The present value of the expected future cash flows.

It sounds like it’s important to you to prove that programs that lift seniors out of poverty are bad and doomed and useless

First. Is the system sustainable? If not then its going to push the old into poverty because it won’t pay them.

Second,the debt and the value of the payments is what the current system delivers. If you then compare that against a funded system you can also test to see if the system you think is good is bad or good.

For example, in the UK the payments in for Mr Median are £5 k a year of value [today’s value of money] for 47 years. Mr Median’s life exectancy at 65 is 18 years, and he gets 6K a year [today’s value again]

That’s 108K of value back fro 235K of payments in.

In the UK the pensions debts between 2005 and 2010 almost quadrupled. They increased at 636 bn a year, which is about the same as current total taxation.

So its completely unsustainable and that means poverty.

Current payouts are crap. The capitalist solution would have given vastly more comfortable retirements. 500% of the current income in the UK.

It also would have gotten rid of income inequality. People get no assets for their money. In fact they get debt.

The young are shafted.

And to cap it all,you think 30% cuts [which is highly optimistic even for the US], is a good system

Even in the last 5 years in the UK, the value of the pensions has been cut by 20%, but the debt is still bigger. The rate of increase in the debt exceeds the cuts that poltiicians can make. So it will collapse.

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nickle nickle
June 27
So how much does your social security system owe for pensions?

Sorry I missed one bit.

I did ask this question because I’m interested in the US numbers.

How much does SS owe?

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"There is a lot of finger-wagging on Twitter and elsewhere about how the exit
voters have just triggered economic self-destruction. House prices will
fall, savings will be diminished, the pound will weaken, jobs will dry
up. Well, that’s all true. Except. Not everyone benefits from the insane
property market. Not everyone has savings. Not everyone benefits, as
the City does, from a strong pound. Manufacturing has suffered from that
priority. Large parts of the country have been haemorrhaging jobs for
years. ‘The economy’ is not a neutral terrain experienced by everyone in
exactly the same way. "

Great article for you to read: http://salvage.zone/online-exclusive/union-jacks-flutter-over-a-widening-gyre/