March 24, 2008

The stupid party lives up to its name

Wow, the Stupid Party appear to be trying to live up to its name. When the very first paragraph setting up the argument is a fallacy then you know that the argument is going to go seriously wrong.
I believe all the proposed plans for welfare reform will fail because they do not tell us how we are to create the one million plus jobs needed to end welfare dependency. This is because the British economy no longer produces the jobs that the unemployed need.

So the hundreds of thousands of eastern europeans that have (thank the spaghetti monster) decided to come to this country are doing what exactly? Sitting around on the beach basking in our wonderful weather? No, they are working. There are jobs for people who are willing to actually work. Eastern europeans are, British born welfare dependents are not. That is the problem a lack of willingness to work not a lack of work, but on with the rest of the article.
Well, for a start we are not making the goods to supply our domestic market anymore, we are importing those goods. So a radio that could have been made in Britain is being made in China instead and a Chinaman has work while the Briton that could have made that radio remains unemployed.

There are other means of employment than manufacturing. There are all of the cleaning jobs (done by the eastern europeans), service jobs (done by the eastern europeans), agricultural jobs (done by the eastern europeans). There are the trades, such as that of the famous polish plumber, or they could get themselves educated and work their way up the value chain to something that pays even better. As no doubt the children of the eastern european immigrants will be doing.
When we have an economy that is reliant on imports it means that we have to pursue a strong pound policy to ensure that the foreign goods stay cheap. To have a strong currency we have to have higher interest rates.

Hello, this is the twenty first century calling! Anybody home? Obviously not. The government has no strong pound policy, it has no weak pound policy. the strength of the currency is handled by the markets and a good thing to. We now have a floating exchange rate and a good thing it is acting as one of the automatic stablisers on the economy. If perhaps there was some secret strong pound policy that nobody had actually noticed then you would think that should the pound start to fall, as it has done, then the Bank would increase interest rates to prop it up, as it has not done either keeping them the same or lowering them.
The answer given by politicians is because it's cheaper to buy them from abroad.

As unusual as it is in this case they are actually telling the truth. It is cheaper to import the stuff we want, and that is great. We get the stuff we want and don't have to do so much to get it.
So we get cheaper goods, but we pay for that in other ways, with unemployment, and we pay for that with higher interest rates too.

Not that again, there are jobs. They are being done. They are just not being done by those for whom sitting around and waiting for their dole money is a more attractive option. Make work more attractive and you might find more of the natives working, possibly for the eastern europeans for whom the hard work that they have already put will have hopefully helped them up the ladder.
So: What have our wonderful imports brought us?

You mean apart from wealth that our forefathers could only dream of?
Permanent mass unemployment and high interest rates or inflation. Rather a high price to pay for cheap goods don't you think?

No that would be the cost of autarchy, as demonstrated by all those that have been forced to follow that path like: Albania, Franco's Spain, Cuba, North Korea, Iraq under Sadam. Notice a pattern? That they where all monumentally shit places to live? Yes that is it, and that is why free trade is considered better than autarchy. Free trade delivers the goods, self sufficiency does not.
Already we can see that producing for our domestic market, that is having a home-market economic policy, has many advantages. The cheap Chinese radio may no longer be available but in its place we have people working, people no longer on benefit, people spending money that stays in Britain, money that British producers can use to re-invest.

Errrm, no actually not only wouldn't you have the cheap chinese radio but everybody would be so poor that it would seem like an extremely expensive luxury good thanks to the much, much greater unemployment. Like in Albania, Franco's Spain, Cuba, North Korea, Iraq under Sadam.


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