After listening to the Stephanomics Radio 4 Programme yesterday morning (Stephanie Flanders talks Economics), I found it very disappointing. I emailed questions to the BBC and after a few minutes was motivated to phone in my questions but the line was continuously engaged.
“Same old Same old” BBC.
They asked themselves the question – “Who do we owe all this money to?” – ‘well’, came the answer ‘To each other’. I guess that implies that Financial Institutions (Private Banks) act as Intermediaries.
No mention of the expansion of the money supply by private banks. No mention that the Financial Crisis was not caused by excessive Public Debt, that only started expanding – after the Crisis; to help Bail out the Banking System.
Two of the Questions people phoned in were:
1. Why do we need continual Growth? Isn’t that impossible?
Their response was: “It’s important to grow because that’s what most people want”. “economic growth flows from technological change ”, “transformation in Healthcare, in people’s diets… ” “GDP increased by a multiple of five”, “getting more for less or the same”. “so far we are finding more things before we run out”.
Basically – mass produced cheap goods of inferior quality for less money that need to be replaced in a short space of time creates the illusion of growth. More mass production – less local produce – cheaper price (who cares about quality), it’s fashionable to throw things away after a few weeks or months? This extends to Food – why are British people eating fake Italian Meat Lasagnes in the UK that were manufactured in France – and then wondering why there’s Horsemeat instead of Beef? Because it’s cheap.
The real reason why we need Economic Growth? – As the Private Debt Burden increases, increasing numbers of goods and services have to be sold to pay off the debt (plus interest) before wages can be paid and before profits can be registered. Expansion requires investment which increases debt, which requires more interest payments. Corners are cut in quality and longevity of products produced, as quality products take longer to design and make, require higher quality materials and have the added disadvantage of lasting longer so that repeat sales do not occur for many years. Quick turnarounds are required. Make ‘em, sell ‘em, wait for them to break then make and sell some more. A need to increase economic efficiency requires a downward pressure on wages – in some cases this can be achieved by relocating to other countries where wage demands and union strength is weak. This requires increased demand for oil – which increases oil use and reduces availability, increasing the price of oil. The increased cost of oil increases private consumption of oil products which increase GDP on one side of the equation, while reducing GDP on the other as Imports have to be increased. Unless a cheap source of oil is found. Note that GDP is measured in units of currency, which is an abstract invention loosely related to goods and services and continually manipulated and free to vary in value in terms of actual physical goods, and completely under the control of Private Lending Institutions – not the public through it’s Parliament.
2. Why wasn’t the £375 billion just given to the public rather than Banks?
Surprisingly they didn’t say ‘because by giving it to the Banks, banks can then expand the money supply to help the economy using the Multiplier Effect’.
They said “because Helicopter drops by Government’s printing money is very inflationary”.
I thought that was the point of QE – to reverse the deflationary trend of a declining money supply. No wonder those who still believe in the BBC as an authority on Economics are totally confused and baffled by the subject.
No mention of Private Banks expanding the money supply and directing this into Housing and Speculative investments.
When asked “Have any Economists lost their Jobs due to the Fact that they failed to predict the oncoming Crisis”, they answered: Well no, because Macroeconomics is very difficult and although we’d all love to predict the Future – the fact is that it just isn’t possible. You know, Stuff Happens!
They forgot to mention that Professor Steve Keen and many others, had predicted the Future because they looked at the accelerating debt and the House Price to Average Income ratios. People did predict the Financial Crisis back in 2006 and were laughed at on live TV. They were labeled as “Doom Merchants” and told that they didn’t know what they were talking about.
Once again the BBC have stumbled about and tripped over themselves and fallen flat on their faces with the sound of a massive clatter of breaking metal and glass – again?!
In fact, I remember buying a book in 2005 with the Title: “Boom Bust: House Prices, Banking and the Depression of 2010“ by Fred Harrison @2005. Maybe mainstream Economists found the Title too vague?
Why did I bother buying a Book about a possible Depression? – because I didn’t understand why House Prices were rising so much in 2005, and continued not to understand it right up until PositiveMoney researched the truth. Then I understood it. My MP still doesn’t – indicated by his reply to one of my letters to him on the subject.
Both excellent books providing the answers.
I am beginning to believe that BBC Editors live within a glass bubble – where Time and Reality are filtered out or distorted into a different parallel Universe. That’s the only rational explanation I can come up with as to why the BBC still don’t produce informative programmes on Economics, despite the overwhelming information on the subject currently available to them.