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Ask HN: What Is Happening in the UK?

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Re: Ask HN: What Is Happening in the UK?

#161

Post by cbeach »

Nursie wrote: post #9
cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

Wow, this might be the most ideologically driven take I've seen so far. Not even all of the Tory party are this extreme in their interpretation. > "policies that mainstream pundits disagree with" That the Bank of England have had to scramble to compensate for by bringing back QE in a limited form, that previous governers of the BoE have spoken out against, that the IMF has spoken out against, that previous heads of t…

The BoE made another huge mistake by using QE during a period of temporary global inflation, and during a temporary blip in the value of the pound. QE is the worst possible strategy.

And the IMF has consistently got it wrong about the UK economy. In the past it has actually made public apologies for doing so (IMF head: "do I have to go on my knees?" regarding incorrect warnings on UK economy): https://www.telegraph.co.uk/news/politics/10884632/Do-I-have...

We have to be careful to avoid the Argument from Authority fallacy, using the IMF and BoE reaction to judge government policy. https://en.wikipedia.org/wiki/Argument_from_authority

> It's not that the wealthiest are also getting tax cuts, it's that virtually nobody else is.

When the most productive members of society got landed with a 45% tax rate in 2013, it was higher than many G7 nations, and there's no evidence to suggest it actually increased revenue. Have you heard of the Laffer Curve?

Re: Ask HN: What Is Happening in the UK?

#162

Post by cbeach »

fnimick wrote: post #18
cbeach wrote: post #10

Earlier quoted context omitted.

Oh yes, you're not wrong. Many people on the left see tax as an appropriate punishment for wealth. In their worldview, wealthy people are demonised and dehumanised. The left are convinced that wealthy people are parasitic on society. This leftwing ideology seems peculiar to me, having seen the data on who's funding public services, and who's benefiting from public services.

How can you possibly justify keeping even more of your money that you earn from profiting from the work of others, when people in need are freezing and starving? I know HN runs libertarian but this is just abhorrent.

I think you must misunderstand my situation if you think I earn money from "profiting from the work of others"?

Have you ever been a senior manager before?

If you had, I hope you'd understand that the role involves creating jobs, hiring people, promoting people and generally supporting them, mentoring and advancing their careers? Taking responsibility for any problems they cause, and ensuring they get the glory of any successes. As well as doing my regular job as a developer at the highest level. I'd never worked so hard in my life.

It was exhausting and I'd expect to be compensated richly for it. Few people would stick the job.

The more jobs created, the more competition for employees, and thus the higher wages offered. We all owe a debt of gratitude to job creators.

Re: Ask HN: What Is Happening in the UK?

#163

Post by cbeach »

mvc wrote: post #59
cbeach wrote: post #10

Earlier quoted context omitted.

Oh yes, you're not wrong. Many people on the left see tax as an appropriate punishment for wealth. In their worldview, wealthy people are demonised and dehumanised. The left are convinced that wealthy people are parasitic on society. This leftwing ideology seems peculiar to me, having seen the data on who's funding public services, and who's benefiting from public services.

It's not a punishment for wealth. Think of it like insurance of your status in the system. Your insurance premiums are proportional to the value of the stuff you want to protect. Presumably you own a house. A pension. Various other investments perhaps. All these become worthless if civil society fails and we go back to the Leviathan. It is right that you should pay a higher premium for that type of insurance than tho…

I'm not sure I get any more value from the public service than anyone else. Do I get faster service from the police? More officers assigned to protect me?

Any perks from the NHS for the wealthy? Or the same service as everyone else?

One thing I know for sure - less public money is allocated to my children (I live in the countryside) than children in urban areas, due to the funding formula.

Re: Ask HN: What Is Happening in the UK?

#164

Post by bluehatbrit »

hgdfhgfdfds wrote: post #142
pyb wrote: post #2

In a few words, PM Truss's first economic measures indicate that she's ideologically-driven and has no idea what she's doing. Namely, cutting taxes for the rich in hope that maybe some economic boost will "trickle-down" to the middle class and the poor. This idea is utterly discredited in economic circles. The UK central bank, the BoE, is forced to take measures to counteract what Truss and her government are doing !…

"This idea is utterly discredited in economic circles." I'm an economist and this is wrong. I usually see this line on on Reddit and not from any journal.

If you're going to counter someone's point y claiming to be an expert, you really need to link to some credentials. If you're not going to do that then linking to some research disproving the parent comment would also be useful. Without any of that it's just an untrustworthy claim and doesn't add to the discussion in anyway.

Re: Ask HN: What Is Happening in the UK?

#165

Post by bitshiftfaced »

yuvadam wrote: post #12

Led by the US, the entire world is in a debt spiral, and just like many of the systems that sustain modern civilization, the global economy itself is in various stages of unraveling from its unsustainable path [1] [1] - https://lookingglasseducation.com/whats-a-debt-spiral-and-is...

Led by the US in nominal, absolute terms

Re: Ask HN: What Is Happening in the UK?

#166

Post by pwinnski »

hcayless wrote: post #97
ksaxena wrote: post #32

Earlier quoted context omitted.

The bigger problem is the energy-price guarantee that Truss has announced that will put a ceiling on fuel price for consumers, with the difference born by the UK treasury - estimated outflow is more than 100 Billion pounds. This outflow is planned to be funded by borrowing, which has resulted in a weaker pound.

They really had no choice about that part. The spike (beyond their control) in energy prices was set to bankrupt hundreds or even thousands of small businesses and put many people in a situation of deciding between heat and food. The tax breaks though, were totally an own goal.

> They really had no choice about that part.

Hello from Texas, where electricity providers are free to pass on absurdly-high energy prices to customers, regardless of whether those people can afford to eat or not.

Re: Ask HN: What Is Happening in the UK?

#167

Post by Nursie »

cbeach wrote: post #161
Nursie wrote: post #9

Earlier quoted context omitted.

Wow, this might be the most ideologically driven take I've seen so far. Not even all of the Tory party are this extreme in their interpretation. > "policies that mainstream pundits disagree with" That the Bank of England have had to scramble to compensate for by bringing back QE in a limited form, that previous governers of the BoE have spoken out against, that the IMF has spoken out against, that previous heads of t…

The BoE made another huge mistake by using QE during a period of temporary global inflation, and during a temporary blip in the value of the pound. QE is the worst possible strategy. And the IMF has consistently got it wrong about the UK economy. In the past it has actually made public apologies for doing so (IMF head: "do I have to go on my knees?" regarding incorrect warnings on UK economy): https://www.telegraph.c…

> We have to be careful to avoid the Argument from Authority fallacy

Indeed, but we also have to be careful of writing off numerous opinions from multiple diverse sources in multiple countries, from politicians, economists, bankers and many other roles, as well as the actual actions of the people on the ground that have born out the criticisms, as the ill educated musings of a few 'pundits'.

> When the most productive members of society...

LOL. Seriously? I'm paid in that bracket (or I was until last year when I left the UK, and I'm now paid in that bracket somewhere else) and I don't believe for a second that we're the most productive members of society, we've just figured out ways to get people to pay us a lot. I look around at some of the unutterably useless arseholes that are on similar money and litter the offices of London, particularly in anything adjacent to city finance, and can only laugh at this ridiculous piece of libertarian orthodoxy. Most productive ... most productive at clumsily and innappropriately flirting with the disinterested secretary, most productive at clearing off for a long lunch somewhere new, most productive at looking busy, passing the buck and collecting the cheque, maybe.

Yes I've heard of the laffer curve, no I'm not a particular believer that it's some sort of cast-iron truism, and neither apparently are the people you're defending, who are forecasting the various tax cuts to cost the treasury multiple billions, at least in the short term, until their miracle of growth happens, if it happens. There's a lot of argument about whether (for instance) the continuation of the lower corporation tax rate is even useful for that.

These decisions are a kick in the pants to the people who actually need a tax break, your man on the street that you mentioned above, who would quite like a bit more money in his pocket due to the spiralling cost of living and energy crisis. He could do with a tax break to keep the family going this winter and deal with the higher mortgage payments that will come about because of the further interest rate rises these new changes will necessitate.

But I guess my highly paid contractor friends will get to stick another few tens of thousands in their pension pots instead.

The best thing that can be said about this budget is that it was done at completely the wrong time.

Re: Ask HN: What Is Happening in the UK?

#168

Post by caoilte »

imdsm wrote: post #135
caoilte wrote: post #126

Earlier quoted context omitted.

> Who takes more risks, a person who works 37.5 hours in an office or a founder who puts their own capital in to try and create a company? Inherited capital in every startup I've worked at. And enough of it that they got several runs at success. It wasn't risky at all. > Which brings more value to a community, a person who is employed, or a person who employs people? Too vague a generalisation to have any value. What…

I feel slightly sad that I numbered the questions and you blew past that but then it seems you've not attempted to answer the actual questions. > Inherited capital in every startup I've worked at. And enough of it that they got several runs at success. It wasn't risky at all. In the event this was an attempt to answer, I have to say, feels like a non-answer. You do say "worked at" though, which makes me think not as…

> the capital risk wasn't yours so much.

You asked "Who takes more risks" not who put more capital at risk. Founders I have known had plenty of capital and risking some of it on startups wasn't nearly as risky to their life as it was for many of their employees for whom this was their only roll of the dice and had no savings.

> 6. Which brings more value to a community, a person who works in an office doing menial admin work for 5 years, or a person who spends 5 years founding a new company that provides medical services to the community, employs 100 people, and produces tax receipts (direct and indirect) of 1000x the person who works in an office doing menial admin work?

I love the way you completely passed over whether or not the founder does any work at all beyond providing the capital. Plenty of founders work hard, but plenty more bring connections and capital and are otherwise a productivity drain.

So again, as before, it depends on the productive work being done by that person. And they shouldn't get to take the credit for the taxes paid by their employees or the profits earned by everyone in the company. That's a shared achievement.

And why define a person just by what they do in their job? The person doing menial admin work could be doing all sorts of other amazing voluntary work that eclipses anything the founder provides in value.

> You don't have to hate or dislike people for creating value — creating jobs and providing services is crucial to the economies around the world.

And yet it's ideologically orthodox to hate governments for doing exactly these things.

> There seems to be a knee-jerk reaction to such a question of "well the office worker has value too", yes, nobody is saying people are value-less, but there is an objective reality that some people produce more value than others.

That is true enough.

> Ultimately, my purposefully crafted questions lead up to one thing: some people deserve to be paid more than others.

Even if it was true that people are paid according to the value they produce (they are not) it does not follow that they deserve to be.

Take a doctor who delivers immense value to their patients. They can only do so thanks to the hospital they work in, thanks to the education they received and the equipment they have access to.

Or consider a founder who starts a company benefitting from the concentration of talent created by a university doing world class research and attracting the best students.

What people deserve to be paid is a social question. When we choose to pay San Francisco founders millions and let thousands of people be homeless, that's a social choice about our shared values.

Re: Ask HN: What Is Happening in the UK?

#169

Post by [deleted] »

EliRivers wrote: post #115
fffobar wrote: post #67

Where is that market meltdown? The FTSE 100 is down a whopping 1% today, and down 3% over the last 5 days. Looks absolutely normal to me.

The FTSE100 does well when the pound drops against the dollar, as about 70% of revenues generated by FTSE100 companies comes from outside the UK. When the pound drops, their revenues (measured in pounds, at least) go up. The FTSE250 is down 7% over 5 days.

[deleted]

Re: Ask HN: What Is Happening in the UK?

#170

Post by rvieira »

Brakenshire wrote: post #75
hunglee2 wrote: post #24

In simple terms, the Bank of England and UK Gov are pursuing conflicting economic policies, BoE trying to take money out of circulation through hiking up interest rates, whilst UK Gov is putting money into circulation by proposing massive debt funded tax cuts. The obvious incoherency of this then led to the markets losing confidence in the UK economy, crashing the value of the pound, which in turn makes the planned U…

Yes, at a moment of inflation, they announce significant tax cuts which will have a big inflationary impact. The Bank of England was already behind on interest rate rises, and now the government is relying on them to not only counter global trends (high rates in the US causing devaluations basically everywhere), and also the inflationary effect of energy cost increases, but also extra inflationary tax cuts. That will…

(Not an economist by any measure) Can you explain "tax cuts which will have a big inflationary impact". The 20% bracket went down to 19%. The 45% bracket disappeared (now included in the 40%) which is only for £150k+ earners, which is a tiny minority in the UK. I don't think the actual numbers move inflation.

Isn't it more the conflicting policies (BoE and gov) in theory and the perception of them not being in the same page?

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