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Austerity in ruins?

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barbados
1240109.  Tue Jun 20, 2017 4:34 pm Reply with quote

Its not just round your way criss, the default action of users is to use things out of the box, which in the past included open doors on routers. Now the OOB setting is to have a password protecting that door.
Of course if you can guess that password - they are of a standard format depending on the provider so vulnerable to brute force you can do quite a bit because the default admin passwords for each of the boxes are available at any good search engine ;)

 
suze
1240112.  Tue Jun 20, 2017 5:41 pm Reply with quote

It must be several years since I've done this when at home, but out of idle curiosity I just asked my laptop to look for networks.

It found fourteen, six of which are identifiable to a particular house by name or address. (The others are called things like "BT Broadband" and "Virgin Media".)

Three are unsecured and would be available to me if I were so minded, although one of those is a pub. It's not a pub that we visit, but I know it advertises having free wifi and so presumably it wouldn't even mind me "borrowing" it.

One is reported as a dial-up system, which I didn't know was even available in the UK any more!

 
barbados
1240129.  Wed Jun 21, 2017 1:59 am Reply with quote

You will find that some providers also provide a roaming wifi service for existing customers.
BT frinstance will allow vodafone devices to connect - I think it is a config setting that is included in the WAP settings that your provider loads on to the device. It assists with the coverage claims by allowing wifi calling AIUI although it isn't my feild, and hasn't been since analogue days.

 
ConorOberstIsGo
1240137.  Wed Jun 21, 2017 3:32 am Reply with quote

Quote:
Keynsian economics says incur public debtr to invest in infrustructure that will reduce the costbase so that subsequent industry can be more competitive and grow your economay back out of trouble. We're not doing that - we're incuring debt to piss ever-greater sums into public-sector wage packets. The "circulation" argument doesn't really work here because only a proportion of the money pissed into the public sector gets trickled-onwards, so each round of the circulation provides ever less benefit. Somewhere in the system there needs to be the wealth-generator to fund it all, and if your core government pronciple is abject hostility to wealth generation then they will simply go elsewhere (or not bother, cash out and retire to a luxury yacht moored off a tax haven).


Okay, the grammar nazi in me has been taken outside to cool off..

I broadly agree with your thinking however I want to understand what you mean here
Quote:
only a proportion of the money pissed into the public sector gets trickled-onwards, so each round of the circulation provides ever less benefit. Somewhere in the system there needs to be the wealth-generator to fund it all,


Yes on the 'wealth-generator' idea (although no-one with a PhD could tell you what that is) but tell me about the first part; how money going to civil servants generally doesn't go back into the economy. Talk about that pls.

 
Alexander Howard
1240142.  Wed Jun 21, 2017 4:35 am Reply with quote

ConorOberstIsGo wrote:
Yes on the 'wealth-generator' idea (although no-one with a PhD could tell you what that is) but tell me about the first part; how money going to civil servants generally doesn't go back into the economy. Talk about that pls.


And people are still quoting Keynes?

Money in civil servants' pay packets does do back into the economy, but they are not generating wealth - it is stale money creating nothing.

Going back to a basic Adam Smith example, if money goes to a cheesemaker (who are blessed, as you know), he will buy milk that has little value as it goes off after a day, and turn it into cheese that will last a year and so be more valuable. A baker with a few quid will buy flour and eggs and create a cake, and he can charge more per slice than all the ingredients for the whole. (You keep saying everyone should get a fair slice of the cake, but you need the baker first.) Give a few tons of iron ore to a manufacturer and it is worth fifty dollars a ton, but he will turn it into a Porsche 911 Turbo, or maybe something useful.

That is wealth creation. Civil servants are needed, but they eat everyone else's efforts.


Last edited by Alexander Howard on Wed Jun 21, 2017 5:02 am; edited 1 time in total

 
PDR
1240143.  Wed Jun 21, 2017 4:35 am Reply with quote

I had a migraine (vision disturbance) at the time, so the typos were even more frequent than usual and I couldn't see well enough to correct them - so please present my apologies to your inner grammar-nazi!

I guess my core point was that the Keynesian "invest in public works in a recession" principle says borrow money to invest in infrustructure. Money spent on (suitably-selected) infrustructure will give a direct return in improved capabilities, reduced operating costs or both, and it will return more than was spent. Money spent on wages will ultimately be spent by the consumer, but the money the consumer spends within the economy will usually be less than was passed out in wages (because it's often spent on imports or just on debt interest); it can certainly never be more so the "trickle-on" principle doesn't work for the lowest levels of the spending pyramid. It can work at the much higher levels because at the higher-income ends the money is more likely to be spent on "investments" and major capital purchases.

Why is this significant? Well AIUI the whole keynesian principle only works where the money will be spenton those capital projects. It is being suggested that increasing the size of the public sector (nationalising things, increasing the wages of the lowest paid etc) is the same thing, where I would suggest it very much isn't.

My core premise is probably that an economy requires a certain minimum amout of wealth-generation to avoid recession or divergence. I have no idea whether there is already a formalised unit of wealth-generation so I'm going to invent one - the Bob. Let's assume that an economy the size of the UK needs a minimum of 60 kBobs. That could be allocated as roughly 1 milliBob per person in the UK.

But many of those people are "non-productive" by virtue of being retired, not-yet-working-age, sick, unemployed etc. Again I don't have the numbers, but lets assume that it's 50% of the population who are in a position to be generators, so each of them must do 2mBobs of wealth generation rather than 1.

Now we say "there will be certain jobs which are essential but don't generate wealth" - examples would be health-care staff, police, armed forces, firepersons, regulatory staff etc etc. For each one of these we allocate in principle someone else must be doing their bit of generating - 4mBobs rather than 2.

Obviously if the number of these people is small compared to the generators it's not really a problem because it's a small shared burden. But if we have an increasing public sector which is intentionally run at "below cost" the problem grows, and you can rapidly get to the point where the few actual wealth-generators have to be delivering 5, 10 or even 20mBobs each to subsidise the lack of Bobs being generated by the others.

Or to put it simply - the bigger the public sector the larger the p[rofits of the private sector must be inherently, because somebody somewhere actually has the GENERATE the wealth for the others to spend. Generating less wealth than you spend is called a deficit. The UK has been in deficit for decades...

Final point - our economy is at least back in a "keynesian zone". Keynes said that inflation and unemployment would always be in opposition - high unemployment would cause low inflation and vice versa. This is one of the axioms of the core maths of keynsianism, which means that the whole "spend to climb out of recession, reduce spending to reduce inflation" thing is only actually *valid* while this is true. For a very large part of the 70s, 80s and 90s we had high unemployment AND high inflation, so the Keynesian model simply didn't apply. That's where the theory of "monetorism" came from, although I never really grasped it and I understand its core maths has since been challenged.

PDR

 
dr.bob
1240155.  Wed Jun 21, 2017 5:51 am Reply with quote

PDR wrote:
Well AIUI the whole keynesian principle only works where the money will be spenton those capital projects. It is being suggested that increasing the size of the public sector (nationalising things, increasing the wages of the lowest paid etc) is the same thing, where I would suggest it very much isn't.


I broadly agree with what you're saying, but I do have a question. This is largely as a result of my not fully understanding economics, so I'd like to explore this a bit further to examine the issue.

But let's begin with some agreement.

PDR wrote:
My core premise is probably that an economy requires a certain minimum amout of wealth-generation to avoid recession or divergence.


I think this is pretty hard to argue against. Any economy that doesn't create wealth will surely stagnate or die. I can't see a flaw in this argument, though would welcome anyone who wants to argue against it.

One note of caution I would add, however. The way I read your post, you seem to be drawing a distinction between the private sector which generates wealth and the public sector that doesn't.

Apologies if that wasn't your intent, but it's hard to read this in any other way:
PDR wrote:
Or to put it simply - the bigger the public sector the larger the p[rofits of the private sector must be inherently, because somebody somewhere actually has the GENERATE the wealth for the others to spend.


Alexander Howard above lists some examples of wealth creation. Clearly such activities can be run by the public sector as well as the private sector. Many people with an anti-public sector bias will try to claim that the public sector is bad at running companies, pointing to particularly bad disasters such as British Leyland, whilst ignoring successful companies under public control such as Cable & Wireless, British Airways, the East Coast Main Line, and similarly ignoring private sector disasters such as Equitable Life, One.Tel, and Woolworths.

Also, on the specific example of rail services (which I'm most interested in discussing), would nationalising the railways remove a distinct source of wealth creation from the economy? As you point out, there are many jobs which are necessary in society but which don't actually generate wealth. Are the railways one of those?

I can see how they facilitate the generation of wealth by improving trade, but do they generate wealth in and of themselves? I'm guessing this might become rather a philosophical/semantic argument :)

 
PDR
1240163.  Wed Jun 21, 2017 6:52 am Reply with quote

dr.bob wrote:

I broadly agree with what you're saying, but I do have a question. This is largely as a result of my not fully understanding economics, so I'd like to explore this a bit further to examine the issue.


And I would want to stress that I'm not an economist - my starting point has always been to look at "the economy" as a dynamic system (something I *do* understand) and then model it as such from first principles. To me this approach seems valid, but I'm fully open to being shown that it isn't!

Quote:

One note of caution I would add, however. The way I read your post, you seem to be drawing a distinction between the private sector which generates wealth and the public sector that doesn't.


I can see how I've made it appear that way, but that's not what I believe - I just skipped a step. In the private sector an enterprise that runs at a loss either changes its ways or dies. This is the "profit imperitive" that drives continuous improvement through basic necessity. In the public sector an enterprise can run at a loss and be subsidised from taxation. This would be wholly appropriate for things like healthcare, police, military, criminal courts etc but (I would argue) wholly inappropriate for nationalised instances of what are otherwise commercial ventures - banks, manufacturing industry, airlines etc. In these cases the public-sector environment de-emphasises the profit imperitive and moves the sources of power and authority such that the core purpose of the venture can become one of providing employment rather than providing the goods/services which are its output. Such enterprises become prone to moribundity - resistant to change and isolated from progress. They also hide their true costs because they are not continually trying to improve them. These are the ones that consume rather than produce kBobs.

I'm certainly not ideologically opposed to nationalised eneterprises. Aside from the obvious police/roads/military/health/justice etc I would see the provision of water and probably even electricity/gas as "natural public-sector ventures". I also see massive benefits in having a TV/internet news medium which is completely free of potentially conflicting commercial pressures.

You mentioned railways, to which I would add telecoms, as less equivocal cases and I would agree. Our privatised railway system is indeed a walking clusterfuck (to use the technical term), but in this case I would argue that the cause is more related to the stupidity of the business model than the pursuit of profit over service. I can (and do, sometimes even for money!) lecture at length on my views around the relationship between performance metrics and mission, and the under-appreciated field of performance management systems engineering which I feel is at the core of this problem. But even then I would observe that in my experience even this clusterfuck service is actually better than the British Rail which preceded it -the service is more frequent and more dependable, the trains are cleaner and more comfortable. I see the failure of the East Coast Main Line contract as simply one of the contracting model (again). If the incumbant contractor had been allowed to change the basic operating parameters as the subsequent public "step-in" service has done then they would probably not have needed to step-out in the first place, but the contracting model (fixed-term franchises) didn't allow this.

Similarly with telecoms - back when the GPO owned everything you had a choice of two types of phone and you would be encouraged to have shared lines ("party lines") in some areas because there weren't enough lines available. Faults would take days or weeks to fix, and when you moved house it took a fortnight for the phone contract to be transfered to the new owner (during which there would be no phone). The privatised companies generally perform better, althogh some ISPs still leave much to be desired.

As an ideological principle I am open to the suggestion that telecoms and backbone transportation are facilitating infrustructure which could happily live in the public sector. But pragmatically I simply observe that neither was especially effective as nationalised enterprises, so I would be very reluctant to revert.

Does that make it clearer?

PDR

 
crissdee
1240177.  Wed Jun 21, 2017 8:59 am Reply with quote

PDR wrote:
We're helping her with the purchase because...... (c) it's what parents do, isn't it?


With respect mate, it's what parents with the luxury of ability do. My parents could never have done it, by dint of the fact that all their income was going into keeping the roof over their own heads.

 
barbados
1240179.  Wed Jun 21, 2017 9:35 am Reply with quote

I have a feeling that the view that the public sector - even the health/military/police - do not generate wealth.

It is particlarly evident (in my view) with the military. People might not pay to be soldiers, however in barrack towns local business is extremely dependant on them being there, and that does generate national wealth.
I was having a conversation on Facebook with an SNP supporter in favour of independance, when the conversation got on to Faslane, he thought there would only be 800 jobs lost if, as a result of independance the program was moved elsewhere. This was because the service staff would follow the project, and as such not become unemployed. What he failed to consider was the amount of money those 3800 people spend in the local area, and 800 having less money, coupled with 3000 (and their families) not being there is a big chunk of a town's economy.

So I would suggest that all job sectors create wealth. Of course, as with the above I'm not an economist, but I've yet to hear a reasonable explanaition on why it isn't the case

 
'yorz
1240180.  Wed Jun 21, 2017 9:53 am Reply with quote

Re helping out offspring - had I procreated, I would no doubt have followed in my parents' footsteps, ergo not forked out for their driving licences, cars, rents, mortgages, etc. If I thought I needed something, I had to earn the money to get it. The only things I recall 'getting' were swimming and piano lessons - life-saving and cultural education. From what I see around me, kids are spoilt rotten and take lots for granted.

 
dr.bob
1240181.  Wed Jun 21, 2017 9:54 am Reply with quote

PDR wrote:
I can see how I've made it appear that way, but that's not what I believe - I just skipped a step.


Fair enough. Thanks for clarifying.

PDR wrote:
In the public sector an enterprise can run at a loss and be subsidised from taxation. This would be wholly appropriate for things like healthcare, police, military, criminal courts etc but (I would argue) wholly inappropriate for nationalised instances of what are otherwise commercial ventures - banks, manufacturing industry, airlines etc.


Weeeellllll, yes and no.

Banks and airlines, whilst being profitable industries in themselves, also help to stimulate other parts of the economy. Banks stimulate the economy by providing loans to help companies start or expand. Airlines stimulate the economy by allowing easier trade between regions or internationally. As such, I imagine it could be theoretically argued that, even if a nationalised Bank or Airline were running at a loss, it could still be a good thing if the overall effect on the economy was positive.

Of course, the devil is in the detail, and the not insignificant problem then becomes how to check whether such a business was having an overall positive effect on the economy.

PDR wrote:
Our privatised railway system is indeed a walking clusterfuck (to use the technical term), but in this case I would argue that the cause is more related to the stupidity of the business model than the pursuit of profit over service.


What would be a better business model for privatised rail?

PDR wrote:
But even then I would observe that in my experience even this clusterfuck service is actually better than the British Rail which preceded it


I'm no expert in the field, but my impression is that this is comparing apples and oranges. Before it was privatised, British Rail had been suffering from decades of under-investment from both Labour and Tory governments. After privatisation, the levels of government money that have been pumped into the system are hugely increased. Surely a lot of the improvements on the rail network are down to the increased public funding of the system which would have happened whether or not it had been privatised, as is evidenced by the excellent service encountered on the East Coast Main Line after it was taken back into public ownership (albeit briefly).

 
dr.bob
1240182.  Wed Jun 21, 2017 9:58 am Reply with quote

crissdee wrote:
With respect mate, it's what parents with the luxury of ability do. My parents could never have done it, by dint of the fact that all their income was going into keeping the roof over their own heads.


Likewise. My wife and I bought our first flat together at the age of 27 or so. By this time we were both employed in well-paid, professional jobs and had been able to save up a decent deposit. No help was possible from our parents.

Prior to this we had lived in a variety of rented places because we were still completing our studies and couldn't afford a deposit.

 
dr.bob
1240183.  Wed Jun 21, 2017 10:02 am Reply with quote

barbados wrote:
People might not pay to be soldiers, however in barrack towns local business is extremely dependant on them being there, and that does generate national wealth.


I think that generates local wealth. I'm not convinced it generates national wealth.

The government collects taxes. Taxes pay the soldiers. Soldiers spend money in their local area. People in the local area benefit from the spend. This is simply a redistribution of money without adding anything extra, unlike the cases highlighted by Alexander Howard above where extra wealth is created.

 
PDR
1240186.  Wed Jun 21, 2017 10:21 am Reply with quote

crissdee wrote:
PDR wrote:
We're helping her with the purchase because...... (c) it's what parents do, isn't it?


With respect mate, it's what parents with the luxury of ability do. My parents could never have done it, by dint of the fact that all their income was going into keeping the roof over their own heads.


Perhaps, but there is a personal values thing here. As far as I am concerned once you have kids you have obligations, and essentially the interests of the kids has first call on any spare dosh - after a roof, food and the necessities like clothes and transport to work they become the highest priority.

As some of you know, from a young age my primary hobby has been radio-controlled aeroplanes of various types. By the late 80s and early 90s I was flying in competitions all over the world and this was a large commitment of time and money. When we had children I stopped - not just competitions but all kinds of flying. I sold up a lot of stuff and mothballed the rest because I couldn't justify spending money on other things.

I have friends who have both families and turbine (jet) powered models which cost 10-15k. They live in small houses and their kids have shared rooms. To *me* that is a form of child neglect, and I cringe at the thought that they would prioritiese their own toys over giving their kids life-expanding experiences.

In my day it wasn't too hard to get on the property ladder - you just needed to do a year or two of saving to get the deposit and then spend another couple of years living frugally until the effects of inflation reduced your mortgage premiums to relative peanuts. These days it is very different, so I regard it as a fundamental parental obligation to do everything possible to help children get that initial step. What with K's mortgage support and A's university costs the meme-sahib and I will have to trim our living a bit for the next 3-4 years, but that's is as it should be (IMHO). I would feel uncomfortable spending that money on myself when they needed it.

YMMV,

PDR

 

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