The Parallax Brief

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Unrepentant Subjectivity on Economics, Politics, Defence, Foreign Policy, and Russia

Dr Ros Altmann is an Idiot and is Dangerous

One aspect of this terrible crisis that has consistently astonished me is how many so-called economists and financial experts can be so very wrong about even the simplest disciplines within their supposed field of expertise.

Quite apart from the terminally orthodox men of the ECB, who seem intent to fiddle while Rome burns, a gaggle of galloping morons with letters after their names have been remunerated by a variety of newspapers to peddle some of the most egregious bullshit I’ve ever read.

This would be irritating in milder climes, but in the current hellhole of an economy it becomes outright dangerous.

One such ‘economist’ and ‘financial advisor’ is Dr Ros Altmann. Upon the news that the Bank of England had reduced rates to 1%, Dr Ros penned an article offering ‘Five reasons why a rate cut is wrong’. There is nothing in monetary policy theory to suggest that easing rates is the wrong thing to do. NOTHING. In fact, most serious experts suggest that the Bank of England is dragging its feet and should have been at zero long ago.

Let us be plain: we are staring into the abyss. Debt deflation, the worst nightmare of any capitalist economy, is on the horizon and approaching fast. All economic indicators suggest Britain’s economy is falling off a cliff. Fear runs deep that this really could be the Big One; that we are heading for the Great Depression of the Twenty-Tens.

An intelligent person could not possibly conjure a single argument against loosening monetary policy in this environment, yet Altmann manages five: cuts damage confidence by giving the impression of panic; we have not had sufficient time to see if previous cuts have worked; cuts damage the interests of pensioners, because many rely on savings; it may not work; and it provides an inflationary risk.

First, it doesn’t seem like panic, because it’s the right thing to do. If anything at all indicates panic, it’s that as a result of the shellacking the pound has taken of late, the boys of Threadneedle Street don’t have the confidence to bang the rate down to zero.

Second, Dr Ros uses an example of a doctor who doesn’t see progress the instant after administering medicine, but waits to see if it has worked, rather than just ramping up the doses. Yes, Ros, but if all indicators that he’s been trained to recognize tell him that if the patient doesn’t get massive doses of the medicine soon, he will die, then he wouldn’t wait to check the effects of the previous clearly insufficient doses, would he? Similarly, if you’re being attacked by a pride of lions, you don’t fire one bullet and then hang around to see if that did the trick.

Deflation is a real and immediate danger. Once set, it might take a decade or more of misery and pain before the country can be extradited. We need action not more dallying.

Third, arguing that monetary policy should be set for the benefit of a single group of society is stupidity of epic proportions. If monetary policy is unfairly penalizing pensioners we should look at pensions policy, dummy.

Fourth, it might not work – so let’s not try!

Fifth, it is true that when the economy starts to recover and deflationary pressure has eased, monetary policy will have to be tightened and fiscal stimulus withdrawn, otherwise both will be inflationary. Does anyone see the green shoots of recovery? Me neither. Worrying about inflation in a starkly deflationary environment is like being concerned about getting fat when you find food during a famine.

Dr Ros Altmann is an idiot, and so is the Guardian for publishing her rubbish. Further, by presenting arguments with no basis in economic theory, Altmann and others like her are performing the destructive role of making more difficult the implementation of sensible monetary policy.

I am so angry with this stupid woman.

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Filed under: Economics, , , , , , , , , , ,

2 Responses

  1. Philip Griffin says:

    Although I agree with your main propositions your style is vile and abusive.

    Is this some fart right organisation?

    I have been an IFA for 30 years.

    Philip Griffin B.Sc(Econ)., B.A., B.Phil. Too many letters???????

    • Abusive indeed – and ill wind; however, that’s not its worse characteristic, (but what can one expect of someone who distorts opponents, then demolishes with ad hominems the straw (wo)man he unfairly constructs, without identifying the “most serious experts” whom he uses as a frightfully weak and equally fallacious “appeal to authority” who may actually be the real “gaggle of galloping morons” if they share the same opinions as this blithering blogger.
      Now if s/he had attacked Christina Romer in the U.S. for saying the “stimulus was working.” When only 12% had been spent, I would agree with the blogger; but is would still not be interested to wasting my time reading vacuous name calling.
      And yes, if he paraphrased of economists what we say about lawyers: “How can you tell when an economist is lying? When her lips are moving.” I would agree.
      But where are the hyperlinks in the blog, so that “we” can form our own opinions?
      The BBC quoted Ros Altman as saying the credit card companies are charging interest rates way too high. Still angry at her?

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