Re: Transcript of Fred Harrison's Videos -1
- Jock, many people screamed something would break - Fred Harrison was one. Since 1997 the right wing press were scare-mongering over house prices every few months until it was like the boy who cried wolf and no one listened - well they were doing it for political purposes preying for a house price crash to get Labour out. They were not being responsible caring nothing about the people affected if the house market crashed due to any negative effects in the housing market they created.The government has to go by a collection of agencies to give them forecasting. When they all do not sound alarm bells why should the government act? According to the British governments Property Valuation office in Jan 2008, land values would continue to rise until 2013. These are agencies the government look to. Eddie may have cried out, but Rachel Lomax admitted he forecasting tools did not work.Fred Harrison encapsulates it well here:Economists Admit Their Economic Models Do Not Work
The Daddy of all central bankers was Alan Greenspan, of the US Federal Reserve. He said,
"the models do not forecast recession because the parameters are dominated by what happens in normal times when the economy is growing".As the economy crumbled, He said to the US congress,
"I discovered a flaw in the model which I perceived as a critical function structure which defines how the world works, I was shocked".Greenspan's victims are more than shocked, they are traumatised losing their homes and jobs.
In failing to raise the warning flags, Greenspan was not alone, economists at the Bank of England also failed to forecast the end of the business cycle. They confessed their economic models break down when the going gets tough. Rachel Lomax, deputy governor of the Bank of England confessed,
"When it comes to quantifying the changes in credit conditions, our workhorse economic models still cannot help us very much".If you were caught by surprise when the bottom fell out of the credit market, don't worry, you were in good company. Leading economist at places like the LSE were also shocked. Professor Sir Charles Woodhart, served on the Bank of England monetary policy committee, he now admits that standard forecast economic models are
"effectively pretty useless".Here is an example of the nonsense that can be produced by economic theory. According to the British governments Property Valuation office in Jan 2008, land values will continue to rise until 2013. Six months later the economy had broken down. The graph has been erased from their web site.