Goldman's Advice On Economy Like Dracula's Advice On Blood Banks, British Economist Says

No one ever accused Goldman of being unbiased, but two British economists claim the bank’s recent self-serving analysis of the UK general elections is particularly egregious.

The background: in a note out this week, Goldman spells out what it says are the dangers of a “leftward shift” in government. Here are the basics:

The business community may be sceptical that a Labour-led government would deliver market-friendly policies at the micro level in the face of adverse shocks. By contrast, the existing Conservative-led coalition has established some market credibility as a consequence of the stabilisation it has achieved in the UK economy since 2010. More generally, a Conservative-led government would likely be expected to react in a more business- and market-friendly manner in the event of unforeseen challenges...

While the published party programmes do not provide a basis for arguing that the UK would be placed on radically different macroeconomic trajectories by the election of one of the main parties rather than the other, it is likely that market and business sentiment would be supported by the emergence of a Conservative government.

In part, this reflects doubts that the Labour party’s manifesto commitment to fiscal prudence and limited intervention in markets would be maintained once it took office. More fundamentally, the policy programmes outlined in manifestos will have to confront macroeconomic and financial shocks that will inevitably emerge in the coming years. Given the mixed record of Labour administrations dealing with such challenges in the past, the business community may be sceptical that a Labour-led government would deliver market- friendly policies in that context, weighing on market sentiment now.

By contrast, the existing Conservative-led coalition has established some credibility in markets as a consequence of its contribution to the stabilisation of the economy and revival of growth that has been achieved since 2010. More generally, a Conservative-led government is expected to react in a more business- and market-friendly manner in the event of unforeseen challenges emerging to its economic management. 

In other words, the usual “left is worse for the markets and the business community than right.” For their part,  economists James Meadway and Michael Burke claim Goldman’s analysis is outright silly. 

Via RT:

Speaking to RT on Wednesday, British economist James Meadway insisted Goldman Sachs is not a credible voice on economic policy.

“Listening to Goldman's for advice on how to run the economy is like listening to Dracula on how to run a blood bank,” he said.

UK economist and anti-austerity campaigner Michael Burke added Goldman Sachs’ general election analysis amounts to “laughably bad economics.”

Burke told RT Goldman’s assessment of Labour’s prospective role in government appears to “confuse the economy with the well-being of its own bankers.” He added the Wall Street banking giant’s prognosis is“blatantly political” and born of self-interest.

And while that assessment is more humorous than anything else, Burke’s criticism gets a little more pointed later in the interview:

“Like all the other Wall Street firms, Goldman had to be bailed out by the US and British governments from a financial crisis that Wall Street caused,” he said.

“They caused the economic turbulence and in Britain were rescued from it by a Labour government.”

Burke said Goldman Sachs’ “moans about zero-hours contracts and a modest cap on energy bills” are a strategic diversion.

“This is because their real aim is to avoid 50p tax rates for high earners, the Mansion Tax and other small impositions which shift some of the burden of austerity onto the shoulders of the rich, the likes of Goldman Sachs bankers and their clients.”

The moral of the story: never trust a Vampire Squid when the topic is British politics. 

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For those interested, here's Goldman's breakdown of campaign commitments:

Comments

[BKbroiler]

Yes, let's ask the cookie monster where we should keep our cookies.

[Cacete de Ouro]

Counting and Cookies! http://youtu.be/5l7KbMVdN7E

[golden torch]

I freelance over th? internet and earn about 80-85$ an hour. I was without a job for 7 months but last month my paycheck with big fat bonus was $15000 just working on my computer from my home for 5-6 hours. Here's what i have been doing... www.globe-report.com

[no more banksters]

In the mid-October of 2009, Goldman Sachs suggested to Greece a new financial product which would ease, at great extent, the huge borrowing needs of the country for the rest of 2009 and 2010 since some older bonds, of huge value, were expiring during that period. However, Goldman's proposal was not accepted by the Greek side. A few days later, Fitch downgrades Greece from A to A-, leading the country out of the top rating category. At the same time, stocks of the National Bank of Greece were sold massively in the NY stock market, as well as, subsequently, to the Athens stock market leading general index to a significant fall. At the same time, the price of Greek bonds was falling, the price of Greek CDS and interest was rising, as well as the cost of lending for Greece.

[The Duke of New...]

Or like listening to Bernanke give advice on how to throw Seniors under the bus.

[Not_FieldingMellish]

Time for an unfortunate car accident. Don't mess with the All Seeing Eye.

[KnuckleDragger-X]

It's Goldman's crap game and they are providing the dice. Even as dirty as the market has become GS s still leading the way...to the sluaghterhouse....

[venturen]

Goldman seems to have done fine with the leftist in the White House and the Democrats in congress

[Rainman]

And just imagine, if Cruz wins, a Squid will actually be living in the White House.

[Omen IV]

GS is advising Hillary on policies against the 99%.

[Iam Yue2]

They may warn, but it is looking more than likely, that they will not be getting their way: UK General Election 2015 Next Government Probability (%) Labour Minority 38% Conservative Minority 16% Conservative-Lib Dem Coalition 14% Conservative Majority 10% Labour-Lib Dem Coalition 9% Labour Majority 2% Conservative-UKIP Coalition 2% Any Other Government 9%

[buzzsaw99]

beware nailguns. the squid has operatives all over the world.

[kchrisc]

Sign on guillotine: "Ex-Goldman banksters have 'no-wait' priority."

Liberty is a demand. Tyranny is submission.

"Repackaging" the banksters: A head tranche, and a torso tranche.

[GFORCE]

Said this yesterday. Goldman in fear of 50p tax rates and mansion tax.

[farflungstar]

And John Wayne Gacy should do your little boy's birthday party too.

[Chuck Knoblauch]

Suck and spit?

Great advice if bitten by a Goldman employee.

[falak pema]

To understand the Goldman Sachs breed you have to rediscover the movie  "The Vampire's ball"...It says it all about our current financial Zeitgeist. Especially the final shot.

[RichardParker]

Conservative-led coalition has established some credibility in markets as a consequence of its contribution to the stabilisation of the economy...

I believe what they meant to say was a Goldman Saachs-led coalition has established some credibility in markets as a consequence of its contribution to the stabilisation of the economy in the US.  The Dow is at +18,000.  The economy has fully recovered thanks to The GS employees hired by the Obama administration.  It would have been so much worse if we didn't have former GS employees turned civil servants to lead us out of the great recession.

https://prof77.files.wordpress.com/2011/10/fh4eca65e4.png 

https://prof77.wordpress.com/politics/an-updated-list-of-goldman-sachs-t...

Now if you'll excuse me, I have to leave the room and go vomit.

[Equality 7-25-1]

Never trust a vampire squid.

[NuYawkFrankie]

Goldman's Economc "Advice": The fox "helping" the chicken with the dinner menu...

Just ask Greece....  or - if you can find what's left of it - The US Economy..

[Promethean]

If ever a building deserved to be blown up ...

http://en.wikipedia.org/wiki/200_West_Street

[HowdyDoody]

The building supposedly cost $2.1 billion. GS were awarded $115 in tax breaks and grants along with $1.65 billion in Liberty Bonds. A fine example of socializing the costs and piratizing the profits.

[onmail]

Fox teaching chicken:

Cock a doodle doo

Cock a doodle doo

Cock a doodle doo

-----------------------

Kosher advice:

U know , we are so pure that we dont mix milk with meat. This is to keep the souls we harvested friendly to us and not attack us. Btw , dont worry , we do the same 2 u 2. Friendly afterlife guaranteed.

[Promethean]

Yeah, and Debt Shall Set You Free.