if this is a V shaped recession

Are we all pretending that 2021 is going to be sunlit uplands?

We’ve only achieved a Government surplus twice in the last 50 years – any notion that this can be achieved in the near future only means austerity and bugger-all fiscal stimulus / infrastructure investment.

Assuming you mean spending equal to tax income that would be an incredibly stupid idea in a recovering economy. As long as inflation is under control and we don’t have full employment then we need to maintain a govt deficit to stimulate recovery. Reducing the deficit will prolong the recession and risk a depression. By saying he wants to balace the books Sunak is saying he wants a recession/depression. He only gets away with that nonsense because the public don’t understand where money comes from.

You might want to read this https://www.ft.com/content/fde4b931-6cd9-4cb2-8cec-89b3ac876b88

Literally the only way “balancing the books” can work just now is if they (sensibly) allow it to include lending and printing money as balancing spending.

“Balancing the books” isn’t really a very meaningful term at all, it doesn’t have a technical definition outside of the most simple applications- balancing a chequebook frinstance just means checking the cheques you’ve written have been cashed, so you know you’re not going to get an unexpected debit. Easy. Balancing the books on a big company? Very dissimilar. Doing it for a country? Pretty much meaningless. Literally none of the approaches or the logic work the same way, you have to basically unlearn everything you know about household finance before you can start thinking about bigger finance.

But of course conservative politicians like to pretend that running a country is similar to running a household- you have to “live within your means” (a lie) and reducing spending and reducing borrowing is always prudent (also a lie). They know it’s not merely untrue, but a really bad way of running a country. But they also know it rings true to everyone who lives paycheck to paycheck, which is a double whammy since successive tory governments have left more and more people doing exactly that.

But of course, “living within your means” means not borrowing to invest. It means not spending a grand on your credit card to fix your house, so it falls down and you end up losing all of the value and also having to rent a new house for £500 a month, forever. But that’s “prudent” because you have £500 a month spare and therefore should spend it all on rent whereas borrowing £1000 and paying it back in 2 or 3 months and then having £500 a month spare again would be “not living within your means”, and your credit card is the “magic money tree”. And god forbid you should actually earn more.

And for countries, it means not borrowing at the incredibly good terms that countries can borrow at, and it means not taking advantage of low inflation by printing money, which are the only things that have any chance of getting us through the next couple of years without financial devastation. You either half to be a cretin not to do it, or you have to be clever enough to understand that you should do it, and awful enough to choose not to because you prefer the alternative, and you don’t want to admit that it works.

Any government that can’t borrow or print money and get a better return on it by investing, shouldn’t be running a corner shop but basically the poorer you are, the harder that is to understand. And they make people poorer so that’s a win win.

One of those situations where you kind of have to grimly admire how good the tories are at this sort of thing, while bearing in mind that it’s all absolutely terrible and will totally kill people and ruin lives. It’s not the incompetents like Johnson and Hammond you have to worry about, it’s the Sunaks and the Osbornes who know how it works well enough to do something else.

Whilst mooching about the FT

There is an article detailing plans to “borrow £100 billion” over five years for a “clean energy & infrastructure plan”

https://www.ft.com/content/68300806-d197-4e94-8dc8-e9af2d1e67df

Does involve Boris so high possibility of blustering bull****

You might want to read this https://www.ft.com/content/fde4b931-6cd9-4cb2-8cec-89b3ac876b88

If you’re gonna post a paywalled link at least summarise or quote some of the content relevant to the topic.

It’s about Sunaks speech. I thought you had a free account where you get a few free articles?

You either half to be a cretin not to do it, or you have to be clever enough to understand that you should do it, and awful enough to choose not to because you prefer the alternative, and you don’t want to admit that it works.

The tories can leverage the ignorance of the public in being the party of ‘prudence’ and responsible financial management. They know it’s bollox but it wins them votes so they carry on with the lie that the countries finances are the same as a households. Also by maintaining the public’s ignorance they retain use of the money tree for themselves and their friends, using it to maintain their position as the natural party of power. It’s a win-win for them, and the interests of the country at large don’t even come into it.

It’s an extremely clever psychological trick which persuades the public that using the state’s power in their interests is irrresponsible, whilst using it to maintain the wealth and power of the elite is the model of prudence. If the general public ever really realised the extent to which they’re being conned they’d be on the streets.

Sunak’s retraining proposals are based on an employee-deficit model which will do nothing to rectify an investment-deficit reality but at least it encourages victims to think they are the author of their own woes.

The other problem with his scheme is that he seems to be suggesting that people who were in highly skilled professions (ie: lighting or sound engineers) should ‘retrain’ to be van drivers or work in coffee shops.

Once they’ve spent the requisite period of unemployment for them to qualify for any assistance, obviously. I’m not sure how much ‘retraining’ is required. Doubtless it’ll be supplied by Serco at immense cost to the taxpayer?

Can an economy actually still function based on selling coffee, delivering pizza and people ordering Amazon deliveries? I suppose that come January we’ll find out

I think there may be a slight flaw in his masterplan

Can an economy actually still function based on selling coffee, delivering pizza and people ordering Amazon deliveries? I suppose that come January we’ll find out

Just need the telephone sanitisers and we’ve got ourselves a B-Ark.

Having previously one of the cross-sector industry skills programmes, which was shelved 5 years ago when the money was re-allocated to another Government initiative: It requires a significant employer contribution which means that the only uptake will be from larger employers – most small businesses that represent 80% of the UK’s employees simply won’t participate.

As for $160m of ‘investment’ that would 5 miles of motorway or employ about 2000 people for a year – whoop de **** do!

The £160 million is intended to develop ports to handle mega sized turbines but putting that to one side…to most people it sounds like a lot of money but, in the context of the sector, it isn’t.
It would cover the cost of 10 deep water turbines – manufacture, ship, install, connect.
Jurgen Maier, the ex Siemens UK MD, estimated that we need 3,000 new turbines to hit johnson’s new capacity target.
As sharma is sec of state for BEIS can we look forward to him being wheeled out to pontificate on this?
Could he explain how the estimated job creation will be facilitated by training inc
re-training, upskilling and apprenticeships?

As for apprenticeships more generally, Interserve Group has sold its Learning and Development business (think apprenticeships and adult education) for an undisclosed amount to a private equity fund called Enact.
That sounds problematic to me.

From whats been said by Johnson and Sunak over the last few days, a few really worrying things are apparent about economic decisions that have clearly recently been taken.

There will be no economic stimulus from government. None. We can forget any hope of any kind of Keynesian infrastructure investment (in true Johnsonian fashion, this isn’t new money, he just re-announced it yesterday). It’s austerity, the even more hardline sequel, from here on in.

It’s clear from what Johnson stated yesterday about ‘any investment having to be lead by the private sector’, that they plan to go ‘Full Thatcher’. Everything will be left to ‘The Market’ and they will sit back and observe the economic ‘creative destruction’ like the Ayn Rand worshipers they all are. Economic policy seems to be Cummings crossing jis fingers and hoping the next Apple or Google emerges from Cambridge

For us lab rats about to be the subject of the Covid/Brexit economic experiment in neoliberalism, any of us who lived through the 80’s in the North of England will be experiencing a sense of deja vu. This will probably be worse. Much worse.

Next year is going to be very very grim indeed. I was sceptical about claims from economists about 5-6 million unemployed, but given the recent announcement of these policies and the general noise coming out of government, it looks like thats very much on the agenda

Just got a wee email from Universal Credit to log on and update my “looking for work” details so I can get help finding a job.

Cattle prods out for all us shirkers!

Bloody layabout! 😉

Have had two “thanks but no thanks and don’t insult us by asking for feedback” responses to applications today.

Oh well, guess I’ll go for a bike ride and get pished. Or vice versa. Possibly simultaneously…

And now the mother of all u-turns. A very welcome one, but how many have already lost their jobs because of the uncertainty and dithering? Turns out Sunak is cut from the same cloth as Boris after all.

https://www.theguardian.com/world/2020/oct/09/sunak-planning-furlough-extension-in-areas-affected-by-local-lockdowns

I’m changing my mind about Andy Burnham… always thought he was an empty weathervane of a politician, but he’s proving himself to be a hard working, dedicated and smart but diplomatic mayor.

always thought he was an empty weathervane of a politician

I think his crushing defeat by Corbyn was a salutory lesson which he has obviously learned from. I was a supporter back in 2015 and it was soul-destroying watching him compromise his principals in the pursuit of what he thought would win him votes. I still believe if he’d stuck to his instincts and beliefs he’d be PM now. Maybe he’ll get another chance in future.

it was soul-destroying watching him compromise his principals in the pursuit of what he thought would win him votes

This is exactly what the numbers say though – the middle ground wins votes.

I’m changing my mind about Andy Burnham… always thought he was an empty weathervane of a politician

I’ve always admired how tenacious he was in getting the Hillsborough inquiry. It simply wouldn’t have happened without the constant pressure he applied

I also think he was very shrewd in extricating himself from the Corbyn car crash, and Westminster’s loss was definitely Manchester’s gain. He’s been quietly effective in the job.

At the moment he’s doing a great job of making himself a right royal PITA for the government. It does feel like we’re got someone with some clout and ability fighting our corner against a government that doesn’t give a **** about us. Obviously, they can’t ignore him when he’s making so much noise. He throws the term ‘leveling up’ in at every available opportunity, which must wind Boris up.

We’ll have to wait and see what Rishi actually announces. With anything this lot do, it gets filed under ‘I’ll believe it when I see it’

He’s been quietly effective in the job.

He’d be a lot more effective if it wasn’t for that king size p**** Richard Leese obstructing him at every turn (or so I hear). I heard a while ago that relations between them are not good, which is a good enough reason for me to like him 🙂

And now the mother of all u-turns. A very welcome one, but how many have already lost their jobs because of the uncertainty and dithering? Turns out Sunak is cut from the same cloth as Boris after all.

The WhatsApp group for my old employer has just exploded due to this news of the furlough scheme being extended. Bosses that are still there have popped on saying if they knew this was going to happen our redundancy could have been pushed back with the hope of reduced numbers. You can guess how this has gone down! 6000 jobs at £30k a year and the 6 depots that go with them have been lost for no reason other than a politician not looking at the bigger picture. *****.

The frustration and anger must be palpable reluctantjumper… really feel for everyone effected. There will be thousands more as well. Labour have been pushing for this announcement for months now, it’s a real shame that this government keeps acting only once it is too late.

Yep being reactive is hopeless when the damage has been done. They completely lack a vision.

So the announcement is help only for those businesses told to close. Presumably if your business or workplace is allowed to open but supplies goods or services to those closed businesses you’re on your own? Say if all the pubs and restaurants are told to close, they get financial help. But what about the businesses that supply the food and drink, do they get help or are they told No because they are allowed to trade. The fact that all their customers are closed is brushed over?

Taking a bit of heart that this doesn’t change the situation with my old workplace, we’d never have been on the closure list. If we were there would have to be bigger issues than a pandemic to worry about!

“All this spending will mean some hard decisions will have to be taken” When will someone call them out on this BS?

After all the news today something struck me about Boris’s demeanour in that he looked like the penny had finally dropped. Not just on the difficulties of suppressing the virus, but on the economic front. He said months ago that another lockdown would be catastrophic for the economy, and much more so than the first, and I don’t think he was lying. Well here we are, and he looked like he’d seen a ghost.

Back in April in an attempt to be transparent the bosses at my firm released some research they’d commissioned on the economic outlook and its impact on the business. They had modelled 4 scenarios, a V-shaped recovery, a U shaped one with a more extended recession (which they thought most likely), a 30s style depression, and then the doomsday scenario of economic collapse. The last one was described as being caused by repeated lockdowns causing a chain reaction of collapsing businesses, banks, and currencies. So if we couldn’t prevent a second lockdown, who’s to say we can prevent a third in the spring or a 4th next autumn, and what will be left after?

That second lockdown (or the same as what we has earlier in the year) is a very real possibility and he knows it. If we do go into one it will destroy so many lives it’s hard to think about it.

I’m resigning myself to the fact that if these current measures don’t slow the virus down rapidly then I’ll be staring at a long time unemployed or at best in a crap job, probably part time, that doesn’t bring in enough to pay the bills. My personal plan is to hold out until Christmas looking for new permanent work somewhere, if I don’t find it I’ll terminate the tenancy on my flat and move back home with my parents. That will give me the flexibility to either retrain, find part time work to slow the drain on my savings and give me the option of moving anywhere in the country where there is work that will pay my living costs. This is one of the few times I’m actually happy to be renting and not have a mortgage!

johnson is now living out his own personal nightmare created by little old him; he didn’t introduce the virus to the UK but, other than that, he completely owns all of the problems resulting from his and his government’s decisions on covid and brexit.
His inadequacy, incompetence and lying are on full public display every time he opens his mouth.
Mr popularity is now increasingly reviled, laughed at and is barely tolerated by swathes of tory MPs.
He has now realised that neither he nor any of his clown circus – and I’m now including Sunak – have the ability to lead at a time of national crisis.
The fragility of the UK is well and truly exposed; he and his various diktats are generally ignored; a ground down police force are under-resourced and disinclined to enforce the
ever changing regulations; shattered relationship with the EU; rising infection rate; Nightingale ‘hospitals’ re-opening; multiple lost opportunities; every reason to believe there will be a high death toll over next 6 months.
Trade deals? No, I can’t see them either.
I absolutely despise him for what he’s inflicted on the country.
Is he the worst PM in parliamentary history?
No wonder he looks like he needs a drink – or maybe he looks like that because of the drink…
Dead man walking – but for how long?

reluctantjumper
Full Member

That second lockdown (or the same as what we has earlier in the year) is a very real possibility and he knows it. If we do go into one it will destroy so many lives it’s hard to think about it.

Unsure. I think at the moment, the financial/economic/cultural impact is ironically a lot like the virus- incredibly bad, but not quite deadly enough. So we’re still approaching it exactly like we did the financial crisis- let’s do as little as we can, disrupt things as little as we can, and then put things back how they were as much as we can. And anything that can’t be easily saved or put back we just go, meh, TINA.

But it doesn’t have to get a lot worse, for that to absolutely stop working. I mean, it doesn’t really work now, but it’s not open and shut enough. People can still delude themselves into thinking old solutions work, and they can definitely be misled into thinking it’s true.

Capitalism is a pretty incredible thing, and I often think that really the only thing that can dent it these days, is its greatest enemy- capitalism. It might very well turn out that the longer term good of the nation is served by a proper reset now, rather than the usual state of constant sustainable survivable dysfunction.

I really don’t want to have to live through a real financial collapse. But I also don’t want to live through another half century of poisonous financial stagnation and built-in equality with things getting more and more into the rut. If I live through the proper collapse now, maybe it means my kids if I have any get to live in the better world that follows.. Without a real shake, we could easily just keep doing what we’re doing, forever. The world gets richer, practically everyone gets poorer, and real critical issues- like global warming, and pandemics- get mishandled because they don’t fit nicely into the algorithm

I really don’t want to have to live through a real financial collapse. But I also don’t want to live through another half century of poisonous financial stagnation and built-in equality with things getting more and more into the rut. If I live through the proper collapse now, maybe it means my kids if I have any get to live in the better world that follows.. Without a real shake, we could easily just keep doing what we’re doing, forever. The world gets richer, practically everyone gets poorer, and real critical issues- like global warming, and pandemics- get mishandled because they don’t fit nicely into the algorithm

The cynic in me (which is most of me) suspects that all a financial collapse will achieve is richer rich, poorer poor, and an even bleaker future.

The collapse in investment long pre-dated CV but this episode will see an acceleration of big business gobbling up the competition, money cascading over landlords and builders, more insecure employment and housing, falling wage rates, unemployment, austerity and privatisation whilst they spaff taxpayers’ money on their mates for future rewards. CV has just put Tory policies on speed and they’ll be quite chuffed with the abstention of the opposition. There will be a rush on trussed Turkey Twizzlers and White Lightning this Christmas.
Meanwhile they aim to cloud people’s vision with The Proms, Marxism in the classroom, statues, poppies, scousers, netting refugees, identity politics, patriotic bunting, cancelling culture and maybe a murder on Corrie and another narcissist on the Archers. You have been warned.

The cynic in me (which is most of me) suspects that all a financial collapse will achieve is richer rich, poorer poor, and an even bleaker future.

Nothing good will come from an economic collapse. To paraphrase Michael Foot, the rich will look after themselves as they always do (and they’re doing an awful lot of it right now), and everyone else will be left to fight it out in a world where they have no savings or income, and all the things we take for granted become more scarce or disappear completely. Civil society has extremely shallow foundations, and we’re more exposed to its collapse now than ever before.

I put this on the Coronovirus thread, but it’s probably more appropriate here.

Honest Bob has drawn the short straw this morning and gives a full indication of what financial support the people of Liverpool who’ve just had their jobs closed down can expect from the government

“Could you live on £5.84 an hour?”@RobertJenrick: “I haven’t had to live off that and I’m not saying that it would be easy.” RC#KayBurley pic.twitter.com/KLuGMADJit

— Kay Burley (@KayBurley) October 13, 2020

And of course, the businesses and jobs not ‘directly’ closed by the government’s new measures will not even be entitled to that.

And they wonder why Andy Burnham won’t be bullied into closing everything in greater Manchester?

They’ve made it pretty clear now that there isn’t going to be any more financial aid for the peasantry who continue to have their incomes devastated by covid and the government’s incompetent reaction to it. ‘The Market’ will be left to decide our fates.

Someone more cynical than me might suggest that it would be terribly convenient to have huge-scale unemployment and millions of desperate people once this lot are free of EU employment law in a couple of months

It’s not cynicism at all, it’s been much written about by eg Marx, Wilkinson, Klein, it’s the destructive forces of capitalism.

Someone more cynical than me might suggest that it would be terribly convenient to have huge-scale unemployment and millions of desperate people once this lot are free of EU employment law in a couple of months

That may well be their thinking, but they’re not in control of events. They’re going to have much bigger problems to deal with than how to take advantage of all this available cheap labour. Whether Boris and Sunak like it or not, if they can’t prevent future lockdowns they’re going to have to step in and underwrite economic activity because the alternative is widespread public disorder. The economic pain is only just beginning to kick in, and when it accelerates so will the anger. It’s not just the virus which spreads exponentially.

The collapse in investment long pre-dated CV but this episode will see an acceleration of big business gobbling up the competition, money cascading over landlords and builders, more insecure employment and housing, falling wage rates, unemployment, austerity and privatisation whilst they spaff taxpayers’ money on their mates for future rewards. CV has just put Tory policies on speed and they’ll be quite chuffed with the abstention of the opposition.

Rentier Capitalism.

https://www.bennettinstitute.cam.ac.uk/blog/rentier-capitalism-uk-case/

Good article!