Canberra, ACT: Seen in Britain a couple of days before I left a roadside sign declaring 'Welcome to our third world country. No salt.' I suspect that those who use this phrase, one often heard in relation to delays on the railways, have never been to a real third world country.
The Adelaide Sunday Mail carried a column about all Britain's social problems, not that Australia is free of them. The columnist said that Britons themselves had labelled the ceountry a 'broken society'. Actually it was Dave Cameron.
In doing so, he may have made a mistake. Deep rooted and extensive social problems are unlikely to be solved by political action. Indceed, the perception that 'they' can or should sort it out may be part of the problem as it absolves others of responsibility.
I am sure Harriet Harman, who is the social engineer par excellence, believes that government could solve all these problems. I see that she is manoeuvring to be Labour leader after the next election.
Monday, 23 February 2009
Thursday, 19 February 2009
No crisis - meat raffle tonight
Adelaide, South Australia: I suppose that sign seen in an Adelaide street tonight is one way of responding to the recession. Actually it hasn't fully hit home here yet, although some primary industries have taken a hit. But interest rates are still at 2.25% and the Reserve Bank has said it may not lower them any further.
Opposition politicians seem to be engaging in a bout of infighting among themselves, but it's probably no more undignified than a spat between Peter Mandelson and Starbucks.
The r-word is much in evidence. That's fine if it means avoiding the kind of catastrophic market failure represented by a collapse of the financial system. What is different is the call by one trade union leader for controls on foreign ownership and the restoration of export licenses.
Similar protectionist calls have been heard in Britain and other parts of the world, some with a xenophobic tinge. But remember that the old 'mixed up' economy was a notionally market economy that was unable to function as such and hence deliver the benefits of competition.
Opposition politicians seem to be engaging in a bout of infighting among themselves, but it's probably no more undignified than a spat between Peter Mandelson and Starbucks.
The r-word is much in evidence. That's fine if it means avoiding the kind of catastrophic market failure represented by a collapse of the financial system. What is different is the call by one trade union leader for controls on foreign ownership and the restoration of export licenses.
Similar protectionist calls have been heard in Britain and other parts of the world, some with a xenophobic tinge. But remember that the old 'mixed up' economy was a notionally market economy that was unable to function as such and hence deliver the benefits of competition.
Tuesday, 10 February 2009
They don't know what they're doing
One of the most interesting figures in the latest Populus poll in The Times is that over half the electorate think that neither Mr Brown nor Mr Cameron know what to do about Britain's economic problems.
Not surprisingly, it's the Lib Dems and other minor parties who have been the main beneficiaries of the slump in Labour support. They now account for 30 per cent of voter preferences.
Labour has dropped back five percentage points in a month to 28 per cent. It's not as bad as last summer, but as the reality of the recession bites, the Brown bounce has deflated.
Not surprisingly, it's the Lib Dems and other minor parties who have been the main beneficiaries of the slump in Labour support. They now account for 30 per cent of voter preferences.
Labour has dropped back five percentage points in a month to 28 per cent. It's not as bad as last summer, but as the reality of the recession bites, the Brown bounce has deflated.
Monday, 2 February 2009
British jobs for British workers
Gordon Brown's periodic attempts to wrap himself in the union jack do himself no good and he has got hoist with his own petard with his 'British jobs for British workers' slogan. Regardless of the complexities of the Posted Workers Directive (of which I had never heard before) and of various legal cases, the underlying principles are clear: freedom of movement of labour within the EU and open competition for procurement contracts.
There's a head of steam behind all this and it's not surprising to see protectionist responses in a recession, but the more momentum they gather, the greater the risk of it turning into a depression.
Quite how the government is going to get out of this is difficult to see, complicated by the fact that different messages have been coming from Alan Johnson and Peter Mandelson, although the former has admitted that he spoke out of turn and has backed down. The room for manoeuvre is quite limited, as there is a contract and that contract is influenced by the fact that Portuguese and Italian workers are cheaper to employ than British ones.
There's a head of steam behind all this and it's not surprising to see protectionist responses in a recession, but the more momentum they gather, the greater the risk of it turning into a depression.
Quite how the government is going to get out of this is difficult to see, complicated by the fact that different messages have been coming from Alan Johnson and Peter Mandelson, although the former has admitted that he spoke out of turn and has backed down. The room for manoeuvre is quite limited, as there is a contract and that contract is influenced by the fact that Portuguese and Italian workers are cheaper to employ than British ones.
Thursday, 29 January 2009
Bad news week
Two reports from authoritative sources yesterday cast doubt on Labour's argument that Britain was particularly well placed to withtstand the global recession. First, there were the latest economic forecasts from the International Monetary Fund: IMF
Downing Street spun this as saying that the British figures were not much worse than those for Germany and Japan, but this is being economical with the actualité. The UK economy is forecast to shrink by no less than 2.8 per cent in 2009 and to grow by only 0.2 per cent in 2010, the worst slowdown since the 1930s.
Admittedly, the euro area is going to shrink by 2.0 per cent and will also grow by only 0.2 per cent in 2010 (which doesn't help British exports). However, a more relevant comparison is for all advanced industrial countries which are forecast to grow by 0.5 per cent this year and by 3 per cent in 2010. Britain is more exposed to the global economy than many countries, but even a comparison with the US is not helpful with a 1.6 per cent decline there this year offset by 1.6 per cent growth in 2010.
The figures for 2010 should give Dave Cameron pause for thought suggesting that the economy will still be in the doldrums should he become prime minister. With that in mind he should be careful about talking down the economy too much.
Even more worrying for Labour is the latest Green Budget from the Institute for Fiscal Studies: IFS
This suggests that some of Labour's key objectives to transform British society look to be increasingly unattainable given the prospect of a freeze on governmnent spending and real cuts from April 2011. Increases of 1.1 per cent a year in real terms would be taken up by higher debt repayments and higher spending on social security and public sector pensions.
Even with spending cuts and tax increases of £20bn a year, public sector debt will not return below the ceiling of 40 per cent of national income which Gordon Brown set as one of his fiscal rules before the early 2030s. Of course, the 40 per cent figure is an arbitrary one and has no particular rationale other than a political choice.
One crumb of consolation is that the IFS gives rare praise to the efficacy of Labour's cut in VAT. Overall, however, it is a bleak picture for Labour, reflected in double digit leads for the Conservatives in a number of recent polls.
Downing Street spun this as saying that the British figures were not much worse than those for Germany and Japan, but this is being economical with the actualité. The UK economy is forecast to shrink by no less than 2.8 per cent in 2009 and to grow by only 0.2 per cent in 2010, the worst slowdown since the 1930s.
Admittedly, the euro area is going to shrink by 2.0 per cent and will also grow by only 0.2 per cent in 2010 (which doesn't help British exports). However, a more relevant comparison is for all advanced industrial countries which are forecast to grow by 0.5 per cent this year and by 3 per cent in 2010. Britain is more exposed to the global economy than many countries, but even a comparison with the US is not helpful with a 1.6 per cent decline there this year offset by 1.6 per cent growth in 2010.
The figures for 2010 should give Dave Cameron pause for thought suggesting that the economy will still be in the doldrums should he become prime minister. With that in mind he should be careful about talking down the economy too much.
Even more worrying for Labour is the latest Green Budget from the Institute for Fiscal Studies: IFS
This suggests that some of Labour's key objectives to transform British society look to be increasingly unattainable given the prospect of a freeze on governmnent spending and real cuts from April 2011. Increases of 1.1 per cent a year in real terms would be taken up by higher debt repayments and higher spending on social security and public sector pensions.
Even with spending cuts and tax increases of £20bn a year, public sector debt will not return below the ceiling of 40 per cent of national income which Gordon Brown set as one of his fiscal rules before the early 2030s. Of course, the 40 per cent figure is an arbitrary one and has no particular rationale other than a political choice.
One crumb of consolation is that the IFS gives rare praise to the efficacy of Labour's cut in VAT. Overall, however, it is a bleak picture for Labour, reflected in double digit leads for the Conservatives in a number of recent polls.
Tuesday, 27 January 2009
Who should get help?
Yesterday was a particularly grim one in terms of employment news with big job losses at steel maker Corus. But, given that government funds are constrained, who should get help? Steel unions have asked for the kind of aid that is given to supplement the incomes of those on short-term working in France, Germany and the Netherlands. The UK Government is unwilling to do this, but might give money for 'training'.
Steel workers were complaining yesterday that money is given to 'top hats' but not to 'hard hats'. However, if we learnt one thing from the experience of the 1930s recession in the United States, it is that one doesn't allow banks to collapse.
In fact there may be another bias in the way in which aid is given. Women are losing their jobs faster than men in the recession and women MPs are complaining that too much emphasis is being given on helping male-dominated industries such as finance and motor vehicles, whilst 'soft' industries such as retailing and catering are ignored.
When I used to work on industrial policy, I was struck how many books were written about motor vehicles and steel, but relatively few about food processing. But, of course, food processing is an industry that employs large number of women workers. All the talk about 'real jobs' and 'making things' often conceals an implicit gender bias.
Of course, recurrent major crises of the capitalist system are a reorganisation device out of which it emerges leaner and fitter and able to grow again. Not everyone's job can be saved or subsidised, but the flip side of that is that the pain of recession falls harder on some than on others.
Steel workers were complaining yesterday that money is given to 'top hats' but not to 'hard hats'. However, if we learnt one thing from the experience of the 1930s recession in the United States, it is that one doesn't allow banks to collapse.
In fact there may be another bias in the way in which aid is given. Women are losing their jobs faster than men in the recession and women MPs are complaining that too much emphasis is being given on helping male-dominated industries such as finance and motor vehicles, whilst 'soft' industries such as retailing and catering are ignored.
When I used to work on industrial policy, I was struck how many books were written about motor vehicles and steel, but relatively few about food processing. But, of course, food processing is an industry that employs large number of women workers. All the talk about 'real jobs' and 'making things' often conceals an implicit gender bias.
Of course, recurrent major crises of the capitalist system are a reorganisation device out of which it emerges leaner and fitter and able to grow again. Not everyone's job can be saved or subsidised, but the flip side of that is that the pain of recession falls harder on some than on others.
Sunday, 25 January 2009
When in a hole ...
The BBC has once again got itself into a hole over the Gaza appeal, but is displaying its usual obduracy and refusing to stop digging. The commercial channels have no difficulty in broadcasting the appeal. It has been made by the Disasters Emergency Committee which is a reputable coalition of charities which has made appeals in conflict zones before. Backing the appeal is not a sign of approval for Hammas policies or a criticism of Israeli ones, it is simply a recognition of the fact that there is a very serious humanitarian crisis in Gaza which requires international action.
The BBC has had a recent track record of shooting itself in the foot. Public service broadcasting is potentially always under attack from the right because its attempt to be balanced is seen as concealing a liberal bias.
Public service broadcasting is an asset not just in Britain. The country benefits from the BBC's worldwide reputation for editorial rigour and impartiality. If one lives in a country like the United States, as I have, one notices the absence of a public service broadcaster. PBS, by raising money from individuals and corporate donations, does its best to fill the gap and its radio service is particularly good. But American television is unwatchable because there as so many adverts.
By trying so hard to get things right, the BBC manages to get things wrong.
The BBC has had a recent track record of shooting itself in the foot. Public service broadcasting is potentially always under attack from the right because its attempt to be balanced is seen as concealing a liberal bias.
Public service broadcasting is an asset not just in Britain. The country benefits from the BBC's worldwide reputation for editorial rigour and impartiality. If one lives in a country like the United States, as I have, one notices the absence of a public service broadcaster. PBS, by raising money from individuals and corporate donations, does its best to fill the gap and its radio service is particularly good. But American television is unwatchable because there as so many adverts.
By trying so hard to get things right, the BBC manages to get things wrong.
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