Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Britain’

John Weeks – Same old same old…Tory austerity

Posted by hkarner - 17. Mai 2018

The British economy is not doing well in any sense. Many UK citizens lead an existential battle of survival. All this has been caused by austerity, which was a miracle solution to solve all economic problems, much as the free market before it. John Weeks analyses the destructive process in an article, despite its many charts, is surprisingly simple to follow. So it you wish to understand the devastating effects of austerity this is a very straightforward explanation.

John Weeks is Professor Emeritus at SOAS, University of London, and associate of Prime Economics

Severe as it has been for the welfare of the British people, eight years of so-called austerity under three Conservative governments are but the most recent manifestation of Tory assaults on public services.  Since Margaret Thatcher became prime minister almost forty years ago, contracting the public sector has been a constant theme across Tory governments.

Chart 1 shows total pubic spending as share of GDP over four decades, 1980-2017.  In the first three years of the Thatcher government the share of public spending in GDP rose.  This unexpected rise resulted not from an expenditure increase, but from contraction of GDP, a severe recession consciously provoked by then-chancellor Geoffrey Howe with the putative purpose of reducing inflation.  The share of public spending declined continuously for the rest of the decade, falling from 42.8% in 1979, in the last year of the Labour government, to less than 35% in 1989 (Thatcher’s last full year in power).

By comparison the years of the Major government were relatively benign for public spending, though continuously below the 38 year average and falling after 1992.  The return of a Labour government briefly coincided with further decline, to 35% in 2000 from 37% when the Major government staggered to its unlamented end in a near electoral wide-out.  The decline at the end of the 1990s represented the reverse causality of the early 1980s.  A four year average growth rate of 3.5% resulted in GDP expanding faster than public expenditure.  During the last of the Blair years, 2000-2007, the public expenditure share in GDP rose almost continuously, to well above the period average.  In 2007 just before the global financial crash public spending relatively to GDP had returned to the four decade average of 39.7%. Den Rest des Beitrags lesen »

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Financial inclusion in the rich world

Posted by hkarner - 4. Mai 2018

Date: 03-05-2018
Source: The Economist

Tech and data offer hope of more financial inclusion in developed countries, too

HACKNEY IN NORTH-EAST London prides itself on being one of the capital’s most ethnically diverse boroughs. The council identifies only 36% of the population as “white British”. Dalston Junction, a now-trendy part of the borough, buzzes with a down-at-heel sort of cosmopolitanism: a Caribbean bakery; the Halal Dixy Chicken shop; the Afro World wig-and-extensions parlour; dozens of outlets for Lycamobile (“call the world for less”) and for money-transfer firms.

It is also diverse in wealth. Nearby gentrification is sprouting in a few trendy coffee bars and a sleek creperie. But Hackney is also, on a measure of “multiple deprivation”, the 11th most deprived of more than 400 local-authority areas in Britain. Dalston has more than the usual number of charity-run second-hand shops and at least four pawnbrokers.

Competing with this last group is a branch of Oakam, a British lender set up in 2006. It advertises itself as an “alternative to doorstep lenders”, the traditional financiers for those beneath the bar set by mainstream banks. Originally aimed at recent immigrants, it extended its reach to the rest of those “lacking access to basic financial services”—a group it puts at 12m across Britain. A report published in March 2017 by a House of Lords committee estimated that 1.7m adult British residents have no bank account; 40% of the working-age population have less than £100 ($140) in cash savings; and 31% show signs of financial distress. Den Rest des Beitrags lesen »

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Ann Pettifor – The Bank of England should not raise rates: here’s why

Posted by hkarner - 24. April 2018

Thanks to M.R.

Central Banks have discovered that they have little idea of what is occuring in the economies they are supposed to be guiding. Using economic models that do not function makes it almost impossible to guride their economies.

Ann Pettifor – Economist, director of Policy Research in Macroeconomics (PRIME) –  Author of “Just Money – How Society Can Break the Despotic Power of Finance”

Cross-posted from Prime Economics

This week a friend casually explained that he and his wife considered having a second child. But having recently moved into a new house, they were having to fork out a large share of their income on mortgage interest payments. Hearing talk of potential rate rises had therefore persuaded them not to risk another pregnancy.

Such are the life-changing impacts of decisions (or non-decisions) made by a group of men (and one woman) on the Monetary Policy Committee (MPC) of the Bank of England.

That morning the BBC had asked me to participate the next day in their 6.15 a.m. Business slot on Radio 4’s Today programme. The reason, the producer explained, was my known opposition to further Bank Rate rises. As I prepared to make the case that evening, Chris Giles of the FT tweeted that Mark Carney, governor of the Bank of England, had flip-flopped on the question of a rate rise. Den Rest des Beitrags lesen »

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Coordination on Syria Strikes Belies Simmering Tensions

Posted by hkarner - 16. April 2018

Date: 15-04-2018
Source: The Wall Street Journal

Assault involved careful planning between the U.S., France and the U.K. despite divisions over other issues

The Trump administration’s close coordination with France and the U.K. to plan the strikes on the Syrian regime underscores an alignment between the U.S. and its European allies despite deep divisions over other issues.

The three countries launched airstrikes late Friday against Syrian regime targets in retaliation for a suspected chemical-weapons attack near the capital, Damascus, a week ago that killed at least 43 civilians and injured hundreds more.

The move was aimed at crippling President Bashar al-Assad’s chemical-weapons arsenal, targeting a research center and two production sites. The strikes also targeted a former missile base 15 miles west of the Syrian city of Homs.

U.S. and U.K. submarines armed with missiles moved within strike range of Syria, while a U.S. destroyer and a French frigate were in the eastern Mediterranean Sea. Three more American cruisers and destroyers are deployed in the Middle East.

French President Emmanuel Macron, British Prime Minister Theresa May and U.S. President Donald Trump emphasized that the strikes on Syrian targets were designed not to escalate tensions with Russia.

The assault capped a week of careful planning between the U.S., French and British militaries, despite tensions that have sowed divisions between the allies in recent months.

French President Emmanuel Macron has slammed U.S. President Donald Trump’s decision to pull out of the Paris climate accord, pledged to push Europe to retaliate over U.S. tariffs on steel and aluminum, and staunchly defended the Iranian nuclear deal against U.S. criticism.

Relations between the U.S. and Britain were tested when Mr. Trump called off a planned trip to London earlier this year to attend the official opening of the new U.S. Embassy in London. And in November last year, Prime Minister Theresa May criticized Mr. Trump when he retweeted messages from a British far-right group.

Further, Britain and France are on opposing sides over Brexit, with Mrs. May’s government seeking a clean break from the European Union and Mr. Macron having pursued a deeper union since his election victory last year. With two-year negotiations just past the midway point, critical issues over the U.K.’s divorce remain unsolved.

Mr. Trump was full of praise for the U.S.’s allies on Saturday, tweeting: “Thank you to France and the United Kingdom for their wisdom and the power of their fine Military. Could not have had a better result.”

At a press conference in Downing Street, Mrs. May said the strikes were aimed at degrading Mr. Assad’s ability to use chemical weapons to attack his own people. A full assessment of the strikes is ongoing, but Mrs. May said the U.K. and its allies are confident they were successful.

“I believe that this action was necessary. I believe it was the right thing for us to do,” Mrs. May said. Den Rest des Beitrags lesen »

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Britain’s era of abysmal productivity growth could be at an end

Posted by hkarner - 13. April 2018

Date: 12-04-2018
Source: The Economist

The second half of 2017 saw the strongest productivity performance in over a decade

A FEW years ago the traffic lights around Trafalgar Square in London had a makeover. In place of the usual green man, which flashes when it is safe to cross the road, some lights had an image fitted of a same-sex couple holding hands. Timed to coincide with a gay-pride parade, the change was meant to symbolise London’s cosmopolitanism. But some economists joked that it was a symbol of something quite different. Where once a single worker was able to shepherd pedestrians across the road, two are now required. What better metaphor for Britain’s woeful labour-productivity growth?

It is little wonder that economists see weak productivity wherever they look. Britain has had a decade of barely any growth in the amount of output per hour of work (see chart). In the long term, productivity determines how much workers get paid. Stagnation over the past decade has thereby left Britons’ pay packets some 20% smaller than they would otherwise have been. It has also pressed down on the government’s tax take, ensuring that fiscal austerity has lasted longer than it otherwise might have. It is no stretch to say that weak productivity is Britain’s biggest economic problem—bigger, even, than the prospect of Brexit.

Lately, however, things have been looking better. Since 2016 productivity growth has been moving in the right direction. And in the second half of 2017, the latest period for which figures are available, output per hour grew by 1.7%, marking the country’s strongest performance in more than a decade. Are British workers shaping up at last? Den Rest des Beitrags lesen »

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What about next time?

Posted by hkarner - 25. März 2018

Date: 23-03-2018
Source: The Economist

Britain pulls off a diplomatic coup against Russia at the EU
After Brexit, it will be a lot harder

ONE question confronting Britain and the European Union is how to maintain foreign-policy and security co-operation after Brexit. Theresa May, Britain’s prime minister, often notes that failure to find agreement would harm the security interests of both sides. On March 22nd that observation found a pointed form of expression at an EU summit in Brussels, following the recent nerve-agent attack on a Russian émigré and his daughter in Salisbury. After some agile British diplomacy the EU’s 28 leaders issued a joint statement declaring that the only plausible explanation for the attack was that Russia was responsible for it.

This language, tougher than Mrs May had dared to hope, clears the way for further collective EU action, including on beefing up defensive instruments against Russian hybrid warfare, later this year. Nor was the European response limited to words. The EU’s ambassador to Russia has been temporarily withdrawn to Brussels, and on March 26th several countries, possibly including France and Germany, are expected to announce that they are following the British example and expelling Russian diplomats. Angela Merkel, Germany’s chancellor, reportedly asked her fellow leaders to state which of them would agree to do so. Den Rest des Beitrags lesen »

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Global Britain or globaloney

Posted by hkarner - 18. März 2018

Date: 15-03-2018
Source: The Economist: Bagehot

The government’s post-Brexit foreign policy of “global Britain” is incoherent

THE idea of a global Britain has become the foundation stone of Britain’s post-Brexit foreign policy. Theresa May says Brexit “should make us think of global Britain, a country with the self-confidence and the freedom to look beyond the continent of Europe and to the economic and diplomatic opportunities of the wider world”. Boris Johnson, Britain’s foreign secretary, declares that “whether we like it or not we are not some bit part or spear carrier on the world stage. We are a protagonist—a global Britain running a truly global foreign policy”.

But what does the phrase mean? The Commons foreign affairs committee, newly energised under Tom Tugendhat, summoned the great and the good of the foreign-policy establishment to answer this question. The results were disappointing. Some confessed that they hadn’t a clue. The Foreign Office submitted a memorandum consisting of little more than a set of aspirations with no details about how to put them into practice. Mr Tugendhat’s committee worries that “global Britain” cannot be the basis of foreign policy because it is little more than an “advertising slogan”. This columnist thinks the problem goes deeper. Global Britain is three badly thought out ideas rolled into one. Den Rest des Beitrags lesen »

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British institutions may not withstand the authoritarian-populist wave

Posted by hkarner - 10. März 2018

Date: 08-03-2018
Source: The Economist: Bagehot
Subject: It could happen in Britain

IN HIS dystopian novel of 1935, “It Can’t Happen Here”, Sinclair Lewis described the rise of an American Caesar, Berzelius “Buzz” Windrip. Buzz easily defeats Franklin Roosevelt for the presidency by promising to make America great again. He then sets about destroying the country’s system of checks and balances, by fomenting fear and unleashing activists, while sensible Americans comfort themselves with the belief that their country is immune to authoritarian takeover.

Donald Trump’s election has propelled Lewis’s novel back onto the bestseller list and provoked a lively debate on the question of “Can it Happen Here?”, the title of a new book edited by Cass Sunstein, a Harvard professor and former adviser to Barack Obama. It is time for Britain to engage in a similar debate. The British are even more confident than the Americans about their immunity to extremism. Britain hasn’t had a violent revolution since 1640-60. Rather than rallying to Oswald Mosley’s fascists in the 1930s, the British treated them as figures of fun—black shorts rather than blackshirts, in P.G. Wodehouse’s satire. But the next five years could test Britain’s immune system to the limits. Den Rest des Beitrags lesen »

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Why Border Controls on Trade Will Rise Again in Europe

Posted by hkarner - 11. Februar 2018

Date: 10-02-2018
Source: The Wall Street Journal By Stephen Fidler

U.K.’s decision to steer clear of any customs union means new red tape for British exporters

The leading voice of British business argued this week for staying in a customs union with the European Union, saying it was “part of the answer to the tough questions facing the government” over trade.

As the Confederation of British Industry was setting out its case, the government made clear it has other ideas. Britain, it said, wouldn’t be a part of any customs union after the post-Brexit transition period it hopes to secure ends in about three years.

As a result, for the first time in decades, the 180,000 British companies that export to the EU will face bureaucracy at the border. Even if Britain cuts a trade agreement with the EU after Brexit that keeps goods tariffs at zero, administrative costs for exporters to the EU will soar. Den Rest des Beitrags lesen »

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Theresa May is intolerable—but unsackable

Posted by hkarner - 2. Februar 2018

Date: 01-02-2018
Source: The Economist

Britain must hang on to its inadequate prime minister

AFTER she contrived to lose the Tories’ parliamentary majority last year in spite of a widely unfancied Labour opposition, Theresa May was described by one former cabinet colleague as “a dead woman walking”. That harsh description has turned out to be only half-right. The prime minister’s inactivity since the election means that it would be more accurate to describe her as a dead woman standing still.

The lack of policies or purpose in Downing Street, coupled with Mrs May’s frequent political pratfalls, have driven the Conservative Party to the brink of seeking a new leader. The case for getting rid of the prime minister is compelling. But consider more closely what would follow and there is a stronger, though depressing, argument that if Britain tried to replace its failing leader it would be even worse off.

Since her electoral disaster Mrs May has blown several last chances. She mishandled the aftermath of a tragic fire at Grenfell Tower. She spluttered her way through a speech designed to relaunch her premiership, as the set literally fell apart behind her. When she attempted a cabinet reshuffle some of her ministers refused to budge. Worse than these blunders is the vacuum of ideas. The politician whom we nicknamed “Theresa Maybe” a year ago still cannot decide what to do about Britain’s housing shortage, the crisis in care for the elderly or the slow decline of the National Health Service. Den Rest des Beitrags lesen »

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