Low economic growth is a slow-burning crisis for Britain
economist.com
economist.com
There seems to be a problem developing across many western democracies that a large segment of voters have developed a tolerance for lying by their leaders. Perhaps it's just me getting older and more cynical but I really feel like this was not how it was 30 years ago.
I'm not sure where it will lead but it feels like this is one of the hallmarks that you would expect to see at the beginning of the breakdown of a civilised society.
In the US, elections are fought between two party candidates, and so the results of a highly adversarial approach can viewed through a zero sum lens. If I lose less social trust by smearing my opponent then they do, then smearing my opponent is a strong viable strategy.
In Canada, due to a host of systemic differences (smaller electoral districts, debates run by inclusive institutions, stricter campaign finance regs, etc) multiple visible parties compete politically. A direct result of this is that if adversarial behavior negatively affects public perception of both the attacking party and the target party, both parties lose while a third party gains.
This a small example of one facet about how differing systems channel the behavior of competitive politicians. An observation of flawed electoral systems is that they tend towards harmful feedback loops. Culturally, maliciously adversarial behavior becomes normalized and escalated. Gerrymandering leads to competitive primaries & non competitive general elections which leads to partisanship that makes it more difficult to deal with gerrymandering. Judicial capture leads to the institutionalization of systemic flaws that benefit the party of the judiciary.
This [1] is "book" (it's short) 8 of Plato's the Republic. If you skip down to the line of "And democracy has her own good, of which the insatiable desire brings her to dissolution?", and read from there you might otherwise assume it was just an elaborately and archaically crafted metaphor referencing the past ~60 years in the United States, aside from a handful of references to substantial norm differences, including slavery. But of course it was written 2400 years ago.
I don't think the issues we face are systemic so much as they are social. Technologies and systems change, but humans remain more or less the same. Reading the classics convinced me that the saying that history repeats itself is not just some some abstract saying where if you interpret things in some way or another they resemble one another, but a quite literal one. We're a species stuck in an infinite loop with little but technology changing the scenery, for better and for worse.
People used to care more about higher politicians' lying. Today, people don't even blink. After Trump's antics, now we have Biden denying something he said the day prior and it's a non-issue at all.
Well everybody except one token opponent to maintain the charade that the decision was driven by "democracy." And if that wasn't enough they took the unpopular chosen one, paired him with another even more unpopular candidate as a vice president, called that the ticket, and people voted for them, en masse, because "well, they're awful but they're less awful than the alternative."
In no way do I mean to imply that lying is is unimportant because both parties do it - it's unacceptable regardless, but I have trouble accepting arguments that point to a shared <bad> thing between parties and then use that to conclude that voting doesn't really matter.
The new wage transparency laws are coming from Colorado and Washington, also blue states. It seems very clear that at least some priorities of the blue team are pro worker and pro civil liberties.
On the federal level, the Republicans have passed two large tax cuts in the last 22 years and entered into two expensive wars. Democrats have passed the only large wealth transfer from rich to poor via Affordable Care Act in 2009, and followed it up with No Surprise Billing Act in 2021, while Republicans have tried to dismantled ACA for 13 years. Democrats passed a bill to expand infrastructure spending in 2021, and tried to pass federal paid parental leave and childcare laws. Republicans spent the same time trying to revoke women’s access to healthcare (abortion) and same sex marriage. Democrats withdrew military from Iraq and Afghanistan. Repubs spend their time defending literal traitors to the country.
Obviously Dems are not perfect, but how anyone can say both are the same is beyond me.
In my country for more than 20 years people don't vote for a party (and we have more than 2), but they vote against what they see as the worst party. It is negative voting. If I would move and vote in US, I have very strong reasons to vote against both major parties, they look like the choice between getting shot to death or hanged to death: no matter what you choose, the result is bad.
Also some part of that enumeration implied as positive changes is not seen as positive in countries that did such things 20-30 years ago and saw the effects. Lots of people seem to wear horse blinders, they do things that were done by other countries ignoring the outcome in these countries. The emperor is naked and nobody wants to admit it.
I have greatly benefited from the policies I specified, so I do not see why I should view both as “bad in different ways”. I do work to support ranked choice voting so that I can get more than 2 choices at the polls, but until then, I work with what I have.
After ACA HMO profits went up. A lot. Along with premiums. It was a wealth transfer from middle class to rich. That was part of the deal for making sure everyone was covered.
The wealth transfer is the out of pocket maximum in conjunction with premium tax credits. Premiums went up because the bottom 50% of society finally started receiving healthcare, and were not liable for astronomic healthcare bills due to the out of pocket maximum. Plus young people greatly subsidize old people because premiums for age 64 are capped at 3x the premium of age 21.
Unfortunately, the wealth transfer was neutered due to the penalty for not having insurance being removed, and due to allowing non ACA compliant plans to exist, as well as not forcing everything onto the same market and letting healthy, white collar employees to silo their risks in employer sponsored plans.
Obviously, the implementation of ACA is not the ideal, but that is what was possible due to near zero support across the political aisle. At least we got that, and it is irrefutable that more people have received more healthcare due to ACA than before ACA. The middle class wealth transfer is actually the 60% to 90% feeling the pain due to their money being used to provide for the 30% to 60% (whoever was not poor enough for Medicaid, but not lucky enough to work at an employer rich enough to provide good healthcare benefits).
I really don't want to see this kind of language in any party's politics. How can we hold all politicians to a higher standard? It has become completely untenable. It is a complete shit show. I don't think any President in the past would say something like this, I can't imagine Obama, Bush or Clinton telling the public they feel so much anger at someone that they'd like to shoot them.
Yes, the resultant behavior of others due to the rhetoric of each case is different (barely, but less time dependent). But so too is the hand-wringing.
There have been massive doozies in the not so recent past.
Certainly there were lies galore during the Kennedy/Johnson Vietnam years.
In the past I think it was more likely that the press only made a deal about lying politicians when it was obvious that said politician was on the way out and that created a false effect. Or the scandals that made it through the wall were truly scandalous.
Maybe politicians have always been liars and people have always let them get away with it.
If he did something serious then fine. But who actually cares about this? It’s a fake outrage.
he instructed police to prosecute, as criminals, people who stopped and said hello to a neighbour when they went for a walk.
he instructed police to prosecute, as criminals, people who tried to hold the hand of their parent as they died.
he instructed police to prosecute, as criminals, people who did what he was doing.
but he did nothing wrong ...
I'm gonna need to see your source.
https://demodexio.substack.com/p/democracy-for-realists-part...
They make the point that the public often screams at whoever the leader is, regardless of whether the leader has any power over economic events, and regardless of whether the leader is conservative or socialist. There is also this:
Democracy for Realists, 2016
Why Elections Do Not Produce Responsive Government
By Christopher H. Achen & Larry M. Bartels
Page 312
The result is that, from the viewpoint of governmental representativeness and accountability, election outcomes are essentially random choices among the available parties – musical chairs. Elections that “throw the bums out” typically do not produce genuine policy mandates, not even when they are landslides. They simply put a different elite coalition in charge. This bloodless change of government is a great deal better than bloody revolution, but it is not deliberate policy change. The parties have policy views and they carry them out when in office, but most voters are not listening, or are simply thinking what their party tells them they should be thinking. This is what an honest view of electoral democracy looks like. It is a blunder to expect elections to deliver more.
https://demodexio.substack.com/p/democracy-for-realists-part...
Crucially, they point out, in every democracy, over and over again, the public will vote out the ruling party whenever the economy is bad. Therefore, the public does not seem to have any particular allegiance to any particular theory of the economy. Does socialism work? Does free trade work? Do markets work? The public doesn't seem to have much commitment to any of these ideas. Instead, when the economy is bad, the public will vote against whoever is in power, and they will vote for the other parties, regardless of what those other parties believe in, therefore, as they said, from the point of view of the people who run the parties, it is a game of musical chairs.
Consider this bit:
Page 205
A crucial feature of this brief litany of electoral responses to the Depression is that the ideological interpretation customarily provided for voters’ reactions in the United States does not turn out to travel well. Where conservatives were in power when the Depression hit they were often replaced with liberals or socialists, as in the United States and Sweden. But where relatively leftist governments were in power during significant downturns they were often replaced with more conservative alternatives, as in Britain and Australia. Where the existing party system was oriented around noneconomic issues, as in Ireland, voters rejected the “ins” and replaced them with “outs” whose policy positions cannot even be sensibly classified in left-right terms. Where the timing of elections forced more than one major party to stand for reelection during the worst years of the Depression, as in Canada and Sweden, voters seem to have been perfectly willing to reject both in turn. Where complex coalition politics diffused responsibility, as in France and Germany, discontented citizens turned to unstable coalitions, to fringe parties, or to the streets. Simply put, there is no consistent ideological logic evident in voters’ responses to the Depression when we look beyond the American case. When voters got a chicken in every pot at election time, they usually liked the incumbent party’s ideology just fine, whatever it happened to be. But when incomes eroded and unemployment escalated, they became ripe for defection to anyone who promised to bring home the poultry.
Is your impression that this is US-specific? Mine is that lying is accepted in politics in general.
Dishonest is a feature for having a better odds to win the elections in modern time. Not a bug. Statistically people get more dishonest politicians who are very good at being elected. It happened to accompanied with other traits. Dishonest is one of them.
Another one , a more dangerous one then dishonest, is that they cause more conflicts and wars by inspiring "good" people fighting against "evil" with illusions that they stand in a high moral ground. The victims of this feature are in none-western countries. So the perceived impacts are less then dishonest.
If the theory is true, then complaining about individual politicians doesn't work. The root cause of the problem which is reflected in statistics would be ignored.
https://twitter.com/davidshor/status/1522341844960436224
Also see Burnham, “The Machiavellians: Defenders of Freedom” or Hayek, “Rules and Order” section “Principles and Expediency”.
In general it’s the elites who have to care about norms and principles, and hold each other accountable. Voters care about expedient matters such as gas prices.
People have been crying wolf at the breakdown of society since the romans. Obviously sometimes there is a wolf, but if everything looks like a wolf, we're really bad at identifying the real ones.
Thing I learned from O. Henry, the easiest mark is someone that thinks he's in on it.
On waiting for services: I was actually (and still technically am) on an NHS waitlist which I've been on for the last 5 years, my new employer is just paying a private doctor to handle everything which begins next week. Just wanted to put that out there to give an idea to the non-UK HN audience of how bad things have got.
The only other state that comes to mind where typical service delivery times were measured in years was the DDR in the late 80s, and we all know how that ended.
One other thing few talk about is the recent noticeable drop in the ability of the state to enforce it's laws (especially when those laws are seen to be morally wrong), for example there's been multiple documented instances now of immigration raids being stopped by hundreds of people surrounding the vans until the police leave (https://news.sky.com/story/peckham-man-arrested-for-immigrat...) and jury nullification is starting to become a noticeable thing even for those who are arrested (a prominent example being the Colston Four: https://en.wikipedia.org/wiki/Colston_Four) - the fact the state can't even consistently enforce its laws anymore speaks to its rapidly diminishing power, even domestically.
Maybe I'm just mad and have read too much into everything, but it feels like the British state is a few mistakes away from putting itself into a slow and irreversible collapse. Maybe it will take a few years so that a noticeable disparity forms between the UK and it's neighbours like Ireland and etc, but it feels it's slowly marching that way.
I suppose it's possible that the jury found that they found the defendants guilty of breaking the law but returned a "perverse verdict" anyway (jury deliberations are secret after all), but their behaviour certainly had the possibility of being lawful and the jury were directed to decide whether or not it was lawful.
A better example would have been for me to use the case of Extinction Rebellion and Shell: https://www.theguardian.com/environment/2021/apr/23/jury-acq...
Don't you pay something like 60% taxes for this?
> of immigration raids being stopped by hundreds of people surrounding the vans until the police leave
I suppose illegal migrants are ineligible for public healthcare. Else it's a little counter productive for people to block immigration enforcement isn't it?
Yep, my effective tax rate is roughly 55% over the year
I've previously applied to go work in the US, particularly at Stripe. Basically got told unless I have something ridiculous (so they can get me an EB-1A) the waiting times for Visas is way too long.
I'm nuking the student loan as fast as possible, especially with the interest rates being near extortion, so hopefully that will mean I get more take home in the future
45% Income Tax + 9% Student Loan Repayment (mandatory) + 3.25% National Insurance Contributions
Gives 57.25%, but this is off because:
- Student loan repayments start somewhere above 20k, which decreases it
- National insurance runs at 10.25% before going down above a certain income, which increases it
- Higher rate and basic rate apply to some income (but no tax free allowance), which decreases it
Hence to a round(ish) number roughly 55%
Also, you're not paying 45% income tax on the total amount right (that's the highest bracket in the UK).
I'm in the higher tax bracket and still I'm far away from that percentage. I see that >50% tax rate in Italy, which is the leading cause of tax evasion, with some actually moving their companies to the UK to pay less tax.
Just get an O-1.
Wait time for the UK shouldn't be that long anyways.
They're eligible in the US.
> Else it's a little counter productive for people to block immigration enforcement isn't it?
Public healthcare is rarely someone's only interest.
Noone pays 60% tax, the UK taxation is at a similar level to the US for most people, they will pay between a 20% and 30% effective rate although there are progressive bands.
To be fair folks in the US also have to pay for college, but to give an example of the typical situation in the UK: £55,000 loan on a 7.3% interest rate (it was going to be 12% but the government decided to reduce it https://www.bbc.co.uk/news/education-61765891) in a country where the average income is £31,722 per year
It’s a very sad situation. The conservative government have been running Britain into the ground since they took power after 10 years of very good governance by labour (reduced NHS waiting times, good economic growth, ability to deliver infrastructure projects in time and on budget, reduced crime, reduced child poverty, etc etc.) that was soured by the financial crisis. Then the conservatives grabbed power and shoved the country into reverse, doubling the national debt in the first four years through “austerity” policies designed to reduce spending that instead caused a double dip recession and negated any savings through reduced tax receipts. Then poverty and crime rose while the economy tanked and the social safety net and police and health services were gutted (my local area lost 1/4 of its police officers, for example). And all of that had to be blamed on Eastern European immigrants and Europe so we had Brexit.
David Cameron has to go down as the worst prime minister in the history of Britain. He’s been a complete disaster on every front. The current clown is just a sick result of Cameron’s incompetence.
Honestly I don't think they'll ever write Plan 2 loans off, these people will spend their entire life paying their 9% loan repayments, with no hope to ever pay off the total sums as they climb by 5% a year.
The voting majority is completely irrational, however one tries to rationalise their behaviour (it was a protest vote!)
I expect Tories to be voted in again next election.
Then add VAT at 20%, fuel duty (approximately 50% tax on the cost of fuel and the duty also has VAT added to it, so you’re taxed on the tax), vehicle excise duty, student loan repayments, council tax, National Insurance (which has just gone up by 25% as well) to that.
https://www.buzzacott.co.uk/insights/exposing-the-60-income-...
48,323/125,000 != 60%
The same thing also happens at 50,000 where you lose your child benefit government handouts, but funnily enough its less discussed yet the comparable rate is 65%.
The education systems really is bad that I have to point this out.
Presumably you've connected the two. If there is a supply side shortage of doctors - and there is - yet if you have the money you can jump the queue, then all that does is increase the delay to those without money.
It's like the priority queue at Alton Towers, which in itself is an affront to one of the core British values - that we are all the same really and we all stand in line awaiting our turn.
The solution is to abolish the fast track option and reorder the priority queue based upon need, not ability to pay. That is, and remains, the founding value of the NHS.
It's how we get the rich to pay more. They wait the same time as the poor person with the same issue, but their time is more valuable.
Private medicine doesn't increase the capacity of the system. It tilts the system towards those who can afford a FastTrack Pass at the expense of those that can't.
Where it gets to the point of NHS dentists where it's a struggle to get one, because they're all private. That is an issue.
If doctors migrate to the U.K. that just means the country where they trained has poorer healthcare. And that country has trained somebody for no benefit to itself.
We call that colonial appropriation of other nations natural resources.
The U.K. has to cut its coat to its cloth.
What you’re suggesting there is that the full time NHS job isn’t full time enough.
On other reasons to not work for the NHS: culture plays a big part. The NHS is very bureaucratic and slow to change. Private companies have the potential to offer a more positive work culture, flexible hours, etc etc all the normal things that ‘good’ companies to work at do to help offset lower wages that the NHS often doesn’t. Similarly, due to different funding models, private healthcare can give drugs/perform procedures which don’t have a good cost/benefit analysis but the customer doesn’t mind paying for. That’s just more money into the system and one fewer person in the queue waiting for treatment for everyone else.
An analogy is helicopter vs train. The free train run by the government is full. Rich guy buys a helicopter ticket. Queue for the train is one person shorter. The government would never fund a helicopter journey as too expensive. So its not even a consideration for the government.
You can try push the everything must be NHS or nothing, but we start moving away from a free market economy, and that that’s a whole different argument, and has much bigger impacts than just the NHS.
Private healthcare causing harm by over-testing, over-diagnosing, and over-treating is not an advantage.
That again requires additional capital allocated to rich people. The government can easily ban use of helicopters and force them to accept the same price as a train. Which is what you do if you want to avoid rich people jumping the queue.
We're back to the Alton Towers example.
"Private companies have the potential to offer a more positive work culture"
All NHS GPs are private companies. Always have been. So why not become a full time GP on the NHS?
Private medicine uses up scarce resources that can be redployed to the NHS - for the benefit of all.
There is no free market economy in healthcare as I said initially. It is supply side limited by the nature of the work. And when a system is supply side limited the 'free market' just means rich people can jump the queue. Their extra money doesn't fundamentally increase supply.
The tone of the article itself reflects that culture, one particular government or set of policies cannot be responsible for malaise that is so generalized. I think the UK needs much more devolution of power, autonomy and less financial and political dependence between its regions.
Except that those parts are the ones who benefited most from being in the EU and are also the parts that overwhelmingly voted for Brexit.
As for labor, again IIRC, the (fruit?) farms are labor intensive and locals aren't interested, at least not at the wages that the farms can afford given what they get paid by the supermarkets, who can't meaningfully pay more without raising prices, which they can't do without hurting more people: even before I left, I was seeing "donate food to the food bank" baskets at the doors to supermarkets in well-off areas like Cambridge.
The entire UK depends on fiscal transfers from London, which is the only part of the country that is fully developed. So what benefits London, benefits the job center material complaining about foreigners in the barbaricum (which is the UK minus London).
Gee, I wonder why those folks don’t believe Londoners who say they have their best interests at heart.
This is something people don't seem to get--anarchy sounds nice to lots of people. However, everything doesn't just keep going--everything suddenly stops.
Maybe what emerges on the other side on anarchy is better for "the people" (history suggests that the probabilities are against it), but there's a lot of bloodshed and starvation in the meantime.
You may get your pound of flesh but will you be alive to appreciate that fact?
The UK has all of those too, but they are all located in one city instead of spread out across the country.
Top schools really are spread out quite well in the US compared to some countries. Which agrees with the general point that the US isn't super centralized.
The geographic diversification of the US really is an enormous asset for the economy.
This is it - over taxing and over regulating productive activity eventually leads to less growth and lower standards of living.
Tax breaks are awarded to businesses, and tax rises are heaped on workers and the youth who are increasingly impoverished. Failing to adequately tax or regulate all of this "productive activity" results in a windfall of profits for a few who hoard it and stagnate the economy while the demand for basic goods and services dries up and actually-productive sectors wither in favour of extractive rent-seeking "productive activity". The resultant budget deficits lead to crises in basic services, crumbling infrastructure, inability to intervene to keep incomes in line with living costs (even if a political party with the will to do that existed, and could get elected, which it doesn't and can't), and a spiralling budget deficit.
Corbyn was completely unelectable and gained 30 seats with a nearly 10% swing towards him in 2017 because of the Tory's policy on social care, removing the triple-lock and cutting the winter fuel allowance. That's how determinative old-people are in elections.
The only reason Tories remain in power is because they're happy to destroy the country in line with boomer preferences, it's not evidence they can ignore boomers at all. We've seen what happens when they make even the slightest moves against Boomer entitlements, they get decimated in the polls.
People who think governments don't respond to voter preferences, especially the preferences of a voting bloc which pretty much single-handedly determines elections, have clearly never worked in government.
[1] https://www.thisismoney.co.uk/money/diyinvesting/article-810...
[2] https://www.google.com/search?q=ftse+index
[3] https://www.google.com/search?q=cac40+index
(click max on the google searches and look at 20 year history).
Society has made promises decades ago about returns that would be delivered in the future, which would then translate to people being able to procure labor/services, especially in old age.
Without those returns, actual quality of life will not meet expected qualify of life (which is and has been happening for decades for greater and greater portions of the population, hence all the political turmoil).
Typically, this growth was easy to achieve due to almost all women having 3+ kids each. Then, advances in technology picked up some of the slack from decreasing birth rates. But seems like advances in technology are not able to make up for the decreasing birth rates since a while now, especially in non US countries.
I would learn this stuff, pretty important for your retirement...
As your first article points out: The "stagnant" stocks pay dividends. That's how it's supposed to work. How is a system healthy and sustainable if you expect share prices to double every 5 years? Tesla's valuation has nothing to do with reality anymore, it's a wet dream.
So using the mains indices like you do to compare economic growth or investor gains is meaningless.
What's the structural problem at play here? Brexit is definitely isolating, which promotes "comparative disadvantage", i.e. doing things domestically that are more efficient to achieve through trade.
Maybe there are demographic problems? Too many elderly, not enough youth and skilled labor?
They allude to democratic inefficiencies, i.e. voting blocs that receive more than they pay, creating poor allocation and disincentive.
But all of the above don't seem to be solvable. UK won't re-enter the EU, demographics can only be tweaked by immigration, and voting blocs are part of democracy.
So what does that leave in terms of solutions?
I found it very informative. Thanks for sharing!
The bedrock of the nation is really not in a good place, unless you aim to merely be better than the Italians or Spanish, there has been a large increase in the use of food banks and that kind of thing.
What we did have during the pandemic was blatant corruption wrt to the purchasing of PPE and building test and trace organizations. Billions lost, conveniently in large part to companies that don't really exist. Governments should not be in power this long, they've run out of honest people.
State has been and continues to be cut, with functions moved over to (read: bought from) private providers. But because there is no real competition among them, the privatisation drive does not push for any gains in productivity. Instead of a public entity doing something, that something is now bought from a private provider with elevated profit margins.
UK governments don't encourage competition. They grant charters. In the US you would probably call these "cost plus" contracts. But because these are essential services, a more accurate description would be: this is tax farming.
The way the government deal with with the private sector in this country is utterly bizarre. It's very much a buy cheap buy twice type of pattern, only the companies that get the deals typically can't deliver anything (i.e. they just pass the money on to a real company, only that means the pricing mechanism/feedback is completely broken)
Doesn’t matter whether you’re Japan or Portugal - demographics seems to doom any notion of “growth”.
The vote to leave by the proletariat demonstrated massive dissatisfaction, but sadly there are subsequently no credible political parties or leadership that are not closely aligned with the CoL and/or the EU, resulting in a becalming.
The Spider's Web: Britain's Second Empire | Documentary Film https://youtu.be/np_ylvc8Zj8
'Michael Oswald's film The Spider's Web reveals how at the demise of empire, City of London financial interests created a web of secrecy jurisdictions that captured wealth from across the globe and hid it in a web of offshore islands. Today, up to half of global offshore wealth is hidden in British jurisdictions and Britain and its dependencies are the largest global players in the world of international finance'.
80 minutes, well worth watching imo
The only thing it demonstrated is massive propaganda, that's it.
People were dissatisfied with the current state of their life, not with the EU. Then people just fed them lies saying that their problems were due to being in the EU.
Italy is now living basically on the debt funded by Northern European countries and soon this might come to the end with the widening spreads and markets not believing Italy’s ability to serve its debt. Either the money printer must brrrr, with massive inflation, or Italy, maybe Greece and Spain to default their bonds.
https://www.reuters.com/business/finance/some-european-state...
https://www.cer.eu/publications/archive/policy-brief/2022/co...
One of the several issues is with how the “dopplegängers” are selected. A basket of (weighted) countries is selected with economic structures and pre-Brexit performance similar to the UK. I haven’t analyzed the linked Python code and datasets, but the text gives scant information on what exactly makes a specific country similar or dissimilar to the UK.
The rare exception is when it compares UK’s GDP growth with Australia’s and New Zealand’s instead of Italy’s, when it says it ignored the latter because of its “rapidly ageing” population.
In the “Services trade” rubric, UK actually outperforms the dopplegänger, until the author removes the country with the largest weight, at which point the UK’s advantage disappears. This could be interpreted as some questionable data massaging.
None of which is to say that I necessarily think Brexit was, or will be, an economic success for the UK. This is not something that can be easily determined at this point, especially with Covid. But these studies should be taken with a grain of salt.
"For all that, debt sustainability is not an imminent risk."
The UK is in far worse shape because Brexit has nuked a huge hole in the economy. 4% is about £80bn a year.
But the real problems are systemic and political. The UK has been taken over by a far right cabal of criminals and opportunists who think nothing of wasting tens of billions of government - in addition to Brexit - while demonising asylum seekers and those on low earnings as a distraction.
Britain has the potential to be a powerhouse, but its political class is one of the least competent and credible in all of the G20.
The UK’s been ruled by a relatively small hereditary aristocracy for, what, 1,000 years? A self-interested political class is hardly a new phenomenon there.
Still, all of the examples of her meddling are in laws that apply to the royal family. There aren't any (known) examples of her putting her thumb on the scales of public policy. Not that that makes it a whole lot better, but it still falls short IMHO of "ruling the country." I think she knows that if she tried to do that it would be the end of the monarchy.
On the flip side, David Camerons grandfather was a recipient of slavery reparations which indebted the country for 150 years but created inter-generational wealth for a small elite of merchants, slave traders and the like. So he may not be a hereditary lord, but it's not exactly a far cry from it, either.
https://www.google.com/amp/s/amp.theguardian.com/money/2019/...
Britain is washed up and will take years to recover from Brexit and Tory rule, if ever.
You could argue that at that point the UK no longer exists to recover and thus “if ever” is a pretty realistic outcome if the decline continues for much longer and the resentment in the outlying areas continues to grow.
The EU lost the exact same amount in that exchange and had to substitute it with inferior or more expensive goods and services from elsewhere.
So no, the UK is not in far worse shape as they can open up to the rest of the world and the EU cannot because it's built around the principles of self-isolation and trade barriers.
Why the UK hasn't done as much after Brexit is a different problem. Sadly, Johnson has turned to be useless, although not nearly as useless as May. I'd like to see a "UK Trump" take over for a while. It's very hard to do worse than the two main parties.
The EU is likely to find it easier to get useful trade deals as it has more recent experience of writing trade deals, partly because it does that for its members, and partly because the UK government doesn’t trust British people who worked for the EU to get that experience.
The UK also has limited room for getting significant alterations to the terms of imports to the UK in any trade deals, because every deal that contradicts EU rules represents another thing that has to be checked for with NI—GB trade.
That said, the UK appears to be very good at getting a large quantity of trade deals, by the cunning method of giving the counter-party whatever they ask for at negligible cost, so the British negotiators can get themselves another headline with the words “trade deal” in it.
So the upshot is that the UK purposely voted for a shifty character, and that's what they got!
Stagnating populations and the goal of sustainability will lead to economic stagnation.
To add to the actual article: Well, this is the price of democracy. People voted, now they have to pay. This is democracy! Populism instead of technocracy. Instead of doing the right thing, the majority decides the direction. And further, you want to support corrupt Ukraine and punish evil Russia? Then you gotta pay, too. We will see how long this "value driven politics" approach will work with the Western majorities and how long it takes until yet another populist is elected fully democratically who promises so much good stuff and in the end just delivery crap like Brexit.
I personally lost the trust in our Western system and stopped voting.
It's not just about buying more stuff, it's about the quality of stuff produced.
Like, in a desperately poor country there isn't enough labour or capital to effectively sanitise drinking water. But as productivity goes up, there is. Poor places don't drink more water than rich places, but the quality goes up dramatically.
I think it makes more sense to figure out what sorts of services needs to be grown to achieve the goal of society in terms of happiness and well being.
A lot of growth is kind of fake. It doesn’t really improve anything other than on paper.
Things are extremely difficult here if you're working for a living and are not ultra wealthy. Just last year I brought a house which put in me hundreds of thousands of pounds of debt because of how ridiculous house prices are. I've worked and saved my whole life since I was a teenager (32 now), yet there are 20 year olds on benefits in my family who live in houses that are worth more than mine and have never worked. I'm so stressed out right now because interest rates are obviously rocketing up so I'll be paying a much higher rate when I go to remortgage next year and at the same time house prices could potentially crash. The reality is if I lose my job over the next few years I'm probably going to be screwed and the last 15 years of work was probably all for nothing. Fun.
At the same time significantly more than half my income goes on taxes when you consider taxes like VAT, council tax, TV license, car tax, fuel taxes, stamp duty tax, and all the others I'm forgetting on top of the income and NI tax that comes out of our wages. For the hundreds of thousands of pounds of tax I've paid over my career I have the benefit of getting literally no help whenever I need it because I work and I also get to enjoy our barely functional public services.
I'm not complaining about my situation, but it does upset me when I've struggled my whole live to get where I am, yet single mums in their 20s in my family still get to live in nicer houses than me, get free cars from the government while not having to work a day in their lives. I'm driving a Fiat Punto with 90,000 miles on the clock while several people in my family on benefits have gotten new BMWs because of government schemes.
The low growth we have in this country doesn't surprise me at all. Last week I was looking for a weekend job to help with the bills, but given my tax rate it's basically pointless looking for extra work. People in my family on benefits are also routinely advised not to work by the job centre because it would leave them financially worse off. But we're not just disincentivised people from working, we're also massively over regulated. It never ceases to amaze me just how difficult it is to do anything here. For example, my girlfriend likes making bath bombs she wanted to sell some so I looked into helping her set up an online store, but I found out you have to pay hundreds of pounds to have every product you want to sell reviewed and approved first making the whole thing pointless at the scale she would be operating at. Another example is something I'd love to do which is sell cakes, pastries and pizzas as a delivery service from my home kitchen because I love cooking and always have too much food. But I can't sell food because to do that I need to have health and safety inspections, and again at the scale I'd be operating at it makes no sense. And it's like this with everything here. Unless you're super rich or know someone in the industry who can get you through all the regulatory hope I don't really understand how anyone starts any business without being terrified that they're operating in violation of some regulation. Apparently I can't even cut the tree down in my own garden without telling the local council because it's over a certain width. It's a beyond a joke.
I very much agree that Britain is heading for a crisis if we're not already in one. The core problem we have is that people here truly believe the government can fix everything by spending more money and increasing taxes, and until that attitude changes nothing will get better. So instead of cutting taxes and incentivising people to work, I can almost guarantee the public will demand the government fixes this problem by increasing taxes on people who earn more than them while spending ever more money on various inefficient wellfare schemes. And if you want an example of this then just look at what's happening right now with the energy bill crisis... No one is asking for tax cuts to help people with affordability, they're asking for handouts to pay for their bills while increasing taxes on the energy companies.
High earners in Sweden for instance pay nearly 11% higher effective rate compared to the UK.
Life is a dream lived over an abyss. We invent all sorts of distractions and systems of order to seal the gates of hell, to keep the dream alive, but the truth cannot be ennchained forever. Like children, we go about our days unaware of the unfathomable darkness lying in the heart of the human soul. We look at men who do great evil, killers, tyrants, etc., and think evil begins and ends with their kind, but this is a comforting lie. It's in us all: the face of the most abominable monster is our face, yet we deftly conceal it with our many illusions that keep the darkness from rising within us.
We will all die and be forgotten. Humanity will be superceded and humiliated by its own progeny. Life, as we wish it to be, as a think that can be conserved, is futile. What happens when then the illusions fall, making life aware of it's own futility? Life can only be kept innocent as long as it believes in itself--that it has a future, that it can be preserved. Once life becomes aware of its own futility, it becomes self-destructive and hostile to life...demonic--if you will.
Our civilization has turned its back on this spiritual struggle against death(satan). Like children who ignore the wisdom of their fathers, we have chosen to pretend that it's not real. That material abundance will solve all of our problems. But no material abundance will compensate for the poverty of the soul of man.
As long as we ignore the eternal struggle, all that we build will fail and we will be utterly unable to know what causes our downfall because it fundamentally takes place in regions we refuse to acknowledge. Like an attack from some higher dimenson beyond our understanding, it will appear as if we were undone by some unaccountable magical force.
Likewise there is a profound disconnect between such societies and nature, even by those who claim to want to "save the planet".
Carl Jung, Joseph Campbell and many others have gone into depth on this.
Something you realise when you travel around the UK is that only a handful of areas actually have a productive economy. In many towns, you find that the only outside money coming is from the government, either in the form of government organisations based there (councils, NHS, etc.) or benefits. That money then swills around the town on services like MOTs and hairdressers and so on.
That means the few productive areas like London, Birmingham and Manchester and a few others have essentially all of their production taken by the government and reallocated to these areas of zero/negative productivity. This isn't a new thing either. The UK has been in a "productivity crisis" since at least the late 2000s.
My family come from one of these productivity holes, and they are all on the take. Everyone's scamming the benefits system and any work they do is under the table.
Really I believe as a country, we need to face reality at some point. We have to turn off the tap that people have become dependent on and require that people figure out how to survive without it.
1. You cannot subsidise unproductive economies indefinitely. If there's no work in your local town, go somewhere else. It's a small country and somehow people from Eastern Europe manage to come here for work, so someone from Merthyr Tydfil can probably figure out how to get to Cardiff. Government spending should be on infrastructure to facilitate productivity.
2. The elderly are clogging up the system. Either we need to start cutting services to the old, such as reducing healthcare provision beyond a certain age, or we need to import massive amounts of productive labour from other countries to rebalance things, and build huge amounts of housing, hospitals, schools to support it.
3. We need to rebuild as a country of innovators. This means making the burden of regulations proportional to the size of your enterprise. But we also need a cultural shift here too. If you have an idea here, everyone will quickly tell you why it won't work and you shouldn't try. If you do it anyway and are successful, you become loathed. Tall poppy syndrome etc.
Everyone is blaming Brexit and sure, Brexit didn't help matters, especially over the last few years. But there are lots of countries doing fine outside the EU, and these problems started well before Brexit. Our problems are deeper rooted and, perhaps, in many ways EU membership was hiding them.
However, if you have no (documented) savings or property, the sorts of things you will get are a free council house, weekly allowance and child benefits.
People will often then supplement it by claiming disability, having multiple people in the house claiming benefits, subletting free property and working illegally.
The cost of living in these sorts of areas tends to be very low too.
The elderly demographic is large and they all vote.
What do you mean? It looks like the UK's income tax system is progressive, so you'd still be making more money, even if at a lower percentage of the real value. Do you mean that your net pay would be too low to warrant spending time on a weekend?
Naturally people optimize around the fact that there are salary ranges that exhibit no increase in net income. It creates a lot of perverse incentives.
I'm surprised by the amount of tax illiteracy shown in these comments.
how do you afford a house on benefits?
So a single person reliant on benefits will at best be able to live in shared accommodation. Larger families in more expensive locations (e.g. most of London) would not have their rent fully covered. A single bedroom flat in the cheaper parts of London rents for about £15,000/yr.
I think this is bad for everyone. Poor people for obvious reasons, and everyone else because even when it works it drives up rents and by extension house prices, with the extra money going to people like me (and I left the UK).
I think the UK government should be building more council houses: https://en.wikipedia.org/wiki/Council_house
This is a policy choice that can and should be changed: https://www.nytimes.com/2022/05/29/opinion/biden-liberalism-....
https://www.theguardian.com/society/2019/jun/24/nhs-consulta...
What government schemes are giving free cars? I hadn’t heard of that. I guess there is Motability for people with disabilities?
1) you own the house you live in, someone on benefits does not;
2) for the point "I have the benefit of getting literally no help", this is literally incorrect, your ability to earn a living in the UK is contingent on a wide range of public services, from roads, to public education, to the NHS, to a functioning civil service and justice system (as flawed as these may be).
but you can claim £1,000 of trading allowance per year if registered as a sole trader!
This is the big fear behind facebook / cambridge analytica - the problem was that a computer could generate different policies for each cohort of voters, essentially lying to everyone so that the same politician seemed to be on everyone's side.
There are two solutions - a clear single manifesto that everyone has to read, or we stop voting for politicians manifestos together - instead we vote for dozens of individual policies and then vote for the people to implemtnthen
it's a terrible idea inthink
Introduce an ageist voting system. Your vote is worth 1/(how many years you've been eligible to vote). I'm only half joking of course.
You should consider that a larger portion of young French people support Le Pen than older French people. Similarly, Biden's job approval rating has tanked among Gen Z and millenial voters, to the point where Gen Z voters approve of him less than boomers do, by a significant margin.
I think you'll find young people aren't as progressive as you assume. Especially not now, after their futures have been demolished by political policy (most obviously by housing policy, student loans and massive inflation).
By suppressing older voters, you will actually push the pendulum to the right. By a lot.
https://yougov.co.uk/topics/politics/articles-reports/2019/1...
In the UK the most important indicator of how you'll vote is your age.
If the bills are paid and the people are fed then it's ok to keep things at their present size. Right?
The money that exists in our system (except for an insignificant fraction) is loaned into existence. Borrowers must repay the principle and the interest. For this to be possible in aggregate, the money supply must grow, which means more loans must be issued....
You need money to be in circulation and the way to do that is by introducing a demurrage fee or negative interest rate which is only paid when people hold onto liquidity for a prolonged period of time.
The problem also exists with a gold standard because people hoard gold instead of letting it circulate.
By “laws” do they mean covid regulations?
This is the crux of the matter. The UK has entered the same trajectory Italy entered a few decades ago. The old have become the most important constituency, if not the only that really matters and their economic objectives are at odds with growth and with the welfare of younger generations. From cutting taxes on work and increasing taxes on property, to building new houses and making the life of private renters less miserable. While the cost of childcare and education goes to the roof, pension increases are financed with tax hikes that only affects workers younger than 65. Even the push against remote work, I think, should be analysed in this light: the home owning elderly don't want the price of their property to go down due to reduced demand.
Johnson and Cameron are equally incompetent and equally damaged the country and its character in ways that I’m not sure are reversible. Cameron was just, let’s say, more composed. The Conservative party is in a power for power’s sake game that doesn't have precedents in this country, at least since the 80s. Here I’m not saying that Thatcher and Blair didn’t have personal ambitions, but they certainly had a vision for the country and they left it in a better shape than when they found it. The current strain of the Conservative party handled the financial crisis so badly, that one may argue that the UK never came out of it. The country became poorer and, so, uglier and nastier, xenophobia has been totally normalised, especially against eastern and central Europeans. Those, that like me, moved to the UK in the mid-2000s, were promised Love Actually and ended up in the Jeremy Kyle Show.
Johnson now is in the process of buying consensus with fiscal transfers and gifts of all sorts, not much differently from what the worst Italian governments of the past 30 years have been doing. 30 years later, we know where this journey ends.
My economic situation is rather comfortable: I own my flat and I should be able to pay off my mortgage with next year’s bonus in my mid-30s. But I’m wondering if I want my child to grow here, to live in a country where, from the 11+ exam, people are in a never ending rat race just to get what the average EU resident takes for granted. Do I want him to be a renter at constant risk of eviction and, so, homelessness? Do I want him to spend 10K a year in tuition fees? Do I want him to participate in the most classist school system in Western Europe?
We are lucky enough to be dual nationals.
When you look deeper, you see that many jobs are 'pointless' from an overall economic perspective. For example how many parking attendants is the right number to employ? In a perfect society, everyone would pay for parking according to the sign, and those attendants could have another more beneficial role.
If you get rid of 20% unemployment by just making 20% of everyone's role pointless busywork, you haven't really fixed the problem.
I think the OP's point was there has to be balanced approach.
Then tax production and just give people money (ie: Universal Basic Income). You're doing the exact same thing with pintless jobs anyway so may as well be less wasteful about it.
Or they could voluntarily do any of the infinite number of jobs to do in the world which cannot and will never be automated, even though they don't really need the money.
Unless there's something special about being forced to work that boosts the dignity and self worth people feel?
I mean that's pretty much the definition of a hobby.
If a hedge fund manager quits to be a social worker, they are doing something to benefit society but they aren’t going to be able to support the lifestyle of an economically productive hedge fund manager
As labor productivity increases, profitability decreases, as historical data shows[1]. In the long term, this problem of capitalism cannot be avoided.
[1]: https://thenextrecession.wordpress.com/2022/01/22/a-world-ra...
I think profit is a different issue. Profit is not necessarily dependent of automation. Automation is just a means to reduce human labor. Generally, this increases efficiency which leads to increased productivity, but it's definitely not the only way to improve efficiency. There are other ways of increasing productivity and I would argue you will never have completely efficient processes. And innovation is always a potential disrupter to generate new profit.
Even Marx said it's just a tendency for profit to fall and not an absolute maxim.
Some jobs simply produce more goods or intellectual property than others (or better facilitate such production). The main point here is it's not good for governments to misallocate resources by encouraging more ~0-production jobs for sake of low unemployment.
Isn't it weird, how there are these logical societal investments and yet the economic system isn't set up to let us do them even though the capacity to do them exists and we have unemployed people desperate for work?
We dislike these investments and deride them as zombie companies.