At the End of the Day

“Yes, the economy grew by this much”

Where are the ideas?

The Office of National Statistics today confirmed that UK economic growth is risible, and slowing down. At 0.2%, it doesn’t have much more slowing down to do before it becomes a slump. And we haven’t had one of those for eighty years. I think we should also bear in mind that almost none of that performance is down to what the Left has once more adopted as its witch doctor doll, The Cuts. For one thing, the cuts aren’t making any difference to the National Debt: it is still growing at an unmanageable pace. And for another, none of the Draper’s scissor-work has as yet filtered through to consumption and output: they are being cut by inflation – a devaluation of the currency by close on 25% that is putting up factory prices through more expensive imports, and the consumer’s inability to afford what is on offer at retail after mark-ups. Don’t forget also that most of us still have enough brain-matter left to realise rainy days are coming, and so we’re saving rather than spending.

Once those cuts (being opposed tooth and nail by the trade union movement) do filter through, we will of course be in a depression. A depression that will get ever more profound as the vicious screw turns on the burrowing machine of Friedmanite fiscal capitalism.

And yet despite all this, it is no good moaning at Osborne, and casting around for a Plan B. The Chancellor is right: there is no Plan B. Where the Chancellor – and most other finance ministers around the globe – are going wrong is in imagining that, at this very late stage in the repair process, we have any chance at all of returning to solvency without debt forgiveness. 3rd form maths should be enough to tell anyone that what should’ve begun around 2004 was begun only last summer….and has been eroded and undermined by civil servants and LibDems ever since. There is not a cat’s tail in Hell chance of returning to a manageable debt load – and from thence to repaying it. Too little is being produced, too few markets want our goods anyway, and far too much was spent by the last lot….or blown by the banks.

The French ‘solution’ remains the same: to spend on regardless, and wait for the inevitable debt forgiveness anyway. Last week our local village became the proud owner of an electronic sign telling everyone what’s going on here. Ours is a tiny community of 2,900 souls. This morning, the sign announced that there would be a seniors’ football practice tonight. It may seem like a smart move on their part: the creditors are not, after all, going to steal all the new road markings and signage that have appeared in such profusion here since 2009. But in reality, credit managers have clocked what’s going on – as have the Germans. The French will find themselves mistrusted in the very different future that beckons; and avoiding the pain will only make the suffering harder when it finally arrives.

The British Government is right to make the austerity effort – even if it is hopeless. But accepting the relatively generous debt forgiveness that might eventually attract, the gaping hole in Camerlot’s plans still remains the same as that of Tory economic strategy since Thatcher: no creativity in terms of marketing, diversification and self-sufficiency is being applied to the problem. With Conservative ministers, the problem as always is, they simply don’t get out enough.

The Cabinet watches an appalling traffic accident taking place in the eurozone, and continues to trot out drivel about our future being ‘inextricably linked’ to that disaster area. Is that the best they can offer? It looks on as banks spit in the face of entrepreneurial business risk, too scared to so much as mention the word regulation, when the rest of us are thinking more in terms of castration. It presides over a farming community on its uppers, when a major part of our problem is the enormous mountain of food we import…and a major part of our EU contribution involves the obscene feather-bedding of French agriculture. And above all, it fails to grasp the obvious reality of Britain’s plight: that our current economic balance and structure stands zero chance of ever employing, on a full-time basis, the citizens we have to support in this tiny island. (Disgracefully, it is backing away from immigration pledges, and bowing meekly to potty Leftist and CBI arguments about  needing to import ‘trained’ labour while we have 2.4 million unemployed).

Since the latter part of the Victorian era, occupations in Britain have been wiped out one by one: domestic service, skilled tradesmen, miners, factory workers, farming, independent shopkeepers, roadsweepers, clerks, secretaries, soldiers, policemen, and a thousand other jobs: all have been sacrificed on the altar of mechanisation, multiple supermarkets, shareholder demands, DIY sheds, IT and – the worst cancer of all – the ridiculous aim that everyone must have a University degree, however useless.

Exacerbating this job shrinkage is the staggering trend towards full-time working women, nil-time working benefit cheats, and a tiny, electronically-driven banking community of some 50,000 adults driving over 60% of the economy. Who but a congenital idiot would imagine that Britain could support an adult population of a hundred times that number with an economy more suited to a ritzy suburb of Zurich?

The mantra put out by the Left – and especially by the Brownshirted autistic – was “the last thing we should become is a siege economy”. A fat lot of use he would’ve been at The Alamo. A siege economy is exactly what we need in the short term; but taking the longer view, we need a self-sufficient economy. We need radical realism applied to that goal. We desperately need politicians offering accountable leadership to help us rise to the challenge. We should demand that all those who are able-bodied do something. And we need to both stop immigration, and penalise the desire to have large families without the means to support them.

But above all, we need to stop saying “we are only a pawn”, “globalism is the inevitable future”, “without Bob Diamond the sky will fall in”, and “there is no alternative to EU membership”. It is all complete and utter bollocks. To hell with soi-disant experts, and the tiny, self-serving micro-elite. They have no imagination: they know only what is, and how to extrapolate that in a straight line towards what they mistakenly think will be the future.

They are merely the people in charge now: the three Parties, the Civil Service, the news media, the sociologists, the economists, the diplomatic service and the fiscal thinkers. They’ve been wrong over and over again throughout history. If we let them get it wrong this time, we will never recover.

28 thoughts on “At the End of the Day

  1. Well another belter.
    I never did understand why anyone thought that the UK could sustain itself on services, mainly financial services. It always seemed to me a typical piece of British arrogance, presumably based on some theory that foreigners were incapable of learning how to count.
    I wonder if all former empires suffered post imperial arrogance syndrome-Britain certainly does.

    • Agreed, but I don’t think it was arrogance. It was a sad recognition that we had failed at miserably at manufacturing in the 1970′s and services were all that was left. Why we failed at manufacturing is very hard to understand, but at only a small percentage of the economy, clearly something went very badly wrong some while ago. I don’t believe the business school mantra that manufacturing is dead and services are the future. That’s nonsense. What we needed in the 1970′s was proper, long term oriented leadership. We have seen nothing of that kind in the last 50 years.

      The fundamental issue with services is that they are dead easy to replicate (needing little unique know-how and fixed investment, just a lot of training) and are very hard to differentiate except on price. Manufacturing requires, in many cases, a lot of unique knowledge and know-how and fixed investment in facilities and distribution. It also provides well paid jobs, if you get it right. We could do with some more of those!

      • Like it or not, the day that women entered the workplace (including politics), manufacturing died.

      • The Inspector: I remember once being shown a door within a door in a factory in Staffordshire – Blythe Bridge, I think – where grandma would pass baby through for mother to feed, without effecting productivity too much. That was in the nineteenth century, and women have been the backbone of manufacturing ever since (esp during two wars).
        What killed manufacturing, and I lived through it, was crap management: pure and simple. With manufacturing gone, these idiots moved on to banking and the government.

  2. Power and genuine ideas don’t ever seem able to co-exist. The rare times it does, it invariably ends up in the hands of the people determined not to do good, but harm with it. Superb writing as always, you’ve another loyal reader here.

  3. “Last week our local village became the proud owner of an electronic sign telling everyone what’s going on here. Ours is a tiny community of 2,900 souls. This morning, the sign announced that there would be a seniors’ football practice tonight.”

    What’s French for “I live in a Butlins Holiday Camp”? ;-)

  4. Yes a dismal outlook with the no hopers at the top offering no real hope !
    Still I’m sure some mind numbing of the populace via a new series of the X factor will start soon ! So many people, so much surprise, so much contentment, so much ignorance, all to be destroyed in the near future !

    That said, I quite fancy a No. 10 version of Big Brother running for the next 12-24 months ! Now that will be entertaining and I am sure we can all imagine or propose the forfeits which should be paid for a failure in a task !
    (Yes, to my eternal shame I saw it once but not a whole episode !)

    Night Johnboy

  5. ‘We should demand that all those who are able-bodied do something. And we need to both stop immigration, and penalise the desire to have large families without the means to support them’ — We all know (should know!) none of that is going to happen. Under an avowedly right-wing & determined tory government it might have happened – but look what we got – so the die is cast. An American friend once said to me that he felt sorry for the once great Britain & particularly the UK – that was 10 yr s ago – he’s how consumed with the parlous state of his own country. We thought it couldn’t happen – look at us now! — Political parties, indistinguishable from each other, imbued with intolerance to divergent views regarding man-made-global-warming, universal-human-rights & open-borders — such obduracy leaves no alternative other than conflict. Europe, at the heart of the notion of ‘no more war — ever again!’ — Is looking odds-on to being the catalyst for such an eventuality.

  6. RE: “…eroded and undermined by civil servants and LibDems ever since.”

    Google “sean gabb enemy class” for a 2001 analysis of the problem we see today (specifically his article 47). At the time, I thought his solution was over the top – but now I’m not so sure.

    A 2009 reprise (incl video) is at http://www.seangabb.co.uk/flcomm/flc.htm

    Essentially, he says that our “ruling class is that group of politicians, bureaucrats, lawyers, businessmen, therapists, educators and media people who derive income and position from the State. By definition, so far as such people operate as members of a ruling class, they are parasitic on the efforts of ordinary people. Their position comes from forcing others to act as they would not freely choose, or by excluding them from activities they might freely choose. Their income is based on forced transfers of wealth. The size and activities of a ruling class will be determined by the physical resources it can extract from the people, by the amount of force it can use against them, and by the nature and acceptance of the ideology that legitimises its existence.”

  7. Do not be in any doubt.
    It is too late to change the terminal damage that has now been done.
    The one and only thing that feeds all of these evils is …….YOUR MONEY.
    Think smart.

  8. A real belter,thanks Mr Ward.
    Again and again its the economy STUPIDS and yet our elite ignore it.Just when do the ruling elite allow us the common man to make a living and allow a thriving economy?

  9. Common expressions heard in the market…….
    ” we’re at that stage of the cycle”….. WRONG – the wheels have fallen off.
    ” we’re not quite at the bottom yet”…WRONG – there is no bottom this time.
    Sell, sell.

  10. Amen to that.
    What seriously worries me is nobody in power is prepared to do any of the things you suggest and just carry on with their heads in the sand.
    What’s in store for us all in the near future? Hunger and violence?

  11. I don’t agree with the original post at all. The problem of the UK economy is that the private sector is paying down debt rather than investing.
    The obvious way to increase business investment and create a construction boom is to allow building on certain green belt land. This seems to be what the government is about to do.

    • Oh yeah right. That’s what we need now…a construction boom. Why don’t we reinstate housing as the UK’s principal economic driver again?

      • Bankrupt, you are confusing the housing boom/bubble with a boom in house building.

        Whatever the UK experienced in he boom years, it was not a house building boom. Second hand houses were passed from one person to another at ever rising prices, which were funded by ever larger mortgages. Nothing new was created only a transfer of wealth ,essentially from the younger to older generation.

        With a construction boom, the position is entirely different. Wealth is created as new assets are created.

      • @james c: OK. So we facilitate a house construction boom.
        How many building companies will want to get into that with house prices still falling or stagnant at best? By the time they’ve finished building a nice, shiny new housing estate, the expected sale prices will have fallen and they’ll end up having to give them away.
        That process will also have (adverse?) effects on the existing housing market of older houses which will force their values down creating more people in negative equity and throwing their keys over the wall.

        Sorry, apart from the societal aspects of it, I can’t see it would have much benefit to the UK economy at this time.

  12. How about, we ditch the command economy, so we arent relient on the man from whitehall for our economic futures?

  13. “…Too little is being produced, too few markets want our goods anyway, and far too much was spent by the last lot….or blown by the banks.”

    Well, surprisingly, I don’t blame the bankers. Bankers being what they are, (parasitic leeches who never made one useful thing nor contributed to society in any useful way), they always revert to type, usurists who profit from the hardship and misery they extract from the population, along with their interest.

    The people I blame are the corrupt and deliberately useless “regulators” at the Financial Services Authority. The people directly responsible for allowing the bankers to create this havoc are Adair Turner (Lord Turner to you oiks) and his even more inept and deliberately incompetent chief executive Hector Sants.
    Turner previously worked for Chase Manhattan Bank and Merrill Lynch and his mate Sants was previously chief exec of Credit Suisse. And people wonder why these two closed their eyes to what their pals in the banking industry were doing.
    The useless Turner replaced Callum McCarthy (Kleinwort Benson & Barclays) who presided over the buildup to the financial disaster without raising a murmur at the rapidly advancing financial chaos, allowing his chums in the banking industry to gamble to their heart’s content. This is despite the FSA being tasked with regulation of the very same banking gang.
    The Times reported in the middle of 2008 that the staff of the Financial Services Authority had received bonuses of £20 million for the year 2008-9. Not bad for the second most incompetent taxpayer-funded organisation in England (the title went to the Defence Procurement Agency).
    So don’t blame the bankers, vent your anger at the regulators who saw nothing, heard nothing, and DID NOTHING. By the way, Turner and Sants are still in their (well-paid) jobs…at least for now.

    Kennyboy

    • - bankers actually do something useful: they manage the circulation of money in the economy, internally and externally. Without the banking system, our economy would collapse in 12 hours. The big question is whether they do the job well and in society’s best interests and the answer to that is probably no.

      - it’s true that the FSA totally failed to regulate the financial sector during the credit/casino boom which ended 2007-8. But it was the Chancellor who created the FSA and gave them their mission.
      Gordon Brown & his cronies have frequently admitted that the FSA was instructed to operate a system of “light-touch-regulation” and that is what they did. In practice, that meant the banks should be allowed to do what they wanted without inteference.
      Warnings to Brown going back to 2003-4 that the economy was overheating were ignored (most notably the housing market) because his huge credit boom was fuelling GDP growth and higher tax revenues – so beloved by Brown – and of course cleared the way for him to repeat his mantra of having abolished boom and bust.

  14. May I firstly respond to The RagingTory’s statement “How about, we ditch the command economy, so we arent relient on the man from whitehall for our economic futures?”.

    There is not a single sovereign nation in the world that does not have some form of central steering of its economic activity. If you have complete laissez-faire the distribution of wealth concentrates in the hands of the very few. This is indeed what is happening in the UK and USA at this very moment.

    To John’s comments; The UK is no longer self reliant or self-sustaining. We do not make enough products that anyone wants and this is not a phenomenon that has suddenly appeared. Having lived and worked in both Germany and the USA as well as here in my home country the contrast as to how business is conducted is amazing.

    I studied for an engineering degree here in Edinburgh many years ago. In the UK I never call myself an engineer, it’s a derogatory term reserved for the likes of a BT or SKY person who comes to install a telephone or a satellite dish on your house. In Germany the title engineer is protected and just as I am not allowed to call myself a medical doctor so in Germany you are not allowed to call yourself an engineer unless you have a University degree. Is it any wonder that British people are not attracted into engineering professions?

    In my opinion the greatest difference between the three countries I have worked in is the class system. Yes, I am afraid to say the class system is alive and well in the UK. As soon as someone starts to climb the ladder of responsibility in the UK their attitude changes into something akin to a Neo-Victorian mill owner. In the other countries I mentioned the concept of teamwork is much more prevalent and is incredibly effective. Even when used in the UK, as is evidenced in the likes of Honda and Nissan, this method works well. Instead we have a whole swathe of workers who are sullen and resentful of being treated as plebs. Not a good recipe for making high quality products at a competitive price.

    A government and government institutions that have longterm strategies is also something that the British seem incapable of producing. Despite a high cost-base the Germans seem very capable of inventing, producing and marketing products that the world is prepared to purchase but this requires more than a sticking plaster solution. It requires root and branch changes to almost everything we do. This ranges from education, banking and finance through to changing societal values. There are huge changes in the world we live in. The most obvious is that China is going to be the country of this century and we could take advantage of this fact. Unfortunately we do seem more interested in bombing Libya and worrying about phone hacking than getting focused on important things. But don’t worry, the Germans are already way ahead of us in recognising the potential of China so all we need to do is copy them!

    • Sympathy.
      Car mechanics are ….”Technicians” today.
      PC diagnostics, change the whole unit, charge £35/hour.

  15. As I read it, the proposed construction is for Industrial and Commercial units, which presumably have to go on brown land if not too close to housing, or else greenbelt.
    The cost of these units today is prohibitive,(£60ft2 freehold with yield at 8% for lease near me, and that’s cheap – midlands)) so they remain empty in many places,( 35% on my local Industrial estate) which means business cannot operate and that affects jobs. This new build will free up those difficulties by providing competion, and provide new Business tax for the Councils to waste.
    The worry is..when the farmers sell a bit more land, they won’t need to get out of bed at all.

  16. BT
    Its a [s]myth[/s] lie that financial regulation was “lite”.
    It was nothing of the sort. It was extremely deep, intrusive, vast, time consuming, and pointless.

    Regulation was not “lite”, it was bad.
    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4308688/FSA-gets-tough-on-banking-regulation.html
    “Banks would be required to build up substantial capital buffers in good economic times – well above minimum levels – so they can run them down in tougher times. ”
    Very sensible, except of course, El Gordo the Mad abolished boom and bust, therefore, as far as *his* men, and remember, the FSA was staffed weith his hand picked men, were concerned, there were never going to be bad times, so there was no need for capital buffers.
    But is it sensible?
    People are still talking about a 50% drop in house prices, even with a 20% deposit, a banks going to lose 30% of its loan book.
    Can a bank keep a 30%+ capital buffer?

    Who gets to decide when and where we are in the economic cycle? And so what the correct buffers are?
    he regulators completely missed this collapse, giving them more power wont make them any less stupid.

    • @TRT: I think you’re slightly off the mark. That Jan/2009 DT article quoting Turner reports what he wanted to do from that moment on, not what the FSA had been doing up to that time. His admission of the need to introduce better/more regulation is itself an admission that it had been very lax before.

      I certainly agree that FSA regulation was “bad” and that the FSA was created by, and stuffed full of, Brown’s chums, but I also think they were missioned to regulate with a lite-touch. IMO the reason Brown stuffed his cronies into the FSA was precisely so he would have more control.
      And if Brown really believed his own rhetoric of having abolished boom/bust, then tight regulation was surplus to requirements!

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