"Biden has steered the country out of a #recession and #pandemic, gotten through a slew of critical legislation (some bipartisan), avoided a default on the #debt, set the stage for about 14 million new #jobs and overseen a resurgence of manufacturing. Internationally, he has restored the #UnitedStates’ image and solidified and expanded #NATO in defense of #Ukraine.
The most important political economic Q. for the UK right now is how deep a #recession is the #BoE (& by extension the #Tories) prepared to engineer to 'tame inflation'?
As usual, those paying the price to reduce inflation, through the #Costoflivingcrisis & a descent into #poverty, are not the same people saying the 'price is worth paying'.
Using only #interestrates to deal with inflation is a political choice taken by those who have a clear notion of how to protect the interests of the rich!
The British Retail Consortium's quick data on January #retail sales confirms that as sales growth (of 1.2%) continues to lag #inflation (4%) we continue to see a squeeze/decline on sales volumes;
as this indicates, the #costofloivingcrisis (or as I prefer the crisis of #enforcedpoverty) is still driving down actual spending power for individuals.
We are still buying less, although spending more on what we do buy.
For consumers, this is what #recession looks like, whatever the formal GDP data
ICYMI on The Paceline last week.I am not an economist. You know that, but I’m saying it now, because I’m going to remind you I said it in just a minute. This is what is known, in the rhetorical game, as a set up.So, it’s shaping up to be a tough year
The continuing #costoflivingcrisis is reflected in a pre-xmas drop in consumer spending & suggest that a winter #recession is more likely;
Politicians should recall #Keynes focus on 'effective demand' in driving economic activity.
Whatever else is wrong about #economic#inequality, if you impoverish the less wealthy (who are much more likely to spend their income/wealth) then you prompt a decline in economic activity.
Of course, this is exactly what the BoE want, whatever the social costs!
Oh, I see the #ONS has revised down its estimate for GDP growth in Q2, so alongside the decline in Q3, we are now in a technical #recession.... which is exactly what's the BoE want, so perhaps will now reduce #interestrates, now that the recession has started.... and given the lag of effect of interest rates changes we can expect 2024 to be mostly recession - which will serve those pesky #workers right for asking for pay rises!
If the US defaults on its debt, we might have to start using Bitcoin as our currency. US Treasury Secretary Janet Yellen warned that a default on government debt would likely leave millions of Americans without income payments, potentially triggering a recession that could destroy many American jobs and businesses. #usdebt #republicans #recession #economy #congress
This is literal doom, but I actually find it mildly encouraging that our security and government services are being told the truth about the current state of the nation, society, and world. This is the kind of report that every single politician needs to not only read but reallyunderstand.
Quotes below:
"The situation will probably deteriorate further in the next five years, as the early effects of climate change and a global recession add their weight to the ongoing crises"
"accelerate the decline in living standards that the younger generations have already witnessed compared to earlier generations"
"the difference between the extremes of wealth is greater now in developed countries than it has been at any time in several generations"
"Law enforcement should expect continuing social and political polarization fueled by misinformation campaigns and an increasing mistrust for all democratic institutions"
"Access to [big data] will allow private entities to develop the means to exercise undue influence over individuals and populations at an unprecedented level"
"In the wake of COVID-19, Canada's governments have normalized operating during a respiratory pandemic... the damage to the economy and to the social fabric of the nation is ongoing"
New Coppola Comment post. Fears that the rapid pace of Fed tightening will cause a #recession ignore the exceptional stimulus of the pandemic years. The level of #liquidity matters more than the rate of change. #inflation
GOLDMAN: "We are cutting our probability that a US #recession will start in the next 12 months further from 25% to 20% .. far below the 54% median .. the recent data have reinforced our confidence that bringing #inflation down to an acceptable level will not require a recession .." #economy#Bidenomics
$350B in pandemic savings was supposed to give the economy a huge boost. It still hasn't happened
Savings stockpile won't help avoid a recession or help many Canadians squeezed by inflation
The majority of the savings now belongs to higher-income Canadians, while lower- and middle-class households have used up their pandemic savings or are making withdrawals because experts say they likely need it to keep up with inflation.
Here's the BBC Verify team's take on Rachel Reeves assertion that this is the worst economic inheritance faced by an incoming govt. sine WW2.
The (downbeat) conclusion is that things are bad but not historically unprecedented....
Oh that's a relief.....
But perhaps the point the BBC team quietly ignore is how much of the situation we find ourselves in right now was self-inflicted, rather than part of a wider global context....
Well headline #inflation is down to 6.7% (in figures released this morning).... but will the #BankofEngland care... No!
They will only be satisfied when they have forced a #recession, plunged #workers into (further) penury, raised #uneployment & by doing so neutered workers power to organise through fear of being out of work.
Its the toxicity of the Phillips Curve written into policy making....
Solid economic growth in France and Spain, and a very modest recovery in Germany could be enough to confirm that the euro area has already exited a recession that started in the final quarter of 2022.
Anyone who is worrying whether or not we are in (or will be in) a #recession this year & into 2024 is missing the larger picture....
#economic activity in the UK has largely stagnated, with the data oscillating around figures of less than 1% GDP growth.
leaving aside issues of the utility of GDP as a measure & if growth is what we need (often discussed in my timeline), the key thing is the UK's economy is in a parlous state after over a decade of government by the rentier class.
Martin Sandbu concludes, after exploring how #inflation has been about supply-side shocks, that:
'we don’t understand how monetary policy works in today’s economy. At least we should hope we don’t, for if it does turn out to work like we used to think it does, we should soon see things get a lot worse as higher rates finally start biting and throwing people out of jobs'!
If #CentralBanks are right then they'll have deliberately engineered a #recession; if they're wrong the pain was pointless
It used to be said that when the US sneezes the rest of the world catches a cold (as a way of explaining the impact of its economy on global markets)....
So as #China slips into a likely deflationary period (potentially slowing its #economic growth further), are we now seeing what happens when the pivot east, opens up the global economy to the impact of a Chinese #recession?
You Should Buy a New Bike Right Now (cyclingindependent.com)
ICYMI on The Paceline last week.I am not an economist. You know that, but I’m saying it now, because I’m going to remind you I said it in just a minute. This is what is known, in the rhetorical game, as a set up.So, it’s shaping up to be a tough year