Optimism anyone?

[Flynny]

Just found this in the Guardian. Bit of a Labour spin to it obviously but if it's even half true it's good news.

http://www.guardian.co.uk/commentisfree/20...onomic-recovery

This year is going to surprise us. After nearly two years of financial and economic mayhem, this will be a year of a steadily improving economy. Incredibly, over the last nine months, the stock market has recorded the third biggest rise since 1693, according to the Bank of England, and if it carries on rising just a little more in January it will be the biggest sustained rise for 317 years. A stock market cannot jump on this scale and with this ferocity without matters quickly improving on the ground. How much economic improvement will follow after 2010 and 2011 is much less obvious – but for the sharp economic recovery in prospect, be grateful.

In some respects, the good news which the stock market is anticipating has already begun. Just before Christmas, the Office for National Statistics reported that unemployment as measured by the numbers applying for the Jobseekers' Allowance (JSA) had fallen 6,300. In no postwar recession has unemployment ever fallen so quickly, just 20 months after the rise began. It took 40 months before the first fall in the early 1980s. True, it is only a one-month fall. And it is also true that as the cut in VAT rate is restored – after its 13-month reduction, which has been successful in stimulating extra spending – some companies may put into place redundancy programmes which they deferred during the period of the VAT stimulus.

But the deep trends are clear. Unemployment has risen much less than anybody expected; for example, the claimant count rate has been decelerating since the spring – from 25,000 a week to 3,000 a week now. The two great students of the impact of credit crunches, Carmen Reinhart and Kenneth Rogoff, calculate in their remarkable book on 800 years of banking crises, This Time Is Different, that the average rise of unemployment in countries experiencing major systemic banking crises since 1930 is 7% of the workforce. In Britain, this would have meant an unemployment rise of around 1.75 million. It is not going to happen, catching everyone out, including me. Unemployment will certainly carry on rising in 2010, but the eventual rise will be around 1.25m; serious, but not as cataclysmic as it could have been.

And would have been without two powerful influences. Companies and workforces have moved heaven and earth to protect jobs. Part of the story is wage freezes, wage cuts and working fewer hours, but top companies have decided that they would rather cut investment in plant than cut their investment in people. In a knowledge-based economy such as ours, skilled workers who know the company, its operations and its customers are ever more valuable, expensive to fire and expensive to replace when times get better. Business investment on the other hand can be deferred.

The other powerful influence is government policy. The Labour government has been hyper-aggressive in trying to cap the rise in unemployment. It has poured resources into the Jobcentre Plus network to increase its capacity. Even during a recession of this severity, the job centres learnt of 10,000 new vacancies a day; the effort has been focused on trying to get the newly unemployed to fill the vacancies: 55% of new claimants are leaving the register within three months and 73% within six months – only fractionally lower than in normal times. There has been the £1bn Future Jobs Fund, and then the guarantee that every 18- to-24-year-old receiving JSA will get a job or training after six months. In total, £5bn has been spent – and it is working.

All of this puts a floor under the economy; consumption holds up as the fear of losing a job retreats. But never underestimate the additional stimulus of a game-changing 30%-plus devaluation, again the largest since Britain left the gold standard in 1931. Under Labour, deindustrialisation proceeded even faster than under the Conservatives as Brown's love affair with the City led to an astonishing influx of foreign banks and capital, all of which pushed the exchange rate up to unprecedented levels of uncompetitiveness. Honest-to-God British companies could not compete, as the City crowded out non-financial enterprise.

As the City has contracted, capital flows have shrunk and the pound has fallen. Imports are relatively expensive and are dropping fast, while in 2010 exports will start to accelerate, especially as the world economy, led by Asia and the US, rebounds. The industry we have left is highly competitive; it had to be. Growth in Britain from the dark days of the 1991 recession to the end of a disastrous 2009 has still averaged a solid 2.1% – higher than any of the big economies in Europe and Japan. There is more to the British economy, thankfully, than financial services – despite the City propaganda.

Two more sources of vital stabilisation are the £200bn of cash printed by the Bank of England to flood the stricken financial system and the £178bn budget deficit. Again, these are unprecedentedly big, but faced by near banking collapse, no other response was possible. The Bank of England has had to be radical about avoiding a calamitous contraction of the money supply, and the government has had to be no less radical in maintaining public demand as private demand risked going into free fall. The banking system has been bailed out and is rapidly repairing its balance sheet.

Britain is emerging comparatively lightly from what could have been a second Great Depression. For anyone who believes in government economic activism – and in the dangers posed by Big Finance – it has been a massive vindication. The government is still too deferential to City interests; for example, Alistair Darling should never have allowed the great banks to refuse to contribute to the proposed National Investment Corporation. They should have been told their refusal was unacceptable, but New Labour has little balls when it comes to bankers. Expect the bonus tax to be rescinded in three months' time. The City has been overindulged and industry neglected for too long. Britain has some great companies – there are just too few of them. Much more needs to be put in place to support innovation and growth if the next decade is to be anything other than austere and hair-shirt.

And yet. We have witnessed a powerful example of how public policy can head off putative slumps. How would a Conservative government have fared? It is difficult to imagine it would have been so aggressive. I doubt it would have spent £5bn on trying to cap unemployment; it would never have implemented the timely and targeted VAT reduction; its hesitations over bailing out the banks could have seen a bank collapse; it would have been a reluctant endorser of quantitative easing; it would have tried to cap the necessary rise in the public deficit. Had it been in power, Rogoff's and Reinhart's projections would been borne out – and nearly half-a-million people more would have lost their jobs.

If the Conservatives win this year, the severity of their proposed spending cuts could nip the renaissance in the bud. Tory high command thinks that the economy is one of their issues. As the feelgood factor returns as the year wears on, British voters may think twice before punishing the team that so successfully got Britain through the crisis – and risking prolonged economic stagnation. This year's gathering economic recovery could yet be one of Labour's strengths.

[acooling08]

God no, Labour has crippled this country and I'll be paying off this debt for most of my working life so there is no optimism here.

[Webbo]

Just found this in the Guardian. Bithuge flippin' dollop of a Labour spin to it obviously

http://www.guardian.co.uk/commentisfree/20...onomic-recovery

Labours done such a wonderful job that it makes you wonder how they got us in the shit in the first place.

A lot of speculation on what the tories would have done and a negative spin on what the consequences would have been. It also conveniently ignores the record deficit that Labour has created that will have to be dealt with whether Labour admit it or not.

[Bellend Sebastian]

I eased my way back into the world of work today by reading a few fund management bulletins, and because of the time of year there was a lot of stuff about their thoughts for the year ahead. Admittedly they're usually on the optimistic side, but given the shit we've been through they were still for the most part very positive, and there was a lot of praise for the government's handling of the economic crisis, which I personally think has been pretty sound, not that this will help them come election time.

All this stuff about the effectiveness of quantitive easing and other apparent good news is all very well, but for average Joes like you and I, the most obvious and worrying sign of the continued downturn is the number of empty shops there are everywhere. I've not seen anything like it, and I certainly don't remember it being like this in the last recession of the early 90s. The florist on the corner of East Street and Granby Street has disappeared over Christmas - that had been there as long as I can remember, even though that end of town has struggled for years. Unfortunately now it's not just Granby Street that's a backwater - Gallowtree Gate will be devoid of shops before too long if the current trend continues

[BoneDog]

The only part of the Guardian article I can agree with is this : "This year is going to surprise us."

And not in a positive way, not for us average/normal folk anyway.

But hey, chin up, cos those at the tip-top only want the best for us and are always trying to make life easier for us

Bless our 'leaders', they're so kind.

Sorry about that It's New Year, come on Empty, get a grip man

[DJ Barry Hammond]

If the public's opinion could be convinced to this point of view (not necessarly the labour spin, just more thinking positive about the economic situation) I'm sure that would be the outcome. The recission only really hit after weeks of newspaper reports that the country was in recession - reports of that nature naturally made people act accordingly, and if people are told it is all over, people will slowly revert back to spending again (and racking up credit debt again where available).

Its all properganda these days - another similar example is FA Cup attendences - with lots of people claiming its lost its magic and Managers not believing in its importance, the fans are going to recognise this.

[Flynny]

God no, Labour has crippled this country

How?

No idea how I'm going to vote yet, might well go Tory, but I don't think Labour have been completely discredited by any means.

[MPH]

I actually think after the the heavy shopping of Christmas and the new year sales, we will see a few more stores going out of buisness...

Infact, just after christmas a place in Wigston called Chapell's fine foods closed having not paid alot of their staff for the end of December...

Produced alot of party food/ pork pies, ect.... family run buisness too..

[lou]

I actually think after the the heavy shopping of Christmas and the new year sales, we will see a few more stores going out of buisness...

Infact, just after christmas a place in Wigston called Chapell's fine foods closed having not paid alot of their staff for the end of December...

Produced alot of party food/ pork pies, ect.... family run buisness too..

No, it was a family run business until June when it was sold to an outsider.... from what I read in the paper theres more to this than meets the eye, the new owner has wound it up despite having full order books and business doing well according to the guys that worked there. It all sounded a bit suss IMO

[Guest Basildon Fox]

How?

No idea how I'm going to vote yet, might well go Tory, but I don't think Labour have been completely discredited by any means.

You don't think Gordon Brown stating "This is the end to boom & bust" when he was chancellor makes him look a tad stupid? Also the Country was in the black when Labour took over from the Tories. WTF happened to that?

Not saying that the Tories would have done any better but I am sure that they would have done things differently and imo just like 1997 we need a change.

[acooling08]

How?

No idea how I'm going to vote yet, might well go Tory, but I don't think Labour have been completely discredited by any means.

Well under Labour the country has fallen into massive debt, had huge unemployment rises, huge crime rate rises, huge teenage pregnancy rises, slip of school standards, etc.

[Webbo]

No idea how I'm going to vote yet, might well go Tory, but I don't think Labour have been completely discredited by any means.

I'm struggling to think of anything to their credit.

[lou]

I'm struggling to think of anything to their credit.

same.... but I do worry that any of the other parties will fare any better? Willing to try though, Ive had enough of this lot

[Head Honcho]

Well under Labour the country has fallen into massive debt, had huge unemployment rises, huge crime rate rises, huge teenage pregnancy rises, slip of school standards, etc.

.................and who's to say this wouldn't have happened under the tories?

Labour are guilty of being in power for far too long and having an opposition thats is quite frankly unelectable.

[MPH]

No, it was a family run business until June when it was sold to an outsider.... from what I read in the paper theres more to this than meets the eye, the new owner has wound it up despite having full order books and business doing well according to the guys that worked there. It all sounded a bit suss IMO

Do you happen to know if its anything to do with the Samworth brothers?

They have bought out the walkers pork pie factories , Dickinson and Morris, Melton foods, Saladworks, another factory that makes sausages and most major food factories in the Leicester area...,

As Chappell's made pork pies and luxury pies i could only think they bought out the company and transferred the orders to Walkers Midshire factory. Just my rough guess , of course!

same.... but I do worry that any of the other parties will fare any better? Willing to try though, Ive had enough of this lot

Well put.

[lou]

Do you happen to know if its anything to do with the Samworth brothers?

They have bought out the walkers pork pie factories , Dickinson and Morris, Melton foods, Saladworks, another factory that makes sausages and most major food factories in the Leicester area...,

As Chappell's made pork pies and luxury pies i could only think they bought out the company and transferred the orders to Walkers Midshire factory. Just my rough guess , of course!

Well put.

Not sure to be honest - blokes name was Ian Nicholls but I guess it could be someone else behind it (oooo have we stumbled across a conspiracy theory!!)

was in the Mercury about a week ago and my Dad knows someone whos worked there for years. The guy who founded it and sold it must be gutted. Shame

[Guest]

Well under Labour the country has fallen into massive debt, had huge unemployment rises, huge crime rate rises, huge teenage pregnancy rises, slip of school standards, etc.

Ah yes, statistics.....

[Head Honcho]

Ah yes, statistics.....

I know.

Statistically we're supposed to be in a recession, but apart from the banking crisis and all the job cuts associated with this I've seen no evidence of it.

[lou]

I know.

Statistically we're supposed to be in a recession, but apart from the banking crisis and all the job cuts associated with this I've seen no evidence of it.

Then youre very lucky, I certainly know of many people whove been made redundant over the last year. None of them were associated with the banking industry

[MPH]

I know.

Statistically we're supposed to be in a recession, but apart from the banking crisis and all the job cuts associated with this I've seen no evidence of it.

wow... you must be like no one else i know.... Job cuts everywhere in every industry i know.... i have been out of work for months.. i applied to over 20 places in one day once... most are saying they just have too many applicants..

[l444ry]

I'm struggling to think of anything to their credit.

1. Longest period of sustained low inflation since the 60s

2. Low mortgage rates

3. Introduced the National Minimum Wage and raised it to £5.35

4. Brought back matrons to hospital wards

5. Restored city-wide government to London

6. Child benefit up 25 per cent since 1997

7. Created Sure Start to help children from low income households

8. £200 winter fuel payment to pensioners & extra £100 for over-80s

9. Negotiated the historic Good Friday Agreement in Northern Ireland

10. All workers now have a right to 4 weeks’ paid holiday

11. Scrapped Section 28 and introduced Civil Partnerships

12. Banned fox hunting

13. Cleanest rivers, beaches, drinking water and air since the industrial revolution

14. Free TV licences for over-75s

15. Banned fur farming and the testing of cosmetics on animals

16. Waiting times for operations halved

17. Cancer death rates down by 12 per cent, saving 43,000 lives

[lou]

1. Longest period of sustained low inflation since the 60s

2. Low mortgage rates

3. Introduced the National Minimum Wage and raised it to £5.35

4. Brought back matrons to hospital wards

5. Restored city-wide government to London

6. Child benefit up 25 per cent since 1997

7. Created Sure Start to help children from low income households

8. £200 winter fuel payment to pensioners & extra £100 for over-80s

9. Negotiated the historic Good Friday Agreement in Northern Ireland

10. All workers now have a right to 4 weeks’ paid holiday

11. Scrapped Section 28 and introduced Civil Partnerships

12. Banned fox hunting

13. Cleanest rivers, beaches, drinking water and air since the industrial revolution

14. Free TV licences for over-75s

15. Banned fur farming and the testing of cosmetics on animals

16. Waiting times for operations halved

17. Cancer death rates down by 12 per cent, saving 43,000 lives

most of those might have happened regardless of who was in power... and whos to say they wouldnt have been even better?

Cancer death rates for example. Maybe theyd have been down by more if someone else had been in power for example? It cant be proven one way or another, the same could be said for most of this list.

Banning fox hunting my arse.. it still happens and anyone who thinks it doesnt is kidding themselves. Total vote grabber that one was - its not policeable and they knew it.

[l444ry]

most of those might have happened regardless of who was in power... and whos to say they wouldnt have been even better?

Cancer death rates for example. Maybe theyd have been down by more if someone else had been in power for example? It cant be proven one way or another, the same could be said for most of this list.

Banning fox hunting my arse.. it still happens and anyone who thinks it doesnt is kidding themselves. Total vote grabber that one was - its not policeable and they knew it.

Bit of a muppet's answer, Lou. Perhaps you ought to do a history lesson on the previous regime's appalling tenure.

Maybe some toffs still do break the fox hunting laws but so do some ignorant slimeballs still break the non-smoking regulations. Shall we give all these heroes a medal then?

[MPH]

1. Longest period of sustained low inflation since the 60s... oh that would happen to be because there is a recession and no one is buying anything so stores are reducing their prices is it?

2. Low mortgage rates . We had periods of low mortgage rates under the tories too? Huse prices have increased at a much faster rate under Labor too meaning less people are buying houses due to the current recession the labor government have had a big part in bringing about... less mortgages given out too .

3. Introduced the National Minimum Wage and raised it to £5.35. Should be much higher.

4. Brought back matrons to hospital wards And Have also introduced so much beurocracy and desk based managers that are scking the hospital of so much f its funding.

5. Restored city-wide government to London Yet couldnt get their man in.

6. Child benefit up 25 per cent since 1997

7. Created Sure Start to help children from low income households. My mum works for one. Whilst the idea is good there is a huge waste of money in the staffing levels... some of them are employing nearly 100% agency workers... a HUGE waste of money

8. £200 winter fuel payment to pensioners & extra £100 for over-80s

9. Negotiated the historic Good Friday Agreement in Northern Ireland So the american delegate who spent so much time negociating with shinn fein had nothing to do with it then?

10. All workers now have a right to 4 weeks’ paid holiday

11. Scrapped Section 28 and introduced Civil Partnerships. You think the Tories wouldnt of? Dont forget David Cameron apologised for it. Even though he wasnt responsible for it.. People often mistake the changing views of generations for something wonderful that labor have achieved.

12. Banned fox hunting Yet have provided no alternative to farmers in how to control the fox population that attacks certain farm animals /products ( banning fox hunting was a good thing btw)

13. Cleanest rivers, beaches, drinking water and air since the industrial revolution. nothing to do with more cheaper and cleaner fuels being used? goodness... ANY government would of gone for a cheaper fuel source

14. Free TV licences for over-75s

15. Banned fur farming and the testing of cosmetics on animals. Yeah, instead we now benefit from fur farms based abroad... chepaer for the consumer but much worse living conditions for the animals.... hardly a victory...

16. Waiting times for operations halved... Dont get me started about the NHS and how its getting on.. ( worked for it for several years...)

17. Cancer death rates down by 12 per cent, saving 43,000 lives

All things i havnt highlighted could easily of been achieved by ANY government in charge...

Suddenly thr list you posted doesnt look quite so good does it....

A Simple search has also brought up umpteen lists of Labor failings.. do you REALLY want them to be posted? Let me know... i off to get me tea now i can do them later if you want to...

[l444ry]

All things i havnt highlighted could easily of been achieved by ANY government in charge...

Suddenly thr list you posted doesnt look quite so good does it....

A Simple search has also brought up umpteen lists of Labor failings.. do you REALLY want them to be posted? Let me know... i off to get me tea now i can do them later if you want to...

I suggest you do a history check on the Grantham Granny and the Galloping Major as well if you call that effort an argument!!