Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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Really glad we've coming off virtually no real wage growth for 15 years to cushion the blow of the biggest drop in living standards since WW2.
What a glorious economy I graduated into in 2009, f*ck me.0 -
No, NO, NO!!!! you and your MMT got us into this mess so you can’t just give up. If there is no downside to borrowing money then why not double down and borrow £90bn a year to subsidise people’s gas bills?rick_chasey said:
At this point I'm at a loss. Predicted deepest recession for 60 years.surrey_commuter said:
Would Rickonomics allow continued borrowing or is it time to panic?rick_chasey said:Looks pretty ugly all round.
Inflation peaking at 13%, expects inflation to still be at 9% come Q3 2023
It's a f*cking catastrophe.
This is exactly the sh1t I have been warning you about just a few decades earlier than expected2 -
Or take responsibility and look after you and yours.rick_chasey said:Really glad we've coming off virtually no real wage growth for 15 years to cushion the blow of the biggest drop in living standards since WW2.
What a glorious economy I graduated into in 2009, f*ck me.
If there is one thing everybody is going to learn is that the Govt is not some all powerful force that can make everything alright.1 -
Isn't that run faster than the next man policy, when being chased by a lion?surrey_commuter said:
Or take responsibility and look after you and yours.rick_chasey said:Really glad we've coming off virtually no real wage growth for 15 years to cushion the blow of the biggest drop in living standards since WW2.
What a glorious economy I graduated into in 2009, f*ck me.
If there is one thing everybody is going to learn is that the Govt is not some all powerful force that can make everything alright.0 -
Hang on. What are you on about? What does govt borrowing have to do with this? What does MMT have to do with this?surrey_commuter said:
No, NO, NO!!!! you and your MMT got us into this mess so you can’t just give up. If there is no downside to borrowing money then why not double down and borrow £90bn a year to subsidise people’s gas bills?rick_chasey said:
At this point I'm at a loss. Predicted deepest recession for 60 years.surrey_commuter said:
Would Rickonomics allow continued borrowing or is it time to panic?rick_chasey said:Looks pretty ugly all round.
Inflation peaking at 13%, expects inflation to still be at 9% come Q3 2023
It's a f*cking catastrophe.
This is exactly the censored I have been warning you about just a few decades earlier than expected0 -
They have kidded people that the Govt can right all wrongs and that has been funded by the magic money tree which never grows sick as we have our own currency.rick_chasey said:
Hang on. What are you on about? What does govt borrowing have to do with this? What does MMT have to do with this?surrey_commuter said:
No, NO, NO!!!! you and your MMT got us into this mess so you can’t just give up. If there is no downside to borrowing money then why not double down and borrow £90bn a year to subsidise people’s gas bills?rick_chasey said:
At this point I'm at a loss. Predicted deepest recession for 60 years.surrey_commuter said:
Would Rickonomics allow continued borrowing or is it time to panic?rick_chasey said:Looks pretty ugly all round.
Inflation peaking at 13%, expects inflation to still be at 9% come Q3 2023
It's a f*cking catastrophe.
This is exactly the censored I have been warning you about just a few decades earlier than expected
If we weren’t stumping up £100bn a year in debt servicing they could afford to do other stuff it their predecessors have already borrowed against current earnings1 -
focuszing723 said:
Isn't that run faster than the next man policy, when being chased by a lion?surrey_commuter said:
Or take responsibility and look after you and yours.rick_chasey said:Really glad we've coming off virtually no real wage growth for 15 years to cushion the blow of the biggest drop in living standards since WW2.
What a glorious economy I graduated into in 2009, f*ck me.
If there is one thing everybody is going to learn is that the Govt is not some all powerful force that can make everything alright.
He was moaning that he graduated into a sh1te economy. My suggestion is that he should stop viewing the Govt as a crutch and make his own way in life.1 -
Anyway. I feel a bit ashamed my super power can't stop all this pent up financial nastiness.
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Expecting this government to save the economy given their track record is, eh, optimistic shall we say? We are doomed.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
A) if any of us were true MMTs we’d just be calling for really heavy taxes and B ) your alternative leaves us all net poorer anyway as it’s been established beyond reasonable doubt that austerity is one of the main causes of the lost decade.surrey_commuter said:
They have kidded people that the Govt can right all wrongs and that has been funded by the magic money tree which never grows sick as we have our own currency.rick_chasey said:
Hang on. What are you on about? What does govt borrowing have to do with this? What does MMT have to do with this?surrey_commuter said:
No, NO, NO!!!! you and your MMT got us into this mess so you can’t just give up. If there is no downside to borrowing money then why not double down and borrow £90bn a year to subsidise people’s gas bills?rick_chasey said:
At this point I'm at a loss. Predicted deepest recession for 60 years.surrey_commuter said:
Would Rickonomics allow continued borrowing or is it time to panic?rick_chasey said:Looks pretty ugly all round.
Inflation peaking at 13%, expects inflation to still be at 9% come Q3 2023
It's a f*cking catastrophe.
This is exactly the censored I have been warning you about just a few decades earlier than expected
If we weren’t stumping up £100bn a year in debt servicing they could afford to do other stuff it their predecessors have already borrowed against current earnings0 -
Right now, as you are aware, it's very hard to hire any graduate or junior in finance without paying very high salaries. The salaries are sufficiently high that it is hard to make a profit. This applies to the legal profession too. That doesn't seem too bad a situation for the kids.rick_chasey said:Really glad we've coming off virtually no real wage growth for 15 years to cushion the blow of the biggest drop in living standards since WW2.
What a glorious economy I graduated into in 2009, f*ck me.0 -
I think it would be fairer to say that Covid got the country into a mess. Whatever was done would have resulted in economic pain at some point.surrey_commuter said:
No, NO, NO!!!! you and your MMT got us into this mess so you can’t just give up. If there is no downside to borrowing money then why not double down and borrow £90bn a year to subsidise people’s gas bills?rick_chasey said:
At this point I'm at a loss. Predicted deepest recession for 60 years.surrey_commuter said:
Would Rickonomics allow continued borrowing or is it time to panic?rick_chasey said:Looks pretty ugly all round.
Inflation peaking at 13%, expects inflation to still be at 9% come Q3 2023
It's a f*cking catastrophe.
This is exactly the censored I have been warning you about just a few decades earlier than expected1 -
I mean. That isn’t born out in the stats at all. Quite the opposite.TheBigBean said:
Right now, as you are aware, it's very hard to hire any graduate or junior in finance without paying very high salaries. The salaries are sufficiently high that it is hard to make a profit. This applies to the legal profession too. That doesn't seem too bad a situation for the kids.rick_chasey said:Really glad we've coming off virtually no real wage growth for 15 years to cushion the blow of the biggest drop in living standards since WW2.
What a glorious economy I graduated into in 2009, f*ck me.
https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/
It’s not an image but look at the first chart.Strikingly, over half of this increase (53.9%) can be attributed to fatter profit margins, with labor costs contributing less than 8% of this increase. This is not normal. From 1979 to 2019, profits only contributed about 11% to price growth and labor costs over 60%, as shown in Figure A below. Nonlabor inputs—a decent indicator for supply-chain snarls—are also driving up prices more than usual in the current economic recovery.
In the UK anyone in the public sector has seen their real pay shrink over the period for the same role. The govt is very happy striking bargains at 4-5% below inflation currently.
This is not remotely a wage led inflationary spiral. Far far from it.
There is a reason I keep banging on on about real wages stagnating over 15 years.
It is a lost decade.0 -
It certainly is reportedly difficult to hire grads in engineering. But part of this seems to be that Covidversity wasn't as good a learning experience as in person university. Wage competition for mid career seems to be fairly high though...
I assume law and finance are now competing with fancy high profile tech companies for a very similar pool of graduates. Is it fair to say its a bit of a niche end of the market and not fully representative?0 -
"Lost Decade" is a lazy cliche that doesn't tell the real (or even nominal) story. Per ONS data, inflation-adjusted total pay levels hit a cyclical high in Q2 2008 and then started falling. Presumably not unrelated to the onset of the Financial Crisis.rick_chasey said:It is a lost decade.
They continued to fall until Q3 2014, after which they rose sharply for two years, plateaued for another two years and then rose again to the onset of the pandemic. During the early days of the pandemic they dropped a couple of % points, then grew strongly until the start of this year when they plateaued again. ONS data currently doesn't extend beyond May, so don't yet show a significant fall.
A more nuanced description would be that there was a "Lost 6 years" due to the Financial Crisis and then broadly upwards growth again until the pandemic. The largely upwards growth since 2014 suggests that "austerity" (not that we've really had any, but it's a concise label for pre-pandemic Tory fiscal policy) is not obviously the cause of stagnating real pay levels.
The unfavourable comparison of the UK vs other countries re real wage growth since the GFC is perhaps simply another reflection of how badly the UK was affected by exposure to the Crisis via its unduly lightly regulated financial sector.
On the subject of inflation, the consensus view of economists we deal with at work is that the current inflations levels are not wholly driven by supply chain issues, with the other factors being the impacts of years of QE finally feeding into the price of goods and services rather than just asset values, interest rates being held low for too long, and overly generous Covid-era financial support. So we're back to "too much money chasing too few goods".
With the obvious caveat that you can lay an infinite number of economists end-to-end and still not reach a conclusion, so other views may obviously exist.
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Yes the tech companies take some of the best graduates but that has been the case for a while.Jezyboy said:It certainly is reportedly difficult to hire grads in engineering. But part of this seems to be that Covidversity wasn't as good a learning experience as in person university. Wage competition for mid career seems to be fairly high though...
I assume law and finance are now competing with fancy high profile tech companies for a very similar pool of graduates. Is it fair to say its a bit of a niche end of the market and not fully representative?
Yes law and finance is not representative, but Rick is a big beneficiary of the market for finance jobs, so moaning about hardship at the moment seems wrong.0 -
Professional services would obviously be unrepresentative as there is no physical product that can be sold at supernormal profits given excess demand. Professional service providers can only meet higher demand by hiring more staff or paying more to eke more hours out of existing staff. They can't just pull a completed deal out of the warehouse to help clients complete the deal that they're currently contemplating.TheBigBean said:Yes law and finance is not representative, but Rick is a big beneficiary of the market for finance jobs, so moaning about hardship at the moment seems wrong.
I would also guess that the section of the labour market that has tangible skills has done pretty well in the last 10-15 years, with national average pay levels being reduced by the less skilled, who have very little bargaining power. (So work hard at school kids, and study traditional academic subjects, even if they're "hard". Or train as a plumber.)
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The service can be sold at higher profits, but there isn't a big warehouse with a stockpile of services, so I do get what you mean.wallace_and_gromit said:
Professional services would obviously be unrepresentative as there is no physical product that can be sold at supernormal profits given excess demand. Professional service providers can only meet higher demand by hiring more staff or paying more to eke more hours out of existing staff. They can't just pull a completed deal out of the warehouse to help clients complete the deal that they're currently contemplating.TheBigBean said:Yes law and finance is not representative, but Rick is a big beneficiary of the market for finance jobs, so moaning about hardship at the moment seems wrong.
I would also guess that the section of the labour market that has tangible skills has done pretty well in the last 10-15 years, with national average pay levels being reduced by the less skilled, who have very little bargaining power. (So work hard at school kids, and study traditional academic subjects, even if they're "hard". Or train as a plumber.)0 -
Agreed. The labour element just gets a much bigger slice of the pie than where there is a physical product that is in short supply.TheBigBean said:
The service can be sold at higher profits, but there isn't a big warehouse with a stockpile of services, so I do get what you mean.wallace_and_gromit said:
Professional services would obviously be unrepresentative as there is no physical product that can be sold at supernormal profits given excess demand. Professional service providers can only meet higher demand by hiring more staff or paying more to eke more hours out of existing staff. They can't just pull a completed deal out of the warehouse to help clients complete the deal that they're currently contemplating.TheBigBean said:Yes law and finance is not representative, but Rick is a big beneficiary of the market for finance jobs, so moaning about hardship at the moment seems wrong.
I would also guess that the section of the labour market that has tangible skills has done pretty well in the last 10-15 years, with national average pay levels being reduced by the less skilled, who have very little bargaining power. (So work hard at school kids, and study traditional academic subjects, even if they're "hard". Or train as a plumber.)
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I'd be interested in the stats on W+Gs thought that the average pay was being reduced by the less skilled? My understanding was that it was a large part driven by public sector, which does include a large number of skilled workers?
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So of the G7, UK and Japan has had the worst growth since the GFC in that period. US economy, German Economy are considerably richer now than pre-GFC.wallace_and_gromit said:
"Lost Decade" is a lazy cliche that doesn't tell the real (or even nominal) story. Per ONS data, inflation-adjusted total pay levels hit a cyclical high in Q2 2008 and then started falling. Presumably not unrelated to the onset of the Financial Crisis.rick_chasey said:It is a lost decade.
They continued to fall until Q3 2014, after which they rose sharply for two years, plateaued for another two years and then rose again to the onset of the pandemic. During the early days of the pandemic they dropped a couple of % points, then grew strongly until the start of this year when they plateaued again. ONS data currently doesn't extend beyond May, so don't yet show a significant fall.
A more nuanced description would be that there was a "Lost 6 years" due to the Financial Crisis and then broadly upwards growth again until the pandemic. The largely upwards growth since 2014 suggests that "austerity" (not that we've really had any, but it's a concise label for pre-pandemic Tory fiscal policy) is not obviously the cause of stagnating real pay levels.
The unfavourable comparison of the UK vs other countries re real wage growth since the GFC is perhaps simply another reflection of how badly the UK was affected by exposure to the Crisis via its unduly lightly regulated financial sector.
On the subject of inflation, the consensus view of economists we deal with at work is that the current inflations levels are not wholly driven by supply chain issues, with the other factors being the impacts of years of QE finally feeding into the price of goods and services rather than just asset values, interest rates being held low for too long, and overly generous Covid-era financial support. So we're back to "too much money chasing too few goods".
With the obvious caveat that you can lay an infinite number of economists end-to-end and still not reach a conclusion, so other views may obviously exist.
They *have* experienced real growth since the GFC, and the UK hasn't. It has just manged to return to pre-crash earnings. So has France, and so have the whole bar UK and Japan.
. When you have economic downturns, the recovery will always involved faster YoY "growth" - but that growth is in context - it's recovery - it's not actual growth. Like when suddenly everything shut in the pandemic we had a gigantic loss in earnings, and when everything opened again there was massive *growth* - but that wasn't actually growing the economy, it was just recovering.
The UK is also the most unequal economy amongst the major economies in Europe and that clearly hampers growth
It's a lost decade because real earnings per-head are the same as they were in 2008. So you can talk about "growth in 2014" but that's because you're zooming in too far on the chart. It was still recovering from a recession - 6 years later! UK collectively earns in real terms basically the same as it did at in 2008. That is what a lost decade means. They don't look at the individual years and go "look, some growth in this year and that year" they look at, "are people earning more in real terms than they did?" and the answer is no.
Only the UK and Japan of the major economies can boast that dire performance.0 -
That was just a guess, as clearly flagged in my post.Jezyboy said:I'd be interested in the stats on W+Gs thought that the average pay was being reduced by the less skilled? My understanding was that it was a large part driven by public sector, which does include a large number of skilled workers?
From personal experience of being married to an NHS Pharmacist, the same rules of supply and demand dictate pay levels there as in the private sector. Mrs W&G's pay has increased significantly in the last decade as part of an overall strategy to retain skilled staff. Sample of 1, obviously (and great though she is, I doubt Mrs W&G has been singled out for pay rises) but the rhetoric often doesn't match what happens on the ground.0 -
Agreed. But none of those countries had f*ckwit Brown in charge to prepare them so uniquely badly for the next financial crisis. And another financial crisis was always going to happen; it was just a matter of when.rick_chasey said:
So of the G7, UK and Japan has had the worst growth since the GFC in that period. US economy, German Economy are considerably richer now than pre-GFC.wallace_and_gromit said:
"Lost Decade" is a lazy cliche that doesn't tell the real (or even nominal) story. Per ONS data, inflation-adjusted total pay levels hit a cyclical high in Q2 2008 and then started falling. Presumably not unrelated to the onset of the Financial Crisis.rick_chasey said:It is a lost decade.
They continued to fall until Q3 2014, after which they rose sharply for two years, plateaued for another two years and then rose again to the onset of the pandemic. During the early days of the pandemic they dropped a couple of % points, then grew strongly until the start of this year when they plateaued again. ONS data currently doesn't extend beyond May, so don't yet show a significant fall.
A more nuanced description would be that there was a "Lost 6 years" due to the Financial Crisis and then broadly upwards growth again until the pandemic. The largely upwards growth since 2014 suggests that "austerity" (not that we've really had any, but it's a concise label for pre-pandemic Tory fiscal policy) is not obviously the cause of stagnating real pay levels.
The unfavourable comparison of the UK vs other countries re real wage growth since the GFC is perhaps simply another reflection of how badly the UK was affected by exposure to the Crisis via its unduly lightly regulated financial sector.
On the subject of inflation, the consensus view of economists we deal with at work is that the current inflations levels are not wholly driven by supply chain issues, with the other factors being the impacts of years of QE finally feeding into the price of goods and services rather than just asset values, interest rates being held low for too long, and overly generous Covid-era financial support. So we're back to "too much money chasing too few goods".
With the obvious caveat that you can lay an infinite number of economists end-to-end and still not reach a conclusion, so other views may obviously exist.
They *have* experienced real growth since the GFC, and the UK hasn't. It has just manged to return to pre-crash earnings. So has France, and so have the whole bar UK and Japan.
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I know that it's all that the BoE has, but why would raising interest rates help just now? Inflation is increasing because of increased input prices, particularly energy costs - is this going to do anything about that? Or just make the expected recession worse, and combine that with inflation?
When inflation comes back down as input costs come back down, do they look out at the wasteland and pat themselves on the back as a job well done?0 -
To be clear, I'm not moaning about my own personal hardship. There is very little. I don't need to list all the reasons why I am not in hardship, but trust me, I do fine.TheBigBean said:
Yes the tech companies take some of the best graduates but that has been the case for a while.Jezyboy said:It certainly is reportedly difficult to hire grads in engineering. But part of this seems to be that Covidversity wasn't as good a learning experience as in person university. Wage competition for mid career seems to be fairly high though...
I assume law and finance are now competing with fancy high profile tech companies for a very similar pool of graduates. Is it fair to say its a bit of a niche end of the market and not fully representative?
Yes law and finance is not representative, but Rick is a big beneficiary of the market for finance jobs, so moaning about hardship at the moment seems wrong.
I reckon I could have earned a f*ckload more in a more normal G7 country. Real f*ck you money. If only I'd been successful in persuading the missus to leave...
It's more I'm p!ssed off on behalf of folks who became grown ups in a post GFC world. It's f*cking brutal out there for a lot of them.0 -
I'd like to know how Brown, as someone not in charge of the economy post 2008, did quite so much, and why the blame is not laid at the door of the people in change during the period we're talking about.wallace_and_gromit said:
Agreed. But none of those countries had f*ckwit Brown in charge to prepare them so uniquely badly for the next financial crisis. And another financial crisis was always going to happen; it was just a matter of when.rick_chasey said:
So of the G7, UK and Japan has had the worst growth since the GFC in that period. US economy, German Economy are considerably richer now than pre-GFC.wallace_and_gromit said:
"Lost Decade" is a lazy cliche that doesn't tell the real (or even nominal) story. Per ONS data, inflation-adjusted total pay levels hit a cyclical high in Q2 2008 and then started falling. Presumably not unrelated to the onset of the Financial Crisis.rick_chasey said:It is a lost decade.
They continued to fall until Q3 2014, after which they rose sharply for two years, plateaued for another two years and then rose again to the onset of the pandemic. During the early days of the pandemic they dropped a couple of % points, then grew strongly until the start of this year when they plateaued again. ONS data currently doesn't extend beyond May, so don't yet show a significant fall.
A more nuanced description would be that there was a "Lost 6 years" due to the Financial Crisis and then broadly upwards growth again until the pandemic. The largely upwards growth since 2014 suggests that "austerity" (not that we've really had any, but it's a concise label for pre-pandemic Tory fiscal policy) is not obviously the cause of stagnating real pay levels.
The unfavourable comparison of the UK vs other countries re real wage growth since the GFC is perhaps simply another reflection of how badly the UK was affected by exposure to the Crisis via its unduly lightly regulated financial sector.
On the subject of inflation, the consensus view of economists we deal with at work is that the current inflations levels are not wholly driven by supply chain issues, with the other factors being the impacts of years of QE finally feeding into the price of goods and services rather than just asset values, interest rates being held low for too long, and overly generous Covid-era financial support. So we're back to "too much money chasing too few goods".
With the obvious caveat that you can lay an infinite number of economists end-to-end and still not reach a conclusion, so other views may obviously exist.
They *have* experienced real growth since the GFC, and the UK hasn't. It has just manged to return to pre-crash earnings. So has France, and so have the whole bar UK and Japan.
It is broad economic consensus that the post-2008 austerity was the main driver of the incredibly sluggish recovery.0 -
"Lost Decade" is an imprecise term and therefore of no use for rigorous analysis, however tempting it is for tabloid headline writers.rick_chasey said:That is what a lost decade means...
The key issues re the "Lost Decade" are:
i) When it started; and
ii) Why the first half of this decade is so much worse than G7 peers
Half the political spectrum in the UK seems unwilling to address these issues.
But that's all water under the bridge and the key issue is what is the best course of action now for our Powers That Be. (And on this, we are likely well aligned in our concerns, given who the Powers That Be are!)
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In fairness to this gov't, they could not have predicted the biggest land war in Europe since WW2, nor could they have predicted COVID.
It's all the earnings lost before that to help cushion the blow that troubles me.0 -
I wonder where the international flow of that 500,000,000,000 quid went?
That's a difficult to comprehend amount of money.0 -
This read has personal hardship to merick_chasey said:
To be clear, I'm not moaning about my own personal hardship. There is very little. I don't need to list all the reasons why I am not in hardship, but trust me, I do fine.TheBigBean said:
Yes the tech companies take some of the best graduates but that has been the case for a while.Jezyboy said:It certainly is reportedly difficult to hire grads in engineering. But part of this seems to be that Covidversity wasn't as good a learning experience as in person university. Wage competition for mid career seems to be fairly high though...
I assume law and finance are now competing with fancy high profile tech companies for a very similar pool of graduates. Is it fair to say its a bit of a niche end of the market and not fully representative?
Yes law and finance is not representative, but Rick is a big beneficiary of the market for finance jobs, so moaning about hardship at the moment seems wrong.
I reckon I could have earned a f*ckload more in a more normal G7 country. Real f*ck you money. If only I'd been successful in persuading the missus to leave...
It's more I'm p!ssed off on behalf of folks who became grown ups in a post GFC world. It's f*cking brutal out there for a lot of them.rick_chasey said:
What a glorious economy I graduated into in 2009, f*ck me.0
