Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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Why did that nuance not appear in the Brexit discussions?rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is, it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.0 -
Because the realpolitik of geopolitics and sizes does matter in the context of trade deals, which of course naturally affects lever 1) ;-)TheBigBean said:
Why did that nuance not appear in the Brexit discussions?rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is, it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.0 -
You think an extra million people in the UK (or whatever it was the government forecast depended on) materially affects the UK's leverage in the world?rick_chasey said:
Because the realpolitik of geopolitics and sizes does matter in the context of trade deals, which of course naturally affects lever 1) ;-)TheBigBean said:
Why did that nuance not appear in the Brexit discussions?rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is, it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.0 -
No, but I do think the EU representing a market of 270m people over the UK's 70m did give it a huge amount of leverage in the negotiations, the reality of which was serially ignored by those supporting Brexit.TheBigBean said:
You think an extra million people in the UK (or whatever it was the government forecast depended on) materially affects the UK's leverage in the world?rick_chasey said:
Because the realpolitik of geopolitics and sizes does matter in the context of trade deals, which of course naturally affects lever 1) ;-)TheBigBean said:
Why did that nuance not appear in the Brexit discussions?rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is, it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.
Both in the Brexit negotiations, as well as globally.0 -
I don't know if this helps the discussion but the US population rose by circa 10% from 2009 to 2019.rick_chasey said:The goalposts here are all over the place.
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My Brexit reference was to the economic forecasts that focussed on GDP rather than GDP per capita.rick_chasey said:
No, but I do think the EU representing a market of 270m people over the UK's 70m did give it a huge amount of leverage in the negotiations, the reality of which was serially ignored by those supporting Brexit.TheBigBean said:
You think an extra million people in the UK (or whatever it was the government forecast depended on) materially affects the UK's leverage in the world?rick_chasey said:
Because the realpolitik of geopolitics and sizes does matter in the context of trade deals, which of course naturally affects lever 1) ;-)TheBigBean said:
Why did that nuance not appear in the Brexit discussions?rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is, it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.
Both in the Brexit negotiations, as well as globally.0 -
I figured productivity is such a tough nut to crack that it was easier to look at the headlines.TheBigBean said:
My Brexit reference was to the economic forecasts that focussed on GDP rather than GDP per capita.rick_chasey said:
No, but I do think the EU representing a market of 270m people over the UK's 70m did give it a huge amount of leverage in the negotiations, the reality of which was serially ignored by those supporting Brexit.TheBigBean said:
You think an extra million people in the UK (or whatever it was the government forecast depended on) materially affects the UK's leverage in the world?rick_chasey said:
Because the realpolitik of geopolitics and sizes does matter in the context of trade deals, which of course naturally affects lever 1) ;-)TheBigBean said:
Why did that nuance not appear in the Brexit discussions?rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is, it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.
Both in the Brexit negotiations, as well as globally.
I think it's safe to say increasing friction to international trade to the market that is by far the biggest trading partner does not improve productivity.0 -
But it was always 4% worse GDP by 2030. That a chunk of that was down to lack of population increase never seemed to be relevant to many posters. Bit like the £350m on the bus really.rick_chasey said:
I figured productivity is such a tough nut to crack that it was easier to look at the headlines.TheBigBean said:
My Brexit reference was to the economic forecasts that focussed on GDP rather than GDP per capita.rick_chasey said:
No, but I do think the EU representing a market of 270m people over the UK's 70m did give it a huge amount of leverage in the negotiations, the reality of which was serially ignored by those supporting Brexit.TheBigBean said:
You think an extra million people in the UK (or whatever it was the government forecast depended on) materially affects the UK's leverage in the world?rick_chasey said:
Because the realpolitik of geopolitics and sizes does matter in the context of trade deals, which of course naturally affects lever 1) ;-)TheBigBean said:
Why did that nuance not appear in the Brexit discussions?rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is, it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.
Both in the Brexit negotiations, as well as globally.
I think it's safe to say increasing friction to international trade to the market that is by far the biggest trading partner does not improve productivity.0 -
What I mean is the impact on productivity is harder to untangle, but the reality of increasing friction of a huge proportion of trade is never going to be beneficial.0
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SC believes borrowers go to the deepest circle of Hell. He's far worse than the Germans 😁rick_chasey said:
As an impacts growth, surely?surrey_commuter said:
but we are taking about the size of the annual deficit and debtrick_chasey said:Bluntly, the average American is richer than they were in 2007 - the average Brit/Western European citizen barely is.
Or are you just a German where it is a matter of principle, regardless or the rest?1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
I think that is true for the UK, but there are certainly those that argue it is not true for all economies at all times (ie the 'infant industry' argument). Cutting ourselves off from access to, and involvement in, fundamental science research hardly a great idea either (at least that seems to have been recognised, albeit belatedly).rick_chasey said:What I mean is the impact on productivity is harder to untangle, but the reality of increasing friction of a huge proportion of trade is never going to be beneficial.
Anyway once we pi$$ed the proceeds of north sea oil up the wall to fund the destruction of our industrial base rather than building up a sovereign wealth fund we were pretty screwed anyway. Brexit is the icing on the cake. The UK is sliding (pretty rapidly) into irrelevance - to paraphrase the Daily Hell somewhat - hope the last person left turns out the lights!0 -
maybe I am not understanding your point but if you are trying to fund a new railway then increasing GDP will increase tax.rick_chasey said:Yes, higher growth per person.
GDP in absolute terms only matters for things like geopolitics and how big an army you can support.
For the purposes of how rich a country is for its citizens it's all about wage growth and productivity.
The goalposts here are all over the place.
The main aim for any government should be *sustainable* growth in productivity; i.e. the majority of people in the country see themselves getting richer over the long run.
The rest is all just noise.
The gov't can affect this in 2 ways really.
1) the rules by which the game of business is played, whether internally or dealing with other countries.
2) the tax and spending aspect.
They are the only levers they have.
This works particularly well when the immigrants come over fully educated, fit and healthy and then fvck off before they become old and unfit and unhealthy.
Can you point to some examples of where a country has borrowed colossal amounts of money to invest for the long term and have achieved your goal of sustained improvements of GDP per capita.
The only ones I can think of are one party states who did not need to borrow such as Vietnam, China, Dubai and Singapore.
I just think your words are a wish rather than a strategic goal with a plan of how to get there. Like efficiency gains and cracking down on fraud it just seems a way of filling a gap in budget calculations.
I think the UK Govt would achieve far more if it set a goal of "doing no economic harm"0 -
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Prices have come down. Quite a bit in real terms.rick_chasey said:So where is this promised post-rate-hike housing crash?
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Have discussed this theory a lot on the forum.0 -
The market is significantly quieter, and asking prices are lower than 9 months ago.rick_chasey said:So where is this promised post-rate-hike housing crash?
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Except in town.Dorset_Boy said:
The market is significantly quieter, and asking prices are lower than 9 months ago.rick_chasey said:So where is this promised post-rate-hike housing crash?
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
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I think from this area as far as I can tell prices haven't changed because there are a lot less transactions, far fewer homes on the market.0
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less liquidity usually means more volatile prices, not less.verylonglegs said:I think from this area as far as I can tell prices haven't changed because there are a lot less transactions, far fewer homes on the market.
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people think they know what their property is worth so refuse to sell for less unless they have to.rick_chasey said:
less liquidity usually means more volatile prices, not less.verylonglegs said:I think from this area as far as I can tell prices haven't changed because there are a lot less transactions, far fewer homes on the market.
If you are looking for a bargain then you need to find some poor barsteward who is a forced seller.
A lack of unemployment will be propping things up plus mugs hanging on in the belief that rates will soon return to 2%0 -
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The Editor hates me and every now and again prints articles just to annoy merick_chasey said:0 -
Who do you think they’re speaking to, to get to that viewpoint?
Fwiw the people I speak to say the same as The Economist0 -
To me it goes against what I understand the ethos of The Economist to be. Removing legislation around what pension funds can invest in is one thing but to push them into things not provided by the market is a whole new ball game.rick_chasey said:Who do you think they’re speaking to, to get to that viewpoint?
Fwiw the people I speak to say the same as The Economist0 -
surrey_commuter said:
To me it goes against what I understand the ethos of The Economist to be. Removing legislation around what pension funds can invest in is one thing but to push them into things not provided by the market is a whole new ball game.rick_chasey said:Who do you think they’re speaking to, to get to that viewpoint?
Fwiw the people I speak to say the same as The Economist
I'm inclined to agree that the cottage industry pension fund sector is not efficient, and that some consolidation would do wonders for the returns.
What's wrong with these two paragraphs?One issue preoccupying Mr Hunt is that startups in Britain struggle to access domestic growth capital. Retirement savings make up just 10% of Britain’s venture-capital pool, compared with 72% in America, according to Onward, a think-tank. British pension funds invest 15 times less in startups than their equivalents in Canada. Risk aversion among British fund managers stems partly from regulations dating back decades. Some eschew equities altogether.
he second, related problem is that British savers get a bad deal compared with their counterparts in other countries (see chart). Many British pension funds are tiny; more than 25,000 defined-contribution schemes have fewer than 12 members. Schemes in America, Australia and Canada tend to be much bigger. This cottage industry persists partly thanks to weak regulations. A “large and highly interested ecosystem” of advisers and trustees also creates a bias against changing things, says William Wright of New Financial, a think-tank. As Mr Hunt notes, scale makes it easier to drive down costs for savers and diversify into growth equity, an asset class which charges higher fees but can lead to higher returns.
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Re the bolded bit, one obvious issue is that it the underperformance of UK schemes is covered in a chart that covers the top 5 schemes in each country, suggesting that size of fund isn't the primary driver of lower returns (you don't need a particularly large scheme to achieve reasonable economies of scale) but the second paragraph focuses mainly on the size of UK schemes being the main issue. So the "UK pension funds need to be consolidated to incentivise higher risk investments for greater returns" line of thought may be barking up the wrong tree.rick_chasey said:surrey_commuter said:
To me it goes against what I understand the ethos of The Economist to be. Removing legislation around what pension funds can invest in is one thing but to push them into things not provided by the market is a whole new ball game.rick_chasey said:Who do you think they’re speaking to, to get to that viewpoint?
Fwiw the people I speak to say the same as The Economist
I'm inclined to agree that the cottage industry pension fund sector is not efficient, and that some consolidation would do wonders for the returns.
What's wrong with these two paragraphs?One issue preoccupying Mr Hunt is that startups in Britain struggle to access domestic growth capital. Retirement savings make up just 10% of Britain’s venture-capital pool, compared with 72% in America, according to Onward, a think-tank. British pension funds invest 15 times less in startups than their equivalents in Canada. Risk aversion among British fund managers stems partly from regulations dating back decades. Some eschew equities altogether.
he second, related problem is that British savers get a bad deal compared with their counterparts in other countries (see chart). Many British pension funds are tiny; more than 25,000 defined-contribution schemes have fewer than 12 members. Schemes in America, Australia and Canada tend to be much bigger. This cottage industry persists partly thanks to weak regulations. A “large and highly interested ecosystem” of advisers and trustees also creates a bias against changing things, says William Wright of New Financial, a think-tank. As Mr Hunt notes, scale makes it easier to drive down costs for savers and diversify into growth equity, an asset class which charges higher fees but can lead to higher returns.
Another issue is the offence against the English language that is committed via "15 times less". You can't have "more lessness". At least not in any civilised world. What's wrong with "British pension funds invest one fifteenth of the proportion of their assets in start ups when compared to their Canadian equivalents?
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I'd disagree re economies of scale.
Firstly, there is only one UK pension fund which is big enough to justify running money in-house and even then it's touch and go - USS. Railpen dabbled but decided not to. BA tried but that's now been handed over to BlackRock.
Compared that to the Aussie Supers or the canandian funds and it's an order of magnitude smaller. Those guys really can put the squeeze on any provider; not least as, at that AUM they are talking, there is always the option of just buying in the PM to run it themselves.0 -
The small schemes tend to outsource a lot - particularly of benefits in payment - to a relatively small number of fund managers, in what is a fairly competitive market, so the effect of small scale may be less than the headline size of schemes suggests. Per the previous discussions on this, a big factor is likely to be the extent to which funded UK DB schemes are open to new members vs the position is Oz etc. The UK DB schemes have mainly pensioners rather than young workers as their members and so risky investment strategies are less likely to be appropriate.rick_chasey said:I'd disagree re economies of scale.
Firstly, there is only one UK pension fund which is big enough to justify running money in-house and even then it's touch and go - USS. Railpen dabbled but decided not to. BA tried but that's now been handed over to BlackRock.
Compared that to the Aussie Supers or the canandian funds and it's an order of magnitude smaller. Those guys really can put the squeeze on any provider; not least as, at that AUM they are talking, there is always the option of just buying in the PM to run it themselves.
But anyway, what did you think was wrong with the two paragraphs concerned?
And as an aside, in the article you linked earlier, the suggestion was that pension schemes invest 5% of their assets in VC etc, so what's being considered is unlikely to be game-changing for pension scheme returns.0 -
You will have to explain your size argument.rick_chasey said:I'd disagree re economies of scale.
Firstly, there is only one UK pension fund which is big enough to justify running money in-house and even then it's touch and go - USS. Railpen dabbled but decided not to. BA tried but that's now been handed over to BlackRock.
Compared that to the Aussie Supers or the canandian funds and it's an order of magnitude smaller. Those guys really can put the squeeze on any provider; not least as, at that AUM they are talking, there is always the option of just buying in the PM to run it themselves.
Our scheme is circa £300m with a deficit on a self sufficiency basis of £20m. The gap to buy out (ie consolidation) is another £70m.
If the market wants to punt on the 3:20 at Haydock then let them crack on, but it is not the Govt’s job to mandate them to do so.
Market sentiment turned against UK PLC in 2016 and they should own it and not try and paper over the cracks with other peoples money0
