There had to be a statistic that would make people appreciate just how serious the current economic crisis is. That statistic has now arrived. It is the increase in the number of people registering as unemployed in the USA in the last week. This was 6.65 million people.
The Guardian has this graphic to demonstrate just how significant this is:
9.95 million people have registered as unemployed in the USA in a fortnight.
To put this in context the Guardian notes that:
William Rodgers, former chief economist at the US Department of Labor ... calculates US unemployment, 3.5% in February, has already reached 17% in just two weeks and that rates for African Americans have soared to 19% from 5.8%.
One in six Americans is now out of work.
This will get worse.
Translate this to the UK with a workforce of some 33 million before the crisis began and it is likely that real UK unemployment, government schemes apart, will rise to more than 5.5 million people very soon, and is likely to get worse from thereon. I am not going to guess by how many, but when it becomes apparent that many more businesses will fail as an attempt at recovery starts sometime this year I suspect the increase to be significant and will be millions more and not hundreds of thousands.
This takes us out of the area of recession.
It takes us beyond depression.
This is a full-blown slump.
No one now in any position of responsibility has ever seen anything like this. Nor have we planned for it.
What that means is that some decidedly lateral thinking, and very deep understanding of the real nature of economics, money, tax, business and its financing and how we get people to work again is required.
I am just hoping it is available. There is none of that around the Cabinet table, for sure.
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Agree with every word of this.
The only thing I could possibly add is that, without wanting to state the obvious, an exit strategy is desperately needed. It doesn’t look like there are going to be any wonderful choices here. But at this rate there will be far more mental breakdowns than virus deaths. Indeed I suspect that there is a huge mental health issue coming down the track.
I’ve no idea what the answer is, but I don’t get any sense that anyone else is confronting it either. A Minister for the Exit Strategy perhaps?
And a Minister for Virus Testing too would be nice.
I was musing on the likelihood of an airline bailout -esp given the tax haven status of some (all?) owners.
Also pondering on all of the SMEs that will be beyond recovery, despite having had a reasonable business before the crisis.
Figure that the former will get support and the SMEs will be left to flounder. Given how many the SMEs employ it will be a disaster for so many people.
The current crop of leaders in government just are not up to the mark, by a long way. Raab ‘ I didn’t realise quite how much traffic came through Dover’ or Gove simply being a small boy with chocolate around his mouth. Or Johnson doing a bad Churchill video on CV testing yesterday.
Not looking good.
Agree with all that
When does the solution become worse than the problem? We burn trees to stop forest fires. But we don’t burn down the whole forest.
Without social isolation the numbers of dying would be hundreds of thousands, a day
Richard how are we going to get out of it, if the government does not have a clue, or will not care to do the right thing? Are we talking revolution territory here, if something is not done?
Do you think the slump is worst than the 1929 crash and the depression of the 1930s?
Ideas will get us out of this
And they are not the preserve of politicians
They use the ideas others create
This is was forecast and expected. There has been an unprecedented about of state intervention. The response has been damage mitigation. At this stage there can only be grim news. Your continuous commentary on this suggests you see this this as an opportunity to impose some sort of new political and economic ideology. May I suggest you wait till this is overcome because it is insensitive to be so clinical and opportunistic in your pursuit.
This is not what was expected at all
The forecast was about 3.7 million
And I will not cease to point out that the failure to manage this is political – and people need to be aware of it
“The forecast was about 3.7 million”
Think that forecast was out of date. Markets for example didn’t move specifically on the news.
No, that was the forecast for today
Read Reuters
Stop misrepresenting the truth
Calm down. The next general election is nearly five years away. There will be no change of government or course IMO, though there may be a change of prime minister if it is judged useful. While this will be a tragedy for our nation, there will be opportunities for further enrichment of the kind of rich people who fund think tanks and armies of trolls.
Nationalise 2020!
In computer games, one can save a game, continue, fail and then restart at the saved game.
I believe this can be done for the UK economy. ( and most other economies.
We could reset to all the values of say 1st Jan 2020. on say 1st Jan 2021, and simply lose this awful year.
Yes, there are lots of difficulties, but I believe this is the simplest, and most likely to succeed policy.
Or more to the point, I don’t know of any other plausible tactic, let alone a better one.
Once the idea takes hold, I’d be happy to work with people to iron out the perceived problems with this tactic.
I heard anecdotally today from a new UC claimant that they’d had a callback saying their claim had been processed and there was no need to comply with the myriad of requirements usually associated with sustaining a claim,
I rather suspected this would be the case as;
A: the system would be overwhelmed,
B: most of the conditions about attending an initial interview, spending 30hrs a week seeking employment, filling out a log of job searching efforts and responses and punctually attending the Jobcentre each fortnight for interrogation, all to be complied with ‘to the letter’ whilst under the constant threat of sanctions have been rendered impossible due to the corona thing,
they can’t even justify the charade now.
I rather suggest that anyone who has been fobbed off and ditched by the benefit system in the last decade and has been existing in the grey margins should reapply for the benefits they’re supposedly entitled to and maybe the true scale of unemployment in this country might be starkly revealed.
For comparison, what are the unemployment claim numbers like in any of our EU neighbours? And what are they getting right that the UK is doing wrong?
Don’t get me wrong. Being furloughed, laid off or losing your job is not a winning lottery ticket, but it’s good to have a safety net in place, and any government that didn’t count the numbers would be doing a disservice.
Some, like Germany, are getting money out in days
Not just vague promises
Sorry,
I still don’t think many of those commenting on here undersand the agniude of what has happened.
There is now no “history”, nothing we know applies to our current curcumstances
We are living in a plutocratic kakistocracy.
We might even be in for the great ‘regression’ if it gets really bad.
The real issue we need to be afraid of is IF the insurance/re-insurance markets flounder & fail.
Insurance is basically one globally authorised ponzi-scheme. If too many start ‘calling in their chips’ & claiming on insurance policies, the Insurance companies will start pressurising the re-insurance companies, who again only have so much they can absorb.
Obviously, the financial system is closely interlinked with the insurance market & I will speculate no further.
But, with interest rates that have basically been stagnant for over a decade. Massive amounts of debt write-off & huge amounts of quantitative easing likely to come; we MIGHT be on track for a Weimar Germany scenario here stemming from excess currency devaluation & hyperinflation.
However, if everyone is doing the same it might well mitigate the actual impact globally.
One thing is certain though I’m sure Warren Buffett et al will be hoovering up stocks/shares in companies he was previously interested in; with a view to holding on to them or medium/long selling them when this all blows over. He will be following his staple strategy.
Two things are certain… the rich will get richer regardless & when there is civil strife in the streets, those who can buy property outright.
The Marie Antoinette attitude of let them (the masses) eat cake, will only last for so long IF it all gets far worse.
Watchful waiting ensues.