It will be no surprise to anyone that the UK is officially in recession. UK GDP fell for the second quarter in a row according to the Office for National Statistics, as announced this morning:
What is harder to explain is why we did so badly. Compare us to other countries (this data is from the Guardian there days ago, but is almost exactly right):
Only Spain did worse than us, and then only just:
We know the US did better because it failed to lock down appropriately.
We know Spain faced the same scale of Covid crisis as us, and reacted too late, just as we did.
And we know that the other countries managed lock down better, reacting earlier and having better track and trace than the UK.
So the difference appears to be down to Covid 19 management. And we have done very badly.
When the reckoning comes as to why we are facing a particularly severe crisis there is one place where the blame may be rested, and that is No.10. Our economic crisis is not wholly its fault: it did not create Covid 19. But it did mismanage it, at considerable cost.
And what we now know is that No.10 thinks that the crisis is far from over. There is already discussion about deferring an autumn budget because a second Covid spike is likely and effective decision making will not be possible if that happens. That too will be No.10's fault: it has managed the dismal failure to manage the track and trace system in the UK that is critical to our well-being, and to school reporting (in particular).
No one can be pleased we are in a recession. Few seem to have much comprehension as yet to the scale of the challenge this is going to face us with. But there is one thing about which we can have no doubt, and that is that there is blame to be attributed, and it is all the fault of the central management of this government.
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Grim, but what can anyone with an ounce of sense of the gravity of the situation do? The government have an 80 majority, that majority has sworn allegiance (literally I believe) to the Brexit boat that is sailing over the cliff. The opposition (and where are they?) say virtually nothing when confronted with an open goal (sorry for all the mixed metaphors!).
From the people I interact with, they are incandescent with rage and anger at the multitude of wrongdoing, a trail of illegal or dubious activity from Cummings, the paid-for holiday, Jennifer Arcuri, housing minister slush fund…etc. The corruption comes thick and fast so that you lose track, I’m sure that’s the idea.
Yet we are powerless.
I dispute that
Thatcher was toppled, for example
I do wish you were correct. However, Thatcher was removed by the internal ‘men in white coats’ who could see which way the wind was blowing. We are in a different era now and all normal rules are suspended.
They were frightened by riots….
That;s how they could tell the way in which the wind was blowing
It is true Thatcher was toppled, but only the second time her popularity plummeted in 1990. In 1981 when monetarism was proving to be a failure the party stuck with her.
The reason is the same as why Johnson will be secure until late 2022 at the earliest. When a Tory PM creates a crisis, the party keep them until the crisis is over so all the mud sticks to the individual. Thatcher was incredibly lucky that jingoism over the Falklands and the Labour/SDP split saved her.
I would agree but look at the evidence from Hong Kong, Belarus, Russia, Detroit. In all these places, dissent is dealt with very harshly.
A recent vote in Russia a citizen was asked his opinion and he said something like, ‘it makes no difference, nothing we do can change the course of events’. This is in the face of blatant vote-rigging, the ‘winners’ have no shame and don’t care about international relations.
We are being tested right now to find out how far they can push, remember the closing of parliament, luckily reopened but only with the intervention of the supreme court. But that was a shutdown of our democracy.
Sounds familiar?
By the time she “departed” Mrs Thatcher was showing signs of her advancing dementia. Only 5 years after her “resignation” her daughter related that she frequently forgot major moments in her and her families lives.
Forgot to say Gove did this very early, before the end of 2010.
I still have my two GTC authorisation cards, from when I did a brief stint of teaching law from September 2009 to January 2010.
Apologies – posted in the wrong post, should have gone in one discussing algorithms and exam results, after my initial post about Gove and the General Teaching Council.
Richard, ons have made adjustments to output data on education and other areas of public services which seem to go far further then any other country. Most countries showing no or limited decline in output of education. ONS showing 34% decrease.
ONS adjustments seem plausible but if no other country makes them then international comparability is destroyed. This really is comparing apples with pears.
The accounting methods used are meant to be similar
You are absolutely right in pointing this out.
Had test and trace been up to it, lockdown (or at least the type we had) might also have been avoided.
Everything – from exam results, the mortality rates, job losses was caused by mis-management from the opening of this crisis but also we must never forget how weakened our means of dealing with it was/is – created by 10 years of stupid austerity measures by the same political party.
To hell with them I say.
we live on a very crowded small island .We would have had greater numbers of deaths and the N H S would have collapsed under the sheer number of those who were infected.Lockdown though awful to put up with saved lives.
Yes the methods are meant to be similar but the methods around government output really are not similar. As government output is not sold on the market nearly all countries simply measure government output and hence government contribution to gdp as input = output. ONS has for the last decade or more not been doing this. Instead they use direct measures of output in certain areas of government including education. Looking at number of children educated, exam results etc. In the good times these does not impact international comparability as both input=output and direct measures give broadly the same results. However if in a pandemic you close all the schools, keep all the teachers employed then the direct measures are going to fall off a cliff whilst input=output does not change.
So where other countries have simply said the the inputs (wages of teachers primarily) have remained constant and therefore there is no decrease in output. ONS have based their numbers on surveys of reported hours worked by teachers and number of children actually attending school.
Despite the best efforts of teachers and schools it is clearly the case that the level and quality of education and therefore education output has dropped over the past months. ONS are to the best of knowledge the only national statistics institute to have attempted to record this in their figures. A 30% decrease in education output. A reward to all those parents who have struggled with homeschooling is that the ONS correctly say (based on current rules) that homeschooling is household production and therefore outside the production boundary. That time and effort is not in gdp.
Here is the ONS article concerning it all.
https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/coronavirusandtheimpactonmeasuresofukgovernmenteducationoutput/2020-05-13
There is a fascinating story to write about this. To see almost the entire academic economic profession and all economics journalists completely fail to spot it is an inditement of them all. And only further confirms that the profession has no idea about the data they use.
And, politely, that’s been a poor measure then
Or, alternatively, a good one
It either shows that the government did not react appropriately to keep public services going
Or it utterly fails to reflect the considerable effort made by many to ensure that they were – which I have witnessed, in education for example
No mention of the fact that the UK is one of, if not the most, service-oriented economies in the developed world?
“No mention of the fact that the UK is one of, if not the most, service-oriented economies in the developed world?”
Oh bloody hell you should be in this Tory government! Excuse my language but why didn’t you think logically that given such a high proportion of the economy being service -oriented with high interaction with other people all the more reason this government should have been extremely proactive from the get-go in nipping this virus in the bud?
Helen
With respect, I think your condemnation of John Jameson’s post is not justified. Pointing out that our economy has a huge slant towards the service sector does not seem to me like an excuse, merely an observation. And drawing attention to that as a factor is implicitly critical.
For the record, I would say that the sort of economy almost 41 years of neoliberal government (in other words, including the Blair administration, but acknowledging he left Brown a hugely poisoned chalice) has created for us is, to my mind at least, indeed structurally deficient.
And a lot of the services we export down a wire. In other words, we carried on working from home.
God knows how they managed to shrink the economy this much.
And why are they not pausing the Brexit process which for many companies will be the final death knell after having been pummelled by Covid ?
Because the bets are already in.
You don’t fix a fight and Call it off before it happens.
I wish I had any clue what you meant
A serving PM with a big majority can be toppled as was Chamberlain in 1940. But I see no sign that there are enough Conservative MPs who care about the true interests of their constituents; nor does there seem to be anyone with the guts to lead such a move.
Another interesting take on our obsession with growth for growth’s sake from Dean Baker. Granted we have done relatively badly, but we may have an opportunity to proceed without having to get back on the growth hamster wheel.
https://rwer.wordpress.com/2020/08/12/more-thoughts-on-the-post-pandemic-economy/
“Returning to the numbers it is immediately clear that we have not come to the surplus in the best of ways. This is because unless we have suddenly kicked out addiction to imports the fall in imports represents a consequence of the depressionary level fall in economic output we looked at yesterday. Also exports fell as well meaning out own domestic output was lower”
https://notayesmanseconomics.wordpress.com/2020/08/13/the-uk-finds-itself-with-a-trade-surplus/
The Tories appear to have a permanent majority in England so that is that. As in the USA the wealthy own the MSM including the Beeb and hence they manipulate the population at will. A lot of my very well educated and fairly well off friends believe that Corbyn was going to tax away all of their money, that he was a communist, that the Skripals were poisoned by Russia and all of the rest of the crap that the govt. churns out. So, with the 0.1% in control and the 9.9% supporting them the Tories will have to fuck up really big time in order to be defeated. Unless a Blair figure appears again on the “left” in which case he can be elected as an ersatz Tory as in the USA and so the rigged game goes on.