I have just noted that the US might be facing an economic tipping point this week.
Then I read this from The Telegraph, which suggests that we in the UK are as well, meaning our stock exchange must follow in due course:
British business activity is expected to shrink at its fastest pace since the depths of the pandemic in 2020 amid growing pessimism since Labour took power.
Economists warned the “negative sentiment” had no end in sight, with activity across “all parts” of the British economy expected to keep shrinking over the next three months, according to the Confederation of British Industry (CBI).
Its latest barometer of private sector output ... was the most negative since October 2020, when Boris Johnson, the former prime minister announced the second national lockdown during the pandemic.
They added:
Bosses were also wary about the impact of global trade policy, even though the UK has escaped with one of the lowest additional tariffs from Donald Trump among major advanced economies.
Let's not pretend otherwise. This is not going to end well, and we have a Chancellor utterly out of step with reality whilst this is going on around her.
The portents are really not good.
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There are many predictors of doom in the media, particularly in the right wing press such as the Telegraph, which is full of it. For clarity, I definitely DON’T include this valuable blog.
They generally say something like the UK is in a doom loop, that there is no way out, that the country will go broke, that our only chance is extreme austerity.
What they don’t say is what will happen when we reach the nadir. That’s because their economic world view is wrong and they simply can’t understand what will happen.
I don’t doubt Richard is right, that we are heading for a crash. It may be bad. The question is what will happen then.
I think we know the answer from past experience. When the situation gets really bad, like during the great financial crash, or during pandemic lockdown, they will be forced to abandon their neoliberal austerity politics and pump money into the economy, as they have been able to do all along (and have done in the past). It is a shame they have let things get so bad, and they will get worse, before they act. Many people will suffer.
Even then there will be people claiming that pumping money money into the economy is only postponing and worsening the inevitable catastrophe (spoiler, they are wrong). That is, they will cling on to failed neoliberal ideology even in the face of incontrovertible evidence that it is wrong and has failed.
The real test will come when the crisis is over. Will they then revert back to the nonsense of neoliberalism? I can only hope not.
Agreed
Austerity is only relaxed and the state shows its power as a monetary sovereign when the wealth and power of the ruling class is threatened.
And all Reeves is doing is trying to inflate the bubble by blocking car finance fraud payouts and trying to authorise dodgy banks like Revolut. Even Andrew Bailey drew the line at that particularly idiotic act…
Agreed
Ah… I hadnt seen it mentioned here that Reeves is planning on over rule the supreme courts judgement if they the allow the fraud payouts. She claims that could be bad for the economy…
Well, clearly putting money in the pockets of consumers to spend must be bad for the economy. Makes complete sense!
Tim Kent is correct.
But we must get away from this idea that Neo-liberalism (NL) has failed. It is causing cognitive dissonance.
NL has not failed. It has caused change and continues to reward those at the top more exclusively, and as long as that remains the case, it will go on being advocated and that TINA.
We must keep pointing out the gross/chronic inequality this is creating which itself is destabilising society.
Exactly. Neoliberalism has failed us, the people, if it was ever even meant to benefit us. It is working perfectly well for some. As I’ve already mentioned today, a system is defined by its results, not its intent.
“See, I told them they were mismanaging the economy and they didn’t listen!”
Then Kemi spends the next 10 mins trying to gaslight the population into believing it would be any different under Tories and that it’s all Labour’s fault.
I know Reeves could and should be doing things differently, anticipating a crash and introducing regulation to help avoid the brunt of it and to make the UK a safer place to conduct business. Just something about Kemi’s smug idiocy that makes me sick.
Here we come – full circle. So I say again… before capitalism leaves nearly all of us starving (there has never been ready access to food growing under the capitalist enslavement imposition) -demand back The Commons and, as communities we need to grow our own food, The worship of corrupt, top heavy Economism, as rite and ritual of obscene globalised greed is so destructively toxic, backed by billionaire investment in land and genetic engineering of food means almost certainly hope is dead, and most of us will follow before long