The economy is reflecting the state of chaos in the government.
Real and nominal wage growth is declining again:
Retail sales growth is unsurprisingly depressed.
The pound has fallen below $1.30 this morning.
Beyond the UK, the Fed is having problems making the idea of interest rate rises stick.
They're just a banking fantasist's pipe dream here.
And the FTSE 100 sales on at near record highs:
The markets are trying to ignore reality.
Reality is biting back.
And its message is deeply uncomfortable. I do not see that changing. And sometime the markets will note.
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Is it just me who ‘s thick or is it just most politicians? The EU appears to be dogmatically wedded to the free movement of labour and therefore likely to reject any UK Brexit solution primarily on the grounds it refuses to accept totally free movement of labour. This is despite Merkel nearly losing power because of the rise of the nationalist party AfD objecting to the rapid increase in economic migration albeit from outside the EU. The same rise in the vote share of nationalistic parties has occurred in Italy for the same reason. So to paraphase Brexit means Brexit doesn’t Economic Migration mean Economic Migration irrespective of where its coming from? My comment should not be misconstrued as support for fascism!
There are massive misunderstandings on free movement.
It is of labour, not people
I also think it will not last a lot longer. Europe cannot sustain it
If there is to be free movement of capital there has to be free movement of labour.
Refugees are a different category of problem; one which could be greatly alleviated by not bombing people out of house and home for dubious reasons mostly to do with oil revenues in recent years.
“If there is to be free movement of capital there has to be free movement of labour.”
Why?
BTW that’s a big “if”.
Why ?
Because people need to be able to follow the money.
Andy,
Most of that money has little to do with people, productive capacity or labour. It is an end unto itself – money following money, in a word: arbitrage.
“Most of that money has little to do with people, productive capacity or labour.”
That may well be correct, but most of those people, productivity and labour, have a great reliance on the money and where it it is at work. And it has shown a remarkable affinity for buggering off and leaving a lot of people bereft of paid employment and taking its operating plant with it in many cases.
What happens in the international money markets is something almost entirely divorced these days from the real economy. But that doesn’t mean the real economy has ceased to be of any account.
Andy,
Do you think that people follow jobs when they get offshored? Has the de-industrialisation that has occurred in some Western countries reversed the flow of migration? I think not.
Capital, in some cases, may relocate to places of cheap labour and low exchange rates but that doesn’t mean that workers from places like the UK or US then follow it to China, Mexico, Bangladesh or wherever. It is neither practical nor feasible for them to do so. Asian workers do not migrate from one East Asian location to the next as Japanese firms shift light industries from one country to another over time.
Capital is mobile because it doesn’t need languages, families,community, education or housing. Labour is not and can never be as mobile as capital (nor should it be).
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