The decline in GDP is shocking: what we do not need though is to go back to the old normal

Posted on June 12 2020

Today's reported decline in GDP from the ONS. Click on the chart to see the animation.

What we do not need to do is go back to the old 'normal'.

There is a better way than this.

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23 Responses

  1. Tim Congdon says:
    June 12 2020 at 10:46 am

    Shocking UK GDP number BUT it’s quite weird to think that even though the UK was almost completely shutdown in April, it was still generating as much economic production we had in fully active 2002 (albeit with a population 13% bigger now).

  2. larry says:
    June 12 2020 at 10:53 am

    Richard, the animation does not play in Firefox.

  3. Graham Hewitt says:
    June 12 2020 at 11:51 am

    Common Weal has some suggestions for Scotland. First of 3 parts: https://commonweal.scot/sites/default/files/2020-06/Resilient%20Scotland%20Part%20One%20Summary.pdf

    • Richard Murphy says:
      June 12 2020 at 12:18 pm

      I am late in blogging it

      May be tomorrow now

    • John S Warren says:
      June 13 2020 at 10:39 am

      I received a Blog from Source Direct (Common Weal) yesterday, titled ‘Tear up the old economic rules’, that I thought very striking. I can do no better than provide a excerpt that I thought especially telling:

      “This health dimension to the economic crisis is a problem which orthodox economic models are not set-up to deal with. In 2019, a group of Finnish academics wrote a paper for the UN Sustainable Development report which assessed that the ‘dominant economic theories, approaches and models’ which underpin western economies today ‘were developed during the period of energetic and material abundance’ and thus ‘almost completely disregards’ the economy’s relationship to nature.
      ‘No widely applicable economic models have been developed specifically for the upcoming era,’ the academics concluded.
      That’s not very promising, considering the current pandemic is recognised by everyone to have been the instigator of the greatest economic crisis since at least the 1930s, and perhaps in the whole history of capitalism. And of course the microbe threat (long warned about by scientists) is just one of many, the loss of biodiversity in what scientists call the ‘sixth mass extinction’ and climate breakdown being two of the other urgent crises we face due to our systemic over-exploitation of the natural world. In this context, using old models to guide economic recovery is a bit like using a broken compass to guide you out of the wilderness.”

  4. John S Warren says:
    June 12 2020 at 11:52 am

    I understand that Mr Gove, who is without question the smuggest narcissist in British politics toady – and perhaps of any day – has just delivered a spectacular handbrake U-turn in Government policy, somewhere near Dover. I think that is at least the third U-turn by this Government in under a week (I am counting Huwai and the Probation policy of the hapless Grayling – and leave it to others to add ones I have missed out, for reasons of space). I am of course inflating the nature of the buffoonery into policy, because this Government doesn’t actually do policies; it lives hand-to-mouth, or rather mouth-to-ear, on sound-bites alone: the only sustenance anyone will ever see from a Johnson-Gove-Cummings Government.

    The back-drop to this car crash, revealing Mr Gove’s steadfast loyalty to political incontinence is the brittle British Brexit approach to EU negotiations. Fuelled by a tough-guy British press, we are going to show these Europeans who is boss, and they will quickly fold. Well, it didn’t last long. After all, this is Mr Gove.

    The FT (11th June) reported that Britsh business has made clear to Government it cannot simultaneously handle disruption at the border with customs checks, and the end of post-Brexit transition, simultaneously.

    We are, therefore back to that classic British non-policy making; temporary light-touch regulation at UK ports for incoming EU goods; which probably means effectively either Nelson’s-eye regulation, no regulation, or just plain muddle, ensuring the trade train-wreck has merely been temp[orarily postponed.

    The FT article notes that the Government is effectively acknowledging that goods from the UK to the EU are likely to face full customs checks as they enter France. This also presumably implies, that we may infer while Europe will probably exact customs tarriffs and taxes on British goods entering the EU; Britain will not be exacting customs on EU imports.

    The FT quotes Whitehall: “‘We recognise the impact that coronavirus has had on UK businesses,’ a Whitehall official said. ‘As we take back control of our laws and borders at the end of this year, we will take a pragmatic and flexible approach’”. The quote is a masterpiece of Newspeak. Taking back control is the choice we made in order to have none at all.

    This is all a hallmark of Mr Gove’s methods, and I am sure he will present this hapless disaster as a sure British victory. When George Orwell painted his picture of the world of Oceania, his vision of tyranny was surely led by the example of Stalin: it would never have occurred to him that when Britain actually descended into disaster, in the 21st century, is in the form of pure comic farce, led by the likes of Mr Bean.

  5. John D says:
    June 12 2020 at 2:11 pm

    I rather like George Monbiot’s new slogan: ‘private sufficiency – public luxury’ – https://www.youtube.com/watch?v=XoRqI0_c-xk.

    • Richard Murphy says:
      June 12 2020 at 2:46 pm

      I do too

    • Adam H says:
      June 12 2020 at 4:17 pm

      It makes a lot of sense. There isn’t enough resources on the planet for everyone to have their own swimming pool but everyone can have access to an amazing public one. The same applies to parks, green spaces and so many other things.

  6. Pilgrim Slight Return says:
    June 12 2020 at 3:30 pm

    This is a concerted effort to panic society so that we get back to normal prematurely and so that we are also prepared to accept less than ideal policies all around and a lessening of standards.

    And a long we go – deceit after deceit after deceit.

    We had lock down to protect the NHS and all we find is that cancer patients have still had their care and treatment affected even when A&E’s have been quiet. It goes to show that we were told not to stay at home for our own good, but so that the we would not see how weakened the NHS has become after 10 years of Tory destruction.

    The mendacity of these criminals is palpable – I just hope that enough of society sees it the same way.

    • Mariner says:
      June 12 2020 at 10:37 pm

      >>The mendacity of these criminals is palpable — I just hope that enough of society sees it the same way.<<

      You'd think so, but the Evening Standard is reporting that their polls indicate 45% of respondents think Johnson has handled the pandemic well compared to 42% who think he's done badly. I just wonder what these 45% of people have seen that I've missed? I realise it has become an act of faith for many, but surely even the most one-eyed can't help but see a shambles unrolling in front of them over the past few months?

    • larry says:
      June 12 2020 at 10:42 pm

      So do I. But I am very concerned that they don’t and that they won’t.