The shift to a green economy can spur innovation and prosperity if we change the quality of growthIt is clear: we are living beyond our planet’s limits. Unless we change something, the consequences will be dire. Should that something be our focus on economic growth?The climate emergency represents the most salient risk we face and we are already getting a glimpse of the costs. And in “weâ€, I include Americans. The US, where a major political party is dominated by climate-change deniers, is the highest per capita emitter of greenhouse gases and the only country refusing to adhere to the 2015 Paris climate agreement. So there is a certain irony in the fact that the US has also become one of the countries with the highest levels of property damage associated with extreme weather events such as floods, fires, hurricanes, droughts and bitter cold.Related: Public borrowing is cheap but ramping up debt is not without risk | Kenneth Rogoff Continue reading...
Borrowing costs are low but the fashion for more debt holds real risks, many of which are hiddenWith interest rates on government debt at multi-decade lows, a number of leading economists have argued that almost every advanced economy can allow debt to drift up towards Japanese levels (over 150% of GDP even by the most conservative measure) without any great concern about long-term consequences. Advocates of much higher debt might be right, but they tend to downplay or ignore everything that can go wrong.First and foremost, the new view of debt understates the risks to other claimants on public tax revenues – such as pensioners, who might be thought of as junior debt holders in the 21st-century welfare state. After all, most social-security systems are debt-like in the sense that the government takes money from you now, and promises to pay it back with interest when you are old. And for governments, this “junior†debt is massive relative to the “senior†market debt that sits atop it.Related: Nine reasons why the stock markets are far too optimistic Continue reading...
Tories take nothing for granted because rival plans resonate with voters and polls could be wrongEven now it is impossible to call the election. Sure, the polls look pretty conclusive but the margin between victory and defeat is slender. The last two elections sprung last-minute surprises and when the Tories say they are taking nothing for granted they are telling the truth.The reason for that is simple: the Conservatives may have had a clear message on Brexit that has resonated with leave voters but they also know that much of what Labour has been saying during the election campaign resonates with the voters. Boris Johnson has been battling against an ideological headwind.Related: Older voters are richer than ever, yet still their needs rule Continue reading...
A majority of pensioner households will be open to Tory tax-break promises. Why did Labour not counter this with a reliable social care plan?Patterns make for ugly pictures in modern British elections. Chief among them is the dominance of older voters. Ever since the loud and justified yell of anguish over Gordon Brown’s infamous 75p rise in the state pension, older voters have harried successive governments to improve their incomes and protect their wealth.Brown’s mistake was made in his budget of April 2000 and from that date onwards, prime ministers have tampered with pensioners’ livings standards at their peril.Those aged 55 to 65 are even wealthier. Just over 30% are asset millionaires, while 53% are worth more than £500,000 Continue reading...
It might sound like a recipe for disaster, but research reveals it leads to better decisions all roundWe should put workers on company boards. We should. We need to get the detail right, but having workers’ representatives present when big decisions are taken is not only a good thing in its own right but would lead to better decisions. It would be a big change in the UK, but it’s not outlandish on continental Europe.If that doesn’t persuade you, let’s turn to what this column is all about – evidence. Do we know the impact of requiring that, for example, a third of board seats go to employees? Helpfully, in the 1990s, the Germans removed this requirement for some new firms, but kept it for similar existing ones, providing a great experiment that economists have exploited with research. Continue reading...
President says China has plenty of money amid market jitters about trade talks and Beijing vow to be ‘strong backup’ for Hong Kong policeDonald Trump has called for the World Bank to stop lending money to China, a day after the institution adopted a lending plan to Beijing despite Washington’s objections.The World Bank on Thursday adopted a plan to aid China with $1bn to $1.5bn in low-interest loans annually until 2025. The plan called for lending to “gradually decline†from the previous five-year average of $1.8bn.Related: China envoy warns of 'destructive forces' trying to undermine US ties Continue reading...
Jeremy Corbyn’s proposals were once widely accepted in pre-Thatcher Britain, says Austen Lynch, while John Forsyth writes of the economic benefit of people having more money, though Chris Pratt questions the efficacy of free school mealsGrowing up in Sweden, Susanna Kierkegaard benefited from free school lunches, had access to university without tuition fees and had free dental checkups – so, as she says, “I already know some of Jeremy Corbyn’s proposed policies can work†(Why a Swede is canvassing for Corbyn’s party, Journal, 2 December).Growing up in pre-Thatcher Britain, we once had all this and more – graduate and postgraduate grants, free dental and medical care, nationalised rail, mail and utilities – all in a country that provided decent council housing, youth centres, care homes and welfare. Continue reading...
US added 266,000 new jobs, boosted by the return to work of 48,000 auto workers following a 40-day strikeThe US added 266,000 new jobs in November boosted by the return to work of striking auto workers.Related: Despite rapid growth in wages, Trump should be concerned | Larry Elliott Continue reading...
Despite a growing economy, many truckers struggle with low shipment numbers, and on top of that a national compliance deadline is loomingIt’s been a tough year for the trucking business. And the outlook for next year isn’t looking any rosier.Despite a growing economy, many truckers continued to struggle with lower than desired shipping rates and shipment levels. Tariffs took their toll, manufacturing continued to contract and the closely watched Cass Freight Index – which measures North American freight volumes and expenditures – logged yet another decline, its eleventh in a row, this October. Not only that but trucking companies in California are now fighting a new law that will require them to reclassify how they treat their independent drivers. Continue reading...
After nine years of the horrors of austerity, who are these people who can’t see that only one party offers hope?I am not, and never have been, one of the cool kids. I was a nerd into Christian rock at school. I love a good Excel spreadsheet. And in 2019 I am resolutely, unfashionably, not politically homeless.Everyone is, these days. Can’t throw a brick without hitting someone saying: “Ugh, there’s no choice at all, it’s like picking between being two different ways of being murdered.†This election, depending on which paper you read, is either a desperate fight to save the Queen from being murdered by John McDonnell at 9am on 13 December, or a deeply dull and unpleasant affair which Your Humble Correspondent finds themselves unfortunately caught up in through no fault of their own, like someone sent out to cover an arts festival in Azerbaijan who ends up accidentally reporting on a scandal involving a dodgy sewage works.Related: To hold back the Tory wave, progressives will have to join forces | Polly Toynbee Continue reading...
Pound hits highest level since May as opinion polls give Tories 11% lead over LabourThe pound raced to a seven-month high against the dollar on Wednesday as City traders bet that Boris Johnson was on course for victory in the general election.Sterling jumped above $1.30 to hit 1.311, its highest level since May, while the euro rate moved above €1.18 from close to parity in the summer when the Conservative leadership contest triggered a fresh round of Brexit uncertainty. Continue reading...
Guardian readers respond to Dave Merritt’s tribute to his son Jack, who, along with Saskia Jones, died on Friday at London BridgeI am in awe of the courage that it must have taken for Jack Merritt’s father to write his tribute to his brave, intelligent, beautiful son (Jack would be livid his death has been used to further an agenda of hate, 3 December). I agree with every word and suspect that the same themes could be applied to Saskia.We must all do everything we can to stop our country adopting a penal system more akin to that in many American states. Instead of an approach towards offenders that is hateful, vengeful and vicious, realistic resources should be used to create one that is focused on rehabilitation. Continue reading...
Macron’s proposed retirement reforms are his latest attempt to erode the safety net. Tomorrow the people are fighting backIt’s shaping up to be one of France’s biggest strikes in recent memory. Responding to calls from unions to protest against the government’s proposed retirement reforms, an impressive swath of the workforce plans to walk off the job tomorrow – everyone from railway workers and truckers to judges, nurses, teachers and students.While it has yet to introduce legislation, Emmanuel Macron’s government has floated a proposal that would mark the deepest overhaul of France’s pension system since its creation in the aftermath of the second world war. This would effectively hike the earliest age at which one can collect so-called full retirement benefits from 62 to 64, overhaul the formula for calculating benefits and merge the country’s 42 existing pension schemes into a single regime – all in all, resulting in likely benefit cuts for millions. Authorities have defended their ambitions with the language of French republicanism, vowing to forge a “universal system†in which everyone is treated equally. But what they neglect to mention is that the new standard would be worse than today’s.Related: How Macron discovered the soft power of the working class | Christophe Guilluy Continue reading...
Asian markets plunge after Trump comments about trade deal delay made worse by possible Xinjiang sanctionsGlobal financial markets have gone into a tailspin amid mounting concern that the US and China are not going to conclude an interim trade agreement before a new set of American tariffs hit Chinese goods on 15 December.Asian markets saw heavy selling on Wednesday after Donald Trump said a trade deal could wait until next year’s presidential election, scotching widely held expectations that he was ready to give the go ahead for an agreement.Related: Trump says China-US trade deal could wait until after 2020 electionThe markets feel like trade talks are on a shot-clock now: December 15 being when the buzzer blows Continue reading...
Shares tumble after president claims tariffs are hurting rival more than AmericaDonald Trump has warned that a trade deal with China could be more than a year away in comments that sent shares in Britain’s top 100 companies and US stock markets tumbling.Speaking at the Nato summit in London, the US president said the US was doing “very well†from the trade war and he was in no hurry to sign an agreement before he runs for re-election next November. Continue reading...
Key issue is how well assets such as railways and energy would run under public ownership, not the costThe Institute for Fiscal Studies is asking the right question about Labour’s nationalisation plans. The key issue is how well the assets would be run under public ownership. What is the party hoping to achieve that could not be done via smarter regulation?This part of the debate has been obscured by endless quarrels over how much it would cost to nationalise rail, mail, water, energy and BT Openreach. On the cost score, the IFS report merely offered a factual two-part answer, one of which was necessarily imprecise.Related: IFS warns Labour renationalisation may delay low-carbon economy Continue reading...
Mr Johnson once thought ‘destitution on a Victorian scale’ might be a good thing. With Tory policies he may yet deliver such a dystopiaDid Boris Johnson watch Channel 4’s documentary Growing Up Poor? He should have. The film is a seminal moment in television which has made people talk about the crisis of destitution that is hiding in plain sight in the UK, and how dreadful it is. In the programme, childhood dreams of being an actor or a solicitor jarred with tales of chronic poverty. There were bleak scenes of Dickensian hardship, as families living in squalor or with hungry children at a food bank explained how these situations had been precipitated by everyday catastrophes of bereavement, domestic violence and mental breakdown. The damaging trade-offs being made – of whether to eat or heat – are a shameful indictment of a country as wealthy as ours.The prime minister does not care to be apprised of such things. Nor is he willing to accept the fact that since 2010-11, on the three main measures, UK child poverty has risen. Nor that the spread of penury has been driven by Conservative cuts and freezes to tax credits and benefits. The government’s own Social Metrics Commission found that more than 4 million people in the UK are trapped in deep poverty, effectively destitute. This is a new phenomenon. Before 2012 the academic literature on the subject found little mention of destitution apart from among asylum seekers. Once the poor might have expected the welfare safety net to help them avoid deprivation. They now have no such guarantee. Austerity, low incomes and precarious jobs have made the poor newly vulnerable to unexpected financial shocks and the slide into desperate hardship. Continue reading...
John McDonnell rejects claim, saying thinktank is taking ‘nakedly ideological stance’Labour’s plan to renationalise large chunks of the economy risks years of disruption that could delay Britain’s transition to a low-carbon economy, a thinktank has said.The Institute for Fiscal Studies warned that taking water, energy companies, the Royal Mail and railways under state control would be costly, complex and risky and said Labour might do better to tighten regulation instead. Continue reading...
Bank president indicates she will move bank beyond traditional remit of controlling inflationChristine Lagarde has said the European Central Bank should do more to help tackle the climate emergency, as she came under pressure from MEPs to step up action against global heating.In a strong hint that as president she would move the ECB beyond its traditional remit of controlling inflation, Lagarde said the bank would incorporate the climate threat into both its economic forecasts and in its capacity as watchdog of the financial system. Continue reading...
Trump targets $2.4bn in French imports amid plans to restore tariffs on Brazil and ArgentinaThe Trump administration is proposing tariffs on up to $2.4bn-worth of French imports, including Roquefort cheese, lipstick, handbags and sparkling wine, in retaliation for France’s tax on US tech companies including Google, Amazon and Facebook.The Office of the US Trade Representative (USTR) said an investigation had found France’s new digital services tax discriminated against US companies. It added that the tariffs could reach 100%.Related: Trump to restore steel tariffs on Brazil and Argentina Continue reading...
by Patrick Butler Social policy editor on (#4VZXH)
Party proposes measures across welfare, public services, transport, housing and jobsLabour has promised to end what it calls the “hostile environment†for disabled people in the social security system as part of a raft of plans to tackle discrimination.The party’s disability manifesto, published on Tuesday morning, proposes a range of measures across welfare, public services, transport, housing and jobs to enable disabled people to live independently, be treated with dignity and respect, and participate fully in society.Related: Disabled workers paid 12% less, 'damning' UK official figures show Continue reading...
Readers respond to a piece by Andy Beckett, where he argues that the Conservative party is avoiding blame for the dire state of Britain todayWell done, Andy Beckett, for trying to refocus electoral debate towards the record of the incumbent party of government (Our focus on the future lets Johnson avoid the present, Journal, 30 November). After almost 10 years of Britain having a Tory prime minister and a Tory-led government, everything in the public domain is worse: the NHS, education, housing, public transport, social care, policing, inequality, poverty and, most shaming of all, child poverty.Add to that their fouling of public discourse with the Brexit mess, which they have failed to clean up, and it is no wonder that Boris Johnson would wish to direct our gaze towards the sunlit uplands of the Tory-managed future and away from the past and present. While the Lib Dems might be shy about pointing the finger, given their complicity in the cruel failure of austerity, it is a mystery why the Labour party is not more vocal on the Tory record. The independent media, meanwhile, have an absolute duty not to neglect this important element of the pre-election debate.
A symbolic slap in the face for Jair Bolsonaro as Trump accuses the two countries of devaluing their currencies and hurting US farmersDonald Trump announced on Monday that he will restore tariffs, effective immediately, on all steel and aluminum shipped into the United States from Brazil and Argentina.In a surprise move, Trump accused the two countries of devaluing their currencies and hurting US farmers. All the US stock markets fell on fears of rising trade tensions. Continue reading...
Monthly manufacturing snapshot shows seventh month of contractionBritain’s factories are laying off workers at the fastest rate in seven years as manufacturing remains in the doldrums amid political and economic turmoil.The monthly UK manufacturing snapshot from IHS Markit/Cips shows the headline purchasing managers’ index (PMI) slipped to 48.9 in November from 49.6 in October. It has been stuck for seven months below the 50 mark that separates expansion from contraction. Continue reading...
Areas with higher probability of automation match those with greater percentage of BrexitersBrexit supporters are more likely to live in areas most threatened by the economic impact of automation, according to a study of the impact of robots and artificial intelligence in the workplace.A map of the parts of the UK likely to be hit by automation fits more closely with the map of leave voters than any other factor, said the Institute for the Future of Work (IFW).Related: Automation could destroy millions of jobs. We have to deal with it now | Yvette Cooper Continue reading...
If pro-EU politicians stopped fighting each other, the majority of voters, who agree with them, may yet prevail against BrexitThis is my last column before the 12 December election. At the time of writing, the Conservative Brexit party – for that is what it is – is way ahead in the polls, and the ineffable Johnson is set to take the British economy hurtling towards the cliff edge.He, his henchman Dominic Cummings and their time-serving accomplices have fooled far too many people into believing that, within weeks, they will have “got Brexit doneâ€.These are classic micro-examples of the chaos in the Remain camp, even though the majority of people in this country are Remainers Continue reading...
In an exclusive interview, Kristalina Georgieva tells why global heating is as big a threat to economic stability as another financial crashKristalina Georgieva is very keen to talk about the research one of her International Monetary Fund economists is doing. Surprisingly, this is not about any of the issues that have gripped the organisation in the past 75 years: balance of payments crises or global recessions. It is about whales and the part they play in the fight against climate change.“Whales act like giant pumps,†says Georgieva, noting that in its lifetime each of these mammals sequesters 33 tonnes of carbon dioxide from the atmosphere, while an average tree absorbs about 20kg a year.Climate change is not just already visible, but tends to hit the world’s poorest countries and poorest people hardest Continue reading...
After nine years of austerity, much of Britain is in a dire state. But we’re not talking enough about whose fault that isIn this acrimonious election, seemingly the one thing everyone can agree on is that Britain’s future is at stake. Yet as a result, so far this election has been too much about the future and not enough about the past and the present. And one party has benefited much more than the others.Related: In this climate, how does Boris Johnson not melt with shame? | Marina HydeRelated: Brexit? This election is about something much bigger than that | Ash Sarkar Continue reading...
Home economics | Shortest-serving PMs | Logistics | Attender | Brexit anagramHow my mother would have loved to be called a beatnik (Learning to cook like a beatnik, G2, 28 November). Growing up in the north in the late 40s and 50s our weekly menu was an “unmovable feastâ€. Sunday roast provided gravy for meatless panackelty Monday or minced leftover meat for a pie. The week progressed through mince and tatties, mince on toast, shepherd’s pie, and once in a blue moon a mutton chop. Friday was putting the knife into my brother’s money box for pennies for a tin of beans until my father’s pay came.
by Felicity Lawrence, Rob Evans, David Pegg, Caelainn on (#4VTWX)
In the wake of the Brexit vote, ultra free market thinktanks have gained exceptional access to the heart of Boris Johnson’s government. By Felicity Lawrence, Rob Evans, David Pegg, Caelainn Barr and Pamela DuncanWhen Boris Johnson assumed office as prime minister in July 2019 and proceeded, without the mandate of a general election, to appoint a cabinet that was arguably one of the most rightwing in post-second world war British history, many commentators called it a coup. The free market thinktank the Institute of Economic Affairs felt self-congratulation was more in order, however. “This week, liberty-lovers witnessed some exciting developments,†the IEA said in an email to its supporters. The organisation, whose mission is to shrink the state, lower taxes and deregulate business, noted that 14 of those around the Downing Street table – including the chancellor, Sajid Javid, the foreign secretary, Dominic Raab, and the home secretary, Priti Patel – were “alumni of IEA initiativesâ€.The IEA had good reason to boast about its influence. Just a few years earlier, on the occasion of its 60th birthday in 2015, Javid had declared that it had “reflected and deeply influenced my views, helping to develop the economic and political philosophy that guides me to this dayâ€. In a speech to the IEA the same year, Raab also enthused about the organisation’s effect on his younger self. A few years back, he told the audience, he had been on a beach in Brazil. He’d had a couple of drinks, and had gone in to the sea to mull over an idea: that New Labour had “eroded liberty†in Britain and created a “rights culture†that had fostered a nation of idlers. Lost in thought, the tide had dragged him far from his starting point, and back on the beach, he had trouble locating his family among all the “scantily clad Braziliansâ€. On stage, he thanked the IEA for helping him develop this idea, which became the starting point for the book Britannia Unchained, an anti-statist tract, co-written with other MPs who would go on to join Johnson’s new cabinet – Patel; Elizabeth Truss, now trade secretary; Kwasi Kwarteng, business minister; and Chris Skidmore, then health minister.Related: Wealthy US donors gave millions to rightwing UK groupsRelated: The US donors who gave generously to rightwing UK groupsRelated: Neoliberalism: the idea that swallowed the world Continue reading...
We are producing and consuming fashion at a rate like never before – and mass shopping sales are simply fanning the flamesThis morning I opened my inbox to find reams of emails – mid-season sale, 50% off, exclusive offer – enticing me to grab the best deal while it lasts. When we’re barraged by messages from the fashion industry to buy more, it’s hard to resist – and I have easily succumbed to these temptations in the past.Related: Millions set for Thanksgiving disruption as storms sweep across USEva Kruse is the CEO of Global Fashion Agenda, a non-profit organisation working to mobilise and guide the fashion industry to take bold and urgent action on sustainability. The Copenhagen Fashion Summit 2020 in May 2020 will convene leaders from across the industry to discuss the issue and potential solutions Continue reading...
Whoever wins the election is likely to make sure that their heretical gamble will be vindicatedIs this election turning out to be a Lutheran moment for the Church of Economics? If one listens to the high priests of the dismal science it might seem so. The Institute for Fiscal Studies says neither the Conservatives nor Labour have produced a “credible prospectus†for balancing the nation’s books in this election. The Resolution Foundation says both parties will break their tax and spending rules announced less than a month ago.Economic sects rely on the faith of the people for their legitimacy. The priesthood are concerned about the radicalism of the two main parties. Boris Johnson wants Brexit over with, whatever the economic cost. Jeremy Corbyn wants to reset the economy along tax-and-spend lines. National debt will rise, warn the experts. Continue reading...
Two main parties’ plans ‘not credible’ but Lib Dem idea to put a penny on income tax is praisedThe much awaited judgment of the Institute for Fiscal Studies was brutal and even-handed: a plague on both your houses.A feature of every election campaign is the day when the thinktank that specialises in tax, public spending and government borrowing does a number-crunching exercise on the party manifestos. Continue reading...
Properties are becoming more affordable but economic uncertainty is still putting buyers off, say expertsHouse price growth in the UK has picked up despite continued economic and political uncertainty, but remains far below the levels seen before the EU referendum.The average price of a home rose by 0.5% in November to £215,734, according to Nationwide building society. This is the biggest monthly rise since July 2018, and up from 0.2% in October. The annual growth rate picked up to 0.8% from 0.4%, the highest since April. Continue reading...
Policymakers could do worse than return to formula of negotiating reciprocal elimination of tariffsThe “bicycle theory†used to be a metaphor for international trade policy. Just as standing still on a bicycle is not an option – one must keep moving forward or else fall over – so it was said that trade negotiators must engage in successive rounds of liberalisation. Otherwise, global openness would gradually succumb to protectionist interests.I don’t know whether the theory was right. In fact, had governments stood still on trade policy over the last three years, the world would be a lot better off than it is now. Trade is faltering – global volumes are down a remarkable 1.1% over the last 12 months – as inept bikers collide chaotically with one another.Related: The IMF is losing influence – and for that it must share the blame Continue reading...
Two main parties on track to break their own spending rules, says Resolution FoundationBoris Johnson’s election spending pledges have left a Conservative-led administration with a slender chance of staying within its borrowing limits if it returns to power, according to a leading thinktank.The extra costs of employing 50,000 more nurses and increasing the national insurance personal threshold to £9,500 would leave the “smallest headroom any chancellor has had†against a government borrowing rule, the Resolution Foundation said. Continue reading...