There is not the slightest shred of evidences to suggest that markets will drive any post-coronavirus recovery. MMT shows that governments can. This has to be our direction of travel.
Does anyone have any example – MMT or not – of a government driving any substantial recovery in anything?
We might compare Clem Attlee’s post-1945 outcome with that of Ludwig Erhard’s in Germany for example…..
I don’t think Mentalist Monetary Theory shows anything, apart from its adherents’ shaky grasp on reality.
@MC:
I thought it showed black is white, up is down and pigs can fly.
“Arthur the Cat
pigs can fly.”
Well, the MMT version of proving that pigs can fly is that if you throw a pig off a cliff, it is claimed that it is indeed flying. Certainly until it lands at the bottom. At which point MMT will claim that it wasn’t a ‘proper’ pig and that if only a ‘proper’ pig were used, MMT could prove that pigs can fly.
There is not the slightest shred of evidences to suggest that markets will drive any post-coronavirus recovery. MMT shows that governments can. This has to be our direction of travel.
I can disprove that right now. I have an appointment at 2 o’clock to look at a newly empty retail unit with a view to opening a take-away or delivered cooked food business. Be our second one. First found a gap in the market. Our contribution to kickstarting the revival of the Spanish hospitality industry.
And Spud’s contribution is?
I must have been dreaming when i read an article recently about the expected boom in holiday travel once the current lockdowns have ceased. I expect that many people have built up quite a lot of holiday entitlement if they have been furloughed or working from home – no need to take a day off to sort out problems with your car or home if you are already at home.
He has diddly squat idea of what government can or can’t do. He’s never seen it from the inside and has no desire to do so.
He just doesn’t get that covid has affected demand, not supply. Yes, unemployment is going to soar for a while, but jobs will be created very quickly when the pent-up consumer demand is released.
In the East Anglian market town where I live, a coffee shop that closed because of lockdown is being re-fitted as an art gallery, and at least two other empty units are being re-fitted, too.
Theo. I think you have a very novel view of what’s going on. What pent up consumer demand are you talking about? Art galleries? They’ve just carpet bombed the economy. It’s going to take a long time for this to work through the system. The bad times are just beginning.
If the High Street with too many coffee shops looks like the sign of a bubble economy, I’m not sure how to describe an excess of art galleries.
BiS
Lockdown has restricted supply, not demand. This is not a typical recession, though it has still accelerated Schumpeter’s creative destruction. Those in work or on furlough have been unable to spend. The savings ratio has gone from c.6% in 2019 to c.19%. There’s £125bn sitting in low-interest accounts ready to be spent. People are desperate to spend – on meals, cars, travel, new kitchens, new bathrooms, etc. Every builder in these parts is booked solidly through 2021 and into 2022. The UK economy shrank by 20.4% in April 2020, but over the summer, between lockdowns, it grew steadily after that – May 6.2%, June 9.3%, etc. Similarly, when or if lockdown is lifted, there will be a mini-boom and the economy will be back to its pre-covid size (barring other crises) within 12 months.
There’s £125bn sitting in low-interest accounts ready to be spent.
Or stolen. Don’t think the Treasury, let alone far Left crazies like Murphy, aren’t looking at that and thinking “Mmmm, I’d love me a piece of that”. Deutsche Bank floated something like this last year.
Theo: my boiler’s making weird noises. Half the local plumbers have gone bust, the other half are booked solid. I also have damp coming through a wall, builders are the same. If I wasn’t clinging to my job I’d do the job myself, but no longer being in my 20s a three-day job for a builder would be three weeks for me.
Theophrastus February 8, 2021 at 9:05 pm – “Similarly, when or if lockdown is lifted, there will be a mini-boom and the economy will be back to its pre-covid size (barring other crises) within 12 months.”
It took one side of my family three generations to rise to the middle class. They worked hard and they saved. They invested in their children. They built assets that they handed on to those children.
I am utterly appalled by the callousness and unconcern with which people treat the destruction of those assets. A lot of people do not have expensive educations that are lock-down proof. All their money is in their small business. Which are all now bust.
Three generations’ work gone in a stroke of a bureaucrat’s pen.
Yes, I am sure that those businesses that survive will do well when the lock down is lifted. But there will be thousands that will not survive that long. All for a relatively mild flu.
Theo is a well-off mug who pays for the scum of BlueLabour because he believes they are a “bulwark against Marxism” even as Blojob Bogus Johnson prepares his long-wanted illegal invaders amnesty using the bogus pandemic as the excuse.
But Theo is going to invest in a conserva-tory (which is likely the nearest to any sort of TORY he will ever get from now on). Thus will UK will be restored.
Yes– economies CAN recover given time. Germany/Japan. But not with shite who hate the market and want a Marxist green paradise in charge. Who have ruined us but still think they can tax us to pay for that–even as the results of their wrecking and money-printing are on the way.
What were living conditions in Germany/Japan like just after WW2? And Blojob couldn’t pass for Werner Dickhard never mind Erhard.
Theo, it’s the supply side of the economy pays peoples wages. If supply is restricted then there’s less wealth creation going on. OK, there’s a class of people so far have come through this financially fairly unscathed what with working at home & furlough payments. But much of that is what I call the parasite classes. The paper pushers & bean counters, the administrators, “professionals”. But the major part of the economy requires people to go out & work & do things where they’re needed. If nothing else, doing those things has become more expensive – less efficient – because Coronapanic restrictions impose costs. Those acrylic screens went up in shops have had to be paid for. That Schumpeter’s creative destruction is businesses going bust & people losing jobs. How many new businesses & new jobs are being created to replace them? The money government is magicking into existence & slinging around with gay abandon is just tokens. It doesn’t represent any wealth creation. In due course there’ll be a reckoning.
I’m watching what’s going on here. Tourism, hospitality & leisure is what we do. A major slice of our economy. That’s the bed & butter brings in the dosh. That’s what pays for the rest of our economy. That’s dead in the water. The bloke I’ve gone into business with owns a well known & popular restaurant. A business his family have built up over decades. That’s effectively bust. October last year he should have had €100k in the bank, the result of a season’s trade. What he had was 100k of debt in government loans which has since grown. There is absolutely no chance that business is going to recover. That restaurant is never going to reopen. The loans will never be repaid. The staff will be joining our ever rising unemployed. The operations we’re putting together require two people & a couple of casual workers. He’s back where they started 30 years ago.
That’s the front line of our economy. But this is now chewing on the second line. We’ve a big industrial estate outside Malaga where the businesses supply the front line live. The wholesalers supply the shops. Businesses supply equipment & services to hotels & restaurants. Drive round there in ’19 & all the units were occupied & trading. Drive round now & you see the gaps have appeared. The locked down shutter & closed gates. Failed businesses need accountants & lawyers. Briefly. Then they don’t need them at all. And they don’t need builders repairing their roofs or plumbers repairing their leaks. Or garages repairing their vehicles.
You follow?
jgh
“Half the local plumbers have gone bust”
Why? Plumbers are still working. They are designated as key workers. Any plumber who has gone bust is incompetent.
SMFS
“All their money is in their small business. Which are all now bust.
Three generations’ work gone in a stroke of a bureaucrat’s pen.”
Tragic, but businesses fail all the time, and your relatives may well be able to re-build theirs in the coming boom.
I am no fan of lockdown, but covid is far worse than “a relatively mild flu”.
Wrong again Theo–C19 has the killing power of a bad winter flu and no more. Most of the bullshit is exactly that–pure bullshit. No 50 thou cases a day no 100 thou dead. 50-200 thou LD dead–I believe that and still more even as we write..
And all in futile attempt to saver Blojob’s career .
It wont of course no matter how much he postures as vax saviour. Because he cant duck economic ruin. Esp as his plans to tax/green-sodomise the country will make matters even worse.
You do talk a load of crap Theo. You have no idea how the world actually operates.
Lets take plumbers.
A plumber is not only the bloke turns up to fix your leaky tap. He’s also the bloke works in the construction industry. Plumbing goes into a building after the shell’s constructed. First fix. That’s the pipe runs, water & gas etc. Second fix comes later & installs bathroom fittings, kitchen sinks & taps. Right through a construction project, every stage depends on the completion of the stage before it. I’ve a mate putting up a block of flats in Essex. He’s about six months behind program thanks to Coronapanic. All sorts of reasons. Material supply problems. The wankers at the local authority scared to come to work & do their bloody paperwork. You name it. So the plumber scheduled to be doing second fix bathrooms can’t work because the tilers haven’t tiled, because the plasterers were delayed waiting for the building inspector to OK the construction. And the plumber had these weeks scheduled in for second fix. So he’s paying two blokes out of his own pocket to sit on their thumbs. Or they’ve gone off to look for other work & he’s lost them & he’s no longer a plumbing contractor Unlike the parasite classes, these people don’t get paid for doing fuck all.
“Tragic, but businesses fail all the time”
That’s a bit like watching someone machine gunning a random load of people to death and then responding “Tragic, but people die all the time”….
Ecksy
Death is not the only covid metric. Hospitalization is just as important. We have had a lockdown, yet hospitals are as full as they would be in a bad ‘flu season without a lockdown, and the patients are taking longer to recover than they do from ‘flu. So, without any non-pharmaceutical interventions at all, health services would have collapsed and the death rate would have been horrendous. And 62% of those in hospital are under-60: most will recover in time but many will require further medical treatment.
BiS
I don’t know where to start with your tsunami of bilge. I suggest you read the media reports on the Bank of England’s forecasts for the UK economy in 2021. The Bank forecasts a mini-boom this year, if lockdown is lifted. And Spain is not the UK.
As for plumbers, plenty of them make a good living servicing the UK domestic market. (There are three plumber’s vans in my road today. One neighbour is having a new boiler installed, another an en suite in a spare bedroom.) Moreover, here in the UK, the construction industry is still operating, as are many other industries, as well as transport and logistics. What are in suspended animation are non-essential retail, hairdressing, hospitality (pubs and restaurants), etc. The businesses that are going under are either doing so voluntarily (and will rise again) or ones that were over-leveraged and/or poorly run.
“That’s a bit like watching someone machine gunning a random load of people to death and then responding “Tragic, but people die all the time”….”
No, it’s not – not even “a bit like”. The intention of the machine-gunner is to kill. The intention of lockdown (however misconceived it is) is not to destroy businesses.
@Theo
I think your 62% number for under 60s refers to patients in intensive care.
The CV-19 hospital admissions by age data is here
https://www.england.nhs.uk/statistics/statistical-work-areas/covid-19-hospital-activity/
It’s not been updated by the lard arses in government for over 2 weeks, and I wish they would as I want to see evidence that the over 75s are coming down in real terms but also as a proportion of the total ( ‘cos I want them vaccines to work ).
But the older ages still dominate all CV-19 admissions
@ bis
The supply side of the economy does not pay the majority of wages (if only …) – it provides the stuff that people want to spend their wages on.
A lot of people would describe your tourism-based local economy as a parasite economy …
@ SMFS
A couple of strands of my ancestry rose to middle class in one generation under Victoria.
Garbage Theo–NHS winter crisis is still on because lots of “covid” victims have winter flu. Test cant tell them apart and if medics can its in their interest to keep their gobs shut. Dont want to go back to Timbuctoo because you took the side of the family and put 100 ft fall on death cert instead of covid. Let alone winter flu.
Nor does C19 present any esp mass recovery problems more than ordinary flu. Nor was NHS chaos –more than usual socialistic chaos that is –any more likely than any other year.
It seems you have swallowed yr plate of Bogus Johnson bollocks faster than a Ken Clarke oyster swill.
Bongo
Yes, thanks, you are right. 62% of those in ICU’s are under 60, or were a fortnight ago. My hospital consultant neighbour says that the number of ICU beds has been increased in our local hospital.
Ecksy
Your confirmation bias-driven pseudo-explanations are risible.
@john77
“A lot of people would describe your tourism-based local economy as a parasite economy …”
For you it is. For here it’s the major part of the economy. There isn’t much else. So everything that isn’t tourism/leisure feeds off of it.
Theo. Thick cvnt. That’s like saying the whole of the retail food industry’s corner shops. The bloke with a van in your street is the equivalent. I’ve run a company does plumbing. We never touched manky little jobs ,changing tap washers. We were geared up to do complete fit-outs in blocks of flats. Big vans full of specialised equipment to tackle large projects economically Cameras for internal pipe inspections & other testing equipment. Materials handling capability. Bulk stock of tubes & fittings. Thousands of quid’s worth of investment that has to be paid off. The programme planning calender would run right through the year with all the contracts dovetailing together & priced to that. Can you imagine what Coronapanic disruption’s done to an operation like this? It’s like saying the building industry must be booming because you can’t find a builder. How many jobs have run unprofitably over time & budget because materials or services couldn’t be sourced when required? Have you tried ringing up a company to progress an order when the tosser you’re speaking to is “working from home” hasn’t a clue & is just there to palm you off with excuses?
The U.S. has already shown what happens when the government is put in charge of economic recovery after COVID. The minute the word “stimulus” entered the conversation, everyone in the Democratic Party and their mother was trying to shove “investment in green energy” into the spending bill (over a decade before that, Obama’s presidency had already shown how great the government is at investing in green energy). They also included $25 million just to go to the Kennedy Center for the Performing Arts.
Even with Trump in office, an amount of this pork still ended up in the final bill, so it takes a real blithering idiot to think that private industry isn’t slightly better at ushering in a recovery than the government. These spending bills weren’t actually meant to be any kind of “stimulus.” The economic recession was artificially caused by government-imposed lockdowns and safety measures, not a bubble or bank run. This money was supposed to be emergency aid for private citizens and small businesses to make up for what they had already lost. Instead, politicians and lobbyists turned it into more failed social experiments so they could fund their pet projects and bullshit.
We have had a lockdown, yet hospitals are as full as they would be in a bad ‘flu season without a lockdown, and the patients are taking longer to recover than they do from ‘flu. So, without any non-pharmaceutical interventions at all, health services would have collapsed and the death rate would have been horrendous.
Theo,
On the basis that the implication above is that lockdown is the NPI without which hospital collapse/death etc, is there any actual evidence for that at all? I don’t mean dodgy modelling from Pantsdown or whatever, I mean real evidence.
Just as an example, studies have shown zero correlation (countries worldwide) between “the extent of lockdown” and “severity of the impact of Covid”. That’s data not modelling. Without even correlation it’s hard to make the case for causation. Is there anything substantive that can help make the opposite case above? I’ve seen very little, so I’m simply curious as much as anything?
Theo
The intention of the machine-gunner is to kill.
Fair comment 🙂
The intention of lockdown (however misconceived it is) is not to destroy businesses.
OK… And in the context as my question above, it does make me then question what exactly the “intention” is (of lockdown). Given that the Government – as an aside – has recently admitted that lockdowns in themselves may kill in excess of 100K …..
And we are still locked down.
PF
“…the implication above is that lockdown is the NPI without which hospital collapse/death etc…”
No such implication at all.
We need to know exactly which NPIs work. That lockdowns have had differing results indicates that it would be a complex multi-factorial analysis. That said, I am sceptical about the degree of lockdown we have been subjected to. I suspect that weaker restrictions (e.g. banning all gatherings of over 100 people, managing flow in shops, table service in pubs, more shielding of the vulnerable), combined with masks and social distancing, would have done the job with less economic damage. But then there’s the difficulty of communicating a more complex message…
“That’s like saying the whole of the retail food industry’s corner shops. The bloke with a van in your street is the equivalent.”
Oh dear more ranting. All I am saying is that the construction industry is ticking over nicely in these parts and that there’s a huge backlog of work to be undertaken as the economy opens up again. This is evidence that, as the Bank of England forecasts, there is likely to be a mini-boom when lockdown is lifted. Your claim that the UK economy has been carpet-bombed is false: parts of it are in suspended animation and ready to spring to life. Some sectors like aviation and aerospace may take a little longer; but personal services, retail and hospitality will roar into life.
” All I am saying is that the construction industry is ticking over nicely in these parts and that there’s a huge backlog of work to be undertaken as the economy opens up again.”
And what do you think was happening, Theo, whilst that backlog was building up? My pal building his block of flats in Essex has had 6 months added on to his completion programme. That’s 6 months worth of finance he’s had to pay for. Six months worth of other outgoings weren’t budgeted in when the project was conceived. Just because work isn’t being done doesn’t stop the numbers ticking over on the cash register. Plant lease companies don’t stop charging you because you’re not using the equipment or not getting the use out of it you expected. They’re the sort of numbers can move a project from above the profit line to below.
This is what has pissed me off all through this. The cvnts working from home or lazing about on furlough wanting MOAR lockdown restrictions to keep them safe. But they still expect people to be working in the supermarkets so they can eat, delivering their Amazon exercise bikes, keeping all the services they depend on running. Yep, Theo, plumbers are key workers who are allowed to run the risks you won’t, so your taps still work.
Theo
I suspect that weaker restrictions … would have done the job with less economic damage.
Well yes. Most countries in the west, prior to March 2020, didn’t envisage any sort of enforced restrictions (such as we’ve seen), be it lockdowns, masks, whatever. The UK’s version of their earlier pandemic planning is here:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/213717/dh_131040.pdf
Mostly clear guidance, advice, followed by voluntary behaviour. Whilst considering a possible downside scenario of over 300K deaths in short order (~15 weeks). Voluntary, because that is all that should be required…
Thanks for the link, PF.