Youth unemployment: finding your first job is the toughest task

I think there is some really important stuff here.
My fear is of a lost generation, and primarily from my own point of view. My fear is that having started looking for work around the time of the economic fuck up, younger people will soon have more experience and overtake me in my search for a good job.
This situation is made worse by those more privileged than I, far from unfortunate myself, who are able to work for free. I need to pay my bills, and during university had to work to pay my bills. That some people are able to work for free being subsidies from elsewhere makes this situation worse when many people are seeing experience, but the little experience that is available is monopolised by those who can afford to work for free and, on that count alone, need it least.

http://www.guardian.co.uk/education/2011/feb/20/youth-unemployment-first-job-ema

Gloom over household finances dents recovery hopes

http://www.guardian.co.uk/business/2011/feb/21/household-finances-markit-index

"He said an unhealthy combination of high inflation and job worries caused households to report that their financial outlook has slumped back to the levels seen during the worst part of the recession."

Sums up my position exactly

Official statistics hide true increase in cost of living

http://www.guardian.co.uk/business/2011/feb/15/official-statistics-hide-severity-uk-inflation

I think there's some truth in that. certainly housing costs are huge, especially lower down the scale. But I wonder how much the general public are really a part of this debate. I mean, I don't sit down and compare my costs of living against the government's official measure then tut at key differences, and I'm the sort of person who would. So I wonder how much people care. I think people will care if inflation is said to be at 2% but felt inflation is up nearer 5%, for example. That would have me pissed off as all the policy decisions would be made with a 'never had it so good' time in mind when in fact times are tough.
Let's hope that doesn't happen, inflation is a worry for me, but then so are my low wages

A rotten sort of recovery | John Harris

http://www.guardian.co.uk/commentisfree/2011/feb/17/rotten-recovery-low-pay-job-insecurity

In amongst all the lefty outrage is one nugget that I think could be really important in years to come: "What that means is obvious enough: for millions, the same deepening insecurity they experienced under the last government, and then some."

I think people are right to fear the lost generation of which I fear I may be a part, and a deepening inequality in terms of security. More and more people are going to have job insecurity, which when added to increasing financial pressure could well be a recipe for social disquiet. I'm certainly not advocating it, but that's what happens when you come down too strongly on the side of private sector employers and harsh supply side reforms.

"week's inflation figures showed prices rising twice as fast as average pay." This can only continue for so long
"To everyone I speak to, the combination of stagnating pay and rising cost of living seems cruel and increasingly unmanageable." Quite.


"the workforce is made anxious by ever-increasing numbers of agency workers, employed on inferior terms, who come and go at speed"
It's not nice being one, I tell thee that

I do wonder if all this will see a re-rise of union membership. It would certainly seem a logical solution to poor pay and job insecurity.

priorities

I'm just listening to the Guardian politics podcast and they went from talking to the economy to talking civil liberties. in all honesty, the economy is far more important. at the end of the day, i care about having a job and a decent standard of living far more than the civil rights of suspected terrorists. i would imagine most people are the same.
with growth stallling and inflation rising i'm worried about my job, i'm worried about my medium to long term prospects too and the idea of getting blown up doesn't help on that.
as someone who thinks terrorism is a terrible thing i'm not entirely sympathetic even though i'm a big believer in personal freedom and liberty

George Osborne - UK will help Ireland through debt crisis

* Osborne visiting Ireland in 2006:

"A generation ago, the very idea that a British politician would go to Ireland to see how to run an economy would have been laughable... Today things are different. Ireland stands as a shining example of the art of the possible in long-term economic policymaking, and that is why I am in Dublin: to listen and to learn.
In Britain, the Left have us stuck debating a false choice. They suggest you have to choose between lower taxes and public services. Yet in Ireland they have doubled spending on public services in the past decade while reducing taxes and shrinking the State's share of national income."
http://www.leftfootforward.org/2010/11/george-osborne-ireland-shining-example/


ozzy is lucky that most people don't know that he was praising Ireland a few years back, because he got that very, very wrong.
the thing is, this is no academic excercise. there are lots of people out of work, and i'm in a shit job well below what i'm capable of so i hope the economy picks up. it's just that, sadly, i don't think it will. taking demand out of the economy at a time like this goes against what i believe to be the best way forward, so i'm not hopeful

UK unemployment falls unexpectedly

While this is encouraging news, underemployment is the other great problem. One that I am feeling very keenly right now.
Let's hope that the Tory economic miracle does come to pass and things improve. That way I might even get a decent job

you don't know what you're doing!

George Osborne and Guido Fawkes on how great and safe Irish banks and economy are. Much better than those evil Labour people's.
As factually accurate as usual

goverment cuts

Cameron has outlined what he thinks needs to be reduced: massive welfare bills", public sector pay and "the bureaucracy .
no change there then

i recently lost my job due to the recruitment freeze, and judging by the above the Tories are still the same old Tories so i'm not too hopeful for much help

BBC - Nick Robinson's Newslog: Intriguing political role reversal?‏

"stand by for Alistair Darling to claim that it is he who is being careful, cautious and candid whilst his opponent is making "reckless" promises.

In reply, Osborne is likely to argue that he and the Tories can be trusted to get more for less from government after years of Labour tax, waste and spending."

It seems we never get out of these basic archetypes. Politicians on both sides use the same tried and tired lines over and again.

The Tories are being a good opposition, not sure they're a government in waiting. The difference being that Cameron and Ozzy are claiming to be able to do everything: cut the deficit, cut taxes, not cut services, cut services, shrink the state.
I've highlighted before that Cameron keeps saying he won't cut X, Y, or Z service, but needs to be up front and honest about what they are going to cut. But both sides think people will be scared and go silly if they are open and honest, and they might just be right

Branson backs 2010 spending cuts‏

Aye, it's a tough one. To cut now and risk sending the economy into a downward spiral, or wait in the hope of tackling the hole in the public finances before the international money markets go nuts.
Now, the rating agencies are a significant part of the reason we're in this mess, but none the less they still have significant power and influence. As a result governments must dance to their tune. But cuts now would bring the economy into recession, possibly a very severe one. Maybe even worse than the current/most recent one. The cumulative effect would be devastating. On the other hand, wait may get the economy going enough to reduce the hole by growth in part, thus taking significant pressure off the need to cut everything. But if cuts need to be made, they need to be made. And there probably will be some. I trust Gordy and Darling with the economy, Darling slightly more.
Cameron and Osborne worry me.

George Osborne vows to cut public spending immediately‏

While steps to reduce the current deficit are to be welcomed, and Ozzy's cuts seem to be well targeted, it's pretty small fry. But it is a start and a couple of steps in the right direction. Funding for the better off should be cut first, those in need suffering last.
There is a big question around when to cut what, as the promised cuts will endanger the recovery, but they need doing. The options are a slow relaxation of spending or a 'slash and burn' approach reminiscent of the early 80s. I can't help but feel that the Tories are caught between both.

Alistair Darling denies benefit rise pre-election 'con'‏

It's dangerously easy to be an opposition politician.
Previously, Osborne was attacking the tax rises, today the spending cuts. Despite him calling for both these things.
Both are viable options at the best of times, but the problems at the moment mean both are pretty much inevitable. Osborne is a very smart political operator, of that there is no doubt. But does he know the first thing about economics?

The economy

Cameron could be trying to promise all things to all people, which is my bet.
He's trying to say that he's come up with an idea that will confound all pre-existing economic thought. Just like that.
There are two ways to play this:
1) Reduce the debt with a long-term view, simular to what Thatcher did in the 80s.
2) Grow our way out of the debt, like Gordy is proposing.
I'd imagine the main parties' approach to this problem will go down party lines.

I'd much prefer this debate to be in Parliament rather than at the CBI.

Inspired by:
Nick Robinson - Spot The Difference
Hopi Sen - We see the hat, but where’s the rabbit?

Employment figures

I'm stuck in the 16-24 group that are suffering the worst, and i'm on the dole too so I feel it.
But we've got to the stage where a smaller-than-expected rise in jobless is good news, so let's enjoy it while we can.
Oh, that's it.
Oh well, joy over.
Gissa job

Broken Britain?

It's been said that "a bankrupt and broken nation? Well, the Tory activists, lobbyists and hangers-on who packed Manchester’s bars and restaurants this week seemed prosperous enough" and i'm inclined to agree. The 'broken' thing is taking it all too far.

Interesting:
"Senior Conservatives say that the gloom is all about honesty: tell it how it is and the voters will trust you. A slightly more cynical interpretation says that the darker the picture the party paints before the election, the more credit it will gain when prosperity returns."

Slash and burn is, i think, their 'narrative' just at the moment:
"My fear is that the urge to slash-and-burn has elbowed aside everything else; that for many in Mr Cameron’s party, the casting of government as the villain is a sufficient prospectus to govern."

At the end of the day

At the end of the day, George Ozzy Osborne and David Chameleon got it wrong on the big economic call:
"But the fact remains Osborne got the big call of the century wrong. When the crisis hit, Osborne said we shouldn't intervene, whereas Gordon Brown led the world on a Keynesian crusade which has saved us from the abyss. I know who I would prefer in charge of Britain's finances."

Middle classes and tax

I like this, so i'll post it at length:

summary: the middle classes benefit from tax, i.e. their income goes UP after tax and benefits inc education, healthcare

Question 1.

What is the income of the middle fifth of British households, before tax and benefits?

Question 2:

What is the income of the middle fifth of British households after tax and benefits? (excluding things like market value of education, healthcare, etc etc).

Question 3:

How much more does the average middle British household pay into the tax pot than they take out in benefits and so on?

Question 4.

As a proportion of household income, have taxes (direct and indirect) on middle income households increased or decreased between 1996/7 and 2006/7?

Question 5

What proportion of the middle fifth of British households rent their home?

Answers:

(all data from National Statistics, unless otherwise stated)

1. The pretax income of a “middle Britain” household (here defined as the middle fifth of British households by income) is £23,640. This is £4,000 less than had as the average Graduate starting salary two years ago, according to the right wing think tank Reform

2. After taxes and benefits, this figure is £19,270.

3. Trick question! Sorry.

If you take the above figure try and ascribe a value to the benefit of free healthcare and education (which you get in return for paying taxes) the income of middle Britain INCREASES, to £25,147 pounds.

Middle Britain gets more out of the Tax system than it puts in. The difference is paid for by the top quintile. The net effect of the tax and benefits system is to give money to middle Britain, not take it away. By one and a half thousand pounds.

4. In 1996/7 direct taxes on middle income households as a proportion of income were 17.6%. Indirect taxes were 18.9% for a grand total of 36.5% of total income.

In 2006/7 the figures were 18.5% Direct, 16.3% indirect – giving a grand total of 34.8%. So the tax take as a proportion of income for Middle Britain has fallen by 1.7%.

Why? Some of this is because middle Britain now smokes less, but 1% of it is because less VAT is now paid – presumably relating to the reduction of VAT on Fuel and Sanitary towels (this latter is a bigger deal than most people think)

5. 29% of non- retired households in the middle fifth of household rent their home. (18% own their home outright, 52% have a mortgage.) For retired middle income households the figure is 45%.

Alastair Darling on new banking

I'm a huge fan of Alastair Darling, I think the bloke is top. He's has just the right balance of ideology and managerialism for me, and a good dry sense of humour.
In his day job, he looks after our economy. And does a bloody good job actually.
His piece here he gives his account of what happened, what didn't, and why.

This is key: "Lehmans' collapse plunged several UK banks into trouble. But that one of our major high street banks could be allowed to collapse would have been unthinkable. Life savings could have been wiped out and the economy would have come to a halt, with cashpoints seizing up and business credit drying up. It would have been irresponsible for us to stand by."

Firstly, my mum supports propping up the banks as letting such important institutions go to the wall would have terrible consequences for far too many people. I agree with her on that.
There is also the issue of how so much banking is based on air, as one bank collapsing took so many others (people and banks) to the edge.

On Fiscal and monetary stimulus: (paraphrase) we woz right, Tories woz (and are) wrong. He's correct about that.

On reform: "We must reform global financial markets so that they can better serve society. Internationally, that means obliging banks to build up bigger reserves in the good times. There must be rules on how global financial companies can be wound up quickly, using a "living will", and without having to turn to the taxpayer."

Quite right. No institution should be too big to fail, certainly not in private hands. It is unacceptable that profits are privatised but losses socialised (publicised is the wrong word).

I am critical of the New Labour approach to competition though:
"A strong, stable financial system also depends on effective competition, essential to make sure consumers have choice and no one faces excessive fees and charges."
A 'competitive' market has lead to excessive charges and fees, there needs to be far greater regulation and intervention to protect consumers, especially those most vulnerable.

on the availability of credit:
"If there is one lesson to be learnt from this crisis, it is that credit must never be allowed to dry up because of reliance on a small number of banks. In the same way that big companies can access funding directly from capital markets, by issuing bonds or commercial paper, I want to start creating a different financial model in the future, in which small companies get funding from sources other than banks. Our goal is to make finance the servant, not the master, of the real economy."

very interesting, and something I support as it's going down the micro-finance route, which has the power to do great good and re-connect the borrower with the lender, which i feel is a good thing.

In conclusion, Ali D rocks

Today's business news from the BBC

There are three stories today that strike me as important, to varying degrees and for different reasons:
1) US gets tough on ratings agencies
2) Lloyds in toxic asset plan talks
3) Bonus claw-back
late addition 4) Support for tax to curb bonuses


1) credit rating agencies were part of the problem in getting us into this mess, where ratings agencies were too quick to give out top marks when they were not merited. There are some theories that corrupt practices were at work, but i can't substantiate it so will only mention in passing. The proposals involve greater regulatory supervision of the ratings agencies, the success of which will depend on their remit and powers.
The agencies will be under greater pressure to make public information about their past decisions, which is a very good thing: "agencies must disclose more information on past ratings to help investors make informed judgements."
this is also important: "The SEC also proposed rules to ban "flash trading" - the process where certain financial institutions gain access to trading information...before it is made public."


2) Lloyds bank is considering removing much that they have invested (or are going to invest) in the government-backed Asset Protection Scheme. Provided this is not done recklessly, it's a good thing all round. The government is liable for less money and less mistakes, the bank has it's money and greater power over itself. Hopefully it can take part in paying back some of the loans it got off the government. The fact that "Lloyds had been told it would need to substantially strengthen its balance sheet if it were to withdraw from the APS" is both good and bad. Good in terms of the long-term sustainability of the banking system, bad in terms of the short-term mountain of debt our economy has been built on. Perhaps that should be sand castle.

3) To me, by far the least important of the three stories is that "EU agrees on bonus claw-back call". The first two are important systemic measures which will have a significant impact on the stability and sustainability of the banking sector. The third, to me, seems like a vague wave in their direction, based more on short-term political motives. If the 'claw back' scheme is a success in bringing about a more sustainable and long-term approach to banking then good, but it's the detail rather than the principle i'm yet to be convinced by.
Gordy says: ""I believe that people have been appalled by the suggestion in some institutions and their practices that they simply want to return to the policies of the past," Mr Brown said."
If these measures deliver the much-needed kick up the back side to bring these practices to an end for the good of wider-society, then i'm in favour.

which brings me rather nicely onto 4) Support for tax to curb bonuses. This is not a new piece like the others, but was listed with them and provides an interesting counter-point with 3. There is also a deeper issue about how the consensus is moving to the left on bankers' pay, the political consensus seems to be drifting to the right with the relative ascendancy of the Tories and demise of Labour.
Interesting times