The US pulls out all the stops to abate the deep recession

There is a much greater sense of urgency in the USA to offset some of the damage done to the economy by anti CV 19 policies. The Central Bank, the Fed, has ridden to the rescue. It has printed money and bought bonds on a huge scale. It has supplied the world with dollars, driven down rates and stabilised the market for financing companies.

Its balance sheet has soared from $4.3 trillion on March 11th to $6.6bn by mid April, a massive expansion of more than 50%. In contrast the Bank of England has gone from £580 billion in early March to just £647 bn in mid April, an increase of 11%.

The US sent everyone below $75,000 a year   a cheque for $1200 as well as setting up business grant schemes and a furlough scheme. The UK has also set up grant and employment retention schemes.

The US money supply leapt by an annualised 20.9% in the first quarter. The UK’s increased modestly to a 5% rate of growth.  Which of these institutions is right?

In the short term I fear the US is correct. The huge downturns the fashionable anti Covid 19 policies generate are designed to do maximum economic damage to all but  health, food and essentials and the public sectors.  All  out of home entertainment ,tourism, most travel and hospitality and most non food retail are simply shut down. Consumer demand plunges. Many people lose their jobs and can only afford the basics. Those who keep their pay are very restricted in  what they can buy so they  end up saving.

Printing money does not bring the closed businesses back to life, and it cannot in the short term generate more demand where business is banned.It does however make borrowing more affordable for the government and for companies fighting to stay alive. It is better than doing nothing and watching more job losses and bankruptcies.

There are many arguments over the details  and duration of the current health policy. There are no arguments over its economic impact. Everyone agrees it is a disastrous economic policy. The US is right to fling money at people and companies to try to offset some of the damage. You cannot go on doing that for very long. The huge budget deficits, the big expansions of money can only  be short term palliatives. The only sensible economic policy is to get many more people  back to work as soon as possible. The Fed will need to rein in the extra money as the economy starts to recover to prevent inflation.

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174 Comments

  1. Posted May 1, 2020 at 5:46 am | Permalink

    Good morning.

    I sense a little bit of frustration in our kind host post today.

    There is a much greater sense of urgency in the USA . . .

    The USA has the benefit of being a reserve currency. It also benefits on economy of scale and its industrial and technical might. There is also an election later this year 😉

    The only sensible economic policy is to get many more people back to work as soon as possible.

    Easily said than done. If there are no business and there is no investment for those business, then there are no jobs. What the Conservative government (sic) has done, although I really do not think it realises this, is trash the economy. The Tories have taken a wrecking ball and swung it around with gay abandonment. But, unlike the US President, they do not have to worry about an election this year.

    Sir John. If you and your leader think we are going to forget this, all I can say to is – Remember what happened after the ERM fiasco ? We had to wait a good few years to get our revenge, but we got it in the end.

    • Posted May 1, 2020 at 6:20 am | Permalink

      Perhaps if the government had taken action by closing the airports and ports to passengers, or at least subject people coming in to a 14 day quarantine, they wouldn’t have needed to trash the economy. But no, to please the jet set they gave the virus an open door into the country so people could distribute it freely.
      Well done the healthcare workers, some of whom have given their lives treating people infected through the government’s carelessness.

      • Posted May 1, 2020 at 6:55 pm | Permalink

        US press secretary just pointing out unbelievably the WHO on 29 Feb still encouraging travel! Raab still supporting going along with it! Govt has herd follow mentality rather than leadership to make best decision for our country.

      • Posted May 1, 2020 at 8:15 pm | Permalink

        In the face of the advice from WHO and from other countries further down the trajectory, such as Italy, it’s a bit more than carelessness. It’s recklessness, I think. And that’s often criminal.

        The murderous and wrongly-titled “herd immunity” policy’s authors should be in the dock, I say. It was always “survivors immunity”.

        • Posted May 2, 2020 at 12:42 pm | Permalink

          Martin, You’re showing your ignorance again. “Herd immunity” is a well known term used by epidemiologists and pre-dates covid19. The WHO only called covid19 a pandemic on 11 March. PotUS Trump locked down flights from China on 2 February. It’s the WHO and China, and all the covidiots who said locking down borders was xenophobic, who should be in the dock.

      • Posted May 1, 2020 at 8:54 pm | Permalink

        Dave Andrews, As you intimate, if the government had locked down our borders they would not need to have closed down our economy. We’re imprisoned, so migrants are free to pour into our country. All just to satisfy the wokes, who will never be satisfied with a Tory government anyway. Why does the Tory party continually shoot itself in the foot?

        • Posted May 2, 2020 at 6:48 am | Permalink

          The feelings of minorities have no bearing on government actions.

          They have an indefeasible Commons majority.

          They alone are responsible for the consequences of all actions and inactions, and for the fact of taking or of not taking them.

        • Posted May 2, 2020 at 8:09 am | Permalink

          NickC

          You have absolutely no proof of this claim

          • Posted May 2, 2020 at 6:07 pm | Permalink

            So prove it bill.

          • Posted May 8, 2020 at 5:23 pm | Permalink

            Edward2, we are getting to Alice in Wonderland territory when one is asked to prove that there is no proof. Did you read as I suggested ‘You talking to me’ by Sam Leith. If you did, clearly there must be some holes in your understanding of some chapters of this book.

    • Posted May 1, 2020 at 6:43 am | Permalink

      In the case of the ERM the foolish John Major actually caused the problem by joining the mechanism (against the advice of sensible people economists) then a PM he mad it even worse by failing to withdraw earlier. Saying idiotic things like “if we come out interest rates with have to go up even further, if it is not hurting it is not working”. Then when it collapsed (after they had wasted billions on it) he failed to even apologise or resign and largely continued with his idiotic left wing policies.

      Boris did not cause this problem and is doing his best. But he should cancel HS2, the climate change act (and committee), the Paris accord and the net carbon neutral lunacy.

      • Posted May 1, 2020 at 7:05 am | Permalink

        Boris can still go on to win three or more election. But he must go for economic growth, deregulation, cheap energy, lower simpler taxes, freedom of choice, a larger private sector and a much smaller state sector.

        He need bangs Hayek’s Road to Serfdom on the cabinet table like Thatcher (then unlike Thatcher actually do it), cut red tape and abandon the expensive energy agenda get the state out of the way. These things take time to act he only had 4.5 years so get on with it. Kill HS2 now for a start – before any more money is wasted on it.

        • Posted May 1, 2020 at 4:15 pm | Permalink

          He needs to bang Hayek’s ….

        • Posted May 1, 2020 at 4:53 pm | Permalink

          Cameron could easily have won three elections too. All he had to be was the Cast Iron, EUsceptic, low tax at heart and real Conservative that he pretended he was (in order to become leader). He had a golden opportunity but through it away.

          • Posted May 1, 2020 at 7:12 pm | Permalink

            In other words all Cameron need to be to win 3 elections, was not himself!

          • Posted May 2, 2020 at 2:55 am | Permalink

            Or threw even!

        • Posted May 1, 2020 at 7:32 pm | Permalink

          @LL; “Boris can still go on to win three or more election.”

          Well perhaps but he will need to get rid of the chaff within the Cabinet, those who have proved to be worse than useless in a crisis, he also needs to stop ministers using the daily CV19 crisis briefings in ways that make them sound more like party conference speeches. What a Minister might have done today, this week or last month is nothing compared what NHS staff have done…

          • Posted May 2, 2020 at 9:46 am | Permalink

            Nothing compared to what ‘some’ NHS workers and cleaners and porters and care home workers and staff, those that continued working have done.

      • Posted May 2, 2020 at 3:45 am | Permalink

        Yes but how do we get him t listen to your last comments

    • Posted May 1, 2020 at 7:21 am | Permalink

      So simple to blame the Tories, when in fact it is the virus that has swung the wrecking ball at the economy. The government has taken the only action it could take in light of the science, and is similar to the action taken by the whole world in response to this pandemic. All I can say is, what on earth do you think the labour party, the limp dems or even the SNP in Scotland would have done — they are happy to say the economy is not worth a single death.

      • Posted May 1, 2020 at 6:59 pm | Permalink

        Rob, What utter rot. It was a choice by the Tory govt, it flipped flopped from its original strategy of herd immunity to lock down. At least be factual and not blame an inanimate object that cannot think or act on its own accord.

        Suggest you read more broadly start with articles in Con Woman.

      • Posted May 2, 2020 at 5:31 am | Permalink

        If nothing else, we need HS2 trashed, and the CO2 nonsense, some say it is actually a very small part of the atmosphere, and without it we would have nothing to eat.
        I feel nine tenths of this is a lib dim sensation by a lot of trendy elites.
        Let’s have some common sense, and cheaper fuel, now we are out of the EU, no more of there dic t ak
        WTO and stop this ridiculous pretension that we will ever agree with them.

    • Posted May 1, 2020 at 7:44 am | Permalink

      And then we just chucked it all up into the air trusting ( why?why?) twits that we are.
      Whatever NF may or may not be, had he won the election ( and what a fiddle all that was!) it would have put them ALL in a huge quandary.
      Where has the bogey man Corbyn gone now? Ushered off quietly ..no longer needed?
      Turns out he wasn’t all that important after all.
      Liblabconkip!

      • Posted May 1, 2020 at 7:01 pm | Permalink

        Arron Banks won his case against the utterly bias useless Election Commission this week. Scrap the EC or change it. Either way heads need to roll.

    • Posted May 1, 2020 at 8:13 am | Permalink

      Mark

      Whilst I agree with your sentiments about the pain of lockdown, just ask what else the Government could have done that would not have led to many more thousands of deaths.

      Face facts, the lockdown has saved lives, yes at a huge, huge cost I would agree, but at the time of lockdown the virus we are told was multiplying at a rate of three or thereabouts.

      The two week legacy from the lockdown was over 1000 deaths a day, multiply that by three for each couple of days, and after a week you end up with projected legacy of over 5000 deaths a day, (just by delaying lockdown for a week) do you really think that would have been satisfactory, the NHS would have been overwhelmed, people would not have been able to get into hospital at all, do you think the legacy of that would have stood the government in good stead !

      The only plan, with hindsight, which so far seems to have worked, was to lock down very much earlier (and for possibly shorter) and refuse entry of people from outside of the Country. But do you think the people would have understood ?

      • Posted May 1, 2020 at 8:40 am | Permalink

        Certainly agree the lockdown should be modified as soon as possible to allow more people to return to work (if they can self distance safely) once we have a real drop in the recorded infection, hospital admission/death rates, with some margin for error.

        We also need to fine tune the number of businesses and facilities which have been closed, like parks and refuse centres, whilst people who are/can work outside, appear to be less vulnerable due simply to air movement and thus virus dilution.

        The big problems remain of Public transport, and sealed to outside air offices and business premises.

        People should remember that whilst the medical profession are working hard, there is still no known cure or even treatment for this virus yet.

        The old and vulnerable should and I am sure to a degree will, continue to self isolate to lower their own particular risk.

        • Posted May 1, 2020 at 7:06 pm | Permalink

          Alan, you are not so assuredly correct. There are many experts who do not agree with your proposition. There is no definitive evidenced proof the lock down saved lives. Some experts claim the peak in deaths was reached about 8/4/2020 and infection rate three weeks before, i.e. Before the lock down started.

          In fact the Tory govt did not agree with lockdown hence why Cheltenham race went ahead under herd immunity strategy.

        • Posted May 2, 2020 at 9:44 am | Permalink

          Alan if people have been locked down for over 40 days how is the virus still rampant in them? We’re social distancing now, where are the new cases from?

          • Posted May 2, 2020 at 6:35 pm | Permalink

            A Tracy

            Could have been passed on to other family members, or other work colleagues, or other people not taking the lock down seriously.
            Care homes are also a case where people have been sent in to hospital and then have returned whilst possibly still infected because they were not tested.

            Then of course we have those who returned from abroad, who were allowed to enter without any form of monitoring.

            I do not know of anyone who has taken the lock down seriously, and who has self isolated properly who has caught the virus or even had symptoms.

      • Posted May 1, 2020 at 8:11 pm | Permalink

        Alan Juston,

        The Govt hasn’t even shown that the oft quoted 500,000 lives (which has been questioned by others) is worse than the effect of the lockdown. Following the GFC the U.K. economy took a decade to recover and consequently 1 or 2 years of forecast increase in life expectancy did not occur (this is an average across a whole population). The Govt has not shown that its choice to lockdown is anywhere near better than indirect deaths, loss of future life years or consequential loss of life in other countries. It is now turning attention to some of the first, but the latter two are much less visible so it ignores them. [A person doesn’t lose a life year now, but this is paid for by many losing life years in the future. The Govt and its advisers have had plenty of time to show their calculation – they have not].

        • Posted May 2, 2020 at 6:29 pm | Permalink

          Caterpillar

          When we eventually get the death numbers for the relative months compared to the last 5 years average, we will get a much better idea as to how many extra lives have been lost by the virus.

          I agree that those who have not had treatment for other critical problems, will also affect the long term figures for perhaps the next year as well.

      • Posted May 2, 2020 at 3:20 am | Permalink

        There is no evidence this lockdown has saved lives. What of the lives lost through stress, a real big killer but not as sexy as say a virus, because people do not have a job. Those communities that experience low levels of employment suffer the worst death rates.

        As for what the government could have done ? Well it could have closed all traffic from infected areas. And once it became obvious, as even our kind host stated, that affected only the elderly and sick, why lock up people and prevent them from working who are neither of those ?

        • Posted May 2, 2020 at 12:46 pm | Permalink

          Mark B, Indeed. There are likely to have been many lives lost because of the paucity of care for non-covid19 patients, due to medical conditions not being treated in a timely manner, or not even discovered.

    • Posted May 1, 2020 at 8:43 am | Permalink

      The UK government`s response is remarkably similar to that pursued by governments in the EU. There are differences in the competence of the administration of the lock downs but the thinking behind them appears the same. The capacity of and competition between health care providers (especially in testing) has marked Germany as the most successful to date in containing deaths. This can probably be ascribed to shared thinking between the respective national health services. Sweden is the exception in expecting its citizens to use their common sense in adapting behaviour. Voter reactions to the failed police state we are currently forced to live in will be illuminating. Reports of the police stopping a musician performing in his own driveway because neighbours stopped to listen is the latest grotesque example.

      Their economies are another matter. All face destructive recessions.

    • Posted May 1, 2020 at 8:48 am | Permalink

      My concern is those with the gumption to get this country back up and running have been turned into bankrupts through no fault of their own. And those with the gumption but who are too young to have started a business will look on and see that you’re far better off being a convicted criminal or a lifestyle-choice benefits user – so will emigrate.

      The effect of these actions has been to treat business owner/employers the very worst. “Get in the queue behind the criminals we have just released early.”

      And all we hear is “key workers” this and “key workers” that.

      The stress of losing a hard won business and your home is a killer illness too, you know.

      • Posted May 2, 2020 at 3:24 am | Permalink

        The good are locked up in their houses, while the bad roam free. Welcome to Conservative (sic) Britain.

    • Posted May 1, 2020 at 9:02 am | Permalink

      “We had to wait a good few years to get our revenge, but we got it in the end.” Mark B

      So tell us who you will be voting for at the next General Election in order to exact your revenge. I’m sure your guidance would be appreciated.

      • Posted May 1, 2020 at 7:17 pm | Permalink

        Well if we are to have Socialism with no option, we may as well have it delivered by Overt Socialists. That was our choice and why I voted Major out and for the Socialists for 20 odd years – and I am a Thatcherite to the core.

      • Posted May 2, 2020 at 3:25 am | Permalink

        Not for people like you, that’s for sure

        😉

    • Posted May 1, 2020 at 9:26 am | Permalink

      Ah, so life’s all about revenge for you.

      That explains it all, pretty well.

      • Posted May 1, 2020 at 6:51 pm | Permalink

        and which is exactly Andy’s position. Saying he gleefully wants to watch us in misery should it all go tits up – in fact promising it will.

      • Posted May 1, 2020 at 8:49 pm | Permalink

        Martin, Revenge is what the EU is trying to extract from the UK for daring to leave their empire.

        • Posted May 2, 2020 at 6:50 am | Permalink

          The European Union need do nothing.

          The UK government are determined to inflict great damage on the nation.

          • Posted May 2, 2020 at 6:09 pm | Permalink

            Why would any government do that?
            Their main aim is to remain popular in order to get re elected.

    • Posted May 1, 2020 at 9:55 am | Permalink

      Mark,

      JR forgets to include the Tory govt budget on 11th March. It was clear and known a worldwide pandemic was progressing at that time, including parts of China and neighbouring countries locked down! It was beyond irresponsible to go ahead with a reckless budget especially as we are told Hancock already had several meetings with Johnson from January about it! The budget still included reckless spending (like £106 billion on HS2!) and a deficit of 2-3% forever! Even Mayhab questioned the wisdom of the spending!

      Johnson told Peston not use the word austerity yesterday! Taxation at a fifty year high, historic debt levels, Tory govt failed to mend the roof time and again over ten years while throwing hundreds of billions away like overseas aid, where is Johnson’s magic money tree? JR please tell us. Can we expect reports to be kept secret, lies and deceit as is the norm for your govt?

      • Posted May 1, 2020 at 10:09 am | Permalink

        JR, please read Will Jones article in Con Woman, suggest Johnson and Tory MPs do as well. The continued destruction of the economy is not justified.

        Johnson, PHE, NHS England and his advisors failed to take all the standard precautions of a worldwide infectious disease i.e. Travel restrictions, border closures, test, trace and quarantine in January and is now considering them after the peak of deaths on 8/4/2020 and infection rate about three weeks before and before the lockdown. He stated at the outset the nation house arrest was to flatten the curve, squash the sombrero. He now changes the goal posts again, knowing we are past the peak because he confirmed that yesterday!

        • Posted May 1, 2020 at 8:21 pm | Permalink

          Please read the comments on the Conservative Woman article which show that it is unscientific innumerate rubbish.

      • Posted May 1, 2020 at 8:23 pm | Permalink

        Hope,

        HS2 is a great use of resources, the lockdown doesn’t use resources, calling for another cut in resource use is a strange logic.

        I have many criticisms of Sunak but my major pre-lockdown one (and this isn’t hindsight) is when the Govt requested people to self-isolate if showing new persistent cough or elevated temperature that this would be done on statutory sick pay. I thought at the time the Govt needed to offer full pay or even full pay plus to make this happen and it would have required less spend then the current schemes.

  2. Posted May 1, 2020 at 6:10 am | Permalink

    The fact this is a presidential election year probably influences some of the responses. Much of the money expansion appears to have gone into propping up the financial system. On the ground many big retail names have filed for C11 bankruptcy, the auto industry is in free fall (after a USD 2 billion 1st quarter loss, Ford is predicting a USD 5 billion loss in the 2nd quarter), the US jobless count is now over 30 million. I expect there will be a big push to bring jobs back to the USA (the Trump agenda).

    The problem all governments will face, having imposed recessions via lockdowns, is persuading consumers to start spending and consuming again. With no rapid return to normality in sight, it is not certain that they will. My belief is that the UK government needs to take a very hard look at all the many frictions that inhibit trading, from regulation to taxation, and remove as many as possible to make faster progress in the return to a new normality.

  3. Posted May 1, 2020 at 6:16 am | Permalink

    The the inflationary implications of an increase in the money supply will be more than offset by the contraction of GDP and and a collapse in the velocity of circulation of money there could be deep disinflation 4 for the next couple of years

    • Posted May 1, 2020 at 8:31 pm | Permalink

      Ian Kaye,

      I think you are only correct if banks unwind their monetary stimulus if inflation approaches target. If they do not do not do that it is possible for rGDP to contract (there is an enormous supply side shock) and nGDP to rise (stagflation).

  4. Posted May 1, 2020 at 6:17 am | Permalink

    95% of Daily Mail comments today saying we have to work to stop the economy collapsing.

    End of the month pay cheques have focused the minds of the masses.

    Soon the media will flip to focus on death from cancer and other diseases and economic stress. The Government will be left helpless like a beached ship.

    • Posted May 2, 2020 at 9:38 am | Permalink

      Truth is those Javelin a lot of those requiring NHS treatments didn’t want to go into virus ridden hospitals.

  5. Posted May 1, 2020 at 6:18 am | Permalink

    It is harsh to say

    The huge downturns the fashionable anti Covid 19 policies generate are designed to do maximum economic damage to all but health, food and essentials and the public sectors.

    The policies are designed to limit the rate of spread of the disease. There may be better ways to do that (look at South Korea). And the policies do have economic consequences, but to say that they are designed to do maximum economic damage is not true

  6. Posted May 1, 2020 at 6:19 am | Permalink

    One surprising thing is that in USA the downturn has been severe in the health sector too, because hospitals and healthcare are private, and elective surgery has been suspended for the same reasons as here, many doctors and health workers have actually been furloughed. About 50% of the GDP loss so far in USA has been in the health sector.

    When we locked down here we were told that the reason was to flatten the peak to stop the NHS being overwhelmed. We are now being told that is just a by-product of the real reason for the lockdown which is to reduce R below zero permanently and thus eliminate Covid entirely from the UK. It apparently doesn’t matter how many millions of people are unemployed and how many businesses go bankrupt. Well, if that is the reason for the lockdown then the government have made a massive mistake because *that* lockdown should have started immediately there was a single case and the borders should have been sealed immediately.

    Moving goalposts. No-one taking these decisions will suffer financially at all – especially as we have been told that apparently austerity (ie. public sector pay restraint) is not an answer to the economic crisis.

    • Posted May 1, 2020 at 9:54 pm | Permalink

      Roy, agree we should have locked down earlier but when I said this earlier a lot of people on this blog disagreed. Korea has it under control and they are more densely populated than we are.

      • Posted May 2, 2020 at 9:37 am | Permalink

        South Korea did not lockdown? Google it.

  7. Posted May 1, 2020 at 6:25 am | Permalink

    Destroy the economy and you destroy peoples’lives. They clap now, but they will be shaking fists later when they lose their jobs and businesses.

  8. Posted May 1, 2020 at 6:27 am | Permalink

    ‘The US sent everyone below $75,000 a year a cheque for $1200.’ It’s precisely this kind of policy response that disgust me. Across the West, governments now think that the right response to any economic problem is to add gazillions to their national debts. It will all end in tears – particularly for our profligate, wasteful government that did nothing to keep CV beyond our frontiers.

  9. Posted May 1, 2020 at 6:33 am | Permalink

    Indeed the government loan scheme has been very slow, painful and inefficient too. I am still waiting on three different applications. The application process itself wasted a lot of my time too. The new 100% guarantee scheme up to £50K should be simpler but the banks still did not have full details if it yesterday. They expect them on Monday.

    Why has the government not relaxed the rules on borrowing from you pensions scheme to lend to you businesses? Such a simple thing to do as they did in Australia weeks back and at no cost to the state and a huge benefit to businesses.

    Get the NHS up to speed and slowly unlock. The NHS is clearly not coping despite what Boris claimed yesterday something like 23,000 people have died of the virus without even being given a bed in hospital let alone any treatment. Plus the UK’s hospital mortality rate is about four times that of Germany – why is this? Partly due to higher test rates in Germany perhaps but a huge difference.

    • Posted May 2, 2020 at 3:45 am | Permalink

      . . . 23,000 people have died of the virus . . .

      LL

      Of or with the virus ? Big difference !

  10. Posted May 1, 2020 at 6:51 am | Permalink

    Unfortunately Sir John is correct in saying

    “The only sensible economic policy is to get many more people back to work as soon as possible”. (Keeping L and K apart will not work.)

    In yesterday’s briefing the PM, although coming over as far more competent than others who have given briefings, still repeated the ‘500,000’ number as the reason for the lockdown. Before and throughout this policy, again Sir John is correct in observing there have been “no arguments over its economic impact” – at least no official and public arguments.As has been argued by contributors to this site it is a lives vs lives decision and this has not been taken up by the Govt, which hopes that an economy can just bounce back from a supply side shock.

    At least yesterday the Govt began reframing its 5 tests in terms of R, but the Govt still has not identified which parts of the economy give maximum return (in terms of economic welfare per increase in R) and how to design a testing regime to aid these.

    Apologies but I’ll flag my own lengthy comment from a couple of days ago

    http://johnredwoodsdiary.com/2020/04/25/making-the-decision-to-relax-some-controls/#comment-1109882

    • Posted May 1, 2020 at 6:58 am | Permalink

      Even more strikingly the Govt has fundamentally changed the economic and political models of the U.K. The Govt could at least state what the new models will be as it aims to replace old normality with new normality.

      We know removal of liberty and democracy, patronage, competition on need, broken price signalling, operating inside the PPF, increased money creation/lending to self, no personal saving etc. are all parts of the new normal, but it would at least be honest for the PM and Chancellor to give an honest statement on these.

      • Posted May 1, 2020 at 9:38 am | Permalink

        One of the more distasteful aspects of Govt patronage (furlough in Newspeak) is the supported competing for jobs with the unsupported. Stop the biased patronage, it shouldn’t have been extended, UBI/national dividend is less distorting, more aligned to freedom (and probably fairer).

        • Posted May 2, 2020 at 4:24 am | Permalink

          Well said. And your long post that you linked to was well worth the read. 🙂

          “Don’t let experts devalue expertise.” Alas some of these ‘experts’ are doing just that.

          • Posted May 2, 2020 at 7:53 am | Permalink

            Ta.

        • Posted May 2, 2020 at 9:34 am | Permalink

          Absolutely Caterpillar

    • Posted May 1, 2020 at 7:31 am | Permalink

      Yesterday the PM rightly argued that full international comparisons (judgements) cannot be made until after epidemics are over. Nonetheless this should not be used as an excuse to avoid maximum disclosure now. Researchers outside Govt circles need this data to add to the analysis informing best unlocking e.g. one university study a argued for keeping all over 50 locked down whilst opening the economy for those under 50 (one could have suspicions of this being rooted in well paid profs sitting in large homes being scholarly whilst young teaching assistants deliver to a young revenue stream), but if one looks at the incomplete data on the mid 50s then much risk seems to be from the higher prevalence of underlying health issues. A more nuanced and trusting policy will not be possible without releasing anonymised case data for analysis by indept researchers (variables need to be controlled for). Similarly another university group suggested that younger people could voluntarily be infected with Covid 19 and remain isolated for 14 days on the assumption that there will be some immunity for some time afterwards, but again the results of the Porton Down antibody research has not been released.

      The Govt needs to put data out much more quickly and much more completely to get the benefits of a critical approach to unlocking. The data (anonymised) is an asset of the country.

  11. Posted May 1, 2020 at 6:52 am | Permalink

    How is the UK government planning to reinflate the economy – What are the plans from the Chancellor?

    While I’m not in favour of printing money, it would be a very appropriate times to adjust our awful tax system, and minimally reduce rates on personal taxation – That alone would help people and contribute to normalising internal trade.

  12. Posted May 1, 2020 at 6:52 am | Permalink

    And the Chinese will be allowed to plunder distressed assets in Britain with the government doing nothing to stop them.
    I think after the Bank Holiday many will say enough is enough and start back to work. It’s the end of the month and the wallet is empty.

    • Posted May 1, 2020 at 8:09 pm | Permalink

      I had a chat with my highly competent professional boozing mate last week. He reckons that this is the most incompetent government ever.

    • Posted May 2, 2020 at 9:32 am | Permalink

      But the wallets aren’t empty Ian for a large proportion of people, what % work public sector or ex public sector laid off on 100% with no cap on earnings I’d guess 60%.

      They NEVER have to worry where their turnover comes from because people go to prison if they don’t pay lots of those bills! If services aren’t delivered then as in the private sector their turnover should evaporate they must have to make the same decisions on endless closure from the same standpoint and personal financial risk!

  13. Posted May 1, 2020 at 7:06 am | Permalink

    What we would like is to get Capitalism back to work- it would be nice- but I think the fundamentals have changed- Covid and not Geo-Political is the great leveller this time and we don’t yet know yet how things will turn out- Cummings and the other great think tankers never even saw it coming- so then what other words of great wisdom have you got for us today- and I don’t think paying attention to what is happening in the increasingly dysfunctional US is the answer either- think I’ll just sit this one out.

  14. Posted May 1, 2020 at 7:11 am | Permalink

    Off topic for today.

    JR – On Wednesday you talked about trade deals with the USA etc being planned, and a number of readers, myself included, queried why they weren’t virtually concluded.

    Reading my daily update from Brexit-Watch yesterday, following a freedom of information request from Get Britain Out it would appear Liz Truss’ department have pretty much done NOTHING! There have been two meetings and four phone calls made to the USA and precious little other progress! I can only assume there to be similar non-progress with the other countries?

    WHY NOT!!!!

    A no deal is looking more and more likely, so these other deals are even more vital!

    What is the matter with this country? Why will no-one stand up to the Civil Servants, they are clearly not doing what they’ve been asked, and are paid to do!!

    • Posted May 1, 2020 at 6:55 pm | Permalink

      Sharon – – ‘Nothing’ and the PM’s promises on which his party and the electorate elected him.

    • Posted May 2, 2020 at 4:40 am | Permalink

      . . . they are clearly not doing what they’ve been asked . . .

      You assume that they have been asked. I argue, they have not !

      😉

  15. Posted May 1, 2020 at 7:18 am | Permalink

    Sir John,

    The US can look after itself, the more interesting question is will Germany save the Euro? It’s the only economy with the capacity to do so, by underwriting all the money creation and bond buying by the ECB.

  16. Posted May 1, 2020 at 7:23 am | Permalink

    Sir JR

    You are absolutely right and we should support that approach

  17. Posted May 1, 2020 at 7:33 am | Permalink

    Meanwhile it might just have been better for govt to have stayed its hand. Waited until a huge crisis actually took place. Never trouble Trouble etc….
    Who knows ( def not WHO)…the worst may be yet to come when all we immune-suppressed troglodytes emerge from our prisons? Like that last bloke in the Bastille.
    And as for all the funny money and pretend jobs…we know what happens cos it was done post 2008. And look….it don’t work….QED.
    Govts have chucked everything away on the altar of liberal nonsense.

    “Look on my Works, ye Mighty, and despair!
    Nothing beside remains. Round the decay
    Of that colossal Wreck, boundless and bare
    The lone and level sands stretch far away.”

    (from Ozymandias by Percy B. Shelley)

    • Posted May 1, 2020 at 7:36 am | Permalink

      Mind you…they do say that counterfeit cash is used to boost up assets..which means that the rich are getting richer. As ever…at OUR expense! The greatest transfer of wealth and power yet.

  18. Posted May 1, 2020 at 7:36 am | Permalink

    “All out of home entertainment ,tourism, most travel and hospitality and most non food retail are simply shut down. ”

    To think of the angst there was about the effect of stopping free movement on these sectors.

    Look what free movement just did.

  19. Posted May 1, 2020 at 7:48 am | Permalink

    From mid November through to January 2nd we had a ‘caretaker government ‘ whilst we had an election and enjoyed the Christmas and New Year holidays. On return we were confronted with an embryo pandemic growing out of Chine caused by a virus that we virtually knew nothing about.

    Those in office have done a fantastic job and were absolutely right to shut the country down once they had got a clear plan on how to attack this virus.

    In record time they have cut their way through layer upon layer of bureaucracy that has grown up in and around the NHS, PHE, NHS Providers (whatever they do) hospital trusts and numerous medical associations. These bodies are littered with chairmen CEOs etc all infected by a high degree of self preservation.

    With the discipline of the military, distribution of PPE was transformed from a few hundred depots to over 50,000 destinations, 7 emergency hospitals built and equipped, and testing expanded to cover the country. Acquisition of supplies in the face of a world shortage is improving and should continue to do so as our own manufacturing capability comes on stream

    Without any of this we cannot get a handle on the vital R factor and until we do, the lock down cannot be eased. Once control is in sight we can start to get the economy back on the road to recovery. To throw money at it like the US is similar to letting the R factor back up above 1 and going back into lock down in a far worse state than when it was lifted.

    • Posted May 1, 2020 at 8:31 pm | Permalink

      Thanks, I needed a good, roaring, laugh-out-loud today.

      • Posted May 2, 2020 at 12:51 pm | Permalink

        Martin, Thanks, I needed a good, roaring, endorsement of George’s comment today.

  20. Posted May 1, 2020 at 7:55 am | Permalink

    Next year just as we are trying to get off our knees. Brexit is going to kick the economy in the teeth. Those who lied about its risks for jobs, growth and the ability to fund schools and the NHS , will face a level of anger not known here for decades .They are terrified and with good reason
    That is what this is all about. I foresee a lot of change coming soon and the kindest thing I can suggest to the guilty men, is that they retire now and take up ..something .

    • Posted May 1, 2020 at 8:41 pm | Permalink

      Incredible, Newmania, you’ve just become a parody of yourself. Didn’t you know that our exports to the EU amount to only c12.4% UK GDP? Set that alongside the expected annualised hit of covid19 being c35% UK GDP, even you can see that the Wuhan flu is about 3 times worse than not selling anything at all to the EU. And even the most crazed Remain has never suggested we would lose all our exports to the EU. No wonder you lost.

      • Posted May 2, 2020 at 8:12 am | Permalink

        NickC

        That calculation assumes that this will be the case every year or what are you trying to say?

  21. Posted May 1, 2020 at 8:20 am | Permalink

    We don’t have to go as far as the USA

    All we have to do is lift the lockdown

    The government doesn’t have to do anything else, the markets will settle, the money will flow and condifence will return

    But the govt must do it 7th may

    • Posted May 1, 2020 at 7:30 pm | Permalink

      My neighbour has a kitchen and bathroom company, he has nationwide distributors and expects 65% of them not to reopen. How are all the people laid off by corporations going to earn a living? A huge increase in self-employed – just when we are knocking down small shops and town centres?

      • Posted May 2, 2020 at 9:44 am | Permalink

        Correct in all respects

        It will be interesting how our government will spin the latest unemployment figures

  22. Posted May 1, 2020 at 8:40 am | Permalink

    You can’t start talking about the economy John, when the good people thinking this is like a free holiday in the sunny weather to decorate the house and fix jobs that have been waiting to be done in their house and garden (although all their garden waste bins are overflowing now because the council for some reason can collect the normal waste once per fortnight but not the garden waste we’re paying for); they’re getting to spend time with their children with pay suddenly realise their small business employer is about to hit the wall they’ll start asking too many questions about why with a self-isolate period of 14 days they’re having to stay in for more than 40 days and it’s still spreading and they may have to stay in another 14-21 days people don’t want to think about it.

    The virus is still spreading by whom, where, why? Why are our hospitals still unable to cope, why? How many new patients are coming off these many flights into Manchester Airport from Pakistan, Europe, China etc. and contaminating others and requiring hospital treatment?

    You see we have so many people in the public sector off on full pay, and many ps workers with children being allowed not to work at home whilst their colleagues without children are having to work full time from home without any loss of income why do they need to think about the economy their jobs are secure aren’t they! All the public sector expecting us all to carry on paying big bills for Council tax without more than half of the services being there, private medical insurers expecting to get their subs without any service, schools expecting to be able to shut until September with no loss of income for the school, Council etc; when all those losing their jobs in the SME sector, or being put on short time and peoples businesses die and income in the long term shrinks and they start to think about this lack of consideration to the economy because lives count more than livelihoods and neigh sayers are uncaring shrills there will be a day of reckoning coming.

  23. Posted May 1, 2020 at 8:50 am | Permalink

    The Federal Reserve has also bailed out hedge funds and billionaires, illegally and outrageously witnessed through its buying of risky junk bond funds facing collapse . It has also provided a bid on Nasdaq and doubtless elsewhere for its friends to sell into.

    The Fed promotes extremely risky behavior then bails out the risk takers. It betrays the American people.

  24. Posted May 1, 2020 at 8:53 am | Permalink

    Sir John . I find myself unable to agree with your thoughts that the American way was,is,the right way . Flinging money around as you put it , is and can only be, a very short term solution to what could be, and probably will be, a very long term problem .
    World leaders handling of the pandemic with a one size fits all (lock down) was always going to create an economic armageddon . We now see the headless chicken syndrome rolling out around in the USA .
    The Dow Jones and the Ftse climb on the back of what exactly at the moment . Hype and idiotic view points by so called economic annalists who state on a regular basis all will be back to normal within a few weeks, while trying not show the fear in their eyes . Shares rise in Boeing and Airbus because of what ,what!! Nobody is going to fly anywhere for months and months , if ever again in the volumes we had pre C19 .
    No amount of the Yankee dollar will save their airline industry from this , and that’s just one industry.
    The rushed policies the government implemented due pressure from the media without frankly really looking at the far wider picture was only going to have one outcome . Economic disaster.
    I think you know whats coming around the corner like a freight train . .
    We reap what we sow .

  25. Posted May 1, 2020 at 8:53 am | Permalink

    2020 will be regarded as the year the World came to its senses and responsibilities.
    Not even Hollywood could have thought this up. Only Taiwan, South Korea and countries bordering close to China know how to deal with its bio problems. The USA CV19 death toll now exceeds the Vietnam War so now no-holds barred is the new reality.

    It is at times like this when Dinosaur organisations realise they are not fit for purpose – Big-Time! Think about that profoundly for a minute.

    There is now a need to harness new thinking unlike ever before. Folks may not care for Dominic Cummins but he has been ahead of the curve as demonstrated by recruiting a variety of different people who think out of the box. Remember no one would have believed it was possible to defeat the mighty Nazi war machine by intelligence esp by a team focussed around the humble Alan Turing outsider who was a genius ahead of his time. (He wrote to his mother as a teenager explaining Einstein’s theory of relativity!).

    Serendipity will show new minds will come to the fore with fresh thinking bypassing the old dysfunctional dinosaur museum organisations that cannot adapt quickly to the new reality. Many folks will be still unable to grasp the depth of changes required and resist as I have witnessed in my IT career. People hate change, but that is coming and it is best to flex up and roll with it. As Hurricane Higgins once said after coming back from lots of set-backs “You have to learn how to bounce well” when you have hit the floor many times.

  26. Posted May 1, 2020 at 9:16 am | Permalink

    Let me get this straight in my tiny brain. The brutal Chinese State deliberately delivers an economic and freedom limiting body blow to the entire world and the UK PM offers them access to our most sensitive communications infrastructure by using the telecommunications arm of the Chinese Communist Party?

    Who stands to gain from the award of a commercial contract to Huawei

    You couldn’t invent the grotesque contemporary Tory party even in a lab experiment. They’ve lost contact with the real world. A warped political party that’s so far removed.

    I saw Osborne on the Marxist channel last night pontificating and talking trash as he always seem to do. Oh, how the UK has suffered from the infection of Eton and Oxbridge types. The damage they have imposed.

    Reply Mr Osborne did not attend Eton

    • Posted May 1, 2020 at 7:01 pm | Permalink

      reply to reply – but rather a lot of the others did. Side-stepping the point just won’t do.

  27. Posted May 1, 2020 at 9:18 am | Permalink

    Businesses will use this opportunity to cut waste from their organisations. They will also look to automate more of their production where possible. People are deluded if they think things will go back to the way it was. When I managed staff around 80% of the work was done by 20% of the people. It was virtually impossible to get rid of the unproductive staff. Unemployment will soar as employers can dismiss staff without the worry of unfair dismissal tribunals. We need to prepare for this by reducing our workforce. Cut immigration to the bare minimum. Reduce the retirement age back down to 65. Ensure further education guides students into studies that will lead to eventual employment.

    Use this crisis to become a more productive country.

    What to do about the public sector is another discussion we need to have. Why we paying six figure salaries to people in the public sector is beyond me. These people aren’t in a competitive market and take on no risk. Their pay has mushroomed in the last twenty years and we don’t even see a better service. Cap their pay and do it now. Why should the private sector take all the pain. This should include the BBC. They have been allowed to pay themselves obscene salaries at the expense of the public being forced to pay a telly tax. There isn’t a shortage of people willing and able to read the news or comment on sport.

    • Posted May 1, 2020 at 7:38 pm | Permalink

      +1 – I think people will read the news and comment on sport free of charge! There is apparently not enough money on earth to produce a comic. We need massively reduced taxes and the banks must be contained, their margins have displaced ‘loan sharkes’.
      All government borrowing to ‘give money away’ whether to Red Nose Day or ‘foreign aid’ must be made illegal. You give from your surplus!

    • Posted May 2, 2020 at 4:52 am | Permalink

      Use this crisis to become a more productive country.

      Fat chance !

      I agree that the Private Sector will use this as a mean to clear out all the dead wood. The Public Sector will, as always, go untouched. And that, Christine, is where the problem lies. We have a very large, scrotic State Sector.

    • Posted May 2, 2020 at 9:25 am | Permalink

      👍🏻 Christine
      500 nhs workers on leave just in Stoke, Staffordshire they should be furloughed on 80% of pay and the extra 20% actually paid in enhancements per day worked as a bonus for all those actually physically working on the front line.

  28. Posted May 1, 2020 at 9:20 am | Permalink

    The approach to the problem of getting business back to work in the USA seems to be much more pro active than in the UK, with Boris beholden to the NHS advisors and not talking to businesses. The mayor of New York has said that they are actively seeking to find practical ways for businesses to work while taking precautions to avoid infection. In the UK there is a still no sense of urgency while some businesses face ruin. The the garden centres stocks are going to waste while other shops can stay open and sell plants. The fish farms are unable to sell trout but we can buy packed cod and haddock. Why can’t someone from the ministries sort out this sort of nonsense?

  29. Posted May 1, 2020 at 9:27 am | Permalink

    My daughter’s university closed down in mid March and all the students were told to go home to continue their studies on-line. So her and her fellow students each paying over £600 per month for an empty apartment on top of the £770 per month for tuition fees for on-line product.

    At least Mr Trump had the decency to suspend student loan interest for the duration of the crisis. The British govt continue to charge interest on student loans at the rapacious rate of sixty times the base rate, kicking them while they’re down.

  30. Posted May 1, 2020 at 9:33 am | Permalink

    In emergencies such as wars, countries set aside political dogma to do what needs to be done.

    This is an emergency, a severe one.

    It could be solved by test, trace and isolate, and by the public all wearing face masks when not at home, as has worked in countries where this menace has been beaten.

    So, if they cannot be bought, the set up a national manufacturer to make and to distribute the masks.

    Employ the staff to trace contacts.

    Requisition hotels etc. as isolation centres.

    The Tories’ utter submission to laissez-faire, small state US socio-economic dogma is the reason for which this country’s and the US’s economies are in this dire mess.

    However, freed from that, the problem could be eradicated in a few short months.

    The arrangements need not be permanent. Calm down.

    • Posted May 1, 2020 at 7:04 pm | Permalink

      Shock horror…..I agree with you. I doubt the ‘problem’ will be eradicated in a few short months, unless you imagine the Government might fall in that time? (tongue in cheek).

    • Posted May 1, 2020 at 11:56 pm | Permalink

      You obviously were speaking to yourself with your final two words, MinC!

      (Hope you’re not feeling so frightened now you’ve had time to breathe deeply.)

    • Posted May 2, 2020 at 12:56 pm | Permalink

      Martin, This isn’t a war, it’s a pandemic. And dogma has not been set aside by the hysterical MSM, with both the BBC and Sky featuring dogmatically far left “experts”, without even disclosing their Labour party affiliations.

  31. Posted May 1, 2020 at 10:07 am | Permalink

    Afraid the Government (taxpayer) is going to have to extend its furlough and mortgage holiday schemes a long way after the initial 3 months already set out, if it really wants to protect peoples jobs and homes, because business is simply not going to pick up to anywhere near to full strength inside a year.
    The lockdown has decimated a huge amount of peoples and business incomes, and that damage will be unfortunately very long lasting for some, even if they manage to hold on in the short term.

  32. Posted May 1, 2020 at 10:13 am | Permalink

    If all businesses and banks are in a mess then the value of everything is upturned . The rich only have what they have and can’t expand as the money they have won’t buy things which are manufactured without the manufacturers,businesses will not exist without the people: the workers who have built it up in the first place. The unseen ability to start a business and entrepreneurship is no good without people , so in fact what will occur is more like a cameo on one level and everyone trying to exist and obtain the basics at another level . I remember the paintings of poverty particularly ‘ the potato eaters’ and think all the basic foods from different nutritional groups should be widely grown . Of course if you have land that may be easier but even farm land and agriculture need machinery and products . The thoughts are levelling . I notice Africa in the poorer areas are not as affected by covid as others.

    • Posted May 1, 2020 at 6:59 pm | Permalink

      The virus has not yet apparently hit Southern Africa badly; however, testing has only just begun, the poor don’t generally live to the (vulnerable) age now becoming normal in the West, and the warm weather which may have been an advantage is now coming to an end in the Southern Hemisphere. Because of severe lockdown regulations, there is an even greater number of unemployed and hence now starving poor; the vulnerability factor of diabetes and hypertension is high in the population. We may be looking at a devastating second wave.

    • Posted May 1, 2020 at 9:01 pm | Permalink

      Median age in Africa is about 19 in EU about 43.

  33. Posted May 1, 2020 at 11:11 am | Permalink

    Just as people sensibly stocked up on food and other essentials in mid-March, in anticipation of the lockdown, so people are now beginning to relax their lockdown. They are right to do so.

    The reasons are straightforward:
    1. Evidence (rather than gigo computer models) shows that those at high risk are people with co-morbidities, obesity, and/or who are elderly. The vast majority of the population shows no more susceptibility to the Wuhan flu than to seasonal flu.
    2. The MSM is recognised to have been hysterical, rather than wise and informative.
    3. The monolithic, centrally planned, top-down, 1950s style, NHS is widely perceived to have failed. Clearly, if the NHS had worked smoothly and well, there would be no point in the wild attempts to blame ministers for the obvious shortcomings.
    4. Deaths from other diseases will increase as a result of the concentration on patients with Cov19. Perhaps more significantly a large number of patients will experience a shortened lifespan, and a damaged life experience, because cancers, aneurysms, heart problems, etc, are not being treated, or are not being discovered.
    5. We are losing herd immunity, not just for Cov19, but for other communicable diseases.

    The government risks being behind the curve, thereby losing the co-operation of the public. It also risks further and unnecessary damage to the economy. Money debasement is not a viable alternative to a functioning economy.

    • Posted May 1, 2020 at 7:09 pm | Permalink

      ‘Just as people sensibly stocked up on food and other essentials in mid-March’

      No they didn’t. They caused panic buying, shortages and virus passing stood in queues and aisle invading in supermarkets. People bought months worth of toilet rolls, flour they didn’t ever use, cans stockpiled for supply meltdown and even added freezers to accomodate the bounty emptied from the chilled cabinets.
      Sensible? my arse.

    • Posted May 2, 2020 at 4:56 am | Permalink

      . . . sensibly stocked . . .

      Are you sure ?!?!?!

      More liked panicked and hoarded just about everything on the shelf ! How much food they bought will now go wasted ? How much food that will not be bought will also go wasted ?

      I have never been so disgusted !

      • Posted May 2, 2020 at 1:13 pm | Permalink

        Mark B, I am not disgusted. But I am disappointed. In you.

        I saw no panicking by anyone in the three supermarkets I went to prior to the lockdown. There was no panic manifest in either my extended family, my friends, or my political associates. There was plenty of fake news reports where the MSM highlighted one idiot and assumed it applied to everyone.

        People did stock up. But that was sensible in the circumstances. If they had not bought extra for the lockdown there would have been panic as people could not get deliveries and were unable to freely go to the supermarkets.

        Within a couple of weeks the supermarkets were back up to stock. They, and their suppliers, did a fantastic job, where the NHS management did not. It was an example of the “Pull” management system working, where the top-down “Push” 1950s Soviet style management failed.

        • Posted May 2, 2020 at 7:40 pm | Permalink

          Nick C – – You obviously know nothing about Wokingham area. We have every supermarket, and small version of others ( like CO-OP ). They ALL had shelves of every description emptied every day, queues were into dozens, possibly a 100 in some places. We heard descriptions of people abandoning it after way over an hour, far from the door. Scrambling to get deliveries – soon were at least 3 weeks ahead! Enterprising organisations began ‘click and collect’ which still involved queuing. Others introduced ‘Boxed’ fixed price – Meat or Veg or Fruit + a few basics – -delivered by companies like DPD ( we got one). An early hour priority for OAPs and the NHS workers started – but soon people found it was busier then and took longer than other times. Aisles got marked ONE-WAY but if you passed by and wanted to go back you weren’t allowed.
          All in all – shambles – -largely caused by selfish empty of anything by taking multiples, with the shops allowing it. Big bonuses coming up for store executives.

          • Posted May 6, 2020 at 9:00 am | Permalink

            Fred H, Did you actually see all that you have described? Or was it “reported”? I saw empty shelves too, but that was not indicative of “panic”, more a reflection of the normal re-stocking cycle common to all supermarkets.

  34. Posted May 1, 2020 at 11:27 am | Permalink

    SJR,
    ‘USA to offset some of the damage done to the economy by anti CV 19 policies.’
    *
    Well done for classifying the virus, nice to see someone who has seen through this.
    CDC (usa) has released figures till mid April.
    And separated out into CV19 and Corona deaths.
    *
    Corona virus cover about 6 virus, from common cold to Sars to Mers to COVID-19
    Corona = dog
    Covid19 = poodle.
    *
    United States. Week ending 2/1/2020 to 4/11/2020.
    Total Deaths .. Covid19= 11,356 .. All Corona= 54,217 (Link attached.)
    *
    Best regard, as always
    Tooley Stu

    https://www.cdc.gov/nchs/data/health_policy/Provisional-Death-Counts-COVID-19-Pneumonia-and-Influenza.pdf?fbclid=IwAR1sgXbDlK54DR4EWoSq3GsG4Rfzuz9Rnb2KH4qtlq4fAoB9PzAC9kiy7QA

  35. Posted May 1, 2020 at 12:37 pm | Permalink

    China is threatening to stop importing food from New Zealand, and raw materials from Australia (they wouldnt be able to do that they are dependent on many of them), if they dont stop their proposed inquiries into Chinese actions re the virus.

    No doubt China will play silly with other decent nations too.

    We need to be prepared.

    • Posted May 1, 2020 at 7:10 pm | Permalink

      time to cosy up to OZ and NZ and make them offers?

  36. Posted May 1, 2020 at 12:38 pm | Permalink

    The different US and U.K. schemes seem not to be working well together for employees of US technology companies in your constituency. The US management are not taking advantage of U.K. furlough schemes and are simply laying U.K. employees off. And of course these employees are not entitled to the $1200 one-tine payments their former colleagues in the US could get. The end result is laid off Britons getting only £94 a week unemployment benefit.

    • Posted May 1, 2020 at 7:13 pm | Permalink

      US corporations have always been aware of weak employment rules in UK vs those in other European countries. Hire and fire easily here, but have hassle in Europe hence the reluctance to grow employment ‘ over there’.

      • Posted May 2, 2020 at 9:16 am | Permalink

        Hire and fire is not easy here Fred and is very expensive.

        • Posted May 2, 2020 at 5:18 pm | Permalink

          US corporations often use ‘compromise agreements’ to silence potential legal challenge over unfair dismissal. If the sum offered is higher than that likely to be awarded to the ex-employee, agreement is often reached. In that case ‘fire’ is thought to be easy.

  37. Posted May 1, 2020 at 1:55 pm | Permalink

    I read Polly Toynbees article today about Young People face a jobless future but we’re told we urgently need care workers, there are adverts for them now on tv every day young fit people could train in care homes to do those jobs, we are told we need hundreds of farmworkers to top up lost bar, waiting on restaurant work if these youngsters aren’t told to apply and learn to help themselves as I was taught, my husband was taught and my children have been taught to not expect a penny off anyone else and crack on until something better comes along then we’re going to be in an awful mess come August. They can keep training online at night and weekends etc. but supermarkets were hiring, delivery companies were hiring I know students and out of work artists that have taken these jobs on. We need to make it easy for people to find work instead of the stupid employment systems that let people down now, Indeed needs a shakeup and quick. Starving students need lining up with the work that is there.

    • Posted May 1, 2020 at 7:27 pm | Permalink

      Polly T is part of the MSM bubble who have forgotten what real work involves and pontificate the easy street way of earning a living. Labour’s idea that 50% should go to University was unsound and creates snobbery about real jobs such as STEM careers.
      It will be a culture shock to work with your own hands for many youngsters who think they are above all that as Frank Field was shocked to hear about them ” not wanting to do immigrants jobs ! ”

      Working in unfamiliar jobs when I was a student gave a broader understanding of people which became invaluable later on. The present system is blinkered and needs shaking up big-time!

      • Posted May 2, 2020 at 9:15 am | Permalink

        I have a bit more faith in the majority of young people, my children and their friends work very hard, several finding solutions to continue to work when they were thrown out of jobs in March because the free money wasn’t available to them for one reason or another.

        Perhaps it’s just my family friends but I know lots of youngsters working with their hands; labourers, brickies, gardeners, plasterers, baggage handlers, without these workers, support workers moving money around in offices won’t be doing anything.

        • Posted May 2, 2020 at 8:47 pm | Permalink

          I always respect and encourage all those I see who worked just as I did (on your feet) when I was young on all kinds of work and also when older and personally renovating a house in Southern France over 8yrs.
          This teaches youngsters IMHO both confidence and widens their chances of discovering essential skills, but most importantly find out:-
          1. What they like & don’t like.
          2. What they are good at & are not so good at.
          3. What to try out before they commit to work.
          4. What to learn to compliment and enhance future careers.
          5. See the real world instead of classrooms, films TV etc.
          6. See beyond their smartphones and virtual world.

          Some of the smartest youngsters I have come across have figured this out themselves but you don’t hear this very often as many think you need to get a degree as the be all and end all. The reality is many graduates struggle to get a decent job and have a £25k debt and as many as 80% of adults overall end up in the wrong kind of work dissatisfied.

  38. Posted May 1, 2020 at 2:21 pm | Permalink

    The Fed is doing its job as the reverse currency of the world, that is to say, if the Fed didn’t print money with abandonment, countries that borrow money in dollars as in Asia would go broke as the dollar appreciates and wouldn’t be able to pay back the interest and debt in dollars. What is UK reason for printing money, well they like inflation with a lower pound to keep GDP going up and do not care about profits of businesses in the corporate arena who instead relies on bailouts instead of good business practices? So why do it this way, the higher your GDP is a country standing in the international community of either being on the G5 or G7 or not, it means more to all politicians in parliament than anything else that is having a say at the top on the world stage it wasn’t for that your country would be much better run along with corporations and your standard of living would a lot higher and also the reason behind importing lot of people to this country. GDP is Gov demigod.

    They are ways to begin this under control but the Gov and Robber barons are wedded to this system that suits them and not the majority of people living in the UK even the NHS is geared to GDP and not serving the people, how is that, the NHS says they need 80,000 more staff but that’s not true, the NHS is well-staffed but decides to hire staff from agencies which double the cost of the 80.000 staff they hire in which turn rises GDP also not training their own and prefer to import staff which leads to higher GDP but when it comes to spending on equipment and saving lives they don’t bother they like to make do in this area.

  39. Posted May 1, 2020 at 2:25 pm | Permalink

    ONS stats today show that under 70s with no comorbidities have a 0.00036% chance of dying ‘with’ cv-19 ( you most likely can add another zero after the decimal point to ‘of’) in England and Wales.
    For this chance it has been worth cratering the economy!
    Welcome to the affects of crowd pressure on the internet allied to cretinous adherence to computer modelling this time at the hands of Ferguson and his crew at Imperial.

    • Posted May 1, 2020 at 7:47 pm | Permalink

      Imperial must lose all public funding. I’m not sure that it’s degrees should also lose recognition. Their playtime on the computer has cost us billions. etc ed

  40. Posted May 1, 2020 at 2:41 pm | Permalink

    Is this not the perfect opportunity to stop and have a rethink about things? Mr. Redwood, like most people, is concerned that ‘everyone’ should be back ‘at work’. I now live in the country. I observe huge pieces of machinery – massive tractors pulling what looks like very expensive equipment behind them – doing work that, generations ago, would have taken hundreds (thousands, even) of men. We ought to be able to grow most of our own food with, in comparison with the past, very few people working.

    Ditto for industry. Cars are made to a greater than lesser extent by robotic machines. Again, far less people than in the past.

    But, instead of this leading to (as was predicted in the 1960s) all of us working a 20 hour week by the year 2000 – we are still obsessed with ‘full employment’ and many people are now worse off than people of 50 years ago. Then we had a 37.5 hour week – coming down an odd half hour every now and then – paid holidays, job security and decent occupational pensions. Now we have an army of self-employed on zero hours contracts – many on low pay, with people needing two or three jobs etc.

    The question no-one seems to ask is:

    WHAT WENT WRONG?

    To me, the simple (and, perhaps, simplistic) answer to that question is globalization. But it is more than that. It is this obsession with ‘work’. Can’t we share things out a bit better so most of the population don’t end up working like dogs all their lives, forever in debt and with no decent retirement to look forward to?

    • Posted May 1, 2020 at 7:15 pm | Permalink

      in a nutshell ‘Buy British – make, grow, sell in Britain’.

    • Posted May 1, 2020 at 7:50 pm | Permalink

      Feminism. That is what has messed everything up. The demand that all women work for money! Now both husbands and wives go out to work to earn half a salary each, and there is nobody to run the home and family, which is a full time job. Women don’t want to work – allow those who don’t want to go out to work to stay at home by reinstating and increasing the married mans allowance.

    • Posted May 1, 2020 at 11:46 pm | Permalink

      What went wrong? What happened – perhaps not wrongly, depends on your point of view – women wanted to go out to work rather than stay at home and look after the children. ”Housewife” was considered to be a dirty word. People became obsessed with material things that necessitated two jobs to provide these, not simply to put food on the table and afford the necessities. And the attitude of ”we want it all and we want it now” has prevailed.

  41. Posted May 1, 2020 at 2:53 pm | Permalink

    I am not worried about this shutdown, I would only be worried if another shutdown comes along later this year or next. In 1918 with Spanish flu the same thing happened and the Govs didn’t do a lot and the economy didn’t crash till the end of 2019 and still, the Gov did nothing and by the end of 1920 the economy started growing at a fast pace and then they started printing money which leads to the swing twenty but the money printing caused the Great Depression and the markets and businesses collapsed.

  42. Posted May 1, 2020 at 3:13 pm | Permalink

    Essentially we need a plan for a staged return to work. A plan which in the early stages at least allows as much separation as is practical. Testing for Covid 19 and those with its antibodies is I believe underway, this needs to be accelerated to qualify the working population as quickly as possible so that the return to normal working practices can go ahead as soon as possible. I would feel much more comfortable were it a necessity prior to any air travel and for air passenger, eurotunnel, and ferry arrivals in the UK. In fact a health visa should be a passport necessity for any international travel.

    Within this overall plan government needs to encourage working from home for as many as is practical because the ancilliary benefits to our transport system and profitability are considerable.

    Much of what I have said to be effective requires international agreement and cooperation so another task for government. The achieved rate of return to work is also dependant on customer rates of return and often these are international.

    Within education, dependant on timing, we should consider changing term times and holiday periods for as long as is necessary to achieve catch up, and the reasses the pattern for the future.

    I think the Donald is right in reassesing the need to be trading with China, a nation in many respects becoming clear is a rogue state. They do not play by the same rules and norms as most nations. Until they do, do we need them.

    • Posted May 4, 2020 at 5:01 am | Permalink

      The government are stalling because :

      a) They don’t have a plan.

      b) They need the EU’s (France) approval.

  43. Posted May 1, 2020 at 3:13 pm | Permalink

    Dear Sir John Redwood,

    You are correct in your analysis of where Britain is at. Huge swathes of the economy have been shut down (and will likely remain so until June). To mitigate the damage and loss of businesses vast amounts of money will be needed to forestall the economic damage.

    There is no way on Earth that the Government will be able to borrow the £1 Trillion needed to continue funding Public Services, fund the Economic Rescue and invest in the Economy later to help it recover without causing a Gilts Strike. So, Printing Money it MUST be, with £1 Trillion of new money used to buy up Gold- backed Securities so that there is something of value behind Sterling (that will prevent Inflation)- whilst liquidity in injected into the UK Economy to prevent the Mother of all Deep Depressions.

    Other measures, to give the Government fiscal firepower to help with Boris Johnson’s Levelling Up policies will be needed to raise the ££ billions required for this: Slashing Foreign Aid and Green subsidies, putting high Tariffs on Chinese imports (to make them repay some of the cost of allowing a Pandemic to run rife) and a Land Value Tax could collectively raise an additional £50 billion annually. The alternative of more domestic Spending Cuts and/ or Tax increases will be electorally toxic and make the economic situation worse.

    • Posted May 4, 2020 at 5:00 am | Permalink

      Ian

      I am afraid that these people do not care about borrowing and its consequences. Socialists never do. Both the government and the governed have to re-learn that, the problem with socialism is, sooner or later you will run out of other people’s money. Or you can print until it becomes worthless.

  44. Posted May 1, 2020 at 3:16 pm | Permalink

    The UK was the reverse currency of the world back in 1918 as world war one came to an end and Spanish flu started and the reason they did nothing on the money printing side is that they were already over-indebted from the war and couldn’t do anything which leads to one of the fastest recoveries in economic history but collapsed by 1929 due to going back to money printing midway and inflation which also lead to the second world war.

  45. Posted May 1, 2020 at 3:41 pm | Permalink

    Dear Sir John,
    We have already passed the point at which ever more extreme monetary and fiscal policies could make good the loss of jobs, net wealth and productive capacity.
    We entered this lockdown with emergency low interest rates and rising fiscal deficit at a time of full employment and buoyant asset prices and when we were already running the economy at a hefty loss for the 37th consecutive year.
    We shall not get out of the mess by distorting the economy ever more at the expense of the next coming generation in the pursuit of obsolete macroeconomic illusions.

  46. Posted May 1, 2020 at 5:20 pm | Permalink

    Here’s an idea. Teachers who prefer not to go back to work when schools open on safety grounds (and there will be plenty) should be furloughed on 80% salary up to a maximum of £2500 per month. That’s fair.

    • Posted May 1, 2020 at 7:19 pm | Permalink

      So how many children have had CV? Why not wear masks and gloves.

  47. Posted May 1, 2020 at 5:27 pm | Permalink

    The US is pulling out the stops, which is exactly what is needed. Fortunately, the US Treasury and its Central Bank, secretly understand how a fiat currency economy actually works, unlike the UK.

    The UK government appears not to understand the difference between a Bank of England loan (credit) and a Treasury grant (money). The first has to be repaid, the second does not. The Bank of England can’t grant money to anybody, because it doesn’t have any money to give away unless the Treasury provides it.

    The beauty of the US fiscal system is that it is legally open to public scrutiny, unlike the UK system which is the exact opposite. For instance, the US Treasury daily publishes its transactions. https://fsapps.fiscal.treasury.gov/dts/files/20042900.pdf

    You can see for instance in Table II, it has spent $139 billion on “Coronavirus Relief Fund” this month. The US Treasury will use its Central Bank and other government agencies to distribute that newly created “cash” while not disclosing its part in the operation.

    • Posted May 1, 2020 at 9:03 pm | Permalink

      Acorn, You have that exactly the wrong way round. The BoE creates money (eg QE), and the Treasury borrows money (gilts) – as well as collecting money from taxpayers of course.

  48. Posted May 1, 2020 at 5:35 pm | Permalink

    Good news!

    The government hit the arbitrary Coronavirus testing target which it set itself. *

    * After twice changing the criteria to ensure it hit the arbitrary target it set itself.

    Perhaps in the same spirit this year’s GCSE and A level students could mark their own work?

    Wonder how many A* and 1 grades we’d get?

    • Posted May 1, 2020 at 7:34 pm | Permalink

      Amazing the constant sneering and carping of the left. Most of the Country recognise the govt are doing their best in a difficult situation, and exceeding the planned target is a great achievement.

    • Posted May 1, 2020 at 7:38 pm | Permalink

      And there for a moment I thought you Andy had a brainwave and become Enlightened to discover a positive contribution and not your graffiti spraying guff.

    • Posted May 1, 2020 at 7:56 pm | Permalink

      We are nearly at 100% so the results will not change much. They remain illiterate and innumerate regardless. Maybe getting them to submit their own results will save us the cost of ‘markers’.

    • Posted May 1, 2020 at 9:08 pm | Permalink

      Says the man who claimed that locking down our borders was xenophobic; and who cheered the deaths of elderly Brexit voters; and who demands that we must repent, ask the EU’s forgiveness, and clamour to re-join to ensure our subservience to his dearly beloved empire.

      • Posted May 2, 2020 at 8:16 am | Permalink

        Nick C

        EMPIRE?

        • Posted May 6, 2020 at 9:02 am | Permalink

          That’s right, Bill, empire. And I have quoted the dictionary definition at least 3 times for you.

  49. Posted May 1, 2020 at 5:47 pm | Permalink

    One suggestion to get more people back to work would be to produce high quality PPE equipment in the UK, I personally will not trust my life to the junk coming out of China.

    • Posted May 1, 2020 at 6:26 pm | Permalink

      Indeed and the pandemic planning clearly should have included plan to produce this and other essential medical equipment locally – but alas it was clearly done by incompetent fools.

      • Posted May 1, 2020 at 6:35 pm | Permalink

        And PPE which doesn’t have to be incinerated every night. It is obscene that thousands of tons, billions of articles, are being disposed of in this way after all those workers have made them, in Turkey and Burma and wherever else, and they have been flown in in RAF jets. Think of the fumes going up from all that plastic being burnt.

        • Posted May 1, 2020 at 7:54 pm | Permalink

          If the remainstream media didn’t agree with Professor Newton’s method of recording why did they wait until today to quarrel with it? Because they were as sick as parrots that their beloved NHS had exceeded its target with the help of the army, volunteers, and private enterprise. So they quickly devised a devious way of discrediting it. That is what they must have been up to when they took a day off from sneering yesterday.

          • Posted May 2, 2020 at 10:26 am | Permalink

            but they didn’t – the numbers include shipped kits not actually tested results. Now the real job is to do 100k tests every day.

      • Posted May 1, 2020 at 7:55 pm | Permalink

        If you want to plan something then you have to employ and to pay people to plan.

        Then, when they have decided what would need to be done, you have to recruit and to pay people to be available to do it when the need arises.

        The last clauses of each of those two paragraphs are heresy, to the slaves of small state, laissez-faire, short-term, capitalist dogma in the US model, as our government are.

        This crisis has exposed what a flimsy, useless, precarious shambles of a set-up that model is, in all the countries which have fallen for it.

        Sling it, finally, for pity’s sake.

        • Posted May 2, 2020 at 7:57 am | Permalink

          Every state is small to you Martin.
          Only if the state was 100% in size would you be happy.

        • Posted May 2, 2020 at 1:18 pm | Permalink

          Yet it is the centrally-planned Soviet style NHS management which has failed, not the much smaller private sector suppliers.

      • Posted May 1, 2020 at 9:25 pm | Permalink

        Some PPE equipment was £2 a few months ago and I’d now £16.50. Disgraceful.

        • Posted May 2, 2020 at 6:57 am | Permalink

          That’s the free market for you.

          • Posted May 2, 2020 at 6:12 pm | Permalink

            Supply and demand.
            Others will soon move into the market eager to make a profit.
            Prices will fall.
            Supply will increase.
            Meanwhile in Venezuela hungry people are queuing outside shops with empty shelves.

          • Posted May 2, 2020 at 7:27 pm | Permalink

            Martin – – you’d like an empty shelf regulated regime controlled one?

  50. Posted May 1, 2020 at 7:36 pm | Permalink

    I see Trump has signed an executive order to stop electric companies buying parts from China, US is worried about China having too much control over US electricity generation and distribution.

    Probably something we should be doing too.

  51. Posted May 1, 2020 at 8:21 pm | Permalink

    I thought Sir Redwood might be interested in this study that shows ‘lockdown’ has had a negligible effect in terms of saving lives.

    https://www.medrxiv.org/content/10.1101/2020.04.24.20078717v1.full.pdf

    The summary is unequivical

    ‘Estimates of daily and total deaths numbers using pre-lockdown trends
    suggest that no lives were saved by this strategy’.

    I am sure he would agree, if this is accurate it’s pretty devastating for the government…

    Why are we spending 2 billion a day to keep workers idle, destroying businesses that have taken decades to build up, smashing liberty and freedom, borrowing 1 out of every 3 pounds spent and plunging the economy into a deep recession. Why are cancer patients being denied treatment when ICU capacity is below the seasonal norm ?…

    • Posted May 2, 2020 at 7:24 am | Permalink

      How can a submitted (not reviewed, not accepted) ‘scientific’ paper comparing the policies of European countries regarding Covid-19 (four countries with lock-down vs others without) based on only official death numbers available to 23 April 2020 (?) by a scientist specialised in mesoscale and submesoscale oceanic processes be of such an interest? There are as many gaping holes in that study as in some journalistic studies published every day in one’s preferred newspaper.
      Despite the few equations (to impress the reader?) it is simply based on rather simplistic exponential growth and decay models without any concern about the time when there is a switch between the two regimes. Possibly a nice pre-graduate exercise to be discussed in a tutoring session, nothing more.

    • Posted May 2, 2020 at 4:19 pm | Permalink

      Absolutely, and this is why we need a full public enquiry. The government is not there to pander to the fears of the electorate who they have scared s***less by their incessant propaganda.

      zorro

  52. Posted May 1, 2020 at 8:25 pm | Permalink

    Britain’s manufacturers suffer worst drop in output and employment since records began nearly 30 years ago – outstripping the figures seen during the global financial crisis

    https://www.dailymail.co.uk/money/markets/article-8277301/Britains-manufacturers-suffer-record-drop-output.html

  53. Posted May 1, 2020 at 9:25 pm | Permalink

    Some PPE equipment was £2 a few months ago and I’d now £16.50. Disgraceful.

    • Posted May 2, 2020 at 6:42 am | Permalink

      Well this is market forces, prices and the “invisible hand” rightly working to match supply and demand is it not?

      More people will step in and make more if prices are higher. The new suppliers may not be able to make as efficiently or may have to similarly pay far more for the new materials needed to their suppliers. Plus these higher prices will only be a short term thing until supply is geared up.

  54. Posted May 1, 2020 at 9:35 pm | Permalink

    The UK government should send a grant to every family of around £1,000 in the form of vouchers redeemable at any disrupted UK business establishments of the recipient’s choice (e.g. restaurants, hotels, airlines, bars, ‘non-essential’ retail stores etc) for a period of 6 months, following which the voucher will expire. The total cost would be around £20 billion.

    • Posted May 2, 2020 at 9:02 am | Permalink

      People go shopping for something to do, a social activity, a browse, more often than not impulse driven purchases. We often don’t know what we want, something we see online may not fit right then it’s a palaver getting the goods and your money back. People are still buying on-line but as Amazon said the cost of providing deliveries has gone up with extra daily delivery runs especially those to remote addresses, ppe, contactless deliveries etc., and meanwhile we’re killing off our retail shops and more than a month of this they’ll be dead anyway the Landlords are dying aren’t you all listening to them. Office workers are support workers if the industries you all support diminish then I predict about 20% won’t be required.

      Will we have to queue to go in each shop with our voucher, will we have to book a time slot to go in a shop and get given 10 minutes? People are terrified now, i suspect a trade would come in using vouchers by the most daring redeemed with 50% of the voucher face cost and the wolves will devour the sheep.

  55. Posted May 3, 2020 at 4:18 pm | Permalink

    “The US sent everyone below $75,000 a year a cheque for $1,200 ……………” To the extent that QE is a good idea at all, this is a progressive method helping ‘the little guy’.

    Contrast this with the UK method of QE. If you Google “How does QE work in the UK?” one of the sites displayed is https://positivemoney.org. There you will find a good explanation and an analysis of what is wrong with the UK method. Briefly, the money created through QE was used to buy government bonds from the financial markets (pension funds and insurance companies). This boosted bond prices and stock markets to nearly their highest level in history (BoE estimated a 20% increase). However, 40% of the stock markets are owned by the richest 5% of the population. The effect of UK style QE has been to give a bung of £200,000 per capita to the richest 5% of the population, leaving the rest of us to pick up the tab for the increase in State debt.

    The UK method of QE is highly regressive. Small wonder that Mark Carney announced that life was about to get tougher for the poor. The US method is much preferred. A challenge to Sir John: can you get the current QE unwound and replaced by a credit of about £1000 to every individual bank account, the equivalent of the US method?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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