Economics

Massive public debt: bad. Massive private debt: excellent. Gordon Brown's bubble: economic ruin. George Osborne's potential bubble: economic salvation. Benefits for non-home-owners: unaffordable. Cash bungs for property buyers: essential. Recite this catechism often and loudly, and over time you too will appreciate the wisdom of the coalition's economic policy. The consensus over Wednesday's budget was that it was a do-nothing affair, a feeble huddle of small measures washed away in a sea of red ink and broken targets. In terms of central government giving and taking – the traditional stuff of Red Books – it was as small beer as that penny off a pint indicates. But stack up the announcements that don't touch the public balance sheets and the chancellor was strikingly radical. Because it turns out that Osborne does believe in that apparent epitome of economic loucheness, borrowing to invest. He just wants you and me to do it, using our own wee savings. Sure, No 11 … [Read more...] about George Osborne is using Britons as economic cannon fodder

Oil prices above $200 a barrel. Energy shortages in western Europe. The return of recession to the still-fragile global economy. A slump in Russia. That's the fear haunting policymakers as they contemplate how to respond to the shooting down of MH17 over eastern Ukraine last week. The meltdown scenario can be easily sketched out. Every global downturn since 1973 has been associated with a sharp rise in the price of energy. Russia is one of the world's biggest energy suppliers and is responsible for about one-third of Europe's gas. America's economic recovery from the deep recession of 2008-09 has been weak by historic standards, while the European Union's has barely got going. From the car plants of Germany to the finance houses of the City of London and French defence firms, there has been pressure on politicians to be wary of provoking Vladimir Putin into retaliation that might rebound on the west. "The possible involvement of Russian-backed separatists in the airliner's destruction … [Read more...] about Economic meltdown scenario piles pressure on Russia and the west

December is usually a time for looking back on the past year and forward to the year ahead. In 2019 we have witnessed rising political extremism (on both the left and right) and polarisation, increased government instability and growing tensions between central and subnational governments. Each trend will continue in 2020. Almost everywhere one looks, there is a growing gap between what people demand of governments and what governments can deliver. The reasons vary but a significant underlying cause explains many of the grievances: sluggish economic growth. While rising inequality – a problem that the data suggest is real but overstated – has moved to the centre of public debate, the key issue is that living standards are not improving fast enough among those who are falling behind. In the US, the policies being proposed to address this issue include much higher marginal income-tax rates, a large tax on wealth and massive new entitlements and subsidies, implying larger … [Read more...] about How to expand American economic pie

A soaring pound. Shares rising to record levels on the stock exchange. With the threat of a Labour government removed, it was a familiar story in the City once details of the exit poll were released. The last time the Conservatives won four elections in a row was 1992, and there were echoes of John Major’s unexpected victory as election night unfolded. For a start, on neither occasion did the Tories have much of an economic record to defend. Britain is not in recession – as it was in the run-up to the 1992 election – but it has come pretty close to it. Growth has stalled in the past three months. Factory output is down. Business investment has fallen. Unsurprisingly, then, the Conservatives had little to say on the economy other than things would be a lot worse under Jeremy Corbyn and miraculously better once the UK had left the EU. The spurious Tory claim that John McDonnell would cost every taxpayer £2,400 was straight out of the 1992 playbook and the … [Read more...] about Johnson’s Brexit needs to deliver economic benefits … and fast

Qatar accused Saudi Arabia of blocking its citizens from attending this year's hajj because of the ongoing diplomatic feud. The Saudi government has denied the charge, saying Qataris were still traveling to Mecca. A quota system entitled about 1,200 Qataris to attend this year's ritual ceremony but Qatar said it had been impossible for its citizens to get permits. It blames the ongoing diplomatic dispute with its Gulf neighbors — Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. Qatar's National Human Rights Committee said Riyadh had shut down an electronic registration system used by travel agencies to obtain permits for Qatari pilgrims. "There is no chance this year for Qatari citizens and residents to travel for hajj," the committee's Abdullah al-Kaabi said. "Registration of pilgrims from the State of Qatar remains closed, and residents of Qatar cannot be granted visas as there are no diplomatic missions." Qataris reach Mecca A Saudi … [Read more...] about Hajj begins amid Qatar-Saudi tensions and Egypt’s economic woes