The political motivations of Standard & Poor’s
First they downgraded America. Now it is the turn of the eurozone. Standard & Poor’s is well aware of the weight financial markets attach to its pronouncements, and of late has developed the alarming habit of timing them to maximise their impact.
Nicolas Sarkozy and Angela Merkel have issued a statement, noting curtly that they ‘take note’ of the ratings agency’s decision to put France, Germany and 13 other countries on credit watch, implying a 50% chance of a downgrade in the next six month.
But the two leaders are almost certainly furious at this intervention, which just two days ahead of a summit meeting in Brussels later this week that is widely seen as the single currency’s last best hope.
The Rioters were more politically sophisticated than many assumed
The initial releases from the Reading the Riots analysis suggests that what I was hearing from my own conversations with people was reflective of the wider picture:
The idea that more than half of those responsible for riots should blame a failure of moral conscience might seem contradictory – but it accords with hundreds of interviews in which rioters expressed regret, concern or disappointment at what they saw going on around them. More interestingly, they revealed how the rioting crowd would – at times – exercise some degree of moral restraint.
Whatever the bleakness of the picture portrayed by the research, this is something to hang on to.
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Three reasons why the Left might not want the Euro saved
contribution by Varun Chandra
Consensus is that the break-up of the euro would lead to economic meltdown. But keeping it together will hit Europe’s common man and woman the hardest, leading inexorably to social unrest. The Left needs to at least consider whether this is a price worth paying.
Muddling along is not an option, and a two-tier Europe (with Britain probably on the sidelines) is coming.
Either the periphery default, leave the Euro and revert to their own devalued currencies – dealing with their debt problem and beginning the painful rebuild of their economies. Or the ‘core’ (mostly Germany) give them enough money to pay their debts / allow partial default whilst bailing out Europe’s banks (again).
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‘How women are key to economic growth’
The rise of working women has been a critical factor in raising living standards of low to middle income households in the last 40 years, according to new research out today.
It is the first major study breaking down the factors which drove household income growth over recent decades.
It found that over one quarter (27%) of all income growth for these households came from women’s work, with only 8% from men. In 1968, 86% of household gross employment income in this group came from men and 14% from women; by 2008, 63% came from men and 37% from women.
Researchers say that growing the incomes of women will be key to economic growth and powering the economy again, since they have been hit the most.
The research was conducted by the Institute of Fiscal Studies for the Resolution Foundation think-tank.
Gavin Kelly, chief executive of the Resolution Foundation said
This report shows the massive contribution of working women to the incomes of hard-pressed households, as well as the growing role of tax credits. But given female employment has now flat-lined – and with cuts to tax credits and less support for childcare – it’s not obvious how families are going to raise their incomes in the future.
From 2002 to 2009, women’s employment income raised household incomes by £301 and tax credits by £581 (in 2008/09 pounds). But these gains were largely cancelled out by big losses from other sources, most notably male employment income, which reduced incomes by £610.
This meant that overall, incomes in low to middle income households rose in real terms by an average of only £143 from 2002 to 2009.
Mike Brewer, co-author of the report said
This report shows the big changes in where working households’ income has come from over the past four decades. In the late 1960s, low-income working households were more reliant on the main earner than better-off households: these households had a low income partly because they had only one earner. But by the 2000s, before the recession, low-income working-age households were slightly less reliant on the main earner than better-off households.
The report also illustrated the importance of Labour’s tax credits. It shows that tax credits accounted for around one sixth of the total rise in household income among the low to middle income group since 1968, despite the fact that their major expansion took place in the past 10 years.
How public opinion is moving towards Labour’s argument on cuts
In his Times column last week(£), Daniel Finkelstein made a bold assertion:
Plan B is incomprehensible to most people. Ed Balls ended up yesterday arguing that we are borrowing too much and that the way to borrow less is to borrow more… I promise you, this is never going to work politically. Ever.
But this ignores the fact that public opinion is slowly moving in favour of Labour’s position.
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Ed Balls rips Tory ‘failed plan’ in the Times
Labour shadow chancellor Ed Balls rips into the Coalition’s “failed plan” in the Times today (£).
‘You can’t borrow your way out of a debt crisis.” That is the simple mantra we have heard from the Prime Minister week after week. The Government took it as read that deep and immediate spending cuts and tax rises would at least serve the goal of deficit reduction — no matter how much Labour warned that going too far, too fast would be bad for borrowing as well as for jobs and growth.
So while the scale of borrowing set out in last week’s Autumn Statement is certainly a challenge for Labour, it is a jarring setback for the Government. Far from reducing the deficit as promised, it is now set to borrow £158 billion more than planned.
He says the government has overseen a massive dive in growth thanks to a fall in consumer and business confidence, a rise in VAT, fall in public sector demand and the fear of rising unemployment.
And what would Labour say in response? He nails the argument:
This autumn, many young people who would otherwise have stayed on at school have lost their education maintenance allowance and — after the abandonment of the Future Jobs Fund — many more have gone straight into unemployment, contributing to the one million young people out of work.
On the surface of things, cutting EMAs and the Future Jobs Fund saved money and reduced borrowing. But how much more will it cost our society and economy to leave those young people unemployed and unproductive, receiving benefits rather than contributing to the national wealth?
And this is the simple argument: if we let a year of flatlining become a decade of stagnation, what price will our country pay in the long term? That is why I believe it makes sense to act now with temporary tax cuts and investment in jobs and growth to save ourselves from the future bills of failure.
He also says the next Labour manifesto will have a commitment to to use any windfall gain from the sale of stakes in RBS and Lloyds to repay the national debt.
He also says we will need “long-term reforms of our economy” to deliver social justice in straitened times.
Four problems with ‘In the Black Labour’
I enjoyed the ‘In the Black Labour’ report, by some of Labour’s brightest and best bloggers and thinkers, which argues that Labour should adopt ‘fiscal conservatism’.
Here are a few thoughts in response, explaining why I am not convinced by the case which they make.
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Labour needs to place fiscal conservatism at the heart of its appeal
Labour’s approach to winning back lost votes seems to be based on two strategies.
The ‘Mastermind’ strategy is based on the belief that it’s the smartest guy in the room who wins out. By correctly predicting the mess the Government will make of the economy, support will apparently flood back to Labour.
The ‘Megaphone’ strategy is founded on the principle that if the Party gives voice to voters’ suffering, they will see Labour as their best hope of respite from declining living standards.
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Revealed: secret police memo labels #occupy as ‘terrorists’
A secret memo issued by the City of London police has labelled #occupyLSX protesters as ‘domestic terrorists’ alongside Al-Qaeda and Columbia’s FARC.
The memo was handed to members of #occupyLSX over the weekend by a local businessman and confirmed as genuine today.
The memo (below) starts off by describing international threats from al-Qaeda, FARC in Columbia and terrorists in Belarus.
It then lists activists from the #occupy movement as a ‘Domestic’ threat and states:
All are asked to be vigilant regarding suspected reconnaissance, particularly around empty buildings. Any sign of access or new markings should also be reported.
…
All are reminded that any encounters with suspected activists could be recorded and then uploaded or live-streamed to the internet.
It then adds in bold: ‘Suspected hostile reconnaissance should be reported to the City of London Police immediately‘.
OccupyLSX released a statement last night stating:
The document exhibits other signs of worrying paranoia. The reference to “suspected activists” seems to demonstrate a disturbing loss of perspective. Activism is not a crime and the desire to participate in democratic decision-making should not be a cause for concern for the police in any free society.
An institution that confuses active ciitizens with criminals and equates Al Qaeda with efforts to reimagine the city is an institution in grave danger of losing its way.
The relevant segment from the memo
.
Update Taxi driver ‘Chunky Mark’ has made this amusing and expletive-filled video in response
They never change: Stalinist Michael Gove and Section 28
contribution by Natacha Kennedy
I take no pleasure in being right here, but I told you so: academies and ‘Free’ schools will soon come under the direct control of Whitehall.
The latest ‘Funding Agreement’ published by the Department for Education sets out conditions for Academies and ‘Free’ schools to receive funding.
Included in those conditions is the rule that they have to teach the “importance of marriage” over all other types of relationship. In effect all these schools are now controlled by Michael Gove.
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» The real agenda behind Telegraph’s abortion investigation
» How Scotland Yard monitors prying bloggers and journalists
» When disabled people want to work – employers can hold the back
» Revealed: the reality behind Workfare and why it doesn’t work
» Job snob? No, I’ve got the T-shirt
» Why country-by-country reporting matters to our wellbeing
» If Unions want to become stronger, they need to modernise
» Why work “reforms” in Spain are a warning for workers across Europe
» Five things you need to know about the NHS bill
» Bigger. Fatter. Gypsier. More Racist.
» Laziness levels in Britain getting lazier, wails government
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