End of Austerity Measures? Cameron next victim?

[Xenophon PCDGS]

If the chart is anywhere near accurate, then it appears to be spelling good news, in that we seem to be at the end of the current downwave, so the tide is about to turn and a period of growth and prosperity is dawning.

Your posting was so detailed and well-crafted that I was almost expecting to see Peter Snow and the "swingometer" to make a guest appearance at the end, to give the final analysis of how of the points that you had provided had actually changed the views of the readership of your posting.

 

[Schnellzug]

The end of Austerity measures? I know some people get disappointed when they turn up at a Heritage line and there's one on the front of the train, but I think they're pretty useful engines...

 

[Peter Mugridge]

Several books have been written about it including one called The Downwave, by Robert Beckman. This book was published back in the late 1980s. Has anyone from here read it ?

I've still got my copy, purchased longer than two recessions ago during the good times of the second half of the 1980s!

 

[Smudger105e]

After a drubbing in the local elections, and with millions of people unemployed, we might have expected this Government to come up with some ideas to get people back into work. But sadly not.

Instead, in the Queen’s Speech, the Tories and Lib Dems have put forward a collection of policies to make it easier for employers to sack people.

Increasing job insecurity is not a path out of the recession. We need people in good, secure jobs, spending in the local economy - not more people on the dole, and millions more saving instead of spending, as they are worried about whether their job is safe.

Will you sign the Unions Together letter to David Cameron and Vince Cable telling them they’ve got it wrong?


Your plans in the Queen’s Speech to make it even easier to put people out of work show that your Government has got its priorities back to front.

2.65 million people in the UK are out of work – your Government should have a plan to create jobs, not to make it easier to sack people.

You’ve already taken away protection from unfair dismissal from millions of people by raising the threshold to two years. The changes you are making to tribunals will make it even harder for people who have been treated unfairly at work to get justice.

Increasing job insecurity is not a path out of the recession. We need people in good, secure jobs, spending in the local economy - not more people on the dole, and millions more saving instead of spending, as they are worried about whether their job is safe.

After the local election results, both your Parties promised you are listening. If you really are listening, then start focussing on the real priority – getting people into work, not making it easier to put people out of work.

TSSA Statement 2012

 

[exile]

It's generally agreed that what's needed is economic growth. However how to achieve that is not at all obvious. Should the government borrow more money and use it to create jobs? Who's going to lend it to them? And if they do lend it won't they apply Greek-style austerity conditions to the loans?

 

[Barn]

The fact that Plan A (in this case austerity) is not working as well as we all would have liked does not logically require that Plan B was right all along. For all we know, that could have been even worse.

 

[IanXC]

The fact that Plan A (in this case austerity) is not working as well as we all would have liked does not logically require that Plan B was right all along. For all we know, that could have been even worse.

This.

If anything we need plan A faster and sooner. Things like the Green Investment Bank and encouraging Pension and Investment funds to undertake infrastructure works are the kind of stimulus that we require. Traditional "Big Government" spending is not going to help, its just the route back to where we've come from.

 

[Johnuk123]

This.

If anything we need plan A faster and sooner. Things like the Green Investment Bank and encouraging Pension and Investment funds to undertake infrastructure works are the kind of stimulus that we require. Traditional "Big Government" spending is not going to help, its just the route back to where we've come from.

I agree with that, you don't spend your way out of a situation like this.

 

[Yew]

The fact that Plan A (in this case austerity) is not working as well as we all would have liked does not logically require that Plan B was right all along. For all we know, that could have been even worse.

Unfortunately we went into this economic crisis the wrong way, with Mr Brown spending money to try and avoid it, meaning Mr Cameron has no money to spend to boost growth.

 

[Pumbaa]

Forget it - this is the end of current state of play as we know it. A new paradigm will soon begin.

It is no coincidence that when oil reaches a $ peak, we are in recession. The two go hand in hand. Current society cannot function without oil. It is currently irreplaceable and we are simply not doing enough to replace it. The cost of oil will continue to soar and we will continue to pay through the nose for it. And then it will run out - simple as that. We are past the peak and there is only way...

The price will soar and we will enter a series of recessions, each one more terrible than the last. Until we wean ourselves off it and take stock.

 

[IanXC]

Forget it - this is the end of current state of play as we know it. A new paradigm will soon begin.

It is no coincidence that when oil reaches a $ peak, we are in recession. The two go hand in hand. Current society cannot function without oil. It is currently irreplaceable and we are simply not doing enough to replace it. The cost of oil will continue to soar and we will continue to pay through the nose for it. And then it will run out - simple as that. We are past the peak and there is only way...

The price will soar and we will enter a series of recessions, each one more terrible than the last. Until we wean ourselves off it and take stock.

Indeed. In the past there has of course been an automatic stabiliser in the relationship between the price of oil and economic growth. I think the changes in patterns of consumption of oil mean that we cannot expect the same thing to happen now.

Whereas in the past the increasing price would result in a fall in demand, the fact that there are now so many more consumers in the market for oil (ie Indian and Chinese consumers) means that even if everyone does reduce their demand, the overall demand is likely to still well above the equilibrium where economic growth has been triggered by a falling oil price in the past.

 

[Pumbaa]

I was hoping you would reply yes you're right (I think so anyway). Previously the sudden jump up in price would have done its job - abated the demand and the whole market would have slowly re-adjusted. Now - thats not the case. The demand is mahoosive.

Even today Saudi Arabia (through Saudi Aramco) admitted they were not put off by the current slump in oil price. They know the price will jump back up very soon. And they hold the smoking gun of course; the worlds largest oil producer lets no-one else know exactly how much they have. And one day...!

For those of who doubt that we are finally running out of oil (its been another 40 years for as long as I care to recall) I have attached Hubbert's Peak. In it's most simple form it accounts for oil production in a single well, but add them together and you get either regional or global models. Basically it shows that we have now passed the 50% point of oil supplies. And it is impossible to get 100% oil out of the ground. There is another geologist on the forum, in Asia if memory serves me correctly, perhaps they will abut here?

For what its worth; everyone worth their salt, be it geologist, geophysicist or economist who acknowledges the environment isn't just another commodity, all agree broadly that we are past the peak. End of 2005/2006 we passed it (my personal favoured estimate actually places it on 4th November 2005 which is brilliantly sour), but we won't have the definitive date for a good few years yet. Maybe past 2015. By which time it will be too late.

--- old post above --- --- new post below ---
Hah; from the Graun a few moments ago:

http://www.guardian.co.uk/business/2012/may/13/oil-price-doubling-decade-imf

 

[Schnellzug]

For what its worth; everyone worth their salt, be it geologist, geophysicist or economist who acknowledges the environment isn't just another commodity, all agree broadly that we are past the peak. End of 2005/2006 we passed it (my personal favoured estimate actually places it on 4th November 2005 which is brilliantly sour), but we won't have the definitive date for a good few years yet. Maybe past 2015. By which time it will be too late.

--- old post above --- --- new post below ---
Hah; from the Graun a few moments ago:

http://www.guardian.co.uk/business/2012/may/13/oil-price-doubling-decade-imf

That seems very logical to me, but need it be apocalyptic? Need it bring about the end of Civilisation? Should there not be plenty of time to develop other mans of fuel? I mean, according to that we're looking at 2040 by the time there'll be a halving of production from 2005 or so. I mean, diesel engines don't have to use fossile fuel based oil, we know already. It may mean a gradual phasing out of petrol, but I'm sure there'd be ways and means of minimising the effect and transitioning to other fuels in that time. i expect they'll come up with something, they usually do, and apocalypses mainly have a record of failing to happen.

 

[Pumbaa]

That seems very logical to me, but need it be apocalyptic? Need it bring about the end of Civilisation? Should there not be plenty of time to develop other mans of fuel? I mean, according to that we're looking at 2040 by the time there'll be a halving of production from 2005 or so. I mean, diesel engines don't have to use fossile fuel based oil, we know already. It may mean a gradual phasing out of petrol, but I'm sure there'd be ways and means of minimising the effect and transitioning to other fuels in that time. i expect they'll come up with something, they usually do, and apocalypses mainly have a record of failing to happen.

No you're quite right of course. Although what I posted is merely the ideal model. In reality, the curve could be a lot flatter at the peak, and tails off a hell of a lot quicker. We have technology that can maintain constant rates of oil production, but instead of having a gradual decline that we can monitor and react to, the decline could be fairly rapid.

To put it another way, the throttle back in capacity means that even adapting to our current usage of oil isn't enough. I would suggest that before cars are abandoned, air travel should be. I would agree that there could be a transition to other fuel types, but even if you glance at the graph below, look at the gap in energy we have to fill to maintain our current lifestyles and how soon that's coming. We can't just turn on the taps for another energy source... as we don't have any ready.

I certainly don't mean to be apocalyptic, and apologies if it sounds it, I just don't believe that any Govt is currently doing enough to mitigate the end of cheap and abundant oil, and it will take a very real 'shock' for them to do so.

 

[LE Greys]

No you're quite right of course. Although what I posted is merely the ideal model. In reality, the curve could be a lot flatter at the peak, and tails off a hell of a lot quicker. We have technology that can maintain constant rates of oil production, but instead of having a gradual decline that we can monitor and react to, the decline could be fairly rapid.

To put it another way, the throttle back in capacity means that even adapting to our current usage of oil isn't enough. I would suggest that before cars are abandoned, air travel should be. I would agree that there could be a transition to other fuel types, but even if you glance at the graph below, look at the gap in energy we have to fill to maintain our current lifestyles and how soon that's coming. We can't just turn on the taps for another energy source... as we don't have any ready.

I certainly don't mean to be apocalyptic, and apologies if it sounds it, I just don't believe that any Govt is currently doing enough to mitigate the end of cheap and abundant oil, and it will take a very real 'shock' for them to do so.

I quite agree. A reduction in air travel is clearly very likely, so we need to start thinking about what will replace it. There are ways around automotive use, for instance electrifying large areas, including electric lanes on major roads for trolleytrucks to shift goods around. However, that needs an initial energy production. I would say a combination of renewable energy, 'clean' coal and nuclear power would be ideal, and the time to start working on that is before it is needed, i.e. right now. With the trouble we are having getting Sizewell C going, that is yet another pointless delay. It's also about time all the fusion research that has been plodding along for fifty years produced something. Clean, waste-free power from seawater and lithium sounds like an inviting prospect.

The other big problem is plastics. Just think how much of our lives are dependent on oil-based plastics. Coal-based ones such as Bakerlite might be able to fill in some gaps, but with others we will have to shift completely away. Paper bags, tin boxes, all the accoutrements of the pre-plastic age will have to come back. They were more expensive, and had to be manufactured differently, so it is quite likely that it will have a massive effect on modern industry. It might make the interior of a Pendolino's successor a bit more comfortable with stainless steel trim, but that means a higher purchase cost.

All I know is it'll be different, I'm not sure how.

 

[Zoe]

The other big problem is plastics. Just think how much of our lives are dependent on oil-based plastics.

It is possible to use coal to produce the hydrocarbons but you are still going to need to get the energy for this from somewhere.

 

[SS4]

This.

If anything we need plan A faster and sooner. Things like the Green Investment Bank and encouraging Pension and Investment funds to undertake infrastructure works are the kind of stimulus that we require. Traditional "Big Government" spending is not going to help, its just the route back to where we've come from.

Because privatisation has worked soooooooooooo well in the past* :roll:

Cameron is using the debt as a smokescreen to impose ideological cuts. How come those at the top of the pay scale are escaping paying their tax? How come the rich/poor gap is getting wider? Why isn't Cameron doing anything to make this a fairer country? That last one is easy to answer: he's a Conservative and conservatives don't care about making the country fairer while there is the 99% to exploit for the benefit of his cronies


* "well" defined as from the perspective of the people. It's been immensely successful for those companies who've took over services

 

[LE Greys]

Because privatisation has worked soooooooooooo well in the past* :roll:

Cameron is using the debt as a smokescreen to impose ideological cuts. How come those at the top of the pay scale are escaping paying their tax? How come the rich/poor gap is getting wider? Why isn't Cameron doing anything to make this a fairer country? That last one is easy to answer: he's a Conservative and conservatives don't care about making the country fairer while there is the 99% to exploit for the benefit of his cronies


* "well" defined as from the perspective of the people. It's been immensely successful for those companies who've took over services

This is why I think the government have handled things really badly. They've left themselves open to attack by the left while not getting people on-board. We used to complain a lot about New Labour being all about PR and Alistair Campbell et al being in the public eye (or at least I did) but ask yourself whether their policies made any appreciable difference. From my perspective, New Labour had a load of bad policies with good PR, and many people bought into them (why did they get three terms after all). Today, I believe it's the other way round.

<EDIT> Let me clarify. I reckon we won't see any appreciable difference creating a bottom-up recovery until at least 2015 as opposed to a credit boom. I also believe that anyone such as Ed Balls suggesting a recovery before the next election is possible is talking out of their backsides. We have a job as complicated and difficult as recovering Germany after WWII, after three decades of bad policies. It won't be fixed overnight and won't be fixed properly until 2020, if ever.

 

[WestCoast]

To put it another way, the throttle back in capacity means that even adapting to our current usage of oil isn't enough. I would suggest that before cars are abandoned, air travel should be.

The practical consequences of a suddenly petroleum starved society are daunting to say the least. A full scale abandonment of the two of the three modern advancements in travel will have extremely dramatic ramifications on global society. The way of life in many industralised nations would change radically. Think of the United States, a country for which its continued existence in its current form depends on the existence of these modes of transport. It's a place where distances between settlements are large and there is very little alternative transport infrastructure in place. Western Europe might just be able to get away with it, but personally I can't see other places fairing too well.

 

[Pumbaa]

I am not economist, but the practical consequences of a suddenly petroleum starved society are daunting to say the least. A full scale abandonment of the two of the three modern advancements in travel will have extremely dramatic ramifications on global society. The way of life in many industralised nations would change radically. Think of the United States, a country for which its continued existence in its current form depends on the existence of these modes of transport. It's a place where distances between settlements are large and there is very little alternative transport infrastructure in place. Western Europe might just be able to get away with it, but personally I can't see other places getting away with it.

I refer you to my previous comment;

Forget it - this is the end of current state of play as we know it. A new paradigm will soon begin.

You are correct that it will have dramatic ramifications on modern global society. What form they will take and how society will respond is really up in the air.

 

[LE Greys]

The practical consequences of a suddenly petroleum starved society are daunting to say the least. A full scale abandonment of the two of the three modern advancements in travel will have extremely dramatic ramifications on global society. The way of life in many industralised nations would change radically. Think of the United States, a country for which its continued existence in its current form depends on the existence of these modes of transport. It's a place where distances between settlements are large and there is very little alternative transport infrastructure in place. Western Europe might just be able to get away with it, but personally I can't see other places fairing too well.

A possible future, although this may have to wait for a while. It's a pity the Turbotrain didn't take off, but it provides another option that could go coast to coast in two days.

 

[IanXC]

Because privatisation has worked soooooooooooo well in the past* :roll:

Cameron is using the debt as a smokescreen to impose ideological cuts. How come those at the top of the pay scale are escaping paying their tax? How come the rich/poor gap is getting wider? Why isn't Cameron doing anything to make this a fairer country? That last one is easy to answer: he's a Conservative and conservatives don't care about making the country fairer while there is the 99% to exploit for the benefit of his cronies


* "well" defined as from the perspective of the people. It's been immensely successful for those companies who've took over services

Who said anything about Privatisation?

The problem is that Government spending has become too large to be supported by the UK economy. Sure we could continue down that road, but its the route to an economy which is stagnant in the long term.

The current government has certainly not been creating opportunities for those on higher incomes to reduce their tax bill. I would at this point highlight the biggest tax cut by this Government; the rapidly increasing personal allowances.

How you look at fairness depends on how you asses recent change. I think its fair to say that the current government are interested in being fair to those who contribute by earning, rather than the previous government who addressed the issue via the Benefit system. The gap between rich and poor has been widening for decades, however at no time since the end of WW2 have we seen it widen at the rate it did between 1997 and 2010.

This is why I think the government have handled things really badly. They've left themselves open to attack by the left while not getting people on-board. We used to complain a lot about New Labour being all about PR and Alistair Campbell et al being in the public eye (or at least I did) but ask yourself whether their policies made any appreciable difference. From my perspective, New Labour had a load of bad policies with good PR, and many people bought into them (why did they get three terms after all). Today, I believe it's the other way round.

<EDIT> Let me clarify. I reckon we won't see any appreciable difference creating a bottom-up recovery until at least 2015 as opposed to a credit boom. I also believe that anyone such as Ed Balls suggesting a recovery before the next election is possible is talking out of their backsides. We have a job as complicated and difficult as recovering Germany after WWII, after three decades of bad policies. It won't be fixed overnight and won't be fixed properly until 2020, if ever.

I think you're right about having a government with good policy but bad PR, I think this is even more apparent since Cameron's Director of Communications resigned.

The only way in which Ed Balls could conceivably achieve a recovery before 2015 is by creating a new credit boom. I'm not sure that industry is in the mood to borrow this kind of amount, nor do I think that consumers would. So we would be back at printing money to spend on more activity by Government. Followed by excessive inflation, higher interest rates, and a distinct Greek feeling.