The Credit Crunch

[XBergMann]

We did try such an experiment with self employed people back in the 80s.
There was a scheme to offer unemployment benefit (or whatever they were calling it back then) to people who were moving from long term unemployment to being self employed.
It worked (up to a point).
However, successive governments removed this scheme.
I believe the people who started Viz magazine were on this scheme.

and the members of lots of 80s rock / pop bands

 

[ramonmercado]

Here is the real result of the Credit Crunch!

 

[Mythopoeika]

and the members of lots of 80s rock / pop bands

It was a way of subsidising the arts, yes.

 

[Frideswide]

We did try such an experiment with self employed people back in the 80s.
There was a scheme to offer unemployment benefit (or whatever they were calling it back then) to people who were moving from long term unemployment to being self employed.

I know several archaeologists who used this and became either successful freelancers or even started units/companies to employ others.

 

[Mythopoeika]

I know several archaeologists who used this and became either successful freelancers or even started units/companies to employ others.

I wish they'd run the scheme again to help people.

 

[Frideswide]

this ^^^^^

 

[ramonmercado]

A new publication by our partners from the Hans Böckler Stiftung.

​

The economic, financial and institutional crisis which started in 2008 looks like it is never going to end. Nearly 9 years after the meltdown of the financial system of developed countries a recovery finally started in late 2014. The latest independent Annual Growth Survey (iAGS) argues that the fragile recovery is, however, unable to solve Europe's social crisis as growth-oriented economic policy is necessary but not sufficient to obtain social progress and individual well-being. Policy makers need to move beyond the predominant, narrow focus on GDP growth, and aim instead at a broader set of economic, social and environmental targets.

PLEASE CLICK HERE OR THE COVER ABOVE TO DOWNLOAD THE PUBLICATION FOR FREE
http://www.boeckler.de/pdf/p_imk_iags_2017.pdf


This message is sponsored by the Hans Böckler Stiftung
Social Europe Ltd., 31-33 High Holborn, London, London WC1V 6AX, UNITED KINGDOM

 

[Yithian]

This looks like spam - Ramon?

 

[ramonmercado]

This looks like spam - Ramon?

Spam?

Its an analysis of the economic situation in Europe post crash and of how the recovery is/isn't going. I haven't finished reading the report but its certainly relevant to this thread.

An interesting survey, full of facts, figures & forecasts and its free!

 

[Yithian]

I meant "Dear Reader," & "This post is sponsored by...": it looked a little like you'd been hijacked.

 

[ramonmercado]

I meant "Dear Reader," & "This post is sponsored by...": it looked a little like you'd been hijacked.

Ah!

I got it via email, should have edited that part out.

It does look a bit like a hijack.

Help!

I've also been robbed in Lagos!

Send money urgently!

 

[rynner2]

I think this fits here given the topic. The idea of a Guaranteed/Universal Basic Income has been around for a long time. I attended a week long ETUC seminar/training course on the issue in 1988. It means different things to different people: some see as the way to ultimate privatisation; you get your G/UBI and buy social services from the private sector.

https://www.socialeurope.eu/2016/05...ntion-to-reduce-poverty-or-income-inequality/

Finnish citizens given universal basic income report lower stress levels and greater incentive to work
Participants receive €560 (£473) every month for two years and do not have to demonstrate that they are actively seeking work
Ben Chapman
Wednesday 21 June 2017 12:06 BST

Finland has been giving 2,000 of its citizens an unconditional income for the last five months and some are already seeing the benefits, reporting decreased stress, greater incentives to find work and more time to pursue business ideas.
The scheme is the first of its kind in Europe and sees participants receive €560 (£473) every month for two years.

Recipients do not have to demonstrate that they are seeking employment and they are not required to regularly report to authorities to prove they still need the payment, as is the case with standard unemployment benefits. They can spend the money however they like.

Under the pilot, if a participant finds work, they will continue to receive the stipend, removing one of the limitations of current welfare systems - the disincentive to find work.

The trial is one measure introduced by the centre-right government to tackle Finland's unemployment problem.

etc...

http://www.independent.co.uk/news/b...er-motivation-work-wages-salary-a7800741.html

 

[Yithian]

I fail to see the conspiracy angle.

 

[rynner2]

I fail to see the conspiracy angle.

I was posting on a thread that had already discussed UBI.

 

[Yithian]

I was posting on a thread that had already discussed UBI.

UBI?

HIC!

 

[ramonmercado]

I fail to see the conspiracy angle.

Its a rightwing conspiracy! They give you UBI and then abolish the Health Service etc!

 

[ramonmercado]

Some economists take the long view.

Matt Whittaker‏@MattWhittakerRF
Looking even further back, we're living through the worst decade for productivity growth since Napoleon invaded Russia

2:14 PM - 22 Nov 2017

 

[Mythopoeika]

It's because this country's corporations have simply not invested enough in automation.
They're all too ready to take the business away to the Far East.

 

[Cavynaut]

It's because this country's corporations have simply not invested enough in automation.
They're all too ready to take the business away to the Far East.

But that is the purpose of capitalism. Maximising profit. Why would any self respecting investor put capital into a long term project when they could make the same or more profit over the short term ?

 

[Xanatic*]

I suppose this might not be directly related, but it still seems surreal. In Brussels, the home of the EU, they are now handing out tents made of cardboard to the homeless people of the city. Cardboard tents made by prisoners.

http://www.bbc.com/news/world-europe-42517710

 

[Quake42]

It's because this country's corporations have simply not invested enough in automation.
They're all too ready to take the business away to the Far East.

Productivity in Britain has been an ongoing problem since the war with various explanations advanced, from poor management and bolshy unions to, as you say, failure to invest in automation.

The other point is that high levels of employment as we are currently seeing does correlate with lower productivity. If companies automated more and only hired efficient workers and management then productivity would go up but so would unemployment. Swings and roundabouts to some extent.

Japan for many years had relatively low productivity because they employed people to do jobs like stand in lifts and bow to visitors. No idea if that’s still the case but as the Japanese workforce has been shrinking it may be that the automation/unemployment conundrum doesn’t affect them the same way it does here.

 

[maximus otter]

In Brussels, the home of the EU, they are now handing out tents made of cardboard to the homeless people of the city. Cardboard tents made by prisoners.

It's a perfect metaphor for the EU: Create a problem by your own ineptitude, then put an expensive Elastoplast on it by devising a crap short-term solution paid for by the peons.

Trebles all round!

maximus otter

 

[TheLeeds]

The credit crunch is when lenders realize that the money they invented by pressing buttons on a computer, isn't going to be paid back, but they ask anyway.
The money only exists because enough other people believe it exists, but none of them have ever seen it, other than printed on a bank or credit card statement. It's an example of a 'market correction' in which reality takes over. For instance, a debt shows up and is expressed on the lender's balance sheet as an asset, because it is expected that they can call in the debt. But once they attempt to call it in, one thing that often happens is the debtor goes bankrupt. At this point, the lender is no longer entitled to express the debt on their balance sheet as an asset, because it is now irrecoverable. In order to keep up the presence and stop the public from panicking, the government bails out the banks, who then carry on and do the same thing over again etc.

There's an explanation here about how money is created and controlled. - http://www.lovethetruth.com/truth_about_money.htm

 

[Cavynaut]

^^^^
Given the chance I'd like the above more than once.

 

[ramonmercado]

THings don't have to be the way they are. How to make Globalization work in the interests of ordinary people.

How To Rewrite The Rules Of Globalization
by Joseph Stiglitz on 18 January 2018 @JosephEStiglitz

How did globalization create such discontent in developed and developing countries alike? Nobel laureate and INET grantee Joseph Stiglitz explains. Stiglitz says that a corporate-driven policy agenda and the distorted economic views bolstering them have deepened inequality and undermined social stability in regions across the world. Economic theory is actually much more qualified in its endorsement of free trade and efficient markets than policymakers made it out to be, he says. Looking ahead, anti-globalization movements and technological disruption represent a challenge to African countries in particular. Addressing it will require a multi-pronged approach that involves governments and the manufacturing, services, and agriculture sectors.

 

[Cavynaut]

THings don't have to be the way they are. How to make Globalization work in the interests of ordinary people.

I do think that it's about time that basic economics was a core subject in schools. Unfortunately it is in the interests of the few that the majority are kept ignorant. Whether that counts as a conspiracy I don't know, but it certainly does seem to keep a lot of people confused as to what the relationship between taxation and government ( for example) really is.

 

[ramonmercado]

Haven't had a chance to read all of this report yet but it touches on some of the topics we've discussed on this thread.

The world of work will change fundamentally in the coming decades. What forces are at work in the labour market? What changes are to be expected? And what does this mean for the actors in labour market policy? This final report by the Work of the Future Commission, whose members included academics, practitioners and representatives from businesses and the trade unions, offers a diagnosis of the present situation and a range of views on the future of work. Above all, however, the Commission provides food for thought on how society might manage the whirlwind of change in such a way that work in the digital economy will guarantee everyone more than just their livelihood, namely social participation and prospects for the future.

https://www.boeckler.de/pdf/p_study_hbs_376.pdf

 

[ramonmercado]

Interesting article on how the nature/ownership of companies has changed. But it also examines what companies actually own and explains the concept of the Hollow Company.

Moving Beyond “Capitalism”
by John Kay on 21 March 2018 @JohnKayFT

I wish we would stop using the word Capitalism.

It is a 19th-century term, derived from 19th-century economic philosophy. But today people who would run a mile from any suggestion that they had Marxist sympathies freely use the terminology of that era. In the 19th century, business was normally organised by and around the owner-proprietor. Arkwright’s Mill was owned and controlled by Mr (in due course to be Sir Richard) Arkwright. Samuel and William Lloyd owned and controlled Lloyds iron and steel tube works, and another branch of the Lloyd family was in charge of Lloyds Bank. John and Benjamin Cadbury established Cadbury Bros chocolate factory. And so on.

Towards the end of the nineteenth century, this style of capitalism would reach its zenith in the United States in the activities of the robber barons – Rockefeller’s Standard Oil, Carnegie steel, the Vanderbilt railroad empire, and lurking behind all these the financiers Henry Clay Frick and JP Morgan.

Joint-stock companies with multiple shareholders and the essential protection of limited liability had become legal in the midcentury. The mechanism was widely used for the capital-intensive expansion of railways and railroads, and was quickly adopted by some retail banks – Lloyds Bank became a joint-stock company in 1865 – and then by resource companies. In 1901 Carnegie Steel merged with two other large US steel companies to become US Steel, by far the largest corporation in the world.

So 20th-century business would be different. The archetypal companies of that era are General Motors and du Pont in the United States, ICI in the United Kingdom. They were controlled by professional managers, and the recruitment and training of professional managers was central to their activities – and to their success. In the mid-50s the first Fortune 500 list included three automobile companies and three steel companies. Their shareholders were no longer the families whose names were on the factories, or the banks which supported them, but a diverse group of private individuals. One could still say, at a stretch, that the shareholders owned the plant, but control was exercised by professional managers. All these companies had large numbers of employees, most of them with moderate to low skill levels. There was no long-term contractual obligation between company and employee, but a realistic expectation of long-term employment if performance was satisfactory.

In the course of the century, the private shareholder became less and less important. Pension funds, insurance companies, and in due course mutual funds became the vehicles of institutional share ownership. In the latter part of the 20th century, outsourcing of investment management became increasingly common, and the investment chain became dominated by specialist asset managers.

Hollow Company
21st century business is different still. Look at the ten largest companies in the world today by market capitalisation. Apple, Alphabet, (the holding company for Google), Microsoft, Amazon, Facebook. The only manufacturing company to be found is Johnson & Johnson, a very different type of company to General Motors or Bethlehem Steel. These companies don’t have much capital employed, and most of the capital that is employed in the business is fungible. It doesn’t need to be owned by the company that uses it and typically isn’t. Apple’s flagship store in Regent Street is jointly owned by the Queen and the Norwegian sovereign wealth fund. The equivalent store in New York is in Grand Central Station. The station in turn long ago passed out of the ownership of the Vanderbilts. It is now the property of a private company controlled by a New York real estate developer – not the one whose name may jump into your mind. ...

https://www.socialeurope.eu/moving-beyond-capitalism

 

[Cavynaut]

So, ten years on from the crash and it seems we've learnt nothing. I was reading today about a relatively new financial "product", Exchange Trading Funds. I've tried teaching myself a bit about economics, but I can't understand ETF at all. Sounds about as much fun as sub prime mortgages though...if one country defaults it will be time to wheel out the old lies again so we all believe that a country can go bust...and more austerity will be the price we pay.

 

[INT21]

Mytho,

...
It's because this country's corporations have simply not invested enough in automation.
They're all too ready to take the business away to the Far East...

Isn't that a bit of an oxymoron.
If the jobs are farmed out to the East (as they are) to cut down on labour costs, surely investing in automation will have the same effect.

INT21