Post by unlawflcombatnt on May 13, 2007 13:51:50 GMT -6
In a May 10 article in the British newspaper Guardian it appears that the British economy has gone through a near parallel evolution with the U.S. economy. There's a major housing bubble, a proportionally huge trade deficit, and an economy that is running on debt. There have also been over 1 million manufacturing jobs lost during Blair's tenure. (With a population of 80 million, this is the equivalent of a job loss of 3.75 million in the U.S.'s 300 million population.) Below are excerpts from the article by Guardian economics editor, Larry Elliott. The title of the article is The Second Worst Kept Secret of the Week
"The second worst kept secret of the week...
At the very moment that Tony Blair was announcing he was stepping down as prime minister...three pieces of data released today spoke volumes about the underlying weaknesses of the economy that will be inherited by Gordon Brown.
First, there was the news from the Halifax that house prices...are still booming.
The average cost of a home is up by almost 11% on a year ago and is now nudging £200,000 (roughly $400,000 in U.S. dollars) According to the Royal Institution of Chartered Surveyors, the body that represents estate agents, house prices have risen 170% in the Blair years....
Why have house prices boomed? Partly because Britain is a small island with tough planning laws and a tax regime that encourages home ownership. Partly because there has been a very rapid increase in migration. And partly because there has been far too much easy money sloshing around the economy, allowing individuals to borrow more than they can really afford.....
Does this sound familiar? The article continues.
"The second piece of economic data revealed that Britain had a monthly trade deficit of £7bn in March (roughly $14 billion in U.S. dollars for the month, or an annualized -$168 billion)....(This was) the third highest on record.
Consumer spending, underpinned by the buoyant housing market, has been the driving force behind economic growth, and year in and year out under Labour Britain has been importing far more than it has been exporting....
The explanation for this lies in the third piece of economic data out today - for industrial production. For a party that has its roots in Britain's manufacturing heartlands, Labour's record has been miserable when it comes to making things. More than a million jobs have been lost in manufacturing and, despite a rebound in production in March, output has flatlined over the past decade.
Blair and Brown rarely mention the inflation-prone housing market, the trade deficit or the stagnation of manufacturing when they laud their own economic successes....
Strong consumer spending is needed to keep the economy growing, and that requires plenty of cheap money to keep the housing market afloat. A strong pound is required to ensure that all the imports flooding into the country are nice and cheap - with baleful consequences for UK manufacturers trying to export....
Ironically, while UK industry has been running to stand still under Blair, the City has never had it so good. The gap between rich and poor is wider now than it was when John Major walked out of 10 Downing Street for the last time on May 2 1997....
Between them Brown and Blair have contrived a live-now-pay-later economy characterised by dangerous levels of excess at every level - personal debt, record trade deficits, and an ever-larger carbon footprint....."
The economic conditions in Britain sound nearly identical to those of the NeoCon-Artist American economy. If all of the currency numbers were converted into US dollars, and multiplied by the population differential of 3.75 (US population of 300 million vs. British population of 80 million), the numbers would be very close to those of the United States. And the underlying problems are identical - Manufacturing job loss, rising income inequality, housing bubble, deficit-financed consumer spending, huge (& rising) trade deficit, and involvement in Iraq.
You have to wonder who's going to crash first.
"The second worst kept secret of the week...
At the very moment that Tony Blair was announcing he was stepping down as prime minister...three pieces of data released today spoke volumes about the underlying weaknesses of the economy that will be inherited by Gordon Brown.
First, there was the news from the Halifax that house prices...are still booming.
The average cost of a home is up by almost 11% on a year ago and is now nudging £200,000 (roughly $400,000 in U.S. dollars) According to the Royal Institution of Chartered Surveyors, the body that represents estate agents, house prices have risen 170% in the Blair years....
Why have house prices boomed? Partly because Britain is a small island with tough planning laws and a tax regime that encourages home ownership. Partly because there has been a very rapid increase in migration. And partly because there has been far too much easy money sloshing around the economy, allowing individuals to borrow more than they can really afford.....
Does this sound familiar? The article continues.
"The second piece of economic data revealed that Britain had a monthly trade deficit of £7bn in March (roughly $14 billion in U.S. dollars for the month, or an annualized -$168 billion)....(This was) the third highest on record.
Consumer spending, underpinned by the buoyant housing market, has been the driving force behind economic growth, and year in and year out under Labour Britain has been importing far more than it has been exporting....
The explanation for this lies in the third piece of economic data out today - for industrial production. For a party that has its roots in Britain's manufacturing heartlands, Labour's record has been miserable when it comes to making things. More than a million jobs have been lost in manufacturing and, despite a rebound in production in March, output has flatlined over the past decade.
Blair and Brown rarely mention the inflation-prone housing market, the trade deficit or the stagnation of manufacturing when they laud their own economic successes....
Strong consumer spending is needed to keep the economy growing, and that requires plenty of cheap money to keep the housing market afloat. A strong pound is required to ensure that all the imports flooding into the country are nice and cheap - with baleful consequences for UK manufacturers trying to export....
Ironically, while UK industry has been running to stand still under Blair, the City has never had it so good. The gap between rich and poor is wider now than it was when John Major walked out of 10 Downing Street for the last time on May 2 1997....
Between them Brown and Blair have contrived a live-now-pay-later economy characterised by dangerous levels of excess at every level - personal debt, record trade deficits, and an ever-larger carbon footprint....."
The economic conditions in Britain sound nearly identical to those of the NeoCon-Artist American economy. If all of the currency numbers were converted into US dollars, and multiplied by the population differential of 3.75 (US population of 300 million vs. British population of 80 million), the numbers would be very close to those of the United States. And the underlying problems are identical - Manufacturing job loss, rising income inequality, housing bubble, deficit-financed consumer spending, huge (& rising) trade deficit, and involvement in Iraq.
You have to wonder who's going to crash first.