| Can someone explain basic economics please 18:46 - Dec 15 with 4402 views | gtsb1966 |
Interest rates go up and people lose their houses and end up in debt and need to claim benefits to afford rent. Interest rates go up and people have to rein their spending in so unemployment goes up as businesses fail and more people have to claim benefits. Recession hits so consumer confidence plummets causing a deeper recession and more unemployment etc etc. Inflation though comes down which is considered a success. I'm baffled so would be grateful if someone could explain how it all works. Thanks. |  | | |  |
| Can someone explain basic economics please on 06:53 - Dec 16 with 1242 views | ElephantintheRoom |
High interest rates make money for those with money. And if you make more money you want to make more and eventually this trickles down to poor people - I though Liz Truss explained all. |  |
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| Can someone explain basic economics please on 08:25 - Dec 16 with 1205 views | Churchman |
| Can someone explain basic economics please on 00:10 - Dec 16 by ArnoldMoorhen |
You're right, of course. We are poorer.
But you miss the biggest factor of all. "We" "chose" to leave the biggest free market in the world, one on which our entire economy has been focused (taken for granted) for nearly thirty years.
And we had the biggest blagger, puffer, shirker, shirt untucker, hair ruffler, waffler and don't do my homeworker in charge.
So no plans were made to ease that transition.
Yes, other unknowables occurred.
But it has mostly been self-inflicted, and we are significantly poorer.
Edit: I hadn't notice phone autocorrect "shirker" to "Shirley" [Post edited 16 Dec 2022 9:57]
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There are a number of factors of which Brexit is by far the biggest in my view. The immediate impact was devaluation of the £. Since key things like oil are priced in $ let’s just add 15%. Boom. Let’s at the same time put a ball and chain around 45% of our trade with additional costs, regs and delays. How about making this country an unattractive place to invest in at the same time, tearing up your relationship with a complete trading block while hoping a trade agreement with the Faroe Islands will do.
Only real idiots would venture down that road without knowing the consequences. Hi May, hi Johnson! Got your wigs, red noses and flowers that squirt water yet? Mugs.
This was on top of carrying out an ideological exercise to rip up the fabric of this country from energy storage to services (austerity) that no economist thought at the time was sane. Add in no investment in anything for decades and this country was left with unique banana republic levels of vulnerability to Covid and war.
Inflation is largely supply driven at the moment, but that will inevitably evolve into wage driven as the recession and stagflation deepens.
It will resolve itself in time as things always do but all bar the rich JRMs of this world, who are insulated, will be significantly poorer.
Thanks Johnson and co. I’d imagine you’ll be laughing in your Clubs fit to burst, given how well you’ve done out of it. [Post edited 16 Dec 2022 8:46]
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| Can someone explain basic economics please on 08:38 - Dec 16 with 1184 views | Guthrum |
| Can someone explain basic economics please on 20:22 - Dec 15 by sotd78 |
Because that is what my employers could afford. So short of leaving and going elsewhere I think we were lucky. The simple fact is that this country as a whole is poorer - Covid and Ukraine have by definition made us as a collective poorer. Everyone either equally tightens their belts or a few people with clout get a bigger slice of a shrinking cake. That's the economics. |
Which would perhaps be ok if it were an evenly-distributed burden. But it's not.
Certain sectors have seen little or no limit on pay. Middle and high earners have been for decades sheltered from tax rises by successive governments.
Sure, the poor may be largely or completely below the tax threshold, but the services and benefits upon which they rely have been starved, while they are disproportionately clobbered bt price increases on basic goods (a tiny amount of chicken is now £3 - nearly 4% of a week's basic Universal Credit - when others can regularly spend £15 on a single home-delivered takeaway meal). |  |
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| Can someone explain basic economics please on 08:44 - Dec 16 with 1177 views | BanksterDebtSlave |
| Can someone explain basic economics please on 00:00 - Dec 16 by MattinLondon |
When we realise that we are all expendable is when we lose our childhood innocence.
That nothing really matters or makes sense.
And as we begin the death March into work.
Stress and unhappiness our only constant perk. |
MERRY CHRISTMAS !! |  |
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| Can someone explain basic economics please on 08:47 - Dec 16 with 1174 views | RadioOrwell |
There is a deliberate transfer of wealth from poor to rich. One mans mortgage default is another mans investment. Then, you have to pay rent to that guy.
High unemployment means business owners can slash wages.
Recession ? I'll buy your house, business, own your mortgage, rent you your house.
Happy xmas. |  | | |
| Can someone explain basic economics please on 08:53 - Dec 16 with 1159 views | SuperKieranMcKenna |
| Can someone explain basic economics please on 08:47 - Dec 16 by RadioOrwell |
There is a deliberate transfer of wealth from poor to rich. One mans mortgage default is another mans investment. Then, you have to pay rent to that guy.
High unemployment means business owners can slash wages.
Recession ? I'll buy your house, business, own your mortgage, rent you your house.
Happy xmas. |
“There is a deliberate transfer of wealth from poor to rich. One mans mortgage default is another mans investment. ”
I’m sorry but that’s utter nonsense- the sort of thing spouted on campus. The BoE is independent of Government and politically neutral.
Edit- just to evidence that they had to work AGAINST the government in Kwasi/Truss suicidal budget which triggered the gilt crisis:
https://www.reuters.com/world/uk/boe-says-it-will-unwind-gilt-market-interventio [Post edited 16 Dec 2022 8:59]
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| Can someone explain basic economics please on 09:06 - Dec 16 with 1131 views | noggin |
| Can someone explain basic economics please on 06:49 - Dec 16 by TractorWood |
I assume because that is the reality of the economic backdrop. Many employers will be giving people nothing from henceforth due to the choppy times ahead. People can leave if they don't like it in reality.
That's how the private sector works largely. People hunker down and don't leave when things get dicey. Hence why these strikes are raising eyebrows when 5% backdated payrises are being rejected. Horses for courses though. [Post edited 16 Dec 2022 6:50]
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You fail to mention the decade of wage stagnation that has ultimately led to these strikes. |  |
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| Can someone explain basic economics please on 09:19 - Dec 16 with 1118 views | Blueschev |
| Can someone explain basic economics please on 21:09 - Dec 15 by gtsb1966 |
Different subject grandad. |
It's almost as though one has no baring on the other. Which begs the question, why are the government talking about it so much when they have far bigger issues to mess up? |  | | |
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| Can someone explain basic economics please on 11:36 - Dec 16 with 1045 views | TractorWood |
| Can someone explain basic economics please on 09:06 - Dec 16 by noggin |
You fail to mention the decade of wage stagnation that has ultimately led to these strikes. |
That's not really relevant to a decision being made today though.
You don't turn down a bonus this year because you didn't get one last year.
Looking a gift horse in the mouth init. |  |
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| Can someone explain basic economics please on 11:41 - Dec 16 with 1039 views | noggin |
| Can someone explain basic economics please on 11:36 - Dec 16 by TractorWood |
That's not really relevant to a decision being made today though.
You don't turn down a bonus this year because you didn't get one last year.
Looking a gift horse in the mouth init. |
Of course it's relevant. Workers have up to 30% less spending power than they did 10 years ago. 5% isn't really a pay rise (or a bonus) when inflation is at 11%. [Post edited 16 Dec 2022 11:52]
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| Can someone explain basic economics please on 12:08 - Dec 16 with 1016 views | cooperd5 |
| Can someone explain basic economics please on 19:50 - Dec 15 by sotd78 |
Very few people do actually lose their houses. That is usually the last thing they give up on. People will rein in their spending; that is kind of what this government is hoping. That will reduce demand and then in turn reduce inflation. The big bug bear at present is all the external costs we cannot control: gas, oil, electricity and food. It's why food inflation is so high. Our economy at present is close to full employment. The real fuel for higher permanent inflation is wages. Hence why the Govt is bearing down on all the public sector and anything else they can influence. I work in a charity sector; we got 3% and thought ourselves lucky. |
"The real fuel for higher permanent inflation is wages."
Except it really isn't. Inflation is measured on prices that were X last year and Y this - % difference. The costs are rising owing to Covid hangover, Brexit and Ukraine. When these factors are considered, inflation will start to drop so there's no reason at all to say wages are a cause, they are an effect. |  | | |
| Can someone explain basic economics please on 14:20 - Dec 16 with 945 views | RadioOrwell |
| Can someone explain basic economics please on 08:53 - Dec 16 by SuperKieranMcKenna |
“There is a deliberate transfer of wealth from poor to rich. One mans mortgage default is another mans investment. ”
I’m sorry but that’s utter nonsense- the sort of thing spouted on campus. The BoE is independent of Government and politically neutral.
Edit- just to evidence that they had to work AGAINST the government in Kwasi/Truss suicidal budget which triggered the gilt crisis:
https://www.reuters.com/world/uk/boe-says-it-will-unwind-gilt-market-interventio [Post edited 16 Dec 2022 8:59]
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What on earth are you talking about ?
Who mentioned the BoE ?
Are you OK ? | | | |
| Can someone explain basic economics please on 14:30 - Dec 16 with 935 views | SuperKieranMcKenna |
| Can someone explain basic economics please on 14:20 - Dec 16 by RadioOrwell |
What on earth are you talking about ?
Who mentioned the BoE ?
Are you OK ? |
Who do you think is responsible for raising interest rates?
Edit- perhaps I’ve misunderstood your comment but you seem to be implying there’s a deliberate attempt to cause a recession in order for predatory capitalists to scoop up repossessed properties. Since the BoE oversee our monetary policy I’d be interested to see what evidence you have to back that claim up.
If I’ve understood, apologies and happy holidays 😉 [Post edited 16 Dec 2022 14:53]
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| Can someone explain basic economics please on 15:01 - Dec 16 with 900 views | Swansea_Blue |
| Can someone explain basic economics please on 06:49 - Dec 16 by TractorWood |
I assume because that is the reality of the economic backdrop. Many employers will be giving people nothing from henceforth due to the choppy times ahead. People can leave if they don't like it in reality.
That's how the private sector works largely. People hunker down and don't leave when things get dicey. Hence why these strikes are raising eyebrows when 5% backdated payrises are being rejected. Horses for courses though. [Post edited 16 Dec 2022 6:50]
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I’m my experience there’s a lot more mobility in the private sector, even in bad times. But that’s just my experience. Also we’ve recently had the largest gap on record between public and private pay, with private sector pay rising three times quicker. And as others have said, that’s also against a decade of stagnation. I don’t think it’s unreasonable to reject 5% at the current time. |  |
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| Can someone explain basic economics please on 16:14 - Dec 16 with 864 views | HARRY10 |
"The real fuel for higher permanent inflation is wages."
Utter nonsense, peddled by those with an interest in keeping wages low.
The absurd theory is that if wages rise so do prices. Which, a moments thought, would show was incorrect, as if it was that simple to raise prices then companies would do irrespective of what level inflation is at. Prices are determined by what the market will bear, not what the seller thinks he should get.
I am currently paying over 3 times the electricity standing charge than 18 months ago. I have no choice, and that is what determines that price, not some inflationary action on the of cables to my house. Likewise, gas prices have halved since July, but as I can't move my supplier I am therefore paying way above the real cost of gas.
What is currently happening is a phenomenon known as 'inflation expectation' whereby as people assume inflation is rising they will expect and accept rising costs. Rising wages are a symptom of this, not the cause.
Claiming rising wages are the cause is to state that trees flapping cause gusts of wind. | | | |
| Can someone explain basic economics please on 16:34 - Dec 16 with 831 views | RadioOrwell |
| Can someone explain basic economics please on 14:30 - Dec 16 by SuperKieranMcKenna |
Who do you think is responsible for raising interest rates?
Edit- perhaps I’ve misunderstood your comment but you seem to be implying there’s a deliberate attempt to cause a recession in order for predatory capitalists to scoop up repossessed properties. Since the BoE oversee our monetary policy I’d be interested to see what evidence you have to back that claim up.
If I’ve understood, apologies and happy holidays 😉 [Post edited 16 Dec 2022 14:53]
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It's fine.
I didn't make it clear. I'm not saying the BoE is behind all this even though they control interest rates.
I think the super wealthy and the Politicians and the Businesses of the super wealthy can and will take any opportunity to increase their wealth. And they are doing this at an exponential rate.
The OP spoke about inflation and unemployment and losing houses etc: These are things that are not of any interest to the folk that have the all wealth.
On that note, have a lovely Christmas. | | | |
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