Tax Cuts for the Rich ... and Double Dip Recession for Everyone Else

George Osborne, the 'smug mugger', in his recent budget stole from the nation's pensioners and gave the proceeds of this raid to the rich ... by cutting the top rate of tax for himself and his multi-millionaire friends.

His budget also effectively started an omni-shambles, which other ministers have also since 'built upon' (e.g. Frances Maude and the self-generated petrol crisis, Theresa May and her shambolic failure in the deportation of Abu Qatada, Jeremy Hunt and his relationship with the Murdoch's) ... and are still building upon!

And now we see the true outcome from these immoral charlatans ... a double-dip recession, with no prospect for a prosperous future in sight (except for the ultra-rich - according to recent surveys).

THE ONS has confirmed the economy contracted again in the last quarter, by 0.2%, despite a late boost to retail sales (due to a exceptionally warm month in March), and (if conspiracy theories are to be believed) a last minute attempt by Ministers to 'manufacture' growth by creating a self-generated petrol crisis to boost sales of petrol in the final days counted in the first quarter results (nb once the final day had passed, they toned down their message immediately).

Simple estimates (see below) suggest that the increase in petrol sales would have boosted GDP by around 0.1% ... enough of an amount, the Government had hoped, would have just have prevented double-dip recession headlines being reported.

Number of cars - 31 million

% People filled up - 30%

% Tank filled up - 40%

Petrol Tank - 65 litres

Petrol price - £1.39

Petrol revenue raised - £336,102,000

GDP - £1,400,000,000,000

GDP/Quarter - £350,000,000,000

Increase in GDP due to petrol crisis +0.1%

And the real concern for these people now is that their estimates proved to be nowhere near either ... despite the temporary 2% boost in retail sales in March!

And will the Government reverse their strategy, e.g. give back the money to the pensioners and put taxes back to where they were for the rich, or will these 'arrogant posh boys', who 'show no remorse, no contrition, and no passion to want to understand the lives of others', plough on regardless ... 

IMHO Nadine Dorries has already answered this, without anyone else having to try!

Double dip ... here we come!

Further evidence today that we are heading for a double-dip recession ... 

1. Two of the nine Bank of England Monetary Policy Committee (MPC) members have effectively now admitted it ... with one now saying there is a 50-50 chance the economy will contract in the final three months of the year. They are trying to 'rescue us', or should I say 'cover the recession up', with a further £75bn of quantitative easing (printing money) ... and they hinted a further extension of this is likely in the coming months. The problem with this approach is that the money simply ends up in banks (who caused the problem in the first place) for them to speculate with (rather than lend out to businesses) and it also pushes up prices/inflation (nb the idea that the stock market is 'rallying' is a big con ... it simply follows the effective devaluation of the pound).

2. Sentiment among the British public has dwindled to recession levels as fears mount over the outlook for the economy and household finances. GfK NOP's consumer confidence index fell to -32 in October from -30 in September. It has only breached that level on two occasions since the survey began in 1974 - March 1990, and June 2008. At both points the UK was heading into recession.

But don't worry ... the Chancellor and the Government now have something else to 'pin the blame on' ...  not themselves ... or any of their policies/inaction ... but the crisis in Europe* ... how convenient ... and timely!

* After all the rhetoric from Cameron and the Government about listening to the voice of the people (and giving them a referendum on Europe), it's interesting that they imposed a 'three line whip' to force MP's to vote against a proposal aimed at giving ordinary people an opportunity to have their say over Europe ... whilst they continue to use taxpayers money to prop Europe up! Hypocrisy indeed.

Reality check - public says we're still in recession!

According to the latest Consumer Confidence Survey by the Nielsen Company and the British Retail Consortium (BRC), one in three people do not have any spare money to spend ... and yet the Government's austerity measures have only just begun!

Yet the most startling revelation in this report was not this, but the fact that their study also found that 82pc of consumers still believed Britain was in recession!  

It also revealed that only 14pc of consumers believed the country would be out of recession in 12 months time!

Stephen Robertson, the BRC's director general, said: “The survey shows mounting worries about household costs, an unshakeable belief that we are still in recession and record numbers with no spare cash. A significant and permanent strengthening of consumer confidence is clearly some way off.”

You can say that again ... as this is yet another reality check from the consumer questioning the reality of the supposed 'recovery' ... will this lead to a self-feeding negative downward spiral ? ... no wonder the Government's looking elsewhere for someone to bail this broken economy out (e.g. business investment, exports) ...

And according to the IMF, they should not be pushing the myth of 'trickle-down' economics and proposing tax cuts for the rich! 

NB Watch out because politicians are experts in spin ... and the Government are lining up to tell us that tax cuts for the rich are essential for creating growth and tackling 'the forces of stagnation' ... what rubbish ... as the rich aren't going to spend it and put it back into the economy, they'll just save it so they can become more rich!

The writing's on the wall

A fellow blogger, called writingsonthewall, often posts on BBC web sites. Their insight is sharp, to the point and accurate, and many bloggers support (including myself) much of what they've said too (see 1, 2 ,3 for instance). Like many comments from bloggers, their comments/insights embarrass most of the BBC 'journalists' (and particularly Stephanie Flanders) who fail the address the issues faced (with Robert Peston perhaps providing one of the few exceptions).

Today they posted the following, and I've decided to publish his exact comments here too:

At 5:37pm on 04 Dec 2009, writingsonthewall wrote:

"Lets get a few things straight ...

a) The recession is going to last for much longer.

b) Small growth off the back of a £200Bn QE programme is not growth, nor is it a sign of recovery.

c) Throwing money into specific areas of the Economy merely creates short term bubbles - not sustained recovery.

d) The Government has given us all a huge pay cut - and nobody has even noticed.

e) 0.5% is the lowest rate by the BoE for a long time (if not forever). A clear indication that the situation is far worse than being admitted to by the Treasury and BoE.

f) Overproduction has occurred and as a result capital needs to be destroyed.

g) The Government will tell any bare faced lie in order to save it's own skin. It's not operating for you - it's operating for it's own success - to be elected. They don't care two hoots about the people.

h) We will not make any real and tangible profit from our banking stakes - not a penny.

I have been predicting a long recession since this started in 2008 - I also claimed the depression has started about a month ago, and I stick by it. I am not alone in these predictions either.

Don't forget, ministers and Government have been talking about recovery since the start of this year - so where is it? Not even a sign out there - despite the media's best attempts to 'make stuff look good'

So far I have not been too far off the mark with my predictions.

I am no genius, nor am I Nostrodamus - I have simply read a few Economic history books and Marx's Das Capital - far less than your average Economist - and yet my predictions are more accurate than theirs? - why is that?

They told you the war was for WMD's - and now it's clear it was for regime change.

They told you we were 45 minutes from Saddam's rocketry - and yet we weren't

They told you the cause of the crisis was from the US - and yet it wasn't.

They told you HBOS was passed to Lloyds as a 'going concern' - and yet we now know different.

They told you the crisis had been averted - and yet it's only just begun.

They told you there would be a return to growth - and yet there is none.

They told you they would kerb banking excesses - and yet they won't.

They told you they were in control and yet they never have been

You cannot lie your way out of recession.

I am clearly angry about the blatant lies from Government and a population which does not seem to be bothered about it. I won't get any satisfaction saying "I told you so" when I see poverty and disarray in Britain in the next 5-10 years....none whatsoever."

"I replied - I couldn't agree more" ... and added a link to all of his comments direct from this blog.

'Recession' and 'Depression'

Official figures confirmed last week that the UK economy 'contracted' once again - pointing to the fact that the country is still in recession - and it's the first time that UK Gross Domestic Product (the total amount of goods and services produced by a country) has contracted for six consecutive quarters (ever since quarterly figures began to be recorded in 1955). The pound fell further after the figures were released, reflecting the fact that many investors had expected the UK economy to 'grow' slightly in the last quarter, which would have technically taken the UK 'out of recession'.

Despite 'printing money' and generating a 'great deal of spin', the UK is one of the few G20 countries still to technically come 'out of recession' (e.g. France and Germany came out of recession six months ago). Potential investors have seen the effective devaluation of the UK's currency (through the £150bn Quantitative Easing programme), but they are also now able to see through the 'spin', and to see the fundamental weaknesses within the UK economy.

The 'stock market recovery' and 'housing recovery' are all part of the 'spin'/'scam' to artificially raise confidence, as 'assets' such as these 'appear to rise' because the 'value of every pound has been reduced'! As highlighted previously, as the pound slides against foreign currencies (nb the UK pound has already lost nearly 30% of its value against currencies such as the euro), the price of imported goods entering the UK will rise (e.g. including oil & gas), pushing up prices and affecting people's purchasing power further. High unemployment may hold back 'wage inflation', but it will not stop 'import price inflation' or people becoming 'progressively worse off'.

As import prices rise, unemployment grows, taxes increase and massive cutbacks are introduced (to pay back spiraling Government debt), the UK will start to feel the real impact of this Government's failure, their lack of prudence, their self-interest (e.g. MP's expenses) and their support of greed (e.g. diverting tax payers money to bail out banks and effectively paying for their excessive bonuses, rather than fixing the problem and helping hard-working people/businesses) - all of which will negatively impact the overall well-being of our nation for generations to come.

Gordon Brown is telling us we will come out of recession by the next quarter, but as many analysts have pointed out, this will mainly be because of a rush of purchases taking place before the Government puts VAT back up to 17.5% at the end of the year! The timing of this change, alongside the delay in addressing spiraling Government debt, are clearly linked to Gordon's own personal agenda/self-interest and demonstrates a cynical 'misuse of power' ... as he wants to say 'he was the one who brought the UK out of recession' (just before the election), as well as to 'blame others' for it all going wrong afterwards! (e.g. see my previous post on the double-dip recession) ... which shows the sheer hypocrisy of a man who is happy to preach to us about 'values' and 'prudence', despite demonstrating neither of these qualities himself.

In the 21st century, GDP is not a true indicator of a nation's 'economic success' either. The use of the word 'recovery' whilst everyone is effectively becoming worse off, and more and more people are losing their jobs, is arguably perverse too. Such outcomes not only result in 'recession', they also create 'depression'. More holistic measures are needed to assess the overall well-being of a nation (e.g. take a look at the 'BUTS' test for instance) and as the overall situation continues to gets worse, ignorance will reduce, depression will grow and anger will increase (e.g. towards the bankers who are once again 'pocketing' billions in bonuses, whilst everyone else pays for it through increased taxes, and and through more and more people losing their jobs).

Traditional economics is dead, and a new economics & politics is about to emerge (powered by the internet) ... focused on community contentment, the well-being of people, and the ability to create real value for others (founded upon fundamental values such as trust, honor, responsibility, respect) ... instead of focusing on wealth manipulation, based on poor moral values, self-interest and greed (e.g. fueled by envy, celebrity and the media).

The battle of the future is one that transcends nations, and is a battle of values:

Leanomics vs Poweromics & Ignoromics

... where values (and value creation) once again return to challenge poor moral values, self-interest & greed (and wealth manipulation)

Nations that fail to change will fail to survive ... and with the advent of modern communication people now have far more 'information', 'choice', and 'power' ... they just haven't realised, or exercised, it yet ... but they will ... and as Ignoromics reduces Poweromics will be challenged, in many different ways ...

Will Spin save us, or kill us?

The UK economy contracted 2.4% in the first quarter of 2009, a decline not exceeded in 51 years, according to the latest official data.

The decline was more severe than the earlier estimate of a 1.9% fall, and worse than analyst expectations.  The Office for National Statistics (ONS) blamed the sharp revision primarily on weaker output in the construction and manufacturing sectors and highlighted the dire state of economy.  New data on the service sector also showed the sharpest quarterly decline in output on record, and whilst the UK consumer has often been said to be surprisingly resilient in this recession, today we learned that consumer spending in the first quarter suffered the sharpest fall in decades.

Are they telling us something we don't know, I don't think so ... has anything significant actually changed, I don't think so ... hence it will continue to get much worse, ... but will Spin 'help us', or 'kill us' (e.g. delay addressing the real problems and causing an even bigger crisis in a year or two?)  .... take a look around, and have a guess, noting house asset price inflation is mainly about 'spinning' a feeling of confidence so people will go borrow/spend again ...