Privatized Keynesianism

Everybody’s talking about the cost of living crisis. Which poses the question: why are we not therefore also talking about recession?

The Treasury’s regular survey shows that private sector forecasts for real GDP growth this year range between 3.3 and 5.7 per cent, with a median of 4.1%, and the OBR is forecasting 3.8% growth. How can we reconcile this with Bank of England Governor Andrew Bailey’s talk of “an historic shock to real incomes” and with the OBR and private sector forecasters predicting a fall in households’ real incomes?

 It’s certainly not because fiscal policy will support demand. It won’t. It will tighten this year: the OBR foresees cyclically adjusted net borrowing falling from 6.1% of GDP in 2021-22 to 4.4% in 2022-23 thanks to higher NICs and real-terms cuts to departmental spending.

Instead, forecasters expect something else to rescue the economy – household borrowing.

The OBR foresees the household savings ratio falling to 3.1% in 2023, its lowest rate in over 60 years. And it expects households to be net borrowers throughout the next five years, something unprecedented since current data began in 1987.

In part, this is because it expects us to run down some of the savings we built up during the pandemic. But of course, not all of us did build up savings: those on low incomes or who lost their jobs never got the chance to do so. The OBR expects these to borrow more. Granted, it doesn’t see aggregate debt rising much more than post-tax incomes over the next five years, but the debt is likely to be concentrated among those in poor financial health to start with.

What the OBR expects is, therefore, a form of what Colin Crouch called privatized Keynesianism (pdf). Government borrowing won’t support demand much, but – it believes - private sector borrowing will.

In three respects, however, this is inferior to conventional Keynesianism.

One is that we cannot wholly rely upon it happening. Perhaps the pandemic has thrust us into more frugal habits, such as eating and drinking at home with friends rather than going to pubs and restaurants. Perhaps the fear of Covid will keep us out of shops and pubs. Perhaps we’ll fear that the squeeze on real incomes will be long-lasting – and if our permanent income falls, so too should our spending. And of course, some of us are credit-constrained: who’ll lend to a single parent on a zero-hours contract?

In this respect, the prospects for privatized Keynesianism are less good than they were in the first iteration of that project, the 1980s. Back then household borrowing rose strongly, supporting demand. But things were different then. Years of credit regulation meant that households began the 1980s with debt below desired levels. We cannot say the same today. And borrowing then was based on those who kept their jobs being (reasonably) optimistic about their future incomes. But there’s a difference between borrowing because you expect your incomes to rise, and borrowing to buy necessities – one of them being banks’ willingness to lend to you.  

Secondly, privatized Keynesianism is simply less efficient as a way of transferring real resources from the future to the present. Even after the recent rise in gilt yields, the government can borrow at real yields of less than two per cent – which means that for every £100 it borrows for 20 years it will have to repay only £65. Households, however, have no such luxury. Even the best personal loan rates are only marginally negative in real terms – and of course not everybody is creditworthy enough to get these. Somebody who responds to the income squeeze by cutting their pension contributions will miss out on a real return of probably 3-5% a year. And of course, there are those who’ll have to resort to loan sharks at usurious rates.

If you believe that government borrowing imposes a burden upon future generations, you much think this is even more true of household dis-saving. Affluent households who cut their pension contributions or bank balances will leave less to their children. And stressed-out lower income parents will be less able to buy books, musical instruments or school trips for their children, thus impairing their education and future earnings.   

Which takes us to a third problem. Privatized Keynesianism increases financial fragility. Households who have run down their savings or built up debts are more likely to cut their spending when made unemployed, thereby exacerbating the next recession. Banks who extend their balance sheets are more likely to restrict credit in bad times. And of course, even if there are no adverse macro-level effects of increased debt, individuals who have run up debts face stress, uncertainty and violent threats from loan-sharks.

All of which poses the question: why would anyone prefer privatized to government Keynesianism?

A good answer is that if you really believe that households will borrow a lot so that demand grows well then conventional Keynesianism is not only unnecessary but dangerous, as it would add to inflation.

But there are less good answers. One is that the government is making a fetish of the public finances, and is ignoring the fact that private borrowing to support demand is more dangerous than public borrowing.

Even nastier than this, however, is another possibility. In our stagnant economy, there are few profitable opportunities, so the government needs to create some. And one way of doing so is to create conditions in which households are forced to borrow at high rates. We have a government for loan sharks.

Comments

[Blissex]

«privatized Keynesianism»

Good to see a post about that instead of the more common "cognitive bias" topics. :-)

«is simply less efficient as a way of transferring real resources from the future to the present»

That is of course physically impossible. Real resources can only be borrowed from other people in the present, notably from foreign creditors as imports.

«and one way of doing so is to create conditions in which households are forced to borrow at high rates. We have a government for loan sharks.»

Only "losers" have to borrow at high rates, "winners", which means the finance sector and property speculators, can borrow at 0.5% and at 2.5%. Rejoice! Rejoice! ;-).

[ltr]

Blissex,

I always read carefully and try to fully understand your comments, but here I am lost. Please explain more clearly, when possible.

[rsm]

《Real resources can only be borrowed from other people in the present, notably from foreign creditors as imports.》

Can't you create the means with which to borrow on spreadsheets?

Thus, why not create enough for an indexed, generous, universal basic income?

[Blissex]

«but here I am lost. Please explain more clearly, when possible»

In 2022 you cannot borrow cars that were made in 2030, but in 2022 you can borrow cars that were made somewhere else in 2021, and promise to return the same number of cars (plus interest) to that somewhere else in 2030 by making them in 2029.

[rsm]

《In 2022 you cannot borrow cars that were made in 2030, but in 2022 you can borrow ~~cars~~ money that was created on bank balance sheets somewhere in 2021, and promise to return the same number of ~~cars~~ currency units (plus interest) to that ~~somewhere~~ someone else in 2030 by ~~making~~ borrowing them into existence in 2029.》

Did I just fix that for Blissex?

[ltr]

Thank you so much for the clarifying responses, however the essay strikes me as completely correct in describing the investment and growth penalty that will result from a reduction in private saving. Investment in the UK needs to increase, while Conservative economic policy is assuring a continuing of national investment at a relatively low level.

This is a terrific essay.

[Blissex]

«describing the investment and growth penalty that will result from a reduction in private saving. Investment in the UK needs to increase»

That to me seems to use wishy-washy "Economics" terminology that I think often is used to fool the gullible (see MainlyMacro etc.),

Actually following Keynes and others:

* Savings respond to the demand for liquidity, and only accidentally may match investment.

* Investment is driven by the availability of purchasing power (which can come from debt) and its expected return.

* In the UK investment is very robust and booming, as it has very high returns, and as a result there is a gigantic inflow of investment capital from abroad, and not just from domestic sources:

https://www.express.co.uk/life-style/property/1589003/house-prices-growth-property-uk-nationwide-house-price-index-latest-uk
“Nationwide’s latest HPI has found that the annual house price growth increased to 14.3 percent in March, from 12.6 percent in February.”

Those figures prove that "investment" and "productivity" in the UK are doing really well, and "the economy" is growing fast ("losers" don't matter).

:-)

J.M. Keynes, "The General Theory", Chapter 12: “Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done”

http://www.theguardian.com/money/2016/aug/28/property-is-better-bet-than-a-pension-says-bank-of-england-economist
«Haldane believes that property is a better bet for retirement planning than a pension. “It ought to be pension but it’s almost certainly property,” he said. “As long as we continue not to build anything like as many houses in this country as we need to ... we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.”»

[aragon]

You will have heard the one about, if people think you are stupid, better to not open your mouth and confirm it!

That applies to the BoE and Treasury. The BoE suggested house price rises (Chris posted a link) are not due to lack of building but to falling interest rates.
(See Haldane above).

As for the Treasury:

https://www.protocol.com/bulletins/crypto-uk-nft-blockchain-fca

"The announcement was part of an ambitious plan to "make the U.K. a global hub for crypto-asset technology" and "to ensure firms can invest, innovate and scale up in this country,” Rishi Sunak, chancellor of the Exchequer, also said in a statement."

Crypto has the stated aim of replacing soveign currencies and be distributed and defalationary.

As for NFT's I have a bridge for sale, no not a picture and actual bridge.

Lets see a sectorial analysis:
The foriegn sector is expanding (all that hot cash going into housing), the public sector is moribund or shrinking (sans automatic stabalisers).

That leaves the (UK) private sector, which by definition is loosing wealth as debt baloons, in the face of the cost of living crisis.

So as loss of purchasing power (for the private sector), and inflating debt, and higher interest rates? will result in private sector Keynesianism! This is the unravelling of neoliberalism.

Were back to the bridge again.

Investment: Hot Money chasing house prices? (In London).
Speculation/Foreign Sector gains.

Inflation: Interest Rates to rise not fall ? (i.e. Squeeze on home owners.) Loss of purchasing power.

Energy costs going through the roof due to supply constraints (war and greens - no oil or gas). Loss of purchasing power.

"The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true."

― James Branch Cabell, The Silver Stallion

The glass is clearly half full.

Finance is destroying the West and the BoE and UK Treasury is doubling down on speculation as investment.

p.s.
If Andy Haldane is not wealthy, perhaps he should spends some time on Universal Credit, so has chance can see the contrast. (Like 'World in Action' with Mathew Paris et al).

https://www.theguardian.com/politics/shortcuts/2013/apr/02/iain-duncan-smith-mp-living-on-benefits

"By 2004 they had basically given up and were living on antidepressants."

[ltr]

Blissex, Thank you for the response, but I am not able to understand your argument.

The UK has failed to grow in per capita GDP since 2007, productivity has declined since 2007, increased nonresidential investment is needed. Conservative economic policy has been ineffective and self-defeating from a per capita growth perspective....

[aragon]

I have just read Collin Crouches pdf. Perhaps more when I recover!

Conservative Economic Policy has a simpler name Looting. Finance is Looting the Economy, and that is Government Policy.

https://jacobinmag.com/2022/04/keir-starmer-labour-party-uk-financial-support-antisemitism-trade-unions

"But we can already be sure of one thing. After a long period of regression, with no real wage growth for over a decade, Starmer and Reeves will be uncompromisingly opposed to any serious reforms that might shift the balance in favor of workers. Such reforms may be popular with voters, but they won’t be popular with the donors on which they intend to rely, nor with the press barons whose approval they seek."

Contrasts with Tony Blair.
https://www.newstatesman.com/labour-in-crisis/2021/05/tony-blair-without-total-change-labour-will-die

Tony Blair backs the Z-List leader, to change the party?

"The progressive problem is that, in an era where people want change in a changing world, and a fairer, better and more prosperous future, the radical progressives aren’t sensible and the sensible aren’t radical."

Starmer: Woke - Yes, What is a women?

Starmer: climate change: Yes, Stop the World.

Starmer: Technology. Looks like he still uses a manual typewriter (not unlike Blair) and the briefs in Vellum and red ribbion.

Yes, Technology provides one approach to changing the neo-liberal circulation of the plug-hole.

But not whith the Corpoeate 'B Team' (or 'A Team') or thier fan at Warwick University.

Corporatism is the future!

Finance for the rich, serfdom for the poor.

"One of the questions that comes up periodically is to what extent could a corporation be considered to be psychopathic. And if we look at a corporation as a legal person, that it may not be that difficult to actually draw the transition between psychopathy in the individual to psychopathy in the corporation." –Dr. Robert Hare

https://dc.claremont.org/the-rise-of-corporate-state-tyranny/

"A convergence between the world’s two superpowers is taking place. In the United States, as property and power further consolidate, the "diffusion of power," so critical to democracy, erodes and autocracy develops naturally. Only players at the highest level possess the heft and the motivation to influence policy.1 This powerful front consists of a new alliance between large corporate powers, Wall Street, and the progressive clerisy in government and media."

The Chumocracy?

[ltr]

Aragon,

A stunning essay; I had no idea how sinister the current Labour "elite" had become. How distressing:

https://jacobinmag.com/2022/04/keir-starmer-labour-party-uk-financial-support-antisemitism-trade-unions

[ltr]

The point is that Labour has abandoned the working class, abandoned the middle class. That was shown as Jeremy Corbyn was continually abused on false premises, having nothing to do with policy. Those who would favor Corbyn-like policy are still being abused by the Labour leadership. We are left then with only Conservative policy, and that policy is disdainful of middle class or working class interests.

[Blissex]

«We are left then with only Conservative policy»

Just as She commanded: "There Is o Alternative". Some people think that was a claim, but actually it was an order.

«and that policy is disdainful of middle class or working class interests»

The middle class almost by definition own property, and property owners are doing exceptionally well. Put another way "middle income" is not the same as "middle class", and and class is not about culture, accent, lifestyle, ... Currently people who don't own property and cannot afford to own it are not able to be middle class even in a lifestyle sense.

[Blissex]

«We are left then with only Conservative policy, and that policy is disdainful of middle class or working class interests»

And it is a very successful policy for 14 million very happy voters; “Conservative economic policy has been” very effective and winning from their “per capita growth perspective”, rather than “ineffective and self-defeating”, and the losers don't matter.

The central political and economic fact in this green and pleasant land has been summarized well by a commenter on "The Guardian":

“I will put it bluntly I don't want to see my home lose £100 000 in value just so someone else can afford to have a home and neither will most other people if they are honest with themselves”

Put another way: distributional issues matter a great deal, and currently quite a lot more than average “per capita [GDP] growth perspective”, which is often an astute way to ignore them.

[ltr]

Blissex, that was terrific.

[rsm]

《J.M. Keynes, "The General Theory", Chapter 12: “Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done”》

Hasn't that ship long since sailed? Why not acknowledge the out-the-window world and rather than try to violently beat the finance genie back in the bottle, instead learn how to use finance to fund a basic income without raising taxes?

《 I don't want to see my home lose £100 000 in value》

Isn't that value due to financial market money creation, backstopped by central banks?

Isn't the "house everyone" proposal really about subjecting everyone to the controls associated with landlords, mortgage holders, neighborhood associations, etc.? What if I want to live on commons using natural shelters on unlogged land? Why has government blatantly violated the Lockean Proviso, and can we use finance to get it back (inflation-adjusted basic income, buying back land to return it to commons)?

[ltr]

April 6, 2022

Coronavirus

United Kingdom

Cases ( 21,461,556)
Deaths ( 169,095)

Deaths per million ( 2,468)

China

Cases ( 158,793)
Deaths ( 4,638)

Deaths per million ( 3)

[aragon]

Blissex, rsm is right, where is the human right to rising house prices? Or the mechanism that ensures it.

On the contrary, assuming house prices are driven by falling interest rates, there is the hard floor of zero interest rates.

There is also the traditional neoliberal response to inflation, raising interest rates.

Rising Interest Rates,
Tax Increases,
Energy and Food price increases.

All reduce purchasing power and makes more debt unattractive.

House prices may stagnate or even decline!

The losers don't matter until there are enough of them and winners become losers.

Are we about to have 14 million unhappy former Conservative voters? Certainly enough to fall below half the 26 million households? or the current Conservative majority.

Of course their is always Neoliberal Team B.

rsm,
Finance (but not the Financiers) will move with the wealth, to Asia.

[Blissex]

«where is the human right to rising house prices?»

In the ballot box, and before that in the nomination process for MPs and party leaders.

«On the contrary, assuming house prices are driven by falling interest rates»

That's not a good assumption, as interest rates are not credit availability, and anyhow credit policy merely *validates* prices.
House prices are fundamentally driven by two things:

* Job and wage growth of "losers". Property speculators have "heat maps" showign the ratio between job growth and house building.

* The ability of "losers" to double up. That is far from exhausted, there are millions of "losers" who still "waste" resources by living 1 per bedroom, when they could live 2, 4, 8 per bedroom. More people can double up, and those who already double up can double up more.

Note that accordingly property prices in "the north" (the pushed behind areas) have been *falling* in real terms for a long time, even if mortgage rates have been very low. Even with a 1% mortage, would you buy property in Yemen or Neath or Afghanistan or Middlesbrough in the expectation of making a big profit in 10 years? :-)

«there is the hard floor of zero interest rates»

Oh no there isn't! What matters is *real* interest rates, and those can be driven deeply negative; or the government can start subsidizing mortgage payments: I have been "advising" Starmer to win millions of votes by making mortgage payments deductible partially or fully from taxes due or at least taxable. That is sort of equivalent to negative *nominal* rates for many people.

«There is also the traditional neoliberal response to inflation, raising interest rates. Rising Interest Rates, Tax Increases, Energy and Food price increases. All reduce purchasing power and makes more debt unattractive.»

Potentially indeed, but property prices are still rising much faster than "inflation", and it is easy to understand why: giving high "inflation", a lot of people are switching their wealth into property. Sure, fewer people become able to do so, but in a plutocracy there are a lot of plutocrats who can take their place.

This will lead to increasing concentration of property ownership and thus a fall in the number of Conservative voters, but"fortunately" “Of course their is always Neoliberal Team B” to ensure that nobody is willing to represent "losers".

«House prices may stagnate or even decline! [...] Are we about to have 14 million unhappy former Conservative voters? Certainly enough to fall below half the 26 million households? or the current Conservative majority.»

Sure when that happens games over, but myself and others expected it to happen in 2001, and then in 2008, bu the "plunge protection team" has been very effective, doubling down with ever looser credit.
To some extent I have been underestimating:

* The short term greed of the english elites and their determination to use finance and property as extraction mechanism even at the cost of long term damage to ("apres mois le deluge") the real economy. There have been (muted) protests against this by a minority (e.g. John Kay, Mervyn King, Vince Cable, and even David Davis), but to no effect.

* The willingness of large parts of the UK losers to accept rapidly rising housing costs by doubling up, and to accept falling real wages and more insecure employment by working multiple shifts/jobs and compressing their living standards. "Mustn's grumble!".

«Finance (but not the Financiers) will move with the wealth, to Asia»

That's already largely happened. As to the financiers, the english ones have already salted away stupendous bonuses and property profits into various tax heavens, like David Cameron, and will just move to the Caribbean to enjoy them.

[Blissex]

«Finance (but not the Financiers) will move with the wealth, to Asia»
«That's already largely happened.»

Chakraborrty on Cameron:

https://twitter.com/chakrabortty/status/942373687168249857
“So the old Etonian married to the daughter of a Baronet now appears to be fronting a private equity fund full of Chinese state-capitalist money. Truly, 21st century Britain is Anthony Trollope's daydream.”

[aragon]

In the ballot box until a Global Recession spoils the party.

"Credit availability:" String!

"Job and wage growth of "losers"".

Are likely to be negative (after inflation).

Multiple occupation of Bedrooms.
Even the poor are likely resist further reduction in their standard of living, and even the benefit system does not require (places a floor) unrelated adults to share a bedroom.

Grouping Middlestown and Neath with war torn countries? For people in financial stress, ten years is another a life time, even if the credit is available.
Pay Day loans anyone. Wonga is no longer available.

You can make credit available, you can't make consumers borrow.

Even empty properties attract taxation and vandalism.

MIRAS next...

[Blissex]

«House prices may stagnate or even decline!»

BTW it is highly unlikely that they could stagnate, or it would take a lot of effort from the BoE to achieve that:

* A significant part of the demand for southern property is because of the expectation of huge, fast, government guaranteed capital gains.

* If southern property prices were expected to merely stagnate a lot of "investors" would not want to lock up their capital in assets with no prospects of huge, fast, government guaranteed capital gains.

* So a lot of "investors" would liquidate their properties as fast as they could, thus crashing prices, and this would of course feedback.

As J.M. Galbraith wrote in "The Great Crash 1929" and H. Minsky in "Stabilizing an unstable economy", both many decades ago, once a system reaches a "ponzi" stage, a "soft landing" is rather difficult to achieve.

[aragon]

You could call it MIRAS.

"I have been "advising" Starmer to win millions of votes by making mortgage payments deductible partially or fully from taxes due or at least taxable. That is sort of equivalent to negative *nominal* rates for many people."

We know that Starmer, Blair, Johnson, Sunak et al, have no principles, but how far down the regressive rabbit hole can you go, before it collapses?

Votes only for property owners or a bidding war as to whom can bribe the people south of a line from London to Bristol for their votes?

https://www.theguardian.com/uk/1999/mar/10/budget1999.budget3

When MIRAS was abolished.

"But banks and building societies said that while not unexpected, scrapping Miras was equivalent to a 0.35 per cent increase in mortgage rates for a typical new borrower."

Negative Interest Rates.
It could be good for Gold and Bitcoin.

https://hbr.org/2012/08/the-last-days-of-pushing-on-a

"Fiscal problems can only be solved with fiscal instruments"

String, String, String...

[Blissex]

«We know that Starmer, Blair, Johnson, Sunak et al, have no principles»

Oh they have principles, for example "There Is No Alternative", “in the urgent need to remove rigidities and incorporate flexibility in capital, product and labour markets, we are all Thatcherites now”, "I wouldn’t want to win on an old-fashioned leftist platform. Even if I thought it was the route to victory, I wouldn’t take it."

«but how far down the regressive rabbit hole can you go, before it collapses?»

Negative stamp duty for example! On sale, the Treasury rewards the seller with a 2% cash bonus, and the sweetens the buyer too with another 2% cash bonus. Starmer should look at this: sure vote winner, and "winners do whatever it takes", something he seems to live by :-).

«When MIRAS was abolished»

But MIRAS did not go far enough :-); also when it was around owner-occupier imputed rent was taxable too, which was COMMUNISM!. :-)

[Blissex]

«Multiple occupation of Bedrooms.
Even the poor are likely resist further reduction in their standard of living»

Sure, "resist" is a beautiful word, but it is just a word. Packing the poor like sardines (those lucky enough not to die in the streets or parks in winter) worked well for a thousand years, that the poor had to deal with it. Dickensian conditions had been common for a thousand years (except during and after the Black Plague).

«and even the benefit system does not require (places a floor) unrelated adults to share a bedroom.»

Such innocence is uplifting! Currently estate agents have sites where they no longer advertise just flats or houses for rent, but also rooms for rent in shared flats or houses, and of course also beds for rent in shared rooms. Benefit law has been partially updated accordingly:

https://www.entitledto.co.uk/help/Shared-Room
“Under Local Housing Allowance rules, single people aged under 35 with no children, who are living in private rented accommodation, are normally assumed to be living in shared accommodation.”

You can rest assured that soon the rules will be tightened, and "losers" benefit will be adjusted to cover only the cost of a bed in a shared room.

Why should taxpayers, who wait so hard every day for their property profits to increase, sacrifice them to pay for the luxury of a private room for "losers" when so many people have adjusted already to live in a shared room? And given that many also share beds by shift, why should overgenerous benefits pay for the luxury of renting a bed for the full day, when people only need at most half a day of sleep? Why should taxpayers be forced to pay for lazy "losers" who want to stay all day in bed? "On yer bike!".

https://www.historic-uk.com/CultureUK/Two-Penny-Hangover/
https://en.wikipedia.org/wiki/Four_penny_coffin
https://www.familytree.com/blog/sleeping-over-strung-out-rope/
https://www.nationalarchives.gov.uk/wp-content/uploads/2020/10/MH-12_7489_1847-Poor-mans-Guardian.jpg

[rsm]

《those lucky enough not to die in the streets or parks in winter》

How did Chris Knight survive 27 Maine winters living outside, until they arrested him? (Search for "The Last True American Hermit")

《Why should taxpayers be forced to pay for lazy "losers" who want to stay all day in bed?》

Did taxpayers pay for Quantitative Easing?

《As J.M. Galbraith wrote in "The Great Crash 1929" and H. Minsky in "Stabilizing an unstable economy", both many decades ago, once a system reaches a "ponzi" stage, a "soft landing" is rather difficult to achieve.》

Does 2008 and 2020 make the case for liberally printing money in panics?

[aragon]

Why are economist obsessed with efficiency? Most are satisfied with sufficiency.

Enough Food, enough warmth, only the truly psychopathic pursue efficiency. (Which results in local maxima/minima not the not the optimum, and can be self-defeating.

https://www.theguardian.com/commentisfree/2022/apr/08/health-inequalities-uk-poverty-life-death

"An idea that goes back to Adam Smith is that the essentials of life include whatever is necessary to take your place in public without shame."

[...]

"Unless we deal with the inability of people to meet their basic needs, by adequate income and services, we are in danger of inflicting a humanitarian calamity in one of the richest countries in the world."

Riots make such compelling viewing don't you think, the property damage, the public order, the state loss of control, and the impact on property values.

But you can't use palm oil in your molotov cocktails, it's bad for the planet. Other substitutes are more available. :)

Lawyers, Accountants and Economists against the wall come the revolution. To expand on Shakespeare's Kill all the Lawyers.

[rsm]

If Zelensky in Ukraine were using nonviolent noncooperation tactics right now, would economic rhetoric be more focused on nonviolent solutions, like just printing more money, to problems such as how to fund basic income?

[aragon]

I know politicians like to follow the US trends.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5607702/

"the stress and hopelessness faced by this population as they enter the labor market and are met with bleaker prospects and lower paying job opportunities relative to the prior generation . . . [has led] to compounding family dysfunction, poor social support, and addiction, conditions that are the drivers of despair deaths (p. 1545)."

Gin is expensive, but Oxycontin and Fentanyl (works for Elephants) are available.

I know Starmer is looking for a big policy idea.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5607684/

"Case and Deaton found that the increase in mortality was largely related to suicide, accidental poisonings (including opioids), and chronic liver disease or cirrhosis, and was associated with a substantial increase in psychological distress among this population group. Moreover, this increase in cause-specific mortality drove the all-cause mortality for middle-aged White non-Hispanic men up, a previously unnoted finding, and this increase in mortality was more prevalent in those with a high-school-or-less education."

Too cynical, not for our leaders.

[aragon]

A real (modest) policy option.

Liberalise the laws on Cannabis for research/medical use.

In my search for something better than Fentanyl (e.g. Nitazenes) - the good stuff, I came across this:

https://www.healthline.com/health-news/cannabis-gum-to-treat-chronic-pain

"A study published in April concluded that new medical marijuana laws reduced hospitalizations for opioid problems in those states by 23 percent. Hospitalizations for overdoses also dropped 13 percent."

https://www.healthline.com/health-news/new-opioids-called-nitazenes-may-be-20-times-stronger-than-fentanyl

"However, in recent months, synthetic pain medications have started to crop up throughout the world including Canada, Germany, the United Kingdom, and domestically in the United States."

Illicit sources only!

[aragon]

Another thought.

The Homeless often prefer the street to dormitory like shelters.

They only work where their is co-operation or discipline like the army or foreign workers hot bunking (for short periods). Drink, violence and theft by other occupants is a problem.

[Blissex]

«Riots make such compelling viewing don't you think, the property damage, the public order, the state loss of control, and the impact on property values.»

For a thousand years the english elites have dealt successfully with riots, regarding them an occasional cost of doing business.
Consider how well they dealt with the recent "soft riot" of corbynism.

«[has led] to compounding family dysfunction, poor social support, and addiction, conditions that are the drivers of despair deaths»

Again, the big political fact is not that a majority are getting shafted in various degrees, but that a large minority has been living the thatcherite/reaganite dream for 30-40 years, with booming living standards.
Again, the big political fact is this:

“I will put it bluntly I don't want to see my home lose £100 000 in value just so someone else can afford to have a home and neither will most other people if they are honest with themselves”

Hopefully one day "the left" starts thinking of ways to deal with mass rentierism, which is not the "let's pander to that" of mandelsonianism.

«The Homeless often prefer the street to dormitory like shelters.»

That does not always work well:

http://www.antipope.org/charlie/blog-static/2011/10/a-cultural-experiment.html#comment-214405
«the deprivation of the Victorian poor-houses, or the piles of emaciated corpses in the parks of London every winter during major economic recessions.»

For some people however bleak those poor-houses are better than becoming one of those "emaciated corpses".

https://www.smithsonianmag.com/history/what-happens-when-a-homeless-new-yorker-dies-808498/
https://www.nytimes.com/2016/01/19/world/asia/delhi-sleep-economy.html
«But shelter, given Delhi’s extremes of heat and cold, is often a matter of survival. The police report collecting more than 3,000 unidentifiable bodies from the streets every year, typically men whose health broke down after years living outdoors. Winter presents especially brutal choices to homeless laborers, who have no place to protect blankets from thieves in the daytime hours. Some try to hide them in the tops of trees.»

[aragon]

The truth is that looting (mass renterism) will result in the subjugation of the British elite, to external forces.

https://www.telegraph.co.uk/business/2022/04/09/letting-china-take-control-biggest-microchip-factory-terrible/

"Belatedly ordered by the Prime Minister to examine the sale of Newport Wafer Fab, Lovegrove concluded there was no cause for concern on security grounds, despite the critical role played by compound semiconductors in areas already identified by the Government as strategic"

[...]

"Like much of the Cabinet, Lovegrove boasts an impeccable Oxford humanities degree, in English."

Just as you pointed out: David Cameron, been a front for Chinese money.

Do you think anyone but the British Public are subject to the British Elite and their mastery of Latin or English?

David Cameron has Children, is it from riches to rags inn three generations without upper class privileges to fall back on.

The rest of the world does not mind if the British elite loot the British Economy and squander it's future. The elites children won't thank them.

[Blissex]

«The Homeless often prefer the street to dormitory like shelters.»

I forgot a classic quote from the usual George Orwell, "Beggars in London", in "Le Progrès Civique" (1929-01-12)

“Spending the night out of doors has nothing attractive about it in London, especially for a poor, ragged, undernourished wretch. Moreover sleeping in the open is only allowed in one thoroughfare in London. If the policeman on his beat finds you asleep, it is his duty to wake you up. That is because it has been found that a sleeping man succombs to the cold more easily than a man who is awake, and England could not let one of her sons die in the street. So you are at liberty to spend the night in the street, providing it is a sleepless night.

But there is one road where the homeless are allowed to sleep. Strangely, it is the Thames Embankment, not far from the Houses of Parliament. We advise all those visitors to England who would like to see the reverse side of our apparent prosperity to go and look at those who habitually sleep on the Embankment, with their filthy tattered clothes, their bodies wasted by disease, a living reprimand to the Parliament in whose shadow they lie.”

At least a dozen million UK voters think that there is too much equality in the country, and that the profligate and underserved lifestyles of workers, renters and the poor depends on their exploitation of employers, landlords, taxpayers.

As to George Orwell, a bonus quote:

"Review of The Civilization of France by Ernst Robert Curtius"

“In England, a century of strong government has developed what O. Henry called the stern and rugged fear of the police to a point where any public protest seems an indecency.

But in France everyone can remember a certain amount of civil disturbance, and even the workmen in the bistros talk of la revolution - meaning the next revolution, not the last one.

The highly socialised modern mind, which makes a kind of composite god out of the rich, the government, the police and the larger newspapers, has not been developed - at least not yet.”

[rsm]

Have you ever met someone who prefers to sleep outside, and do the drugs one pleases, rather than be subjected to controls indoors? Why criminalize sleeping outdoors? Have you indoor-dependent softies forgotten skills and conditioning that allow one to thrive outdoors (not to mention good drugs)?

Isn't the real problem policing where people want to sleep?

Why not print money like there was a stock panic to fund and inflation-proof a basic income?

[aragon]

BTW, I have no specific knowledge of the Newport Wafer plant.

* Gallium compounds switches faster than silicon, but has a specialist application in Radio Frequency Electronics and Power applications (Like 5G or Radar: FaceID, or Inverters). This is an established technology.

More on GaN and it's applications.

https://en.wikipedia.org/wiki/Gallium_nitride

* Other companies operate in the same market. GalliumSemi.com?

https://www.telegraph.co.uk/business/2022/04/08/decision-chinese-takeover-newport-wafer-fab-delayed/

"one of just three [in the UK] capable of supporting production of power electronics chips used in electric cars."

* Yes state of the art silicon is 10nm or less.

* Silicon semi-conductors can also do optics and tends to dominate mass market products (Computers).

https://www.iof.fraunhofer.de/en/competences/optics-and-photonics-materials/silicon-optics.html

Cutting edge Intel (Silicon) Fabs come in at about $20Bn each. The Newport Wafer Fab was sold for £63 million.

https://www.grandviewresearch.com/industry-analysis/gan-gallium-nitride-semiconductor-devices-market

It's a small player £63 million (capital value) in a expanding $1.65Bn market (for products).

Of similar capital value:

https://www.telegraph.co.uk/business/2022/04/05/oxford-start-up-claims-major-nuclear-fusion-breakthrough/

"Spun out of Oxford University in 2011, First Light Fusion is among the front-runners in the global race to produce energy through nuclear fusion."

[...]

"In February the company raised $45m from backers including the Chinese tech giant Tencent."

[...]

"Professor Yiannis Ventikos, co-founder of First Light Fusion and head of UCL’s mechanical engineering department, said: "This pursuit of practical and affordable fusion will give us the clean and abundant baseload power that we so desperately need in our effort to address - and hopefully reverse - global warming.""

Not all chip companies are the same. The UK's biggest chip company does not make computer chips! However the loss of process knowledge and control is a concern.

[aragon]

p.s.
"I suspect the Cabinet minister quoted was misled by a piece of irrelevant information. The Newport Fab runs to a 200 nanometer process, a measure of density of the circuitry, while today’s silicon microprocessors from AMD and Intel run on narrower, more modern processes.

But this is not relevant here: that’s a chalk and cheese comparison. The compound parts uniquely move the electrons around much faster than silicon. What’s curious is that the very same piece of misinformation appears online, favoured by shadowy online commenters, who insist there is nothing to worry about China acquiring the Newport plant."

GaN switches faster than silicon and (and always has) is used in RF and power circuits and is much larger than the circuits used for Silicon.

But the fact that it is a chip maker does not make it Intel, TMSC or Samsung. This is just as misleading as the 200nm vs 10nm process scale.

It's a chip made, by a minnow, in a non-cutting edge application (Power).

"What’s curious is that the very same piece of misinformation appears online, favoured by shadowy online commenters, who insist there is nothing to worry about China acquiring the Newport plant."

I oppose the sale of the Newport Wafer plant, but can I be a shadowy online commentaor.

Do I get a mask or badge and/or decoder ring?