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politicalbetting.com » Blog Archive » How the papers are treating Sunak’s pandemic budget
politicalbetting.com » Blog Archive » How the papers are treating Sunak’s pandemic budget
Inevitably there is a split between what we used to call the tabloids which focus on the meal deal while the Guardian the Telegraph and the Financial Times highlight the big overall worries for the economy.
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https://www.ucdavis.edu/coronavirus/news/your-mask-cuts-own-risk-65-percent/
https://twitter.com/amymaxmen/status/1280844062384361473
https://twitter.com/amymaxmen/status/1280844063357485056
If it’s right, not acting on it might be very costly indeed.
Absolutely spot on.
If we take a global rather than myopic view of this, which a responsible Government is required to do, it is evident that serious spikes are occurring where people drop their guard. Look at Melbourne today which has just gone back into a 6-week total lockdown.
Coronavirus surges in the UK are a question of when not if.
The Government probably do know this and have decided to pull the wool over everyone's eyes. Beer, chips and ice-creams on the beach are more beneficial to the economy and so what if several thousands more people die?
Imagine a hundred Zeebrugge disasters and that's what this Government are dishing you up.
Sunak will eventually face the problem all socialism does, when he runs out of other people's cash to piss away.
Truss wrote to the chancellor, Rishi Sunak, and Michael Gove on Wednesday warning of four “key areas of concern” over their plans for the border next January. Gove has unveiled a border regime for traders whereby customs and health checks for goods from the EU would not be imposed immediately and instead be phased in over six months.
But Truss warns it would “be vulnerable” as the WTO could object to EU goods being treated differently to those from elsewhere which incur tariffs and quotas. She also raises concerns over smuggling because full checks will not be in place from 1 January.
But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.
Something somewhere is clearly quite wrong with the media narrative on Cummings.
Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.
Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.
Now is the time to have experienced adults at the heart of government, not a bunch of spoiled brats.
It is undeniable that the only route out of this is by opening the economy and of course there are risks but we simply cannot keep the economy closed
The airlines are complaining they have had no help but the only feasable help for them is for travel to recommence no matter in a restricted way
There are no good options in any of this
I assume, of course, that when we see the small print, if I lunch at the local wine bar, the £10 off will still apply is I have a couples of glasses of wine with that lunch.
Not, of course, that I work these days. I was quite surprised that he didn't mention the triple lock. Or did he, and I missed it.
He's only the BAD GUY he's been made out to be because:
*he tends to get his way in the long run
*he doesn't tolerate fools
I would say that says more about the chattering classes than it does about him.
If they are medically vulnerable and there was an outbreak in the other jail maybe they thought they couldn’t wait to transfer them?
He is quite happy with BoZo
And since it became reality it's been a question of how to keep things going rather than listening to Cummings - who is probably too busy dealing with other stuff anyway..
you don't need to read it first.
The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.
Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...
I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.
Mike seems wary because he's unconvinced about opening up the economy due to ongoing concerns about the virus. But the catch is, there's unlikely to be a properly effective vaccine for years. Do we close the global economy and society until then? Or do we all slightly recalibrate our risk tolerance and behaviours to infectious disease? I would counter that keeping the economy on deep freeze would look pretty dumb with hindsight too.
As for giving everyone a cheque for £2k. This is not the worst idea but before glibly dismissing everything apart from this policy, how about looking at the evidence of what it's meant where it's been tried in the US. The vast majority of people have used Trump's cheque to increase savings, pay down household debt or buy shares.
Now these are noble goals themselves. Personally I'd print £100-200bn to put in Junior SIPPs for every under-18 year old in the country, with the goal of achieving a private retirement pot in real terms of £250k. It would only increase gilt holdings by the BOE by a quarter and wouldn't do too much to GBP given where we are (a weaker GBP would be a nice side effect in my view).
But this is not the same goal as the VAT cut and voucher scheme. Which is to save jobs and otherwise viable businesses and to kickstart consumer spending again.
Given that no one has to commute at the moment how many people are going to shift their entertainment budget to Monday - wednesday in August rather than Thursday to Sunday.
I can see the reason for the plan, but it instantly fell apart.
Some of the populist tabloid headline grabbing measures like the discount vouchers would seem to have the stamp of Cummings all over them. Maybe they are a great idea, but I have my doubts. The VAT and stamp duty measures seem to be more in tune with how I read Sunak
The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.
Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).
And what about the numerous medically vulnerable in the prison to which they were transferred ?
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
Cutting VAT and similar issues on the struggling hospitality sectors will allow money to circulate more in those sectors - and allow businesses to cope with thicker margins on smaller volumes - thus saving the sector from a catastrophe and in the long-term the government will make more tax revenue despite temporarily lower taxes.
Essentially adjusting for the time value of money the peak of the Laffer Curve has temporarily moved far to the left of the graph and the government needs to respond accordingly.
https://twitter.com/bbcworld/status/1281077649151049729?s=21
Public investment on a vast scale was in the 2019 Conservative manifesto even before the pandemic. As suggested here at the time, there would need to be a great deal of reverse ferreting from both Labour and Tory supporters once they read it. PB Tories busily condemning Labour's broadband plans might have been surprised to learn their party even proposed free, state-supplied broadband infrastructure!
Given social distancing requirements its not about shifting people from Thu-Sun to Mon-Wed instead, its about getting people who wouldn't have eaten out due to the crisis to start going out when its quiet.
If you think about it, the state built and maintains the M6 but if I want to drive on it I still need my own vehicle, the state doesn't supply that.
On its importance, see this Labour Party video. Boris is a fan!
https://www.youtube.com/watch?v=_eJFb-r48Ys
A boost in inflation right now is a good thing, not a bad thing.
Labour used to believe in Keynesian economics. What changed?
However, reality appears to be dawning more quickly than usual this morning. This time you don't need to pour in detail over the appendices to the Red Book to find that all is not as it seems. We already have a chorus of businesses in different sectors who have woken up to the fact that they've missed out from any meaningful further help and are shouting loudly about it. Labour needs to do no more than echo those complaints and wait for reality to bite in the form of sectoral unemployment leading to a more general loss of demand. The charge of insufficient targeting will be the Achilles heel of these measures.
Any Chancellor can spend £30bn. The question is whether they can do so effectively.
Add general inflation to that and we have a heady cocktail of serious debt to deal with.
Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?
We need to get inflation away from deflation and back up to betweeen 2-3%.
There are no policies which can be guaranteed not to lead to disaster, both health and economicswise. And both together.
BTW from appearances Rishi would see to be more relaxed about this than his shadow opponent, who so far does not quite look the part.
Rishi is now where a chap called Portillo once was. I imagine his resident joker will occasionally whisper in his ear that he is mortal, and that 'Who Dares Wins' is not a great speech ending.
Id think the majority have received their normal income for 4 months, but spent a lot less. They will be more reluctant than usual to spend those savings/reduced credit for fear of the future, not because they are already struggling.
That'd be enough for some people.
(j/k I didn't watch it and OKC isn't that partisan)
It’s not like going into a pub is comparable with spending all night mingling on a crowded nightclub dance floor.
Looking at the TMC data ( https://www.tmc.edu/coronavirus-updates/current-covid-19-related-patients-through-tmc-system/ ) their overall death rate for hospitalisations in Houston is sitting at 6.5%
I would have expected it to be lower by now.
You might be right, but a consumer debt lead recovery can be problematic.
This is of some importance, as it underlies their resistance to recommending universal mask use.
Modeling* the role of respiratory droplets in Covid-19 type pandemics
https://aip.scitation.org/doi/10.1063/5.0015984
...The small droplets ( < 2 µm–3 µm) have a very short evaporation timescale. This implies that these droplets evaporate quickly ( < 1 s) after being ejected. However, the same conclusion does not hold for slightly larger droplets ejected in the form of cloud (>5 µm). These droplets exhibit longer evaporation time, leading to increased chances of transmission of the droplet laden viruses. In particular, when inhaled, these droplets enable quick and effective transport of the virus directly to the lungs airways causing a higher probability of infection. In general, the smaller droplets ( < 30 µm) have low Stokes number, thereby allowing them to float in ambient air without the propensity to settle down. For larger droplets (>100 µm), the settling timescale is very small (∼0.5 s). In effect, based on the diameter of the exhaled droplets, there are three distinct possibilities:
•
Small droplets ( < 5 µm) evaporate within a fraction of second.
•
Large droplets ( > 100 µm) settle within a small time frame ( < 0.5 s), limiting the radius of infection.
•
Intermediate droplets (∼30 µm) show the highest probability of infection due to a slightly longer evaporation lifetime and low Stokes number....
* If you read the full paper, the model is experimentally tested.
This isn't dependent on the 1/1000 rate being quite accurate. If it's actually 1/500 or 1/3000 the argument is the same.
I have a mildly increased risk (>70) but had a haircut and went into two shops yesterday. I feel the risk has declined to the point that an exceptional outing is a reasonable roll of the dice. But I don't plan to do it again for a month or so.
Hence doing everything they can to make this a blip rather than an long term issue.
Yes the actions being taken now lead to "higher" inflation but "higher" than what?
When your inflation rate is 5% then higher inflation is bad.
When your inflation rate is 10% then higher inflation is terrible.
When your inflation is close to 0% and heading down then higher inflation is a good thing.
What is the inflation rate today?
What we are going through is a catastrophe not seen since the Spanish Flu. What was the inflation rate in the early 1920s in the UK after the Spanish Flu?
It's absolutely true that the risk is, in any individual case, very low.
To prevent a resurgence of the virus, it needs to be kept that way.
* You very probably can, even if, as acknowledged, the individual risk is very low.
It is the overall risk that counts, though, when it comes to the population.
So, at any time, you could be the infectious person who does not have symptoms.
What is the responsible way to behave?
You only need to see the scenes at pubs to know that they are a no go area for now., if you are of a certain age.
Obviously most of them don't care about the question they asked 99% of the time.
The contrast when a member of the public asks a question they want an answer to is striking. Which is why all politicians dodge them as much as possible, of course.
He is absolutely correct that any response to emergencies has above all else to be rapid, and that any rapid unplanned response will include mistakes and missteps.
That he's prepared to acknowledge the downsides of his actions, and that he will make mistakes, differentiates him from anyone else currently in the cabinet.
"On Tuesday morning, Harper's Magazine published a joint letter from 153 prominent writers, academics, and entertainers, ranging from Noam Chomsky to David Brooks, J.K. Rowling to Wynton Marsalis, Salman Rushdie to Gloria Steinem, expressing concern that "the free exchange of information and ideas, the lifeblood of a liberal society, is daily becoming more constricted."
The 532-word document is a direct response to the remarkable past six weeks or so at American media and cultural institutions, which have experienced a wave of firings, resignations, and castigations over purportedly harmful words, deeds, and sometimes costumes."
https://reason.com/2020/07/08/lefties-hate-on-liberal-open-letter-on-free-speech/?fbclid=IwAR0OT1BZFV-q2jf4Id3q97C8yMsCEYM7bte_dNr1xp1BFTXG5jhNw34kJ9c
First, there is a huge deadweight effect. Most of the purchases would have been made anyway, so all you're doing is cutting prices to individuals. They will save the difference.
Second, depending on the sector, people will often just bring forward future spending, leading to reduced economic growth when you take it away.
Third, there are often surprisingly large administrative costs involved in cutting VAT then raising it again, which is why, when they did it during the financial crisis, a lot of businesses did not even bother cutting their prices.
Fourth, sector-specific cuts lead to reclassifications and other inefficiencies.
Cutting less sexy business taxes, like payroll levies, or increasing capital allowances, gets you much more bang for your buck.
2) someone decided not to
If 2) then
a) they are a heartless monster who wanted everyone to die
b) they didn’t have budget
c) they thought that they didn’t have time to wait for the results before transferring
d) all the prisoners were put into quarantine for 14 days in arrive at San Quentin and they believed this was sufficient
My guess is 2(d). It’s also not clear from the article that the infection came with those prisoners. post hoc proctor hoc
https://www.theguardian.com/environment/2020/jul/08/spreading-rock-dust-on-fields-could-remove-vast-amounts-of-co2-from-air
Edit: It's one of those why didn't I think of that ideas.