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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Britain’s economy will get worse forever

67 replies

ShottaSheriff · 17/03/2024 22:47

https://novaramedia.com/2024/03/03/britains-economy-will-only-get-worse-forever-aaron-bastani-meets-gary-stevenson/

AIBU to say that: Unless something massively changes, wealth inequality will continue to destroy this country (and others around the globe). I fear for our children.

Poverty has explodes in the UK, the middle class is being eroded. Those in power, making the decision are the same people who benefit from widening the gap between rich and poor.

Gary Stevenson’s piece is really worth watching. It’s horrifying and obvious all at once and yet most people in this country are buying into the divisive narratives that apportion the blame for the decline in standards of living, of society, on anything and everything else except the rich elite.

We collectively need to educate ourselves and we need to do something.

Britain’s Economy Will Only Get Worse | Aaron Bastani Meets Gary Stevenson | Novara Media

Gary Stevenson went from being Citibank's most profitable trader to one of the world's most incisive critics of the financial system. Gary sat down with Aaron to discuss the lightbulb moment that led him away from trading, why economists can't predict...

https://novaramedia.com/2024/03/03/britains-economy-will-only-get-worse-forever-aaron-bastani-meets-gary-stevenson/

OP posts:
MissConductUS · 03/05/2024 19:51

EmmaEmerald · 03/05/2024 19:31

@MissConductUS I can’t read this article.

But the prospect of London turning into Tokyo, is one of the many reasons I left.

The Japanese government are offering people money to leave Tokyo now?

I’m sorry if I’m making assumptions about what your link says. Is it about overcrowding Tokyo and surrounding areas?

Just as overcrowding London and the local areas has not gone well, that sounds awful.

Whatever we do to prosper, we do have to accept that England is a small place.

And already very overcrowded. An endless pyramid scheme of over population, followed by generating more and more business, cannot be the answer for a small country.

Surely it’s more about addressing wage disparity and putting in things like rent controls?

as well as many other things. We are not short of money in this country. It’s been very questionably spent.

Edited

The article doesn't mention offering people money to leave. The Japanese invested in transit and built more housing to bring down prices. Japan is also a very small country. Housing prices are determined by supply and demand. You can't do much about demand, but you can add supply.

By the way, rent controls just make the situation worse, by reducing incentives to build new housing.

What does economic evidence tell us about the effects of rent control?

Here's the conclusion for those who don't care to click the link:

Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood. These results highlight that forcing landlords to provide insurance to tenants against rent increases can ultimately be counterproductive. If society desires to provide social insurance against rent increases, it may be less distortionary to offer this subsidy in the form of a government subsidy or tax credit. This would remove landlords’ incentives to decrease the housing supply and could provide households with the insurance they desire. A point of future research would be to design an optimal social insurance program to insure renters against large rent increases.

Here's the full text of the NY Times piece:

Yuta Yamasaki and his wife moved from southern Japan to Tokyo a decade ago because job prospects were better in the big city. They now have three sons — ages 10, 8 and 6 — and they are looking for a larger place to live. But Mr. Yamasaki, who runs a gelato shop, and his wife, a child-care worker, aren’t planning to move far. They are confident they can find an affordable three-bedroom apartment in their own neighborhood.

As housing prices have soared in major cities across the United States and throughout much of the developed world, it has become normal for people to move away from the places with the strongest economies and best jobs because those places are unaffordable. Prosperous cities increasingly operate like private clubs, auctioning off a limited number of homes to the highest bidders.

Tokyo is different.

In the past half century, by investing in transit and allowing development, the city has added more housing units than the total number of units in New York City. It has remained affordable by becoming the world’s largest city. It has become the world’s largest city by remaining affordable.

Two full-time workers earning Tokyo’s minimum wage can comfortably afford the average rent for a two-bedroom apartment in six of the city’s 23 wards. By contrast, two people working minimum-wage jobs cannot afford the average rent for a two-bedroom apartment in any of the 23 counties in the New York metropolitan area.

Maintaining an abundance of affordable housing has its downsides. Green space is scarce in Tokyo, living spaces are small by Western standards, and relentless redevelopment disrupts communities.

But the benefits are profound. Those who want to live in Tokyo generally can afford to do so. There is little homelessness here. The city remains economically diverse, preserving broad access to urban amenities and opportunities. And because rent consumes a smaller share of income, people have more money for other things — or they can get by on smaller salaries — which helps to preserve the city’s vibrant fabric of small restaurants, businesses and craft workshops.

As political leaders in urban areas around the developed world grapple with how best to revive their cities in the aftermath of the pandemic, Tokyo offers a template.

What does economic evidence tell us about the effects of rent control? | Brookings

Rebecca Diamond discusses short term and long term effects of rent control. In the long run, the costs outweigh the benefits.

https://www.brookings.edu/articles/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/

Jk987 · 03/05/2024 19:54

Nice and cheery for the weekend.

I'm still glad and grateful I was born in Britain.

MissConductUS · 03/05/2024 20:04

Jk987 · 03/05/2024 19:54

Nice and cheery for the weekend.

I'm still glad and grateful I was born in Britain.

You should be. Britain is fabulous in so many ways, with such great history and heritage. I've been an anglophile my whole life.

Bigredpants · 03/05/2024 20:04

It’s not the worst time and place to exist. It feels like the whiniest sometimes.

GreatGateauxsby · 03/05/2024 20:11

Meadowfinch · 18/03/2024 06:13

That's a pretty negative view, one I doubt the middle class share. The way to improved lifestyle is, as it always has been, education and effort.

The thing is definition of education. Going to university to take a pointless degree that delivers no significant knowledge, or skills of any value doesn't really count. The whole 50% to university isn't working.

We need teachers, scientists, medics, engineers and a small number of arts/humanities graduates.

Otherwise, we need skills, trades etc.

My ds is looking at two routes, a degree in engineering or a trade apprenticeship. So far he's done taster days in slating, thatching, metalwork. He works hard in school, enjoys what he does. I'm a single mum but I'll support him until he's on his feet. I have no fears. He'll be fine.

Im middle class and highly educated.

I share most of @ShottaSheriffs views on this topic. dh and most of our friends have similar views tbh...

I keep trying to explain to my dm and mil my children dont need £80 tommy hilfigure dungarees and £120 dresses from boden 🤦‍♀️🤦‍♀️🤦‍♀️
They need financial provisions to help ensure they are on the right sife of the wealth gap

If i had a pound for every time i asked them to put the cash onto their jisa instead of buying random stuff we dont need my kids would be set for life 😅

RishiSunak · 03/05/2024 20:15

You know, I think you may be right.

Any ideas?

Any one?

GreatGateauxsby · 03/05/2024 20:19

RishiSunak · 03/05/2024 20:15

You know, I think you may be right.

Any ideas?

Any one?

😅😅😅
Dont worry Rishi....if times are tough I'm sure your wife will spot you a few million quid

EmmaEmerald · 03/05/2024 20:21

@MissConductUS thank you, lots of things to ponder there

here’s a piece on the offers of money to move out

https://eastasiaforum.org/2024/02/10/tokyo-residents-require-more-motivation-to-relocate/

CranfordScones · 03/05/2024 20:38

Doom-laden economic forecasts are commonplace and nearly always wrong. People seize on them to confirm their own biases or agendas.

Here's my long-term economic forecast - It'll be fine! And, for the most part, that forecast has a near perfect track record; certainly much better than all the doom-mongers. Well, apart from John Maynard Keynes' observation that in the long term, we're all dead...

ontheflighttosingapore · 03/05/2024 20:39

I don't worry about things I can't do anything about out. It's pointless and very negative.

MissConductUS · 03/05/2024 20:40

EmmaEmerald · 03/05/2024 20:21

@MissConductUS thank you, lots of things to ponder there

here’s a piece on the offers of money to move out

https://eastasiaforum.org/2024/02/10/tokyo-residents-require-more-motivation-to-relocate/

That's interesting, but it sounds like the goal is to halt population decline and develop rural areas as much as decreasing urbanization.

You're welcome, by the way. I'm a New Yorker, and we also struggle with high housing costs. My son moved home after graduation from uni, largely because of high housing costs. He has a very good job and salary for someone his age, but if he were paying rent, he'd be eating beans and rice and not saving anything for his future. He's looking for a job in areas with a lower cost of living, which is too bad, as we'd rather have him local to us.

MrsSkylerWhite · 03/05/2024 20:44

One word: Brexit.

EmmaEmerald · 03/05/2024 20:45

@CranfordScones “Doom-laden economic forecasts are commonplace and nearly always wrong”

those of who saw high inflation and increased rates coming in 2020, (called CTs of course) and were privileged enough to be able to plan for it, have done well in £ from our pessimism.

@MissConductUS always good to see you. Was lucky enough to work in NY in my 20s, it was a joy and a privilege.

MissConductUS · 03/05/2024 21:06

Thanks, @EmmaEmerald. I'm always surprised when people here recognize me from my prior posts. MN is so big and busy. Perhaps I stand out a bit as a Yank.

I'm so glad you got to experience NYC as a resident. We love our Brits, and it's a fun place for a single person in their 20s. One thing I've noticed about the Brits in NYC is that they seem to think it necessary to posh up their accents when speaking to us. You're fine just the way you are.

blue345 · 03/05/2024 21:13

The reason so much gold was being exported is because it’s seen as a safe investment. The sudden clamour for gold was a sign of a lack of confidence in our economy (and the wider world economy too).

You can't really dismiss the commodities sector given it's one of our economic strengths. Yes, gold is seen as a inflation hedge and safe haven asset but the primary driver has been geopolitical issues (I interviewed a director at the Royal Mint last year and he said that demand spiked by 30% when Russia invaded Ukraine).

It's not all doom and gloom for the UK. The FTSE 100 hit a record high last week, it may be more old economy than sexy tech companies but we still have our fair share of global leading companies.

I do agree that we have structural macroeconomic issues (high public debt, modest growth, an ageing population etc) but it's a similar situation to other European countries.

PocketSand · 03/05/2024 21:43

I think it's pretty obvious from the posts above that many posters are ignorant as to who Gary is. From wiki

'From a working class background in Ilford, Stevenson studied economics and mathematics at the London School of Economics before becoming a financial trader at Citibank in 2008, at age 21. Stevenson grew to become the bank's most profitable trader in 2011 by predicting there would be a large increase in economic inequality, and that growing poverty would cause interest rates to stay low.[3][4] In 2014, Stevenson quit his job to study for an MPhil in Economics at the University of Oxford in 2016.[5] In 2020 he started the YouTube-channel GarysEconomics, where explains economic concepts related to inequality to a wider audience.[6]
He has contributed to outlets such as the Guardian, BBC, LBC, and Novara Media. In 2024, Stevenson published the book The Trading Gameon Penguin Books, which is a memoir about his years working in the finance industry.[7]'

Summergarden · 04/05/2024 00:29

hattie43 · 18/03/2024 12:12

Society isn't equal , it never has been and never will be . Everybody has to make the best of their circumstances whatever life throws at them . Some will flourish some won't . Education, resilience and commitment are free . I agree with a previous poster that your politics and negativity are very unattractive qualities and you'd be written off in a lot of companies .

True, but some societies are a lot more equal than others and strive to improve on reducing the inequality gap. The Nordic nations, for example.

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