Do you remember what it was like during the 2008 crisis?

[bushproblems]

I’ve seen a few comparisons of today’s economical situation and the 2008 crash. I was in high school at the time so heard a lot about “the credit crunch” but didnt really know what it meant.

Are we in a worse or better position job wise, cost of living etc than my parents were? How were you affected?

Im at risk of redundancy so I’m freaking out about the job market and the astronomical cost of basically being alive!

I think she’s responding to your posts on growth needing to be via the public sector first, whereas we’re only going to deal with things if the private sector isn’t squashed and can do the heavy lifting.

@EasternStandard I think you have confused me with someone else. I haven’t said anything about the public sector!

There seems to be a fundamental lack of understanding about what has happened to productivity over the years and what can help to boost it.

I don’t think so. I agree with @TeenagersAngst

The public sector wasn’t impacted immediately but it started a process of wage stagnation that lasted 10 years or more. Both the public and third sectors have been hammered in terms of wages. I didn’t get a pay rise for over 6 years and then only through promotion. Neither sector has really recovered.

The job I had in 2009 is now advertised at £5k less per year than I earned doing it 15 years ago.

@EasternStandard well you definitely have misunderstood my posts! 😆

Which bit are you agreeing with though? How do you think we fix the productivity puzzle without any investment?

Can you post without emojis? I agree with her on the private sector needing to be incentivised not hammered.

I was on ML when it really struck and my company got credit crunched.
I did get a new job, and what I remember was how my commute got quicker because there was much less traffic on the road. I mean like from 40 minutes to 25 minutes over the course of about 9 months.

The current economic situation is absolutely nothing like the 2008 situation. We were on the brink of total global economic collapse. Banks went under, people lost huge amounts of money. Gordon Brown steadied the ship and gets very little praise for the actions he took (“he sold our gold”). If he hadn’t, it would have been another Great Depression.

Can you post without accusing me of saying things I didn’t say? Where did I say growth has to come from the public sector?

Exactly how would you incentivise the private sector & why will incentives restore productivity? Is there examples of how this works?

I completely agree that things like the tax cliff edges are stupid etc but that is a tiny part of the jigsaw. And the Tories froze the tax bands as they needed to raise money & didn’t have another mechanism.

I was working in banking. 1000s of people lost their jobs overnight, not just in the banks that went bust, but in the ones that were saved too. No one cared because we were "bankers" , but as well as the people on big bonuses etc, it included people in very ordinary jobs, and it had a massive knock on effect for the businesses where the big boys spent their bonuses. High end clothing retailers, restaurants, travel agents, car dealerships all went out of business, laying off their staff too.

For the staff that survived it was a horribly toxic environment to work in for at least 5 years, with round after round of further redundancies.

We can do both at the same time. The example I gave up thread of taxation affecting housing supply is a good example.

We can do both at the same time

Do both of what?

The example I gave up thread of taxation affecting housing supply is a good example.

I disagree, the broken housing market and the impact that it has on productivity is far more complex than looking at tax on small time landlords.

@Jellycatspyjamas everyone's wages were stagnant. Private sector too. And private sector generally doesn't even have increments or progressive pay scales. The Labour Party alienated a lot of voters during that time banging in about how public sector wages were uniquely failing to keep up with living costs - everyone's wages were failing to keep up with living costs and lots of us were facing that off the back of redundancy and having to take lower paid work just to be able to work at all. Plus, in their zeal to centre public sector workers, Labour during that time completely missed the wider mechanisms that were keeping all wages low - it was a huge gap in policy proposals.

This is a really good graph showing that real wages have stagnated since 2008 to today:

You said "Before we tinker about with the tax system (which does need overhauling) we need growth and as I said that needs to come from investment which requires a lot of money"

I disagree. You don't need growth to make changes to the tax system. Far from it. Governments make stupid decisions all the time about tax which, if reversed, would help stimulate growth. The employer NICs decision made by our poor excuse for a Chancellor is just one. Unemployment going up and job vacancies going down since Labour got into power. So yet more downward pressure on growth.

The example I gave of taxing landlords has had a huge impact on the rental sector over the last decade and the knock-on effect on councils is significant. I didn't say this is the only problem facing the housing market. I cited one example. There will be hundreds of others across many sectors. Yet you dismiss it so easily.

You seem very sure that nothing can be fixed. Why is this? And please don't suggest that if it could be done, someone would have done it - politicians of our time are appallingly inexperienced and ill-informed compared to years gone by and we have a civil service and system of government that does not embrace innovation.

It feels worse now. The cost of living is just so much higher than it was then.

I think i’m just repeating myself now so not sure how much help it is.

You need growth & a healthier economy so that you have the money to make up the shortfall from reducing the tax take. Growth is multi faceted and comes from private businesses & the government but you need investment from both. The NIC change was recent so why was productivity low prior to this?

I am dismissing the fact that you think simply changing some tax rules is going to reverse nearly 2 decades of low growth. It’s way bigger than that & as I said tax is just one part of the jigsaw.

You seem very sure that nothing can be fixed

Again I’m just repeating myself. I don’t believe the majority of the electorate would vote for the changes needed, that’s the point. For one fixes would require long term planning but people want short term results.

I am interested though why you think it can be fixed and it only hasn’t been because of politician incompetence? Why do you think it’s been a feature of the economy for so long? How quickly would you expect us to return to strong productivity?

It doesn't just feel worse, it factually is when you look at the graph.

The frustrating part is that everyone knew that the debt fuelled boom from 1997 to 2008 wasn't sustainable both from a household level (110% mortgages, self certification or liar loan mortgages) or a corporate level (RBS takeover of ABN Amro with minimal due diligence) or at a Government level (Greek bailout).

Its just when the party is in full swing no Government wants to do the politically unpopular decision of taking away the punch bowl.

I was a 'sweet summer child' who graduated in 1999 (and got a graduate job very easily I must say), I thought it would always be like this. I did see my father lose his business in the 90s recession but I guess it's how it is when you come of age that sticks. ..

If this just means that what you could buy on the average salary is the same in 2007 as it is now, I don't have a problem with that. Why should we always expect to get more? But it feels like what you can buy on the average salary has gone way, way down.

Only the right wing are making any sort of comparison to 2008, we ve had more growth in the last 18months than we had in the previous 18months prior to the GE in July 24.

Look at the FTSE and all World stock markets now and then?

...it lost over 30% of its value, around £270 billion.

FTSE today and the FTSE All Share are all time highs, as are many other World stock markets, FTSE100 8200 in July 2024, 11700 today....

Inflation is 3%, unemployment at 5.2%, bang on historic average.

We had a recession in 2023, i don't remember people coming on here then and saying "this is as bad as 2008..."

For us, it’s was bizarrely awesome. We were both lucky enough to keep our jobs and had recently taken out a tracker mortgage when interest rates were 5.5%. They dropped to next to nothing for almost 15 years and let us pay off the mortgage really early. But, the country still hasn’t recovered, and Brexit plus Covid certainly haven’t helped!

We remortgaged (to a stupid level looking back, but felt quite normal at the time) with Northern Rock a few days before it went bust. It was sold on at stupid rates, house prices crashed and DH was made redundant several times. We eventually let the house be repossessed in 2012 after four years or significant financial hardship, getting further into debt and never being able to recover. The amount we owed the bank after the sale was sickening.

We are only just attempting to get back onto the property ladder now 14 years later, but still have to declare the repossession.

It isn’t. It really really isn’t.

You might not like the NICs changes but the Govt had no choice, they had did not have enough money, NI cuts - unfunded, Public sector pay rises - unfunded, PO & Blood Scandals - unfunded.
SENDs - unfunded, increased Childcare- unfunded, increased Defence spend....

RR could have raised income taxes by 5 or 6 %... any view on what that would have done to consumer confidence, esp in a cost of living crisis?

Cutting welfare would have raised 5 or 6billion (half what Hunts NI cut is costing the Govt) or shall we slash SEN and Childcare spend?

Unemployment has been increasing long before the GE & as i said, zero growth as an average in 2023.... inc a recession.

Not too mention debt interest increases in 2022 and inflation at 11%....