economic situation is dire

[peterms]

A more 'hands on' way of cutting the deficit?

Or possibly "hands off"...

[rbcuk]

Blockbuster has called in administrators aswell now

http://news.sky.com/story/1038898/sky-sources-blockbuster-uk-collapses

[drat01]

Blockbuster has called in administrators aswell now

http://news.sky.com/...er-uk-collapses

and still some will claim that the economy is doing well under this Gvmt - amazing

[CI]

and still some will claim that the economy is doing well under this Gvmt - amazing

Probably the same posters who claim Paul Lambert is doing a fine job

[drat01]

funny cause I could have sworn all I asked was when did we actually "ENTER" the triple dip recession you claimed we had entered , all you did was answer a question with a rant

Tell me which poster said he voted based on what was best for him and his family first and then the country second ..isn't it then a bit hypercritical , one might even say selfish idealogical even , to accuse others of being selfish for putting their interests first ??

More rubbish Tony, in your desire to deflect any scrutiny and possible criticism of this Gvmt's failing economic policy

Funny how nearly all, except those in the Tory party and its supporters are talking about a triple dip recession and you answer the point with an attempt to deflect. Amazing

And I see you try and turn things around, knowing exactly that I said when looking for which party to chose, I looked at those that would be of benefit for my family first. Totally different from the point you are trying to make. You know your pathetic attempts are now somewhat tiresome and show you up as being somewhat petty.

[Awol]

and still some will claim that the economy is doing well under this Gvmt - amazing

Nothing to do with renting DVD's in the internet age being a pretty poor business model, it's obviously the government's fault....

That's like blaming government's past for the motor car putting Blacksmith's out of work.

[peterms]

Article here summarising very long EU report. May be of interest to some.

European labour markets: six key lessons from the Commission report

I haven't always been complimentary about the European Commission - either its economic analysis or its policy advice. So it's nice to be able to be wholeheartedly positive about the excellent report "Employment and Social Developments in Europe 2012" (brought to my attention by this articleby Ambrose Evans-Pritchard in the Telegraph, also excellent) produced by the Commission's Directorate-General for Employment, Social Affairs and Inclusion.

The report is really worth reading. But it's close to 500 pages, and the main messages deserve as wide an audience as possible, so I thought I'd try to highlight them with some commentary. To my mind, the key ones are the following:

1. Economic weakness in Europe, and the consequent rise in unemployment, are mostly to do with a lack of aggregate demand, which in turn is the result of mistaken macroeconomic policies - especially aggressive fiscal consolidation:

"

Since 2011, the economic slowdown has gradually turned into recession in the EU, as the escalation of debt crises in several Member States led to significant policy shifts toward sharp fiscal consolidation by and large across the EU with adverse effects on aggregate demand. As a result, the previous timid employment growth has come to a standstill in the recent quarters and unemployment has reached levels not seen in more than a decade

."

This is a statement of the obvious. Except that of course it is not obvious to a different bit of the Commission (the Directorate General for Economic and Financial Affairs-sadly the Directorate in charge of economic policy) which produced a s<a href=http://ec.europa.eu/...ipliers_en.pdf" target=_blank">hockingly bad piece of analysis in their November 2012 forecast arguing that fiscal consolidation wasn't really such a big deal (on the basis of an econometric analysis which would shame a first-year Masters student). Nor, sadly, has it yet sunk in to our own Treasury, Office of Budget Responsibility and Bank of England, despite the best efforts of the likes of Adam Posen.

2. Although financial markets may have stabilised - who knows for how long - things are getting worse, not better, in the real economy of the crisis countries.

"

A new divide is emerging between countries that seem trapped in a downward spiral of falling output, massively rising unemployment and eroding disposable incomes and those that have at least so far shown some resilience – partly thanks to better functioning labour markets and more robust welfare systems, although there is also uncertainty about their capacity to resist continuing economic pressures.

"

So much for Commissioner Rehn's light at the end of the tunnel.

3. Countries with more generous welfare states, but also more flexible labour markets, have fared best:

"

countries with relatively un-segmented labour markets and strong welfare systems [Germany, the Nordics, and to some extent the UK] have fared better than those with highly segmented labour markets and weak welfare provisions [southern Europe]

."

So much for the absurd myth, popular in some quarters (especially the US) that the European crisis is caused by a "bankrupt welfare state" as the Wall Street Journal put it. The structural problems in Southern European labour markets are, as the report says, much more about segmented (two-tier) labour markets than about excessive generosity.

4. Following on from this, structural reforms in labour markets are required in many countries - but they need to be based on evidence! Segmented labour markets are a problem and raise youth unemployment:

"Many EU economies, particularly those with segmented labour markets, experience difficulties in integrating young people into the labour market, not only in terms of getting them out of unemployment but also in terms of matching their qualifications and skills with suitable jobs."

This suggests some types of so-called "deregulation" - especially making it easier to fire some types of worker, especially younger workers, while preserving protections for others, or exempting small firms only from some employment laws - would make matters worse not better. On this the UK government has got the balance mostly right, in particular by rejecting those recommendations from the Beecroft report which would have moved us in the direction of a two-tier labour market.

..and even in recession, minimum wages at a sensible level do more good than harm.

"

the evidence that minimum wages would impact negatively on jobs even in a severe economic downturn is limited..[and] raising minimum wages has the potential to increase the tax base, as overall employment increases, and reduce the outlays for unemployment benefits and in-work benefits, thereby improving the overall fiscal stance.

"

5. Where they were allowed to operate, the "automatic stabilisers" worked...(in both macroeconomic and social terms):

"In these MemberStates, the combined effect of robust automatic stabilizers (reinforced by initial discretionary measures) and more resilient labour markets in general helped mitigate the impact of the recession on overall household incomes and private demand."

...while where they were overriden, in the pursuit of "self-defeating austerity", things have got worse:

"

Simultaneously, the social situation is deteriorating, especially in Member States in southern and eastern Europe, as the effect of national automatic stabilisers, which played an important role in keeping up household expenditure and protecting the most vulnerable in the first phase of the crisis, has weakened more recently.

"

This makes it even more puzzling that the Chancellor here has chosen to reverse his position and override the automatic stabilisers by cutting benefits for the unemployed and low-paid workers.

6. Latvia, Ireland (and even Estonia) may look like "success stories" to some in the Commission, and perhaps to the financial markets (at present) but the reality in terms of jobs and incomes is rather different.

Between 2008 and 2011, long-term unemployment rose more than three fold in Estonia; more than four-fold in Latvia, despite mass emigration; and almost five-fold in Ireland. This in countries that (unlike Greece and Spain) have been praised for their relatively flexible labour markets! There is also a lot more on the rise in poverty and social exclusion in these and other affected countries.

And finally, one point from me on the relevance of this to the UK policy debate. Too often, discussion of eurozone and UK economic policy proceeds on two entirely separate tracks, as if the problems of one were completely different from, and irrelevant to, the other. In one respect, this is clearly rational; borrowing in its own currency and with its own central bank, the UK cannot and will not default and hence has vastly more fiscal policy flexibility than eurozone countries, as I and others have repeatedly emphasised. But that doesn't mean that many of the issues, both macroeconomic and microeconomic, don't apply in both; virtually every point above is just as relevant to the UK as to the eurozone.

[Xela]

As posted earlier up, the sad (but inevitable) news today that Blockbuster is going in administration. It was just a matter of time wasn't it? I think we all predicted it some point in the Corporate dead pool.

[CarewsEyebrowDesigner]

A lot of companies going to the wall at the minute had outdated business models and have failed to move with the times and react to the change in consumer habits. It has little to do with the shambolic twerps in charge of the country.

Which is a pity, because I like pointing out their baffling incompetence.

[Dr_Pangloss]

Blockbuster should have adapted to new consumption trends, with their name they could have been the market leader, instead they were just too slow to adapt and well, 'innovate'.

They brought it on themselves. It's sad because back in the day Blockbuster was the place to rent horror films and Mega Drive games.

Edited January 16, 2013 by Dr_Pangloss

[CI]

Dropping like flies, who next ??

[peterms]

Dropping like flies, who next ??

Any of a very large number.

...Figures produced by RSM Tenon accountancy group show that in 2012 about 1,300 retailers became insolvent, meaning they could not pay their debts – a rise of 7% on 2011. Chris Ratten, the firm's head of restructuring, said: "We expect this year to be worse, as those who have managed to teeter on the edge for the past few years will feel the full effects of the reduction of discretionary spending, fierce competition and reducing cash reserves.

"We believe 12,679 retailers have a high risk of insolvency out of more than 100,000 retailers nationally." The number at high risk, he said, was 40% up on December 2011...

Here.

[Genie]

I do feel quite surprisingly sad about the loss of Comet, Jessops, HMV and now Blockbuster. Thats all really.

[peterms]

A lot of companies going to the wall at the minute had outdated business models and have failed to move with the times and react to the change in consumer habits. It has little to do with the shambolic twerps in charge of the country.

Which is a pity, because I like pointing out their baffling incompetence.

Reassure yourself that you can still blame the Bullingdon Boys.

There is a crisis of lack of demand.

Retail sales are at the lowest point for years, apart from two years ago when everyone was snowed in. And that's even with food costing 10% more than last year.

The particular firms that went down may not have been very well run. But the shrinking of the economy means that if it wasn't them, someone else would have taken their place.

And the decision to shrink the economy, reduce people's income, cut overall spending and therefore overall income, is a deliberate policy decision by Lord Snooty and his chums.

[peterms]

This is a good starting point, in 140 characters:

Michael Meacher ‏@michaelmeacher

Bankers must be brought to justice, prosecuted, banks broken up, money supply restored to public control #banks http://wp.me/pPvte-1eH

[coda]

Lord Freud defends bedroom tax

[peterms]

Lord Freud defends bedroom tax

That's actually quite shocking.

I've heard a lot of tory attitudes down the years, but his complacency, indifference, refusal to engage with the problem, and sheer lack of any shred of interest in or sympathy for the hardship he is causing, is stunning.

[snowychap]

That's actually quite shocking.

I've heard a lot of tory attitudes down the years, but his complacency, indifference, refusal to engage with the problem, and sheer lack of any shred of interest in or sympathy for the hardship he is causing, is stunning.

It's not that shocking, really. This is David Freud.

[peterms]

It's not that shocking, really. This is David Freud.

I'm easily shocked. You should know that by now.

[TheDon]

A lot of companies going to the wall at the minute had outdated business models and have failed to move with the times and react to the change in consumer habits. It has little to do with the shambolic twerps in charge of the country.

It's not like this is even a new thing either. Anyone remember Rumbelows?