Pro-growth
Joined April 2011
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Is there any #news or just what PR people are pushing #r4today @omrgriffiths @bbcnickrobinson @JustinOnWeb
Derconomy retweeted
French politicians talk a lot about yields, the French central bank and the ECB, but none are brave enough to state the obvious. Without drastically addressing the absurd, debt-financed French pensions, France will not be able to avoid a debt crisis.
The French retire years sooner than other Europeans, and France is the only country where pensions exceed the income of the working-age population. It is absurd and unsustainable, yet nobody discusses the necessary deep adjustments. Cosmetic changes won’t be enough. Even the allegedly "right" RN seriously demands a lower retirement age at 60 and 62.
It is simple, either France fixes its funny pensions system, or it goes bust and takes the entire eurozone with it.
Derconomy retweeted
Our full report is here, complete with a recreation of Cebr's model that lets you see precisely how they came up with their too-good-to-be-true numbers.
taxpolicy.org.uk/vat-free-sh…
Summary below, but *way* more detail in the report.
Derconomy retweeted
Luxury retailers want taxpayers to fund a 20% tax break for foreign tourists.
They paid consultancy Cebr to claim this will raise £2.6bn for the UK. That convinced Sadiq Khan and Kemi Badenoch.
But it's false: a free lunch. Four basic errors mask a £600m loss.
Thread:
Derconomy retweeted
Bloomberg reports that Gulf leaders they spoke with at the U.N. are working to end the Iran war, at odds with a Wall Street Journal report portraying key Gulf allies as resistant to easing pressure on Tehran.
“Gulf Arab states are putting whatever pressure they have at their disposal without actually escalating to using financial means to pressure the U.S.,” says Bloomberg Economics’ Dina Esfandiary. “But everything else, diplomacy, you know, really insisting and ensuring that the U.S. kind of walks away.”
“War for them is their worst case scenario,” she adds.
Derconomy retweeted
"James K. Galbraith takes up the challenge of identifying some of those economists—the “nobodies” of the profession—who did see it coming, and who have not gotten the credit they deserve."
levyinstitute.org/publicatio…
Derconomy retweeted
No, it’s about taxpayers subsidising developer profits. The same developers who failed to fix thousands of defective buildings they built.
And @UKlabour is just throwing another generation under the bus.
Derconomy retweeted
This "the state pension has been paid for" line has to stop. People QUALIFY for a future state pension by either paying NI from salary, buying years or claiming NI Credits for childcare, caring responsibilities, sickness, disability, unemployment. PAYING NI IS NOT A REQUIREMENT.
Is the #RentersReformAct the new #NI increase? These kinds of shocks in theory should only have an impact on the price level rather than the longer-term inflation rate but adverse supply shocks keep on happening and this seems likely to impact inflation expectations.
This would be the chart that would worry me at No.10 (North & South). Rents now rising at +4.2% YoY. There were plenty of warnings that the Renters Reform Act would constrain supply, and cause a surge in rents. Typically rents lag core inflation by ~18 months (due to lease renewal lags) so the pick coming now - with more inflation likely in the new year - risks making this a big political problem heading into an election.
Scathing from @darioperkins but #KevinWarsh really does feel out of his depth. With a hike today #Trump will likely not only be furious with #Warsh but Scott “TheHouse” #Bessent too.
How did Warsh get into this position where the market is bullying him to hike? Clearly energy prices haven't helped, but also:
1) excessive virtue signalling. He didn't need to criticise the record of his predecessor or challenge the "revealed preference" stuff.
2) his FOMC colleagues have been turning increasingly hawkish all year
3) the Jackson Hole speech. Its ironic that when he finally gave something resembling forward guidance he basically tied himself to one data data point. We only asked for a view on the economy...
4) the underlying inflation data. While the MoM stats are patchy and residually seasonal, very little disinflationary progress has been made since Warsh took over. Given the distortions, maybe we should go back to looking at yoy rates!
Derconomy retweeted
The hospitality industry are back lobbying for a VAT cut
They don't mention the cost: £12bn
They don't mention who gets the £:
❌ The smallest most vulnerable businesses? Get nothing
❌ Consumers? Prices won't fall
✅ McDonald's gets £400m. Big chains are big winners
🧵:
Derconomy retweeted
People saying pensioners should have a Personal Allowance that tracks the state pension. In a word - no. As I said, I'm all for people on low income having "more" but preferential treatment for pensioners is not the answer. Paying taxes is all part of the social contract.
Derconomy retweeted
Attempting today to forecast US CPI components using their nearest PPI counterparts would be a fool’s errand. The PPI data:
- are revised, often substantially;
- generally reflect prices on August 11, unlike the CPI data, which cover the whole month;
- capture prices for goods and services provided that month, whereas the airfare and accommodation CPIs capture bookings for future trips;
- miss the import-price-to-CPI channel, which is crucial for many core goods.
This is clearly true. We can not afford to be a global military power, have triple-locked pensions, and have high levels of benefits.
Exclusive:
Britain is “poorer than we often think” and cannot rely on higher public spending as a route to making the country “great again”, a former minister has said
Darren Jones, the former chief secretary to the prime minister under Sir Keir Starmer, said that higher public spending alone would not lead to economic growth
Writing for The Times, he said: “Britain is poorer than we often think. We won’t get richer based on higher public spending alone, and we can’t tax billionaires who don’t live here
“We shouldn’t rely on public spending as a route to some romantic version of making Britain great again as we look in the rearview mirror for a great history that is no longer available to us. We must face the future, and I know my colleagues are up to the challenge.”
He said Burnham’s ten-year plan, which is expected to be published in November, must “rise to these challenges, or the sugar rush of short-term announcements will be meaningless in the face of the populist backlash that will follow”
thetimes.com/uk/politics/art…
Advocates of higher spending point to countries like Denmark but we don’t have Danish levels of productivity or economic structure. City states such as Singapore and HK are aggressively trying to capture industries like trading and asset management at the same time as…
Derconomy retweeted
Taxing young people just to keep seniors from ever having to sell their family-sized homes is the bipartisan response we seem to have settled on to demographic collapse and housing unaffordability.
open.substack.com/pub/progre…
