It is Wednesday and I am going to stick to my decision to ‘not publish a blog post’ on Wednesdays unless there is some new data (such as the quarterly release of the Australian National Accounts). I want to use this time to attend to other writing obligations. But a few snippets won’t hurt, will they? The first, looks at some extraordinary denial from the European Union bosses. The second, looks at evidence that the Brexit environment is already providing positive dynamics for British workers in low-wage areas of the labour market. And that is being presented by the Remainers as something negative! We move into 2019, just as we left 2018!
Eurozone Dystopia: Groupthink and Denial on a Grand Scale
My 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – was named to reflect the reality of the European Union.
No better demonstration of the validity of that title and the arguments presented need be produced than to refer everyone to the New Year’s Eve Tweet from the European Union Commission President Jean-Claude Juncker who was ‘celebrating’ 20 years of the common currency.
Here is the Tweet:
Try to work out whether:
(a) He was drunk.
(b) He lives in a parallel universe.
(c) He was trying to inject humour into the disaster of the euro.
(d) All of the above.
And then you get the Portuguese Minister of Finance and president of the Eurogroup (yes a ‘Socialist’ and we know that term no longer means anything much) saying (Source):
The single currency has been one of the biggest European success stories: there can be no doubt about its importance and impact over the first two decades of its history … The euro and the close economic cooperation that it entails has evolved over time, overcoming challenges in its way.
If the euro is “one of the biggest European success stories” then the rest of history and development must be dire, to say the least.
These sort of statements attempt to revise history and cover up the damage to ordinary citizens of one of the biggest scams in European history.
Here are two graphs.
The G7 is the US, UK, Japan, Canada, Germany, Italy, France.
The ‘Advanced economies’ are:
Australia, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong SAR, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Macao SAR, Malta, Netherlands, New Zealand, Norway, Portugal, Puerto Rico, San Marino, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Taiwan Province of China, United Kingdom, and United States.
The ‘Other advanced nations (excluding G7 and euro area)’ are:
Composed of 16 countries: Australia, Czech Republic, Denmark, Hong Kong SAR, Iceland, Israel, Korea, Macao SAR, New Zealand, Norway, Puerto Rico, San Marino, Singapore, Sweden, Switzerland, and Taiwan Province of China.
The next graph shows real GDP growth for these aggregates (and the European Union) between 1999-2018 and 2008-2018.
Knowing the composition of the aggregates allows one to do some deduction and conclude that the Eurozone Member States have peformed poorly since inception and particularly so since 2008, when the first real test of the monetary unoin came.
The G7 is clearly dragged down by the Eurozone members (France, Germany, and Italy, and they with the exception of Italy, they were among the strongest performers within the Eurozone.
The next graph shows the employment growth performance.
I could offer more evidence (and have previously), but this is enough.
And, remember, that it is only because the ECB consistently breaks the law (by funding fiscal deficits) that the Eurozone is still intact.
There was an extraordinary article in Bloomberg a couple of weeks ago (December 22, 2018) – Cornwall Pub-Hand Shortage Shows the Future of Work After Brexit – which was trying to spin a line that the Brexit decision was creating labour problems for employers in the tourist areas of Cornwall.
The article began by stating:
Cornwall, the southwest peninsula of Britain, is struggling to find enough bartenders to serve the millions who flock to the rocky coastline every year.
Any prospect of recruiting cheap labor from the continent has dried up after the region voted along with the rest of the country to leave the European Union. More significantly, pubs and hotels are coping with an ageing, dwindling workforce that often doesn’t have the right skills.
This gets to the heart of the productivity problem in the U.K., which is dogged with some of weakest growth in output per hour worked among Group-of-Seven nations.
All negative by the sound of it.
A typical Remain-type hype that Britain will cease to exist because it will not be able to harness any labour skills.
Not a mention of the word ‘austerity’ and the its impact on the sustained period of poor economic growth and the flow-on effects to productivity-enhancing investment and training.
No, apparently productivity growth in Britain is lagging behind because the decision to exit the European Union has deprived industry of “cheap labor from the continent”.
You just can’t make this sort of stuff up.
Whether the decision by the British people to exit the European Union is actually behind the ‘shortage’ of labour in Cornwall is one thing.
And that proposition is not sustained by the article with anything but anecdotal evidence.
But the article does ‘spill the beans’, even if that is not its intention.
We read that in relation to the behaviour of employers in the region:
What is expected of us is increasing … staff want more training and bigger career goals …
And as a result, employers are being forced to invest in staff development, skills training, and better workplaces.
The article says that efforts are now in train to give workers:
… a broader view of the industry as an investment, a way to retain them at the end of their training.
The organisation of workplaces is evolving (“moved to a three-month ahead rota in its kitchens — something that raises eyebrows among small business owners used to operating on a week-to-week basis”) and workers will be able to take advantage of the fact that vacancies “hit a record high in the three months through October as unemployment held at the lowest since the 1970s” to get better pay and conditions and redistribute some of the profits back to those who do the work.
If the access to cheap imported labour is being reduced then for low-wage workers in Britain that will be a good thing.
And in Cornwall “a 56.5 percent majority voted Leave”.
This sort of dynamic will start showing up all through the British economy. The balance of power will tilt just a bit towards workers after years of shifting the other way.
I was trawling through some old albums this morning and dragged out this beauty from – The Spencer Davis Group – which was quite an eclectic UK band (still going) who released music spanning pop to pulsating R&B to pure Chicago Blues.
My preference was to the latter although it was the former that made them more famous.
The song (that follows) – I’m a Man 0 was released in January 1967 and was written by keyboard player Steve Winwood (who joined the band in 1963 as a 14-year old).
Steve Winwood left in the same year it was released to form the magnificent band Traffic.
You might also try to find Chicago’s 1969 version which was a near 8 minute jam and set the model for other bands to replicate.
All young garage bands at the time wanted to play this song.
Many bands I have played in over the years produced versions of the song.
But none were as good as the original.
This was on the 1967 album, also entitled, “I’m a Man” which is probably their best (I think). By the time of the release, the Winwood brothers had left the band.
I can recommend this album highly.
That is enough for today!
(c) Copyright 2019 William Mitchell. All Rights Reserved.