Chris is not impressed with Beecroft

Rick is good on Beecroft

Bloomberg reports that “France finds itself in a sweet spot, drawing the strongest auction demand since the European debt crisis began in 2009 as bond investors give Francois Hollande, the country’s first Socialist president in 17 years, the benefit of the doubt.” French government 10 year bonds are at 2.739%, the lowest since October and down from 3.17% just before the first round of the presidential election. The spread between French and German bonds (the extra interest investors demand for French bonds because they are perceived as riskier) has fallen to 133 points, down from 149 on April 20.

A brilliant post by Jonathan Portes on trhe Not the Treasury View blog.
He says: "with long-term government borrowing as cheap as in living memory, with unemployed workers and plenty of spare capacity and with the UK suffering from both creaking infrastructure and a chronic lack of housing supply, now is the time for government to borrow and invest. This is not just basic macroeconomics, it is common sense. "

In the 'Inequalities' blog, Lindsey Macmillan and Paul Gregg look at the evidence about inter-generational unemployment. There’s lot less than politicians and media sometimes suggest: “only 0.3% or 15,000 households are in a position where both generations have never worked” and in a third of these households the younger generation has been unemployed less than 1 year.
There +is+ inter-generational worklessness, but “it is only in the labour markets with high unemployment that sons with workless dads are disproportionately more likely to be workless than sons with employed dads.”

Thomas Piketty, Emmanuel Saez & Stefanie Stantcheva look at 18 OECD countries and disputes the claim that low taxes on the rich raise productivity and economic growth. The optimal top tax rate could be over 80% and no one but the mega rich would lose out.

A new SKOPE pamphlet by Ewart Keep looks at what puts people off training & education (amongst other things).
If people know that they are members of a group or come from an area where people tend only to get lousy jobs (or none) they may not see much point in education & training. Raising the number & quality of jobs available may change their minds.
The UK has a high percentage of graduates working in jobs that don't require degrees: suggests over-supply & is likely to exacerbate problems for those who aren't graduates. If you see yourself as destined for unemployment or a bad job you will be even less likely to find learning attractive.
It is less and less credible to say education isn't producing numeracy & literacy skills. What it does fail to provide are maturity, a positive attitude and work experience – but these are best obtained in workplaces; they really should be seen as employers' responsibility.

John Monks on Europe's challenges

Center for American Progress's Matt Browne draws attention to Hollande's election campaign, which, though aimed at a French audience who want France to remain French, was resolutely about achieving change at a European level. Has any previous election campaign in a country of comparable scale seen such a progressive mix of nationalism and internationalism?

Good sense from Rick

A survey by the MS Society looks at attitudes to disability: 21% said disabled people should just accept they can’t have the same opportunities in life, 24% think disabled people often exaggerate the extent of their physical limitations (and 76% of people with MS say there has been at least one occasion when someone questioned whether they have MS because they ‘looked well’).

Chris Dillow asks “What is happening to profits and wages?”. He looks at GDP by income (wages, profits and ‘other’) since 1955 and says that “the wage share fell between 1975 and 1997, but recovered thereafter, only to slip back since 2009.”

The Northern Ireland Commissioner for children and young people's assessment of the Welfare Reform Act and the other welfare reforms concludes:
"The incomes of families with children in Northern Ireland have already been badly affected by welfare reforms introduced since 2010, with consequent lowering of living standards for those in the bottom half of society. Those families face a further drop in living standards over the coming three years and the Assembly needs to move to protect families with children in any way it can."
Northern Ireland has a relatively large proportion of households with children and higher levels of disability, so it will be especially hard hit.
The document also includes a useful timeline for welfare reforms affecting families with children since 2010.

Robert Reich sets out an election-winning strategy for President Obama: growth not austerity, greater income equality, tackle mortgage arrears, and capping fuel prices.

The web page for the campaign to save Sure Start, with links to campaign resources developed by UNISON and the Daycare Trust and useful facts and figures.

GMB analysis of figures for employment in councils for the third quarter 2011 shows that women account for 68.2% of the reduction in employment in local councils in England & Wales.

The South East is the worst affected region, with women accounting for 75.6% of the drop but they are more than 50% in every region. In 20 of the 375 councils, women account for 100% or more of the drop.

The Welsh Assembly’s new Jobs Growth Wales scheme will create 12,000 jobs for 16- to 24-year-olds. The jobs will last forsix months, and pay at least the Minimum Wage for at least 25 hours per week.

Campaigning in Wales in the local government elections Vince Cable denies that the government will impose lower pay on Welsh public sector workers. Apparently, he says: “It would be wrong to do so and it’s practically impossible”. Well fancy that.

Paul Krugman has a graph that says it all, charting EU nations' fiscal policy against their real GDP growth, 2007-11. And guess what?
There's a strong positive relationship between change in real government consumption as a proportion of initial GDP and change in real GDP.

Alphaville presents a Moddy's review of US corporate cash piles – an amazingly high proportion is held by Apple:

"Apple alone represents $64 billion or 36% of the total $179 billion increase in corporate cash since 2009. And in 2011, overall corporate cash would have actually declined by $6 billion had it not been for Apple’s $46 billion increase. …

"Apple alone could represent 12% of total corporate cash, about three times more than the next cash king. …"

As Alphaville notes, America's top five companies account for 22% of the total.

Paul Krugman has a great short answer to the "we've maxed out our credit card" argument.

The report of the 2011 TUC Poverty Conference, with speakers including Frances O’Grady, Christine Blower, Natascha Engel MP and Owen Jones (author of Chavs).

BBC News Magazine compares benefits now with poor law benefits paid before the “New” poor law of 1834 (which brought in workhouses).
“Lone mothers could receive up to 37% of the income of neighbouring working households” – this compares quite well with the percentage of average incomes they would receive under the modern system, but everyone was poorer, so they were worse off in absolute terms. Pensioners could receive up to 70% of average wages – much higher than the equivalent figure today.

BRC Sales Monitor reports UK retail sales values last month were down 0.3% on a like-for-like basis from February 2011. They comment: “Total sales growth is still below inflation, so overall customers are actually buying less than a year ago, while discounts are eating into margins”

The BCC expects the UK to avoid double-dip recession, but predicts weak growth in 2012. Their 2012 forecast for GDP growth is revised down from 0.8 to 0.6 per cent; they have not changed their 1.3% forecast for 2013. Unemployment expected to rise from 2.67m to 2.90m in Q1 2013.

In 2006 Norway legislated to require that women should fill at least 40% of Board places in companies traded on the Oslo bourse. This study compares Norwegian and other Scandinavian companies and finds “that firms affected by the quota undertook fewer workforce reductions than comparison firms, increasing relative labor costs and employment levels and reducing short-term profits.”
The authors speculate that, over time, as more women candidates for board places become available, shareholders may find it easier to vote for candidates who share their beliefs. As a result, the differences highlighted in this study may gradually diminish.

Michael Krauss summarises some research that sheds light on why inequality persists in America and which seems to be very likely true for Britain too: 1. People don’t realise the scale of inequality; 2. Social classes are less distinct; 3. There’s an assumption the rich will behave well (have a look below for an indication of why that may not be a good idea…)

A series of studies by a team of American researchers has found that upper class individuals are more likely to lie and cheat and agree with unethical work behaviour.
In one of the studies, upper-class motorists were 4 times as likely to cut other drivers off and 3 times as likely to cut off a pedestrian. In a game with dice rigged to ensure low scores, upper class individuals were more likely to claim scores it was impossible to achieve. Attitudes to greed were the best predictor of unethical behaviour and upper class individuals were more likely to believe that “greed is good”. Another summary of this study reports co-author Paul Piff’s comment: “Across all seven studies, the general pattern we find is that as a person’s social class increases, his or her tendency to behave unethically also increases”

A new monthly report from the CCCS debt counselling service finds “households are spending 24% of their discretionary income – £199 per month – on interest payments.” Households “try to rebuild their balance sheets” and will “push the debt to net income ratio down about a quarter by late 2014.” Last year it was difficult for households to make progress “due to the real disposable income squeeze caused by high inflation and low wage growth. This has been compounded by the increased cost of key essentials such as petrol, utilities and housing with many turning to loans to smooth consumption over this tough time for family budgets… [M]ortgage debt is crucial for personal finances and is becoming an increasingly important area of debt advice.”

USDAW, which represents 410,000 workers in retail and distribution, is in talks with a number of major companies "to examine their continuing participation in the Government’s Work Programme."
Like the TUC, USDAW supports schemes that provide reasl help for unemployed people but it is becoming clearer that the Work Programme is more about exploitation.