Thursday, 26 November 2020

Rishinomics in not Conservative

I don't sadly have the time to got through a line by line take down of the errors in the fiscal and monetary policy currently being suggested to get over Covid. 

What I can say is that it is not capitalist, there is no role for a private sector led recovery. Instead we continue down a higher borrowing, higher taxing and higher spending Government route. Let's not pretend apart from some very minor bouts of abstinence for a few years every few decades or so, this has been the trajectory of the UK since the Napoleonic wars.

However, the risks of it are worse now that the finances are in such poor shape. We are but a bout of inflation away from a bond crisis. Worse, the money the Government is spending is in now way investment. Take defence spending, I am not sure who we are defending ourselves from currently and neither is the Government. We are buying lots of ships when there is no danger of invasion or credible threat to our trade lines. So why now? Why not in five years when we have righted the fiscal hole?

Spending on the NHS, endless though it is and awful though the machine has proved in the pandemic, is also never investment, just more jam today. There will be no return on the money. 

Extra benefits and automatic stabilisers I get, but the real impact the Chancellor should have had is to insist all Leisure and Retail remains open after December 2nd, with enforcement of Social Distancing strongly prioritised over closing businesses. Again, this is a statist response in its entirety. 

Finally, worst of all, it plays into the hands of Labour for the future, it frames the whole debate as how much can we spend and on what freebies. The Tories last were in that position in the early 2000's and promptly spent a decade out of power. You can't outspend Labour's imagination.

Somehow Rishi is getting a write-up as a good Chancellor, search me as to why.

16 comments:

E-K said...

I agree about the write up of Sunak. I've never rated him.

We have one of the lowest infection rates here in our part of England. Why do we face Tier 2 ? All I see around me is ultra compliance with the rules. Fat lot of use it has done us.

We are being punished. All of us. Pure and simple. It's as though they want to turn Britain into 1960s East Germany.

I did say in my guest post that a vaccine would always be on a dangerously distanced horizon and here it is. "One last push !"

It won't be the last push. Even the vaccine won't be good enough. Hancock is now trying to make us all hypochondriacs even about the common cold.

Project Fear.

Unknown said...

"Spending on the NHS, endless though it is and awful though the machine has proved in the pandemic, is also never investment, just more jam today. There will be no return on the money. "

It is often an investment. When the NHS cures somebody in their 30s of, for instance, appendicitis, then that person can do several more decades of useful work instead of dying young.

Any increase in the health of working age people must benefit the country as a whole.

Don Cox

E-K said...

Mixed feelings, Don.

My experience of the NHS is that it is very good at encouraging poor health - even injuring patients, both my Mum and Dad - and then keeping people alive in a poor state for a very long while.

There is always a pill that will keep you going and now people get obese in epidemic numbers because 'there's a pill that'll take care of it.'

Six months of Dad lying on his back on drugs with a final week of him screaming and we now face the serious prospect years of Mum on dialysis in her '80s... 3 days a week.

That's three days a week a son is going to have to spend sitting in a car park or a unit if they'll let him.

A blessing maybe, but certainly not an investment.

Graeme said...

"it is often an investment" - citation required. For example, what is the age profile of the frequent customers?

Sobers said...

"My experience of the NHS is that it is very good at encouraging poor health - even injuring patients, both my Mum and Dad - and then keeping people alive in a poor state for a very long while."

I've always said that the NHS is brilliant at picking up the pieces off the floor, and assembling them back into an approximation of a human being, but after that it doesn't want to know. It will get you into a state of 'not actively dying' but thats as far as they go. The rest of the system can't be arsed to see care through to full recovery. Thats too much like hard work. If you have any debilitating but non fatal illness/syndrome it doesn't care either. To be honest I struggle to understand how anyone who has had to deal with the NHS for care for themselves or their loved ones can have anything positive to say about it.

I do suspect that one of the reasons the UK has been disproportionately hit by covid is the failures of the NHS have left a significant proportion of the public as you say 'alive in a poor state of health', and thus are more susceptible to the virus. Similarly the nature of NHS care means people have no active incentive to manage their own health - if becoming type 2 diabetic cost you money (as it would on the Continent, with charges to see doctors etc) then you have a direct monetary incentive to try and sort yourself out. When healthcare is 'free at the point of delivery' no such incentive to self help exists......

Anonymous said...

@sobers
The American health care model doesn’t invoke much ‘self help’ either.

jim said...

I don't think Rishi has much choice, a major hiccup on the vaccine front, no shovel ready projects and hospitality is our low-skill low wage route to killing more people. We behave ourselves on the Covid and transport front or else our European neighbours will shut the ports - sovereignty or no.

As for the private sector, there is absolutely no barrier to setting up the biggest and bestest manufacture and service industries here. Except for a lack of market access.

Come January 1st I am hoping the ERG will let us all in on the big secret strategy that drove Brexit. The ERG is a club for the very rich and successful and they are bound to have a top banana strategy up their sleeves. Let us hope it extends beyond those elderly tropes, flogging off the NHS and the BBC.

I always saw Brexit as the most stupid idea on the face of the planet but I hung up my consulting boots long ago. All I can see is a try-out of the 'bowl of rice a day' idea, work cheap and stay employed. Snag is that outside Europe people can work cheaper.

Nick Drew said...

the NHS is in a game of desperately high stakes; so in the eyes of its clients, sometimes it wins big (full recovery of someone at death's door) and sometimes the opposite (perennial scandals that leave lives ended or wrecked)

plus, it cannot avoid being the front-man for the famous clinical / financial paradox: successfully treating otherwise healthy middle-aged people who, in an earlier age, would have been finished off by some fatal condition - but are now shepherded towards a staggeringly expensive, anything-but-healthy old age, cancer, dementia...

in this, it is like Defence spending / the cost & capabilities of individual items of kit: but whereas in defence, governments can just reduce the amounts of kit (and, once in a while, come up with new tech that seriously cuts costs, e.g. drones), in health it can't work like that

in any health system, private or public, someone is going to pay for the brilliant pharma business model: buy my wonder drug to save your life now; then buy my twice-a-day statins / blood-pressure drugs / heart pills / blood thinners / anti-depressants / water retention tablets etc etc etc to keep you going for another 30 years, ramping up all the time

taking Don Cox's point @ 4:01, that's a return on investment for somebody ... but maybe not always the taxpayer

E-K said...

I highly recommend the books by Alex Berenson - The Unreported Truths about Covid-19 Lockdowns

The links are useful and it provides peer reviewed data on the lack of efficacy for lockdowns and face masks.

E-K said...

ND

Dr Max Mosely reported this week on the treatment of type 2 diabetes being the completely free (in fact money saving) method of dieting and exercise.

The NHS prefers to prescribe pills.

Well of course it does. It doesn't like being beastly to people. It doesn't like saving money. The whole set-up is geared towards Pharma companies making the most out of new drugs and the ten-year patent window they have to rake it in. Doctors bought by someone with a BTEC to his name for the price of a beer and a prawn sandwich.

Yet again the BBC presents before me interviews comprising a street parade of fatties who have done nothing about their weight in the last 9 months all telling me I must take CV-19 more seriously.

Well clearly they don't take it seriously either. Obesity is one of the worst comorbidities.

This has become a complete Karen's charter.

DJK said...

The NHS certainly has its problems, but the eye-watering costs and the futility of keeping people ticking over halfway between life and death is common to most of the western world. Like a lot of things, criticism of the NHS suffers from extreme parochialism. Spending 10% of GDP on health care is actually pretty typical. (The USA is an outlier at 17%). Even Afghanistan and Cuba each spend 12%; Cuba with much better outcomes than Afghanistan, or pretty much better than anyone else in the world.

There are more alternative systems out there than those of the USA, France and Germany. Some humility, and an examination of systems in the far east or in the more advanced developing countries might help us spend our own 10% a little better.

CityUnslicker said...

bringing "the USA" into a discussion on the NHS is a version of Godwin's law.

BlokeInBrum said...

As is discussion of Cuba. Their remarkable results are only valid if you believe the stats coming from a totalitarian regime.
How's tractor production coming along, Comrade?

Anonymous said...

With medical care (I'll get to the NHS itself shortly), return on investment is by no means monetary.

Let's be clear, society is about people, and the governments primary remit is protecting those within its borders, with an emphasis on its citizens who are effectively its employers. Economic security plays a part it that, but should not be allowed to eclipse all else, otherwise we lose sight of what civilisation is actually for.

Case in point. The second biggest complaint on here, and elsewhere, with lockdown has been mental health. So that there are non-financial considerations is implicitly understood, even though there are those who will explicitly claim otherwise until they're in the firing line, and then it's all atheists in foxholes.

The NHS is a special point - I've worked within it, provided services to it, consumed non-medical services from it and used it for mine and my family's health.

It's generally good, but it has been elevated into some ethereal realm that benefits neither it, nor us, and will ensure that any debate about fixing its issues gets stymied.

This means when it fails, those failures are quickly forgotten about, and those responsible can usually get on with their careers. There is a lot arse covering between medical professionals, and there is a lot of political antics that go on.

Stuff the government could clamp down - e.g. meaningful prison terms for silencing whistleblowers, enforced by the courts, enforced transparency for groups like the GMC - will achieve a lot if they actually do it.

If you've been in the NHS, and are of the managerial bent, you can play it to make a nice sum of money. If you're someone like Crapita, you can do the same, safe in the knowledge projects are mishandled and that medical professionals are frequently a bit thick outside their area of expertise. Although Doctors are trained to be arrogant (how much trust would you have in an uncertain GP? They must convince, even when they turn out to be wrong)

Suff said...

One of the biggest issues with the health care system is the matrix by which it is measured by the government. Namely “ the hospital waiting time”. It’s an easy stat to roll out at question time “ this government has reduced hospital waiting times by....” but it’s absolutely meaningless and counter productive to the health of the nation and the financial cost for later treatment. The assumption is they treated more people through greater efficiency or extra spending on more operations (then why not say that). The reality is that they delay the point at which you are put on the list, through ever more loops of consultation. All the time the patient is in pain and condition deteriorating (unacceptable from the social perspective) probably on the sick and more expensive to treat later ( so not contributing from the financial perspective) or worse case, just gets so frustrated with whole process that they just give up, until it becomes catastrophic

Matt said...

The NHS is shit partly because most of the clients don't see the costs due to it being free at the point of delivery.

You can be damn sure that people wouldn't clog up the local doctors with their hypochondriac issues if they had a £20 fee each time. Add £1 for each % over ideal body weight for the fat shamed to top it off.

And no, this wouldn't remove vast swaths of otherwise economically useful people due to illness they couldn't afford to have treated. They'd just have to find a real reason for a few days off on the sick after a weekend of lager and kebabs.