Britain's GDP fell again in the fourth quarter of 2012, raising the specter of a triple-dip recession
Britain's economy is a riddle wrapped in a mystery inside an enigma, but this much is clear: it's a disaster. After its Olympics-fueled growth, such as it was, lifted it out of recession in the third quarter of 2012, Britain might be headed back after its economy fell 0.3 percent at the end of the year -- the fourth time in five quarters its GDP has contracted. Britain's now verging on a triple-dip recession, which is just another way of saying a depression.
But it's not so simple.
Britain is stuck in its worst GDP slump in a century, but not so for jobs. As you can see in the chart below from Jonathan Portes, the director of the National Institute of Economic and Social Research, Britain's stagnating economy has left it in worse shape at this point of its recovery than it was during the Great Depression. GDP is still more than 3 percent below its 2008 peak, and it hasn't done anything to catchup in years. At this pace, there will be no recovery in our time, or any other time.
It's no accident this era of zero growth has coincided with an era of austerity. Despite entering office with borrowing costs at 50-year lows, the Cameron coalition decided the government deficit, and not the growth deficit, was the chief threat to future prosperity. It raised taxes and cut the growth of spending, but did so with little regard for what constituted smart cuts and what did not. As Portes points out, public net investment -- things like roads and bridges and schools, and everything else the economy needs to grow -- has fallen by half the past three years, and is set to fall even further the next two. It's the economic equivalent of shooting yourself in both feet, just in case shooting yourself in one doesn't completely cripple you. Austerity has driven down Britain's borrowing costs even further, but that's been due to investors losing faith in its recovery, rather than having more faith in its public finances. Indeed, weak growth has kept deficits from coming down all that much, despite the higher taxes and slower spending. In other words, it's economic pain for no fiscal gain.
But the story of Britain's flatlining growth isn't just one of ignoring Keynes' maxim that the boom, not the slump, is the time for austerity. It's more like an economic whodunit. The euro crisis -- yes, we're rounding up the usual suspects -- has kept Britain from exporting its way out of trouble, as its largest trading partner, the euro zone, has been too busy flirting with breakup and recession to buy as much stuff as it otherwise would. It hasn't helped that some of Britain's big productivity industries like oil and finance have gone into what might be the start of long-term declines; the North Sea oil and gas fields and the City of London have both shed output and jobs. But this downtrend in Britain's top industries doesn't nearly explain the real puzzle of its economy -- the collapse in productivity.
In other words, the disconnect between GDP and jobs. While the economy is, at best, stuck in neutral, Britain has been adding jobs at a better-than-decent clip the past year or so. Unemployment recently reached an 18-month low, and, in absolute terms, more people have a job today than in 2008 (though underemployment is a problem). This combination of zero GDP growth with positive job growth means Britain is working more to do less. Richard Davies of The Economist calculates Britain is 12 percent less productive today than it was at similar points in other recoveries -- and the decline of the North Sea fields and the City probably only explain 1-2 percentage points of this gap. That leaves a pair of, hardly mutually exclusive, possibilities: either Britain has some serious GDP mismeasurement problems or some serious economic problems, full stop. The former is usually the case any time there's an apparent disparity between GDP and jobs data, but the disparity is so large and so persistent in this case that it seems something else is going on. Davies hypothesizes zombie firms are starving new, more productive firms, for credit, which may well be true, but, again, doesn't seem to explain the full scope of the disaster.
The good news, if there is any, is Britain just poached Mark Carney, one of the top central bankers in the world, to run the Bank of England, and he seems determined to do more than his predecessor to get the country out of its economic rut. And that's it. There is no other good news. Thank goodness for stiff upper lips.
She lived with us for 56 years. She raised me and my siblings without pay. I was 11, a typical American kid, before I realized who she was.
The ashes filled a black plastic box about the size of a toaster. It weighed three and a half pounds. I put it in a canvas tote bag and packed it in my suitcase this past July for the transpacific flight to Manila. From there I would travel by car to a rural village. When I arrived, I would hand over all that was left of the woman who had spent 56 years as a slave in my family’s household.
The condition has long been considered untreatable. Experts can spot it in a child as young as 3 or 4. But a new clinical approach offers hope.
This is a good day, Samantha tells me: 10 on a scale of 10. We’re sitting in a conference room at the San Marcos Treatment Center, just south of Austin, Texas, a space that has witnessed countless difficult conversations between troubled children, their worried parents, and clinical therapists. But today promises unalloyed joy. Samantha’s mother is visiting from Idaho, as she does every six weeks, which means lunch off campus and an excursion to Target. The girl needs supplies: new jeans, yoga pants, nail polish.
Listen to the audio version of this article:Download the Audm app for your iPhone to listen to more titles.
At 11, Samantha is just over 5 feet tall and has wavy black hair and a steady gaze. She flashes a smile when I ask about her favorite subject (history), and grimaces when I ask about her least favorite (math). She seems poised and cheerful, a normal preteen. But when we steer into uncomfortable territory—the events that led her to this juvenile-treatment facility nearly 2,000 miles from her family—Samantha hesitates and looks down at her hands. “I wanted the whole world to myself,” she says. “So I made a whole entire book about how to hurt people.”
The office was, until a few decades ago, the last stronghold of fashion formality. Silicon Valley changed that.
Americans began the 20th century in bustles and bowler hats and ended it in velour sweatsuits and flannel shirts—the most radical shift in dress standards in human history. At the center of this sartorial revolution was business casual, a genre of dress that broke the last bastion of formality—office attire—to redefine the American wardrobe.
Born in Silicon Valley in the early 1980s, business casual consists of khaki pants, sensible shoes, and button-down collared shirts. By the time it was mainstream, in the 1990s, it flummoxed HR managers and employees alike. “Welcome to the confusing world of business casual,” declared a fashion writer for the Chicago Tribune in 1995. With time and some coaching, people caught on. Today, though, the term “business casual” is nearly obsolete for describing the clothing of a workforce that includes many who work from home in yoga pants, put on a clean T-shirt for a Skype meeting, and don’t always go into the office.
The American president has surprised everyone with his enthusiasm for the Israeli-Palestinian peace process. But he might not understand what he's getting into.
JERUSALEM—Is Donald Trump the last best hope for the peace process?
As a candidate, Trump was an iconoclast in many ways, but by and large he hewed to the positions on Israel typical of Republican presidential candidates. Trump promised to move the United States Embassy from Tel Aviv to Jerusalem and railed against the Iran deal.
Trump’s promises reassured the Israeli right and the pro-Israel American right. He earned rave reviews from figures like the Jewish Home leader Naftali Bennett, who declared after the election that “Trump's victory is a tremendous opportunity for Israel to immediately announce its intention to renege on the idea of establishing Palestine in the heart of the country—a direct blow to our security and the justice of our cause.”
President Trump’s former national security adviser won’t comply with the Intelligence Committee’s demand for Russia-related documents, his lawyers said Monday.
Michael Flynn, President Trump’s former national security adviser, told the Senate Intelligence Committee on Monday he won’t comply with their May 10 subpoena of materials related to the Russia investigation, invoking his Fifth Amendment right against self-incrimination.
“The context in which the committee has called for General Flynn’s testimonial production of documents make clear that he has more than a reasonable apprehension that any testimony he provides could be used against him,” Flynn’s lawyers wrote in a letter to the committee. “Multiple Members of Congress have demanded that he be investigated and even prosecuted.”
Flynn’s response comes less than a monthafter the committee issued a formal demand for any documents “relevant to the committee’s investigation into Russian interference with the 2016 election.” The committee noted it had asked him to voluntarily turn over the documents in April, but his legal counsel declined.
Isabel Caliva and her husband, Frank, had already “kicked the can down the road.” The can, in their case, was the kid conversation; the road was Caliva’s fertile years. Frank had always said he wanted lots of kids. Caliva, who was in her early 30s, thought maybe one or two would be nice, but she was mostly undecided. They had a nice life, with plenty of free time that allowed for trips to Portugal, Paris, and Hawaii.
“I wasn’t feeling the pull the same way my friends were describing,” she told me recently. “I thought, maybe this isn’t gonna be the thing for me. Maybe it’s just going to be the two of us.”
At times, she wondered if her lack of baby fever should be cause for concern. She took her worries to the Internet, where she came across a post on the Rumpus’ “Dear Sugar” advice column titled, “The Ghost Ship that Didn’t Carry Us.” The letter was from a 41-year-old man who was also on the fence about kids: “Things like quiet, free time, spontaneous travel, pockets of non-obligation,” he wrote. “I really value them.”
“Having a slave gave me grave doubts about what kind of people we were, what kind of place we came from,” Alex Tizon wrote in his Atlantic essay “My Family’s Slave.”
A thousand objections can be leveled against that piece, and in the few days since it was published, those objections have materialized from all quarters. It’s a powerful story, and its flaws and omissions have their own eloquence. For me, the most important failure is that Tizon seems to attribute Lola’s abuse entirely to another culture—specifically, to a system of servitude in the Philippines—as though he believes, This doesn’t happen in America. But that system is not only in America, it’s everywhere. It ensnares not only immigrants, but everyone.
The president’s tax-and-spend plan isn’t just a reversal of his campaign promises. It’s also a deeply unpopular blueprint for the country.
President Donald Trump’s first major budget proposal comes out on Tuesday, but many of the details are already public. The budget would reverse several of Trump’s campaign promises—like his pledge to preserve Medicaid and Social Security—by dismantling welfare for the poor and sick, while ensuring that rich Americans keep more of their income.
At this point, the proposal is just that—a proposal, and Congressional Republicans, some of whom have balked at the president’s blueprint, hold the power of the purse. But if followed, the plan would reportedly cut anti-poverty programs by $1.7 trillion over the next 10 years in an attempt to balance the budget, according to the The Washington Post and Axios. In addition to $800 billion in cuts to Medicaid—which comes directly from the House’s Obamacare replacement—the budget would also let states use “work requirements” to limit eligibility and spending on programs like SNAP (the Supplemental Nutrition Assistance Program, previously known as food stamps), CHIP (the Children’s Health Insurance Program), and Social Security Disability Insurance. There is little question that these policies would raise the number of uninsured Americans (the Congressional Budget Office’s estimates suggest by more than 20 million), expose more households to medical bankruptcy, and push more families into poverty.