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The UK is now a near Communist state run by Conservatives

Politics / UK Politics Apr 20, 2020 - 06:50 PM GMT

By: Submissions

Politics

The State and Politics

 


  • The role of the state will be more invasive
  • Governments have got used to telling everybody what to do and all authorities have new emergency laws in place. In some countries these powers are already misused by the police (France)
  • The freedom of the individual is gone, and it will take a hard fight to get freedom back
  • All this will be combined with the cause to fight Global Warming and the same powers will be used to that end. E.g. whether or not you may use your car.
  • The fact that Governments in many countries are now paying for the livelihood of many businesses and employees strengthens the State’s power further
  • The Covid-19 crisis has shown up cracks in the cohesion of the Global co-operation, between friendly countries, trade blocs and even federal states (USA, EU and Germany)
  • Business and holiday travel will become an exception. Much will be and is done online and digitally
  • Countries will become more nationalistic. They have seen that when such a serious crunch comes, it is only one’s own government that will look after you and even our own government has been slow in their protection of the population
  • Countries will want to become more self-reliant on manufacturing the end products of many goods that were found out lacking at the start of the Covid-19 outbreak. Some PPE is still in short supply and has to be bought of all place in China.
  • Nationalism is expensive and it will drive prices up
  • There will be a policy to strengthen the National Health Service where money is no object. Vast sums will be spent on new staff, training and equipment
  • The UK NHS will be treated like a victorious army and will have everything it needs (eventually) but it will never be enough as so many health treatments have been put on hold. The cancer patients will have to be treated as well.
  • All this NHS expenditure and the keeping the economy going (sort of) will require unbelievable sums of money. As the Tax base has shrunk, owing to companies no longer paying tax and having many tax/rates breaks, the National Debt will explode. It will be so vast that nobody can grasp the amount of zeros or what it means. Unfortunately, it means poverty for generations to come. Just as a reminder, the UK government paid off its last instalment of its WWII Lend Lease loans from the USA in 2006.

How will we get back to normal?

  • To find out how we could get back to normal from our lock-down, we must study the experience of the people of Wuhan after they were told that they could come out (partially) and travel again
  • The reaction was not that enthusiastic. Many do not trust that it is over, not even the government itself. “Outdoors is not safe!”, many feel. There is a suspicion that recovered patients may still carry the virus and they are not welcome everywhere. There is also great sadness and mistrust of the authorities who lied to the people when the virus was first discovered.
  • Only a few shops and businesses have opened again. Many can’t, no money, no staff
  • Some areas which were unlocked and free to go again, have for whatever reason been restricted again (new outbreaks?)
  • It seems that the reality of unlocking a lockdown is not easy. People will have been hurt through losing loved ones or having been ill themselves, they are psychologically affected, nervous and uncertain.
  • One thing seems to become clearer: The economy will not suddenly burst into bloom. Recovery will be very patchy, uncertain and tentative with a possibility of severe setbacks, mistrust and quite a bit of social strife. It certainly will not be a V shape recovery.

The economy

  • There will be a global crash with economic activity falling by numbers never seen before. No-one is buying large ticket items and manufacturing is slow and patchy in recovering. There is a demand and a supply problem that will lead to great instability in many sectors.
  • Unemployment will be at record highs.
  • In the medium term this is not all bad news as firms will come back on stream, often with the help of their governments, to provide goods that are in short supply. Again, the governments will be directing much of the initial recovery. Politicians are not the best managers of industry so we must hope that they will let go soon. This is more difficult because many firms and industries have been financially carried by the State and dependent on orders from the State.

The financial markets

  • We have witnessed one of the largest and steepest falls in the stock markets ever.
  • Certain sectors, have since recovered about half of the initial fall
  • In view of the severity of what is will be the deepest recession for years, there will be more market setbacks.
  • There cannot really be a full market recovery until there is a vaccine available and in quantities that enable billions of people to be immunised.
  • That will be some years from now at the earliest
  • My conclusion for the stock markets is that there will be enormous swings between hope and despair. It will be a trader’s market and they will have to be exceptionally brave and nimble.
  • Just at this moment (19/04/20) I think the recovery has gone far enough and there may be a setback in world markets of 10-15% in the coming week(s)

By Frederik s’Jacob


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