The Bums on Pews Indicator

Last night I hear the most ridiculous argument in support of the economic recession thesis. On BBC's Newsnight, Jeremy Paxman cited as one indicator the fact that apparently attendances at Catholic Churches have halved because Polish workers have gone back home!!! But, the evidence seems to be that many Poles have gone back home because the Polish economy is growing strongly, not because the British economy is declining. Many came here with the express intention of earning some money before returning home, much as did the Geordie brickies from Auf Wiedersehen Pet who went to work in Germany in the series. Moreover, the inidcation seems to be that the Poles are being repalced by other Eastern European workers.

All day long the BBC harped on about the BCC survey, eyt the Chief Economist of the CBI said not only were we not in a recession, but it was not at all a foregone conclusion that we would go into a recession. But, that didn't fit the mood music so was passed over quickly. Today, the BBC News reported on the fact that large numbers of building workers were being laid off. But, where is the surprise in that. The whole Polish plumber phenomenon arose because for many years you couldn't get hold of a plumber, joiner, electrician or brickie. For the last few years building companies have been throwing up as many houses on as many small pieces of land they could get their hands on. They have been in league with the banks and building societies to get people to flats and houses at inflated prices, promising discounts to people who bought off plan and other such silly ideas, giving buyers money for their deposits to get round lending restrictions, packaging up houses along with the payment of professional fees, and encouraging people who often really had no idea what they were doing to go in for "Buy to Let" spurred on by all those BBC Programmes about how easy it is to become a property speculator. No wonder when that great Ponzi scheme collapsed those same Banks and builders are reaping what they sowed, or more corectly as always happens under capitalism it is the workers who are made redundanct from those firms, and the workers who lose the houses they couldn't really afford in the first place.

Other figures were out today that I didn't see on the BBC. Japanese Machinery orders for last month rose by more than 10%. That was against a forecast of just over 1%! Now you shouldn't take one month's figures on its own, but clearly soem Japanse companies must see some prospect of business if they are incresaing their orders for amchinery at that rate. The revised First Quarter figures for EU growth were announced also with only a marginal 0.1% downward revision, giving year on year growth of just over 2% still. That average is pulled down by Spain and Ireland who grew very rapidly on the back of what was for them a lax monetary policy by the ECB for years. At the other end Germany continues to grow strongly.

In the US sales and profits figures for ALCAN the huge aluminium producer came in a head of forecasts too. In another segment of Newsnight there was a report from Tanzania where the economy is growing strongly, and it is becoming clear that there are a number of African Lion economies that in the next long cycle will occupy the role that some Asian economies have occupied this time round. Already, the huge increase in food and commodity prices is binging large revenue streams to these countries rich in resources, and many of which could be huge food producers for the world if the right Capital investment in infrastructure, drainage, fertiliser etc. was put in.

The world may be experiencing a slowdown from the rampant growth of the last few years, but it is certainly not in a recession. Nor will the world economy go into recession. Some of the older more sclerotic economies such as the US, and UK that have kept themselves afloat during the 25 years of the downturn with huge doses of liquidity are suffering the effects of that like a drug addict going Cold Turkey, yet its likely that even these economies will either escape recession or experience only a fairly mild one. All of the doom and gloom has a political motivation. It is designed to encourage workers not to seek wage rises to protect them against inflation. The bosses hope that if they ca do that for this year then inflation will fall next year, and so they will be able to argue for low wage rises next year again having screwed more profits out of workers this year. Workers shouldn't be taken in.