Monday, 1 June 2009

Macro and micro

What news from the economic front?

Today General Motors will be filing for bankruptcy, so the economy is once again ‘news’ It is over two weeks since Conductive World last dwelt upon ‘the recession’ but the problems have not of course gone away, They are just so commonplace now as hardly to merit specific remark.
The economic situation is just ‘there’, essential background to everything that we do and plan for the future (and that goes for Conductive Education too, your programs, your jobs).

General Motors’ going to the wall, however, is news, at any time and by any measure, a way-mark from which to look round and seen where we’ve got to at the middle of 2009.

Macro

I have just being listening to Professor Danny Blanchflower, a British economist resident in the United States, summarising the macro-economic state of play for Britain, the United States and similar countries on this morning's Today programme, on BBC Radio 4 (Blanchglower, 2009).

Simple really:
  1. We live in the greatest financial crisis for a century, facing an age of austerity, a world that we know very little about, in which people will have to learn to adjust their living standards because of the big changes that are going on around them.
  2. .An especial worry is growing unemployment. Reduced lending rates and ‘quantitative easing’ (printing electronic money) are being tried in the United Kingdom to combat this but it is too early to see whether they will have long-term effects. Long-term trends probably mean anyway that unemployment will continue to grow at an unprecedented rate into 2010.
  3. Especially worrying is the large increase in youth unemployment. This is a large cohort and the cost of doing nothing are likely very high, a ‘lost generation’ that will be a permanent scar on out economy [and, one might add, our social fabric].
  4. What is happening now is a necessary but painful adjustment in the economy after a period of excess, bringing us back to back to financial reality by, for example increasing the price of risk. Some businesses die in this process, others will grown.

Nothing there really that most people who do not live on another planet will not have worked out for themselves, but some might find it reassuring to have authoritative corroboration.

Micro

Conductive Education is not on another planet,nor is it apart from and immune to the forces that frame the rest of life. Rather it is a part of that life, a microcosm of its world.

You may wish to consider how all four of Danny Blanchlowers' points are reflected in the present and foreseeable situation of Conductive Education, at least in the United Kingdom and the United States, and other countries like them.

And don’t forget General Motors and the wider crisis in the motor industry that it represents. People have turned away from expensive manufacture of high-cost gas-guzzlers and, if they buy cars at all now they may be looking to purchase smaller, more efficient units. Some are even turning back to public transport. Any lessons here for our own microcosm?

And don’t forget either what happens in Hungary (most recent bulletin on Conductive World also two weeks ago: Sutton 2009b), It has also been suggested here that Hungary serves as an economic canary, an indicator of things to come. Ho, what news from Hungary, macro and micro?

References

Blanchflower, D. (2009) Interviewed on Today, BBC Radio 4, 1 June
http://news.bbc.co.uk/today/hi/listen_again/default.stm

Sutton, A. (2009a) It’s going to be L: continuing course of recession gets ever clearer, Conductive World, 15 May
http://www.conductive-world.info/2009/05/it-going-to-be-l.html

Sutton, A. (2009b) Hungarian democracy: an oxymoron? Conductive World, 15 May
http://www.conductive-world.info/2009/05/hungarian-democracy.html

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