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Author Topic: The wartime mentality? [DotD 5.4.2020]  (Read 829 times)
grahame
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« on: April 05, 2020, 09:19:23 »

We are all changing our daily lives. Some is to reduce our dependence and drain on others. Some is to be of extraordinary help to others.  Some is to protect ourselves and our loved ones.  Is this what might be called a "wartime mentality" - as is commemorated in this photograph, taken (tenuous transport link!) at an ACoRP (Association of Community Rail Partnerships) event a few years back.



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Lisa, Billy and I are in informal physical self-isolation; haven't left here for a week. Virtually, we are far from being isolated - online perhaps even more than ever, and a number of incoming long phone calls - all very welcome; a bias in the opening gambit towards "calling to see if you're OK" but really very much a two way chat - and a two way benefit. Keep 'em calls coming, please; lets me / us feel that at least we can do somethig to help raise spirits.  Friend on line / on Facebook - yes, we're here, Facebook, Messenger too.  We've been far from running out of things to do, but changing life balance makes time for friends all the more findable and precious.

May not be a war as they have been know in the past - but we are in a war against disease ...
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« Reply #1 on: April 05, 2020, 19:39:18 »

It's a funny sort of war though... the economy is in what someone described as a medically-induced coma; not something that's ever been done before. Usually after a war there's a need for reconstruction, but nothing's been broken yet.

If we are to spend our way out of the coming depression, then investing very heavily in broadband seems like an obvious candidate, as does 5G (if they can find a way to stop the eccentric belief that 5G equipment causes coronavirus). But what about sustainable transport? Hyper-mobility is without doubt a factor in the spread of the disease; will it be harder to justify investing in anything that helps people physically move around?
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« Reply #2 on: April 05, 2020, 21:09:40 »

It's a funny sort of war though... the economy is in what someone described as a medically-induced coma; not something that's ever been done before. Usually after a war there's a need for reconstruction, but nothing's been broken yet.

I think there is an important parallel with wartime, which could usefully be made explicit. Look at it this way:

During a war (WW2 in particular), a huge number of employees stopped doing their normal jobs and worked to the state - fighting the war, making materiel, wardening, and lots of other things. Some were directly employed by the state, some via contracts with their employers. The product of all this was the war effort, which was not something people would choose to buy or want as a service, it was just the negation of something worse.

Today, many employees are similarly paid (or way or another) to do what the state directs, for the greater good - which is stay at home, as it happens - and similarly producing nothing of monetary value to anyone. I think that's really pretty similar.

During the war, some of the cost of this wasted effort was raised by borrowing, but tax rates were also raised  so, not only was everyone paying, but their unspendable pay was pulled back out of the economy. Part of that was called "post-war credit" - a form of compulsory loan. For those working for the state, it was as if they were paid partly in IOUs. Doing it that way allowed the government to control when that money could be spent, after (for many long after) the war. I've heard no serious suggestions that big tax rises in the short term are needed - quite the opposite. Odd, that.

In some ways it would have been better for the current income support to have been implemented by some kind of contract of non-employment, or requisition to stay home. It would encourage the idea that following the confinement rules is part of the deal, and if a rumour got going that you could be docked pay for disobedience ...  But I can see why in practical terms it was always going to be easier to use the existing benefits system, even if it needs a big boost in capacity to cope.

What really puzzles me is why "economists" (or commentators of that sort) are labelling these payments, whether here, the USA, or elsewhere, as "stimulus" (an entirely Keynesian notion). Does anyone really think people are holding back money they might spend, and need prompting to spend more right now? What on? And I've also heard a lot about the risk of depression or deflation, but when I heard Rishi Sunak announce his Big Bung  my first though was: This is a full-size experiment to test the idea that inflation is dead - if £330Bn (and more since) in income with no corresponding production doesn't kick off inflation, then is probably is dead.
« Last Edit: April 06, 2020, 01:39:51 by stuving » Logged
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