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"... A Spartan future awaits the 40% of working-age Britons who are falling behind. They are in the bottom half of the income scale but, unlike the poorest 10%, predominantly live off wages, not benefits. Their predicament dates to the early 2000s, when GDP and earnings peeled apart. Living costs have since left median wages far behind (see chart).
"The plate tectonics of the labour market offer the best explanation for this. With a declining industrial base, the British economy needs fewer mid-level skilled workers. Most new posts are low- or high-paying ones (see chart 2). Many in the middle lack the skills to move up and are pushed towards the low-wage end of the economy. Machinists and tradesmen become cashiers and call-centre workers."
"The notion that the Bank of England base rate is dominant and we should all go shopping has already been punctured"
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The Guardian: "No, this is not the road to recovery. It's the road to Wongaland"
"Before becoming chancellor, George Osborne provided a sound analysis of the British economy. In his Mais Lecture of February 2010, he said: "The overhang of private debt in our banking system and our households weighs heavy on future prosperity." A new model, he announced, rooted in more investment, more savings and higher exports, would require "new policies and new institutions".
"... [However,] for three years the government has revived and propped up a very old, Victorian model of the economy. Just as in the 19th century, bankers or creditors dominate policymaking, ensuring that the value of their assets (mainly debt) is not just stable but rises relative to profits, wages and incomes.
"... Far from pursuing a 'new economic model' based on investment, savings and exports, it's back to the old inflate-the-housing-market-and-boost-consumption meme – but this time with a high-debt, low-wage economy. That is the road to Wongaland."
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Daily Telegraph: "Are we in a new 'Alice in Wongaland' spending bubble? No: consumer confidence is up, but that's a good thing"
"Ann Pettifor, director of Prime Economics, is a fantastic economist. She was way ahead of her peers in 2006, when she published her prophetic booklet “The Coming First World Debt Crisis”. She never sought out the limelight, like rivals who had only loosely identified the looming crisis, but instead stuck to valuable forensic research.
"And now, following stonking retail sales growth in July, she has coined one of the catchphrases of the year with her claim that Britain has an 'Alice in Wongaland economy' reliant on the ephemeral 'confidence fairy'.
"This time, though, I can’t agree with her. There is no new consumer debt bubble. Households are not 'plundering their savings', as she put it. House prices are not spiralling out of control. There is a fear that the Government is stoking another bubble, but it is no more than that for now – a fear."
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