A nice succint article on where it has all gone wrong.
According to the IMF's "Direction of Trade Statistics," our 2008 trade deficit with China was $285 billion, larger than any nation. However, we also run deficits with Germany, Israel, Italy, Japan, South Korea, Switzerland, and Vietnam, despite some having higher production costs. Why? How do Germany, Switzerland, and Sweden accomplish a nearly balanced trade relationship with China? Why can't we?
Business Week (5/5/201) reports U.S. employment in high-paying, essential manufacturing continues to decline (about 18 million in 1979, 11.5 million now), and now is the lowest since March 1941. Productivity improvements account for some job reductions, but not all. Manufacturing's share of GDP shrank from 25 percent in the 1960s to 11 percent in 2008, according to data from the Commerce Dept.'s Bureau of Economic Analysis. We keep hoping new high-technology jobs will absorb those losing manufacturing jobs -- however, Business Week also reports that we bought nearly $15 billion worth of advanced technology products from China during January-February of this year, but sold China only $3 billion in high-tech goods. The Chinese will soon also have more high-technology DNA-sequencing capacity in one building than the entire U.S., and at least one respected economist expects massive offshoring of U.S. service jobs next.
The point is all these countries make things worth buying.
You go to China and almost all the lifts are Otis built, even the maglev was built by them.
You see railways made with german / Korean/ French tech.
You've got to have a salable product if you want to sell it, the UK doesn't seem to have anything other than the ponzi scheme of property bubbles (according to dispatches how the banks won) we won't invest in anything at all other than ponzi schemes.
The UK is a world leader in pharmaceuticals and weapons manufacture. Our HE sector (which in terms of foreign students is an export industry) is also a world leader. Unfortunately those industries do not necessarily employ the number of people to make a fully rounded economy.
This is true. HPI is our biggest industry and it was a success all the time the credit bubble was growing.
ONS data said 40% of our total net worth (8.4Trillion) in 2007 was housing. That is a massive sector of our economy that produces nothing other than debt and passive social benefits (places to live). The side industries that grew along with the bubble include the many shylocks, expanded banks that gave us the multi-million poound bonuses based on even more debt creation, EAs and sign makers. None of which are exportable although we did export a few EAs when the E Europe boom got started. I can still see one of them now, standing in a square in Latvia somewhere and saying how flats were flying off the shelves as Brits were clamouring for the last remaining centrally located properties that could double in price in a few months as the European economy exploded. And explode it did.
We are still living in a fools paradise and I am afraid Osborne did not come to grips with the reality that our economy is still reliant on HPI and the non-productive industries that support. On the other hands, if he lets HPI go we lose 40% of our economy and that would hurt.
ONS data said 40% of our total net worth (8.4Trillion) in 2007 was housing.
On the other hands, if he lets HPI go we lose 40% of our economy and that would hurt.
2. HPI was our biggest industry - I am willing to believe but how do you measure that?
3. How is 40% of our net worth 40% of our economy - surely they are two different things?
Sorry if this is derailing the thread.
First maglev was in Birmingham I believe.
Next export market: importing chinese citizens.
We already do that - it is called postgraduate business studies for the ladies and postgraduate information technology for the gentlemen.
I was thinking more about the peasantry.
They are already in your local takeaway.