Covid

AEP writes below on “Britain’s remarkable recovery from Covid” and compares this with the German situation as of now.

More post facto reckoning: Carl Heneghan, professor of evidence-based medicine at the University of Oxford talks about how lockdowns failed to protect the vulnerable, the catastrophic errors of the Covid modelling, and the suppression of critical voices during the pandemic.

Cosas de España/Galiza

Shortly after I did a lot of work yesterday on the Spanish article on 2021’s fake news from the execrable Vox party, the Olive Press came up with an English version, though only in respect of 8 items.

Spanish meat and veg. And fruit.

And drink. Something on the red Mencia wine of Bierzo, up in our mountains. Not to mention the white Godello wine I favour.

Here and here, autónomos can learn something useful about new laws and about reducing their taxes.

Here’s the full article on life in Cataluña. If you read part 1 yesterday, you only need to read from the paragraph which begins The secessionist parties’ new strategy . . .

The UK

Richard North’s latest comment on Mr Johnson: No-one really expects to see his demise any time soon. Although a sense of shame would have had anyone with any decency offering their resignation, this is not for the prime minister, who will doubtless cling to power until his party finally musters the will to depose him. Then, the end will be swift and brutal. As has always been the way of the Conservative party. Even with Mrs Thatcher. And, more recently, Mrs May.

As RN says: Any number of important issues are stacking up and we, as a nation, cannot afford the government to be neutered by closeting a weak leader. And we need the media to return to the news agenda, instead of obsessing over the trivia of a failed v administration.

Ex Tory MP, Maatthew Parris feels that: The Tory right will decide when Johnson goes. They’re close to concluding — but have not quite yet concluded — that his usefulness to them has passed. . . . He might survive: might live, at least, to fight another day. He has been shot. He is winged. He will never fly again but he will stagger from one shenanigan to the next. What an indictment of British politics!

Looking ahed . . . Says Parris: Johnson will stumble again. Dreadful local government election results loom in the spring. Can he really hold out that long?

Spanish

Agallas: Nerve; Guts; Balls (it says here)

Finally . . .

I recently went on Tinder, stressing I was only interested in hearing from folk wanting to walk the Camino de Santiago. I neglected to specify an age range, which led to the discovery that several young women on the site are sex workers and many of the rest present themselves as if they were. TBH, I was a tad shocked. The other surprise was how similar most young women look these days. About which phenomenon this is an apposite comment:-

How do they do it? Make-up and hairstyle, I guess.

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THE ARTICLE 

Britain’s remarkable recovery from Covid – and the lesson of Dante’s Paradiso. Germany’s comparative struggles are an extraordinary reversal of fortunes: Ambrose Evans-Pritchard, The Telegraph

The UK has regained its pre-pandemic levels of GDP long before Germany, Italy, and Spain, and slightly before the eurozone as a whole. It is ahead of Japan and Canada. This is a remarkable outcome when you think that the OECD forecast a year ago that Britain would limp into 2022 with output still 6.4% below its pre-Covid peak, an economic basket case languishing along with Argentina at the bottom of the developed world’s league table. The International Monetary Fund also predicted that the UK would be left behind in perma-slump through 2021 and into 2022. The global institutions got it seriously wrong. Why?

It certainly looked terrible in the blackest days of mid-2020, when the UK seemed to be suffering the worst economic contraction of the major western economies, even as it was recording (or seemed to be recording) one of the worst tolls of excess deaths from Covid – another illusion of timing and misused data as we now know. The UK downturn appeared to be an outlier in relative terms because of the purist way that the Office of National Statistics measured public sector output, as did the French data office, which made France look worse than it was. The UK’s coiled-spring recovery (and the French recovery) was the predictable flip-side of this distortion. The British economy has grown 8%  over the last year, more or less as predicted last Easter by Capital Economics, Investec, Jefferies, and Goldman Sachs.

Output in November was 0.7% higher than before the pandemic. Omicron will take a bit back in December but the light-touch response of the Government, vindicated by booster vaccination and widespread immunity from past T cell memory, ensures that any economic hiccup will not seriously hold back recovery.  

German output is still far short, even though we are not quite comparing like with like. The German data agency warned today that the economy faces contraction this quarter of minus 0.5 to 1%  There are growing fears of an outright recession over the winter. This is an extraordinary reversal of fortunes. Germany was universally praised in the first wave of Covid for limiting the economic damage. Its Kurzarbeit system designed to help companies keep workers employed part-time was hailed as a model for the rest of us, as it is in many ways. But whether it is because of a shortage of semiconductor chips for the car industry, and over-reliance on Chinese supply chains, or whether it is a deeper malaise that has coincided with Covid and has yet to be fully diagnosed, the German recovery has been strangely weak.

It is noteworthy that the UK saw a record £25.5bn last year of technology start-up funding from venture capital, more than in Germany and France combined. This has lifted the number of British ‘unicorns’ to 75, mostly in areas such as artificial intelligence, digital tech, biotech, and blockchain. People see what they want to see in Brexit, according to their ideological bias. This infects analysis.

Italy has not done too badly thanks to Mario Draghi’s Bidenesque New Deal spending but the Italian economy probably ended last year 1%  below pre-Covid levels nevertheless. Spain is still almost 5%  lower. Yet the rise in public debt across the Club Med bloc is vertiginous, and remember that these states are sub-sovereign borrowers without a currency and central bank of their own – ie, they cannot unilaterally print their way out of trouble in extremis. All told, the euro area is unlikely to recoup lost output until early 2022. “I think it is fair to say that eurozone GDP was probably still just short of its pre-pandemic level in the fourth quarter,” said Andrew Kenningham, chief Europe economist at Capital Economics.

Caution is in order. The UK has in a sense pulled forward its recovery and flattered the picture. Rishi Sunak’s ‘super deduction’ cut the effective marginal rate of corporation tax to zero, enticing companies to invest their bloated corporate savings, which reached £100bn during the pandemic, 50% above normal levels. The Bank of England has been running an extremely loose monetary policy with the lowest real rates in the rich world, and perhaps the lowest in peace-time history. It is rocket fuel for overheating. The current account deficit is running at 4%  of GDP. But there again, a bad recovery is better than no recovery. As for the sequence of events, one is reminded of Canto XIII in Dante’s Paradiso:

“Nor yet shall people be too confident

In judging, even as he is who doth count

The corn in the field ere it be ripe.

For I have seen all winter long the hawthorne

First show itself dried and sterile,

And then bring forth its flower in the Spring;

And I have seen a ship direct and swift

Run o’er the sea throughout its course entire,

To perish at the harbour’s mouth at last.