The Overton Window

[tyke1962]

Are we about to see it move I wonder ?

Inflation running at 9% and workers expected to take the hit on terms and conditions so as to protect profits and corporate greed .

The current situation seems different to what we've experienced in the relatively recent past , following the financial crash and the austerity years for instance .

Public opinion seems to favour the union's and strike action .

The union leaders are handling the disputes and themselves with incredible integrity .

What's different from the past is that inflation is running high and affecting everyone which hadn't happened before and allowed the transfer of wealth to take place from the low and middle paid to the wealthy since 1979 .

This isn't the railway , teachers , airport staff and NHS's dispute this is actually everyone's .

Workers are also waking up to the fact that it's Trade Unions who are fighting for you and not politicians and membership is increasing due to people like Mick Lynch talking in a language they understand .

Mick Lynch is connecting and the politicians aren't , the government is nothing more than a scandal and sleaze machine and the Labour Party don't want to know you .

[albie]

You raise an important point, Tyke.

The most pervasive shift is happening in UK politics, where the centre of gravity of debate across a range of issues has shifted to the right.

This is even clear within the parties themselves. The one nation Tories have no voice under the ERG domination of the Johnson Cabinet.

Labour have been centralising control under head office, to the detriment of local democracy, as we saw in Wakefield.

The same thing has just happened in Stroud:
https://www.opendemocracy.net/en/stroud-labour-quit-starmer-doina-cornell-greens-coalition/#Echobox=1656697134

This is the opposite of what Labour should be about.
Constructive strategic alliances at a local level, determined by local members, is essential to good public governance where a working majority is not won.

This is becoming the new normal, and it casts a shadow over the integrity of the democratic process.

[belton rover]

When I voted to leave the EU, I did it mainly because I felt British politics needed a right old kick up the arse, and I hoped a shock result might be just what was needed. It was in a mess, and that has continued to snowball since.
I had to look up ‘the Overton Window’ as I’d never heard the term, but I think now we are quickly approaching a period of massive change.
As a country, we cannot go on much longer with such incompetence, arrogance, and ignorance from our political parties and their politicians.
Now is the time for wide scale change, but I have no Idea what that will look like.

[tyke1962]

You raise an important point, Tyke.

The most pervasive shift is happening in UK politics, where the centre of gravity of debate across a range of issues has shifted to the right.

This is even clear within the parties themselves. The one nation Tories have no voice under the ERG domination of the Johnson Cabinet.

Labour have been centralising control under head office, to the detriment of local democracy, as we saw in Wakefield.

The same thing has just happened in Stroud:
https://www.opendemocracy.net/en/stroud-labour-quit-starmer-doina-cornell-greens-coalition/#Echobox=1656697134

This is the opposite of what Labour should be about.
Constructive strategic alliances at a local level, determined by local members, is essential to good public governance where a working majority is not won.

This is becoming the new normal, and it casts a shadow over the integrity of the democratic process.

What we are currently witnessing at least in my opinion is the reverse of the 1970's .

As that decade drew to a close the country were sick to the back teeth of strikes by powerful trade unions bringing the country to a standstill .

The public are now sick to the back teeth of bosses protecting their profits and bonuses and attempting the hit to be taken by those who can least afford to .

The cost of living crisis has made the elephant in the room visible because more sections of society are feeling the pinch .

Most people who were doing ok really couldn't give a shyte about those who needed to use a food bank .

Most people who didn't need universal credit couldn't give a shyte about how much it was cut .

But they care about the price they are paying for their fuel at the forecourt .

They care about the cost of their energy .

They care about the price of food and they care about the rise in taxation .

The more people getting financially hurt the more likely the Overton Window moves .

You'd pretty much expect a Tory government to be desperately trying to uphold the status quo since 1979 , workers standing in solidarity is their worst nightmare and threatens everything they've gained since 1979 .

Labour have decided to look the other way too , it's not even sitting on the fence , there is no grey area here .

You are either in favour of workers standing up for themselves in order to put food on the table or you aren't .

Labour have more or less told you which side they are on and it isn't the RMT .

But the Overton Window will shift anyway irrespective of politicians .

[River Don]

"at 9% and workers expected to take the hit on terms and conditions so as to protect profits and corporate greed .

The problem here is, that whilst it is an attempt to protect profits, wage rises like this feed into secondary inflation.

I think many on the left know this but ignore the problem.

When large wage rises kick in, they simply force prices higher because fundamentally those commodities, oil, gas, grain have become scarcer.

So, it's self defeating, wages rise. Then prices react and rise correspondingly.

An inflation spiral is triggered, which helps no one.


We need more affordable energy. That must be the focus.

[River Don]

Tyke,

I disagree. This is exactly like the 1970s. There was an oil cris then pumping inflation. There is an oil crisis now. In fact it is worse now because it's not only oil. It's gas too. Even coal is expensive.

We need affordable energy.

[BillyStubbsTears]

That's almost bang on RD.

There are two problems in parallel here.

1) There is less "stuff" (cars, energy, food) being produced globally per unit effort. That by very definition means that we are poorer than we thought we were as a world and as a nation. Until we start finding ways to produce more stuff with less effort, that's just a fact of life. A standard economic result of us all being poorer on average is that prices go up faster than wages. That means, on average, we can each afford to buy less. Which kind of squares the circle.

2) A particular problem in the UK is that we've been increasingly unequal in how we have divvied up the economic pot for 40-odd years now. We've had more people dropping through the bottom if the net. More people just about managing. And the inflation shock is going to be existential for them.

In simple terms, there are millions of people who genuinely can't afford to get a bit poorer, without slipping into serious poverty.

In an ideal world, we'd deal with the fact that we are poorer as a nation, by putting that pain onto the higher paid who can, by definition, pull their belts a bit tighter than those who are already living on a knife edge. If we did that, we could see inflation-matching pay rises at the bottom end, while those of us at the more comfortable end became a good bit less comfortable. That could be done without producing a wage-price spiral because, on average, we wouldn't be all having inflation-level pay rises. On average, we'd be accepting the economic reality that we as a nation are a bit less well off overall.

  That would be the morally right thing to do. It would go some way to reversing the imbalances of the past 4 decades. But there's no way this Govt are doing that at the scale needed. So we are likely to see either really significant incrases in genuine poverty. And/Or a scramble among the more powerful unionised workers to cut themselves a better deal. Which will be great for them, but likely to leave as many losers as winners.

[BillyStubbsTears]

H/t to the brilliant economist Tony Yates for putting the supply shock inflation problem into simple terms that even a non-expert like me can follow.

When you realise that reduced overall supply means that we all, on average, have to do with less, it really clarifies the thinking.

There's no way out of that in the short term, until, as you say RD, we start producing more. Until then there is literally no escape.

Until then, the only question is, "How do we share out the losses?"

Imagine if the only people in the world were four farmers who collectively worked a common plot of land. And they each took a share according to some agreed formulae on who did what work, who looked after the machinery etc. Their individual "incomes" were just whatever share of the crop they got.

Now imagine there was a bad drought. And the crop yield dropped by 10%. By definition, on average they would lose 10% of their income.

They could do that by each of them agreeing to take 10% less.

Or they might agree that that would leave the poorest literally starving, so agree that they'd have a bigger cut for the most comfortable ones and protect the poorest.

Or they might all fight each other for whatever they could get.

At root, that is exactly the problem we now face. There's no getting away from the fact that the supply shocks mean we are all poorer. The question is - how do we manage that?

[albie]

For starters, a wealth tax alongside public ownership of key sectors like energy.
A wage policy for public sector industries tied to cost of living rises.

Once you have stripped out pricing to deliver shareholder returns, the nature of the problem changes.

[River Don]

In the short term the supply shock means:

More hydrocarbons from the North Sea.

Push the middle east to help us make up the shortfall. Forget about kashogi.

Look at fracking again.

Invest in renewable energy and batteries.

[tyke1962]

"at 9% and workers expected to take the hit on terms and conditions so as to protect profits and corporate greed .

The problem here is, that whilst it is an attempt to protect profits, wage rises like this feed into secondary inflation.

I think many on the left know this but ignore the problem.

When large wage rises kick in, they simply force prices higher because fundamentally those commodities, oil, gas, grain have become scarcer.

So, it's self defeating, wages rise. Then prices react and rise correspondingly.

An inflation spiral is triggered, which helps no one.


We need more affordable energy. That must be the focus.

So where does corporate pay plus bonuses , shareholder dividends and huge profits come in to this ? .

Was it right that the Thatcher government destroyed the trade unions leading to the greatest transfer of wealth from the lower paid to the wealthy in history ?

You won't get affordable or cheap energy whilst corporate greed and free markets are providing it ?

The Overton Window doesn't move because of politicians or economists , it moves when the people start to think differently on how they can best improve their lives .

Politicians then move in to that space that's created as Thatcher did , it's not the other way around .

Keith and the rest of his morons of course remain sleeping at the wheel .

[River Don]

Affordable energy is all that matters.

If energy is cheap then the economy grows.

[Colemans Left Hook]

H/t to the brilliant economist Tony Yates for putting the supply shock inflation problem into simple terms that even a non-expert like me can follow.

When you realise that reduced overall supply means that we all, on average, have to do with less, it really clarifies the thinking.

There's no way out of that in the short term, until, as you say RD, we start producing more. Until then there is literally no escape.

Until then, the only question is, "How do we share out the losses?"

Imagine if the only people in the world were four farmers who collectively worked a common plot of land. And they each took a share according to some agreed formulae on who did what work, who looked after the machinery etc. Their individual "incomes" were just whatever share of the crop they got.

Now imagine there was a bad drought. And the crop yield dropped by 10%. By definition, on average they would lose 10% of their income.

They could do that by each of them agreeing to take 10% less.

Or they might agree that that would leave the poorest literally starving, so agree that they'd have a bigger cut for the most comfortable ones and protect the poorest.

Or they might all fight each other for whatever they could get.

At root, that is exactly the problem we now face. There's no getting away from the fact that the supply shocks mean we are all poorer. The question is - how do we manage that?

have you ever heard of "creative accounting"

Old antiques trade joke - ‘There were three antique dealers stranded on a desert island with one Chippendale chair between them; and they all made a living’.

[River Don]

"at 9% and workers expected to take the hit on terms and conditions so as to protect profits and corporate greed .

The problem here is, that whilst it is an attempt to protect profits, wage rises like this feed into secondary inflation.

I think many on the left know this but ignore the problem.

When large wage rises kick in, they simply force prices higher because fundamentally those commodities, oil, gas, grain have become scarcer.

So, it's self defeating, wages rise. Then prices react and rise correspondingly.

An inflation spiral is triggered, which helps no one.


We need more affordable energy. That must be the focus.

So where does corporate pay plus bonuses , shareholder dividends and huge profits come in to this ? .

Was it right that the Thatcher government destroyed the trade unions leading to the greatest transfer of wealth from the lower paid to the wealthy in history ?

You won't get affordable or cheap energy whilst corporate greed and free markets are providing it ?

The Overton Window doesn't move because of politicians or economists , it moves when the people start to think differently on how they can best improve their lives .

Politicians then move in to that space that's created as Thatcher did , it's not the other way around .

Keith and the rest of his morons of course remain sleeping at the wheel .

Corporate greed and free markets have always provided cheap energy. Always.

We need affordable energy. It is essential.

[tyke1962]

"at 9% and workers expected to take the hit on terms and conditions so as to protect profits and corporate greed .

The problem here is, that whilst it is an attempt to protect profits, wage rises like this feed into secondary inflation.

I think many on the left know this but ignore the problem.

When large wage rises kick in, they simply force prices higher because fundamentally those commodities, oil, gas, grain have become scarcer.

So, it's self defeating, wages rise. Then prices react and rise correspondingly.

An inflation spiral is triggered, which helps no one.


We need more affordable energy. That must be the focus.

So where does corporate pay plus bonuses , shareholder dividends and huge profits come in to this ? .

Was it right that the Thatcher government destroyed the trade unions leading to the greatest transfer of wealth from the lower paid to the wealthy in history ?

You won't get affordable or cheap energy whilst corporate greed and free markets are providing it ?

The Overton Window doesn't move because of politicians or economists , it moves when the people start to think differently on how they can best improve their lives .

Politicians then move in to that space that's created as Thatcher did , it's not the other way around .

Keith and the rest of his morons of course remain sleeping at the wheel .

Corporate greed and free markets have always provided cheap energy. Always.

We need affordable energy. It is essential.

Really , remind me how our North Sea Oil venture worked out ?

[River Don]

"at 9% and workers expected to take the hit on terms and conditions so as to protect profits and corporate greed .

The problem here is, that whilst it is an attempt to protect profits, wage rises like this feed into secondary inflation.

I think many on the left know this but ignore the problem.

When large wage rises kick in, they simply force prices higher because fundamentally those commodities, oil, gas, grain have become scarcer.

So, it's self defeating, wages rise. Then prices react and rise correspondingly.

An inflation spiral is triggered, which helps no one.


We need more affordable energy. That must be the focus.

So where does corporate pay plus bonuses , shareholder dividends and huge profits come in to this ? .

Was it right that the Thatcher government destroyed the trade unions leading to the greatest transfer of wealth from the lower paid to the wealthy in history ?

You won't get affordable or cheap energy whilst corporate greed and free markets are providing it ?

The Overton Window doesn't move because of politicians or economists , it moves when the people start to think differently on how they can best improve their lives .

Politicians then move in to that space that's created as Thatcher did , it's not the other way around .

Keith and the rest of his morons of course remain sleeping at the wheel .

Corporate greed and free markets have always provided cheap energy. Always.

We need affordable energy. It is essential.

Really , remind me how our North Sea Oil venture worked out ?

Generally not bad.

If you ignore the environmental costs.

[tyke1962]

"at 9% and workers expected to take the hit on terms and conditions so as to protect profits and corporate greed .

The problem here is, that whilst it is an attempt to protect profits, wage rises like this feed into secondary inflation.

I think many on the left know this but ignore the problem.

When large wage rises kick in, they simply force prices higher because fundamentally those commodities, oil, gas, grain have become scarcer.

So, it's self defeating, wages rise. Then prices react and rise correspondingly.

An inflation spiral is triggered, which helps no one.


We need more affordable energy. That must be the focus.

So where does corporate pay plus bonuses , shareholder dividends and huge profits come in to this ? .

Was it right that the Thatcher government destroyed the trade unions leading to the greatest transfer of wealth from the lower paid to the wealthy in history ?

You won't get affordable or cheap energy whilst corporate greed and free markets are providing it ?

The Overton Window doesn't move because of politicians or economists , it moves when the people start to think differently on how they can best improve their lives .

Politicians then move in to that space that's created as Thatcher did , it's not the other way around .

Keith and the rest of his morons of course remain sleeping at the wheel .

Corporate greed and free markets have always provided cheap energy. Always.

We need affordable energy. It is essential.

Really , remind me how our North Sea Oil venture worked out ?

Generally not bad.

If you ignore the environmental costs.

Generally not bad how given the only revenue generated since 1986 was through taxation because it ended up in private hands .

The Norwegians by comparison  held a 50% state stake in the venture and ended up with a £400bn wealth fund .

So it's on the record corporate greed isn't going to lead to lower energy prices because Norway through 50% state ownership have proved it .

[big fat yorkshire pudding]

Couple of questions/thoughts on the points made.

How would we avoid a wage/inflation spiral?  Prices have increased hugely despite pay rises being fairly marginal.  If businesses pay the lower earners 7-10% more there is no alternative but to increase prices, most businesses just don't have the margins.

So, decrease pay for those at the top?  I'm not sure how you could do that.  The guys at the top of the payment tree usually get it because they could go elsewhere or there's little alternative, not many will accept a.lower wage, some would granted.  But overall like it or not there's a reason an engineer earns more than a cleaner.  They could just go elsewhere and there aren't many of them.

At what point do we perceive the help isn't needed?  How much do you have to earn for this to kick in?  Then, how do you actually prevent that?  I'm not sure you can.

[BillyStubbsTears]

BFYP
One way to do it by increasing taxes on those at the top. As Albie says, a wealth tax is sorely needed.

Another way is to do what we did after the War. Have inflation run ahead of interest rates for a generation while allowing the workers to get inflation matching pay rises. That worked very well for 25 years until we lost control in the 70s.

Both ways mean a redistribution of wealth from those who have it now without working, to those who work.

You may well say that's unfair. I say we've had 40 years of (mostly) exactly the opposite happening. There has been a long period of a large product of growth going to those with money, and a smaller product going to those who work. And that's also unfair.

It's time for the pendulum to swing back.

[tyke1962]

Couple of questions/thoughts on the points made.

How would we avoid a wage/inflation spiral?  Prices have increased hugely despite pay rises being fairly marginal.  If businesses pay the lower earners 7-10% more there is no alternative but to increase prices, most businesses just don't have the margins.

So, decrease pay for those at the top?  I'm not sure how you could do that.  The guys at the top of the payment tree usually get it because they could go elsewhere or there's little alternative, not many will accept a.lower wage, some would granted.  But overall like it or not there's a reason an engineer earns more than a cleaner.  They could just go elsewhere and there aren't many of them.

At what point do we perceive the help isn't needed?  How much do you have to earn for this to kick in?  Then, how do you actually prevent that?  I'm not sure you can.

A 7% pay increase doesn't make you better off , you are still 2% behind inflation .

The fact of the matter is that the money is there to such as the rail industry to make good on a pay increase that follows inflation .

But the powers that be refuse to pay it , it's that simple mate .

They refuse to pay it because they think they can get away with not paying it , again it's as simple as that .

The truth of the matter is historically nobody ever got a dam thing unless you were prepared to fight for it .

40 hour week , sick pay , holiday pay were all fought for and not given .

Here's the thing , the company I worked for pays out an annual bonus every January .

It's a big company with interests across the whole of Europe .

It's not listed on any stock exchange and it's remained in the hands of the same family who started it in the 1960's .

I receive the very same bonus as my boss does , I receive the same bonus the boss in Spain , France , Italy , Germany and Portugal does .

I'm just an ordinary worker on the shop floor , nowt particularly special about anything I do .

The company's culture says differently , it says we all contribute and we all add equal value to the profits created .

The world of work doesn't have to be the one that's presented to you and the Overton Window suggests it's going to move .

[phil old leake]

Tyke I think from memory that Norman Lamont used all our North Sea Oil reserves to prop up the economy on Black Wednesday in 1992

It’s a no win situation.  People need more money to survive to the standard they have now.  That means cheaper fuel as that seems to me to be the main problem.  Large pay rises will not help the situation because the corporate giants will want to maintain their profits so will just push up prices.  It’s the same as people calling for ridiculous rises in minimum wage. It’s a vicious circle.  I for one can’t see any easy way out if it.

[SydneyRover]

''Thatcher and North Sea oil – a failure to invest in Britain’s future
Had Thatcher been a truly visionary politician, she would have established a wealth fund for the oil windfall, not squandered it on tax cuts and current spending''

https://www.newstatesman.com/business/economics/2013/04/thatcher-and-north-sea-oil-failure-invest-britain-s-future

Thatcher transformed Britain to a spendthrift society you could say.

[big fat yorkshire pudding]

BFYP
One way to do it by increasing taxes on those at the top. As Albie says, a wealth tax is sorely needed.

Another way is to do what we did after the War. Have inflation run ahead of interest rates for a generation while allowing the workers to get inflation matching pay rises. That worked very well for 25 years until we lost control in the 70s.

Both ways mean a redistribution of wealth from those who have it now without working, to those who work.

You may well say that's unfair. I say we've had 40 years of (mostly) exactly the opposite happening. There has been a long period of a large product of growth going to those with money, and a smaller product going to those who work. And that's also unfair.

It's time for the pendulum to swing back.

Works in the public sector to a point (as long as it's at a level where the employment demand is low) but how does that solve the issue in the private sector?  Tax high earners as much as you like that will not feed it's way through to the little shop round the corner that doesn't make much money.

[tyke1962]

Tyke I think from memory that Norman Lamont used all our North Sea Oil reserves to prop up the economy on Black Wednesday in 1992

It’s a no win situation.  People need more money to survive to the standard they have now.  That means cheaper fuel as that seems to me to be the main problem.  Large pay rises will not help the situation because the corporate giants will want to maintain their profits so will just push up prices.  It’s the same as people calling for ridiculous rises in minimum wage. It’s a vicious circle.  I for one can’t see any easy way out if it.

Phil , I'm not suggesting that companies shouldn't be making good profit or shareholders receiving good dividends .

What I'm trying to establish and this to me is how it's getting played out is that workers have to become poorer in order for profits , corporate pay and shareholder dividends to be maintained .

That's the crux of the matter and that's where we are at with these current disputes .

Let's not forget the union's are only seeking to keep pace with inflation at best and aren't looking to enhance their wages and conditions above the current rate .

This is the classic workers taking the hit whilst nothing changes elsewhere within the various sectors even though there's enough money available for a pay increase to be given that tracks inflation .

This is more than just about money and conditions , this is about  corporate class culture as much as it's about anything else .

This is about power and maintaining the status quo that's built up since 1979 and that's why these disputes are massively important .

You can only push people so far and I suspect we are in that territory right now .

[albie]

Pud,

"Works in the public sector to a point (as long as it's at a level where the employment demand is low) but how does that solve the issue in the private sector?  Tax high earners as much as you like that will not feed it's way through to the little shop round the corner that doesn't make much money."

Taxing high earners is to redirect resources to the lower paid.
Depending on how you do it, and where you focus that resource, you inject purchasing power into the everyday economy.

This is an effective way of reducing fuel and cost of living poverty, by diverting spending from asset accumulation to basic services.

Anything that works in the public sector will also impact the private sector economy.
Reviving public services by public ownership of energy, water, rail and mail retains finance generated within the sector for re-investment, not dividends to shareholders.

This means that all those companies supplying the public sector pick up additional contracts supporting that public investment.
This becomes a virtuous circle of development, replacing the capital extraction central to privatisation.

[phil old leake]

Tyke I absolutely agree that executives should also be taking the strain and playing their part.   The way I see it and I’m in no way an economist is that higher wages won’t maintain living standards. Companies will maintain their profits the best they can and no one is better off.  It’s the same as calling for some of these ridiculously high minimum wages.  The only people to benefit are the treasury with people paying more income tax

[big fat yorkshire pudding]

Pud,

"Works in the public sector to a point (as long as it's at a level where the employment demand is low) but how does that solve the issue in the private sector?  Tax high earners as much as you like that will not feed it's way through to the little shop round the corner that doesn't make much money."

Taxing high earners is to redirect resources to the lower paid.
Depending on how you do it, and where you focus that resource, you inject purchasing power into the everyday economy.

This is an effective way of reducing fuel and cost of living poverty, by diverting spending from asset accumulation to basic services.

Anything that works in the public sector will also impact the private sector economy.
Reviving public services by public ownership of energy, water, rail and mail retains finance generated within the sector for re-investment, not dividends to shareholders.

This means that all those companies supplying the public sector pick up additional contracts supporting that public investment.
This becomes a virtuous circle of development, replacing the capital extraction central to privatisation.

So you want to return all those elements to the public sector? How much is that going to cost? And to achieve what?

[tyke1962]

Tyke I absolutely agree that executives should also be taking the strain and playing their part.   The way I see it and I’m in no way an economist is that higher wages won’t maintain living standards. Companies will maintain their profits the best they can and no one is better off.  It’s the same as calling for some of these ridiculously high minimum wages.  The only people to benefit are the treasury with people paying more income tax

Exactly Phil , it's the culture that needs to change which is the whole crux and why I titled this thread " The Overton Window " which is culture driven .

The whole culture around free market economics and no state intervention has created this culture along with the dismantling of the trade unions .

The culture that should exist is the win - win one instead of what we have today with the winner taking all and that goes for both sides of the debate .

[albie]

Pud,

1) "So you want to return all those elements to the public sector?"
Yes, to prevent loss of income being syphoned off by private companies to shareholders.

 2)"How much is that going to cost?"
Depends on how you do it.
I would pay back shareholders their original share purchase price, but others prefer a system based on inflation of the asset value in the wider economy....room for discussion.

3) " And to achieve what?"
As written, to make public services reflect public values in their delivery.
The majority of UK voters support this position.

As an aside, it is impossible to properly tackle issues like climate change with the current structure.
The incentives to act on international challenges do not work in the context of privatised industries operating to criteria outside government control.

I am not saying that there is no role for the private sector...there is, but not the one currently in place.
If you think that climate change will be resolved without public ownership of energy, please explain how?

Rachel Reeves and Keith seem to think so, but they are not the sharpest tools in the box, are they?

[Axholme Lion]

All the middle ground achieves is maintaining the status quo.
Lets start with nationalisation of all infrastructure and utilities. Take them back by any means required.