There is so much we do not know about the long-term economic impact of the pandemic.
But one common theme for Britain, and for newly-installed President Joe Biden and his team in the US, is that the tolerance of fiscal promiscuity and monetary looseness has changed dramatically.
As the Biden team pushes hard for his first major intervention – an extra £1.4trillion of Covid-19 help for households, business and vaccinations – the Congressional Budget Office cautions that the US is on a path of rising debt.
A common theme for Britain, and for President Joe Biden and his team in the US, is that the tolerance of fiscal promiscuity and monetary looseness has changed dramatically
It reckons that by 2050, the US national debt, currently close to 100 per cent of output at £15trillion-plus, could be double that.
In the last year alone, borrowing soared by £2.2trillion – and this in a country where a balanced budget used to be an act of faith.
A big concern on the horizon, on both sides of the Atlantic, is whether the respective economies can absorb huge amounts of fiscal and monetary largesse without triggering 1970s-style inflation.
The US enjoys the privilege of being able to keep the printing presses whirling because the dollar is most of the world’s reserve currency. There isn’t a real alternative, unless one happens to be a bitcoin fan.
The current era of huge monetary easing began with the financial crisis. In the US it was also a period of fiscal expansion with Barack Obama unveiling a big stimulus and bailing out Detroit.
Much of the money created ended up as bonds held by the banks and insurers as tougher regulation required them to build up reserves for the next crisis.
The pandemic measures have seen a different response. The ‘haves’ in society have seen their bank accounts overflowing with cash and great swathes of that have flowed into global equity markets, swelling indexes to ever-new highs.
Symbols of that are the plundering of UK-quoted companies by US private equity adventurers and the swelling of hedge fund assets, which climbed by £159billion in the final quarter of 2020 and stand at £3.6trillion.
The enormous stimulus must be regarded as worthwhile in that it has steered the world clear of another Great Depression and the unconscionable unemployment and desolation portrayed so vividly in John Steinbeck’s novel, The Grapes of Wrath.
One doesn’t have to be a devotee of Milton Friedman to recognise that pouring huge amounts of cash into the economy and monetary financing, paying down the deficit by buying government bonds, can have serious consequences.
So far so good, as governments have battled the pandemic against a background of suppressed demand, output and trade.
Britain’s latest inflation data, showing a jump from 0.3 per cent to 0.6 per cent, clearly is not a problem. But as the global economy snaps out of hibernation, and we get the lift-off, the narrative may change.
What central banks have given they may have to take back, or risk climbing prices, wages and interest rates.
High street and travel retailer WH Smith has a dishonourable history of fat-cattery.
In a year when there is a national expectation for chief executives to show restraint, WH Smith chief executive Carl Cowling has received a bloody nose with 33 per cent of investors voting against his pay.
Notionally, the vote was against a relatively modest £25,000 uplift. The bigger row has been about a new share incentive scheme, now being redrawn, which could have handed him a £4.5million bonus this year.
All of this after the newsagent made 1,500 workers redundant last summer and tapped shareholders for a £166million Covid-related fundraising.
The uprising marks the start of what will be a raucous annual general meeting season with firms paying bonuses – even greatly reduced bonuses – held to account.
There is an obvious irony in the partnership to help the less well-off between millionaire footballer Marcus Rashford and a fashion house making and selling expensive trench coats and luxury items.
But Burberry is among those UK companies which recognised broader responsibilities in an emergency by turning coat factories over to PPE and contributing to the Oxford-Astrazeneca vaccine.
Just as Burberry has done the right thing, so should Chancellor Rishi Sunak – by rescinding a decision to end the VAT break for overseas visitors. That ought to be a key part of the Global Britain agenda.
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