Spread & Containment
Age, not class, is now the biggest divide in British politics, new research confirms
The latest findings from the British Social Attitudes survey suggest younger voters appear to have little faith that public spending will be directed their…
Share this:
“Class is the basis of British politics; all else is embellishment and detail.” So wrote Peter Pulzer, the former Gladstone professor of politics at the University of Oxford in the 1960s. Nowadays, however, it is age, not social class, that is the biggest demographic division in Britain’s electoral politics.
According to the British Election Study, at the 2019 general election, the Conservatives won the support of 56% of those aged 55 and over, but only 24% of those under 35. Conversely, Labour was backed by 54% of those under-35s who cast a vote, but by just 22% of those aged 55 and over.
In contrast, support for Britain’s two main parties among those in working class occupations was little different from that among those in professional and managerial jobs.
But what underpins this age divide? We typically think of Labour as a party that is more “left wing”, more concerned than the Conservatives about inequality and more supportive of “big government”. So does young people’s greater willingness to support Labour mean they are more left wing than their older counterparts?
Are they more concerned about inequality and more inclined to believe that government should be acting to reduce it? And are they more inclined than older voters to want the government to spend and tax more?
These questions are addressed in a chapter in the latest British Social Attitudes report, published by the National Centre for Social Research. Based on the 40 years of data the annual BSA survey has collected since it began in 1983, the chapter reveals that while younger people have become more concerned about inequality in recent years, this is not accompanied by greater enthusiasm for more tax and spend.
Since 1986, nearly every BSA survey has regularly presented its respondents with a set of propositions designed to measure how “left” or “right wing” they are on the issue of inequality. People are, for example, asked whether they agree or disagree that “there is one law for the rich and one for the poor”, and “government should redistribute income from the better-off to those who are less well-off”.
Their answers to these and similar statements can be summarised into a scale measure that runs from 0 to 100, where 0 means that someone is very left wing and 100 indicates that they are very right wing.
Young people shift left
When the scale was first administered in 1986, there was no difference between the average score of those aged under 35 and those aged 55 or over. Both had a score of 37.
Equally, 30 years later, in 2016, younger people’s average score of 38 was little different from that of 37 among older people. The growth in Labour’s support among younger people that was already in evidence by then was not underpinned by a more left-wing point of view.
However, a gap has emerged during the last three or four years. In the latest BSA survey, conducted towards the end of 2022, young people scored 28 – ten points below the equivalent figure in 2016. In contrast, at 36, the outlook of older people has barely changed at all.
Yet this does not mean that younger people want more taxation and spending. Every year since 1983 BSA has asked people what the government should do if it has to choose between increased taxation and spending on “health, education and social benefits”, reduced taxation and spending, or keeping things as they are.
In the 1980s, younger people were typically more likely than older people to say that taxation and spending should be increased. In 1984, for example, 42% of those aged under 35 expressed that view, compared with just 33% of those over 55.
But since the mid-90s the opposite has been the case. By 2015, 41% of younger people wanted more taxation and spending compared with 49% of older people.
Meanwhile, the gap has since widened further. Whereas support for increased taxation and spending has risen to 67% among older people – the highest it has been in the last 40 years – among younger people it is still no more than 43%.
Lost faith
So why might have younger people become more concerned about inequality, yet at the same time less supportive of more spending? The answer may well lie in the distinctive economic position in which those in today’s youngest generation find themselves.
The ageing of Britain’s population means that a larger proportion of government spending goes on health and social care from which older people primarily benefit. Meanwhile, while older people are in receipt of relatively generous pensions that have been protected by the triple lock, younger people who have been to university find themselves in effect paying a higher level of “income tax” in order to pay off their student loans.
Meanwhile, although the pandemic posed a greater threat to the health of older people, it was younger people who were more likely to find their educational and economic lives disrupted, and to have found themselves having to endure lockdown in lower quality accommodation. At the same time, home ownership has become more difficult, not least because so many are spending a significant proportion of their income on rent.
There is, then, good reason why younger people have become more concerned about inequality but seem at the same time to doubt that increased taxation and spending would help them.
The challenge to the parties at the forthcoming election could well be to convince these voters that the next government will offer them a brighter future, rather than add to their woes. But to do that they may well need to be willing to think outside the traditional mindsets associated with the terms “left” and the “right”.
John Curtice receives funding from UKRI-ESRC
lockdown pandemic
Spread & Containment
Las Vegas Strip faces growing bed bug problem
With huge events including Formula 1, CES, and the Super Bowl looming, the Las Vegas Strip faces an issue that could be a major cause for concern.
Share this:
Las Vegas beat the covid pandemic.
It wasn't that long ago when the Las Vegas Strip went dark and people questioned whether Caesars Entertainment, MGM Resorts International, Wynn Resorts, and other Strip players would emerge from the crisis intact.
Related: Las Vegas Strip report shares surprising F1 race news
In the darkest days, the entire Las Vegas Strip was closed down and when it reopened, it was not business as usual. Caesars Entertainment (CZR) - Get Free Report and MGM reopened slowly with all sorts of government-mandated restrictions in place.
The first months of the Strip's comeback featured temperature checks, a lot of plexiglass, gaming tables with limited numbers of players, masks, and social distancing. It was an odd mix of celebration and restraint as people were happy to be in Las Vegas, but the Strip was oddly empty, some casinos remained closed, and gaming floors were sparsely filled.
When vaccines became available, the Las Vegas Strip benefitted quickly. Business and international travelers were slow to return, but leisure travelers began bringing crowds back to pre-pandemic levels.
The comeback, however, was very fragile. CES 2022 was supposed to be Las Vegas's return to normal, the first major convention since covid. In reality, surging cases of the covid omicron variant caused most major companies to pull out.
Even with vaccines and covid tests required, an event that was supposed to be close to normal, ended up with 25% of 2020's pre-covid attendance. That CES showed just how quickly public sentiment — not actual danger — can ruin an event in Las Vegas.
Now, with November's Formula 1 Race, CES in January, and the Super Bowl in February all slated for Las Vegas, a rising health crisis threatens all of those events.
The Arena Media Brands, LLC and respective content providers to this website may receive compensation for some links to products and services on this website.
Image source: Palms Casino
The Las Vegas Strip has a bed bug problem
While bed bugs may not be as dangerous as covid, Respiratory Syncytial Virus (RSV), Legionnaires’ disease, and some of the other infectious diseases that the Las Vegas Strip has faced over the past few years, they're still problematic. Bed bugs spread easily and a small infestation can become a large one quickly.
The sores caused by bed bugs are also a social media nightmare for the Las Vegas Strip. If even a few Las Vegas Strip visitors wake up covered in bed bug bites, that could become a viral nightmare for the entire city.
In late-August, reports came out the bed bugs had been at seven Las Vegas hotel, mostly on the Strip over the past two years. The impacted properties includes Caesars Planet Hollywood and Caesars Palace as well as MGM Resort International's (MGM) - Get Free Report MGM Grand, and others including Circus Circus, The Palazzo, Tropicana, and Sahara.
VISIT LAS VEGAS: Are you ready to plan your dream Las Vegas Strip getaway?
"Now, that number is nine with the addition of The Venetian and Park MGM. According to the health department report, a Venetian guest reported seeing the bloodsuckers on July 29 and was moved to another room. An inspection three days later confirmed their presence," Casino.org reported.
The Park MGM bed bug incident took place on Aug. 14.
Bed bugs remain a Las Vegas Strip problem
Only Tropicana, which is soon going to be demolished, and Sahara, responded to Casino.org about their bed bug issues. Caesars and MGM have not commented publicly or responded to requests from KLAS or Casino.org.
That makes sense because the resorts do not want news to spread about potential bed bug problems when the actual incidents have so far been minimal. The problem is that unreported bed bug issues can rapidly snowball.
The Environmental Protection Agency (EPA) shares some guidelines on bed bug bites on its website that hint at the depth of the problem facing Las Vegas Strip resorts.
"Regularly wash and heat-dry your bed sheets, blankets, bedspreads and any clothing that touches the floor. This reduces the number of bed bugs. Bed bugs and their eggs can hide in laundry containers/hampers. Remember to clean them when you do the laundry," the agency shared.
Normally, that would not be an issue in Las Vegas as rooms are cleaned daily. Since the covid pandemic, however, some people have opted out of daily cleaning and some resorts have encouraged that.
F1? SUPER BOWL? MARCH MADNESS? Plan a dream Las Vegas getaway.
Not having daily room cleaning in just a few rooms could lead to quick spread.
"Bed bugs spread so easily and so quickly, that the University of Kentucky's entomology department notes that "it often seems that bed bugs arise from nowhere."
"Once bed bugs are introduced, they can crawl from room to room, or floor to floor via cracks and openings in walls, floors and ceilings," warned the University's researchers.
spread social distancing pandemic
International
Americans are having a tough time repaying pandemic-era loans received with inflated credit scores
Borrowers are realizing the responsibility of new debts too late.
Share this:
With the economy of the United States at a standstill during the Covid-19 pandemic, the efforts to stimulate the economy brought many opportunities to people who may have not had them otherwise.
However, the extension of these opportunities to those who took advantage of the times has had its consequences.
Related: American Express reveals record profits, 'robust' spending in Q3 earnings report
Credit Crunch
A report by the Financial Times states that borrowers in the United States that took advantage of lending opportunities during the Covid-19 pandemic are falling behind on actually paying back their debt.
At a time when stimulus checks were handed out and loan repayments were frozen to help those affected by the economic shock of Covid-19, many consumers in the States saw that lenders became more willing to provide consumer credit.
According to a report by credit reporting agency TransUnion, the median consumer credit score jumped 20% to a peak of 676 in the first quarter of 2021, allowing many to finally have “good” credit scores. However, their data also showed that those who took out loans and credit from 2021 to early 2023 are having an hard time managing these debts.
“Consumer finance companies used this opportunity to juice up their growth at a time when funding was ample and consumers’ finances had gotten an artificial boost,” Chief economist of Moody’s Analytics Mark Zandi told FT. “Certainly a lot of lower-income households that got caught up in all of this will feel financial pain.”
Moody’s data shows that new credit cards accounts that were opened in the first quarter of 2023 have a 4% delinquency rate, while the same rate in September 2022 was 4.5%. According to the analysts, these levels were the highest for the same point of the year since 2008.
Additionally, a study by credit scoring company VantageScore found that credit cards issued in March 2022 had higher delinquency rates than cards issued at the same time during the prior four years.
More Investing:
- Why the recession never really hit -- and what indicates that it still could
- Jim Cramer and Dan Ives say a powerful technology will give the markets a boost
- Here's what companies Nvidia is joining in the $1 Trillion market cap club
Credit cards were not the only debts that American consumers took on. As per S&P Global Ratings data, riskier car loans taken on during the height of the pandemic have more repayment problems than in previous years. In 2022, subprime borrowers were becoming delinquent on new cars loans at twice the rate of pre-pandemic levels.
S&P auto loan tracker Amy Martin told FT that lenders during the pandemic were “rather aggressive” in terms of signing new loans.
Bill Moreland of research group BankRegData has warned about these rising delinquencies in the past and had recently estimated that by late 2022, there were hundreds of billions of dollars in what he calls “excess lending based upon artificially inflated credit scores”.
The Government's Role
Because so many are failing to pay their bills, many are wary that the government assistance may have been a financial double-edged sword; as they were meant to alleviate financial stress during lockdown, while it led some of them to financial difficulty.
The $2.2 trillion Cares Act federal aid package passed in the early stages of the pandemic not only put cash in the American consumer’s pocket, but also protected borrowers from foreclosure, default and in some instances, lenders were barred from reporting late payments to credit bureaus.
Yeshiva University law professor Pam Foohey specializes in consumer bankruptcy and believes that the Cares Act was good policy, however she shifts the blame away from the consumers and borrowers.
“I fault lenders and the market structure for not having a longer-term perspective. That’s not something that the Cares Act should have solved and it still exists and still needs to be addressed.”
Get exclusive access to portfolio managers and their proven investing strategies with Real Money Pro. Get started now.
recession economic shock bankruptcy foreclosure default stimulus trump lockdown stay-at-home orders pandemic coronavirus covid-19 recession stimulus russiaInternational
Inflation: raising interest rates was never the right medicine – here’s why central bankers did it anyway
We need to start cutting rates, but there’s something that has to happen first.
Share this:
Inflation remains too high in the UK. The annual rate of consumer price inflation to September was 6.7%, the same as a month earlier. This is well below the 11.1% peak reached in October 2022, but the failure of inflation to keep falling indicates it is proving far more stubborn than anticipated.
This may prompt the Bank of England’s Monetary Policy Committee (MPC) to raise the benchmark interest rate yet again when it meets in November, but in my view this would not be entirely justified.
In reality, the rate hikes that began two years ago have not been very helpful in tackling inflation, at least not directly. So what’s the problem and is there a better alternative?
Right policy, wrong inflation
Raising interest rates is the MPC’s main tool for trying to get inflation back to its target rate of 2%. The idea is that this makes it more expensive to borrow money, which should reduce consumer demand for goods and services.
The trouble is that the type of inflation recently witnessed in the UK seems less a problem of excessive demand than because costs have been rising for manufacturers and service providers. It’s known as “cost-push inflation” as opposed to “demand-pull inflation”.
Inflation rates (UK, US, eurozone)
Production costs have risen for several reasons. During the COVID-19 pandemic, central banks “created money” through quantitative easing to enable their governments to run large spending deficits to pay for furloughs and other interventions to help citizens through the crisis.
When countries started reopening, it meant people had money in their pockets to buy more goods and services. Yet with China still in lockdown, global supply chains could not keep pace with the resurgent demand so prices went up – most notably oil.
Oil price (Brent crude, US$)
Then came the Ukraine war, which further drove up prices of fundamental commodities, such as energy. This made inflation much worse than it would otherwise have been. You can see this reflected in consumer price inflation (CPI): it was just 0.6% in the year to June 2020, then rose to 2.5% in the year to June 2021, reflecting the supply constraints at the end of lockdown. By June 2022, four months after Russia’s invasion of Ukraine, CPI was 9.4%.
The policy problem
This begs the question, why has the Bank of England (BoE) been raising rates if it’s unlikely to be effective? One answer is that other central banks have been raising rates. If the BoE doesn’t mirror rate rises in the US and eurozone, investors in the UK may move their money to these other areas because they’ll get better returns on bonds. This would see the pound depreciating against the US dollar and euro, in turn increasing import prices and aggravating inflation.
Part of the problem has been that the US has arguably faced more of the sort of demand-led inflation against which interest rates are effective. For one thing, the US has been less at the mercy of rising energy prices because it is energy self-sufficient. It also didn’t lock down as uniformly as other major economies during the pandemic, so had a little more space to grow.
At the same time, the US has been more effective at bringing down inflation than the UK, which again suggests it was fighting demand-driven price rises. In other words, the UK and other countries may to some extent have been forced to follow suit with raising interest rates to protect their currencies, not to fight inflation.
What next
How harmful have the rate rises been in the UK? They have not brought about a recession yet, but growth remains very weak. Lots of people are struggling with the cost of living, as well as rent or mortgage costs. Several million people are due to be hit by much higher mortgage rates as their fixed-rate deals end between now and the end of 2024.
UK GDP growth (%)
If hiking interest rates is not really helping to curb inflation, it makes sense to start moving in the opposite direction before the economic situation gets any worse. To avoid any damage to the pound, the answer is for the leading central banks to coordinate their policies so that they cut rates in lockstep.
Unless and until this happens, there would seem to be no quick fix available. One piece of good news is that the energy price cap for typical domestic consumption was reduced from October 1 from £1,976 to £1,834 a year. That 7% reduction should lead to consumer price inflation coming down significantly towards the end of 2023.
More generally, the Bank of England may simply have to hope that world events move inflation in the desired direction. A key question is going to be whether the wars in Ukraine and Israel/Gaza result in further cost pressures.
Unfortunately there is a precedent for a Middle East conflict leading to a global economic crisis: following the joint assault on Israel by Syria and Egypt in 1973, Israel’s retaliation prompted petroleum cartel OPEC to impose an oil embargo. This led to an almost fourfold increase in the price of crude oil.
Since oil was fundamental to the costs of production, inflation in the UK rose to over 16% in 1974. There followed high unemployment, resulting in an unwelcome combination that economists referred to as stagflation.
These days, global production is in fact less reliant on oil as renewables have become a growing part of the energy mix. Nonetheless, an oil price hike would still drive inflation higher and weaken economic growth. So if the Middle East crisis does spiral, we may be stuck with stubborn, untreatable inflation for even longer.
Robert Gausden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
recession unemployment economic growth reopening bonds monetary policy mortgage rates currencies pound us dollar euro governor lockdown pandemic covid-19 recession gdp interest rates commodities oil uk russia ukraine china-
Uncategorized9 hours agoCalifornia bill aims to cap crypto ATM withdrawals at $1K per day to combat scams
-
International11 hours agoA further examination of the state of the economic tailwind
-
International9 hours agoStock Market Today: Stocks turn higher as Treasury yields retreat; big tech earnings up next
-
Uncategorized9 hours agoBitcoin price must break $31K to avoid 2023 ‘bearish fractal’
-
Uncategorized11 hours agoBitcoin ETF to trigger massive demand from institutions, EY says
-
Uncategorized11 hours agoCrypto community accuses WSJ of exaggerating Hamas crypto funding by 99%
-
International11 hours agoiPhone Maker Foxconn Investigated By Chinese Authorities
-
Uncategorized9 hours agoAn airline just launched one of the country’s longest domestic flights