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Pity the lost generation

David Blanchflower, The New Statesman
The spectacular failure of Lehman Brothers a year ago has become a convenient excuse for those who failed to spot the recession. “Once events changed, dear boy, I responded,” is the established line. Sorry policymakers, not good enough: you missed the greatest financial crisis for a century. Interest rates should have been cut earlier. Not good enough, journalists, who kept writing that we weren’t in recession and that it was only the threat of inflation that mattered. So they argued interest rates needed to be high, and that made matters worse. Wage price spirals were everywhere, they thought, but it turned out they only existed in their imaginations. The collapse of Lehman was a symptom, not the cause. It was all terribly predictable.

Here is my evidence. First, by September 2008, the US had been in recession for nine months and the US housing market for 18months; unemployment had been rising for even longer. Second, in the UK, Northern Rock had failed in September 2007, and we had been in recession since the spring of that year, while the UK housing market had peaked a year earlier. Third, the Baltic Dry had lost two-thirds of its value between June and early September 2008. This is the best measure of world demand. It isn’t subject to speculation.

…So where did all these useless economic models get us? Actually, in pretty dire straits. Most worrying to me, at present, is the state of the youth labour market. Britain has nearly a million people under the age of 25 who are already out of work; two-fifths of the unemployed. And their numbers are high because of a demographic echo that dates from the baby boomers, who have since had their own children and so on. There are 13.5 per cent more 20-year-olds today than there are ten-year-olds and 11.5 per cent more than the number of 30-year-olds.

Unemployment is going to continue to rise this year and may keep on rising. If spending cuts are made too early and the monetary and fiscal stimuli are withdrawn, unemployment could easily reach four million. If large numbers of public sector workers, perhaps as many as a million, are made redundant and there are substantial cuts in public spending in 2010, as proposed by some in the Conservative Party, five million unemployed or more is not inconceivable. Crime will inevitably rise and there will be widespread social unrest if this happens. But this isn’t the fault of the millions of young people who have had the misfortune to be born at the wrong time. And those with student loans to pay back are especially distressed at the thought of being unemployed. They could be our lost generation…
(24 Sept 2009)

London’s new drinking fountains a challenge to bottled water industry

Paul Gallagher, The Observer
London may soon follow in the footsteps of Bundanoon, the Australian town that last week banned bottled water and set up drinking fountains for thirsty locals.

The capital’s first water stations will be set up this month in a move that could have serious repercussions for the £1.5bn-a-year bottled water industry, with companies finding it increasingly difficult to justify their carbon footprint as the quality of tap water improves.

Thames Water, Britain’s largest privatised water company, with 13.6 million customers, has had talks with the Greater London Authority and Transport for London to install water machines in the capital. In the first trial, Hydrachills will be installed at Hammersmith bus station and at the Tower Bridge museum. The machines can fill bottles of up to 500ml with chilled water for a 20p charge. All proceeds will be donated to Waste Watch, a charity working to change the way people use natural resources.

Should London’s water stations prove a hit with the 400,000 visitors who annually pass through the two sites, the scheme will be extended to underground, bus and railway stations across London and the south-east before the 2012 Olympics…
(4 Oct 2009)

UK£10 Million for Low Carbon Community Projects

Sami Grover, treehugger
The UK Government has not been popular of late – with some saying the ruling Labour Party is in the fight of its life. It might be why Ed Miliband, Secretary of State for Energy and Climate Change, seems to be going to some effort to reach out to grassroots environmental movements. From joining the high profile 10:10 Campaign to attending the Transition Conference as a keynote listener, Luckily, Mr Miliband seems intent on walking his talk too. His announcement of 34% emmisions cuts by 2020 already got a lot of people talking, and now he is throwing some serious money (UK£10m, or US$16m) at low carbon grassroots community efforts. Read on to find out how you can benefit.

The announcement is part of the Government’s Low Carbon Communities Challenge, and is offering £10m to be shared between up to 20 local authorities – with local people voting on how the money should be spent. According to the Government Monitor, beneficiaries of the Low Carbon Communities Challenge could range from electric car charging stations to biomass power plants. Crucially, the recipients will be expected to work with Government to monitor the success of their programs – with the most effective schemes being modeled for roll out across the country.

In launching the initiative, Ed Miliband argued that grassroots initiatives have a crucial roll to play in setting the scene for national and international action…
(30 Sept 2009)
related: Miliband to Unveil the ‘Low Carbon Communities Challenge’

Nuclear Poker Heats Up in Berlin

cgh, Spiegel
It seems a foregone conclusion that Berlin will back away from the nuclear energy phase-out legislated in 2002. But with power companies set to profit handsomely, the bluffing has begun.

With the best election-day result in their history behind them, Germany’s business-friendly Free Democrats (FDP) promised tough negotiations as coalition talks with Chancellor Angela Merkel’s conservatives begin on Monday.

But another set of negotiations on the horizon promises to be even tougher. Both the FDP and Merkel’s Christian Democrats (CDU) have expressed a desire to revisit a 2002 law which calls for Germany’s nuclear reactors to be taken offline by the beginning of the 2020s. The new government would like to extend the deadline, a move that could generate as much as €60 billion in extra profits for Germany’s three largest energy companies.

The question, though, is what E.on, RWE and EnBW will offer in return. Indeed, politicians from both parties over the weekend seemed eager to counter concerns that Germany’s energy branch was in for a huge windfall. Andreas Pinkwart, a leading FDP politician, even said that his party could imagine backing away from an extension of reactor lifetimes…
(5 Oct 2009)