Let's be honest with ourselves for a second. The United Kingdom is finished, as a functioning, viable economic entity.

The professor can no longer ignore the incessant terrible official data, however much he cheerled the calls of 'green shoots' and manufacturing/economic nascent recovery in the 2009-2011 period of 'mirage recovery', but he still can't/won't, for fairly obvious reasons, lay it on the line what this data, when taken with many others easily available to consult, tell us about the true state of 'UK plc'.

The obscene - I'll explain that below - trade data for June and Q2 2012 tells us part of it. But consider the following, which has been given no prominence in the mass media:

the June dataset from the Office for National Statistics also tells us that the production of 'wood and wood products' fell by 19.6% compared to June 2011, and the production of 'basic iron & steel' fell by 13.4%, compared to a year ago. source:
http://www.ons.gov.uk/ons/dcp171778_274942.pdf

And then there's this, to deliver the coup de grâce, so to speak:

the UK has the highest priced diesel in Europe and petrol is within a few cents of being the most expensive. source: http://www.clever-tanken.de

The June production data from the ONS was reported last week in the mass media as perversely being 'good news', as it was seen as possibly revising up the preliminary estimate of Q2 GDP by 0.1%, so from -0.7 to -0.6%.

What they didn't report was the fundamental collapse of basic, domestic, indigenous UK manufacturing, as shown by the two key manufacturing sub-groups above - the figures were flattered to a fall of 'only' 3% year on year overall, by basically flat vehicle and machinery sector output, both of which are overwhelmingly dominated by foreign-owned companies and are characterised by final assembly, 'screwdriver' operations in the UK, rather than highly vertically-integrated, local industrial networks, as still occur in Germany, Japan and even northern Italy.

'Wood and wood products(except furniture)' basically means construction lumber/timber, things like roof trusses, doors, floors and so on. What this tells us, contrary to the message peddled constantly by vested interests, in the BhamPost and elsewhere, is the depression-equating collapse of general construction activity in the UK. Bear in mind that June 2011 wasn't exactly a high base point for reference, certainly down around 30% minimum already on the bubble years of 2003-2007, certainly. A fall of near a fifth in an already depressed level means depression type scenario, or an entrenched and deepening slump, running into its now sixth year(from the collapse of Bear Stearns in July 2007), with no end in sight, in plainer speaking.

The collapse of 'basic iron and steel' output by 13.4%, again down from an already depressed June 2011 level compared to 2003-2007 period, tells us again that far from any real recovery in UK manufacturing/the economy generally, and the prospects of the average UK citizen, things are headed downwards faster, with an apparent further throttling back in production, in expectation of now no real recovery, driving a need to cut back on mounting-up unsold inventory, which would otherwise need to be released at firesale prices, which would almost certainly endanger the continuity of the whole business.

And then there's the price of fuel in the UK. Diesel, as we can all appreciate, is not just expensive for filling the private car, but ultimately affects the cost of almost everything, as it is used for transport and power. When a country sets out to have the most expensive fuel - which is what the powers that be in the UK have decided - is it any wonder that manufacturing is suffering and the UK runs a trade deficit in goods of over £100 billion each year, or around 8% of GDP, an entirely unsustainable figure? Who, in their right mind, would set up a new venture, a possible exporting company, in the UK with a background of the highest fuel prices in Europe, if not the world?

For the record, the price of a litre of diesel in the UK is now almost €1.80 equivalent (1.8 euros = £1.41). The average price across Europe is €1.45. Thirty-five cents is a hell of a difference when considering where to make things or where to set up a distribution operation, and so on. The British may point the finger at Spain as a basket case economically but at least its people and their businesses are 'only' paying €1.35/l.

For the record too, the price of petrol in UK is around €1.75 equivalent, or around twenty cents more than the European average, extortionate yes, thanks to the oil companies, City of London speculators and UK govt. taxation, but it is the price of diesel which is killing UK as a going economic concern particularly.

Which brings me to my last point on the professor's blog. I said the trade deficit figure was 'obscene'. Obscene because the UK populace has been deliberately hoodwinked into thinking they are a special case. Pretty much the rest of the world has pulled its horns in. The Eurozone, China, the BRICs, the US are all seeing reduced real consumer activity, as the word finally gets around that the supposed short-term 'credit crunch' of 2008 is actually a global economic enduring slump, caused by the deliberate, reckless creation of debt in the bubble years of 2001-2007 especially, which has now impaired, i.e. it's nearly worthless, and cannot be revived, even by lying about 'marking to market' by the infinite printing of money by the main central banks.

A rational people would rein in their spending in such times of economic dislocation, thereby reducing the trade deficit, as so much of consumer spending in the UK goes on imported manufactures, as has happened in the eurozone and the US particularly. But no. Thanks to a peculiarity of the British consumer, and encouraged by a mass media that has told them that 'recovery is around the corner', perpetually, for the last four years, and the printing of hundred of billions of pounds, i.e. counterfeiting of the coin of the realm, by the Bank of England, and its political leaders telling the little people that the UK is a 'safe haven', all this has led to, perversely, the UK pound gaining some 15% on the euro, thereby making exports more expensive and imports cheaper, at a time of an already huge, structural trade gap, so being directly contrary to economics theory, which calls for depreciation/devaluation of a currency to re-balance trade, and has egged on a credulous UK consumer to actually step up their purchasing, perversely, as some kind of patriotic duty to get tghe country going again, and god forbid, not to be seen by their peers, especially in the all-important to the the marketeers age demographic of 18-35, as a skinflint, not ready to keep up with the purchase of the latest sweatshop-made iTat or other shiny bauble. How sad.

But the worst of all this is the cynical, deliberate propagandising of the little people in the UK by its elite, its supposed leaders, who are paid out of the taxpayers' money to look out for the country's greater interest. For example, each rise in new car registrations in the UK, as happened just last week for July, is greeted and reported as 'a huge boost for UK', and 'contrary to the gloom of slumping sales in 'loser-Europe' the plucky UK consumer is getting out there and showing confidence in Britain', or some such other disgraceful piffle, by putting himself up to the eyeballs in debt, for some invariably foreign-made, foreign-owned product.

You know the world, or at least the UK has gone mad, when, as a particularly galling example, you have an outfit passing itself of as British, to the naive patriotic consumer, Vauxhall, flogging a Spanish-assembled car(Opel Corsa), by a wholly taxpayer bailed out US company, General Motors, which otherwise would be long bankrupt, the purchase financed on the effectively never-never, 'sub-prime' basis, 60 months/0% APR/minimal deposit, by a Spanish bank, Santander, that has already received billions of euros in backdoor bailouts by the money printing of the European Central Bank, which as collateral receives 'assets' which are worthless, and when it all goes truly belly up for Santander, GM (again), and the Ponzi economy generally, the call will once again go up, by the usual suspects, for the Taxpayer to bail out the to-big-to-fail banks, once again, until total collapse, like the fall of the Soviet Union, or worse, violent insurrection and return to barbarism, like the fall of Rome.

The UK mass media and the UK's elite generally have led the UK consumer up the garden path, with outright lies and deception, as to the real economic situation of the country. If the people had been informed properly you would have seen a gradual reduction of the huge, unsustainable trade gap, and a fall in the value of the pound, to somewhere near its true exchange worth. The UK would have followed the path of other developed countries; not been the glaring outlier.

As this is not in the interests of the rulers of the UK - as has been shown most clearly recently the UK's real economic role and only raison d'être in the 21st century is a money laundering, financial fraud and tax evasion centre for the world's mega rich - this will never happen. One could blame a feckless consumer splurging the credit card on ultimately worthless trinkets, to be in with the crowd/rest of the sheep, and being desperate to get on 'the property ladder', at a time of a collapsing housing bubble, but ultimately it is the leaders, politicians, 'great and the good' and their 'fellow-travellers' in the mass corporate media that have wrecked the UK, and its last chance at righting a sinking ship, by throttling back on consumption, of imported goods in particular, and accepting a drop in living standards, before rebuilding, literally and metaphorically, for the greater good. That is why the trade data and what lies behind it is obscene.

Paul Kelly you're absolutely correct, but you're wasting your time as Professor Bailey's blogs simply follow a political agenda, and just like a politician, he never ever answers a direct question when he is asked one.

For example, he was a fan of Advantage West Midlands and stated that it was a big mistake abolishing them as they supported manufacturing/SME's and that they had many "experts" that would now be needed? However, despite asking him on numerous occasions how much money (to the nearest million) they gave to SME's he simply cannot give us the answer. Also, what has happened to all their "experts"? As far as I can tell the majority have just moved to other parts of the public sector, so obviously their "expertise" wasn't wanted by the private sector. So why was he so vocal in his support of them?

Professor Bailey talks about the need for an infrastructure bank, but he can't tell us how it would be funded? Would it be funded with elephants, zebras, or cabbages? He has stated that employment would be increased by having a temporary reduction in NI, but he doesn't seem to understand that companies only recruit when there is an increased demand for their products. He also states that we need to support exports, but he can't tell us specifically how. Anyone can make bold statements, but it's a different matter putting your "ideas" into action and making them actually work, and not just become another waste of public money.

Also, the Professor (and others), keep mentioning JLR as some sort of huge example of a "manufacturing" success story. However, as I have stated it will not remain a "success story" and the majority of the assembly/production will move abroad within the next ten years. What will Professor Bailey and Co say then? Will they admit that they were wrong? I doubt it.

I said a long time ago that China's demand would fall, and surprise surprise the Professor mentions it now after it has started to actually happen. It's not rocket science and could easily have been seen as being on the cards by anyone with an ounce of common sense and business knowledge.

I've also mentioned to the Professor that it is only a matter of time before the markets begin to look at the state of the UK's economy and debt. The public sector is still too big and largely unproductive. UK Plc is essentially bankrupt and there is much worse to come, but the Professor simply cannot accept this. His answer to everything is to throw more public money at the problem, without even thinking about value for money, or even if it is going to actually work.

The fact that Professor Bailey knows nothing about real business is not surprising. As far as I can see he has never ran a business in his life, or for that matter "worked" outside of academia.

UK Plc is bankrupt and essentially finished. As always, a tiny minority will do okay out of it, but for the majority, things will "never be so good again"....

Regards,
Mr Srutineer.

P Kelly, don't worry about the problem with, "the blog author's permission". I get that alot. Maybe someone doesn't like matters being debated?

All the best,
Mr Srutineer.
PS. Apologies, I called you "Paul" in error in my original submission without knowing if your name is Paul.

Thanks for the post.Much thanks again. Great.

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