14:38 GMT13 April 2021
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    New research from the Resolution Foundation has found that millennials who entered the job market during the 2008 global financial crash are still suffering “scarring” effects on their earnings as they enter their mid-30s. Sputnik spoke about it to the Economist and Wealth Advisor Jonathan Davies.

    Sputnik: The Resolution Foundation think tank said people who were in their 20s at the height of the recession a decade ago were worst hit by the pay squeeze. How significant are these recent developments and is it true do you think?

    Jonathan Davis: I have no doubt that the data is broadly accurate. We know over the last 10 years or so, since the great recession as they call it, that there has been a massive increase in low paid service work at the minimum or living wage, and of course young folk re going to be hit hard by this and indeed young graduates are hit hard because they come out of university with vast debts and don't get high salaries like we did 30 years ago when we graduated.

    I'm sure it is valid but the bailouts were not about helping the people. I'm a free market capitalist and the bailouts were not capitalism — it was about bailing out rich people. Over the last 10 years other data, such as data from the Office for National Statistics, shows that the top 10 percent have done exceptionally well out of the last 10 years and the middle classes, the poor and younger folk have broadly stayed where they are, or their position financially has got worse. There is no question that inequality has risen because of the bailouts and because of quantitative easing and very low interest rates.

    Sputnik: Many economists are predicting that we are on the verge of another global recession… What economic measures should we be seeing to ensure we don't make the same mistakes we did a decade ago?

    Jonathan Davis: The economists in general to whom you refer have been talking about another crash for the last five years, and they have been wrong for the last five years. If and when at some point in the future there is a material, a very big recession/crash, opposed to a commoner garden economic slowdown, which we can always expect for the cycles of the global economy… if there was a big crash we should have capitalism! We should let fail businesses go bust.

    If you let failed businesses go bust, whether they're bankers or steelworkers, then what happens is that the cost of doing business and the cost of living will fall thus whatever assets and income that the rest of us have; we'll find that our standards of living and our opportunities to do business will be easier because as I say the cost of business will be lower. How can it possibly help to bail out the South Wales Steelworkers? How does that help the guy in Yorkshire on twenty-eight thousand a year, three kids and mortgage, who ultimately is paying for it? It doesn't. Capitalism equalizes — it brings fairness. Socialism and cronyism brings inequality and this is what socialists never understand.

    READ MORE: Major Economies Slumping but 'Nowhere Near' Global Recession — Financial Analyst

    Sputnik: With Brexit looming closer and closer and a no deal Brexit becoming ever more likely; could we see repeats of some of the scenes we saw in 2008 if Britain's withdrawal is any less than concrete?

    Jonathan Davis: The thought is absolutely ludicrous! I will remind you that right up until the 23rd June 2016, the date of the EU referendum, we were being told by luminaries in the establishment, top politicians, the Prime Minister, the Chancellor, the Governor of the Bank of England… socialists all over the place, they all in cahoots, telling us that if we vote to leave the EU the UK economy will go to hell in a handcart — it was, of course, a pack of lies.

    The same people have been doing it since then, nearly three years now; they've been pushing out that if we leave the EU, the UK economy will go to hell in a handcart. It is absolutely utter nonsense. Nothing, practically nothing, is going to change at 11:01 pm on March 29th 2019 if we leave the EU. Unfortunately, although we have a leave population we have an antidemocratic remain parliament, thus it is unlikely we will be leaving the EU and if we do it will be Brexit in name only.

    The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.


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    decade, millenials, rich, financial crisis, Brexit, Resolution Foundation, United Kingdom
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