Oxfam is indulging itself in a little bit of backcasting. Actually, not just bits or gobbets but vast steaming piles of it. This is the practice of taking a result you like, then assuming back to what causes it. Then you construct an index – if you’re going to propagandise – from your backcasting and you’ve a tool to berate all. Oxfam assuming – good little progressives that they are – that a high tax, high spending socio-economic environment is desirable, so they’ve constructed to insist that all should be doing this.…See More
William Nordhaus has finally got his Nobel which is good. What is also excellent about this is that we’ve now this official recognition of how to do climate change economics right. This is something that all economists know, of course, but something that near no one else – especially the policy makers – does.
Stick on a carbon tax at the social cost of carbon and we’re done.
Don’t try to plan or strategise through things, don’t insist that the money must be used to fight climate change nor compensate for it.…See More
There is a new initiative to bring the joys of Modern Monetary Theory to the UK. The Gower Initiative. In the interests of journalistic inquiry the first of their explanatory notes opened, the one on inflation. In which we are told the following things:
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There could be a variety of reasons for an increasing deficit and it isn’t always correlated with government spending.
A country that imports more than it exports will usually need continual government deficits to keep its domestic economy growing.
This is a pretty good result – the United States unemployment rate is now at a 49 year low. It’s also a reflection of something that Richard Layard has been saying for decades now – there’s a fundamental difference between the US and most European economies. The US tends – tends note – not to have long term unemployment. That’s not something that can be said of most of the European ones. The why? Well, the US doesn’t have time unlimited unemployment benefits, much of Europe does.…See More
North Korea has a slightly odd method of asking that citizens contribute to the welfare of the State. Contribute there being used in its taxation, confiscatory, form. Given that dog meat is a regular enough portion of the diet they insist that dog skins are, or at least one is, handed over to said State. One implication of which is don’t sign any orders for mink hats from North Korea. Those who don’t have a skin can make a cash contribution instead.…See More
The United States economy has added 230,000 jobs in September in the private sector, well above consensus estimates. It probably is right to say that this is a result of Donald Trump’s tax cuts – it’s the reason why that is so which is the issue. The economy as a whole is at what we’d generally call full employment and on that front there’s really only Danny Blanchflower’s undermployment to worry about.
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In a recent research paper, the economists David Bell and Danny Blanchflower insist that the persistence of low wages in the UK and US is a result of unemployment being replaced by underemployment.
This is the one great achievement of the last half century. It is entirely and absolutely astonishing, we’ve just seen the biggest reduction in absolute poverty in the entire history of our species. And it’s not just that people are moving up to that second stale crust a day – we’ve got to where half of all of us now enjoy those bourgeois pleasures of three squares, a change of clothes and a roof overhead. We are actually solving the grand economic question, how do we all get rich?…See More
The Bank of England – more accurately, someone from it, Gertjan Vlieghe – has good news for public sector employees. Their compensation for turning up to work has just gone up. Equally, bad news for private sector workers for the pressure is going to be the other way. This might not be what is first thought of when discussing the yield curve post the unwinding of quantitative easing but it is all indeed so.
The point he’s making in his recent speech is that as long as no one does anything silly then unwinding all of that unconventional monetary policy isn’t going to be a problem.…See More