tag:blogger.com,1999:blog-2546602206734889307.post3178414400039761895..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: Brexit and the LeftMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger34125tag:blogger.com,1999:blog-2546602206734889307.post-61156864832979505692016-06-23T05:59:30.919+00:002016-06-23T05:59:30.919+00:00"A post-Brexit Boris Johnson government....&q..."A post-Brexit Boris Johnson government....". Would the Parliamentary Conservative Party (who are in the majority for Remain) really elect as their leader someone with no ministerial experience, a reputation for idleness while Mayor as London, with a record of contradicting himself on numerous issues, and, to put it politely, being guilty of the occasional misrepresentation of the facts ? Following an unpleasant campaign in which Johnson has been a divisive figure? Surely a Teresa May administration is a more realistic prospect ?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-3509765735933831942016-06-22T17:15:05.617+00:002016-06-22T17:15:05.617+00:00Perhaps the strongest leftist argument for exiting...Perhaps the strongest leftist argument for exiting is the EU's institutional commitment to neoliberalism. See the European Commission and to a lesser degree the ECB. Their agenda is to reduce wages, reduce worker protections, weaken unions, and reduce public benefits to the poor and middle class. Last week the EC proposed a law to prohibit any country from regulating what it calls the new "flexible" economy. This includes businesses like Uber which pay less without worker protections and without unions.<br /><br />Many if not most of the Brexit supporters favor austerity and neoliberalism hence the absence of this issue from the campaign. Of course getting out from under the EU does not get the UK out from under the austerity/neoliberal current ruling party. Still it would be easier to jettison the Tories then to also get rid of the neoliberal EU institutions.Douglashttps://www.blogger.com/profile/10475867500169018058noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-86734789255035193582016-06-22T15:48:46.022+00:002016-06-22T15:48:46.022+00:00"If migration falls following Brexit (a big i...<i><b>"If migration falls following Brexit (a big if), and if we add in the other negative effects of Brexit, we will have a large increase in the government’s budget deficit even at full employment. Given government policy on how holes in the deficit are to be filled, this NIESR analysis suggests you are talking about large hits to the lower paid."</b></i><br /><br />This I would content is indeed the crux of the matter: the failure of successive governments and economists to protect the national finances. Why is there a budget deficit anyway when the economy is now larger than before the Great Recession began? It is for three reasons. (i) We borrowed from the wrong people (i.e. the Bond Market) during the recession. (ii) We have failed to identify new taxes on the rich to fill the tax gap that has arisen from the growing inequality of our society. (iii) We have pursued policies that increase inequality, and favour asset prices at the expense of consumption.<br /><br />In answer to point (i) I give you MMT. If we had borrowed from the Central Bank, then we wouldn't be paying huge interest payments overseas. As a result our balance of payments would be close to zero, our currency would be trading at its true rate, exports would be up, inflation would be high enough to drive spending and consumption (instead of leading us into a depression as it is currently), AND our budget deficit would be virtually zero by now.<br /><br />In answer to (ii), we need establish where the money in our economy has gone and then use new taxes to recoup some of it. This means doing things like taxing royalties at source, taxing UK ex-pats abroad, and shutting down tax avoidance routes. Unfortunately the main thing stopping us doing all of this is the EU and its rules for the Single Market. <br /><br />Cantab83https://www.blogger.com/profile/12485401571391377815noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-39460176043215942902016-06-22T15:03:42.073+00:002016-06-22T15:03:42.073+00:00The craziest response to the bailout of the banks ...The craziest response to the bailout of the banks in the US was the accusation from the right/which developed into the "tea party" that this was because "Obama" was a socialist and wanted the govt. to take over the economy. To my way of thinking it was a "capitalist crisis" and an example of capitalist taking over/from the government so that it could address the crisis.<br /><br />They should have directed their energy at the people who set the stage for the failure.<br /><br />Interestingly, the between the lines point of your post is that the austerity response to the 2008 Depression/Recession, counter to Keynesian approaches and not a particularly sound response in other schools of thought, has generated stronger support for Brexit, when the austerity response was a choice selected by the Conservatives, not imposed upon them by the ECB/Germany as it was for countries like Greece.Richard Laymanhttps://www.blogger.com/profile/02765521217875752850noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-13908904178343130112016-06-22T14:14:02.497+00:002016-06-22T14:14:02.497+00:00I agree the main problems identified as being caus...I agree the main problems identified as being caused by immigration (problems with services, housing, etc.) are caused by tory austerity.<br /><br />But "A pretty robust finding is that migration at the kind of levels we are now seeing does not do any harm to GDP per head, and could improve it" is a Bill-Gates-walks-into-a-bar type of argument. Considering Britain's problem with inequality why should someone who has received a smaller and smaller share of the national income care if GDP per head goes up? They may see none of those gains in their personal income. Immigration could cause a rise in GDP per capita even if 100% of the gains go to the top 1%. It's another case of asking the poor to take on the burden of measures designed to increase the value of the economy as a whole. bbkhttps://www.blogger.com/profile/01099727870255840001noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-77317272949256640862016-06-22T14:11:50.477+00:002016-06-22T14:11:50.477+00:00"... the evidence does not point to strong ne...<i><b>"... the evidence does not point to strong negative effects [of migration] on wages…"</b></i><br /><br />Oh really!!! So why have living standards in most developed countries stagnated for the bottom 50% over the last 30 years? Migration is just another manifestation of globalisation policy. And both have been exploited and abused to suppress wages because that is how western governments have managed to deliver economies that simultaneously have low inflation and low interest rates. The adverse side effect is of course wage inequality, excess savings by the rich, low investment and asset price booms. You need to read your Hyman Minsky (as do most other left leaning economists and politicians).<br /><br />As I pointed out on your last post, UK growth declined when we joined the EEC and it declined again when we joined the single market. The reasons for this are obvious: at each level of integration we have effectively exported an increased amount of our economic growth to other countries (c.f. Germany after reunification).<br /><br /><i><b>"Migrants tend to be young, healthy and working. They provide more in terms of resources than they take out by using public services."</b></i><br /><br />The first part of this may be true but the second is most definitely not. What you have conveniently omitted from your analysis is that most migrants pay no tax because they are seasonal, and under EU rules, if you work in a country for less than 6 months you are exempt from income taxes. Secondly, most migrants are net savers and they spend those savings in their country of origin, not here. So there is no multiplier effect. The best migration is permanent migration because it is more likely to involve people with tradable skills, in high income professions who invest all their earnings in this country thereby creating as many, if not more, jobs than they take away.<br /><br /><i><b>"The first point to make is if labour mobility keeps wages down in the destination country, it should increase wages and/or reduce unemployment in the country the migrant came from. As migrants move from lower to higher wage countries, then migration tends to equalise incomes. This should normally count as a plus from a left wing perspective."</b></i><br /><br />In the long run, yes, but what did Keynes say about the long run? So only if we are all immortal can we all expect to benefit from migration. The reality is that most will not benefit in their lifetime. Moreover, if is only beneficial and equitable if those that sacrifice the most in the short term benefit the most in the long term. But if migration hurts the poor in the UK and benefits the rich, how is this <i>"a plus from a left wing perspective"</i>?<br /><br /><i><b>"The idea that Brexit will shock the EZ into mending its ways, then thank us for showing them the light and invite us to rejoin whatever is left is pure fantasy."</b></i><br /><br />On the contrary. If we leave then the whole project will almost certainly fall apart. A domino effect is almost inevitable. At least then we can start again and get it right. What is abundantly clear is that if we remain the EU will press on with its failed policies regardless. They will interpret a vote to stay as vindication of the current zeitgeist, not a criticism of it and a need for change.Cantab83https://www.blogger.com/profile/12485401571391377815noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-20168497481313511572016-06-22T11:17:32.014+00:002016-06-22T11:17:32.014+00:00Somewhat odd that you can write about the left and...Somewhat odd that you can write about the left and Brexit and not mention<br /><br />(1) TTIP<br /><br />and <br /><br />(2) the barriers in place to stop member state preference for particular businesses<br /><br />Also a somewhat short term perspective, as the reasons John McDonnell and Jeremy Corbyn have had for leaving the EEC/EC/EU were and are nothing to do with migration.SpinningHugonoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-14632885622296196832016-06-22T09:59:55.945+00:002016-06-22T09:59:55.945+00:00"Much of the analysis about why Brexit will h..."Much of the analysis about why Brexit will hurt the medium term economy ignores migration - its about trade." Indeed. And if you read the Treasury document - there's time I'll never get back - it's all about the supposed impossibility of free trade and economic efficiency through any arrangements other than the present ones. Yeah - I'm sure. I also love the claim that it's these macro things which drive productivity and workers' wages. So unskilled monoglots will be highly paid as strangers in a strange land because their labour - however routine - will be expended on first world machines. I think you'll find that when the machines can move anywhere, and so can the people, the privileged scarce-labour status of the western worker until 1950 can't exist, and "high productivity" handle turning and bolt tightening results in returns to capital. But hey ho - if you need to see it played out in real time let's do it. Craig Rosshttps://www.blogger.com/profile/12679887749816299173noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-48086264892511527542016-06-22T08:16:26.738+00:002016-06-22T08:16:26.738+00:00The serious left opposition to the EU does not rep...The serious left opposition to the EU does not repeat right-wing arguments on migration. Instead it sees the EU as irremediably neoliberal (seeing events in the Eurozone as confirming this) and anti-democratic, limiting opportunities for any future left government. More immediately it hopes Leave might bring down the Tory government. I have some sympathies with these views but on balance I see a Leave victory boosting the right across Europe more than it would create opportunities for the left, particularly after a campaign dominated by xenophobia.<br /><br />Anyone interested in a longer explanation of this, please see http://welshlabourgrassroots.blogspot.co.uk/2016/06/reluctant-remain-by-lyn-eynon.html.Anonymoushttps://www.blogger.com/profile/10623963884259918737noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-2610151264874941412016-06-22T07:56:57.581+00:002016-06-22T07:56:57.581+00:00Repeating far right arguments against migration is...Repeating far right arguments against migration is not a left position. It reminds me of those who in pre-war Europe thought attacking Jewish business was somehow anti-capitalist. Many on the left who support Leave will rightly have no truck with this.Anonymoushttps://www.blogger.com/profile/10623963884259918737noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-90729945709576983872016-06-22T07:11:04.180+00:002016-06-22T07:11:04.180+00:00Immigration has redistributive effects that lead t...Immigration has redistributive effects that lead to inequality:<br /><br />"In the 1980s, the wages and employment rates of less-skilled Americans fell relative to those of more-skilled workers. This paper examines the contribution of the continuing inflow of less-skilled immigrants and the increasing importance of imports in the U.S. economy to these trends. Our empirical evidence indicates that both trade and immigration augmented the nation's supply of less-skilled workers, particularly workers with less than a high school education. By 1988, trade and immigration increased the effective supply of high school dropouts by 28 percent for men and 31 percent for women. We estimate that from thirty to fifty percent of the approximately 10 percentage point decline in the relative weekly wage of high school dropouts between 1980 and 1988 can be attributed to the trade and immigration flows. In addition, our analysis suggests that from 15 to 25 percent of the 11 percentage point rise in the earnings of college graduates relative to high school graduates from 1980 to 1985 can be attributed to the massive increase in the trade deficit over the same period, but that the effects of trade on the college/high school wage differential diminished with improvements in the trade balance during the late 1980s."<br /><br />http://www.nber.org/papers/w3761<br /><br />That we need to be careful with having a standardised theory about what 'should happen' and ultimately what is important is context:<br /><br />David Card<br /><br />"In the aforementioned Mariel Boatlift study, for example, he emphasized that the observations could not be generalized. Specifically, Miami’s labor market is not typical in its track record of successfully absorbing immigrants, not least thanks to the city’s myriad opportunities for low-skilled workers and its vast Spanish-speaking population.<br /><br />In a 2001 paper he acknowledged that increases in unskilled immigration—if massive—could actually reduce employment rates for younger and less-educated natives by 1 to 3 percentage points in traditional gateway cities such as Los Angeles."<br /><br />http://www.imf.org/external/pubs/ft/fandd/2016/03/people.htm<br /><br />In Britain I do not think anyone has said that immigration has massively contributed to increased GNP per capita (Although the establishment were making that case that it would early on before it was basically demolished by the Lords Report. Portes now says that there has been little effect on the economy although there has been a small effect, he says, on the very low income end of the labour market.)<br /><br />The literature on global inequality is huge - start with Branco Milanovic. Outside the mainstream economics profession people were making these warnings much earlier, as the IMF and World Bank were still pedalling the statement above that you make. <br /><br />For a broader and more balanced perspective I would encourage you to read outside the mainstream (neo-classical economics) literature. This issue requires multidisciplinary analysis. People with some real insights are people who go out to the communities affected and do the field work. Anthropologists, sociologists and political scientists. My own view is that very large scale immigration can be both good and bad, as David Card points out - it is entirely contextual. For sure Britain's social problems which relate to inequality are deeply entrenched historically and cannot be blamed on migrants. But I am not sure that a high immigration policy skewed towards low income labour flows is helping and I am wary of the win-win outcomes that neo-classical theory asserts. Priority I believe should be placed on assisting refugees, as our numbers admitted are lamentably low.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-49744612470330789792016-06-22T01:50:55.784+00:002016-06-22T01:50:55.784+00:00Boris a market internationalist. He wants a global...Boris a market internationalist. He wants a globalized capital market to replace the nation state one. That has been the goal of liberals since the end of the cold war. <br /><br />If you want to really stop immigration, you nationalize capital markets. Pure and simple. That would undermine capitalism as a global construct............and a socialist chuckles when he says without the global construct, capitalism is impossible to survive long term. Indeed, that is very very right. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-4010728698835356922016-06-22T01:39:09.748+00:002016-06-22T01:39:09.748+00:00Well, there really isn't any "real" ...Well, there really isn't any "real" internationalist left position. Calling them 'left' shows how bad political dialect has been molested. <br /><br />The problem is private contracts which create immigration in the first place. There is not law in the EU itself or in the members own legal system, to stop it. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-28855814186855338202016-06-22T01:35:53.862+00:002016-06-22T01:35:53.862+00:00Brexit is DOA. Not happening. There are no plans a...Brexit is DOA. Not happening. There are no plans afterwards and the recession it would cause, pretty much means new elections asap. Interesting when this dies tomorrow, if people sorta act like dumb sheep to the market. <br /><br />Immigration has little to do with the EU. It goes into the private sector trade patterns which the EU does not enforce. In otherwards, this type of situation existed well well before the EU. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-21955252374227486282016-06-22T00:34:46.073+00:002016-06-22T00:34:46.073+00:00Er, I have a feeling that Craig will not find your...Er, I have a feeling that Craig will not find your answer here entirely satisfactory. His argument, if I have understood it correctly, is this. Most UK workers (call them group A) produce very little value. A small proportion of UK workers (call them group B), however, are highly productive. At present, through various transfers, group B are supporting group A. As it is, group B's ability to support group A is being pressed to breaking point. Indeed, incontinent public borrowing is the only reason that that breaking point has not already been reached. Plainly, present levels of public borrowing cannot continue indefinitely and it follows from this that group A's dependence on the largesse of group B is already unsustainable. Migrants will be, disproportionately, members of group A as opposed to group B and so their arrival in ever greater numbers can only hasten the social catastrophe that is implicit already in our hopelessly incontinent social welfare model. Apologies, Craig, if I've misunderstood you.Anonymoushttps://www.blogger.com/profile/07115423820938009661noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-2634124562989769592016-06-22T00:09:23.889+00:002016-06-22T00:09:23.889+00:00You've overlooked that better economic conditi...You've overlooked that better economic conditions in the EZ would encourage more Eastern Europeans to go there rather than come to the UK.<br /><br />SAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-90419085563809633512016-06-21T23:34:13.637+00:002016-06-21T23:34:13.637+00:00And the new ISDS-based legal order https://twitter...And the new ISDS-based legal order https://twitter.com/SurelySmMistake/status/738795177368784896Tim Wilkinsonhttps://www.blogger.com/profile/15237522140184882034noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-63775856720590218392016-06-21T22:56:14.445+00:002016-06-21T22:56:14.445+00:00As I do read what mainstream economists are saying...As I do read what mainstream economists are saying about immigration, I think you need to point me to those who back up your argument. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-85799975444882616022016-06-21T22:48:18.928+00:002016-06-21T22:48:18.928+00:00On the right sure, but I'm talking about the l...On the right sure, but I'm talking about the left here, which worries about what happens in Europe.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-40598899491901150342016-06-21T22:46:52.971+00:002016-06-21T22:46:52.971+00:00Much of the analysis about why Brexit will hurt th...Much of the analysis about why Brexit will hurt the medium term economy ignores migration - its about trade. Who is being dishonest?Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-76376960352144832222016-06-21T22:43:47.185+00:002016-06-21T22:43:47.185+00:00Podemos maybe, but not Brexit. They look at our Eu...Podemos maybe, but not Brexit. They look at our Europhobic tabloid press and think there is nothing we could do to change that - and they would be right. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-67979849105665938902016-06-21T16:59:33.914+00:002016-06-21T16:59:33.914+00:00"It seems reasonable to assume that one reaso..."It seems reasonable to assume that one reason immigration into the UK from the EU is currently high is because of considerable youth unemployment in many EZ countries. "<br /><br />This is an argument of the remain campaign which is little to do with the facts. It is true that very recently EZ immigration has shot up because of high youth unemployment and this is likely to be transitory.<br /><br />But overwhelmingly the source of EU immigration is Eastern Europe, by far the biggest source is Poland, but Romania and Bulgaria are also not insignificant. There is no chance that this is likely to subside any time soon, wage differential between Eastern Europe and the UK are too wide. It would take a generation to close the gap to a level where we would get some relief. <br /><br />EU labour flows were never really an issue before expansion.<br /><br />Applying the same rules to Eastern European immigration to all immigrants from other countries will not get immigration to the 10s of 1000s. But it will make a substantial difference to numbers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-87957623019248532592016-06-21T16:58:26.371+00:002016-06-21T16:58:26.371+00:00"If migration falls following Brexit (a big i..."If migration falls following Brexit (a big if), and if we add in the other negative effects of Brexit, we will have a large increase in the government’s budget deficit"<br /><br />Not necessarily any more than otherwise. Nobody has any idea what it will be. Deficits depend on private decisions to spend and save. Which is why the government's *impossible* surplus obsession is insane, especially with a large trade deficit and corporate surplus.<br /><br />If Osborne makes spending cuts of £xbn, then people receive less income by £xbn and there is less spending in the economy and therefore less tax and saving to the tune of ... £xbn. So the hole (people saving) is not filled no matter how many people on benefits Osborne kills. It is incredibly sad and idiotic. They may well cause a recession for no good reason (not that there is a good reason.)<br /><br />"The first point to make is if labour mobility keeps wages down in the destination country, it should increase wages and/or reduce unemployment in the country the migrant came from. "<br /><br />Then the right wing government in the country pushes up unemployment and down wages.<br /><br />The simple solution to this conundrum is as part of implementing the Job Guarantee you restrict the open borders to other parts of the world that have an equivalent Job Guarantee programme and social infrastructure. If you don't come from such country then you have to apply for a visa and be assessed.<br /><br />It's quite difficult for a foreign leader to argue against that position, because if they do then they are essentially saying they want to dump their unemployment in the UK rather than deal with it themselves. The push back would be: Implement a Job Guarantee and we'll gladly remove the restrictions for your country.<br /><br />I don't agree with the internationalist left position but it would be better than what we have at the moment. Unfortunately Labour will never govern the nation until it gets back to believing in nations and what they can do to improve the lot of the ordinary resident of these Isles.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-75985486658607911372016-06-21T16:33:53.361+00:002016-06-21T16:33:53.361+00:00"A post-Brexit Boris Johnson government would..."A post-Brexit Boris Johnson government would take away worker rights that the EU currently ensures and, as the deficit deteriorates, cut welfare benefits including tax credits."<br /><br />The deficit nonsense is indeed moronic, but it is going to happen anyhow.<br /><br />It will take a good three years to get the 'divorce' from the EU, which means the treaty stays in place. 1st July 2019 is being pencilled in as the date - because that is when the new EU commission and new EU parliament convene.<br /><br />And in less than a year after that the UK government faces a general election.<br /><br />Please explain how Boris is going to implement his hard right agenda with that lot going on and a working majority in Parliament of 12.<br /><br />In six years of Tory rule 'workers rights' have not been brought down to EU minimums, and they likely won't be. <br /><br />Things like the Working Time directive, like the late payment directive, is ignored everywhere. Because there is no law without enforcement. In the UK it is routinely opted out by default and is useless.<br /><br />As usual you are impressed by words on a page rather than the reality of the situation - which is the persistent lack of jobs and income across the continent imposed by the neoliberal Stability and Growth Pact which systematically prevents sovereign governments from protecting their citizens against the ravages of business.<br /><br />Outside the EU we set our own protections by electing governments to represent us who are then free to make the changes necessary.<br /><br />If you want better protections, then campaign for a free Labour government that can implement a full Job Guarantee, working for the state at the living wage for 35 hours a week. Then simple competition eliminates any worse job from the private sector. No stupid unenforceable rules required.<br /><br />I see no benefit to your system of Very Clever People and higher law. Because it fails the Platonic test - who watches the watchers.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-54063387382711309912016-06-21T14:48:03.343+00:002016-06-21T14:48:03.343+00:00Suppose it is the case that the wages of low paid ...Suppose it is the case that the wages of low paid workers are undercut by migrants from within the EU - what do you think is the best way to fix the problem?nertsaevhttps://www.blogger.com/profile/06624358312506541853noreply@blogger.com