tag:blogger.com,1999:blog-2546602206734889307.post5758305335288009421..comments2024-03-18T11:12:51.114+00:00Comments on mainly macro: The academic consensus on austerity solidifies, but policymakers go their own sweet way Mainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-2546602206734889307.post-76137479815630665442017-03-03T11:12:05.954+00:002017-03-03T11:12:05.954+00:00The recent story regarding the setting of the Pers...The recent story regarding the setting of the Personal Injury Discount Rate down to minus 3/4% based on the real yield of Index Linked Gilts should tell a tale, but the media doesn't seem to have made the leap to see that, in this case at least, the government can borrow for less than nothing, better than free money.<br /><br />It may seem a leap from Insurance Payouts to Deficit Deceit but it must surely be worth challenging the idea that the deficit is unaffordable.<br /><br />Unfortunately the belief, received wisdom, that the debt and deficits are unsustainable is so embedded in the minds of so many journalists, I doubt the leap is not simply ignored, but completely invisible.<br /><br />Alexander Harveynoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-83699597013893683482017-02-27T13:36:15.045+00:002017-02-27T13:36:15.045+00:00Why do people always dance around the real issue f...Why do people always dance around the real issue facing us, we are suffering from the policies of a global elite transferring power and wealth to themselves without any regard to the impact it has on ordinary people.<br /><br />Margaret Thatcher's secret 1982 cabinet papers, "the longer term options" spells out the agenda in detail.<br /><br />https://skwalker1964.files.wordpress.com/2016/10/cab-129-215-6.pdf<br /><br />Thatcher denied the existence of this document and it was only released under the 30 year rule in 2012.<br /><br />I welcome the views of others as to why people are so reticent not see what is actually happening around them and has been ever since Friedman espoused his mad cap ideas in the 1970s.<br /><br />This other 1977 document is just as revealing and was a paper instigated by the then Nicholas Ridley who planned the dismantling the nationalised industries, the undermining of the Unions, and to use military and arms of the state, Police etc., against them. The Miners of course were totally unaware that this had all been planned years in advance. This paper can be found in Bodleian Library in Oxford.<br /><br /> https://en.wikipedia.org/wiki/Ridley_Plan<br /><br />https://quod.lib.umich.edu/h/humfig/11217607.0004.106/--thatcher-s-civilising-offensive-the-ridley-plan?rgn=main;view=fulltext<br /><br />The level of bile and smears currently being waged against across the mass media, and Neo-Liberal politicians across the political spectrum isn't it obvious that when Bernie Sanders proclaimed "that the 1% per waging war on its own people", that there is nothing but merit in that view point, and isn't it time for all decent human beings to recognise that?<br /> <br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />Mervyn Hydehttps://www.blogger.com/profile/10509054505553883594noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-16463237716183373552017-02-26T07:43:33.437+00:002017-02-26T07:43:33.437+00:00http://www.nytimes.com/1998/02/11/business/interna...http://www.nytimes.com/1998/02/11/business/international-business-imf-concedes-its-conditions-for-thailand-were-too-austere.html<br />The IMF removed the austerity.Cesiumhttps://www.blogger.com/profile/02025636403503365433noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-7128760833470819652017-02-24T00:03:06.090+00:002017-02-24T00:03:06.090+00:00How is this paper evidence? Based on the abstract,...How is this paper evidence? Based on the abstract, Its just a general equilibrium model stuffed with paramaters. Why should anyone trust their results?JoeMachttps://www.blogger.com/profile/12650518988624821388noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-83844218887147490622017-02-23T16:31:29.111+00:002017-02-23T16:31:29.111+00:00Simon Wren-Lewis's post gives pöliticians an e...Simon Wren-Lewis's post gives pöliticians an excellent excuse not to take economists seriously. He has no reason to complain.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-14020190444160943472017-02-23T14:36:22.270+00:002017-02-23T14:36:22.270+00:00"What we are sure to get is tax cuts, particu..."What we are sure to get is tax cuts, particularly for the rich, because that is nowadays the main goal of Republican economic policy."<br /><br />Nowadays? It's been their "main goal" since at least 1980, the beginning of the Reagan era. I'd also amend "main goal" to tell it like it is: it's an obsession, a fixation, a mania. Geraldhttps://www.blogger.com/profile/17319994161960244400noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-42999425391040413512017-02-23T08:37:01.128+00:002017-02-23T08:37:01.128+00:00"The NHS is crying out for a substantial tax ..."The NHS is crying out for a substantial tax financed fiscal expansion, which would help get interest rates off their lower bound". Not sure this makes sense. If its fully financed by taxation, how is it a fiscal expansion? Are you assuming that the hit to aggregate demand from higher taxes would be smaller than the boost from higher government spending? And isn't it odd to cite the prospect of higher interest rates (including on government borrowing) as a positive of increased spending on the NHS?Julian Jessopnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-51871201430513788512017-02-23T00:36:06.905+00:002017-02-23T00:36:06.905+00:00House et al's paper can be found here:
http:/...House et al's paper can be found here:<br /><br />http://www-personal.umich.edu/~ltesar/pdf/austerity.pdf<br /><br /><br />HenryAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-40828913906909670672017-02-22T23:43:04.941+00:002017-02-22T23:43:04.941+00:00I think our policymakers are doing the best they c...I think our policymakers are doing the best they can in the circumstances. Austerity alone hasn't really worked but Brexit should help. So far we're still well behind Greece, except <a href="http://touchstoneblog.org.uk/2016/07/uk-real-wages-decline-10-severe-oecd-equal-greece/" rel="nofollow">in one respect</a>, but of course our policymakers have been handicapped by the greater deal of ruin that there is in the UK.Paul Hayeshttps://www.blogger.com/profile/04309125585593320043noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-47636185571191712952017-02-22T23:10:09.410+00:002017-02-22T23:10:09.410+00:00"what has been done and continues to be done ..."what has been done and continues to be done to Greece is the age old story of the creditor refusing to admit that they have made bad loans, and therefore squeezing the debtor for every last drop and not realising that doing so only makes things worse."<br /><br />Nonsense. The creditors continually lent Greece more money, and the private creditors had to agree to an important haircut, i.e. debt pardon.<br /><br />But the creditors want reforms, otherwise they can be sure never to get anything back. As the IMF points out in its latest pronouncements, things cannot work in Greece if half the population is exempt from income taxes and pensions are on the level of much richer countries.<br /><br />Unfortunately, Greeks consider refusing reforms as a form of national resistance, rather like against the Ottomans, their first king after their independence, who was a Bavarian, or the Italians and Nazis.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-66846571530574338072017-02-22T22:54:56.766+00:002017-02-22T22:54:56.766+00:00"There were three countries or areas that ado..."There were three countries or areas that adopted austerity in spades: the US, the UK and the Eurozone."<br /><br />The US: When?<br /><br />The UK: That's what the voters wanted - no borrowing.<br /><br />The Eurozone: Where? In France, public expenditure rose continually since 2007. The same is true of Germany with rhe exception of one year. In the countries that count, there was no austerity.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-53614152779383124042017-02-22T22:45:45.669+00:002017-02-22T22:45:45.669+00:00And why should they? The rule is silly and practic...And why should they? The rule is silly and practically impossible to apply, as the Fed and the ECB have found out, and this is even more true in a single Country.<br /><br />Anyway, the Iraq war has tought Germans to be stubborn, and right they are.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-57535623216803620162017-02-22T16:21:46.663+00:002017-02-22T16:21:46.663+00:00Why does this seem not to apply in the case of the...Why does this seem not to apply in the case of the Asian Financial Crisis? The IMF was vilified for its imposition of austerity, yet these economies (Thailand, South Korea, Indonesia) have enjoyed high growth since.Anonymoushttps://www.blogger.com/profile/01564096730987905967noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-37344090625987272822017-02-22T14:02:46.992+00:002017-02-22T14:02:46.992+00:00I can see a post-Corbyn Labour Party having to tur...I can see a post-Corbyn Labour Party having to turn on the BoE, forcing it to reveal who said what to whom over the period of excess bank lending in the 2000s, just to stop the Tories from linking the Labour Party to the 2008 crisis.<br /><br /><br /><br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-26291489358093183322017-02-22T13:39:26.738+00:002017-02-22T13:39:26.738+00:00Why won't politicians take your advice? Paul K...Why won't politicians take your advice? Paul Krugman finally figured out years ago why the Very Special People don't always listen to him: class interests and politics. Why presume anymore that politicians are public servants? It seems that ethos died years ago.<br /><br />I appreciate your constant critique of these stupid policies--we need that kind of ammo and "rally the troops" call. But that won't be enough. The kind of town hall meetings the Tea Party unleashed seven years ago, and that liberals and others are doing now, will get the point across more affectively. The elite can ignore a blog or a paper--but not a mob. <br /><br />Welcome to political sociology & political science.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-59704888849353212672017-02-22T11:48:16.267+00:002017-02-22T11:48:16.267+00:00Austerity appears to have worked in Ireland?
Austerity appears to have worked in Ireland?<br />Pseudonymnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-70442144215370328952017-02-22T11:02:59.148+00:002017-02-22T11:02:59.148+00:00“This rule has to be symmetric in inflation differ...“This rule has to be symmetric in inflation differentials, prescribing fiscal expansion if a country’s inflation is lower than average.” Good idea. Though getting Germans to agree might be difficult.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-74010482485249283102017-02-22T11:00:23.465+00:002017-02-22T11:00:23.465+00:00I would question some of your assumptions here as ...I would question some of your assumptions here as they affect policy directly.<br /><br />You say for example "In addition, the NHS is crying out for a substantial tax financed fiscal expansion, which would help get interest rates off their lower bound". Presumably this is due to an increase in borrowing but this is just what the authorities want to avoid (being forced off the ZLB), in fact they seem to be terrified of it. There is far too much debt around (especially private) and all but a purely nominal increase in rates is likely to have severe economic consequences. As to the substance of your argument I think you are right about the NHS but clearly this is just one element in the "austerity" context.<br /><br />Also your comment that in the EZ there should be rules is I think somewhat naive. The last thing the ECB want are rules because that may force them to tighten when they have no wish to. The BOE do this much better by having such vehicles as FLS or TLS to subsidise rates under the radar whilst keeping the fig leaf of positive rates above it.<br /><br />Also your four ways to avoid another ZLB episode are also somewhat questionable. A higher inflation target absent wage increases (very likely) will result in lower real wages which, in an economy driven by debt and with high debt levels, is likely to result in lower aggregate demand rather than the soft default that the authorities may want; this will exacerbate problems not alleviate them. This aspect has been recognised by a speech given recently by the governor of the Australian CB.<br /><br />You are right to stress politics but the reason is that policy has put us into a box from which there is no easy escape and the politicians know this full well, as do the BOE.Robert Joneshttps://www.blogger.com/profile/03593742130088640939noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-80908023040785194132017-02-22T10:03:23.553+00:002017-02-22T10:03:23.553+00:00Perhaps we need to attack the problem directly? Wh...Perhaps we need to attack the problem directly? What might the economics profession do to help politicians start doing the right thing? <br />Metatonehttps://www.blogger.com/profile/00175633633918800979noreply@blogger.com