A fairly short post today (Wednesday oblige!). So just some snippets. Today, the Australian Bureau of Statistics published the latest – Retail Trade, Australia, Preliminary, February 2020 – which was the first release of a “suite of new products for Australian retail turnover”. The new offering is designed to more accurately and immediately pick up the “economic impact of coronavirus”. This release is preliminary and gives us more current data to that which is published in the upcoming April Retail Trade, Australia. The news is not good, as you might expect. Retail trade rose by 0.4 per cent in February 2020, as food purchases rose but all other spending categories fell. So the result is driven by the ridiculous panic hoarding behaviour that is now common. I went to a supermarket last night on the way home to get a few items (like some oats for muesli) and the shelves were nearly empty across a wide range of products. It makes no sense. Even if we are to be locked down, the Government has said shopping will be allowed. But in other sectors of the economy major impacts are being felt. All by band’s gigs in Melbourne have been cancelled and Virgin (who I fly with mostly) have cancelled all international flights until at least the end of June and many domestic flights. Life is changing dramatically. And this would be a great time to introduce a Job Guarantee for artists and musicians. Further, I report on some statistical events in West Africa that have far-reaching implications for how nations interact with multilateral agencies such as the IMF or the World Bank.
“Every musician I know is now facing bankruptcy!”
Classic FM – published an article last week – “Every musician I know is now facing bankruptcy” – the impact of coronavirus cancellations on classical artists – which reports a trend that is now happening all over the world – artists, musicians are rapidly becoming unemployed.
As I noted above – all the gigs my band had on our books for the coming months are cancelled (postponed) as venue owners face an almost complete drying up of their custom.
One place we play in South Melbourne is reporting no one coming into the pub anymore.
Classic FM “is the UK’s only 100 per cent classical music station”.
In the article cited it notes:
1. “Concert halls are closed, gatherings cancelled, and large sectors of the economy are paralysed. Many members of the classical audience are self-isolating or just staying home.”
2. “freelance and touring musicians, who rely on performances for their livelihoods, are feeling a deep impact from the cancelled performances, scrapped tours and the resulting loss of income and opportunities.”
3. “with most cultural organisations worldwide shutting down for a period, is unprecedented and will cause most self-employed performers to face major financial issues, even bankruptcy.”
4. “Most performers live life on a financial knife-edge because if we don’t work, we don’t get paid, and we aren’t catered for even under the current statutory sick pay regime.”
And so it goes.
Pretty easy really.
Introduce a Job Guarantee – which is an unconditional job offer at a socially inclusive minimum wage to anyone who wants to work and cannot find it.
The Government has flexibility in what it would require as work given their is no ‘profit’ motive involved in this.
And while the musicians might reasonably be called on to contribute to society in normal times in return for the income security a Job Guarantee wage would provide, these are not normal times.
So, the musicians might be expected to develop some new repertoire while the coronavirus prevents public performance or mixing with each other.
The Government could also help with better digital connectivity. My own band records and mixes remotely via exchanging information through the Internet.
It doesn’t extend the imagination too far to think that with high quality broadband, live rehearsals and even concerts could occur via the Internet with musicians from disparate locations.
It is time to use our imagination.
But there is absolutely no reason why artists and musicians need to go without income as a result of losing their gigs while the crisis unfolds.
African nation suddenly grows – and exposes the problem of using debt ratios
I follow the news in Africa as I have work interests there. Last week (March 12, 2020), it was reported that the West African nation and former French colony, Côte d’Ivoire had suddenly discovered its economy was nearly 40 per cent larger than previously calculated.
This is one of the CFA franc using nations, which reflects the on-going post-colonial exploitation by Europe.
Now, one shouldn’t assume anything much has changed. It was always larger than recorded. Why?
Because the national accounts data becomes sensitive to the passage of time and over time can become a distorted (inaccurate) measure of output produced in a nation.
The – Intitut National de la Statistique – the national statistics office in Abijan has been engaged in a modernisation process for their national accounts dissemination.
You can read the Termes de référence (in French), which guided their review process.
Last week (March 11, 2020), the Cabinet approved the new framework that has been in the pipeline for some years.
The most important change reported by Reuters in their new release – Revision to GDP methodology gives boost to Ivory Coast’s reported economy (March 12, 2020) – is that the:
The new methodology for determining GDP … includes changing the base year for its calculation from 1996 to 2015 …
What does that mean?
Real GDP attempts to represent the actual volume of production over given period.
When calculating real GDP, statisticians attempt to remove the changes in prices over the period so as to get a more pure measure of volume shift.
Now, think of all the goods and services that are sold in each period. These are valued by their individual prices.
One way of decomposing the price and volume effects is to choose a base year set of prices and then compute the subsequent volumes with the base year prices.
The problem is that the prices of some goods and services might fall over time and as a result real GDP growth will be overestimated.
Why? Because these goods will have a higher (price x quantity) weight in the calculation than is justified (given their prices are lower than the base year price).
Base years are changed by statistical offices in order to better represent the structure of the economy at the current time, given that major shifts can occur over time.
In the case of Côte d’Ivoire, its economy has transformed from a war economy to a more diverse, peaceful economy. The pattern of production and sales has shifted dramatically since 1996 with many new industries and services.
I could go into more technical detail but that would just blur the point.
In the case of Côte d’Ivoire, the statistician is reporting that:
1. In 2015, GDP was now estimated to be 27 trillion CFA francs instead of the 1996-weighted estimate of 19.6 trillion CFA francs.
2. The average growth rate between 2015 and 2018 was 7 per cent per annum.
3. Other nations, such as Ghana, Nigeria and Senegal have performed similar exercises in the last few years with similar results.
Why does this matter?
Think about the use of fiscal balance and public debt ratios, which all use GDP as the denominator in their calculations.
These ratios are weaponised by multilateral organisations such as the IMF, the World Bank and by conservative governments to invoke austerity and hardship on nations if they pass some meaningless threshold.
As of yet, the Intitut National de la Statistique of Côte d’Ivoire has not released the full updated time series.
But in 2015, the following ratios were recorded for Côte d’Ivoire:
1. General government fiscal deficit in 2015 as a per cent of GDP = 2.823 per cent (and rising to 4.5 per cent in 2017).
2. General government gross debt in 2015 as a percent of GDP = 47.266 per cent.
Now, if we recomputed those ratios, with the upwardly revised GDP estimates
1. Fiscal deficit ratio falls to 1.67 per cent.
2. Public debt ratio falls to 27.9 per cent.
While these ratios are of no particular importance to a person with an Modern Monetary Theory (MMT) understanding, the bean counters in the treasuries and multilateral institutions use them to push anti-people policies.
This is why the statistical agencies should ensure their weighting in the national accounts estimation process is as current as resources allow.
Call for MMTed Support
I imagine the current crisis will put a halt on people donating to causes.
But we are making progress in developing the program that will become – MMTed.
I ran my first Masterclass in London recently and it was well attended. I received good (useful) feedback from several people which will help tune the way we run these face to face classes.
The planned further Masterclasses (May in Australia, June in Europe, September in the US) are on hold while we assess the state of the world. But I hope we will be able to offer them sometime this year.
And on-line curricula is being developed.
But we still need significant sponsors for this venture to ensure that we can run the educational program with negligible fees.
If you are able to help on an ongoing basis that would be great. But we will also be appreciate of once-off and small donations as your
You can contribute in one of three two ways:
1. Via PayPal – which is our preferred vehicle for receiving donations.
The PayPal donation button is available via the MMTed Home Page or via the – Donation button – on the right-hand menu of this page (below the calendar).
2. Direct to MMTed’s Bank Account.
Please write to me to request account details.
Please help if you can.
We cannot make the MMTed project viable on a sustainable basis without funding support.
We will always maintain strict anonymity with respect to donations received, except if the donor desires to be publicly associated with the venture and gives their permission in writing to appear on the Donors Page.
Up until now, all donors have wished to remain private.
But we can still listen …
The gigs might be cancelled and we might be soon locked up inside our homes, but, we can still listen.
Michel Philippe-Gérard was a French composer (born in Brazil 1924) who died in Paris in May 2014. He wrote this classic – originally called Le Chevalier de Paris (recorded by Edith Piaf in 1950). The English and French lyrics were quite different but the melody is the thing.
The narrative of the English lyrics is about a Parisien who frequents the streets of Paris (a ‘boulevardier’) – often Anglicised to ‘man about town’ – who is getting old and losing it. The song describes his reflection on life as he watches the world go by.
But even though the lyrics are somewhat crass (in my view) the melody is beautiful and you hear all the sensitivity of it in this rendition by the so-called “The Sound” – alias Stan Getz on tenor ably supported by – Gary Burton on vibes, Steve Swallow on double-bass and Roy Haynes on drums.
The latter three are still alive.
This concert was recorded in London in 1966.
It is hard to find better than this.
He certainly knew how to get the range out of the tenor particularly in the low register.
That is enough for today!
(c) Copyright 2020 William Mitchell. All Rights Reserved.