Friday lay day

Its my Friday blog lay day which today means a short blog day. Yesterday, July 17, 2014, the Australian government voted to scrap the Carbon Tax as the climate change denialists proved that the destiny of our nation is in the hands of those who are ignorant of reality. We shouldn’t be surprised by that. The abandonment of respect for knowledge in favour of sham works in favour of the financial and corporate elites who fund the political parties. Society used to value education. Now it rejects the research findings that educated people, who know far more about things in specific areas, in favour of views propagated by morons. I wasn’t a great fan of the Carbon Tax (I prefer regulative approaches aka telling the coal industry it has 20 years to close down, no questions), but Australia now has no official position on combatting global warming. That will make us the pariahs of the world in years to come.
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    Posted in Friday | 6 Comments

    Macroeconomic textbooks ripe for composting

    I have been travelling a lot today – train, car, plane, car – and in between speaking and other commitments so not much time to type some thoughts. Also a detective novel I am reading was quite interesting on the plane, which didn’t help. But I have been thinking about our upcoming textbook and what will differentiate it from the others apart from nearly everything. I have also been looking into what has been sponsored by George Soros’s iNET initiative (the so-called CORE curriculum) and the latest versions of the dominant macroeconomics book Mankiw’s textbook (now in its 8th edition). Juxtaposing those developments (if we can call retrogression development) with some papers that have come out recently from central bank economists and then thinking about my own project with Randy Wray makes it seems as though the so-called progressive development (iNET) is a ‘try hard’ effort to disguise a neo-liberal heart with some comforting concessions to reality, while the avowedly mainstream approach represented by Mankiw has barely learned a thing about reality and essentially aims at business as usual. That business is the business of deception. Here are some thoughts on this.
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      Posted in Economics, Teaching models | 16 Comments

      A Brussels-run unemployment insurance scheme is no fiscal solution

      The new European Commission president Jean-Claude Juncker is a federalist. He claims in his new role that his first priority is “to put policies that create growth and jobs at the centre of the policy agenda of the next Commission”. Juncker was also the Prime Minister of Luxembourg and the head of the so-called Eurogroup (2005-2013) which comprised of the Eurozone Finance Ministers, the European Commission’s Vice-President for Economic and Monetary Affairs and the President of the ECB. Juncker and the Eurogroup were vehemently pro-austerity. He also reaffirmed last week at a – Meeting in Brussels of the Alliance of Liberals and Democrats for Europe, that “we need to keep austerity going”. Remember he was Angela Merkel’s choice for the EC Presidency! But there is new talk of federalist type fiscal innovations in Europe under the new Commission. The problem is that they are just neo-liberal smokescreens and will do very little to change the underlying problems that have prolonged the crisis and will ensure there is a repeat down the track.
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        Posted in Euro book, Job Guarantee, Unemployment Benefits | 10 Comments

        IMF wrong on QE

        Yesterday the IMF released new analysis of Quantitative Easing, specifically in relation to the Euro Area – Euro Area – Q&A on QE. This is in the context of the ECB beginning to discuss the possibility of introducing a large sovereign debt buy-up as the euro-zone inflation rate looks to be close to deflating (negative inflation). Once again, all the financial commentators are rehearsing their usual claims about driving up inflation etc. The reality is the QE will not provide much help for the euro-zone economies which are mired in recession or stagnant, low growth. What is needed are fairly substantial increases in the fiscal deficits in all Member States and none of the neo-liberal ideologues want to face up to that. So, instead, we get these ridiculous debates and analyses of QE – good and bad and all the rest. The IMF is wrong on QE. But then why should we be surprised about that. An apology or admission of error will be issued down the track, notwithstanding that in between all sorts of spurious forecasts about inflation, inflationary expectations and growth will be issued by them.
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          Posted in Economics, Eurozone, IMF | 10 Comments

          Financial elites win with growth and austerity

          I was thinking over the weekend about the concept of post nationalism in relation to the evolution of the Economic and Monetary Union (EMU) in Europe. As I complete my current book project on the euro-zone it is clear that by the end of the 1980s, the European financial and political elites were designing a system that they must have known would undermine the prosperity of their own nations. It was obvious at the time that the EMU would fail badly and so the question arises as to what was motivating them to act in this way. The is where ‘post nationalism’ comes into play. Characters such as Jacques Delors had moved from being a major promoter of French interests within the Franco-German rivalry to pushing the interests of international capital by the time he formed the Committee in 1989 to design the EMU. By then Monetarism, which came out of the American academy, had taken over the policy debate and was usurping national economic interests. The EMU was a major vehicle for transferring national income from workers towards capital interests. It allowed the banksters to reap financial harvests that were unprecedented in history. These ideas, which play out in my book, also links in with recent research published by Oxfam on income and gender inequality.
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            Posted in Economics, Eurozone | 15 Comments

            Saturday Quiz – July 12, 2014 – answers and discussion

            Here are the answers with discussion for yesterday’s quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
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              Saturday Quiz – July 12, 2014

              Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
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                Posted in Saturday quiz | 9 Comments

                Blog lay day

                It is Friday, my blog lay day, so no real blog. I am editing my Europe book in the freezing weather down in Melbourne. The laugh of the week was the Federal governments bungled attempt to get rid of the carbon tax. It will probably go next week and then we will rely on that expert on the environment, Prime Minister Tony Abbott (see credentials overleaf) to lead the way into the future.
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                  Posted in Friday | 4 Comments

                  Australian labour market – unemployment rate higher than in crisis

                  Today’s release of the – Labour Force data – for June 2014 by the Australian Bureau of Statistics is slightly improved on recent months but still portrays a weak labour market. While the participation rate rose, which pushed extra workers into the labour force, employment growth still remained below population growth and so unemployment would have risen without the participation rate rise. The other poor outcome was the decline in full-time employment. Overall, the labour market is scudding along a very flat path and unemployment continues to eke its way up. The unemployment rate topped 6 per cent in June 2014 and is now higher than it was 5 years ago (June 2009) when the worst of crisis was being endured before the fiscal stimulus took effect. That symbolises policy failure.
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                    Posted in Labour Force | 1 Comment

                    Fact checking the fact checkers is required in macroeconomic matters

                    There is a lot of misinformation spread in the media about the fiscal history of Australia and elsewhere. The Australian Broadcasting Commission, for example, has now a “Fact Check” facility where it checks statements made by politicians against the facts. It should apply it to some of its own stories and subject more journalists (including its own) to the scrutiny it imposes on the pollies.
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                      Posted in Economics | 5 Comments