Falling enrolments in mainstream economics programs is a desirable outcome

If you have had the misfortune to study economics formally at university then you will recall sitting through endless and tedious lectures where the instructor asserted some superior knowledge about psychology and human behaviour. If you had combined the economics study with studies in psychology and sociology, you would have soon realised that what was being taught in your economics course was total nonsense. There was an article in the Fairfax press recently (August 6, 2017) – Crisis in high school economics a threat to national wellbeing – ruing the declining enrolments in secondary school economics programs. The point is that these courses are typically more damaging than useful and the contention of the journalist that we are reducing the quality of the economic debate as a result of less people studying economics is problematic. The typical economics program is simple indoctrination into a set of neoliberal principles that allow poor policy to continue despite it delivering disastrous outcomes. There is a crying need for more economic and financial literacy, but that requires an entirely different approach to be adopted rather than jamming more kids into the existing courses and having them come out dangerously brain dead.
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    Posted in Economics | 14 Comments

    US labour market – improves again in July

    Shonk is an Australian/NZ slang word to describe someone engaged in shonky behaviour, which the Oxford Dictionary describes as being behaviour that is “Dishonest, unreliable, or illegal, especially in a devious way”. So a shonk means a “dishonest person; swindler or con artist” and while intent is implied it doesn’t have to be conscious action (note the inclusion of the descriptor “unreliable”). It could just mean stupidity or ignorance that leads to shonky performance. I will come back to that topic soon. On August 4, 2017, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – July 2017 – which showed that total non-farm employment from the payroll survey rose by a relatively healthy 209,000 in July. The weak result for May now seems to have been a blip in the data. The Labour Force Survey data showed that employment rose by 345 thousand in July but was still not large enough an increase to offset the rise in the labour force (349 thousand), and as a consequence, official unemployment rose by 4 thousand. The official unemployment rate was stable though at 4.4 per cent. There are still 6.98 million unemployed persons in the US. There is still a large jobs deficit remaining and other indicators suggest the labour market is still below where it was prior to the crisis. Further, the bias towards low-pay and below-average pay jobs continues.
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      Posted in Labour Force, US economy | 1 Comment

      Australian government employment plan – racist and in breach of our laws

      Today’s discussion is about how employment policy becomes so corrupted by neo-liberal ideology (overlaid with some healthy racism) that the government causes damage rather than advances well-being. The examples I outline demonstrate the wider problem that neo-liberal inspired governments clearly understand the economy is not working yet they cannot bring themselves to introduce obvious solutions to the problems identified. Further, while they claim their policy choices are constrained by the ‘money’ they have to spend (limited according to their narrative), when they do spend ‘money’ they bias the benefits to corporate interests as a profit subsidy rather than providing sustainable income support for the most disadvantaged who just become pawns in the subsidy to capital. And then, they pretend, they are obeying ‘market’ dictates when the ‘free market (not!)’ was never in the picture anyway. The on-going hypocrisy of this neo-liberal era.
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        Posted in Job Guarantee, Labour costs, Labour Force | 5 Comments

        The Weekend Quiz – August 5-6, 2017 – answers and discussion

        Here are the answers with discussion for this Weekend’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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          Posted in Saturday quiz | 7 Comments

          The Weekend Quiz – August 5-6, 2017

          Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.
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            Why haven’t any IMF officials been prosecuted for malpractice in Greece?

            I have discussed the work of the IMF Evaluation Office before. The IEO “provides objective and independent evaluation” of the IMF performance and operates “independently of IMF management” and reports to the Executive Board of the organisation. It is an independent as one could imagine in this milieu. I have just finished reading the 474-page Background Papers that the IEO released in 2016 and which formed the basis of its June 2016 Evaluation Report – The IMF and the Crises in Greece, Ireland, and Portugal. It is not a pretty story. It seems that the incompetence driven by the blind adherence to Groupthink that the earlier Reports had highlighted went a step further in the case of Greece into what I would consider to be criminality. The scale of the professional incompetence notwithstanding, the IEO found that IMF officials and economists violated the written and constitutional rules of their own organisation and failed to supply relevant documents for audit. So why are all these economists and officials still walking free, given the scale of the disaster they created?
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              Posted in Eurozone, IMF | 31 Comments

              The neo-liberal infestation – Australia’s broadband fiasco gets worse

              I have written about Australia’s fraught venture into establishing a national broadband network (the so-called NBN) to apparently take us into the next era of communications, although it seems the lifespan of what they eventually will build will be short, in the sense, that it will need massive new investment almost immediately to make it workable. The current conservative (neo-liberal) government came into office not long after the NBN, which was commissioned by the outgoing Labor government, was in its development phase. It immediately altered the design to fibre-to-node (so optic fibre goes to boxes in suburbs and the final route relies on the dysfunctional copper wire), from fibre-to-home to apparently make it quicker to implement and require less government outlay. The changes and the ‘business model’ the government has forced on the NBN Company (the public monopoly constructor and wholesaler) have created such a mess with respect to our network availability and speed that it really serves as an ideal case study for students seeking to understand how the neo-liberal ideology stifles national interest and innovation. The latest dynamics being revealed about this disaster are simply staggering. We have moved so far away from an understanding of public infrastructure as the Government engages in its ideological crusade against innovation and government spending. Amazing really how all of us can be so stupid to tolerate it.
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                Posted in Economics, Fiscal Statements | 13 Comments

                Reflections on a visit to New Zealand

                Last Friday, I gave a public lecture organised by the strategy group Strategy2040 and the full presentation is available on YouTube – Thinking in a Modern Monetary Theory Way (I made it available in yesterday’s blog). After that presentation I was invited to a ‘Roundtable’ meeting (although the layout was rectangular) which comprised about 30 or so people (mostly economists as I gather) being given the opportunity for 90 minutes to question me about the presentation etc – to tear me apart really. There was a call from an former senior central banker in the audience to have Chatham House rules governing the meeting. I declined acceptance of that constraint. Opinions should be owned. But what the meeting taught me was that, despite the GFC and the failure of the mainstream macroeconomics to predict it, deal with it when it arrived and then change its approach in the aftermath, very little has changed within the mainstream narrative. The same myths are being propagated and academic and senior policy economists seem blithe to reality.
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                  Posted in Economics, Framing and Language, New Zealand | 29 Comments

                  Travelling all day today but here is something to watch and listen to

                  I am travelling most of today and thus my usual blog will resume tomorrow. Yesterday, an interview that I did for RadioNZ (the public broadcaster) on Friday was aired on their popular Sunday Show. You can access the interview overleaf. You can also access the video of my presentation on Friday (July 28, 2017) at the University of Victoria, Wellington. That should keep you all busy.

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                    Posted in Admin, Debriefing 101, New Zealand | 24 Comments

                    The Weekend Quiz – July 29-30, 2017 – answers and discussion

                    Here are the answers with discussion for this Weekend’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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                      Posted in Saturday quiz | 1 Comment