All net jobs in US since 2005 have been non-standard

The Australian labour market has been characterised over the last 12 to 24 months by the dominance of part-time employment creation with full-time employment contracting. Over the last 12 months, Australia has produced only 84.9 thousand (net) jobs with 107.2 thousand of them being part-time jobs. In other words, full-time employment has fallen by 22.2 thousand jobs over the same period. This status as the nation of part-time employment growth carries many attendant negative consequences – poor income growth, precarious work, lack of skill development to name just a few disadvantages. Further, underemployment has escalated since the early 1990s and now standard at 8.3 per cent of the labour force. On average, the underemployed part-time workers desire around 14.5 extra hours of work per week. If we look at the US labour force survey data quite a different picture emerges, which is interesting in itself. Does this suggest that the US labour market has been delivering superior outcomes. In one sense, the answer is yes. But recent research based on non-labour force survey data (private sampling) suggests otherwise. That research finds that “all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.” That is, standard jobs have disappeared and are being replaced by more precarious, contract and other types of alternative working arrangements. The trend in the US has not been driven by supply-side factors (such as worker preference) but reflects a deficiency in overall spending. Not a good message at all.
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    Posted in Labour Force, US economy | 3 Comments

    Moving on from the post-modernist derailment of the Left

    “The linguistic construction of post-capitalist hegemony opens a space for the engendering of the public sphere”. Sounds ominous and deep. Sounds knowledgeable. Then what about the next sentence: “The illusion of praxis carries with it the discourse of the public sphere.” amd the next: “The emergence of normative value(s) opens a space for the ideology of the public sphere.” I could write a whole essay about that topic in the style that typified the so-called post-modernist explosion in social sciences in the 1970s and beyond. Aah, Pomo, the nonsensical shift in literary endeavour that has set the Left back as much as the embrace of Monetarism and, more generally, neo-liberalism. This blog continues to add to the material we are working on as part of my next book (with co-author, Italian journalist Thomas Fazi), which traces the way the Left fell prey to what we call the globalisation myth and formed the view that the state has become powerless (or severely constrained) in the face of the transnational movements of goods and services and capital flows. This material will be part of the final section of the book, which we are sort of calling a ‘Progressive Manifesto’, designed to guide policy design and policy choices for progressive governments. We also hope that the ‘Manifesto’ will empower community groups by demonstrating that the TINA mantra, where these alleged goals of the amorphous global financial markets are prioritised over real goals like full employment, renewable energy and revitalised manufacturing sectors is bereft and a range of policy options, now taboo in this neo-liberal world are available. The book will be published in 2017 by Pluto Books, London. This blog examines the way the Left became entranced with post-modernism and fell into the trap of disappearing into crevices of meaningless at the expense of a focus on class struggle and a coherent critique of capitalism. We argue that critique is an essential part of the revitalisation of the Left political struggle against neo-liberalism and the restoration of the Left as a political force.
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      Posted in Demise of the Left | 24 Comments

      Happy something …

      I am travelling for a fair part of today and also taking a day off writing (well blogs at least). I have been pushing forward on the final manuscript for our next version of the Modern Monetary Theory textbook, which will come out in 2017 sometime. Anyway, until tomorrow I will leave you with some music that I have been listening to this morning before taking off for the day. Back on to the hard stuff tomorrow.
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        Posted in Admin, Music | 4 Comments

        The Weekend Quiz – December 24-25, 2016 – answers and discussion

        Here are the answers with discussion for this Weekend’s Special Xmas 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 | 2 Comments

          The Weekend Quiz – December 24-25, 2016

          Welcome to The Weekend Quiz, which used to be known as the Saturday 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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            Posted in Saturday quiz | 12 Comments

            France Stratégie’s three options for the Eurozone ignore the elephant

            I read a short discussion paper this morning – What model for the future of the eurozone? Critical actions – released by France Stratégie, which is formally known as the Commissariat général à la stratégie et à la prospective (CGSP). It is a government body attached to the Prime Minister’s office. It was created in April 2013 Its mission is to provide broad discussion parameters to aid future policy directions for the French government. The discussion paper provides nothing new and seems to avoid the realities of the European cultural and historical milieu that really dominates or constrains (whichever way you want to think about it) the possible routes back to prosperity for the continent. It lists three options for reforming the Eurozone: (a) Return to original principles (Maastricht 2.0) where nations were fiscally separate and there would be no bailouts; (b) Reinforced fiscal integration with “joint liability for sovereign debt” and control of “national parliaments’ fiscal sovereignty’ by some European-level institution (Commission/Parliament); and a (c) a US federal model. They are motivated by the conclusion that the current situation is “ineffective”, which is a euphemism for total dead-in-the-water failure. They do not broach the most obvious and, in the long-run, best solution, which is consistent with the cultural and historical realities – orderly breakup and return to true currency sovereignty. So the discussion paper really offers very little by way of a path out of the maresme that the elites in Europe have created to line their own pockets at the expense of everyone else.
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              Posted in Eurozone | 13 Comments

              It is just ridiculous to starve public investment funding

              On Monday (December 19, 2016), my blog – US central bank decision to raise interest rates doesn’t make much sense – examined the recent interest rate hike in the US and made a case that it didn’t appear, on the basis of the evidence at hand, to be a well-reasoned policy decision. In researching the case I was struck by how far public gross capital formation has fallen in the US, particularly at the State/Local level as mindless austerity takes its toll. Governments find it easier to cut capital spending than recurrent spending because the ‘costs’ of the those spending cuts are not immediately obvious to the population and, typically, do not manifest until after the political cycle exhausts. Cutting pensions, school outlays, and other recurrent targets usually brings an immediate political outcry because the impacts are immediate. But it takes time for public infrastructure to degrade from lack of maintenance and replacement. Eventually it does degrade and in some cases becomes unusable. Then the costs of repair/replacement are usually higher than if the resource had have been maintained and replaced according to reasonable engineering schedules. The US Bureau of Economic Analysis (BEA) publishes a very interesting data series that allows us to examine the ageing of the capital assets (public and private) on an annual basis back to 1925. I thought I would explore that dataset to inform the proposition that neo-liberalism has been associated with degraded public infrastructure and the loss of service (to the non-government sector) that accompanies such degradation. The results of my enquiry are fairly stark.
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                Posted in Economics | 22 Comments

                A lying government pushing economy towards recession and greater inequality

                It is highly surreal listening to radio/TV commentators talking about government financial affairs (fiscal balance etc). These so-called experts are paraded before the nation and the script is generally the same. The interviewer who knows virtually nothing but has the key triggers on hand (‘budget repair’, ‘ratings downgrade’, etc ad nauseum) asks the ‘well respected expert’ about the state of affairs and the answers are always the same – fictional. This charade plays out almost daily but reaches a hysterical fever pitch at the time the Government releases its annual fiscal statement (May) or its Mid-Year Economic and Fiscal Outlook (December). The Government plays along with the charade releasing what it deems to be cleverly crafted documents, shifting revenue and spending across year lines to give one impression or another of the state of affairs. None of the charade is based on any fundamental economic understanding. None of it means anything other than a demonstration of a national scam to hide the truth from the ordinary citizen who for one reason or another relies on experts to summarise technical detail into meaningful sound bites. The nation then goes about its business in this cloud of ignorance, while the elites continue to suppress wages and living standards and march of with increasing shares of national income. They know what is going on and it is in their interests to keep the rest of us from having the same information. It is the same the world over. Well, here is what is going on with a framework that allows the reader to cut through the lies …
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                  Posted in Economics, Fiscal Statements | 12 Comments

                  US central bank decision to raise interest rates doesn’t make much sense

                  On December 14, 2016, the US Federal Reserve Bank pushed up its policy target interest rate from 0.5 per cent to 0.75 per cent. In its – Press Release – it said that the “labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year”. It acknowledged that “business investment has remained soft”. But it believes that even though it has increased the rate by 25 basis points, there is still room for “some further strengthening in labor market conditions and a return to 2 percent inflation”. The logic is very confused in my view. First, the US labour market is weak (in inflation pressure terms) notwithstanding the reduced official unemployment rate. Real wages growth has been effectively zero and the broad measure of labour underutilisation (U6) remains at 9.3 per cent (as at November). Second, the emphasis on central bank policy shifts is based on a view that elements of total spending are sensitive to interest rate changes and by increasing rates, price pressures will attenuated. The only problem with that logic is that all the elements of spending in the US (private investment, household durable goods) are hardly setting the world on fire. Private investment, in particular, is in poor shape. So by the US Federal Reserve bank’s own logic (which I do not share) it should be expecting on-going further poor investment growth, which will further undermine potential productive capacity. Not a sound strategy at all.

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                    Posted in Central banking, US economy | 5 Comments

                    The Weekend Quiz – December 17-18, 2016 – 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 | 11 Comments