Much of the decline in the US unemployment rate has been due to falling labour participation. Otherwise, the rate would be 8%, not half that at 4%. So it isn't that much of a jobs miracle.@ProfSteveKeen @TheBubbleBubble @jtepper2 pic.twitter.com/p5Ldht35WY— Philip Soos (@PhilipSoos) November 8, 2017
In response to the Teutonic sado-monetarism Italy has taken to using tax credits to allow the government to pay for some of the services that it needs.
The interesting point here is that they are a very short distance from actually creating money without coming hat in hand to the European Central Bank (ECB)
If the Italians take their program one more step forward, and they are creating money:
Italy is experimenting with giving tax-cuts to its citizens in exchange for public services―such as pulling weeds and cutting grass. Wow. What an amazing idea! The government issues a tax credit, and uses it to pay a citizen in exchange for the citizen’s services to the government. The government could even make this arrangement more formal by printing the tax credits on pieces of paper called “LIRIES” (or something like that) and paying for the weed-whacking services with this “cash.” That way the citizen who’s earned the “LIRIES” has the option of using them as payment to another citizen (who’d also like a tax-cut) for, say, a bag of potatoes. So, the first citizen pulls some weeds, gets paid in “cash” and then uses the “cash” to buy her dinner. If you thought about it, you could possibly run an entire economy in this fashion. The only thing you’d have to worry about, of course, is that the government might run out of the tax-credits it needs to pay the citizens to do the work! If that happened, where could the government possibly get more tax-credits? Could it collect tax-credits as “taxes”? Could it borrow them from all the street-sweepers and weed-whackers who’ve earned them? (In which case it would have to pay “tax-credit interest”―which just seems to exacerbate the problem!) Hmmm. I’m going to have to think about that one. But in the meantime, doesn’t this mean that any Eurozone country has the option to stay IN the Eurozone while at the same time operating its own local economy using its own local “sovereign” currency?In a followup, it is explained how this can be used to essentially create money:
As I said, Italy, is now experimenting with paying for public services with tax credits. Presumably, this is happening because Italy doesn’t possess enough Euros to pay its citizens to provide all the goods and services needed to maintain and run the public sector of its social economy. And Italy can’t “create” the additional Euros it needs because that prerogative is the exclusive right of the EU Central Bank which Italy, even as a sovereign member of the EU, has no control over. But, as the news article explains, Italy still needs to have the grass mowed and the weeds pulled in its public gardens. So it has decided (out of desperation, the article implies) to pay the gardeners with tax-credits. The gardeners are willing to do the work in exchange for the government’s tax-credits, because it means the Euros they earn (in other ways) can then be used to purchase goods and services rather than for paying their taxes. So, in practical terms, it is “just like” getting paid in Euros.While I don't think that the Italians would have the guts to take this to the next level right now, but this would a good way to deal with the current problems with the Euro. (Not as good as getting the Germans out of the Euro, but a pretty close 2nd)
This, in fact, is way more interesting than it seems. In fact, it might even be mind-expanding! Here’s why:
Presumably, the tax-credit payments described take the form of notations on the gardeners’ tax account. An hour’s worth of weeding is noted as 15 Euros worth of extinguished taxes. If the gardener has a tax liability of, say, €3750, her taxes would be completely paid after providing 250 hours of weeding and pruning. After that, obviously, she’d have no more incentive to provide any services in exchange for the tax-credits. So the amount of services Italy can obtain in this fashion is directly limited by the amount of tax liabilities it can impose on its citizens.
It would be possible, however, to structure the tax-credit payments in another way which would have a very different outcome. Instead of making the payment as a credit notation on a citizen’s tax account, the Italian government could issue paper tax-credits and pay them to the citizens for their gardening services. To be specific, this would be a piece of “official” paper, signed with an important signature, on which was printed something like the following:
The Sovereign Italian Government promises the bearer of this paper ONE EURO of credit on taxes owed to the Sovereign Italian Government.
………
Now we have to ask an important question: Is the amount of services Italy can obtain by issuing and “spending” its paper tax-credits still directly limited by the amount of tax liabilities it can impose on its citizens? In other words, if every Italian citizen theoretically has received enough PTCs to pay their taxes with—either having received them directly from the government for providing public services, or having received them from other citizens in exchange for lasagna dinners—will the citizens’ willingness to exchange real goods and services in exchange for the PTCs come to a halt?
Crucially, the answer is No. This is because the act of “embodying” the tax-credits in exchangeable pieces of paper has given the PTCs a usefulness in addition to their usefulness as tax payments: This additional usefulness, of course, is the ability to use them to buy goods and services from other Italian citizens and businesses. Thus, the number of paper tax-credits in “circulation” could vastly exceed, at any given time, the total actual tax liabilities of the Italian citizenry. The PTCs would continue to be accepted for lasagna dinners, because the Trattoria owners know they can use the PTCs they receive to subsequently buy Italian shoes and motorcycles— in addition to using them to pay their taxes.
It will no doubt have dawned on most every reader that what we’ve just created is “money.” Specifically, we’ve created what is called “fiat money”—which happens to be the kind of money the world has been using now for the past half century (ever since the U.S. formally abandoned the gold-standard in 1971). Having thus conjured a rudimentary image of fiat-money to life we should quickly make some important (and perhaps startling) observations about it.
………
Having made these observations, it appears the Italian government has stumbled on an actual solution to the “austerity” it has been forced to impose on itself by the European Union. Except we must now confront the fact that the rules of the EU do not ALLOW Italy to issue and spend its own sovereign fiat currency! The only “money” Italy is allowed to use is the Euro—and the only way the Italian government can obtain Euros is either by collecting them as taxes from its citizens, or by borrowing them from the European Central Bank, which has the exclusive prerogative of issuing them. And these methods of obtaining Euros to spend are falling short of what Italy needs to pay its citizens to do. So…. Italy has decided to pay its citizens with tax-credits, and then (why not?) with paper tax-credits. And then, presumably, the EU says, “Whoa, hold on here! It looks like you are printing your own money, which is not allowed by our rules!”
Venezuela is moving its oil sales to non dollar currencies.
The last guy to do this was Saddam Hussein in 2000, and it was seen as a challenge to the position of the US dollar as the world's reserve currency, and we know how that turned out.
Rebecca Rojer has done meticulous work describing Modern Monetary Theory (MMT), and seeing as how it is an approach that is both becoming more popular, and is in opposition to the (almost always wrong) economic orthodoxy, it pays to understand this:
Too often the origins of our economic ills are cloaked by a mystical reverence for some autonomous money spirit. The economists behind Modern Monetary Theory (MMT) seek to lift money’s veil by studying the specific actions that occur as money is created, circulated, and destroyed.At its core, MMT sees money as being a construct that derives from the willingness of the state to use coercion, and frequently violence, to enforce the use of a token for value.
For those seeking a grand, unifying sociopolitical economic theory, MMT will disappoint. But as an analytic tool, MMT clarifies who holds genuine power—sovereignty—within society, and how they organize the money system to serve their interests. Unsurprisingly, this is often a story of tremendous cruelty and exploitation.
But the revelation that the rules of money are not immutable laws of nature but are instead created and constantly modified by people opens up possibilities beyond the scope of our current political imagination. The questions become: What sort of society do we want? Do we have the physical resources to support that society? And finally, how the hell do we muster the political will to get there?
As for who *should* pay for the bridge, there's no question in my mind: it should be (mostly) the trucking industry. It won't, of course, but that would be fair.If the problem in our society could be reduced to a single issue, (They can't) it would be the various direct and indirect subsidies that the rich and powerful in our society extract from the rest of us.
Most of the vehicles that go over the TZB are cars, of course. But it turns out that the stress a vehicle puts on a road or bridge goes up as the fourth power of its weight per axle.
An example: my 2-axle car weighs about 4000 lbs. Empty, a typical 5-axle tractor-trailer weighs about 33,000 lbs. So the empty truck is about 3.3 times as heavy per axle, and causes almost 120 times the damage.
My toll on the TZB is $4.75. If that truck was paying its way across the TBZ, it should pay a toll of more than $500. But that's only if it's empty! Remember, the burden on the system goes up as the fourth power. If the truck is pretty full, weighing 72,800 lbs, it weighs 6 or 7 times as much per axle as my car -- and does more than 1500 times the damage. A fair toll would be more than $8000.
In actuality, no truck pays more than $50 to go over the TZB, and that's the rush hour price: it drops to under $25 if you cross at night. Other drivers, and the population as a whole, are subsidizing the trucking industry to a truly epic degree. And this occurs while the trucking industry has exploited its workers to the point of indentured servitude -- before they start replacing most of them with robots.
It looks like support is growing in Italy for establishing a parallel currency as an alternative to the Euro:
There have been some amazing Italian inventions over the centuries. The newspaper. The pistol. The radio. The stock exchange. The motorway. And who could overlook those staples of modern life, jeans (originally from the French word for Genoa: genes) or the pizzeria.I've always said that the best way to fix the Euro is to kick the Boche out of the common currency, but a parallel currency as a way to create infrastructure for leaving the Euro is not an unreasonable tactic for dealing with the deep problems of the Euro as a currency.
Few other countries have contributed quite as much to creating the world we live in.
Right now, Italy could be on the brink of another major innovation. A parallel currency to run alongside the euro. It already had the backing of the former Prime Minister Silvio Berlusconi, and the parties supporting it are steadily gaining ground in the polls.
Could it work? The mainstream economic establishment will no doubt heap scorn on the idea. And yet, in reality, a parallel currency could provide an elegant exit from the euro, maintaining some of the advantages of the single currency, while freeing the country from endless recession. If it ever gets off the ground, Italy could quickly become one of the most attractive economies in the world.
It is hard to find any words to describe Italy’s experiment with merging its currency with Germany, France and the rest of the eurozone other than “dismal failure.” Since it adopted the euro, Italy’s average annual growth rate has been zero, according to calculations by the Bruegel Institute. You read that correctly. Absolutely nothing, over almost two decades.
………
Italy’s unemployment rate is a crippling 11%, the highest of Europe’s three biggest economies, and youth unemployment is a scary 35%. The national debt has climbed to a giddy 133% of gross domestic product, not because the government is especially extravagant, but because that’s what happens in a zero-growth economy.
The weakness of the Democratic Party is not due to an underrepresentation of venture capitalists and tech company board members.This was in response to the self serving proposals put forward by WTF (Really, their initials), a goup of self-absorbed narcissistic Silicon Valley dweebs, which come down to "more of the same".—Alex Lawson of Social Security Works
In my neighborhood, I frequently walk past “shop local” signs in the windows of struggling stores. Yet I don’t feel guilty ordering most of my family’s household goods on Amazon. In a world of fair competition, there will be winners and losers.The US Post Office has been subsidizing package delivery for decades, and it has continued to do so even though this was forbidden by Congress in 2006.
But when a mail truck pulls up filled to the top with Amazon boxes for my neighbors and me, I do feel some guilt. Like many close observers of the shipping business, I know a secret about the federal government’s relationship with Amazon: The U.S. Postal Service delivers the company’s boxes well below its own costs. Like an accelerant added to a fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon.
………
In 2001 the quantity of first-class mail in the U.S. began to decline thanks to the internet. Today it is down 40% from its peak levels, according to Postal Service data. But though there are fewer letters to put into each mailbox, the Postal Service still visits 150 million residences and businesses daily. With less traditional mail to deliver, the service has filled its spare capacity by delivering more boxes.
Other companies, such as UPS and FedEx , compete with the Postal Service to deliver packages. Lawmakers, to their credit, wanted a level playing field between the post office and its private competitors. The 2006 Postal Accountability and Enhancement Act made it illegal for the Postal Service to price parcel delivery below its cost.
………
In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.
Amazon is big enough to take full advantage of “postal injection,” and that has tipped the scales in the internet giant’s favor. Select high-volume shippers are able to drop off presorted packages at the local Postal Service depot for “last mile” delivery at cut-rate prices. With high volumes and warehouses near the local depots, Amazon enjoys low rates unavailable to its competitors. My analysis of available data suggests that around two-thirds of Amazon’s domestic deliveries are made by the Postal Service. It’s as if Amazon gets a subsidized space on every mail truck.
Dean Baker, who called the housing bubble collapse, and sold his house before it happened has a remarkably evocative and accurate description of modern economics. He calls them the inept firefighters club:
Suppose that our fire department was staffed with out-of-shape incompetents who didn’t know how to handle a fire hose. That would be really bad news, but it wouldn’t be obvious most of the time because we don’t often see major fires. The inadequacy of the fire department would become apparent only when a major fire hit and we were left with a vast amount of unnecessary death and destruction. This is essentially the story of modern economics.Read the rest of the article, because it addresses some more serious deficiencies in economics, particularly the tendency of people in the field to take simple concepts and obfuscate.
The problem is not that modern economics lacks the tools needed to understand the economy. Just as with firefighting, the basics have been well known for a long time. The problem is with the behavior and the incentive structure of the practitioners. There is overwhelming pressure to produce work that supports the status quo (i.e. redistributing to the rich), that doesn’t question authority, and that is needlessly complex. The result is a discipline in which much of the work is of little use, except to legitimate the existing power structure. In terms of the poor quality of work, it is easy to point to the failure to recognize the size and risks posed by the housing bubble in the last decade. This failure has been unbelievably costly to the United States and the rest of the world. If we compare the most recent estimates of the potential GDP of the U.S. economy from the Congressional Budget Office (CBO) with the projections made in 2008, before the severity of the crash was recognized, the difference is $1.8 trillion. This is an annual figure; it implies a loss of $18 trillion over the course of the decade. This amount averages out to more than $54,000 for every person in the country. Other countries have seen even larger losses.
………
I have suggested that economists who prescribe policies that turn out badly, or who can’t see multi-trillion dollar housing bubbles coming whose collapse sinks the economy, ought to pay a price in terms of their careers. Invariably people think I am joking. When they realize I am serious, they think I am crazy or vindictive.
Leaving aside motives, let me just speak to the economics. If we have a profession in which people are rewarded with high pay and career advancement for saying the same thing as everyone else, and never face any consequences when the accepted wisdom proves to be wrong, then we should expect to see economists like the firefighters mentioned at the beginning of this piece. They aren’t qualified to do the job and our only hope is that we don’t see any more major fires.
As you are no doubt aware, Apple has locked down its iPhone platform something fierce.
Among other things, it makes security research much more difficult, which makes bugs a rare commodity in the Apple security community.
Of course, under the laws of supply and demand, it means that the price of the bugs would increase, which means that Apples iPhone bug bounty program has no takers, because it's not enough money:
For now, security researchers who have been invited by Apple to submit high-value bugs through the program prefer to keep the bugs for themselves.
In August 2016, Apple's head of security Ivan Krstic stole the show at one of the biggest security conferences in the world with an unexpected announcement.
"I wanna share some news with you," Krstic said at the Black Hat conference, before announcing that Apple was finally launching a bug bounty program to reward friendly hackers who report bugs to the company.
The crowd erupted in enthusiastic applause. But almost a year later, the long-awaited program appears to be struggling to take off, with no public evidence that hackers have claimed any bug bounties.
The iPhone's security is so tight that it's hard to find any flaws at all, which leads to sky-high prices for bugs on the grey market. Researchers I spoke to are reluctant to report bugs both because they are so valuable and because reporting some bugs may actually prevent them from doing more research.
"People can get more cash if they sell their bugs to others," said Nikias Bassen, a security researcher for the company Zimperium, and who joined Apple's program last year. "If you're just doing it for the money, you're not going to give [bugs] to Apple directly."
Patrick Wardle, a former NSA hacker and researcher at Synack who now specializes in MacOS research and was invited to the Apple bug bounty program, agreed. He said that iOS bugs are "too valuable to report to Apple."
………
But it's not just about the immediate reward. iOS is such a complex, locked-down, and secure operating system that simply to inspect and do research on it, one needs multiple, unpatched, zero-day bugs, perhaps even a full-fledged jailbreak, according to researchers. In other words, you need unknown bugs just to find bugs in other parts of the operating system that might be otherwise locked.
That's why some prefer to keep their bugs and continue doing research rather than handicapping themselves for a reward of few thousand dollars.
"Nobody is going to kill bugs unless they're fucking dumb," Luca Todesco, a well-known iPhone jailbreaker, told me a few months ago. "Just because they will kill their own future […] If I kill my own bugs then I'm not able to do my own research."
………
While the researchers were visiting Cupertino, they asked Apple's security team for special iPhones that don't have certain restrictions so it's easier to hack them, according to multiple people who attended the meeting. These devices would have some security features, such as sandboxing, disabled in order to allow the researchers to continue doing their work. One researcher described them as "developer devices."
But Apple, for now, isn't willing to provide those special devices, according to three researchers who recounted the exchange.
There seems to be much hand wringing over the fact that not enough people want to work construction these days:
About two-thirds of the contractors who are struggling with the labor shortages gripping the construction industry say it has become a challenge to finish jobs on time, according to a new survey.If you have a shortage of workers, increase wage and non-wage remuneration to a level where you have enough workers.
More than one-third of contractors said they are being forced to turn work down and 58% said they are putting in higher bids, said the survey sponsored by USG Corp. and the U.S. Chamber of Commerce. Three-quarters of those who said they are having difficulty finding skilled labor said they are simply asking their employees to work harder.
“Basically they’re just making people work harder as a way to cope,” said Steve Jones, senior director of Dodge Data & Analytics, which was the research partner of USG and the Chamber on the project.
Words cannot describe the torment experienced by the data before they confessed what the University of Washington team got them to confess. I can only urge readers with an open mind to study Table 3 carefully. The average wage increase, from the second quarter of 2014 to the third quarter of 2016, for all employees of single site establishments was 18 percent. Eighteen percent! That is an annual increase of almost 8 percent. For two and a quarter years in a row. Not bad. And the number of hours worked of ALL employees of single site establishments? Up 18 percent in a little over two years. That too is an increase of almost 8 percent per annum.(emphasis original)
Now multiply that wage by those hours and the total payroll for all employees rose 39.5 percent over the course of nine quarters. An annual rate of increase of 17.5 percent. These are BIG numbers. They are freaking HUGE numbers.
It must have taken a team of at least six academics to extract a 9.4 percent decline in hours from the 86,842 workers (out of a total of 336,517) earning under $19 dollars an hour at these single-site establishments. Look at the Table and weep.
Japan’s tightest labor market in decades shows signs of reversing a long shift toward the hiring of temporary workers.I've said it many times: Economists who talk about population declines like they are the end of the world are completely unconnected to the real world.
The number of full-time, permanent workers is rising for the first time since the global financial crisis, outpacing growth in temporary jobs over the past two years.
“The labor shortage has become so bad that companies can’t fill openings only with part-timers,” said Junko Sakuyama, Tokyo-based senior economist at Dai-ichi Life Research Institute.
Japan’s 2.8 percent unemployment rate is the lowest since 1994 but most of the hiring over the past decade or so has been for temporary, often part-time positions, known as non-regular.
A shift back toward permanent hiring could help sluggish consumer spending pick up. Economists say a decades-long move toward non-regular jobs is partly to blame for weak consumer demand. Non-regular workers now make up more than a third of the workforce. Many work part time, and all on average receive less pay, few benefits, little training and no real job security.
It’s too early to declare a trend reversal, but the number of regular jobs grew by 260,000 in March from a year ago, while part-time, temporary and contract jobs rose by 170,000, the internal affairs ministry reported on Friday. Last year, 510,000 permanent jobs and 360,000 non-regular ones were added.
Correlation does not imply causation, but lack of correlation does imply lack of causation.
As such the /complete lack of causation between minimum wage levels and employment puts a stake through the heart of the trope that minimum wages kill jobs:
Since the passage of the Fair Labor Standards Act in 1938, business interests and conservative politicians have warned that raising the minimum wage would be ruinous. Even modest increases, they’ve asserted, will cause the U.S. economy to hemorrhage jobs, shutter businesses, reduce labor hours, and disproportionately cast young people, so-called low-skilled workers, and workers of color to the bread lines. As recently as this year, the same claims have been repeated, nearly verbatim.Of course, this runs counter to the two rules of neoliberalism:
Raise wages, lose jobs, the refrain seems to go.
If the claims of minimum-wage opponents are akin to saying “the sky is falling,” this report is an effort to check whether the sky did indeed fall. In this report, we examine the historical data relating to the 22 increases in the federal minimum wage between 1938 and 2009 to determine whether or not these claims—that if you raise wages, you will lose jobs—can be substantiated. We examine employment trends before and after minimum-wage increases, looking both at the overall labor market and at key indicator sectors that are most affected by minimum-wage increases. Rather than an academic study that seeks to measure causal effects using techniques such as regression analysis, this report assesses opponents’ claims about raising the minimum wage on their own terms by examining simple indicators and job trends.
The results were clear: these basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels, even in the industries that are most impacted by higher minimum wages. To the contrary, in the substantial majority of instances (68 percent) overall employment increased after a federal minimum-wage increase. In the most substantially affected industries, the rates were even higher: in the leisure and hospitality sector employment rose 82 percent of the time following a federal wage increase, and in the retail sector it was 73 percent of the time. Moreover, the small minority of instances in which employment—either overall or in the indicator sectors—declined following a federal minimum-wage increase all occurred during periods of recession or near recession. That pattern strongly suggests that the few instances of such declines in employment are better explained by the overall national business cycle than by the minimum wage.
These employment trends after federal minimum-wage increases are not surprising, as they are in line with the findings of the substantial majority of modern minimum-wage research. As Goldman Sachs analysts recently noted, citing a state-of-the-art 2010 study by University of California economists that examined job-growth patterns across every border in the U.S. where one county had a higher wage than a neighboring county, “the economic literature has typically found no effect on employment” from recent U.S. minimum-wage increases. This report’s findings mirror decades of more sophisticated academic research, providing simple confirmation that opponents’ perennial predictions of job losses when minimum-wage increases are proposed are rooted in ideology, not evidence.
L'évolution de l'ensemble des sondages, avec le dernier @opinionway :#Macron 22,4%#LePen 21,7%#Fillon 20,8%#Mélenchon 19,1% pic.twitter.com/J9XXVMa7WD— mathieu gallard (@mathieugallard) April 17, 2017
A specter is haunting Europe — the specter of Jean-Luc Mélenchon.Just how freaked out is the establishment?
In the latest plot twist in France’s highly contentious presidential election, Mélenchon — an outspoken 65-year-old leftist who often appears on the campaign trail via hologram and who has pitched his proposal to nationalize France’s biggest banks and renegotiate its relationship with the European Union via free Internet games and YouTube videos — is now soaring in the polls. With less than two weeks before the election, his meteoric and unexpected rise is already sending jitters through financial markets and shock waves through an increasingly anxious electorate.
For months, analysts have likened the upcoming French election to “Europe’s Stalingrad,” a crucial turning point that will determine the future of a country and a continent. But while commentators worldwide have focused on the steady rise of the far-right, fiercely anti-immigrant National Front of Marine Le Pen, few have paid any attention to the leftist fringe of Jean-Luc Mélenchon, who has vaulted into the picture in the past week and who shares with Le Pen the desire to drastically alter France’s relationship with the E.U., the 28-state bloc it once designed.
Mélenchon is running as the candidate of the Unbowed France political movement, in an alliance with the French Communist Party. The latest polls show him narrowly trailing Emmanuel Macron, long seen as the favorite, and Le Pen, expected to qualify for the final round of the two-round vote but to lose to Macron in the end. In the final days of a truly unprecedented campaign, Mélenchon’s unexpected surge is a reminder that radical change is in the air and that its extremist apostles — on the right or the left — may soon hold power.
Some have reacted with panic: Investors have begun frantically selling off French bonds, while the head of France’s largest trade union has decried what he described as Mélenchon's “rather totalitarian vision.”
………
Perhaps more than any of the other candidates, it is Mélenchon who best represents 2017’s potential rupture with history, or at least the status quo. Central to his platform is the promise to abolish France’s Fifth Republic, the system of government established by Charles de Gaulle in 1958.
What Mélenchon detests in this style of government is its monarchical presidency — designed for de Gaulle himself — which can dissolve parliament at will and is subject to few checks and balances. Mélenchon has pledged to found what he calls the “Sixth Republic,” a vision that would “take us out of this presidential regime, notably with proportionality in all elections.”
It is an idea that resonates widely — even among those who do not necessarily support Mélenchon’s other more radical proposals, including taking France out of NATO and imposing a 100 percent tax on all income earned over 400,000 euros ($425,000).
Centrist French presidential candidate Emmanuel Macron called for a “rebalancing” of Germany’s trade surplus in an interview with French and German media published Monday.This is true, of course, but it is also as close to heresy as you can get from the any EU supporter.
Even as he touted strong relationships with the German political leaders, Macron used the interview with Ouest-France newspaper and Germany’s Funke newspapers to call out German trade policy for hurting the Continent’s economy.
“Germany benefits from the imbalances within the eurozone and achieves very high trade surpluses,” he said. “Those aren’t a good thing either for Germany or for the economy of the eurozone. There should be a rebalancing.”
Macron, an independent, is facing fresh pressure from anti-EU candidates in the final week before the presidential election’s first-round vote. He has been running neck-and-neck with nationalist Marine Le Pen, ahead of three other candidates. However, recent polls suggest a surge for Jean-Luc Mélenchon, who rails against Europe from the left.
And so, contrary to Hayek’s expectations, financial globalisation has proved that it is market fundamentalism, and not the regulatory state that is leading the world into an era of authoritarianism and totalitarianism – in the US, Eastern Europe, India and China.This is not surprising the relentless concentration of power by monopolists has always had this effect.—Ann Pettifor
Mainstream economic models are nothing but broken pieces models. That kind of models can’t make economics a science.That sound you hear is a mic dropping.—Lars P. Syll
Jacobin, is an excellent place to find reasoned and concise writing from an unabashedly socialist* perspective.
I find this article a bit Panglossian, I believe that the reports of the death of Neoliberalism have been greatly exaggerated, it does raise some interesting issues.
What's more the lede for the article is a hoot:
PBS NewsHour is generally pretty staid stuff — like Ambien but less habit-forming.They owe me a screen wipe.
It's an essay about economists by an economist titled, The Wrongest Profession, and the can of whup ass that it's author, CEPR economist Dean Baker, unleashes on the dismal science is a thing of beauty:
Over the past two decades, the economics profession has compiled an impressive track record of getting almost all the big calls wrong. In the mid-1990s, all the great minds in the field agreed that the unemployment rate could not fall much below 6 percent without triggering spiraling inflation. It turns out that the unemployment rate could fall to 4 percent as a year-round average in 2000, with no visible uptick in the inflation rate.I think that the last graph is a bit to kind to Obama, but it's well worth the read.
As the stock bubble that drove the late 1990s boom was already collapsing, leading lights in Washington were debating whether we risked paying off the national debt too quickly. The recession following the collapse of the stock bubble took care of this problem, as the gigantic projected surpluses quickly turned to deficits. The labor market pain from the collapse of this bubble was both unpredicted and largely overlooked, even in retrospect. While the recession officially ended in November 2001, we didn’t start creating jobs again until the fall of 2003. And we didn’t get back the jobs we lost in the downturn until January 2005. At the time, it was the longest period without net job creation since the Great Depression.
When the labor market did finally begin to recover, it was on the back of the housing bubble. Even though the evidence of a bubble in the housing sector was plainly visible, as were the junk loans that fueled it, folks like me who warned of an impending housing collapse were laughed at for not appreciating the wonders of modern finance. After the bubble burst and the financial crisis shook the banking system to its foundations, the great minds of the profession were near unanimous in predicting a robust recovery. Stimulus was at best an accelerant for the impatient, most mainstream economists agreed—not an essential ingredient of a lasting recovery.
While the banks got all manner of subsidies in the form of loans and guarantees at below-market interest rates, all in the name of avoiding a second Great Depression, underwater homeowners were treated no better than the workers waiting for a labor market recovery. The Obama administration felt it was important for homeowners, unlike the bankers, to suffer the consequences of their actions. In fact, white-collar criminals got a holiday in honor of the financial crisis; on the watch of the Obama Justice Department, only a piddling number of bankers would face prosecution for criminal actions connected with the bubble.
