Comparing the 2016 Referendum vote with the 2019 Withdrawal Act outcome

My head is hurting less today! But while I haven’t been able to write much I have been able to amuse myself by examining the Brexit Referendum figures and juxtaposing them against the vote in the British Parliament last night. I realise (so don’t start Tweeting what a fool I am!) that the vote last night was not whether to exit or not! And if I was a British parliamentarian I would have certainly voted against the Act presented by the Prime Minister to the House of Commons last night. But then I favour (yes, Tweet away) a No Deal Brexit, which I believes puts the bargaining chips firmly in the favour of the British. But I have made that point often. The problem with last night’s vote is that it sets a dynamic for the parliament to reject the outcome of the 2016 Referendum outright, when the British government promised the people before the 2016 vote that they would respect and implement the outcome. The outcome wasn’t complex – it was clearly to Leave. And if last night’s vote leads to a process where the 2016 outcome is not implemented as promised then there are a lot of MPs who are behaving in a way that violates the wishes of their constituencies – the worst offenders being British Labour MPs. In the 2016 election, 60.7 per cent of the Labour constituencies voted to Leave (75.4 per cent of Tory constituencies). Yet only 3 out of 256 Labour MPs voted for the Act last night. One hopes that when it comes to the crunch a much higher proportion of Labour MPs will see to it that Brexit occurs.
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    Posted in Britain, UK Economy | 2 Comments

    No blog post today

    My usual very active life ground to a halt today as the flu bug that is working its way through the human population took me with it. Staying vertical for any length of time is quite a task. And I do not write very well on the horizontal plane. I cannot even listen to any music as my head hurts. And if I was to publish a blog post I might start saying that killing Brexit is the best thing the British can do or that the European Commission needs to further tighten their fiscal rules. And we wouldn’t want either, would we? Back again tomorrow, hopefully.

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      Posted in Admin | 12 Comments

      Must be Brexit – UK GDP growth now outstrips major EU economies

      I suppose Brexit is to blame for the fact that Britain is now growing faster than the major European economies. The latest ‘monthly’ GDP figures show that the British economy grew by 0.3 per cent in the three months to November 2018 and will probably sustain that rate of growth for the entire final quarter of 2018. This is in contradistinction to major European economies such as Germany (which will probably record a technical recession – two consecutive quarters of negative growth) with France and Italy probably following in Germany’s wake. I have made the point before that the growth trajectory of the British economy (inasmuch as there is one) is very unbalanced and reliant on households and firms maintaining expenditure by running down savings and accessing credit – which means ever increasing private debt burdens. With private credit growth weakening as the debt levels become excessive and the rundown of saving balances being finite, Britain will face recession unless the fiscal austerity is reversed. Earlier in 2018, the Guardian Brexit Watch ‘experts’ were continually pointing out that Britain’s growth rate was at the bottom of the G7 as evidence that Brexit was causing so much damage. So now European G7 nations are starting to lag behind, these commentators will have to find another ruse to pin their anti-Brexit narrative on. We also consider in this blog post some more Brexit-related arguments – pro and con – which reinforce my conclusion that a No Deal Brexit will not cause the skies to fall in.
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        Posted in Britain, Eurozone, UK Economy | 22 Comments

        The Weekend Quiz – January 12-19 – 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 | 2 Comments

          The Weekend Quiz – January 12-19, 2019

          Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that 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 | 6 Comments

            There is no internal MMT rift on trade or development

            I was going to write about Jamaica today but this topic emerged that I thought I should deal with before I write about the home of reggae. In fact, some of the material is input into a reasoned discussion about Jamaica so it logically precedes it. With the increasing profile of Modern Monetary Theory (MMT), social media activists are wont to talk about MMT in various ways that, in many cases, do not bear resemblance to our work. But that doesn’t stop them claiming things about what we have written or said and then proceeding to say how this is a ‘big problem’ with MMT that they cannot accept. Then their own local commentators chime in reinforcing the point. It is obvious that the original writer hasn’t read our work or if they have they haven’t grasped it (including the nuance and subtlety) but still feels privileged to hold themselves out as experts to wax lyrical about the technical flaws in the said work. This gets amplified by the responses from the readership who have probably read even less – to the point that we end up with MMT being constructed as something ridiculous and foreign to its original. Sort of like start by saying you are discussing 2, call it 3 and say it equals 4. It is a problem because it confounds people and also gives those who oppose our work ways to further misrepresent it in the public debate.
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              Posted in Capital controls, Economics, Fiscal Statements, Framing and Language, IMF | 35 Comments

              The mindless and myopic nature of neoliberalism

              A short blog post as per my usual Wednesday behaviour these days. Fiscal austerity manifests in many ways, all of them unpleasant, destructive and unnecessary. Here is one of the more insidious ways that mindless cuts in government programs have long-term damaging impacts. In 2013, the Queensland State Government was taken over by a conservative extremist as Premier who thought it was a good idea to hack into sexual health programs targetted at indigenous communities. Over a few short years, this was just one of a huge number of social and health cuts that were made by that particular state government. More than 14,000 public service jobs were cut (a huge relative number). The State government fiscal deficit fell from a predicted $A6 billion in 2013-14 to $A2.58 billion. But like all these austerity cuts which deliver short-run reductions in public spending, the longer-term effects of the cuts lead to much higher amounts of public spending. Neoliberalism is not only mindless but myopic. I have made this point often in regard to infrastructure cuts. In the end, the government has to spend much more fixing the crisis the initial cuts create. Not a sensible strategy at all. The ‘chickens’ (manifestation) of those cuts in Queensland a few years ago are now coming home to roost. As predicted at the time, there is now a health crisis in the form of a STD epidemic moving across the north of Australia from east to west, purely because this idiot wanted to ‘save’ a few pennies. Now serious public cash is being required to put a brake on the health crisis he created. There are countless examples across the world over this neoliberal era of this same phenomena. Myopic and mindless.
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                Posted in Economics, Music, Reclaim the State | 14 Comments

                US labour market remains fairly robust

                Last week’s (January 4, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – December 2018 – showed that total non-farm payroll employment rose by 312,000 and the unemployment rate rose by 0.2 points to 3.9 per cent on the back of a 0.2 points rise in the participation rate. The coincidence of rising employment and rising participation is usually a good sign as workers are being attracted back into the labour force by the increased job opportunities. We will see in the next few months whether that is a one-off blip or a sustained trend. If it is a sustained trend then the rise in unemployment as a consequence of the labour force growth outstripping employment growth will be temporary and sustained reductions in unemployment will then occur. While the US labour market is looking fairly robust there is still a substantial jobs deficit remaining which tells us that it remains some distance from full employment. There is room for expansion.
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                  Posted in Labour Force, US economy | 2 Comments

                  The Brexit scapegoat

                  The UK Guardian continued its anti-Brexit bias in its article (January 4, 2019) – Brexit anxiety drags UK economy almost to standstill. Read the words which clearly mean – Brexit anxiety causes UK economy to stall. No nuance. No comparability. Just plain, unproven bias. Now, let’s be clear. The British economy has slowed considerably in the last quarter and the chaotic political behaviour among the British government is bound to be causing anxiety among voters. The British establishment is looking more comical lately than it usually does. But, as I have demonstrated previously, the trajectory of the British economy that is emerging pre-dates the Brexit referendum and has more to do with austerity biases in policy design and the state of private domestic balance sheets (accumulated debt positions) than it has to do with Brexit anxiety. Further, the data that the Guardian reports (the latest PMI results) also suggest that the Eurozone and Germany, in particular, are also recording similar declines in sentiment and activity. It is hard to blame Brexit on that.
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                    Posted in Britain, Eurozone, UK Economy | 34 Comments

                    The Weekend Quiz – January 5-6 – 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 | Leave a comment