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.
Given I provided a detailed National Account analysis yesterday, I am using today as a blog lite day with just some snippets and then a musical offering – as per my usual Wednesday practice. I did an interview for Real Progressives last week and some of the social media reaction has been hysterical – claims that Modern Monetary Theory (MMT) has gone political and that MMT advocates abandoning the capitalist system and so on so forth. Some of this stuff is coming from self-identified ‘progressives’, which makes me wonder how much meaning term retains. In some cases, the attacks were really Trojan horses for the dislike of my Brexit stance or my attacks on the British Labour Party for pushing an unworkable and neo-liberal inspired fiscal credibility rule, which they had to change just before the election anyway because it was unworkable in its original form. So the resentment of those who hang onto the ‘European dream’ for the UK manifests as stupid, lying attacks on anything I say. Fine. More importantly, Switzerland is having a little ‘Brexit’ sort of move itesel, that has angered the European Union and is another chink in the now very depleted European ‘dream’. And if all that is a bit much, we can finish with some Jazz.
The data release from the Australian Bureau of Statistics of the – Australian National Accounts: National Income, Expenditure and Product, March 2021 (released June 2, 2021) – shows that the Australian economy grew by a healthy 1.8 per cent in the March-quarter after growing by 3.2 per cent in the December-quarter 2020. Further, the economy is now 1.1 per cent larger than it was at the outset of the pandemic in March 2020. Household consumption growth is positive but subdued. Fiscal support is declining. But business investment is now recovering and is a really positive sign. Several sectors are still struggling and renewed outbreaks of the virus in recent weeks will further create these disparities. I consider there is still need for expanded fiscal support.
Today, we have a guest blogger in the guise of Professor Scott Baum from Griffith University who has been one of my regular research colleagues over a long period of time. Today he is continuing his discussions around the uneven regional impacts of job losses since the start of the COVID-19 pandemic. So while I am tied up today it is over to Scott …
Everybody is concerned with ‘herd immunity’ at present as the pandemic continues on ravaging our social and economic lives. But I have been studying the concept of ‘herd mentality’ for some years, aka – Groupthink. Mainstream macroeconomics is sustained, not by any internal logical consistency (on which it fails), by close congruency with the empirical data (on which it fails), which are the usual qualities of a dominant system of ideas, but, rather, by (using modern terminology) its long-standing and on-going cancel culture. So it is rather amusing to read one of the leading voices in that paradigm, Kenneth ‘Spreadsheet’ Rogoff, whinging on the Internet that ‘cancel culture’ is being used to undermine the reputations of one of his mates (Larry Summers). Both continue to get platforms in the world media without trouble to push their vapid ideas into the narrative. The antithesis of cancel culture it would seem. What is going on is that more people are realising that the prognostications of mainstream macroeconomics are deeply flawed, and, while many may not know the technicalities and the theoretical complexities, they can see the empirical dissonance, and that means they know a – lemon – when they see one. And social media has given more people a voice and they are using that to call these characters out for what they are. And the sense of invulnerability that pervades all disciplines riddled with Groupthink is being questioned.
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.
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.
Well, the Melbourne virus outbreak has scuttled lots of plans and events. We wouldn’t be in this situation if the Federal government had have invested in dedicated quarantine facilities last year when they were told to and taken advice to ensure their vaccination purchases were sufficient. Anyway, that is for another day. Today, I have been examining European data and matching them against a recent interview (May 26, 2021) – Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Jun Ishikawa – that Nikkei published yesterday. Things have changed a bit in Europe since the GFC although the fundamental problem of the Eurozone remains – there is a disjuncture between fiscal responsibility and fiscal capacity and the only way that that mismatch is being addressed is the via the on-going ECB funding of fiscal deficits, despite the denial that that is what is happening. It is plainly obvious to all.
It is Wednesday so a blog lite day for me. The next part of this week is a bit up in the air for me after the Covid outbreak that resulted from a breach of quarantine in Adelaide has spread to Melbourne and looks a bit ugly. Fingers crossed that I can get back home to Melbourne tomorrow. Today I briefly review the latest payroll data from the Australian Bureau of Statistics, which shows that despite all the bluster from the Federal government to the contrary, their fiscal retreat in March is now costing jobs, as predicted. I also examine the latest production data from the UK, which should provide good news for British manufacturing workers. And finally, we have a little birthday celebration with some singing.
Don’t say its over until its over. There has been progress in the macroeconomics narrative since the GFC, which accelerated during the pandemic. Governments have certainly expanded fiscal deficits and taken on more debt and the usual hysteria, which many of those same governments helped to ferment in the public debate, has fallen away. Obviously, for political reasons, a government that has previously been terrorising the population about the dangers of deficits and rising debt as a cover for ideologically-driven austerity programs, has no incentive in continuing those narratives while they have been dragged into maintaining capitalism on life support. The question has been whether these narratives will return once the health emergency starts to fade a little. There is clear evidence emerging that the lessons that the pandemic has taught us are not being absorbed by the economics commentariat, who dominate the public space with their opinions. Two clear examples of this came out this week (already) in the Australian press, which replicates the sort of commentary I am increasingly seeing around the globe. Deeply sad.