Zimbabwe is the new Weimar Republic. Not! Zimbabwe is the front-line evidence that shows that government deficits will generate hyper-inflation. Not! Zimbabwe is the demonstration of the folly of a fiat monetary system. Not! Zimbabwe is an African country with a dysfunctional government. Yes!
This afternoon I am off to Brisbane to appear in tonight’s SBS TV Insight Program, which is focusing on unemployment. The program airs live from 19:30 tonight on SBS One. The on-site location for tonight’s show is Logan City, which is south of Brisbane on the way to the Gold Coast. In the work I did with Scott Baum at Griffith University earlier this year developing an Employment Vulnerability index, we identified the Logan City area as having a concentration suburbs which we considered to be at high risk of job loss. So SBS decided to conduct a ground level exploration of the sorts of considerations that expose a region to job loss and to develop narratives that inform us of how people in battling areas cope with economic downturn. While the topic is depressing it is excellent that one of our national TV broadcasters is actually elevating it to national importance.
News Limited is still (mis)leading the way on the deficit-debt attacks. In another appalling piece of misrepresentation and erroneous reasoning, The Australian ran a story from its economics chief, Michael Stutchbury today entitled Now comes time to pay the piper. This newspaper has really excelled in recent months in the lengths it has gone to mislead and lie to its readers on matters relating to the macroeconomy and the conduct of fiscal policy. There will be a piper to pay – that I agree – but it will be because the federal budget deficit is not large enough right now rather than because it is too high.
I was a speaker at the Sydney Greens Forum yesterday and today I am on a panel with Bob Brown at the Greens National Conference in Adelaide. Regular readers will know that in the past months we have been engaging with the Greens after I wrote – Neo-liberals invade the Greens. The initial reaction towards me was hostility but that soon gave way to a more reasoned engagement which I have found to be extremely beneficial. That is why I accepted invitations to speak at their functions. While there is a long way to go in fully articulating a modern monetary paradigm within the context of the generally sophisticated social and environment policy that The Greens have already developed I think the possibilities are now there. One issue that does emerge in my discussions is that of whether a person should have to work under a Job Guarantee approach to full employment. That is, should the Job Guarantee be compulsory?
Welcome to the billy blog Saturday quiz. The quiz tests whether you have been paying attention over the last seven days.
There is a slight change of format this week just for a change.
See how you go with the following five questions. Your results are only known to you and no records are retained.
I wrote the following piece this morning for tomorrow’s local Fairfax newspaper. While some of the content is definitely of local interest there might be some things of interest to the broader debate. Also it is written to fit a column so it doesn’t allow for much elaboration.
This weekend I am quite busy presenting modern monetary economics to two Greens events. You can see the details below. If you are interested in coming along I am sure you will be welcome.
The world seems to be going more insane every time I check. I have this naive belief that we bother to elect governments because we understand they can do things (as a collective) that we cannot do very easily (as individuals). I also assume we all think our elected governments will broadly use their fiscal powers to pursue an agenda that will advance public purpose – that is, seek ways to improve our standard of living and ensure all citizens participate in the bounty that the economic system generates (including sharing the losses when it doesn’t so generate). Of-course, I know that our polities basically govern to keep themselves in power. But there is the occasional election. Anyway, recent events suggest that governments seem to be able to construct popularity by taking actions that do us harm.
I mentioned yesterday that I would reflect on the ACTU Jobs Summit, which was held in Sydney on Monday. I was one of the invited speakers. You can download notes of my talk HERE. The revolving door idea has been on my mind a lot over the last decade or even earlier. The revolving door idea – that open door between key institutions such as unions, welfare agencies and the like and government – relates to how political struggle manifests. The revolving door is a process which increasingly sees organisations and institutions that started out to defend the rights of the poor and the workers become co-opted into the discourse of the day to the detriment of their own charters. That is what this blog is about.
In an article in yesterday’s WSJ The Fed’s Exit Strategy, federal Reserve Chairman Ben Bernanke provides an account of some of the operations of the monetary system that I write about in billy blog. While he doesn’t say it explicitly, he confirms that debt is issued to support interest rates (not fund net government spending) and that debt is not necessary at all if the central bank pays a “competitive” rate on overnight bank reserves held at the central bank. He also confirms that inflation is not an inevitable aspect of an expansionary package but it could be. All fundamental propositions of a modern monetary view of macroeconomics. So in one week, a Nobel Prize winner and now the Chairman of the Fed are stumbling around logic that confirms the neo-liberal driven deficit-debt-inflation-higher-taxation hysteria is without foundation.