Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
Its my Friday lay day and a shorter blog day than usual. Today, it was revealed that one of the Australian government’s premier measures to combat unemployment has failed. Not just a small failure. Rather, the data just released shows the plan is a disaster. It was always going to be. The supply-side measure to provide wage subsidies to firms to take on unemployed workers who were above 50 years of age and were enduring entrenched unemployment failed because it doesn’t address the problem. Mass unemployment arises not because wages are too high relative to productivity (the mainstream myth) but because there is not enough sales to justify firms putting on extra workers. The lagging sales are because there is deficient total spending. Firms will not employ more workers if they cannot sell the extra output, no matter how cheaply the workforce becomes. The data we were apprised of today categorically supports that view. The data accompanying such programs always supports the view that demand is the problem not supply.
I am travelling all day today so no time to write at all and post. So in lieu of a more complete analysis of something interesting, I am sharing an interview I did with the Institute for New Economic Thinking (iNET) at their conference in April 2014 in Toronto Canada. iNET posted the interview on December 28, 2014 after they had finished editing and producing the material recorded in April. The interview probed the basic principles of Modern Monetary Theory (MMT) and how I think it can be extended in to the policy space. I hope you enjoy it.
Another day of light blogging. It used to be the case that if you secured a University degree then you were nearly immune from unemployment and enjoyed a fairly quickly growing wage gap on those of the same age who were not so fortunate to attend university. It was always the case that the unskilled are at the back of the jobless queue. This cohort is traditionally forced to endure low wages when they are lucky enough to find work and when they are not so lucky, they have to tolerate the opprobrium that neo-liberal attack dogs impose on them for daring to try to live on the pittances handed out as unemployment benefits. Any time the economy takes a nosedive this group finds itself out of work. But, even in recessions, the possession of a University degree was a fairly good insurance policy against such misfortune. The GFC changed that and in some nations the austerity that has been enforced by mindless and unaccountable bureaucrats has not only had devastating effects on the unskilled but has also undermined the prospects of the higher skilled workers. There is no cost-benefit analysis available that could justify such an arrant waste of productive resources, quite independent of the massive personal cost that the unemployed face upon their exclusion from mainstream society. Those pushing for austerity have a lot to answer for. But most of them will be long retired on their fat superannuation pensions before the full scale of the disaster they have created is revealed.
I am away most of this week and have limited time for blogs and I am also concentrating on the Modern Monetary Theory (MMT) book I am working on that will be published later in 2015. I also do not want to use the blog space exclusively for that book writing like I did for a portion of this year when I wrote the book on the Eurozone (which will come out in May 2015). I can also say that an Italian version of the book is now going to be a reality and we hope to get it out as soon as possible in 2015 – more later on that topic – it tells a story in itself about the Italian left! So for the rest of the week we will be in Blog Light’ territory although only marginally. Today – a sad story of how progressives seem to lose their way. I would have thought the first progressive imperative would be to counter the neo-liberal myths about economics in order to liberate a range of other social and environment initiatives that will improve society and the world in general from the yoke of neo-liberal lies about fiscal deficits and the way the monetary system operates. I was wrong. After considering the material for this blog, I think I will file it under my – Friend’s like this … – series.
I am travelling for most of today and so have very little time to write. But I do comment on the latest French unemployment data released the day before Xmas which signals that things are getting worse in France as the European Commission bolts down the austerity clamps even tighter. While I thought that Italy might be the jewel in the crown and be the ones to exit the unworkable Eurozone first, I am now thinking that France might be the straw that breaks the back. Things are certainly going to get worse there and their political system is veering towards an anti Euro sentiment. Not before time, although the parties promoting the anti-euro feeling are not very nice at all. Where are the Socialists? Oh, I forgot, they are in power – spearheading the austerity. What a mess. In addition, as a sort of stocking filler, I also thought I would post the Q&A section of the presentation I made in Rome on November 24, 2014 – Framing Modern Monetary Theory.
Here are the answers with discussion for yesterday’s quiz. The information provided should help you understand the reasoning behind the answers. 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 Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
Its the Friday lay day blog. I was travelling back from the South coast of NSW one Sunday a few years ago after giving a talk to a workshop on regional development. We stopped for a break in South Sydney where there was a street fair going on – the normal run-of-the-mill affair. It was centred in the main street of the electorate where Scott Morrison was (and remains) the Member of the Federal House of Representatives. He had a stall at the fair, touting his policies – then as the Opposition spokesperson for immigration. His helpers were nasty types who were raving on about illegal boat people and what Morrison would do to them once they won the next election. They did win it, and he did do it to them. As he shifts his ministerial portfolio from immigration to become the Minister for Social Services, it is worth recalling what his record has been in his last job. Julian Burnside captures it beautifully in his article last Tuesday (December 23, 2014) – Morrison’s calculated cruelty is his legacy – although the sociopathy revealed is anything but beautiful. But there is worse to come.
I am not doing much work today. But in the early quietness I was able to finalise an edit of a presentation I gave in Rome on November 24, 2014 on Framing Modern Monetary Theory. So among other things I include today that video is now available. All the best for today.