Posts about linguistics, framing and the way to present arguments

British Labour’s obsession with fiscal rules is untenable and ignores the reality of the situation

I have been a consistent critic of the way in which the British Labour Party, both in opposition and in government, is obsessed with rigid fiscal rules, thinking it is the only way that it can demonstrate fiscal credibility (whatever that is in their minds). The result is that they get cornered into situations that either lead them to make poor decisions which lose them votes and give the likes of Nigel Farage more fuel for his crusade or they are forced to admit they cannot achieve the (unachievable) fiscal rules. Either way it is a clusterf*)@. In the last week or so, we have witnessed the ludicrous situation of the British Office of Budget Responsibility failing to protect its own file systems and leaking information before the Chancellor presented her official fiscal statement. The leaked information just happened to contradict the messaging of the Chancellor which was a bit inconvenient. But the important issue that all this raises is not whether OBR can run a secure WordPress site (evidently it cannot), but that the information it generates is so inaccurate and systematically biased that it cannot realistically be used as the basis for assessing fiscal policy. Which means that the obsession with the fiscal rules leads to policy changes that damage things that matter – such as employment and services – but those policy changes are based on information (OBR forecasts) that subsequent revelations tell us would not justify those policy shifts. As I said – clusterf8x@.

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Panel of Japanese economists mired in erroneous mainstream constructions and logic

Last Friday, I met a journalist in Tokyo and we discussed among other things, the results of the latest Nikkei/JCER ‘Economics Panel’, which was conducted between November 13 and November 18, 2025. The panel involves “questionnaires” being “sent to approximately 50 economists to gather their evaluations of various economic policies. The aim is to promote deeper and more active discussions on economic policy by clearly conveying the consensus and differences of opinion among experts, along with presenting individual comments from each economist.” The results are quite striking and demonstrate that the Japanese academic economics profession is mired in destructive Groupthink that means the profession is failing to contribute in any effective and functional way to advancing the well-being of the Japanese population or providing insights into how the nation can meet its considerable and immediate challenges.

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My current number one candidate for the worst economics article of the year

Unfortunately, the so-called progressive UK Guardian has an Australian economics editor who is anything but if his economic analysis is anything to go by. The economic news for this week started with the release of the – Final Budget Outcome – (FBO) for the 2024-25 fiscal year for the Federal government (released September 29, 2025). It showed the actual fiscal deficit for the year just gone was slightly lower than had been predicted in earlier official statements. The government celebrated claiming a lower deficit was a sign not only of its good management but was also virtuous. The journalists, however, had a different spin, claiming that while the situation could have been worse, it was still bad. The discussion in the media and the official statement from the Treasurer seemed to omit one rather important fact. The context. This allows us to understand the distinction between ‘good’ and ‘bad’ fiscal deficits, a distinction that the commentariat seems unable to grasp. Anyway, this UK Guardian article is my current number one candidate for the worst economics article of the year. Why discuss it? Because it helps illustrate the essentials of macroeconomics that people need to understand.

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Some discussion about taxation

Over the weekend, I was a presenter at a Fabian’s Society meeting which sought input on ‘alternative taxation policies’ under the general tenet of the need for the Australian government to raise revenue to ensure a socially just society. The other presenter was John Quiggin and I think we provided a good complementarity for the relatively large audience (for a Saturday afternoon – with football finals in progress!). Of course, my opening salvo was to reject the fundamental premise of the workshop – which is a premise that progressive commentators and activists seem unable to shed to the detriment of their argument. I indicated to the audience at the outset that the aim of taxation is generally not to raise more revenue for government, but, instead, to ensure the non-government sector has less spending capacity. More is not less. That is a fundamentally different frame in which to discuss the topic and I closed the workshop by suggesting that one of the single most important things that progressives can learn is to stop using terms like ‘taxpayers’ money’ when discussing fiscal policy. Using those type of terms immediately frames the discussion against progressive goals.

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Recent podcast and some thoughts on trade

I don’t have much time today as I am travelling a lot in the next few days for various work commitments. But recently I did a podcast for Real Progressives in the US about trade and the external economy. I started the discussion with an interesting quote that I will reproduce here. Regular readers will know that there are several so-called progressive critics of Modern Monetary Theory (MMT) who focus on the way we construct the external economy. They claim it is ridiculous to think of exports as a cost and imports as a benefit and extend that argument to narratives about the advantages of maintaining a strong export-oriented manufacturing sector. Whether we want a strong manufacturing sector is a quite separate discussion from the trade issue. That is what the podcast was about.

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The struggles to teach political economy and the aftermath – we all lost

I started my undergraduate studies in economics in the late 1970s after starting out as an Arts student in the early 1970s studying philosophy, politics, history, anthropology and statistics. The Vietnam War movement and other things interrupted my first years of studies and it wasn’t until the Federal government introduced the National Employment and Training (NEAT) scheme in 1974 that I was able to get some government support to resume my studies, this time as an economics student combining statistics, politics, law and economics. The major student rebellions of the late 1960s around the world had ended and the Monetarists had seized control of the academy, which led to major shifts in the way economics was taught. The world is much poorer as a result of these changes and the end-game problems of neoliberalism that we are all struggling with now – housing crises, welfare retrenchments, aftermath of privatisation and outsourcing, casualised labour markets offering poorly paid jobs with precarious outlooks, rising income and wealth inequality, and the climate crisis to name just a few of the individual crises that are now converging into the poly crisis we are enduring now – are directly related to the shifts in the economics profession in the 1970s. I was a student then young academic through this early period and when I read an article in the Australian Financial Review this morning (September 1, 2025) – Why my dad fought against ‘Albonomics’ at Sydney University (usually behind a paywall) – I could hardly believe what I was reading.

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Cryptocurrencies are not currencies

I often get asked about cryptocurrency. And I immediately become bored. The sort of claims that people have made about this phenomenon, which is historically just another speculative asset, are over-the-top to say the least. There are two realities that seem to be ignored. First, we already have mainstream digital money and have had for a long time, before cryptocurrencies emerged. For example, when the central banks credit reserve accounts held by commercial banks as part of the daily payments system clearing, digitial transactions take place. Similarly, when you go on-line and conduct some bank transactions shifting deposits to other owners (paying bills etc) you are using digital currency. Second, cryptocurrencies are not currencies nor are they money, which makes their name rather misleading. In fact, they are just another speculative, non-money asset that are not backed by anything so we say that the fair value is zero. There is an intermediate asset that has emerged – the so called – Stablecoin – which differs from cryptocurrencies, in that the asset is specifically pegged in some way to some national currency or basket of assets. However, the hype surrounding stablecoins is similar to that which has accompanied the evolution of cryptocurrencies, the point being that the ‘stable’ bit is not backed in anyway by any government guarantees. I also distinguish this class of non-monetary assets from the recent developments in central banking known as – Central Bank Digital Currency – which is really just an extension of the already myriad of digital transactions that central banks conduct every day.

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The report of the Special Envoy to Combat Antisemitism in Australia should be categorically rejected by government

In July 2024, as a knee jerk reaction to pressure being put on it by powerful lobby groups in Australia, the Federal Government created a Special Envoy to Combat Antisemitism. After it was pointed out that this seemed an odd creation, especially given that Australia has relatively strong racial discrimination and laws that protect freedom of religion, and that other definable ethnic/religious groups were also regularly in the firing line of abuse (for example, Muslims and First Nations peoples), the Government then (with a lag of a few months) created a Special Enjoy to Combat Islamophobia. Both creations are poor policy. On July 10, 2025, the Antisemitism Envoy delivered a major report, which, if the recommendations are implemented will become a major threat to academic and artistic freedom and do nothing to advance world peace and harmony. Quite the opposite. I have been reluctant to discuss the atrocity that is now entrenched in the Middle East as a result of the actions of the Israel government. But the release of this Report and subsequent news coverage that I saw in Doha recently (while transiting) of the starvation of people (especially little children) has led me to this blog post. If the Report’s recommendations are implemented by the Government, such a blog post will probably open me to prosecution as an anti-Semite, which would be a preposterous accusation, and just shows how flawed the path we are taking to these issues has become.

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Economics as politics and philosophy rather than some independent science

Last week, I wrote about – The decline of economics education at our universities (February 6, 2025). This decline has coincided and been driven by an attempt by economists to separate the discipline from its roots as part of the political debate, which includes philosophical views about humanity and nature. In her 1962 book – Economic Philosophy – Joan Robinson wrote that economics “would never have been developed except in the hope of throwing light upon questions of policy. But policy means nothing unless there is an authority to carry it out, and authorities are national” (p.117). Which places government and its capacities at the centre of the venture. Trying to sterilise the ideology and politics from the discipline, which is effectively what the New Keynesian era has tried to do, fails. The most obvious failure has been the promotion of the myth of central bank independence. A recent article in the UK Guardian (February 9, 2025) – You may not like Trump, but his power grab for the economic levers is right. Liberals, take note – is interesting because it represents a break in the tradition of economics journalism that has been sucked into the ‘independence’ myth by the economics profession.

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The decline of economics education at our universities

Economics courses at university in Australia have been under threat for several decades now and many specialist degrees have been abandoned by universities as student enrolments declined. When the federal government merged the vocational higher education institutions (Colleges of Advanced Education) with the universities in the late 1980s, traditional economics faculties were swamped with half-baked ‘business’ courses in management, HRM, marketing and whatever which then attracted the aspiring ‘entrepreneurs’ who were told by the marketing literature that they would be fast-tracking into management careers in the corporate sector. The reality was that these programs did not equip the students to do very much at all (perhaps erect marketing displays in supermarkets!) but the impact on economics programs was devastating. The most recent Reserve Bank of Australia (RBA) Bulletin published on January 30, 2025 contained an article which bears on this issue – Where Have All the Economics Students Gone?. I discuss some of the implications of the decline in student numbers in economics and the lack of diversity that existing programs have for societal well-being.

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