It’s Wednesday and I use this space to write about any number of issues or items that have attracted my interest and which I consider do not require a detailed analysis. The issues discussed may be totally unrelated. Today, I provide my response to yesterday’s decision by the Bank of Japan to vary its Yield Curve Control (YCC) policy, which some commentators are frothing about. The change was very minor and is not a sign that the expansionary position of the Bank is shifting significantly. I also discuss the culture of denial in the US State Department and then rock out to come classic swamp.
It’s Wednesday and while there is a lot to write about, I am prioritising the release today of our latest research at the Centre of Full Employment and Equity (CofFEE). The release of what we are calling the – CofFEE Financial Resilience Barometer – Version 1.0 – is part of a research collaboration I have with Professor Scott Baum at Griffith University. We have Australian Research Council funding for the next three years to explore regional resilience in the face of economic shocks, particularly after the massive disruptions from the Covid pandemic. Today we release the first output of that research. I also consider other matters today and the usual Wednesday music segment comes with a song from a leading Palestinian singer.
It’s Wednesday and I spent some time this morning reading the latest IMF – Global Financial Stability Report – in which the IMF pretends to know what is going on in the world economy based on a set of erroneous assumptions about how that economy functions. But the data it provides is interesting in itself. Of interest is that fact that Australian households now have the highest debt-servicing ratios in the world as a consequence of record levels of debt and rapidly rising interest rates. What is generally overlooked in these discussions, however, are the circumstances in which the debt rose so much in the first place. In this post, I explain, among other things, how the obsessive pursuit of fiscal surpluses combined with labour market (in favour of the employers) and financial market deregulation (in favour of the bankers) in the 1980s and beyond, created the conditions whereby households could really only maintain growth in consumption expenditure by significantly increasing their indebtedness and running the saving ratio into negative territory. The legacy of that misguided shift to fiscal austerity lives on. Later in the post I make a brief comment about the Middle East and then we listen to some music.
Australia has a new federal government. We have finally rid ourselves of the worst government in my lifetime. An indecent, lying, corrupt government. A government that messed up so many important things yet never took responsibility. During the pandemic, it was the state governments that saved the day, while being hectored by the federal government to abandon restrictions. Thankfully the state premiers held firm. The outgoing federal government has attacked minorities and the poor. It has gutted the higher education system and the public broadcaster. It has installed its cronies throughout the public sector and other important regulative bodies. It has been a vehicle for the coal lobby. It has failed to support the growing needs of women against domestic violence. It has now received its marching orders. I had a glass of champagne on Saturday evening to celebrate the passing of this awful gang. I hope we have a ‘night of the long knives’ and the new government cleans out all the cronies and appoints progressives to these important positions. In general, the policy direction will improve. But all is not well given the predominance of neoliberals in senior economics positions in the new government. I hope they broaden the advice they receive. But for now – we have rid ourselves of this awful government.
Australia is in the last week of a federal election campaign, which has been marked by a disturbing absence of any policy vision by either main party which might address the most important issues confronting society and our land. Hopefully, the conservatives will get their marching orders this coming weekend (I have scheduled a rare glass of champagne around 22:00 on Saturday, when the result should be known) and the worst government in my lifetime will be gone. The problem is the Labor opposition is also short of policy mission. They have been too scared to enunciate anything much worth thinking about on climate, housing, education, health care, urban planning etc because, as the main narrative goes, they feared being wedged by the conservative government who lacks any remotely acceptable. The rival explanation for Labor’s timidity is that they are not committed to root-and-branch reform because they are inherently neoliberal themselves – a light version of the conservatives – without the extreme right tendencies on gender and those sorts of issues that dominate conservative politics. So, for whatever reason, the main challenges ahead are not being prosecuted by the major parties, which means our society will just be compounding the unsustainable evolution under the neoliberals and the price we will increasingly pay is rising.
Emmanuel Macron won the second-round of the Presidential election in France at the weekend (April 24, 2022), as expected. He easily beat the right-wing candidate Marine Le Pen – scoring 58.54 per cent of the vote compared to 41.46 per cent for Le Pen. Some might say that Le Pen was closer this time, having improved on the 66.1 versus 33.9 per cent from the 2017 run-off. That is true and the spatial concentration of the 2022 vote intensified with Le Pen improving her vote in the East, North, and South as well as the overseas territories. One of the notable features this year was the 28.01 per cent absentee vote (some 13.6 million registered voters), which represented more voters than actually cast their support for Le Pen (13.3 million). There is a lot of speculation about what the vote means in European terms and in Left-Right terms. I noted some commentators from the Left urging the voters with progressive inclinations to vote for Le Pen because she represented the best deal for workers. My view is that would have been a disastrous strategy for the Left to follow. That is what this blog post is about.
The Wednesday news and music blog post. The Prime Minister has now announced the federal election will be held on May 21, 2022. I think I will concentrate on the football that Saturday rather than the election given how depressing the political situation is. They should allow only a week for campaigning because 3 days in to the current 6-week campaign it is already deeply depressing and reinforces that Australian voters, particularly those of the progressive variety are caught – Between the Devil and the Deep Blue Sea – when it comes to federal elections. Both major parties are happy to over 550,000 Australians (and their dependants) deliberately forced by government policy to live in abject poverty. Many thought that the Australian Labor Party (the leader of which couldn’t even tell the media this week what the unemployment rate actually is) would probably honour their previous promises to review the unemployment benefit system and increase the payment as a result. Given that voices from the welfare lobby, the OECD, the business lobby (and yours truly) have consistently been calling on the federal government to end the enforced poverty. Overnight, the Labor Party demonstrated their credentials for re-election. No matter what else they say in the next several weeks, the fact that they have abandoned any intent to raise the unemployment benefit nor engage in any job creation disqualifies them from office. I hope they lose. But then I hope the other rotten conservative lot lose to. An impossible set of hopes. The Devil and the Deep Blue Sea. Speaking of the devil we can then listen to ‘Old Devil Moon’ after all of that and calm down.
Australia will go to a federal election on May 21, 2022 with the current conservative government looking in bad shape and the Opposition Labor Party has been helped a little by interventions from the French president. Emmanuel Macron candidly called the Australian Prime Minister a liar which further dented his already fractured image as the most untruthful politician in Australia. I hope the conservatives are routed but, in saying that, I know it means the Labor Party will take power and continue their embarrassing pretence to be progressive, while preaching the very mainstream economics that has damaged so many of the people that the Labor politicians claim to represent. A bad situation really. We are not yet in a situation where the traditional conservative and labour parties are being challenged by new entrants to the field. The first round of the French presidential election for 2022 were held at the weekend with some very interesting results and definitely showed that the traditional political voices in France are dead – something we could only wish for in this country.
Here is my Wednesday news blog post which ends as usual with some music – today some consummate guitar playing. Today, I discuss the dispute about M4A in the US and clear up some misconceptions. Many think that Medicare for All is defunct in the US because the ruling party – the Democrats have essentially rejected the lobbying attempts. Some people who have associated themselves with Modern Monetary Theory have, it seems, been advocating a state-based campaign to get single-payer schemes installed at that level. Is this a violation of MMT principles? Some think so. I do not. It might reflect ignorance of the nature of the sector but it doesn’t amount to a rejection of MMT. Anyway, I am a federalist and I explain why. I also bring attention to some anti-colonial struggles in the Caribbean.
It’s Wednesday, and I am flat out today on a range of things including two live events to finish of the edX MOOC we have been running over the last 4 weeks. These sessions go for around 90 minutes each and have given the participants from all over the world a chance to discuss things about Modern Monetary Theory (MMT) and clarify uncertainties etc. It also helps me find out what beguiles those who come into the material for the first time. So it works to benefit both ways. Today, I am sad that the Australian Labor Party federal leader, who is in the box seat to become the next Prime Minister in May this year has just announced his model is a past Labor prime minister (Hawke) who turned out to be a US corporate spy acting against the labour movement when he was President of the Australian Council of Trade Unions (the peak body) and who fast-tracked neoliberalism in Australia during the 1980s. His other model apparently is John Howard, the conservative prime minister from 1996 to 2007, who accelerate that neoliberalism, locked up refugees on remote islands indefinitely (some are still there), turned against the unions, turned against the unemployed, and oversaw the explosion of household debt while his government ran surpluses and crippled public infrastructure and services. What gives? And the music today had to be an antidote to the anger that the Labor leader’s revelations today have engendered. And a tiny thought on Russia.