Is there hope for a post neoliberal world?

I grew up in a society where collective will was at the forefront and it is true to say people looked out for each other. The state – at all levels – had various policy structures in place to provide levels of economic protection for the least advantaged members of society. Having grown up in a poor family, those structures were important in allowing me to stay at school and then go onto to university. It also allowed my friends on the housing commission estate (state housing) who had different skills (not academic) to get apprenticeships and build careers that gave them material security in that way. It wasn’t a perfect period – there was racism, misogyny, and xenophobia – but as mass education spread, my generation left a lot of that behind. I was thinking about that when I read the recent article by Robert Reich in the UK Guardian (December 29, 2026) – Americans are waking up. A grand reckoning awaits us – which carried a resonance of some of the things that I have seen emerge in Australia as well as this 4-decade or so neoliberal nightmare reaches some sort of denouement.

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Trump’s “best is yet to come” and the data reality are diverging – for the worse!

I haven’t provided detailed commentary on the US labour market for a while now. To some extent the month-to-month changes are not that interesting but after a lapse, discernible trends can be detected. The US President is about to give a national address today in the context of declining poll popularity and a series of negative trends emerging. His constant narrative that everything is great and America has never been so soundly governed (by him!) is finally starting to come up against the reality of data, which has been masked a little by the government shutdown, which meant that key statistics were not published in a timely manner or are being published late. The labour market data has been so affected and the most recent release by the US Bureau of Labor Statistics (BLS) last Tuesday (December 16 , 2025) – Employment Situation Summary – November 2025 – shows a deteriorating situation and negates the political bombast coming from the President and his cronies.

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Talk of a Plaza Accord 2.0 should heed the lessons of Plaza Accord 1.0

Pressure is building from the US for a Plaza Accord 2.0 as part of the US President’s attempts to ‘improve’ the US trade situation. I use the term ‘improve’ cautiously because the US President seems think that making it more difficult and expensive for US consumers and businesses to access imports from abroad is a benefit to the same. While Japan is being discussed in this frame, the real US target is China. However, it is unlikely that the US will be able to bully China into agreeing to a similar deal that the US effectively forced on to Japan and other nations under the Plaza Accord 1.0 in 1985. Further, the Plaza Accord 1.0 was extremely disruptive – some say it caused the asset price bubble in Japan, which led to the secular stagnation, after the bubble burst. And, there is little evidence that it led to any significant long-term benefits for the US anyway.

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US Bureau of Labor Statistics revisions are not some arbitrary act but an attempt at making the data as accurate as possible

Last Tuesday (September 9, 2025), the US Bureau of Labor Statistics published a news release – Preliminary benchmark revision for March payroll employment is -911,000 (-0.6%) – which told us that its employment estimates for the current year are likely to be significantly overstated. Given that the BLS has been under intense political scrutiny in recent months, with the US President recently sacking the Bureau’s head, I expect some noise from the conspiracy types to accompany this preliminary statement from the BLS. The fact is that when we undertake the adjustment process that the BLS deploys (explained below), the average monthly change in non-farm employment between March 2024 and March 2025 will turn out to be around half the current estimate – 71 thousand as opposed to 147 thousand per month. In other words, when the revisions are finalised in February 2026, the labour market will be assessed as having started slowing considerably in 2024 and continuing into 2025. I explain all this in the following discussion but emphasise that the process of revision is not some arbitrary act to make some politicians look bad. It is actually a process that upholds full transparency and is a regular activity that national statistical agencies undertake to make the data they publish as accurate as possible.

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The so-called ‘land of the free’ is now a failed state and heading towards totalitarianism

Last Friday (August 1, 2025), the US Bureau of Labor Statistics published their latest – Employment Situation Summary – for July 2025. What followed was somewhat extraordinary. The data and the revisions to the previous two months data releases (which is standard practice) showed that the US labour market is in decline. It starkly runs counter to the official Trump narrative that the US is booming. While we don’t have enough evidence to really establish causality – it is likely (based on theoretical conjecture) that the highly volatile policy regime that Trump runs and his tariff flip flops is undermining the confidence in the economy. We need a few more months of data yet before we can be sure. But the BLS results certainly support the view that Trump’s economic policies are not working to advantage the American public. The extraordinary thing was that Trump then sacked the BLS head and signalled a further descent towards totalitarianism.

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The US dollar is losing importance in the global economy – but there is really nothing to see in that fact

Since we began the Modern Monetary Theory (MMT) project in the mid-1990s, many people have asserted (wrongly) that the analysis we developed only applies to the US because it is considered to be the reserve currency. That status, the story goes, means that it can run fiscal deficits with relative impunity because the rest of the world clamours for the currency, which means it can always, in the language of the story, ‘fund’ its deficits. The corollary is that other countries cannot enjoy this fiscal freedom because the bond markets will eventually stop funding the government deficits if they get ‘out of hand’. All of this is, of course, fiction. Recently, though, the US exchange rate has fallen to its lowest level in three years following the Trump chaos and there are various commentators predicting that the reserve status is under threat. Unlike previous periods of global uncertainty when investors increase their demand for US government debt instruments, the current period has been marked by a significant US Treasury bond liquidation (particularly longer-term assets) as the ‘Trump’ effect leads to irrational beliefs that the US government might default. This has also led to claims that the dominance of the US dollar in global trade and financial transactions is under threat. There are also claims the US government will find it increasingly difficult to ‘fund’ itself. The reality is different on all counts.

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Commentary on Moody’s downgrade gives the game away – finally

We sometimes encounter commentary that blows away the smoke that provides cover for important myths in the world of economics and finance. Whether that commentary knows the import of its message is questionable but it certainly has the effect of casting aside a myriad of fictions and redefines the sort of questions that one can ask. Such was the case last week following the decision by the ratings agency Moody’s on May 16, 2025 to ‘downgrade’ US government debt ratings from Aaa to Aa1. While many commentators acted in Pavlovian fashion and crafted the ratings downgrade as signifying that the US government was “more likely to default on their sovereign debt”, one influential opinion from the mainstream came out with the conclusion that “there is next to zero chance the government won’t be able to pay its creditors”. Which really game the game away and exposed these ratings agencies as political attack dogs representing sectional interests that want less government money going to welfare and more to them – among other things.

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I wonder how progressives are viewing the fact that they gave credence to a key Trump operative

It’s a big data week for me and today’s post is more of a news information offering rather than a deeper analysis of a topic, which is my usual pattern. However, I discuss in some detail recent appointments to the US Health Administration, some of which were prominent during the early COVID years and received considerable promotion from so-called Left progressives. One of the leading characters in the attack on government restrictions is now Trump’s appointment to the major national health research funding agency and he has vowed to defund any institution that doesn’t follow the ‘freedom’ dictates of the authoritarian regime that Trump is running. I wonder how these progressives are viewing the fact they gave credence to a key Trump operative.

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Australia is not America – elections after Trump

Last week, the – 2025 Canadian federal election – was held and the Liberal Party won for the fourth consecutive time securing 169 seats (in the 343-seat House of Commons), just short of a majority. They also won the popular vote (43.7 per cent of the vote – up 11.1 per cent), which was the first time they had achieved that since 2015. The Opposition Conservative Party leader lost his own seat in the election. On January 7, 2025, national polling saw support for the Conservatives of around 47 per cent and support for the government around 20 per cent. By the time the poll came, that had shifted dramatically in favour of the government. In between, came Trump. The UK Guardian analysis (March 19, 2025) – Canada’s Liberals on course for political resurrection amid trade war, polls show – said the shift “has little precedent in Canadian history, reflecting the outsized role played by an unpredictable US president”. To some extent, the craziness of the US political situation at present also impacted on the – 2025 Australian federal election – which was held on Saturday (May 3, 2025). The incumbent government, which was well down in the opinion polls before Trump took power, won in a landslide achieving the highest two-party preferred outcome in Australia’s electoral history. The parallels with the Canadian outcome are strong despite the different voting systems in both countries. Moreover, the conservative Liberal-National Coalition in Australia, the dominant party in the Post-WW2 era has been reduced to being little more than a far Right populist party. Similar to the Canadian situation, the Opposition leader also lost his seat, which was the first time that has ever happened in Australia. So Trump is undermining the very movements he is trying to promote. But what is very clear is that Australia is nothing like the US, despite some commonalities (language – sort of!).

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US National Accounts – growth contracts but likely to be temporary

People are closely watching the US data at present to see what the impacts of the recent tariff decisions by the new US President might have. I am no exception. Yesterday (April 30, 2025), the US Bureau of Economic Analysis published the latest US National Accounts figures – Gross Domestic Product, 1st Quarter 2025 (Advance Estimate) – which provides us with the first major data release since the new regime took office. The fact though is that this data cannot tell us much about the tariff decisions, given that Trump’s – Executive Order 14257 – only really became operational on April 4, 2025, although there had been some earlier tariff changes before then.

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