Welcome to The Weekend Quiz, which used to be known as the Saturday Quiz! The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.
On June 26, 2016, the Bank of International Settlements (BIS) published its – 86th Annual Report, 2015/16 – claimed that “there is an urgent need to rebalance policy in order to shift to a more robust and sustainable global expansion and address accumulated vulnerabilities”. Yesterday (October 5, 2106), the IMF issued its latest – Fiscal Monitor – Debt: Use it Wisely – which as the title might suggest focuses on what it sees as a dangerous exposure to global debt, which it currently estimates to be “at 225 percent of world GDP … currently at an all-time high.” Needless to say, this latest offering from the IMF has attracted news headlines with dire warnings about impending catastrophes. Some of this emphasis is justified but overall the IMF is erring, once again, in the opposite direction to its pre-GFC prediction errors. The context is obvious – mass unemployment continues as economic growth is stalling (or modest at best) because of a combination of non-government sector spending caution and the government obsession with fiscal austerity. The latter obsession has been stoked for years by the likes of the BIS and the IMF and while they do not explicitly recognise that in these latest documents, their stilted support for more fiscal action now, amounts to an admission of prior failures driven by the neo-liberal Groupthink that pervades these institutions.
The European Commission released a new report yesterday (October 4, 2016) – The Youth Guarantee and Youth Employment Initiative three years on – which provides an updated evaluation of the progress of the policy framework designed to reduce youth unemployment. The results are as one would expect after taking into account the design limitations of the Youth Guarantee – pretty disappointing. We learn that for the 20 countries for which there is available data – “Of the 2.5 million young people that left YG schemes … during 2015, less than 0.9 million (35.5%) were known to be in employment, education or training 6 months after exit”. That is an appalling result really and signifies that the design of the program should be reappraised and changed to accord with characteristics of an ideal Job Guarantee program. These results are unsurprising, dismal though they are.
The UK Guardian newspaper began life as the Manchester Guardian in 1821 as an artifact of the cotton mill owners who were opposed to the reform movement (for parliamentary representation to alleviate the mass unemployment and poverty that followed the end of the Napoleonic Wars). The suppression of the reformist agenda culminated in the Peterloo Massacre the cavalry charged into around 80,000 protesters killing and injuring many of them. The police closed the newspaper (Manchester Observer) which had been sympathetic to the reform movement. Step in one John Edward Taylor, a cotton merchant, who established the Manchester Guardian to advance the interests of the capitalists. After a period under the editorship of C.P. Scott, where the Manchester Guardian was significantly more progressive in outlook (for example, supporting the Republican government against Franco; supporting women’s suffrage), the paper has increasingly become a neo-liberal propaganda machine with respect to its economic coverage, irrespective of progressive positions that might take on other issues (for example, its criticism of Israeli government policy). It now rarely publishes anything on economics that passes muster.
I am close to finishing the manuscript for my next book (with co-author, Italian journalist Thomas Fazi) which traces the way the Left fell prey to what we call the globalisation myth and formed the view that the state has become powerless (or severely constrained) in the face of the transnational movements of goods and services and capital flows. Social democratic politicians frequently opine that national economic policy must be acceptable to the global financial markets and, as a result, champion right-wing policies that compromise the well-being of their citizens. In Part 3 of the book, which we are now completing, we aim to present a ‘Progressive Manifesto’ to guide policy design and policy choices for progressive governments. We also hope that the ‘Manifesto’ will empower community groups by demonstrating that the TINA mantra, where these alleged goals of the amorphous global financial markets are prioritised over real goals like full employment, renewable energy and revitalised manufacturing sectors is bereft and a range of policy options, now taboo in this neo-liberal world are available. In today’s blog I discuss trade unions and strategies available for workers.
Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! 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.