Greece “neither thrived nor struggled” – the financial press alt world

It is my last blog post for the year. And we leave the year with not much gained from a progressive perspective. The mid-term elections in the US just swapped deficit-terrorist Republicans (who have been compromised by the big-spending Trump) with ridiculous PayGo Democrats, who are intent on repeating all their previous mistakes. The Brexit negotiations reveal how appallingly compromised the Tories have become and how venal the European Commission is. The British Labour Party fiscal rule shows that the next British government hasn’t yet jettisoned its Blairite past and its New Keynesian economic advisors are dogmatically taking Labour down a path it will regret. Italy has been bashed into submission by the European Commission bullies, which a week or so later, choose to turn a blind eye to France breaking the rules, because the Gilets threaten the whole show. And Germany still accumulates massive external surpluses in violation of European law and nothing happens. Happy New Year.

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The Weekend Quiz – December 29-30, 2018 – answers and discussion

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.

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More Brexit nonsense from the pro-European dreamers

What editorial control does the UK Guardian exercise on Op Ed pieces? Seemingly none if you read this article (December 24, 2018) – What Labour can learn about Brexit from California: think twice – written by some well-to-do American postgraduate working for DiEM25 in Athens. But when Thomas Fazi and I sought space to discuss our book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017) – or when I have sought space to provide some balance to the usual neoliberal, pro-Europe bias, the result has been no response (yay or nay). We never received a response to our solicitation. Even if we ignore the obvious imbalance in experience and qualifications (track record) of the respective ‘authors’, it seems that the UK Guardian only wants a particular view to be published even if the quality of that view would make the piece unpublishable in any respectable outlet. Go figure. Anyway, I now have read the worst article for 2018. And, I thought that the Remain debate had reached the depths of idiocy but there is obviously scope for more if this Guardian attempt at commentary is anything to go by. And I know the Guardian journalists read this blog – so why not allow Thomas and I to formally respond to all this Remain nonsense?

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On holiday

The blog is on holiday until Thursday, December 27, 2018. All the best from my local beach (Nobbys). Today is an economics free zone. Music discussion if you click on …

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US Federal Reserve decision exposes moral bankruptcy and incompetence

On December 19, 2018, the Federal Reserve Bank Open Market Committee (FOMC), which determines the monetary policy settings in the US, increased the policy interest rate by 25 basis points to 2.5 per cent, as part of its plan to ‘normalise’ monetary policy. Even within the parameters of their own logic, it is hard to see any inflation threat. Long-term inflationary expectations suggest that people expect an unchanged situation over the next decade. Which suggests that the current unemployment rate is not seen as a threat to the price level. Now, while the FOMC decision may or may not cause some slow down in real GDP growth, given the blunt and ambiguous nature of monetary policy adjustments, the really disturbing aspect of the policy change is the fact that the FOMC members were plotting to push up unemployment by more than 1.2 million people as a plan to lower the inflation rate by a few basis points. Not only is that an obscene revelation but the fact that the FOMC use economic models that cannot tell them that the economic costs of such a shift are massive compared to any benefits that might arise from a slightly lower inflation rate tells us that policy is being made using deeply flawed, useless economic theory and models. Moral bankruptcy and incompetence rules.

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The Weekend Quiz – December 22-23, 2018 – answers and discussion

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.

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Australian labour market – weak with broad underutilisation rising

Today, the Australian Bureau of Statistics released the latest data – Labour Force, Australia, November 2018 – which shows that the employment growth was all due to part-time jobs growth (probably related to the Xmas season) and both full-time employment and hours worked were negative. Not a good sign. The moderate employment growth, however, trailed behind the growth in the labour force and unemployment rose a bit. The broad measure of labour underutilisation rose by 0.3 points to 13.6 per cent with underemployment rising by 0.2 points. Again, a sign of a weak labour market that is relying on part-time jobs for growth. The Australian labour market remains a considerable distance from full employment. There is clear room for some serious policy expansion at present.

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