Proposed pension reform in Japan (and elsewhere) misses the point

Earlier this year, I analysed how decisions taken by the Japanese Government Pension Investment Fund to speculate in global financial markets have played a significant role in the depreciation of the yen. In this blog post – Japan’s Government Pension Investment Fund and the yen – mainstream macro myths driving bad policy (February 2, 2026) – I demonstrated how massive quantities of workers’ savings held by the GPIF are being channelled into the private, for-profit investment banks and hedge funds, which deliver huge profits to these financial market players. Moroever the GPIF has shifted its investment portfolio significantly towards foreign bonds and shares post 2010, which has seen the GPIF selling large tranches of yen and adding to the excess supply in foreign exchange markets. The Japanese Finance Minister is now pressuring the GPIF to reallocate its portfolio into domestic assets to boost the domestic growth rate. A similar trend is happening in the UK and Australia. What does it mean? The conclusion lets you see they the proposals miss the point.

Read more

Imagine if the British government wrote off its holdings of its own debt

Last week, I considered recent research published by the BIS – Bank of International Settlements pushing the ‘growth friendly austerity’ myth – which was a classic example of how the sense of urgency and crisis is engendered by constructing the narrative in such a restricted manner that real world options are excluded which contradict the mission. If we assume that key features of any system are unable to be activated, then it is easy to speculate that the system will fail. This communication technique abounds in the financial and economic commentariat and leaves listeners and readers with a sense of anxiety and distort the political process. The commentaries that typify this approach all invoke a sense of urgency – ‘act now or else’ – and like to quote large dollar (pound, yen etc) sums because the commentator knows that our eyes glaze over with numbers that are beyond our own experience. Further, when the article parades as an Op Ed, the writer regularly just rehearses some press release or perhaps, less formal statement, that some organisation like the IMF has made. The other part of the scam is that these organisations are elevated into the sphere of sources that are to be believed without question. Two recent examples are the recent articles appearing in the UK Guardian – Burnham’s funding gap: what state are UK finances in for the PM-in-waiting? (published July 3, 2026) – and – Act soon to change ‘unsustainable’ direction of UK debt, OBR warns (published July 7, 2026).

Read more

Bank of International Settlements pushing the ‘growth friendly austerity’ myth

I have been ‘at it’ for decades now but it never ceases to amaze me how mainstream macroeconomic analysis is carried out and the way the public just accepts the conclusions without understanding the basis on which the analysis generates those conclusions. Chapter II in the BIS Annual Economic Report (released June 28, 2026) – High public debt and shifting financial markets: challenges for central banks – exemplifies this point. The conclusions are rather stark but they all flow on some key assumptions that could be varied at any time by the government, which would nullify the conclusions. In other words, the projections of crises and monetary emergencies are all predicated on the assumption that the government would not step in with its unique capacities to prevent the catastrophe. In what world would we think that would happen? Not the real world, and the GFC and pandemic are recent examples where the alleged constraints are jettisoned by government in the blink of an eye.

Read more

Depreciating yen – look beyond the obvious for the explanation

The editorial in The Japan Times (July 3, 2026) – Little hope for a declining yen amid structural pressures – is an example of how mainstream commentators seize on superficial facts, apply some ideology, and come up with the wrong conclusion. As I have noted many times, the challenges facing Japan are many, not the least being the high savings rate, which is dominated by corporations. After the asset collapse in 1991, Japanese corporations have become large-scale net savers, with strong profits and very weak investment. The corporations are sitting on massive stockpiles of cash and liquid assets, and use on-going financial surpluses (profits greater than costs) to reduce their debt exposure. The 1991 crash (and the massive debt buildup that preceded it) has left a psychological scar on the Japanese firms. The Takaichi strategy is to ‘shock’ the economy into increasing investment rates via a large fiscal injection. This has implications for the currency value, which I will explain.

Read more

What the new British government needs to do to get the unions on side with climate action

The recent extreme weather in the northern hemisphere, the twin monster tropical storms in Japan, the impending shutdown of the – Atlantic meridional overturning circulation (Amoc) – among other happenings is telling us that things are changing for the worse. Clearly long-term weather trends are open to interpretation because the available data is sketchy the further one goes back. And, narratives from historians tell us that there have been rather extreme weather events in the past, which have led to many lost lives. The National Museum of Australia has an interesting information page – Heatwaves – which helps us understand the historical experience in Australia. There are other credible sites that deal with global events. However, the serial nature of the recent weather trends and the interlinked changes in the oceanic conditions, the cryosphere, rain and storms, and temperature allows us to counter the arguments that are presented to refute climate change science, which rely on claims that the current period is just part of a recurring cycle. These events are also relevant to the current political machinations in the UK, where Starmer is going (yay!) and the new probably PM is under fire from both business and unions for wanting to do something about climate change. In this post, I discuss what can be done.

Read more

Australian labour market – slight improvement after dismal results in April

The Australian Bureau of Statistics (ABS) released the latest labour force data today (June 25, 2026) – Labour Force, Australia – for May 2026 – which showed that the labour market improved slightly in May after a poor showing in the April figures. However, there are now 10.2 per cent of available labour not being used (either unemployed or underemployment), which makes a farce of the RBA’s claims that the labour market is tight. There is substantial scope for more job creation given the slack that is present.

Read more

Replacing Starmer/Reeves with another captive of the finance sector will change nothing

Successive governments in the UK – Labour and Tory – have pushed the nation to the brink where there is little capacity left for progressive policy. And I am not referring to Brexit. Rather, the elevation of the financial sector as a primary force in the economy, dating back really to the Callaghan Labour government and then fast tracked by Thatcher and Blair, has resulted in almost every important part of the economy being devoured by the greed machine. This is relevant to the leadership struggle in the UK Labour government, which should see the lamentable Starmer replaced by the (to be assessed) Andy Burnham. The latter would be the first Prime Minister to hail from Lancashire since David Lloyd George (1916-22) although Harold Wilson came from nearby Yorkshire. The problem the new leader will face apart from his own misguided notions about fiscal capacity and the need for ‘strict’ fiscal rules is that the financialisation of the British economy (like most economies in this neoliberal age) is so pervasive that the spheres of resistance to change are everywhere.

Read more

Towards a progressive rebuttal of the far Right narratives

I saw a clip from John Stewart’s Daily Show yesterday where he showed some Fox News commentators (I think) talking about how they hate ‘woke’ and how they now have to put up with public events featuring “half naked men” (their slight against the gay community). Stewart then showed the next clip – the cage fight at the White House where two half naked men were featured. The way he presented it was (as usual for the show) very funny. Yesterday (June 17, 2026), the leader of the far Right party in Australia (One Nation) gave her first ever – Speech – to the National Press Club in Canberra and apart from several outrageous statements (such as “Businesses also tell me you can’t sack people these days, they’re on their phones, they don’t work, they don’t turn up, they actually are lazy” and the “hoax of global warming”), she announced that Australia cannot be a multicultural society and that “we must be monocultural”. The fact checkers have already exposed her lack of honesty with respect to the actual data surrounding many of her assertions. But the question of culture and national cohesiveness is a subject that I am working on as part of my aim to publish a sequel to my 2017 book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World – which I co-authored with Thomas Fazi. The question that the sequel begins with relates to what defines a viable currency area and what legitimates government fiscal policy. I see this issue as a central extension of the work on Modern Monetary Theory (MMT) because it provides a sociological basis for currency sovereignty. One needs to develop a concept of the – Demos – to answer that question. I use that concept in the original sense.

Read more

Can capitalism survive? Not if we want to solve the climate and poverty crisis

The opening line of Part II of Joseph Schumpeter’s 1942 book – Capitalism, Socialism and Democracy – was “Can capitalism survive? No, I do not think it can”. His thesis was not that capitalism would perform badly, quite the opposite. Rather the considered that “its very success undermines the social institutions which protect it, and inevitably creates conditions in which it will not be able to live and which strongly points to socialism as the heir apparent.” The climate crisis facing the world is combining with the other outcomes of neoliberalism to create what is now called a poly crisis. Recently, a group associated with the United Nations Human Rights Council has released a – Roadmap for Eradicating Poverty Beyond Growth (published June 10, 2026) – which proposes a series of policy shifts designed to address aspects of the poly crisis. While it recognises that we must “escape the trap of growthism”, it fails to articulate that the fundamental logic of capitalism is capital accumulation that requires growth. To escape the trap, we must move beyond that mode of production. Merely tweaking policy structures within capitalism will not solve the problem.

Read more
Back To Top