Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
Its my Friday lay day blog. I am in Sri Lanka at present and will have some reports about that over the next 14 odd days. I was amazed overnight by the comments from IMF boss Lagarde who made overt political statements in an upcoming election year by claiming that David Cameron had shown “eloquent and convincing” leadership in the global recovery. She said they were a model for the European Union. When asked why the IMF had criticised Britain in 2012 for “playing with fire” by invoking fiscal austerity, she said the IMF had “got it wrong” (Source). Hmm. No recognition that Britain cannot be a model for most of the EU nations, given the latter surrendered their currency sovereignty, imposed fiscal rules that prevent growth, and have a central bank that will not act as a responsible currency issuer. Further, it was a false admission of failure. In fact, the IMF got it right and Britain didn’t implement the austerity that it had initially planned and has kept a relative large fiscal deficit that has helped support growth.
Today’s release of the – Labour Force data – for December 2014 by the Australian Bureau of Statistics shows that the Australian labour market modestly in the month of December. The good news is that full-time employment growth was positive and the participation rate rose, and unemployment fell. The bad news is that employment remains below the underlying growth in the labour force and the bias is thus towards higher unemployment. Monthly working hours fell this month, which was curious given the predominant full-time employment growth. But monthly data is volatile and the trends are still fairly poor. Remember that last month, the broad ABS labour underutilisation rate – the sum of unemployment and underemployment – was estimated to be at 15 per cent. That is a crisis. So a month’s growth in December is good but needs to be kept in context. The teenage labour market went backwards again this month, which signals an urgent policy problem that the Federal government refuses to recognise or deal with. They are so obsessed with cutting fiscal deficits that they cannot see the future damage they are causing as a result of the appalling state of the youth labour market.
The British Prime Minister gave a New Year’s speech in Nottingham on Monday (January 12, 2015), where he railed about the “dangers of debts and deficits” as part of the buildup to this year’s national election in Britain. There does not appear to be an official transcript available yet so I am relying on Notes that the Government released to the press containing extracts (Source). However, it is clear that the framing used by the British Prime Minister was seeking to personalise (bring down to the household level) public fiscal aggregates and invoke fear among the ignorant. The classic approach. There was no economic credibility to the Prime Minister’s claims. But that doesn’t mean that it wasn’t a politically effective speech. So woeful was the response by the Opposition that it suggested Cameron’s speech was very effective. That is the state of things. Lies, myths and exaggeration wins elections.
Last week (January 9, 2015), the US Bureau of Labor Statistics released the – Employment Situation – for December 2014. The data showed that “Nonfarm payroll employment rose by 252,000 in December, and the unemployment rate declined by 0.2 percentage point to 5.6 percent”, which suggests the US recovery is on-going. However, the participation rate continued to decline and the employment-population ratio has not showed much sign of recovery. There are two other ways of looking at the labour market, which are typically neglected by the mainstream press analysis, but which provide very useful information about the direction of the labour market. I updated my gross flows database today and also the job openings and quits database. I will consider the latter next week, but today the question is whether workers have a higher probability of gaining a job in the US now than in the recent past.
The youth are our future. The future is for our youth. Poverty used to be a problem of the aged as they left employment and entered retirement. Shorter life spans than now meant it was a relatively short-lived but deplorable state for people to end in. All that has changed. The youth are still our future but there is a much diminished future for them. Poverty risks and burdens have also shifted from the older members of the population to the younger members. From the retired to the jobless and casualised worker. And we get angry when young people get lured away by what they see as attractive, hope-filled futures, that may or may involve remaining alive in the here and now, and wield guns and bombs. Yet the policies we support close the door on any future that might be more acceptable to the rest of us. Neo-liberalism is creating a ticking bomb. The GFC was just the first act. Societies around the advanced world are undermining their own longevity as they accept that fiscal austerity is the only alternative. To what?
Here are the answers with discussion for yesterday’s quiz. The information provided should help you understand the reasoning behind the answers. 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.
Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
Its my Friday lay day blog and today I have been working on social psychology and group dynamics today. I am trying to dig into how economic ideas forms and how they are reinforced by language, media, and the educational system. Many people have researched topics like this but we are aiming to bring it all together into a coherent framework with the added aim of developing a progressive language guide to advance the conceptual ideas that I research and write about. The events in the last few days in Paris have also given me cause for thought within this overall research agenda, given the obvious link with a particularly zealous interpretation of a religious script and the role of economic disadvantage and austerity in fostering what some might call medieval, at best, behaviour. The role of language and conceptualisation is also implicated. I don’t intend to write about the events though. I am not professionally qualified to provide any meaningful input and as an individual I have mixed views on it. I certainly wouldn’t be perpetuating the ‘Je Suis Charlie’ campaign but that doesn’t mean I excuse the behaviour of the barbarians. But barbarism has many forms as does terrorism, and one could easily argue that the sort of austerity that has been inflicted on nations like Greece and France has created a responsive form of terrorism that is more random and very dangerous.
I am travelling a lot today so do not have much time. Apart from my usual projects that are on-going, I started reading the – Court of Directors’ Minutes 2007 – 2009 – that were released yesterday (January 7, 2015) by the Bank of England, after the UK Treasury Select Committee (House of Commons) demanded the Bank act in a more transparent manner in its November 8, 2011 Report – Accountability of the Bank of England. The minutes and accompanying data demonstrate that the Bank and the supporting financial oversight bodies were caught up in the myth of the Great Moderation and the governance of the Bank was captive to a destructive neo-liberal Groupthink. The Bank helped cement the pre-conditions to the crisis, didn’t see it coming, and delayed on essential action, thus ensuring the crisis was deeper and more prolonged than was necessary.