Australia – inflation still falling while the RBA governor keeps inventing ruses to keep hiking rates
It's Wednesday and there is a lot going on in the data release sense -…
Some Wednesday snippets today. Tomorrow, I will write about what I have been thinking about the Eurozone. There has been a lot of hot air about the Franco-German accord that Emmanuel Macron and Angela Merkel came to recently. Hot air is the operative term. The fault lines in the Eurozone continue to widen and the policy dissonance is becoming more acute as they deal, not only with the health crisis, but also the 19 economies that have been starved of investment and infrastructure development. This Saturday (May 30, 2020) marks the 75th Anniversary of the release of the famous ‘White Paper on Full Employment’, which outlined the responsibilities that the Australian government took on to ensure there were jobs for all workers who were wanting work. This White Paper really defined the Post-WW2 consensus and began a period of low unemployment, upward social mobility, the development of public education and health, declining income and wealth inequality and stable wage shares as real wages kept pace with national productivity growth. It wasn’t nirvana because lots of issues were still in need of solutions (for example, gender attitudes, indigenous inclusion, etc). But it was a blue print for an inclusive society with growing material prosperity. The vision was abandoned sometime in the 1970s as neoliberalism took centre stage and political parties on both sides of the fence gave up talking about full employment. To restore full employment as a primary social goal and government responsibility is an agenda I have pursed all my career. We should all read the ‘White Paper’ and recast it in modern terms and fight like hell for a similar vision that is apposite for the times and crises we now face.
I have received a lot of E-mails in the last week asking me why (if I did) I turned down an invitation to participate in a so-called 75th anniversary recognition of the 1945 White Paper on Full Employment, which is being organised this week by the think tank Per Capita.
The fact is that I was not invited. Whether I would have accepted an invitation is moot, especially given some of the actual invited speakers that are attempting to make political capital out of the event, when their track record suggests they have never supported true full employment.
A bit of history though.
Some years ago, it became apparent that it was very difficult to get access to the original White Paper.
So we (CofFEE) created a digital version and you can find it on my home page at – FULL EMPLOYMENT IN AUSTRALIA (The 1945 White Paper).
That was the only on-line archive of the document available and reflected my commitment to keeping these ideas in the public arena and the obvious commitment of my research centre – Centre of Full Employment and Equity (CofFEE) – to the issue.
From 1998, when CofFEE was inaugurated, we held 15 Path to Full Employment Conferences which combined with the National Unemployment Conference to promote the ideas of full employment.
We were largely a voice in the wilderness.
Most of the progressive voices were embracing the government’s training narrative, which I coined as the ‘full employability’ paradigm. It was clear both sides of politics had abandoned the Full Employment paradigm outlined in the ‘White Paper’.
We stopped running the conferences, which were resource intensive on my small staff, when it became apparent the Federal government was no longer allowing (encouraging, whatever) staff in the key departments – ABS, Department of Employment, Treasury, etc – to attend. We used get a good turnout of policy makers and researchers from those departments but then they stopped coming and it made the conference economically unviable.
Five years ago, I organised an event to recognise the 70th Anniversary of the release of the 1945 White Paper on Full Employment. We held that event in Sydney (rather than Newcastle) to make it easier for people to attend.
We sent a written invitation to the head of the Australian Council of Trade Unions (ACTU) Ged Kearney and her deputy at the time to be keynote speakers at the event as a symbol that the trade union movement in Australia was still committed to true full employment and the central role that the government has in maintaining that state.
Remember unemployment is a political choice.
We sent written invitations to many senior union leaders encouraging them to attend.
Ultimately, the ACTU didn’t participate in any way.
Think tanks like Per Capita, did not show any interest and none of their staff attended.
There was some union interest.
The NSW Trades Hall kindly gave us their auditorium in Sussex Street in central Sydney for free as the venue. I was very appreciative of that generosity.
And, we had a great contribution from the NSW Teachers Federation (a really committed union) who gave the audience a stark reminder of how fiscal austerity and the fake private competition in vocational education that the government had forced onto the public education sector had gutted the Technical and Further Education (TAFE) system.
A good audience attended, mainly, activists and some academics.
None of the politicians on Per Capita’s speaking list showed up to our event – all were invited.
Holding a 75th anniversary of the ‘White Paper’ with any speakers who believe in neoclassical NAIRU concepts is not a very inviting prospect.
The Harvard economist who has made a career on trying to prove the impossible – that austerity is good for economic growth and prosperity – died last week.
As the German physicist – Max Planck – observed:
A new scientific truth does not generally triumph by persuading its opponents and getting them to admit their errors, but rather by its opponents gradually dying out and giving way to a new generation that is raised on it. … An important scientific innovation rarely makes its way by gradually winning over and converting its opponents: it rarely happens that Saul becomes Paul. What does happen is that its opponents gradually die out, and that the growing generation is familiarized with the ideas from the beginning: another instance of the fact that the future lies with the youth.
So he was making the point that new paradigms (like Modern Monetary Theory (MMT), for example) do not emerge and take a dominant position by simply showing the shortcomings of the mainstream dominant paradigm.
There is no process of enlightenment for entrenched members of a dominant paradigm that is in decline.
Rather, it is a slow, intergenerational burn.
What Max Planck considered to be the way forward was that the senior members of the dominant paradigm (usually the professors of the discipline in question) had to die off and be replaced by new scholars, who had not yet been indoctrinated in the old ways, and, could be more open to the new ideas and cope with the cognitive dissonance that was a bridge too far for their senior professors.
I have written extensively in the past about this phenomenon in other disciplines.
That is what I thought of when I saw that Alesina had died.
And I supported Brexit!
Anne and Kelvin at the Melbourne Community Radio Station 3CR are hosting a regular series for the Unemployed Workers Fight Back every second Friday from 17:30 to 18:30.
Their home page has all the past – Episodes.
I have done some interviews for them and their latest episode is on the – Job Guarantee (broadcast Friday, May 22, 2020).
I also have done a Station Promo for the station.
3CR was one of the early community radio stations in my home town Melbourne that focused on political issues, trade unions, environmental issues and provided “community language-based programs” in a city that was very diverse in cultural terms.
In 1978, the conservative magazine ‘The Bulletin’ mounted a campaign against the station because it had aired content supporting the rights of the Palestinians. The Jewish Board of Deputies tried to get the licence revoked but a massive grass roots stopped that from happening.
Later in the mid-1990s, it was reported that Victorian Police had undercover cops infiltrating the station as volunteers to “gather information.”
We are working on the MMTed Project and hope to start accepting expressions of interest for enrolments in July but we won’t promise that at this stage.
With limited financial support at present, we are cross-subsidising the development of the venture so far, mostly via funds and labour time from my research group – Centre of Full Employment and Equity (which is located at the University of Newcastle).
MMTed plans to offer educational opportunities in a number of different ways:
So far we have a functional on-line student system now in place and we are testing it for scaling and security.
We will start adding content soon.
We have successfully trialled live streaming and have developed the requisite broadcasting skills and have invested in some elementary software and hardware to make that possible.
We have been running Masterclasses to a number of organisations – in part, to elicit donations. The Masterclass I ran in London in February, which was open to all was fully subscribed, allowed us to trial material to gauge appropriate level of pedagogy. Several classes I have run have been private and aimed at building a network that might support the venture.
We have been developing topic-based presentations for our textbook (Macroeconomics – Mitchell, Wray and Watts) and will start filming small modules in the coming weeks to be integrated into the student system.
We also have filmed and are editing several lectures covering an introductory MMT course. Those lectures will be released around July when we start taking students formally.
With the shortage of funding, the progress has to be staged – we are doing the work around our other jobs and commitments (which have been rather intense the last several months).
As part of the on-going development of our MMTed project, we are introducing – MMTed Q&A – which will be a weekly live program screening on Wednesday nights starting at 20:00 Australian EST.
This will be at:
19:00 Tokyo, Kyoto and Dili
03:00 San Francisco
06:00 New York
The program will run for 30 minutes each week and the format will be around 5 questions will be answered with discussion.
Each week, we plan to bring in some of the MMT experts who can help answer your questions.
If you want to ask a question the process, as a trial, will be to submit your enquiry via the – MMTed Q&A – page.
We do not guarantee that your question will be answered but we will do our best.
Only submissions will valid E-mail addresses will be accepted.
We had originally planned to launch the program tonight – but logistics and time has prevented that.
We will be broadcast the first show next Wednesday, June 3, 2020 at 20:00 Australian EST.
The links to the live stream each week will be published in advance on the site and via Twitter and on this blog site.
As noted above, we are making progress in developing the capacity that will become – MMTed.
Courses are being designed and essential infrastructure is well on the way to completion, even though we have only a fraction of the funds we need to do this.
But we still need significant sponsors for this venture to ensure that we can run the educational program with negligible fees and ensure is sustainable over time.
If you are able to help on an ongoing basis that would be great. But we will also appreciate of once-off and small donations as your circumstances permit.
You can contribute in one of two ways:
1. Via PayPal – which is our preferred vehicle for receiving donations.
The PayPal donation button is available via the MMTed Home Page or via the – Donation button – on the right-hand menu of this page (below the calendar).
2. Direct to MMTed’s Bank Account.
Please write to me to request account details.
Please help if you can.
We cannot make the MMTed project viable on a sustainable basis without funding support.
We will always maintain strict anonymity with respect to donations received, except if the donor desires to be publicly associated with the venture and gives their permission in writing to appear on the Donors Page.
Earlier this month, I wrote about the death of Tony Allen, who is one of the greatest drummers to hit skins (see – BVerfG decision once again exposes the sham of the Euro system (May 6, 2020)).
Today, we reflect on the work of – Jimmy Cobb – who played drums with Miles Davis 6-piece band in the glory days.
I first encountered him through my regard for saxophonist Earl Bostic – Jimmy Cobb was his drummer in 1950.
And after that a litany of gigs with all the great jazz stars of the era – Cannonball Adderley (alto), John Coltrane (tenor), Bill Evans (piano), Wynton Kelly (piano), Paul Chambers (bass), Miles Davis (trumpet), and Jimmy Cobb (drums).
Cannonball Adderley gave him a reference which allowed him to join the – Miles Davis – in 1957. All the great players were in that band and they defined what has become known as the – Hard Bop – tradition.
This form was a derivative of the standard bebop and added the emerging R&B and electric blues influences that later underpinned the soul revolution.
In 1959, they released the momentous album – Kind of Blue – which even non-jazz followers seem to know about and like.
The piano playing of Bill Evans on this album defined the way that this form was evolving as did the simplification into modal playing by Miles Davis.
But it was also the very subtle and delicate drumming by Jimmy Cobb that gave this album such force.
I recommend putting on the album tonight and just concentrating on the drumming, particularly the hi-hat work. You may hear things you have never heard before.
Here is track 5 – Flamenco Sketches – which if you decompose really just consists of an exercise in different scaled solos, all exquisitively executed.
The UK Guardian carried an good obiturary of Jimmy Cobb (May 25, 2020) – Jimmy Cobb, drummer on Miles Davis’s Kind of Blue, dies aged 91.
Another one of the best drummers dead.
That is enough for today!
(c) Copyright 2020 William Mitchell. All Rights Reserved.
This Post Has 9 Comments
Impossible – IMHO – to disagree with Planck’s generalisation, at least insofar as the “hard sciences” are concerned. It recognises a fundamental trait in human nature, and can clearly be seen in action over and over again even in cases of some who were great scientists in their own fields (such as Ernst Mach repudiating and disparaging the foundational ideas of Ludwig Bolzmann, concerning entropy).
But I do wonder a little about its applicability to economics – anything but a hard science. I think economics is at least 50% politics – hence its original designation “political economy”. The ideas of Friedrich von Hayek, deriving from the Austrian school (von Mises in particular) remained those of an isolated fringe throughout the ‘thirties until (except in Germany, in the form of ordo-liberalism as propagated by Walter Eucken at Freiburg) the late ‘sixties from when onwards they rapidly became the only game in town. That happened because those ideas were taken up (modified to fit their own aims by) a coterie of rich and powerful backers plus a sprinkling of intellectuals and some politicians who saw to it that virtually the whole of the academy switched-over its teaching to the neo-classical/monetarist/neoliberal mainstream paradigm – the so-called “neoliberal thought-collective”. There was no patient waiting for the existing Keynesian paradigm to die-out one funeral at a time: instead there was a politically driven, paid-for by an oligarchy, coup accompanied by a purge. The genesis and implementation of the Powell Memorandum’s war-plan exemplifies the process perfectly – in the USA at least.
I point this out as an argument for saying that economics may be an exception to Planck’s proposition. It’s perfectly possible (though at present seeming very unlikely) that the *politically* overwhelmingly-dominant neoliberal paradigm could be overthrown in its turn just as quickly and completely as it overthrew – through *political* action – the preceding dominant paradigm. But the precondition for that might be that (just as in its own case) the *teachers* of mainstream economics have to be purged (not converted) and replaced en masse by teachers – and media figures – of a different persuasion.
Can’t see the monied and privileged giving up their hegemony, ever.
“It’s perfectly possible (though at present seeming very unlikely) that the *politically* overwhelmingly-dominant neoliberal paradigm could be overthrown in its turn just as quickly and completely as it overthrew – through *political* action – the preceding dominant paradigm.” Helpful questioning here of Bill’s reliance on the observation, made by many, that the old order changes, yielding place to the new, only by attrition, by generational replacement. The speed at which the Jesus movement spread throughout the Roman Empire, for example, shows how rapidly a startling new paradigm can uproot an old one already beginning to fade. IMHO, there will be no breakthrough by MMT on the academic level until it has become the lens through which political progressives formulate and advocate their socioeconomic demands. Win over the people, and the academics will follow, not vice versa. And the beauty of MMT in this regard, something it shares with Jesus’ gospel, is its elemental simplicity, which allows ordinary people to grasp its fundamental truth. The power of a currency-sovereign government to create money not linked to debt, and to invest that money to improve the health of people and planet, is MMT’s equivalent to the bedrock message of the fatherhood of god and consequent brotherhood/sisterhood of all human beings. Average people can grasp the MMT story as easily as the gospel story, and the manner in which this pandemic plays out–whether or not such governments will create and invest such money to ameliorate the severe economic suffering caused by their own governmental edicts (however necessary or well-intended)–could provide the perfect setting in which to propagate rapidly MMT’s startling new paradigm. But again, that propagation, if it occurs, will first be among the masses, not the academics, which means that evangelizing must take precedence for the moment over additional analyzing. “The harvest is plentiful, but the laborers are few.”
Physics isn’t economics. The wealthy and the powerful exert a consistent powerful force in one direction only. They control the path to success. Look at Alberto. They are stakeholders. When they feel their wealth and power threaten, they become murderous. All relevant ideologies must serve. They follow the logic of wealth and power. They are committed to wealth and power. They care less for everything else. As long as they have wealth and power, they feel everything can be muddled through. Look at Trump! He’s a concretization of this!
‘And I supported Brexit!’
No you didn’t Bill, you supported Lexit. Let’s get it right 🙂
Brexit was always a vile, proto-fascist movement based on diverting awareness from financialisation towards knee-jerk based on false information and the stirring of immigrant hatred by using bogus explanations of housing shortages and low pay.
maybe you supported Brexit in the sense that there was the break from the EU (in ITSELF positive) BUT you can’t separate brexit from all the other faecal matter that is stuck to it.
“No you didn’t Bill, you supported Lexit. Let’s get it right :-)” (Simon Cohen)
Face it: Bill supported Brexit.
That ought to be “enough said”, but apparently not. So:-
Bill (repeatedly) propounded his detailed and cogent arguments as to why he believed any Brits with progressive views ought to do so. Those arguments were centred upon the EU’s many glaring deficiencies, primarily of a structural but also of an ideological (ie neoliberally-skewed) nature – based on his many years of studying and writing about the EU’s political evolution. But he always took care to stress that whether after exit Britain’s own new-found policy-space would then be put to what he would regard as the best use was a separate issue and – obviously – would depend on internal British future political developments. Personally I agreed with the entirety of that argument.
Bill uses pretty robust language on occasion but no imputation of “fascism” played any part in any of his analysis. Nor did virulent hatred or demonisation – of *anybody* so far as I can recall.
Consistently Intruding that into the debate has been your choice.
Fine, if that’s your thing. But I happen to think that speciously grafting onto Bill’s argument (together by extension anyone else’s sharing his position) your own so-called “Lexit” agenda is just plain misrepresentation and the hate-filled language in which you couch it completely out of place.
Thanks for your Pavlovian response. I could have written that myself as the level of predictability is very high indeed.
Yet again, you did not read my comment and simply projected some of you prejudices upon it in an automoton-like manner.
I’m well aware of your unpleasant right-wing views (which of course, you are welcome to express here-it’s good we have some right wingers who are MMT aware and thus express their ideological biases without the cover of fiscal myths).
I’ve covered this ground with you before yet you persist in repeating the same nonsense, so let me please explain what you missed in my post:
1. When Bill said he supported Brexit I understood what he meant ( I think) but was concerned about the use of the term as Bill clearly subscribed at the time to a group of economists who referred to themselves Lexiter. A group that was almost totally excluded from the debate at the time.
2. The view I am putting forward is that to say one is supporter of Brexit (without adding further nuance) runs the risk of people thinking that you buy into the WHOLE political program connected with that name.
3. Brexit was NOT just about leaving the EU in some sort of neutral way it had a lot of other matter (‘faecal matter ‘as I called it) which was built up by UKIP, BNP, Britain First , Brexit Party and then desperately appropriated by the Tories in 2017 to get the Right Wing vote.
4. Despite what you say, all these groups MANIFESTLY used bogus jingoism, xenophobia and outright lies to garner support involving simplistic, binary thinking about peoples real grievances causing them to be misdirected creating a polarisation within the population which is a classic decoy tactic of proto-fascistic groupthink.
5. I felt Bill (whose work I admire enormously and to whom I owe much of what I understand about economics) was doing himself a disservice by not being more nuanced about the term ‘Brexit.’ That is my view.
I suggest, Robert H, that you wake up from the corpulent slumber of your binary mind and start to see what is going on around you in the UK which is heading for a big data, nudge-theory, agent of maximalisation of self-interest dystopia run by mendacious thugs.
“The view I am putting forward is that to say one is supporter of Brexit (without adding further nuance) runs the risk of people thinking that you buy into the WHOLE political program”
But that would run counter to Plato wouldn’t it.
The intelligent mind can entertain a notion without subscribing to it.
The first thing you need before you can change anything is the power to do so. That mean removing the yoke of the corporate kleptocracy that is the EU.
“The intelligent mind can entertain a notion without subscribing to it”.
Which I’m afraid disqualifies our friend from taking part in any *civilised* debate whatsoever.
As vividly demonstrated above.
I’m bored with this and shan’t bother to read still less react to anything further.