Sometimes, not often, I read some economic analysis that is sound. In the constant barrage of mainstream economics telling us that budget deficits are causing the crisis to linger; that interest rates are about to rise sharply because there is too much public debt; that inflation is about to go hyper because bank reserves have risen; that taxes will soon sky-rocket to pay back the debt; and all the rest of the lies that students are forced by lecturers around the world to rote learn, to find a well-reasoned piece of analysis is very refreshing. My attack dog propensities subside and I am able to think about what is being written – seeing where I agree and disagree and even learn some things. Such was my experience this morning when I read a new Report from the US-based The Way Forward Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness. It will not be a case of common sense prevailing because the forces against this type of clear thinking are many and powerful. But it is evidence that views that are not incompatible with Modern Monetary Theory (MMT) are being developed and thrown into the public debate. In this case, the authors also have some public profile. The ideas in this Report would provide a Way Forward.

Yesterday, October 5, 2011, the UK Office of National Statistics released their Quarterly National Accounts, June 2011 for the second quarter. The data revealed an economy that barely grew at all in the period from April to June. It also showed that households are continuing to reduce their overall consumption. The data also revised earlier releases and we now learn that the UK recession was deeper (for three quarters) than previously thought but was one quarter shorter. The data release continues to demonstrate that the policy settings (which are pushing towards contraction) are completely wrong for the spending trends that are being revealed in the private and external sectors. If the British economy goes back into recession there will be only one cause – the wilfully irresponsible management of fiscal policy.

Last night, I was listening to the ABC Current Affairs program PM and they were running a segment – ‘Occupy Wall Street’ protest growing and they were interviewing American journalist Jeff Madrick. At one point in the interview he said: “I hope the American establishment has the courage to ask one fundamental question; what is Wall Street for? What are they supposed to do?” The answer to those questions are in order: not much that is worth anything; and not what it was created to do.

It is a public holiday in NSW today – Labour Day – which originates from the “eight hour day movement, which advocated eight hours for work, eight hours for recreation, and eight hours for rest”. History will tell you that on April 21, 1856, the stonemasons and building workers on building sites around Melbourne, Australia (my home town) laid down their tools and marched to Parliament House to call for an 8-hour day. They were successful and were the “first organized workers in the world to achieve an eight hour day with no loss of pay”. Similar action saw the spread of the 8-hour day to the other states. Now Australia is in the farcical situation where 600 thousand workers cannot get any hours of work, 750 thousand cannot get enough, and millions are coerced by employer-friendly industrial relations legislation into working more hours than they desire just to keep their jobs. In recognition of the holiday I will write less than usual! The issue surrhttps://billmitchell.org/blog/?p=16325&preview=trueounding wages and conditions of work are crucial to understanding why the world entered the crisis and why it is persisting. At present policy makers, in response to the disaster that beset them in 2007-08, are skating around the edges of reform and are refusing to recognise that they will have to engage in a wholesale abandonment of neo-liberal policies before sustainable recovery will be possible. There is no more stark demonstration of this reality than in the area of wages.

I’m sitting here at the airport typing away while the morning TV news in the background is showing the Australian Treasurer acknowledging that the economy is slowing and undermining his obsessive desire to achieve a budget surplus next year. Tax revenue continues to decline as activity stalls. Why? Because the Government withdrew the fiscal stimulus too early which caused real GDP growth to stall. Not to be beaten though the resolute Treasurer is now exploring further spending cuts to get the budget “back on track to surplus”. Its high comedy in one sense but high tragedy in the real sense – that unemployment is rising and employment growth falling. But the Treasurer is running with the rest of the G-20 Finance ministers and they are all tripping over their ideological shoe laces

On Monday, September 26, 2011 the British Shadow Chancellor gave a speech (his first major speech in that role) to the Labour Party Conference in Liverpool. The Full Transcript of the Speech is courtesy of the New Statesman. Balls ended his speech by saying “There is a better way” and I agree – the current macroeconomic policy settings in the UK are destructive and will be regretted. The problem is that Balls’ path to prosperity is not that better way which means the British people are in the same boat as a lot of electorates – caught between the devil and the deep blue sea. Playing Ball is not a better way.

It seems my attempt to escape the Lands of Austerity last week unscathed was a pipe dream. I have been slowed over the last days by a European flu of some sort. So I have less energy than usual which doesn’t tell you very much but might explain why I might write less today than on other days. I am also behind in my reading. But I did read a little over the weekend, especially the documents and statements pertaining to the IMF annual meetings, which had the effect of worsening my condition. I also dug out an old 1933 document which helped restore my equanimity. It allows us to frame today’s leadership failure in history.

The US President delivered his long-awaited speech outlining the proposed American Jobs Act today to a packed Congress. The room was full of self-serving, anti-intellectuals masquerading as the representatives of the people of America. Eventually, this sham will be clear to all and the “American people” will “demand action”. If they don’t then the neo-liberal domination of policy which has led to the crisis and the extended malaise will continue to impoverish them. Bold action was needed from the President at least to demonstrate leadership so that the democratic forces could start to pressure the T-pots. Unfortunately, the President doesn’t seem to understand that it is easy to create jobs. A government just has have the will to do so.

I have noted in recent weeks how the deficit terrorists have started to suggest that Ireland, which led the world into enforced fiscal austerity, is now demonstrating how such a policy can spawn growth. I don’t know what planet these commentators live on but when you examine the most recently available data and understand what it is saying you would not conclude that Ireland is emerging as a picture of health. What I learn from the daily data that is coming out from that part of the world is that fiscal austerity is ensuring that Britain is tracking Ireland down the drain.