Corporate welfare is rife in Japan’s banking sector

I am travelling a lot today so I am typing this up in between segments. I met a journalist in Tokyo on Friday and we discussed various matters relating to the current policy debate in Japan. In addition, we discussed the latest situation for the Japanese banking sector and the fact that they are recording record levels of net profits almost across the board, but particularly for the three mega banks, and it might surprise readers when they learn the source of those profits. It is actually quite scandalous but demonstrates the bind that the Bank of Japan now finds itself in – of its own doing, while being cheered on by mainstream economists, several of which are probably receiving lucrative consulting income from the very same banks.

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Kyoto Report 2025 – 8

This Tuesday report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

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The achievement of a degrowth future requires system change not green new deals

When I was just coming into adulthood (1972), the – Club of Rome – published its famous – The Limits to Growth – which focused on the consequences of “exponential economic and population growth with a finite supply of resources”. It was a very influential research document generally, but also very important in shaping the way I would think about the world. The critics were many and the fossil fuel industry lobbying powerful and while the ideas did move policy makers somewhat and motivated new movements or gave impetus to existing bodies, such as the – Zero population growth – organisation, the vital message was largely ignored. Even the more recent green-oriented activism has not seen fit to focus on population growth as the primary problem that has to be addressed, if all the other problems of excessive energy use are to be dealt with effectively. Marxists were also very critical of the Club of Rome report for reasons that always escaped me. They criticised the Club’s focus on overpopulation, claiming it distracted us from the real problem, which was the voracious logic of the Capitalism system of production and accumulation. I always thought those attacks were unhelpful and allowed the progressive (Left) response to climate change to be fractured and, hence, weakened.

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Australian labour market – slight improvement after two bad months

For the last two months, the Australian labour market has gone backwards. The deterioration seems to have stabilised in October. The Australian Bureau of Statistics (ABS) released the latest labour force data today (November 13, 2025) – Labour Force, Australia – for October 2025, which reveals a slight drop in official unemployment and underemployment and a stable employment to population ratio – marking time. The best sign this month is that full-time employment growth was relatively strong. However, there are now 10 per cent of available labour not being used in one form or another, so it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

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Supply-side employment services models fail and promote sociopaths

One of the ways in which neoliberal dogma altered the relationship between government and the citizens in Australia was in the way employment services were delivered. Before this dogma gained traction, the Australian government operated the – Commonwealth Employment Service (CES) – which was created in 1946 as part of the grand plan to sustain full employment and improve the material standards of living after the travails of the Great Depression and then World War 2. It was created by the – Re-establishment and Employment Act 1945 – which was “designed to help members of the forces transition back to civilian life by providing for their re-establishment in employment and civil life”. The CES was an integral aspect of this process and provided job matching services, occupational planning, vocational training and support, income support payments, and career guidance. It was a very effective service that operated over many decades after its introduction. There were spin-off services to help those with disabilities (particularly chronically injured service men and women). As neoliberalism took hold in Australia, the narrative shifted towards blaming the unemployed for their plight rather than understanding that the unemployment was due to a systemic lack of jobs being created because aggregate spending was insufficient. Parts of its operation were hived off to (grasping) private operators and eventually the whole operation was privatised in 1998. It has been downhill ever since and the problems arising from this decision by government continue to serve as a blight on the civility and decency of Australian society. The latest news, which I canvas in today’s post is just more of the same.

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Japan challenges – is there really a labour shortage? – Part 6

This blog post continues my exploration of the available productive resources in Japan which would allow a nominal fiscal expansion to be accommodated without adding to the inflationary pressures. People consistently point to the low official unemployment rate as a proxy for a shortage of labour in Japan. It is good that the official unemployment is consistently low and that is a good thing. But the official rate might not be a very good indicator of the degree of labour market slack, especially as Japan has endured many years of low economic growth and falling real wages. A focus on underemployment probably provides a better guide to the availability of idle labour resources. That is what I consider in today’s instalment.

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Australian labour market – getting worse due to policy failure

Last month the Australian labour market went backwards. That trend is now consolidating and the policy makers seem to be finally getting their wish – to put an increasing number of Australian workers out of work. Two years ago, the official unemployment rate was 3.5 per cent. Now it is 4.5 per cent. That is an extra 153 thousand workers who are now jobless. The Australian Bureau of Statistics (ABS) released the latest labour force data today (October 16, 2025) – Labour Force, Australia – for September 2025, which reveals that the growth in the labour force is outstripping employment growth with the consequence that unemployment has risen rather sharply in September – by 0.2 points. Underemployment also rose by 0.2 points and there are now 10.4 per cent of available labour not being used in one form or another. Meanwhile, if you ring the technocrats at the RBA they will tell you that we have adjusted close to full employment. And for that they should be sacked for incompetence in public office. It is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

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Japan – the challenges facing the new LDP leader – Part 2

This is a second part of an as yet unknown total, where I investigate possible new policy agendas, which are designed to meet the challenges that Japan is facing in the immediate period and the years to come. This is also in the context of the elevation of Ms Takaichi to the LDP presidency and soon Prime Minister. She has suggested that her policy agenda will shift somewhat from the current government position, in the sense that she wants lower interest rates, while the majority of economists want higher, and she is advocating further fiscal expansion, while the mainstream want austerity. In the first part I examined the inflation issue in Japan, which suggests that the mainstream view that rates have to rise is misguided. Today, I am considering the scope for fiscal expansion.

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Japan – the challenges facing the new LDP leader

This will be a series of blog posts where I analysis the period ahead for Japan under the new LDP leadership of Ms Sanae Takaichi. The motivation is that on November 7, 2025, the research group I am working with at Kyoto University will be staging a major event at the Diet (Parliament) Building in Tokyo where I will be one of the keynote speakers. The strategic intent of the event is to outline a new policy agenda to meet the challenges that Japan is facing in the immediate period and the years to come. It is highly likely that the Lab Director here at Kyoto, who promotes and Modern Monetary Theory (MMT) perspective and was formerly the special advisor to the Shinzo Abe, will return to that position under Ms Takaichi. This gives the event increased importance for outlining an Modern Monetary Theory (MMT)-based perspective. Today, I examine the inflation issue in Japan.

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My current number one candidate for the worst economics article of the year

Unfortunately, the so-called progressive UK Guardian has an Australian economics editor who is anything but if his economic analysis is anything to go by. The economic news for this week started with the release of the – Final Budget Outcome – (FBO) for the 2024-25 fiscal year for the Federal government (released September 29, 2025). It showed the actual fiscal deficit for the year just gone was slightly lower than had been predicted in earlier official statements. The government celebrated claiming a lower deficit was a sign not only of its good management but was also virtuous. The journalists, however, had a different spin, claiming that while the situation could have been worse, it was still bad. The discussion in the media and the official statement from the Treasurer seemed to omit one rather important fact. The context. This allows us to understand the distinction between ‘good’ and ‘bad’ fiscal deficits, a distinction that the commentariat seems unable to grasp. Anyway, this UK Guardian article is my current number one candidate for the worst economics article of the year. Why discuss it? Because it helps illustrate the essentials of macroeconomics that people need to understand.

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Argentina entering the usual doom loop that austerity inevitably creates

‘A picture is worth a thousand words’ is an old adage, which means that some image can express a very complex message more quickly than a written tract – of the sort that will follow in this blog post. At the Spring 2025 meetings of the IMF in Washington, the IMF boss Kristalina Georgieva was ebullient about how well Argentina was doing as a result of the harsh austerity (‘shock therapy’) that the current President Javier Milei has unleashed on his nation. If you watch the IMF boss please also have a brown bag handy for the obvious nausea that will follow. The scene became even more bizarre when the new Minister of Deregulation and State Transformation. aka El Coloso, one Federico Sturzenegger, during a panel with others including Rachel Reeves, pinned a little badge of a chainsaw to Georgieva’s lapel. It was all very lavish and symbolic and ignored the plight that these elites have imposed on ordinary citizens back in Argentina. What is happening back in Argentina is once again demonstrating how the ideology of austerity initially promises the world to the citizens only to backfire and turn to crisis.

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Australian labour market takes a backward step

I regularly warn against using the observations from one month to tell a story given that the data jumps around a lot at this frequency over time. It is clear that there is a lot of month-to-month variation in the data at present. The Australian Bureau of Statistics (ABS) released the latest labour force data today (September 18, 2025) – Labour Force, Australia – for August 2025, which reveals that the slowdown that has been signalled for some months and was interrupted by last month’s stronger result appears to have reasserted itself. Employment fell overall as did the participation, which saved the unemployment rate from rising. Without the fall in the participation rate, the official unemployment rate would have been 4.4 per cent (rounded) rather than its current official value of 4.2 per cent. That means some workers are likely to have moved into hidden unemployment (outside the labor force) as job opportunities have stalled. Underemployment fell 0.1 point, which was surprising given the significant loss of full-time employment. I expect a revision to this result next month. It remains a fact that with 9.9 per cent of available labour not being used it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

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US Bureau of Labor Statistics revisions are not some arbitrary act but an attempt at making the data as accurate as possible

Last Tuesday (September 9, 2025), the US Bureau of Labor Statistics published a news release – Preliminary benchmark revision for March payroll employment is -911,000 (-0.6%) – which told us that its employment estimates for the current year are likely to be significantly overstated. Given that the BLS has been under intense political scrutiny in recent months, with the US President recently sacking the Bureau’s head, I expect some noise from the conspiracy types to accompany this preliminary statement from the BLS. The fact is that when we undertake the adjustment process that the BLS deploys (explained below), the average monthly change in non-farm employment between March 2024 and March 2025 will turn out to be around half the current estimate – 71 thousand as opposed to 147 thousand per month. In other words, when the revisions are finalised in February 2026, the labour market will be assessed as having started slowing considerably in 2024 and continuing into 2025. I explain all this in the following discussion but emphasise that the process of revision is not some arbitrary act to make some politicians look bad. It is actually a process that upholds full transparency and is a regular activity that national statistical agencies undertake to make the data they publish as accurate as possible.

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Recent podcast and some thoughts on trade

I don’t have much time today as I am travelling a lot in the next few days for various work commitments. But recently I did a podcast for Real Progressives in the US about trade and the external economy. I started the discussion with an interesting quote that I will reproduce here. Regular readers will know that there are several so-called progressive critics of Modern Monetary Theory (MMT) who focus on the way we construct the external economy. They claim it is ridiculous to think of exports as a cost and imports as a benefit and extend that argument to narratives about the advantages of maintaining a strong export-oriented manufacturing sector. Whether we want a strong manufacturing sector is a quite separate discussion from the trade issue. That is what the podcast was about.

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The struggles to teach political economy and the aftermath – we all lost

I started my undergraduate studies in economics in the late 1970s after starting out as an Arts student in the early 1970s studying philosophy, politics, history, anthropology and statistics. The Vietnam War movement and other things interrupted my first years of studies and it wasn’t until the Federal government introduced the National Employment and Training (NEAT) scheme in 1974 that I was able to get some government support to resume my studies, this time as an economics student combining statistics, politics, law and economics. The major student rebellions of the late 1960s around the world had ended and the Monetarists had seized control of the academy, which led to major shifts in the way economics was taught. The world is much poorer as a result of these changes and the end-game problems of neoliberalism that we are all struggling with now – housing crises, welfare retrenchments, aftermath of privatisation and outsourcing, casualised labour markets offering poorly paid jobs with precarious outlooks, rising income and wealth inequality, and the climate crisis to name just a few of the individual crises that are now converging into the poly crisis we are enduring now – are directly related to the shifts in the economics profession in the 1970s. I was a student then young academic through this early period and when I read an article in the Australian Financial Review this morning (September 1, 2025) – Why my dad fought against ‘Albonomics’ at Sydney University (usually behind a paywall) – I could hardly believe what I was reading.

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Australia’s unemployment rate is well above any reasonable full employment level

Central banks around the world tightened interest rates starting late 2021 in some places and there was a systematic period of hikes over the next year or more despite the inflationary pressures mostly showing signs of abatement as a result of factors that were not sensitive to the rising interest rates. In Australia, the RBA started hiking in May 2022 and continued through to November 2022, despite the inflation rate peaking in December 2022. The RBA consistently claimed the labour market was too tight and that the unemployment rate was below the unobservable Non-Accelerating-Rate-of-Unemployment (the so-called NAIRU), which meant to stabilise inflation in their eyes, they had to force unemployment higher. Their logic was not consistent with reality and tens of thousands of workers have lost their jobs over the last few years as a result of deliberate policy choices all for nothing. The inflation outbreak was not the result of excess spending and came down on its own accord as the COVID constraints abated and supply chains worked around Putin and all that. In this blog post I produce some research that further cements that conclusion. There are some technical details but essentially the narrative should be easy to follow.

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Basing a childcare system on how much private profit it generates is a recipe for certain disaster

We knew in the 1980s, when neoliberal-influenced governments started selling off public trading enterprise for not much that the strategy would not deliver on its promises. At least some of us knew and wrote about it then. I was part of a team that analysed the disasters that would follow the sell off of the Commonwealth Bank and Qantas. Qantas, by the way, has gone through a sequence of high profile scandals, including selling tickets for flights it had already cancelled, illegally sacking workers during COVID, and other demonstrations of incompetent and capricious management. Just this week, it was fined $A90 million for the illegal sacking of the baggage handlers. The latest demonstration of how privatisation has failed is the revelation that the child care industry in Australia has become a honey pot for paedophiles and sociopaths as for-profit child care centres pursue profit at the expense of caring for the children in their centres. The solutions are always straightforward but rejected by governments – bring these activities back into the not-for-profit state sector. Meanwhile, the future of tens of thousands of children are being compromised by profiteering by corporations as governments wax lyrical about how much they care for the kids but do very little to stop the abuse.

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Productivity growth is not the only source of increases in material well-being for the majority

One of the issues that emerges when one is studying undergraduate macroeconomics is that there is a curious disregard for the role that income and wealth distribution play in determining the aggregate outcomes, that are at the centre of the study. Most students in my cohort didn’t think about that and the curriculum certainly didn’t encourage such digressions. For me, a student of Marx basically, I was extremely interested in the topic and read a lot outside the standard curriculum, which took me into the work of Sidney Weintraub and others, for example, who demonstrated how aggregate spending was not just influenced by income but also how that income was distributed. I have been thinking about this issue in relation to the way the Australian debate at present is being dominated by the productivity question and the imperative for a degrowth strategy to emerge. This thinking is also in relation to the Federal government’s – Economic Reform Roundtable – which they are running in Canberra this week, led by the Treasurer. The overarching theme is ‘Making our economy more productive’ so we can grow faster. Exactly the opposite of a discussion about degrowth.

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