Lack of universal health care due to application of spurious ‘sound finance’

I have been reading several reports in the past week – ranging from studies using dodgy input-output tables to claim the regions that voted most enthusiastically for Brexit will suffer the most – part of the never ending ‘modelling’ of the alleged disaster – to reports by the historians tracking the impact of austerity on the rise of the Nazis in pre-war Germany. All interesting. I am particularly researching the way in which the Common Agricultural Policy impacted on Britain and why it will be good to be free of it. But one report struck me as fundamental to the way in which neoliberalism has led societies astray and damaged the most defenseless citizens of the world. On December 13, 2017, the World Bank and the World Health Organisation (WHO) published its latest – Tracking Universal Health Coverage: 2017 Global Monitoring Report. This is an audit report to keep track of the progress towards the UN’s 17 Sustainable Development Goals, which were agreed upon in September 2015. One of those goals is health and well-being and within that ambit comes, among other targets, universal health care provision. We learn that “at least half of the world’s population cannot obtain essential health services” and health care service deficiencies are chronic at the poorer end of the income and wealth distribution. The reason is not a lack of real resources to be deployed. Rather, these appalling results are persisting because governments apply neoliberal ‘sound finance’ principles to their spending choices (with the IMF bullying them to do so). So we find major cuts to health care service provision in nations because they claim they cannot raise enough revenue to pay for the provision. In currency-issuing nations, no matter how low the average income levels are, that sort of claim is always spurious.

Read more

British Tories reject the ‘free market’ neoliberal myth

The conservatives in the British Labour Party are obviously worried. The UK Guardian article (December 2, 2017) – Labour faces subversion by Momentum and far left, says Roy Hattersley – reports the claim by former Deputy leader, Roy Hattersley that British Labour is “facing the biggest crisis in its history” because left-wingers are engaged “in a systematic takeover of the party”. Gosh. Sounds shocking. A traditionally left-wing political party slowly wresting it back to mission after being hijacked by the right-wing, neoliberal Blairites. That sounds like Armageddon. The Blairites tried to kill off Jeremy Corbyn several times as they continued to undermine him in the public eye and bleated about how he was going to destroy the Labour Party. They then fell silent when he nearly delivered the Party government in the recent national election and saved many of their jobs. Now, with a by-election in Watford, the conservatives are back to it although it has to be said that Hattersley cannot be called a Blairite. He represents the pre-Blairite right-wingers who backed Dennis Healey as he imposed Monetarist ideology on the Party in the mid-1970s. And this article came out soon after the Tory government announced a major ‘socialist’-style industrial plan. In its press release (November 27, 2017) – Government unveils Industrial Strategy to boost productivity and earning power of people across the UK we learn that the Tories are finally understanding that it can actually improve the fortunes of British workers by abandoning the failed neoliberal, ‘free market’ narrative and recognising, instead, the central role to be played by the nation state in advancing well-being and economic fortune.

Read more

Travelling all day today – up hill and down dale

I am travelling a lot today and do not have enough time write a blog other than to tell you that. Last Thursday, work took me to remote destinations where the wind blows strong and rain is always expected. This Thursday, I am pursuing my craft and spreading the Modern Monetary Theory (MMT) word up hill and down dale. I have also been reading various new ‘reform’ proposals for the Eurozone – they seem to be coming out at a rate of one a day or so it seems. They all fail to get to the nub of the problem – it is essentially so flawed with so many historical and cultural constraints that it needs to be abandoned. One lame idea tells us to ‘fix the roof while the sun shines’. I will comment on that next week. The problem – as my recent tweet notes – is that the ‘roof’ is the least of the problems. It is falling in for sure but only because the foundations are rotten to the core. I also wouldn’t actually characterise the current situation in the monetary union as being ‘sunny’. If it is, then spare the thought of what ‘cloudy’ much less ‘rainy’ might be. The quiz will be back tomorrow as usual. For the moment I am listening to …

Read more

The EMU reform ruse – Part 3

This is the third part of my mini-series which have been evaluating one so-called progressive reform approach to the Eurozone disaster. Part 2 provided essential background, given that one of the proposals being circulated by progressives involves the weaker Eurozone nations re-establishing their own currencies and then pegging them against the Euro. I showed that attempts to maintain any form of fixed parities among the core European states has been chaotic and led to breakdown. Along the way, the weaker trading nations were subject to austerity biases and elevated levels of unemployment. Given the scope of the topic, it will take me two more parts to finalise the discussion. In this part and the final part 4 I will discuss the second proposal from German academic Fritz Sharpf, which appears to have gained some traction with the Europhile Left, much to my disappointment. Here we commence the analysis of Sharpf’s “Two-tiered European Community” proposal.

Read more

The lame progressive obsession with meaningless aggregates

Maybe the British Labour Party could get Nancy Pelosi to do some stupid tweets for them as well. She is an expert at it – see my blog – When neoliberals masquerade as progressives. She thinks it is smart progressive politics to post tweets criticising her political opponents for a policy that “explodes the deficit … dumping … debt on every man, woman & child in America”. A fallacious argument. But moreover, a very stupid strategic argument because it fails to educate the public on what deficits and public debt are and what the capacities of a currency-issuing government and locks the progressive side of politics into no-win dilemmas. When it is their turn to govern they quickly find that they have no room to move on government spending because their own taunts when in opposition are thrown back at them. Same the world over. The progressive side of politics seems to have a lame obsession with meaningless aggregates – like the size of the fiscal deficit or public debt to GDP ratio. Pathetic is not the word.

Read more

When neoliberals masquerade as progressives

One wonders what goes on in the heads of politicians sometimes. Perhaps not much other than a warped sense of their purpose in life – which for some seems to be to advance themselves rather than advance societal well-being. In recent days, fiscal debates have raged on both sides of the Atlantic. In the US, there is the Trump tax cut debate. The correct progressive response would be to focus on why these cuts will not advance anybody but the rich and will do very little if anything to create new jobs. Unfortunately, prominent Democrats such as the awful Nancy Pelosi have been spouting stuff about the tax cuts increasing the federal deficit and federal debt. At a time, when the Republicans are abandoning the deficit terrorism to advance their own interests, the Democrats seems to be reinforcing the ‘deficits are bad’ narrative. Instead, they could have seized the opportunity to say to the American people – see deficits are fine but the real issue is what we do with them. Pelosi and her ilk seem incapable of adopting that quality of leadership. In the UK, the reality is dawning on the British government that the austerity harvest is anything but what they had hoped it would be. No surprises there. Austerity undermines growth which can easily increase the fiscal deficit when the goal is the opposite. But the way that reality is being handled in the progressive press is pathetic. The UK Guardian, for example, has headlines about ‘black holes’ and is giving oxygen to reports that talk about the deteriorating fiscal situation in the UK. Readers are left with nothing but neoliberalism reinforcement of the ‘deficits are bad’ myth. A shocking indictment of the progressive debate in the UK.

Read more

British mainstream media spreading dangerous MMT ideas

The British newspaper, The Independent seems to be getting in beds with Commies lately. The evidence I elicit is the recent article (November 4, 2017) – Actually the magic money tree does exist, according to modern monetary theory – by a journalist Youssef El-Gingihy. It gives oxygen to the views of an Australian economist, one William Mitchell who espouses what is known as Modern Monetary Theory (MMT) – yes, you got it in one – another crackpot economic approach that fails to recognise that most professional economists reject it, which means it must be wrong. Right! More than two thousand people have shared the article, which means the socialist cancer is being spread by these Modern Monetary Theory (MMT) fanatics. One commentator thought it was a “rearly stupid article”. Don’t worry about the spelling error. The opinion is what mattered and it was dead-centre true. Mitchell must be one of the most stupid economists ever. Like his MMT mates who seem to be tweeting and being retweeted in ever increasing frequencies these days, which just goes to show that people can be indoctrinated to believe anything. Some comments were made on the article, which just reflected what anybody who knows anything about economics would say – you know – government spending will ultimately cause “hyperinflation” – everybody knows that. Further, one insightful commentator noted that because Britain is not at war there is “no justification to rack up big debts” – everybody knows that. Mitchell obviously wants the government to rack up huge debts, although he doesn’t actually say that. But if the government does run deficits it will obviously intend “to soft-default on debts through inflation” which will then mean “the markets will smash the pound”. Everybody knows that too. For me, I couldn’t get any traction in the comments section – most commentators seemed to be supportive of this mad professor’s crazy ideas – so I decided to E-mail him. I didn’t get any satisfaction from that either. He is obviously a commie in disguise. He said something about Chartalism. I think that was just a typo in his reply – probably he was trying to say that he was a charlatan. What is the world coming to!

Read more

When the mainstream Left gets lost down its Europhile hole

Thomas Fazi and I recently published an Op Ed in Social Europe (October 20, 2017) – Everything You Know About Neoliberalism Is Wrong, which is a precis of the main arguments in our new book Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017). It seems that our message resonates with a lot of people. And, inasmuch as it is deeply critical of the extant Left position on ‘internationalism’ who continually seem to live in terror of those amorphous financial markets just waiting for a chance to send a nation state bankrupt, it seems to have also upset some who I consider to be the ‘lost’ mainstream Left. One such critic accuses us of using a “presumptuous title” but he is seemingly unable to capture the pop culture irony that is inherent in the choice. Just a bit of fun Andrew. Since when is comedy presumptuous? But failing to grasp the subtlety of the title is just the start. Things go downhill from there.

Read more

Time to nationalise superannuation in Australia – even conservatives think so!

In our new book, Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017) – Thomas Fazi and I argue that that reversal of many of the neoliberal changes that governments have agreed to over the last three or more decades is not only possible but desirable. While many of our proposals exploit the legislative power that a democratic government clearly possesses (such as reregulating banking etc), other proposals directly rely on the currency-issuing capacity of the government. One such proposal is to create national pension funds (or superannuation funds in the Australian terminology), which provide an efficient and secure vehicle for workers to channel savings while working to improve their retirement prospects later in life. This idea runs counter of the neoliberal myth, which claimed that the ‘market’ would be a better vehicle for creating institutions to manage workers’ saving and maximise pension entitlements. In Australia, we are now witnessing the indecent greed and major rip-off of workers that the ‘market’ solution has delivered. Even one of the architects of privatised superannuation schemes, the former conservative Treasurer Peter Costello is seeing the folly of his work. In the UK Guardian article (October 13, 2017) – Peter Costello calls for nationalisation of superannuation – we learn that the former treasurer believes that “Australia’s collective $2.3 trillion pension pot would be better invested by a government agency”. The natives are getting restless!

Read more

British productivity slump – all down to George Osborne’s austerity obsession

Apparently, whenever some poor economic news is published about the United Kingdom, journalists have to weave in their on-going gripe about the outpouring of democracy in June last year that saw the Brexit vote to leave successful. Its hysterical really. The most recent example is from the otherwise sensible Aditya Chakrabortty from the UK Guardian (October 17, 2017) – Who’s to blame for Brexit’s fantasy politics? The experts, of course. The story has nothing much to do with the June 2016 Referendum but more about massive forecasting failures of the Office of Budget Responsibility. But somehow the story opines about the lies told about Brexit and a fiscal “bloodbath” – the latter being the description for the fact that the fiscal deficit is likely to increase a little as a result of a slower than expected economic growth outcome. The UK Guardian continually writes about these two obsessions – the first that Brexit will be a disaster and the second that the fiscal position of the British government is in jeopardy and will undermine the capacity of the government to defend the economy if a major downturn comes along (as a result of the ‘Brexit disaster’). The narratives are interlinked – Brexit is bad, it will cause deficits to rise which are bad, and the government will be powerless as a result of the rising deficits to stop the bad consequences of Brexit – which is a big bad. All propositions are largely nonsense. Brexit will be bad if the British government continues to implement neoliberal policy. Rising deficits do not alter the spending capacity of government. And as a currency-issuing government, Britain can always arrest a recession, if there is political will. The fact is that the OBR forecast errors are just part of the neoliberal lie. And the productivity growth slump the OBR has now ‘discovered’ predates the Brexit referendum by years and is all down to the misplaced austerity imposed by George Osborne in June 2010. But it is disappointing to read this sort of stuff being repeated by so-called progressive commentator. There is clearly more work to be done via education.

Read more

Three recent interviews – transcripts and video

Today, I have translated two interviews I did while I was in Europe recently. The original interviews were in Spanish. The first interview was with Andrés Villena Oliver for CTXT and was published in the Spanish newspaper Público. It was conducted at Ecooo in Madrid on September 28, 2017. The the second interview was with journalist Marta Luengo Garcés from the progressive newspaper El Salto Diaro. It was conducted at the Principe Pio Hotel in Madrid on September 29, 2017. You can get a feel for the concerns of the progressive journalists in Spain by the type of questions they asked me. I have also included the video of an interview I did yesterday (October 16, 2017) with Steve Grumbine of the Real Progressives. That should keep readers more than busy until tomorrow.

Read more

Prime Minister Corbyn should have no fears from global capital markets

It is clear that the British Tories are looking like the tawdry lot they are as the infighting over the leadership goes on, more often rising to the surface these days as wannabees circle the failing leader Therese May. Her performance at the Tory Annual Conference was poor, and I am not referring to her obvious difficulties with the flu (or whatever it was). I have been stricken with the flu since I left the US a few weeks ago and occasionally struggled for a voice as I gave talks every days for the 2 weeks that followed. It is obvious there is little policy substance in the Tories now and it is only a matter of time before she is ejected. At the same time, the British Labour Party leadership is showing increased confidence and are better articulating a position, that is resonating with the public. They are even starting to look like an Oppositional Left party for the first time in years and I hope that shift continues and they drop all the neoliberal macroeconomic nonsense they still utter, thinking that this is what people want to hear. A growing number of people are educating themselves on the alternative (Modern Monetary Theory, MMT) and demanding their leaders frame the debate accordingly and use language that reinforces that progressive frame. And, in that context, it didn’t take long for the mainstream media to start to invoke the scaremongering again. It is pathetic really. The New York Times article (October 5, 2017) – Get Ready for Prime Minister Jeremy Corbyn – rehearses some of these ‘fears’. It is also true that the Shadow Chancellor has expressed concern himself about these matters – without clearly stating how a sovereign state can override anything much the global financial markets might desire to do that is contrary to national well-being.

Read more

A former UK Chancellor attempts to save face and just becomes confused

On May 6, 1997, just 4 days after coming to office in what was to become Tony Blair’s retrogressive regime, the then British Labour Chancellor Gordon Brown announced that Labour would legislate the so-called independence of the Bank of England. The BBC claimed this was the “most radical shake-up in the bank’s 300-year history”, which gave “the bank freedom to control monetary policy”. Gordon Brown’s legacy to the British people, of course, is in his famous ‘light touch’ regulation, which he boasted about in the lead up to the GFC but went silent about soon after. But he has come out of the woodwork recently to reflect on his decision to set up the Monetary Policy Committee (MPC) within the Bank of England and abandon the practice where the Chancellor and the Governor of the Bank would meet on a monthly basis to determine interest rates. He claims that decision kept Britain out of the euro and was a great success. But then in the same speech he railed against the ‘political’ intrusion of the MPC into broader fiscal policy debates and its failure to conduct monetary policy correctly during the GFC. A very confused narrative. The point is that central banks can never be independent of treasury departments and the claims to the contrary were just part of the depoliticisation of policy that accompanied neoliberalism. Brown is also wrong that setting up a separate MPC kept the nation out of the euro. Britain realised the euro would be a disaster long before 1997.

Read more

Gross Flows analysis of Australian labour market – some improvement – August 2017

Today, I am writing from the Brighton, UK and today the first event of the British part of our Reclaim the State tour is to be held. See below for details. Last week, I attended the first International Modern Monetary Theory (MMT) conference, which although there have been many MMT-focused workshops or conferences in the past, was truly a gathering of the clan. The large number who attended (over 200 I believe) shows we are making progress. There is a snowball rolling and it will inevitably get bigger. The only danger of these focused events is that the ‘group’ can easily get trapped into thinking that the views expressed are the norm, which is the first step towards Groupthink. They are clearly not the norm and further work is required, but the fact that we can hold such a large conference focused exclusively on MMT is a significant step forward. I will write more about the MMT conference another day. Today, I want to focus on some statistics analysis – I had time on the plane journey across the Atlantic (Kansas City to London) to delve into the latest Gross Flows data from the Australian Bureau of Statistics. Gross flows analysis provides a different way of viewing the labour force data and often reveals some interesting trends that are hidden in the net analysis of labour market data.

Read more

Reclaiming the State

On June 3, 1951, the Socialist International association was formed in London. It is still going. It is “a worldwide association of political parties, most of which seek to establish democratic socialism”. Its roots date back to the C19th (to the First International formed in 1864) when it was considered beneficial to unite national working class movements into a global force to overthrow Capitalism. Internal bickering among various factions led to various dissolutions and reformations over the last 150 odd years. In 2013, the membership split when the German SPD decided to set up an competing group, the Progressive Alliance, which saw a host of so-called social democratic parties (including the Australian Labor Party) join and desert the SI. Both bodies are dogged by internecine conflict and members who have fallen for the neo-liberal macroeconomic myths. More recently, DIEM25 has emerged to pursue a Pan-European vision of Left-wing politics. The more recent dynamics of these movements deny power of the nation state in a globalised economy and global financial flows. They are all failing because of this denial.

Read more

British employers exhibit on-going greed but lie about it

One of the abiding and recurring trends, accentuated in the neo-liberal era, is the apparent ‘concern’ for the low-paid by the captains of industry. They continually warn against allowing pay increases for this cohort because they are – so the story goes – deeply concerned about the damage it will do to the employment prospects. What they really mean is that they know pay rises at the bottom end of the pay structure don’t alter employment levels significantly but have some impact on profitability. That is, they reduce profits a little. And that is the concern they are really expressing. The British Chambers of Commerce have called for a freeze on real wages for the lowest paid workers in Britain despite profitability soaring and the share of business profits in national income rising. The expression ‘where do these characters get off’ comes to mind. Although it is hardly surprising. British entrepreneurs tend to be lazy and take the easy way out when they can to further their own ends.

Read more

Disturbing pay trends in Britain

Earlier this month (July 3, 2017) the British Office of National Statistics (ONS) released a research report – Wage growth in Pay Review Body Occupations – which basically summarises what has gone wrong with the world under neo-liberalism. While the Report is about the UK, which has particular characteristics, the trends identified are almost universal and reflect the dominance of the ‘free-(not!)-market’ austerity mentality that has crippled progress around the world. It also helps us understand why the British economy is stalling again and why the latest data on household spending is so disturbing. These trends have nothing to do with Brexit. They are all down to misguided government policy (austerity) and erroneous strategies that seek to generate fiscal surpluses when the non-government sector needs to also run surpluses (and the two aspirations are not simultaneously achievable). British workers are paying for this incompetence. The economists who gratuitously hand out the spurious advice, unfortunately do not lose their jobs.

Read more

Something is rotten in the state of … Britain

When I was trawling through the British fiscal statements in 2010 and 2011, hidden in all the detail (an obscure Annexe) was a very explicit statement that told me that the British government was inflicting austerity on the economy and relying largely on the growth of non-government indebtedness to offset the fiscal drag and restore the growth cycle. In the same documents but more visible (in the main fiscal statement), the Government was claiming that the non-government debt position that had deteriorated sharply in the lead up to the crisis was unsustainable as a growth strategy. The mainstream press didn’t pick up on the contradiction. Now, the same press seems alarmed with the latest data from the British Office of National Statistics that shows that the Government’s strategy has been working like a charm – the non-government saving ratio has plunged, household debt escalated sharply, non-mortgage debt has accelerated and to top of the impending disaster – real household disposable income growth has been negative for three successive quarters (the first time since the mid-1970s). None of these trends are surprising. I predicted them 6 or 7 years ago. I have been watching the results steadily unfold. But for the mainstream commentators it is all a big headline – ‘look at what we have discovered’ … As Marcellus in Hamlet notes as the dead king’s ghost appears in the palace – “Something is rotten in the state of Denmark” although he might have been referring to modern-day Britain under the Tories (apologies to William Shakespeare).

Read more

When Austrians ate dogs

You will notice a new ‘category’ on the right-side menu – Future of Work. It will collect all the blogs I write as part of the production of my next book (with long-time co-author Joan Muysken) on that topic. We aim to present a philosophical, theoretical and empirical analysis of a plethora of issues surrounding the role, meaning and future of work in a capitalist society. As I complete aspects of the research process I will produce the notes via blogs. Eventually, these notes, plus the input from Joan will be edited to produce a tight manuscript suitable for final publication. Today, I am discussing an important case study that needs to receive wider attention. Its lack of presence is in some part due to the fact that it was written up in German in 1930 and escaped attention of the English-speaking audience until it was translated in 1971. In selected social science circles this study provides classic principles that transcend the historical divide. The relevance of the study is that it provides a coherent case for those, like me, who argue that work has importance to societies well beyond its income-generating function. Humans need more than just income and in a society where work is considered normal time-use and frames the time we spend not working, it is an essential human right. Progressives who think that only income should be guaranteed by the state rather than work miss many essential aspects of the issue. The case study is important in that respect.

Read more

There is a true oppositional Left forming and gaining political traction

I have avoided discussing the British and French parliamentary elections to date, mostly because I couldn’t stomach the outcomes – May back and the neo-liberal Macron dominant. I also was tired of reading stupid columns from the likes of William Keegan and the rest of the Guardian neo-liberals raving on about Brexit and Jeremy Corbyn. Keegan is like an old record that lets the needle get stuck in a groove. He seems to have written the same column since June last year where the reader is told about the Brexit disaster and how Britain will be impoverished. But both elections, particularly the British outcome confirms what we have been noticing for a few years now – there is finally what we might call a true oppositional Left forming and gaining political traction in these nations. This is a Left platform that concedes little to the neo-liberals. It is vilified by the conservatives and the so-called progressive commentariat (such as the Guardian writers) and politicians (New Labour in Britain) as being in “cloud cuckoo land” and predictions from all of sundry of electoral wipeouts have been daily. But the results demonstrated that the message (such as in the Labour Manifesto) resonates with millions of people (40 per cent of those who voted in Britain). It is now a mainstream Left message that has taken over the British Labour Party and the Blairites are hiding under rocks. There is hope. People will only tolerate being bashed over the head for so long. There is now retaliation going on.

Read more
Back To Top