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 the rest of this entry »

Spread the word ...
    Posted in Britain, Reclaim the State, UK Economy | 4 Comments

    The Weekend Quiz – December 9-10, 2017 – answers and discussion

    Here are the answers with discussion for yesterday’s quiz. The information provided should help you work out why you missed a question or three! 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.
    Read the rest of this entry »

    Spread the word ...
      Posted in Saturday quiz | 2 Comments

      The Weekend Quiz – December 9-10, 2017

      Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.
      Read the rest of this entry »

      Spread the word ...
        Posted in Saturday quiz | Leave a comment

        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 the rest of this entry »

        Spread the word ...
          Posted in Admin, Music | 5 Comments

          Australia national accounts – growth slows with declining consumption growth

          When the Australian Bureau of Statistics released the September-quarter National Accounts (on September 6, 2017) annual growth was running at 1.8 per cent, around half the trend rate before the GFC. But the striking result was that public spending (consumption and investment) contributed 0.8 percentage points to the growth rate – which means that without that contribution, real GDP growth would have been zero in the September-quarter. Today (December 6, 2017) we received the next ‘rear vision’ account of where the economy has been from the ABS, when it released the September-quarter 2017 National Accounts data. Real GDP rose by 0.6 per cent in the September-quarter 2017 (down from 0.8 in the June-quarter) and the annual growth (last four quarters) was just 1.8 per cent just under half the trend rate before the GFC. The striking result was that household consumption expenditure was very weak while private capital formation improved. The reduced growth in household consumption (with a slight rise in the saving ratio) may signal that the recent credit-fuelled consumption binge is coming to an end and households are starting to restructure their precarious balance sheets. Let us hope so. But this will require a stronger fiscal contribution than is evident in the current data. The external sector made a zero contribution to growth while public spending (consumption and investment) reduced growth by 0.4 percentage points (a sharp reversal on the June-quarter result). Overall, the growth is unbalanced and uncertain.
          Read the rest of this entry »

          Spread the word ...
            Posted in National Accounts | 9 Comments

            The EMU reform ruse – Part 4 and Final

            This is the final part of my four-part discussion of a so-called progressive proposal advanced by German academic Fritz Sharpf to reform the Eurozone into two tiers: a ‘Northern’ hard currency tier and a ‘Southern’ non-euro tier with the latter nations tying their currencies to the euro. We have seen that rather than providing a framework for convergence between the current Eurozone Member States, Sharpfs’ proposal would not liberate the weaker nations from the yoke of the euro, In fact, the proposal would just tie the exiting nations to the euro in a slightly different way – one that will not provide sufficient flexibility to make much difference. Further, Sharpf recommends that the ‘Northern’ nations should retain the euro and operate within the current European Commission orthodoxy. Yet he admits that this regime kills the democratic process. In other words, his proposal sustains that technocratic illegitimacy which would not appear to be the basis for a progressive solution. Finally, while he dichotomises the current 19 Eurozone Member States into a Northern and Southern grouping, there is no reliable way to allocate the Member States across the groups that would remain in the euro and those who would exit. What criteria would reasonably allocate nations to stay in the so-called Northern hard currency zone with the euro? For example, I do not think that a democratic France can ever function reasonably in a hard currency arrangement with Germany. The hard currency zone would effectively just revert to a ‘mark zone’ tantamount to the last EMS arrangement prior to the euro. That configuration was totally unworkable and that dysfunction would repeat itself. In other words, the proposal makes little operational sense. My view is that the vast majority of the Member States would be in the ‘Southern’ group, which would effectively end the EMU in any functional sense. Hardly a proposal for reform.
            Read the rest of this entry »

            Spread the word ...
              Posted in Eurozone | 3 Comments

              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 the rest of this entry »

              Spread the word ...
                Posted in Eurozone, Reclaim the State | 10 Comments

                The Weekend Quiz – December 2-3, 2017 – answers and discussion

                Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! 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.
                Read the rest of this entry »

                Spread the word ...
                  Posted in Saturday quiz | 3 Comments

                  The Weekend Quiz – December 2-3, 2017

                  Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.
                  Read the rest of this entry »

                  Spread the word ...
                    Posted in Saturday quiz | 5 Comments

                    Travelling all day today to where the wind blows and it rains a lot

                    I am travelling a lot today and do not have enough time to think much less write a blog. I am travelling where the wind blows strong and rain is always expected. A perfect place to write once I land and have some other things to complete. On Monday, I will post Part 3 in the series I have been working on this week on EMU reform proposals. The quiz will be back tomorrow as usual. For the moment I am listening to …
                    Read the rest of this entry »

                    Spread the word ...
                      Posted in Admin, Music | 4 Comments