Note what they don’t note

The world’s richest 1% holds about the same proportion of global wealth now as it did at the start of the millennium, according to Credit Suisse’s 2018 global wealth report.

Wealth inequality rose after the financial crisis in 2008 but has stopped rising in the past two years.

Wealth inequality fell during the financial crisis therefore….

To explain MMT to people

It’s often said that people disagree just because they don’t understand each other. I do indeed understand MMT, and I don’t think proponents understand humans. The varied “if this, then do that” in the theory all work. It’s just humans don’t tend to do the things the theory requires. Sure, we can stimulate the economy with more money printing. It’s just that people with the taste for that never do stop nor tax back the resultant inflation.

We can even explain this to people who have no idea of economics at all. Here’s one way of putting it: Politicians can spend as much as they like on whatever, and if it goes too far they can just raise taxes. Sound like a deal? It could also be described as follows: Giving politicians a blank checkbook and telling them to go have fun is likely to work out well, right?

To be honest, I doubt it

The Nobel prize-winning economist Paul Krugman has predicted that there will be a recession in America by the time Donald Trump comes up for re-election at the end of next year.

There will be one, sure. And Donald hasn’t aided matters by the tax cutting stimulus at the top of the cycle. But there’s 18 months to go and we’d need 6 months of negative growth to be in recession – unlikely to say the least.

Possible, sure. But I tend to think that’s Krugman the columnist talking there, not Krugman the economist.

Interesting

Ana Joaquim, from Wood Green, who is originally from Portugal, earns £8.50 an hour as a barista at BEIS, which outsources its catering to a company called Aramark.

Looking out my window into Portugal where the minimum wage is €600 a month or so.

So, Ana, you should be paid more why?

For Biggie

A slightly puzzling thought here:

Of course a privateer statelet like Singapore or Hong Kong can get rich that way. The upper bound seems to be approximately Switzerland, and plenty of smaller states ain’t no Switzerlands. Britain is well above that upper bound.

So, small states and small states only can prosper by having low barriers to trade with hte rest of the world. Large states cannot.

Hmm.

But large states have no internal barriers to lots and lots of trade among their large population. Something which makes those places richer. The internal economy is always much larger than any international trade.

So we seem to be saying that tariff free no barrier trade is just super except when it crosses national borders. Which doesn’t seem to work either as a piece of logic nor empirically.

Why not?

Speaking separately Mr Fox admitted a zero tariff approach was among a range of options being considered.

But he insisted that was not “what I would propose and I have not actually heard anyone else in government propose it”.

Is there no one in government who understands the basic economics of trade? That unilateral free trade is the only logical stance?

Rather fun

Modern monetary theory seems to be just macroeconomic populism:

Macroeconomic populism is an approach to economics that emphasizes growth and income distribution and deemphasizes the risks of inflation and deficit finance, external constraints and the reaction of economic agents to aggressive non-market policies

In more detail:

Macroeconomic populism is a term coined by Rudi Dornbusch and Sebastian Edwards in a 1990 paper.[1] The term refers to the policies by many Latin American administrations by which government spending and real wages increase in a non-sustainable way leading to inflation, then stagflation and ultimately an economic collapse that drops real wages to lower than they were before the populist period began. The paper cites as examples Salvador Allende in Chile (1970–1973), and Alan García first term in Peru (1985–1990). In 1991, Dornbusch and Edwards edited a book titled The Macroeconomics of Populism in Latin America which analyzed more cases like Argentina between 1973 and 1976, Mexico between 1970 and 1982, and Brazil.[2]

The heart of development economics

The reason places like Africa are poor is not because of capitalism, exploitation, the residues of colonialization, or even the long, dark shadow of the slave trade. Nor is it poor even because of idiotic socialism or the propensity of politicians to run off with the national treasury. You can blame any selection of those as you wish, and with some of them you’d even be right, but they are all proximate causes. The ultimate reason is simply that poor places are using less productive technologies, richer ones more productive. All of those varied things can be blamed for reducing the use of more advanced technologies, but it is the lack of technological advance itself that causes the poverty.

Fun and interesting

Hundreds of customers with smart meters will cook their Christmas Dinner without paying a penny for their power, after Octopus Energy said it would offer four free hours of energy.

The challenger brand said it would enable the price pause by tweaking its so-called “time of use” tariff, which is available to people with smart energy meters. Octopus is making the festive gesture following fears that smart meters might cause bills to spike at times of high demand because of “surge pricing”.

Greg Jackson, the chief executive, said the supplier wanted to show that “plunge pricing” was possible too.

Industrial usage of electricity being about nothing on this day, right?

Actually, don’t we get to see the stats on this in real time these days? Percentage of ‘leccie from different sources etc? And is the auction market price also listed? And, if it is, what was that price last Xmas Day? Anyone got this to hand?

Stupidity

An agreement has been reached at the eleventh hour between Chief Pleas and Sark Electricity to keep the power on and avoid any disconnection.

The two parties initially failed to reach a deal during a meeting on Wednesday evening and the power was set to be cut off at midnight tonight.

Sark Electricity had been in dispute with Chief Pleas for a number of months after the government forced the company to drop its price 14 pence to 52p per unit recommended by an independent price regulator.

The agreement reached last night now states the price of electricity will go back up to 66p per unit to allow the company to sell supplies without losing money.

Sark’s government now has three months to buy Sark Electricity.

Electricity on Sark will cost what electricity on Sark costs. Doesn’t matter who owns it. Tey can – and probably will – subsidise it thought taxes. But it’ll still cost the same.

The global 1%

When left populists rail against elites they are generally referring to economic and political power. Their target is the richest 1% that owns half the world’s wealth: the newspaper moguls, bankers, political donors and corporate lobbyists; Tony Blair, the Clintons, the Bushes, Old Etonians, Old Harrovians, Oxford, Cambridge, Yale, Harvard, Bullingdon. Those people who run things unchecked from a position of absolute and relative privilege that is often inherited. The left believes that the prospects for democracy weaken as inequalities grow and oligarchies emerge which govern in their own interests. Society then operates according to the golden rule – those who have the gold make the rules.

But when rightwing populists focus on elites they are mostly referring to culture. Their targets are filmmakers, actors, lecturers, journalists, “globalists”, spiritualists, scientists and vegans; the Clintons, Hollywood, Londoners, New Yorkers, Silicon Valley, Sussex and Berkeley.

All of those will be in the global 1%. Own a home and a pension in Britain? Global 1% pretty much.

Teaspoons

The village was originally home to 40 staff and their families, as well as the hub of activity for the 1,200 workers who laboured on the dam. Waitaki Dam was the last in New Zealand to be constructed using , as part of a government initiative to reduce the unemployment rate.

Logic professor, logic

The late Prof Mick Moran, who taught politics and government at Manchester University for most of his professional life, had, according to his colleagues, once had “a certain residual respect for our governing elites”. That all changed during the 2008 financial crisis, after which he experienced an epiphany “because it convinced him that the officer class in business and in politics did not know what it was doing”.

After his epiphany, Moran formed a collective of academics dedicated to exposing the complacency of finance-worship and to replacing it with an idea of running modern economies focused on maximising social good.

If the officer class is clueless – obviously it is and that applies to any group we might promote to such status – then there’s no manner of “running” the economy is there? Which is, of course, why we use liberty and markets to do so, so that there’s no clueless wonder “running” things.