For the last 30 years, neoliberals have fixated on a simple program: “Get government out of the way,” which meant reduce taxes and regulations. Business will invest more, which will produce a higher growth rate and greater prosperity for all. The belief was that unfettered capitalism could solve all ills.
That’s not how this children’s story is turning out.
Read more...What’s rent got to do with climate change? More than you might think.
Read more...Monetarism began it’s rise to world prominence in the ever-conservative Bundesbank in 1974. But it would be the government of Margaret Thatcher in the UK, elected in 1979, that would truly launch monetarism in central banking. After Thatcher’s monetarist experiment undertaken between 1979 and 1984 every economics student would be taught to recite the various monetary aggregates by heart for at least a decade or two.
This is what accounts for the monetarist bent we see in the economists of the last generation. Basically any economist trained between roughly 1980 and 1995 would be heavily exposed to monetarist dogma. And only those that read alternative accounts of money creation — namely, the theory of endogenous money — would be fully immunised. This explains, for example, why certain economists that champion Keynesian policies — like Paul Krugman — actually speak in monetarist tones.
Read more...Damsel in distress!
Read more...Gaius examines the connections between neoliberalism and the convulsions that climate change will bring to the world.
Read more...A seldom-noticed book review sheds new light on Keynes’ critique of loanable funds theory.
Read more...Peculiarly, despite the importance of tax havens, a pathbreaking paper published in 2013 by Gabriel Zucman of the Paris School of Economics, The Missing Wealth of Nations: Are Europe and the U.S. Net Debtors or Net Creditors? (hat tip Dikaios Logos) has received perilous little attention. Perhaps that’s because, among other things, it undercuts the Bernanke-flattering claim that “global imbalances” were a major driver of the financial crisis.
Read more...Why Obama’s budget is yet another economic policy failure.
Read more...Yves here. Although Keen’s use of the Godzilla metaphor is fun, the unvarnished facts he presents are plenty alarming. Bank of England Governor Mark Carney is actually gleeful at the prospect that England’s banking sector might grow to be as large relative to its economy as Iceland’s and Cyprus’ on the eve of their busts. But even worse, Carney’s enthusiasm for a banking sector that continues with its cancerous (or as Keen would have it, monstrous) growth gives license to bank lobbyists in the US and Europe to press for high rates of growth in their finance sectors so as to defend their national champions.
Read more...One thing we’ve discussed repeatedly is that the activities of large banks, as presently constituted, are purely extractive. And to add insult to injury, GDP calculations exaggerate what in the way of value they arguably do add.
Read more...Yves here. This post does a nice job, if unintentionally, of showing the limits of using economics as the lens for viewing well-established social norms and biological urges.
Read more...Are austerity-promoting Democrats stupid or evil?
Read more...Yves here. I’m a huge fan of Jamie Galbraith’s book The Predator State. Aaron Swartz wrote a good recap. Pilkington, who is also keen about the book, uses it to raise a different set of issues: how it reveals the deep-seated impediments to having well-informed public discussions about economic issues.
Read more...Yves here. I’ve written from time to time how openly partisan the Congressional Budget Office is, not in the traditional sense of favoring one party over the other, but as serving as an key enforcer of neoliberal ideology. For instance, its projections of government debt to GDP ratios were highly misleading by virtue of failing to net out financial assets. And after being called out for that error in paper, what did the CBO do? Make it even harder to find the data to prove the magnitude of their misdirection.
Read more...Ryan Grim and Mark Gongloff of Huffington Post described one of the key mechanisms by which CEO pay has risen to stratospheric levels: cronyism and backscratching among board members, many of whom are also CEOs. And that’s not the only one that gets less attention than is warranted.
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