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Showing posts from 2016

The essence of evil

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I have a confession to make. I have been reading the Daily Mail.

No, I haven't gone over to the dark side. Rather, I have been true to myself. I have always tried to keep an open mind. And sometimes that means doing something of which my critical self does not approve. Like reading tabloid newspapers.

Reading is an important part of my life. I've always needed time to myself, to read and think. Without that space, my mind fogs and I become irritable. I suppose I am a bit introverted, really.  But shutting people out, even temporarily, can be difficult. Frances has her head in a book again? Just shout to get her attention. Works every time. And now that I have become my father's part-time carer, time for reading and thinking is hard to come by. The fog is slowly descending on my mind.

I discovered long ago that the easiest way of creating time to read and think is just to disappear for a while. So, over the years, I have collected some favourite boltholes. One of them, bi…

Market failure

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I hate the term "neoliberal", but in this piece I am going to use it, simply for want of a better word.

Neoliberal economic dogma says that the public sector crowds out the private sector. So the public sector should only step in as a last resort to provide for those that the private sector cannot or will not serve. In recent years, we have interpreted this to mean that the public sector should only provide for the very poorest in our society. If people can afford to pay, the private sector will provide. 
Is this true? Well, true believers say it is. So, if an elderly man with a gold-plated defined benefit pension and substantial savings needs sheltered accommodation because he is no longer safe to live on his own, he should have no problem finding it, should he? 
I did an internet search for sheltered housing on the Isle of Sheppey, where the elderly man lives. This is what I found:

Only one of these enclaves is sheltered housing: the other is accommodation restricted to ov…

The in-betweeners

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How effective is monetary policy?

Highly effective, according to the Governor of the Bank of England. In a speech earlier this week, Mark Carney robustly defended the Bank of England's record:
"Simulations using the Bank’s main forecasting model suggest that the Bank’s monetary policy measures raised the level of GDP by around 8% relative to trend and lowered unemployment by 4 percentage points at their peak. Without this action, real wages would have been 8% lower, or around £2,000 per worker per year, and 1.5 million more people would have been out of work." Well, lots of us might agree that monetary policy did help to offset the damaging effects of bank and household deleveraging in the aftermath of the worst financial crisis since the 1930s.

Carney suggested that monetary policy also dampened the effect of premature fiscal consolidation when everyone panicked about government deficits in the wake of the Greek crisis:
Fiscal policy quickly came under severe strain as…

Brexit, trade and echoes of the past

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Brexit supporters have been severely critical of the OBR for its grim outlook for the UK post Brexit. The OBR is by no means the most negative of the professional forecasting bodies, and historically its forecasts have tended to err on the side of optimism, as Duncan Weldon observes. But it struggles to find anything good to say about post-Brexit Britain. In particular, it is distinctly negative about the future for Britain's external trade.

Brexit is above all a shock to trade, since its primary impact will be on Britain's trading relationships, not only with the EU but with other countries too. At present, we have no real idea what these will look like once the UK has left the EU. The OBR is therefore forecasting under extreme uncertainty. If there is one thing we can be sure of when forecasting under extreme uncertainty, it is that the forecasts are even more likely than usual to be wrong. This does not indicate that the forecasters are biased. It just means they have litt…

True patriotism

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Treason is popular. As the tide of protectionism rises around the world, the concept has come back into vogue. If you believe in the right of all people, whatever their colour or creed, to seek life, liberty and happiness for themselves and their children, you are unpatriotic. I am one of many who have been labelled a "traitor" for voting Remain in the EU referendum. But I have got off lightly. The same label cost Jo Cox MP her life.

Jo was a fervent Remain supporter. She believed strongly that Britain would be better off as a member of the EU. As Thomas Mair shot and stabbed her in June 2016, shortly before the EU referendum, he shouted "This is for Britain”, “Keep Britain independent”, and “Britain First”. Political assassination? No. Execution. Treason used to be a capital offence, and Mair regarded Jo as a traitor because of her support for Remain. To him, killing Jo was an act of patriotism.

Patriotism is taking an ugly turn. We wear poppies on Armistice Day, hono…

Reinventing work for the future

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We have a crisis of work. The secure, well-paid jobs of the past - many of them in manufacturing - are disappearing. What is replacing them is insecurity and uncertainty. Low-paid, part-time, temporary and seasonal work. The "feast or famine" of self-employment. The so-called "sharing economy", where people rent out their possessions for a pittance. The "gig economy", where people are paid performance by performance - or piece by piece. "Piecework", we used to call it. Perhaps we should rediscover this name.

Piecework has been the lot of most humans throughout history. Secure full-time jobs for wages have existed for less than a hundred years. And they were never available to everyone. In the post-war "golden age" of manufacturing to which many would like to return, most men had secure full-time jobs - but women did not. My father left school at 16 and went to work for an insurance company. He stayed with that company for his entire w…

The dangerous scheming of stupid politicians

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There is growing speculation that the Governor of the Bank of England, Mark Carney, will not extend his term. Carney originally agreed to a five-year term, which would end in 2018, but it had been thought he might extend to the more usual eight years for a Bank of England governor. This is now looking increasingly unlikely.

Carney has come under fire from pro-Brexit politicians for warning that Brexit is likely to increase inflation and unemployment and reduce economic growth. They accuse him of "talking down" the UK. This is some chutzpah, from politicians whose incompetence and arrogance has stunned the world. If anyone is "talking down" the UK, it is the Three Clowns currently running the Brexit project, and their baying packs of supporters.

I have been severely critical of Bank of England policies. I don't like the over-reliance on QE: I think it is a useful crisis tool, but far too much has been expected of it. I think that the independence of the Bank of…

Raising interest rates is not that simple, Lord Hague

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The present period of very low interest rates is widely assumed to be temporary, a consequence of the 2008 financial crisis and subsequent central bank action. Because of this, as the financial crisis fades into the mists of time, there is growing political pressure for "normalisation" of interest rates. Here, for example, is William Hague warning that central banks must start to raise rates or face losing their independence:
The only way out is for the US Fed to summon the courage to lead the way to higher interest rates, and others to follow slowly but surely. If they fail to do so, the era of their much-vaunted independence will come, possibly quite dramatically, to its end. Hague gives ten reasons why low interest rates are a bad idea. His points can be summarised thus:


the "reach for yield" by savers who want higher returns drives up the price of assetshigher asset prices increase wealth inequality, fuelling popular angerpension funds are struggling, forcing…