tag:blogger.com,1999:blog-8764541874043694159.post5233805535725702669..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: Austerity and the rise of populismFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-8764541874043694159.post-8968141570133695692016-11-18T02:35:31.831+00:002016-11-18T02:35:31.831+00:00Thank you Frances, for this detailed and expansive...Thank you Frances, for this detailed and expansive analysis of where Western democracy has arrived after 40 years neo-liberalism - and thanks to Friedrich Hayek and QE.<br />If you haven't seen it already there's a wonderful documentary titled 'Requiem of the American Dream' with Noam Chomsky. You can see it on Netflix. Noam takes us back to USAs founding fathers (a group of wealthy white guys) and leads us up through to the 20th Century's creation of the 'consumer' (who's sole purpose is to 'buy stuff'). The 1960s in the USA was the one period where the system was shaken up a bit due to mass activism. That seems to be the only method of changing the system that has ever worked. Time for Action. <br />Here's a trailer for the doc: https://www.youtube.com/watch?v=zI_Ik7OppEI Michael J McEvoyhttps://www.blogger.com/profile/07871361303069866983noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-25192560780299344092016-10-07T13:49:55.506+01:002016-10-07T13:49:55.506+01:00Ok, I will rephrase. This piece is not about the d...Ok, I will rephrase. This piece is not about the deficiencies of the EU. It is about a much longer-term global phenomenon that in my view causes both financial and political instability.I am happy to discuss this long-cycle phenomenon. I am not preared to discuss the nitty gritty of why someone doesn't like the EU. It is off topUC for this post.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-59819813332917612652016-10-07T11:01:23.018+01:002016-10-07T11:01:23.018+01:00Really?
Your article is titled 'Austerity and...Really?<br /><br />Your article is titled 'Austerity and the rise of populism', and you opine that 'The populist paradigm shift started with the EU referendum', so that is surely the central pillar of your argument.<br /><br />In my opinion, the previous commenter is very much on-topic and deserves a fuller answer.<br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-44789704476909311532016-09-24T16:43:20.952+01:002016-09-24T16:43:20.952+01:00Your great post reminds me of another parallel bet...Your great post reminds me of another parallel between previous eras of approaching calamity and our own, via Yeats. <br /><br />I've sometimes wondered how sensitive, decent folk (like Yeats) could at times be taken in by the nastiest of right wing populisms. It's a question I still don't know the answer to but am reminded of frequently these days. <br /><br />It's appalling to see, over the last year or so, certain sections of the left veering off towards nationalism and even some degree of Trumpism ("I don't agree with everything he says, but..."). It's nasty and very concerning.<br /><br />I wish people would realise that when internationalism and solidarity are subtracted from progressive ideals, and a dose of scapegoating added, you're left with something not dissimilar to right wing populism.... potentially even fascism. <br /><br />Also, if you fight the far right on it's own terms, you will lose.<br /><br />Troubling times.DPDownSouthnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-3253356793435085162016-09-12T03:38:01.885+01:002016-09-12T03:38:01.885+01:00"This time is different" is the most dan..."This time is different" is the most dangerous statement in the world. I deliberately used it to see if anyone would fall into the trap. And you did. Congratulations. <br /><br />The more people who think like you, the more likely it is we will sleepwalk our way into war, just as we sleepwalked our way into financial crisis because we believed there would never be another crash. <br /><br />The way we do war may have changed. But we are still humans, and humans have not fundamentally changed their nature. We are the most dangerous predators ever to live on Earth, and we are naturally belligerent towards our own species. <br /><br />I repeat, this time is NOT different, in any really fundamental way.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-14595284104984275982016-09-09T15:35:38.107+01:002016-09-09T15:35:38.107+01:00Historically, resurgent nationalism has always led...<i>Historically, resurgent nationalism has always led to war. I see no reason why this time should be different.</i><br /><br />Of course I may be totally wrong, but I think things have changed since the world wars in a number of relevant ways, ones that are not usually mentioned in this context:<br /><br />1) Mass conscription no longer exists in Western countries, with a tiny handful of exceptions. There has been a lot of talk about how the British government has had trouble recruiting civil servants to handle Brexit because the potential recruitment pool of the civil service as a whole is so overwhelmingly anti-Brexit. Similarly, soldiers today are paid professionals who won't go for just any idiotic nationalist fantasies just because the political leadership asks them to.<br /><br />2) Wars resulting in mass casualties for one's own side have become politically impossible already some time ago. This is so to the extent that wars such as the Vietnam and Iraq Wars were let go to ruin because, although the leadership knew what it would have taken to win, the opportunity cost of winning was too high <i>in terms of deaths</i>. The Vietnam War is remembered as a shameful bloodbath for the US Army, but it had 58,315 men killed in action over a decade, while the Battle of Kursk in World War II killed more than 600,000 in just seven weeks. Battle deaths have become such a rare exception from the norm that in the Iraq War, they had generals attend the funerals of teenage corporals, and being almost apologetic about the fact that someone, anyone, from their army had actually died in their war. By comparison, imagine if they had had a general give a memorial speech at each of the 11 million military funerals in World War I.<br /><br />3) No war in today's world could be truly major without the involvement of NATO. And for better or worse, the United States, the major player in NATO, is gripped by probably the strongest isolationist mood in 100 years.<br />Tommi Uschanovhttps://www.blogger.com/profile/02852865209279310471noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-37302317384216507832016-09-09T09:25:54.816+01:002016-09-09T09:25:54.816+01:00I despair when people attempt to "prove"...I despair when people attempt to "prove" or "disprove" austerity on the basis of total government expenditures.gastro georgenoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-46677947656110018332016-09-09T04:07:31.915+01:002016-09-09T04:07:31.915+01:00Much as I empathise with your view that things are...Much as I empathise with your view that things are likely to get ugly, your sketch of the fiscal background seems somewhat at odds with the facts.<br /><br />Per the IMF*, UK general government total expenditure going into the crisis was 39.5 % of GDP against general government revenue of about 36.5%. During the crisis, total expenditure peaked at 45.5% of GDP and has very gradually fallen away to a current level of 39.5% again. Revenue briefly dropped to just over 35% in 2009 and has since fluctuated around 36% of GDP. So, peak net general government borrowing was around 10% of GDP in 2009 and 2010 and has slowly come back to a 2015 deficit of 4.4%.<br /><br />Does this really constitute "austerity"?<br /><br />Sweden and Switzerland provide an interesting, and perhaps instructive, counterexample. Including both seems useful since, measured by government involvement in the economy, they straddle the UK with Sweden between about 7-10% of GDP above in terms of total expenditure while Switzerland ranged between 7-13% below. Both reacted to the crisis in a low-key fashion. Pre-crisis net general government lending (i.e. fiscal surpluses) gave way to moderate net borrowing, topping out at 1.68% of GDP for Sweden and 0.25% for Switzerland.<br /><br />As a result, net general government debt in Switzerland fell from 30% of GDP in 2007 to 23.8% now. Sweden's equivalent numbers are -16.2% and -15.5% against the UK's 38% and 80.6%. Both Sweden and Switzerland, unsurprisingly in my view, enjoy unusually high levels of gross national savings (est for 2016 at 30.8% of GDP for Sweden, 32.5% for Switzerland vs 13.76% for the UK).<br /><br />I'll stop there but it seems to me even this very brief sample of real-world figures casts a rather different light on the potential sources of our current undoubted dilemmas. <br /><br />* http://www.imf.org/external/pubs/ft/weo/2016/01/weodata/weorept.aspx?sy=2006&ey=2016&ssd=1&sort=subject&ds=.&br=1&pr1.x=15&pr1.y=6&c=132%2C134%2C176%2C144%2C146%2C158%2C112%2C111&s=NGDP_RPCH%2CNGDPD%2CNGSD_NGDP%2CLUR%2CGGR_NGDP%2CGGX_NGDP%2CGGXCNL_NGDP%2CGGXWDN_NGDP%2CBCA_NGDPD&grp=0&a=Ingolf Eidehttps://www.blogger.com/profile/17200591395574835358noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91177675240432214752016-09-08T16:55:45.442+01:002016-09-08T16:55:45.442+01:00Excellent beautifully written article and diagnosi...Excellent beautifully written article and diagnosis, even if I do hope the prognosis is wrong. There are a some additional points to consider. First Greece and the UK are not comparable from an economic POV because the UK is a sovereign currency country and Greece is not, the UK is not nearly as vulnerable to foreign bank exploitation as Greece experienced from mainly German banks, and the UK does not have the culture of tax evasion that has been prevalent in Greece. Second there is a new school of economic thought that has been incubating since about the early 1980s usually called Modern Money Theory (MMT) that can much more effectively deal with the economic cycles described, at least for sovereign currency countries. Third there is a better alternative to war that needs to be promoted, - a better EU that is a fiscal as well as a monetary union. Only a common fiscal policy set can overcome the disparate economic problems of EU countries, especially the need to resort to austerity economics. Fourth, the USA, at least, is not dealing with austerity. The economy is doing surprisingly well and the fiscal arrows have not yet been taken out of the quiver. The biggest problem in the USA is demographics, which economists have not yet learned how to address. Finally, who can actually carry out a war and on whom under present world economic conditions? The only likely aggressors are Russia or China and neither of them has the economic and cultural issues being faced in Europe.Murrayhttps://www.blogger.com/profile/02921485672730468492noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-90862307220310438102016-09-08T02:45:16.972+01:002016-09-08T02:45:16.972+01:00Paul Samuelson attempted a proof that in a zero-gr...Paul Samuelson attempted a proof that in a zero-growth economy, real riskless long-term interest rates will also be zero:<br /><br /> https://server1.tepper.cmu.edu/Phd/DCA/samuelson.pdf<br /><br />And near-zero is what U.S. Treasury TIPS now yield, like the debt of all other creditworthy governments. <br /><br />Yet, in what country on the planet can a politician win election, or a pension manager remain employed, on a promise of 0% growth?Donhttps://www.blogger.com/profile/00929414959558369349noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-84821267990377316372016-09-07T23:29:14.703+01:002016-09-07T23:29:14.703+01:00Sounds great, but has nothing to do with what is r...Sounds great, but has nothing to do with what is really going on. In fact, the public sector continues growing (in Europe at least), money is thrown at all sorts of stupid public projects and programs, spending is never anti-cyclical but persistent, and public sector employees are basically overpaid everywhere (if you include the usually generous, unfunded pension schemes).Szopohttps://www.blogger.com/profile/07200117304398212957noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-74916779450417492392016-09-07T23:10:37.238+01:002016-09-07T23:10:37.238+01:00How are you going to restore democracy without a n...How are you going to restore democracy without a nation state? It cannot be done. Internationalists were given a chance and they've failed. You can attribute war to anything, not just nationalism. Voters are fed up with internationalists utopic dreams.Kristjanhttps://www.blogger.com/profile/09592440548093816331noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-54382939615400791182016-09-07T07:23:57.443+01:002016-09-07T07:23:57.443+01:00Thanks for the article. I don't know if you...Thanks for the article. I don't know if you've read the work of René Girard but it's very interesting on the ubiquitous desire to find a scapegoat. Human psychology doesn't change very much and as a result I think society is, sadly, massively complacent about the potential for war. GeorgeCostanzaIrlhttps://www.blogger.com/profile/13772787700638152835noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-10112561510662080702016-09-07T00:16:29.796+01:002016-09-07T00:16:29.796+01:00This comment has been removed by the author.hestalhttps://www.blogger.com/profile/06360397201064435600noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-59689530270687316382016-09-07T00:15:49.873+01:002016-09-07T00:15:49.873+01:00I take your words to mean that the supply of money...I take your words to mean that the supply of money is suffering from an artificial limit, probably a law of some of kind. Could the public sector spending you mention include a basic guaranteed income for citizens? In America we might call it the Social Security Lifetime Supplement (SSLS). hestalhttps://www.blogger.com/profile/06360397201064435600noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-17078349318485546652016-09-06T21:44:56.524+01:002016-09-06T21:44:56.524+01:00No, the point of austerity is not that "there...No, the point of austerity is not that "there is no money". The rationale for Keynesian fiscal policy is not difficult to understand, but ultimately it implies abolishing the budget constraint for the public sector. Whenever there is a shortfall in private demand, politicians (think of Trump or Clinton) and a bunch of bureaucrats get the mandate to throw money at the economy. You need to read a lot of Krugman or Wren-Lewis columns to believe that this policy will work. Szopohttps://www.blogger.com/profile/07200117304398212957noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-54737532722602418532016-09-06T20:33:11.820+01:002016-09-06T20:33:11.820+01:00Need to ask. Was Margaret Thatcher making a "...Need to ask. Was Margaret Thatcher making a "false promise" when she argued that the Euro was detrimental to the LT economic well-being of the UK?<br /><br />Or were the majority of economists in the UK making "false promises" when they argued that the UK would be better of with the Euro.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-2772391503941116702016-09-06T17:32:36.504+01:002016-09-06T17:32:36.504+01:00This article is not about Brexit. Please keep to t...This article is not about Brexit. Please keep to the topic. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-43509999334068736682016-09-06T14:43:14.262+01:002016-09-06T14:43:14.262+01:001. Permanent deficits do not mean a big public sec...1. Permanent deficits do not mean a big public sector. One can run a deficit of X% of GDP with a public sector taking 10%, 20%, 60% or any other % of GDP.<br /><br />2. Inequality has not increased since WWII. The Gini coefficient dropped between WWII and around 1970, then it rose again back to where it started. The rise was mainly during Thatcher's reign (surprise, surprise).<br /><br />3. As in No.1 above, the fact that for example a socialist high public spending government comes to power SHOULDN'T result in a higher deficit. However I appreciate politicians are incompetent, i.e. they're likely to increase the deficit when increasing public spending (wholly illogical). That's where the system advocated by Positive Money, Richard Werner & Co is so good: politicians do not have control over the size of the deficit - that's left to a committee of economists. But politicians DO HAVE control over strictly POLITICAL matters, like what public spending will be as a % of GDP, and how that's allocated as between education, law enforcement, etc.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-33565337551400046702016-09-06T11:31:44.861+01:002016-09-06T11:31:44.861+01:00From your general tone, you seem to imply that Bre...From your general tone, you seem to imply that Brexit is a disaster and that the EU is generally a very good thing indeed. Respectfully, I would beg to differ here since the EU has never shown its self to be particularly effective at running what amounts to a superstate. Greece is a microcosm of this; the current situation merely promises pain upon pain for the Greeks with no respite in sight.<br /><br />The actions here of the EU bankers are typical of their general attitude and aptitude; they are not experts and seem generally exceedingly timid, especially when telling their political masters how it is and how a situation must be resolved.<br /><br />Greece will not recover as a member of the Euro, and likely not as an EU member. Rather it will remain as a small backwards financial sink reliant on its neighbours for subsidy. The most likely donor (and chief beneficiary of the Euro project) would be Germany, but explicit funding from them to other EU countries is explicitly forbidden by the German constitution.<br /><br />In other words, we have here a problematic situation where the obvious solutions are impossible, and where the actual empire-building process has been attempted arse about face anyway. A Fiscal union of countries is something you only do as a last step after political union and linkage to the two countries' currencies. Basically the Euro is a doomed project, held together only by inertia and political hubris, and the bankers charged with keeping this union in play have their hands tied behind their backs.<br /><br />We know what will happen here in time. Eventually the internal stresses inside the Euro will destroy it, but before that happens the Euro bankers will try everything they can to rescue the union, and this is certain to include plundering the assets of anyone incapable of resisting. Basically, this means you and I (or did, until the Brexit vote) in the form of levies on bank accounts, raids on pensions, and printing money.<br /><br />After this the Euro will of course collapse, but do you really want to hand around for a good hiding before the inevitable? Basically the people of Britain had a good look at two lots of politicians, and decided that whilst both are a collection of rogues, scoundrels and fools at least the British collection are more handily placed for retribution in the event of trouble and are thus likelier to stay somewhat honest.Danhttps://www.blogger.com/profile/02618328278732100203noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-64160911148615599442016-09-05T20:36:41.885+01:002016-09-05T20:36:41.885+01:00To my mind there are these sensible (i.e. non popu...To my mind there are these sensible (i.e. non populist, non ideological) arguments against fiscal solutions:<br /><br />(1) If the stagnation is not primarily due to financial issues (e.g. demographic stagnation, energy constraints, flattening total factor productivity), then we do not have a problem which is 'cyclical' and can be addressed by 'counter-cyclical' measures. If this is the case, then the fiscal expansion would have to be permanent to be successful, which in turn would mean that the public sector would eventually come to dominate the economy entirely. Japan is the classic example.<br /><br />(2) Fiscal solutions whether counter-cyclical or in the form of a permanently open tap will increase the stock of safe assets. The stock of safe assets has been increasing every year since the second world war and this appears to be co-incident with a similar increasing trajectory in inequality. Fiscal measures might succeed in generating inflation and increasing the velocity of money and perhaps also increasing average employment and wages, but if they do so without pushing inequality downwards there is reason to be cautious.<br /><br />(3) A solution based on the private sector or at least having the private sector do an equal share of heavy lifting ought to be preferable simply from a perspective of political pragmatism. Fiscal solutions can be slow, prone to regular reversal due to changes in elected parties and captured by special interests. Fiscal programs are also more problematical for smaller nations with limited international clout who may be forced down a particular route by a more powerful neighbour or trading bloc. Likewise fiscal solutions probably need to be co-ordinated cross-border which makes all the above problems even worse.<br /><br />Scepticusnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-1129086856392731192016-09-05T20:23:13.079+01:002016-09-05T20:23:13.079+01:00Liam Byrne's infamous note was left for David ...Liam Byrne's infamous note was left for David Laws, Byrne's direct successor as Chief Secretary to the Treasury, not George Osborne. This is significant for two reasons. First, it shows that that the Lib Dems were just as opportunistic in twisting a joke for political capital as the Tories, so the current protestations by Nick Clegg that the latter were the real bad guys should be taken with a pinch of salt. <br /><br />Second, Laws was an Orange Booker, which meant he was already ideologically committed to a smaller state. Getting the Lib Dems to take responsibility for cutting spending was not an adroit manoeuvre by the Tories but a task enthusiastically embraced by Clegg and co (Laws was one of the main negotiators of the coalition agreement).David Timoneyhttps://www.blogger.com/profile/03568348438980023320noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-47591525466218521642016-09-05T17:36:54.621+01:002016-09-05T17:36:54.621+01:00When swimming in the sea I know the times of the t...When swimming in the sea I know the times of the tides and can estimate the effect of any wind, also I can see what the surface is doing. None the less I prefer to stay within my depth because I cannot see what is going on below. Even then it is very easy to go beyond this. In the science of economics we can see, calculate and estimate many things but there can always be currents beneath that surprise us.Demetriushttps://www.blogger.com/profile/17198549581667363991noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-55273514909217986272016-09-05T16:32:46.810+01:002016-09-05T16:32:46.810+01:00The war you're predicting is already muddling ...The war you're predicting is already muddling along in the Mideast. The entrance of Russia into the mix completes the cycle. It's kind of a slo-mo WWI runup, isn't it?Mikels Skelehttps://www.blogger.com/profile/08171857717652175231noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-59212438335282598092016-09-05T15:22:50.627+01:002016-09-05T15:22:50.627+01:00Look to Asia - China's efforts at New silk ro...Look to Asia - China's efforts at New silk routes (land & sea) to undermine US influence vs mutual military pacts with Japan and Phillipines Chrislongshttps://www.blogger.com/profile/08252889875324409569noreply@blogger.com