tag:blogger.com,1999:blog-8764541874043694159.post900448857701733877..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: The terrible price of austerityFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-8764541874043694159.post-27535127121410738172018-01-03T02:50:38.574+00:002018-01-03T02:50:38.574+00:00The problem is the money is owned by the monopoly ...The problem is the money is owned by the monopoly and not the people , giving money /commons directly to the people is deflationary , devaluing one sister banks currency against another medusa will not solve the gap problem. Everybody sentient has witnessed the lengths the high priests will go to so as to maintain prices higher then income including physical intervention above & beyond monetary methods (massive industrial sabotage & transhumance migrations) - the problem perhaps you have been found out - your livestock become somewhat selfaware of their wage slavery condition - they must therefore be hearded into the fascist pen rather then the open fields of distributionism.<br />The Dork of Corkhttps://www.blogger.com/profile/01118115538944689118noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-18241132845867097102018-01-02T21:34:00.452+00:002018-01-02T21:34:00.452+00:00Good afternoon
Very nice article as usual
I woul...Good afternoon <br />Very nice article as usual <br />I would like to stress the fact that the rise of the Nazis happened because there was communism<br />otherwise we do not know what would happenΖάχαρηhttps://www.blogger.com/profile/08416263338005015765noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-16118684808974957902018-01-01T06:30:50.940+00:002018-01-01T06:30:50.940+00:00yes if Austerity works when the economy is slowing...yes if Austerity works when the economy is slowing then no-one would have heard of Hitler but Bruning would go down as one of the longest serving chancellors ( although he despised the Reichstag as much as Hitler). <br />Keynes proved right again unfortunately.<br /><br />Great articlenot trampishttp://nottrampis.blogspot.com.au/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-75184677386306403932017-12-30T14:30:18.132+00:002017-12-30T14:30:18.132+00:00«"the squeeze", because it was a policy ...«<i>"the squeeze", because it was a policy of deliberate reduction of living standards</i>»<br /><br />As hinted in previous lines, the policy was not motivated by sadism or idiocy, but by worsening international terms of trade that at the time could not be balanced with capital inflows, and at the time the exchange rate still mattered. In recent times capital inflows mean avoid having to beg the IMF for the same, and most governments try to drive their exchange rate as low as possible, including the UK, so completely different conditions anyhow.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-24425906383832210792017-12-30T11:24:37.809+00:002017-12-30T11:24:37.809+00:00«I regret that these days Hitler etc. and his Germ...«<i>I regret that these days Hitler etc. and his Germany is the go to history for comment and comparison with the past</i>»<br /><br />It is a bit of a national obsession here, with the celebration of the "finest hour" and the vileness of the huns to drive attention away from military and political defeat.<br /><br />In this article the argument seems quite tendentious to me, because the original and well understood thesis was that fascism in Italy and later natsoc in Germany were the byproduct not of deliberate policies of austerity, but of depression conditions in those countries, same as the earlier depression in Russia leading to the revolution, and the contemporary brown/black shirt movements in the USA and UK. What leads to adventurism is not mere "austerity", but desperation about an ongoing depression and widespread unemployment.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-76449615325999273352017-12-30T11:06:22.300+00:002017-12-30T11:06:22.300+00:00«older people with pensions, savings and property ...«<i>older people with pensions, savings and property who voted for Brexit. [ ... ] The selfishness of older people</i>»<br /><br />Ah, but “<i>older people</i>” (as related in part to Brexit in part to "austerity") is indeed somewhat inappropriate as a demographic because the distinguishing character is not age, but indeed “<i>pensions, savings and property</i>” and that correlates with class, geography, sex as well as age, because the divide between those whose living standards are doing well, and those with falling living standards cut across those categories:<br /><br />* Class: rentier class are often but not necessarily older, and whichever age they have been doing quite well.<br />* Sex: most older people and pensioners are women, and they are disproportionately property or investment fund owners (divorce or widowhood), and pensioners.<br />* Geography: northern property and business rentiers are not doing that well, but southern ones have been doing very well.<br /><br />The two extremes are:<br /><br />* Struggling with insecurity and lower living standards because of both lower wages and higher rents and property prices: younger, male, working (or trying to), northern renters (e.g. Momentum members).<br />* Celebrating G Osborne for better security and improving living standards thanks to higher profits and property prices and lower real wages: retired (or close to), southern rentiers.(typical Conservative club members).<br /><br />People with different mixes fall in-between: for example older people in the north often have good final salary pensions as FlipChartFairyTales noticed, and younger people in the south often look forward to a massive property inheritance.<br /><br />The situation is nowhere like depression-era Germany (or Italy or even USA or UK), because there is no austerity: while many are struggling, a large number of people are doing quite well out of what G Osborne described:<br /><br />"<i>A credible fiscal plan allows you to have a looser monetary policy than would otherwise be the case. My approach is to be fiscally conservative but monetarily active.</i>"Blissexnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-3268881806201468902017-12-30T10:33:22.927+00:002017-12-30T10:33:22.927+00:00«I had always assumed such a policy was for times ...«<i>I had always assumed such a policy was for times of full employment to tame potential inflation during the good times to prevent booms. </i>»<br /><br />Well your intuition that "austerity" is being used quite inappropriately by F Coppola and many sell-side Economists is quite correct, but this is not the historically appropriate use of "austerity" either. Technically, "austerity" was the "stop" phase of "stop-and-go" cycles, and was triggered by balance of payment deficits and consequent falls in the currency.<br />The standard policy answer to that, "austerity", involved fiscal tightening, mostly through higher taxes, to cut both consumption and investment to reduce trade inflows, and at the same time monetary tightening via credit caps and higher interest rates to increase capital inflows and reduce capital outflows.<br />At the time "austerity" was also called "the squeeze", because it was a policy of deliberate reduction of living standards that afflicted everybody, poor to rich.<br /><br />Austerity has not happened for several decades now, the current policy is not one of austerity: imports are booming, lending is booming, interest rates are nugatory, asset prices have been zooming up in the south. In general there is no squeeze for the upper, upper-middle, and southern middle-classes: their incomes and their living standards, especially if they are property and and business rentiers, have been doing very well indeed, after a wobble around 2009. As a result Conservative votes have risen by 1m between 2010 and 2015 and another 2m between 2015 and 2017, which would be absurd if Conservative-leaning voters were suffering "the squeeze".<br /><br />So the current policy is not ever remotely describable as "austerity", it is something completely different: upward redistribution, and north-to-south redistribution, that is redistribution from poorer to richer, and from labour to tory voters, not "the squeeze" reborn.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-33502971801251232732017-12-29T16:42:55.388+00:002017-12-29T16:42:55.388+00:00The fact that pro-cyclic, ZLB austerity is an econ...The fact that pro-cyclic, ZLB austerity is an economic mistake isn't widely enough known to make it a political mistake. We have <a href="http://speri.dept.shef.ac.uk/wp-content/uploads/2016/12/SPERI-Paper-36-What-Brexit-and-austerity-tell-us-about-economics-policy-and-the-media.pdf" rel="nofollow">too poor</a> a fourth estate to help make it one.Paul Hayeshttps://www.blogger.com/profile/04309125585593320043noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-90393235515580945972017-12-29T16:19:43.407+00:002017-12-29T16:19:43.407+00:00This comment has been removed by the author.jerred seiysllhttps://www.blogger.com/profile/17375770046164311780noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-65361123069136179732017-12-29T14:18:05.155+00:002017-12-29T14:18:05.155+00:00As I pointed out in the post, it was the German mi...As I pointed out in the post, it was the German middle classes who flocked to the Nazis. Similarly, it was older people with pensions, savings and property who voted for Brexit. Where have Millennials turned? Jeremy Corbyn. Not quite Communism, but certainly substantially further left than any Labour party leader since the 1970s. Austerity drives people to extremes in both directions. <br /><br />The most worrying feature of the Brexit vote in my view is the intergenerational divide. The selfishness of older people is sowing the seeds of a very nasty backlash in the future. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91130844530300651582017-12-29T12:22:37.673+00:002017-12-29T12:22:37.673+00:00"Brexit is no accident: a straight line can b... "Brexit is no accident: a straight line can be traced from the financial crisis, through the years of stagnation and austerity, to the rise of UKIP and ultimately to the Brexit vote."<br /><br />Except that the leave /UKIP voters were overwhelmingly Boomers who have tended to have done very well over the last 15 years with higher pensions, lower taxes and a surge in asset prices. True , there were concerns about spending on the NHS but this was shielded from the cut-backs to some extent.. The Millennials were the big losers from austerity/globalisation and they overwhelmingly voted for remain. http://ukandeu.ac.uk/were-millennials-screwed-by-older-generations-at-the-eu-referendum/<br /><br />You are right about austerity giving rise to political parties with autocratic tendencies offering populist policies.Stewarthttps://www.blogger.com/profile/05827642486227619609noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91424334716477731062017-12-29T10:48:49.732+00:002017-12-29T10:48:49.732+00:00Interesting article, but isn't this just econo...Interesting article, but isn't this just economists repeating what historians have long known? Hobsbawm's Age of Extremes for example makes this very point. Anonymoushttps://www.blogger.com/profile/11993510726583127490noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-89315720290198727872017-12-29T01:06:18.325+00:002017-12-29T01:06:18.325+00:00I hope someone can help me out here, as a layman w...I hope someone can help me out here, as a layman who has read of much economics but never studied per se. I had always thought of austerity as "the chancellor taking away the punchbowl" just as the party gets started. I had no idea that using austerity during recessions had such a long history, I had always assumed such a policy was for times of full employment to tame potential inflation during the good times to prevent booms. <br /><br />That we're making exactly the same mistakes again I find totally depressing, how often do we have to repeat the same mistakes? It's almost as if the Gold Standard have never ceased. Today austerity has been directly responsible, not only for Brexit, but also the rise of Corbyn. It could just be that he will be fine if he sticks to sensible social democratic policies but what if he doesn't? <br /><br />The worst that could happen is we relearn capital "s" Socialism doesn't work and have the worst of austerity nulled somewhat. What a truly depressing choice we'll have at the next election, where is any new thinking? I despair.bill40https://www.blogger.com/profile/07133785926315743691noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-63004777477049415942017-12-28T20:53:11.245+00:002017-12-28T20:53:11.245+00:00I completely agree. That paper by Keynes is outsta...I completely agree. That paper by Keynes is outstanding. I should add it to the Related Reading list of this post, really. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-75427296683612155672017-12-28T20:38:17.204+00:002017-12-28T20:38:17.204+00:00Great post. It is very frequent to hear that Hitle...Great post. It is very frequent to hear that Hitler was a Consequence of hiperinflation. That is a mantra for the spanish libertarian, very motivated by hiperinflation as the unique evil, an austerity as the greatest good in the earth. But I reserve my mostadmiration por “The Economic Consequences of The Peace”, one of the best essay in the Economic history, in my opinion. Welcome to a paper that demonstrate the deep wisdom of young Keynes. www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-58044090955339296732017-12-28T18:25:56.126+00:002017-12-28T18:25:56.126+00:00No they weren't. The hyperinflation was in 192...No they weren't. The hyperinflation was in 1923, and Bruning's austerity was in 1930-32. There is simply no connection. <br /><br />Austerity can be evil. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-84906863846103167572017-12-28T17:39:36.004+00:002017-12-28T17:39:36.004+00:00Austere and hyperinflation are nouns describing ec...Austere and hyperinflation are nouns describing economic conditions of the economy.<br /><br />It seems to me that austere and hyperinflation describe opposite ends of the same continuum. <br /><br />Between austere and hyperinflation should lay a stable economy. <br /><br />Should an economy be in a hyperinflation condition, the only way to stability would be towards 'austerity'.<br /><br />'Austerity' as a method cannot in itself be evil. <br /><br />The evils you describe may be the result of overly aggressive policies attempting to reverse the causes of hyperinflation (which may have resulted from excessive anti-austere policies).<br /><br /><br /><br /><br />Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-11674574502484513402017-12-28T16:44:51.251+00:002017-12-28T16:44:51.251+00:00Its very simple - the West did well for about 50 y...Its very simple - the West did well for about 50 years post 1945 precisely because there was abject alleviated poverty in vast swathes of the rest of the world, that the rulers of those countries were quite happy to allow to continue, for their own ideological reasons. Now those masses have been freed from their shackles, and are joining the world trade party in a rapid process of wealth creation the like of which has never been seen before. The West however can not insulate their populations from the effects of that process. <br /><br />Why are wages static in the West? Because billions of low paid workers in the BRICS suddenly were available to make stuff that used to be made in the West. In 1970 Apple (if it existed) would have made iPhones in the US, and delivered well paid jobs to US citizens. But the phones would have been very expensive and thus only a niche market. Now they are made in China for a few dollars and owned by refugees the world over. <br /><br />So we can no more go back to the pre-globalisation days than we can make all those Chinese and Indians etc etc as poor as they used to be. They're getting richer at our expense. One day they'll have caught us up, and everyone will then proceed at a similar pace. But until then we are treading water. To pretend anything else is possible is basically saying that lots of brown people have to become poorer so some (relatively) rich white ones can get richer. Sobershttps://www.blogger.com/profile/11407417389022146963noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-64675292004740801012017-12-28T16:29:26.238+00:002017-12-28T16:29:26.238+00:00I regret that these days Hitler etc. and his Germa...I regret that these days Hitler etc. and his Germany is the go to history for comment and comparison with the past. As someone who was bombed during a visit to Bootle, had refugees from Coventry to share a bedroom with as well as losing two loved uncles, never mind time spent in the British Army of Occupation on the banks of The Elbe, I have my own issues with The Third Reich. My point now is that given all the states and all the economies to choose from, The Third Reich is a bad one and too far removed from the modern economic structures of today. Hitler was no economist, none of his close henchmen had much clue about economics, he relied on a handful of unreliable men whose "advice" was what he wanted to hear, otherwise chop chop. Flash mob finance make work for an occasional scheme, flash mob economics and sociology based on a deranged dictator and his circle from near a century ago do not.Demetriushttps://www.blogger.com/profile/17198549581667363991noreply@blogger.com