If you listen to the broadcast media, you will have almost certainly picked up the message that at some point in the near future the Chancellor is going to have to raise taxes or cut spending to ‘pay for’ all the support to the economy during the pandemic. At least the Financial Times has learnt the lesson of 2010, and notesin this editorial that the Chancellor“must hold the line and resist attempts to push the UK into a premature fiscal retrenchment. Cutting spending in the middle of the worst recession since the creation of the country would be a historic blunder and make Britain poorer in the long run through unnecessary unemployment and business failure.” If only they had said the same in 2010. But they add “Eventually … [Read More...]
Why does this government get away with murder?
In the government’s final press conference Chris Whitty, the Government’s chief medical officer, said““I would be surprised and delighted if we weren’t in this current situation through the winter and into next spring.” The significance of that statement cannot be overstated. Deaths in the UK from the virus are currently running 100 every day. (The true total may be higher.) The chief medical officer is saying don’t expect to see deaths running at an order of magnitude lower before the Spring of next year. I fear we have become desensitized over coronavirus deaths. We keep being told by the government that they are at a much lower level than they used to be, every graph shows deaths are much lower than they were at the peak, … [Read More...]
Who still thinks austerity was a good idea?
It is getting towards autumn in 2020, and the new regime of test/trace and isolate with occasional local lockdowns seems to be working. The economy has begun to recover from the 30% fall in GDP compared to a year earlier in the second quarter. But the recovery is not what the media is talking about. Instead they are focusing on the massive government budget deficit that has been a natural consequence of that fall in GDP and the huge government support effort. In response to media concern, the government announces an immediate 5 year programme of cutbacks to government spending, although the NHS will be “protected”. If you think that last sentence is unlikely to happen, I would agree. But this is pretty well what happened in the … [Read More...]
Low paid jobs for British born workers
I have always had a problem with those who focus on the need to reduce low skilled immigration. Skilled migrants are OK, so the argument goes, because the UK needs their skills, but we don’t need low skilled immigrants because British workers can do those jobs. At a microeconomic level it makes sense, and in a world where there is widespread unskilled unemployment it may make sense. But in a high employment economy like the UK today, it makes no sense at the macro level. To see this, let’s think about a stylised example. Suppose there are a fixed number of jobs at each skill level. You will always need the same number of engineers, care workers and so on. To make things easy suppose 50% of … [Read More...]
The left needs to campaign for social liberalism
The continuingexpulsion of the Windrush generation from their home country to a country they hardly know, splitting up families in the process, is just a deliberateact of state cruelty. Why did the government go ahead with these deportations despite sitting on a report suggesting they should stop? Their pretext was that these individuals had at some stage in their lives committed a ‘serious’ crime, yet all had served their time for these offences. This act of cruelty is part of the Conservatives attempt to appeal to socially conservative voters, both traditional Tories and one time Labour voters. What do we call splitting up families just to make a political point? As Paula Surridge shows here, voters who were thinking of leaving Labour for the Conservatives in June 2019 … [Read More...]
The UK’s place in the world
As an economist, I naturally focus on the economic aspects of the EU. The EU is mostly about economics. To counterpoise sovereignty as an alternative perspective to economics misses an important point: most EU rules stem from the economics of free trade within the EU. The EU wants common regulations to make it easier to trade. The EU wants restrictions on state aid to prevent countries giving their own firms an advantage over others in the union. Much the same applies to labour market and environmental standards. Economics is also involved in another aspect of being in or out of the EU, and that is how the UK sees its place in the world. Is the UK’s identity partly a European identity, or does the UK ‘stand … [Read More...]
What causes concern about immigration
It is part of folk law among politicians and most social scientists that concern about immigration is governed by the number of immigrants. So how do we account for the decline in the relative salience of immigration since the EU referendum (source)? There are of course many explanations for this decline. Perhaps people now see the benefits of immigration after all the post-referendum talk of nursing and doctor shortages. A rather more straightforward explanation is that people think that by leaving the EU the immigration ‘problem’ is being solved (i.e immigration numbers are much reduced). If it is the latter, then their knowledge is incomplete. Immigration from the EU has declined dramatically, which is not surprising, but this has been partly offset by a significant … [Read More...]
Can we think about politics from Blair onwards in one chart? and what it means for Blue Labour
This is an experiment. You can judge how successful it is. I am trying it because with this election there has been a lot of talk about a revival in Blue Labour to recapture the Red Wall. The Conservatives have been playing to socially conservative voters since at least William (‘a foreign land’) Hague. So why has the strategy succeeded so well in 2019 when it has had at best modest success before now? We can represent all this in a simple diagram that is now widely used The precise positions of the party leaders could be the topic of endless discussion, but for this post I just need them to be roughly right, and for the directions of travel to be right. Blair was fairly liberal but … [Read More...]
Who to blame for Johnson winning?
When I wrote thisin July I desperately wanted to be wrong. (Of course I was wrong about a lot of the details but alas not the main point.) But it soon became clear that, compared to 2017, the press had had two more years to paint Corbyn as marxist, unpatriotic and racist, and for enough people that would be a reason not to vote Labour. Among others who supported Brexit, they really did believe that Johnson was the man to get Brexit done. Many will say that Labour lost badly because they had a left wing manifesto. They always do after each election defeat. I doubt that has much to do with this defeat, although the large amount of giveaways to the wrong people was probably a … [Read More...]
Is Labour’s economic plan credible?
Labour have a huge set of spending proposals, many of which are unequivocally good like extra spending on the NHS, some are open to debate like abolishing student loans, and only one that I think is foolish (keeping the state pension age at 66). It would be good if all the debate was about these spending pledges. However the standard excuse for why you cannot have these things has always been about paying for them. There are actually two issues here. The first concerns current spending, around £80 billion each year or about 4% of GDP, and public investment, expected to rise by about £50 billion a year or over 2% of GDP. Labour’s current spending increase is financed £ for £ mainly by higher taxes on … [Read More...]
In defence of the IFS, and why it cannot tell the whole story
Our own fiscal council, the OBR, is very restricted in what it is allowed to say by the party that created it. As a consequence, it is absolutely essential that we have widely respected bodies, principally the IFS but I would also include the Resolution Foundation and the National Institute (NIESR), that are able to provide good quality economic advice at all times, but particularly before General Elections. A good example is the Conservative manifesto published last Sunday. Without the IFS, it is quite possible that it would have made extravagant promises on public expenditure and it would have also included some tax cuts. But because the media treats the IFS as authoritative and impartial, this year they will have judged that the political costs of a … [Read More...]
Some thoughts on Labour’s campaign
The importance of this election cannot be overstated. Voters have a choice between re-electing a government that since 2010 has done untold damage to this country and which will be led by someone totally unsuited to be Prime Minister, or giving a minority Labour government a chance to do better for a few years. The fact that the polls suggest the public want more of the same illustrates how close we are to becoming an authoritarian, populist (in the Jan-Werner Müller sense) right wing state where it becomes very difficult for any opposition to break through.This post looks at some key aspects of Labour’s campaign so far, in I hope a helpful fashion. Tax and spend One of the dangers Labour faces is that they … [Read More...]
The Tories will never undo the impact of austerity
One of the impacts of 2010 austerity we saw again last week. Widespread floodingruining hundreds of homes, and costing a life. Can we say those floods were caused by climate change? Not with certainty, but climate change has made this kind of flooding more likely. Can we say the lack of spending on flood defences under a Tory government made the recent floods worse? Not with certainty, but lack of spending has increased the damage flooding does more generally. In 2007 the Labour government commissioned from Michael Pitt (no longer available on a government website, but available here) which stated:“The scale of the problem is, as we know, likely to get worse. We are not sure whether last summer’s events were a direct result of climate change, but … [Read More...]
Schmuck!
SOURCE: Funny Economist – Randall Parker’s Completely Serious Macroeconomics Blog – Read entire story here.
Schmuck too!
Who would say something like that except for some nasty old gink? [Read More...]
Fun with Bernie ….if there is such a thing with a Marxist mental midget…
What is scary is that he actually believes the Marxist filth that comes out of his pie hole. As Brett Stephens has said, the young people who support him are too young to remember what socialism did. The older folks who support him are too stupid to understand what it does.”Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” Winston ChurchillCount me out. [Read More...]
This is the problem here in NC…a Tranny in the bathroom.
SOURCE: Funny Economist – Randall Parker’s Completely Serious Macroeconomics Blog – Read entire story here.
This is worth listening to, all of it. Unless of course you are a member of the church of climate change.
SOURCE: Funny Economist – Randall Parker’s Completely Serious Macroeconomics Blog – Read entire story here.
Wow!
SOURCE: Funny Economist – Randall Parker’s Completely Serious Macroeconomics Blog – Read entire story here.
You can fool some of the people….
You can fool some of the people all the time…all of the people some of the time…but you can’t fool all the people all the time.Just watch me make a fool out of Lincoln. [Read More...]
