One of the striking aspects of the furor over Thomas Herndon, Robert Pollin and Michael Ash’s dissection of the considerable flaws in the Carmen Reinhardt and Kenneth Rogoff austerity-justifying paper are the “the earth is still flat” efforts to salvage the theory.
Read more...By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from http://www.macrobusiness.com.au/2013/01/imf-admits-more-mistakes/“>MacroBusiness.
Another day, another round of atrocious data out of the Eurozone:
Read more...By Stephanie Kelton, Associate Professor of Economics at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives
Neil Irwin at Wonkblog has a new post up: The Deficit is Falling Fast. Can Washington Accept Victory?
He quotes John Makin of the American Enterprise Institute, who says, approvingly, that the U.S. has probably imposed enough austerity “for now.” Then he shows us the, erm, evidence.
Read more...Somebody has some 'splaining to do!
Read more...There appears to be no intellectually honest defense of austerity left standing.
Read more...Nathan Tankus is a student and research assistant at the University of Ottawa. You can follow him on Twitter at @NathanTankus
President Obama adopted a reflective tone to mark the passing of Maggie Thatcher. Commenting on her death, he stated “the world has lost one of the great champions of freedom and liberty.” In Obama’s proposed budget, we found out what the terms “freedom” and “liberty” mean: the freedom for the old to go hungry and the freedom of the poor to go cold.
Read more...I’ve mentioned repeatedly that Germany wants contradictory things: it wants to stop financing its trade partners (the periphery countries in Europe) and yet wants to continue to run large trade surpluses. I took this to be a sign of German wishful thinking, or just politicians figuring the incoherent strategy can still be maintained for the duration of their time in office.
A post by Yanis Varoufakis show that the Germans at least have better delusions that I realized.
Read more...Nothing like dramatic proof that austerity is a failure
Read more...By David Llewellyn-Smith, founding publisher and former editor-in-chief of The Diplomat magazine, now the Asia Pacific’s leading geo-politics website. Cross posted from MacroBusiness
PIMCO famously coined the phrase to “the new normal” to capture what it saw was a structural change to global markets in the wake of the GFC. It was to be period defined by lower returns on assets owing to a combination of delevering, deglobalization, and reregulation. Today that looks like fantasy.
Read more...It must be really hard to be an Obama defender these days, at least if you are not on a big corporate payroll.
Read more...Yves here. I’m overdue for a post on the propagandizing against Cyprus. Black describes one element of this barrage.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posed from Benzinga
I’m announcing the New York Times award for incompetence in macroeconomic reporting (IMR, pronounced like “screamer”).
Read more...Yves here. Be warned this piece is long but very much worth your time, since it demolishes the myth of the attractiveness of privatizations by looking at its record in England, where it was first undertaken on a widespread basis.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.”
As in Chile, privatization in Britain was a victory for Chicago monetarism. This time it was implemented democratically. In fact, voters endorsed Margaret Thatcher’s selloff of public industries so strongly that by 1991, when she was replaced as prime minister by her own party’s John Major, only 35 percent of Britain’s voters supported the Labour Party – half the proportion registered in 1945. The Conservatives sold off public monopolies, used the proceeds to cut taxes, and put the privatized firms on a profit-making basis. Their stock prices rose sharply, making capital gains for investors whose ranks included millions of Britons who had been employees and/or customers of these enterprises.
Yet by 1997 the Conservatives were voted out of office by one of the largest margins in their history. What concerned voters were the results of privatization that Mrs. Thatcher had not warned them about
Read more...There is no more pretense possible. We now have the absurd spectacle of Paul Ryan’s budget being to the left of Obama’s on the issue of Social Security and Medicare.
Read more...Ambrose Evans-Pritchard, in a provocative column, argues that the monetary authorities are not going retreating from QE, and that might not be a bad thing. But in its current form, it probably is.
Read more...By Dan Kervick, who does research in decision theory and analytic metaphysics. Cross posted from New Economic Perspectives
(Brussels) Nonplussed by this week’s unemployment report showing the Eurozone jobless rate rising to an unprecedented 12%, members of the European Parliament and Europe’s national governments pressed ahead on Wednesday with passage of a stringent new package of austerity measures. Dubbed “hyperaustérité” or “Übersparpolitik” by its backers, the new program of ruthless cuts and social demolition promises to deliver even higher levels of joblessness, misery and hopelessness than has been achieved so far by earlier rounds of austerity.
Read more...