Opposition to the UK government’s cuts, since 2010, in all public services – deep cuts in police, transport, hospitals, schools, fire, universities, disability benefits, mental health services, care for the elderly, legal aid for the poor, nursery schools, the army, green technology … everything – has gone under that banner of “anti-austerity”. And every time I hear the slogan, I despair.
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In this post, fiscal expansionist Brad DeLong says kind and admiring about austerian Ken Rogoff, concluding on a note that if taken literally is strikingly humble – not a characteristic we associate with DeLong. All the while, he is gently taking Rogoff’s argument to pieces: the humility smacks of false modesty, going almost too far to be good manners, but it’s clearly meant as good manners. Is he making up for joining in the schadenfreude over the Reinhart-Rogoff spreadsheet debacle? Is he just happy to be able to engage with a prominent austerian who, unlike many of the Chicago school (Fama, Cochrane, Lucas, Stephen Williamson …) understands Keynesian reasoning and has not erased from memory two hundred years of monetary theory? Maybe he just figures you can’t do nuance on the Web, so he slathers the flattery thick. It’s a little disconcerting to see somebody whose reflexive reaction to error is such that he used to run a “stupidist person alive” contest on his blog, to frame a fundamental disagreement about a matter of great import in such an elaborately respectful tone. Still, civil discourse is nice.
p.s. Read De Long’s post down to the comments – Robert Waldmann’s is spot on.
Joe Weisenthal at Business Insider posts this chart as an exoneration of the Obama administration’s recovery efforts. The Eurozone has the Eurocrisis, and Obama has Congress, so I suppose it’s a fair match.
Jeff Weintraub then packages the chart together with a riff on Nick Clegg’s decision to form a coalition with the Conservatives rather than Labour. Brad deLong sums it up with a new version of the chart (below) and the headline “Nick Clegg Is a Wizard! He Makes Economic Recovery Disappear!”
Image courtesy of Kieran Healy at Crooked Timber.
Research papers that justify today’s austerity policies are scarce, and the first thing economists teach is that scarcity creates market value. The two big jewels in the small crown of austerity justification have been Continue reading
A few weeks back I linked to this Guardian piece, upbeat about the OECD’s sudden interest in reducing, rather than abetting, corporate tax avoidance. I posted that because it was a nice surprise, coming from the OECD; on the assumption that the OECD acts according to the wishes of its member governments, it seemed to be an indication that, perhaps, the erosion of national tax bases had gone far enough to bring on a serious reconsideration of the ludicrous and growing tax gift that we have all been giving to multinational corporations.
Now Bloomberg has to go and spoil cast doubt on that. They detail the revolving door between the top levels of the OECD’s tax unit and the accounting and legal firms that help corporations minimize their tax payments. And they conclude by noting that the latest OECD tax chief – the new broom Continue reading
Julia Cagé and Lucie Gadenne find that
tariff cuts lead to lower tax revenues as a share of GDP. The drop is highest in poor countries that don’t have the capacity to compensate for lost tariff revenues with domestic taxes.
This is an important point in itself, and illustrates a more general principle that many of the benefits of economic liberalization depend on strong states. Continue reading
It’s about time. If this is true, it’s a step in the right direction – towards a fairer sharing of the burden of the crisis, towards increased demand (reduced austerity), and towards creation of a more stable financial system through a reduction in moral hazard.
In case you were still wondering who was being bailed out (h.t. Counterparties) in Spain…
Blaming the governments of the Eurozone periphery for the current banking & currency crisis is not so different from blaming the mayors of Atlanta and San Bernardino for the US housing bubble.
Frederick Guy 