Paul Krugman: Monetary and Fiscal Implications of Secular Stagnation Crooked Timber: If this is “secular stagnation”, I want my old job back The Global Bezzle – whence it came, where it went and why it matters (repost from 2011) [more inside]
How The Economic Machine Works by Ray Dalio actually makes a case against austerity and for redistribution, but also for money printing (and, arguably, for bailouts), while stressing the need to keep making productivity-improving public and private investments. However, it could be equally entitled: How The Industrial Age Political-Economy Doesn't Work Anymore, viz. Surviving Progress (2011)... [more inside]
Ha-Joon Chang on why separating politics from economic policies is bad for democracy. What free-market economists are not telling us is that the politics they want to get rid of are none other than those of democracy itself. When they say we need to insulate economic policies from politics, they are in effect advocating the castration of democracy. (Related FPP.)
The Austerity Delusion: Why a Bad Idea Won Over the West. "Austerity is a seductive idea because of the simplicity of its core claim -- that you can’t cure debt with more debt. This is true as far as it goes, but it does not go far enough. Three less obvious factors undermine the simple argument that countries in the red need to stop spending. The first factor is distributional, since the effects of austerity are felt differently across different levels of society. The second factor is compositional; everybody cannot cut their way to growth at the same time. The third factor is logical; the notion that slashing government spending boosts investor confidence does not stand up to scrutiny."
Philip Pilkington writes for naked capitalism: The Origins of Neoliberalism Part I: Hayek's Delusion
Hayek’s entire ideology and career had begun to come apart in the 1930s. His theories were shown to be inconsistent in the academic journals of the time and the practical implications of those theories had shown themselves to be both discredited and dangerous. A man in such a position only has two choices: he can either completely re-evaluate his ideas which, if they were held with unshakeable conviction and constituted a core component of his emotional make-up, as seems to have been the case with Hayek, would have likely resulted in a mental collapse; or, alternatively, he can engage in a massive repression, shut out reality and construct around himself a fantasy world.[more inside]
There's been a lot of talk in the US media about the "Fiscal Cliff" and the "Grand Bargain" What are they?
The "fiscal cliff" is a confluence of three legal changes taking effect Jan. 1: the expiration of a payroll-tax cut, the expiration of the Bush-era tax cuts, and the advent of mandatory spending cuts known as "sequestration."Fiscal Cliff 101: 5 Basic Questions Answered. What's Happening: Fiscal Cliff Explained [more inside]
If Britain were Greece... (audio slideshow)
This is the story of one cut. Back in October 2010 George Osborne announced £95 billion in cuts to public services, saying he’d leave it to councils to choose what to shut down. Inevitably most of the casualties ended up being unrenowned places, unlikely to stir up much protest - drop-in centers in housing estates, inner-city park rangers, community theatres, etc. I wanted to write about just one of them, about the ripples created by a single closure. I made my selection quite randomly. I chose a place called Youthreach. I didn’t know much about them, only that they offered weekly counseling sessions to young people, aged 11–25, in Greenwich, South East London. Jon Ronson
There is an European Commission budgetary proposal to boost E.U. funding for science and technology by 45% from €55B to €80B by trimming some fat form the controversial Common Agricultural Policy. [more inside]