July 18, 2012
"

Spending Myth 1: Today’s deficits have taken us to a historically unprecedented, economically catastrophic place.

This myth has had the effect of binding the hands of elected officials and policymakers at every level of government. It has also emboldened those who claim that we must cut government spending as quickly, as radically, as deeply as possible.

In fact, we’ve been here before. In 2009, the federal budget deficit was a whopping 10.1% of the American economy and back in 1943, in the midst of World War II, it was three times that — 30.3%. This fiscal year the deficit will total around 7.6%. Yes, that is big. But in the Congressional Budget Office’s grimmest projections, that figure will fall to 6.3% next year, and 5.8% in fiscal 2014. In 1983, under President Reagan, the deficit hit 6% of the economy, and by 1998, that had turned into a surplus. So, while projected deficits remain large, they’re neither historically unprecedented, nor insurmountable.

More important still, the size of the deficit is no sign that lawmakers should make immediate deep cuts in spending. In fact, history tells us that such reductions are guaranteed to harm, if not cripple, an economy still teetering at the edge of recession.

"

— Mattea Kramer, Spinning Ourselves Into a Deficit Panic | TomDispatch (via nickturse)

(via pieceinthepuzzlehumanity-deacti)

4:57pm  |   URL: http://tmblr.co/ZDZu3yPcJMgn
(Notes: 101)
  
Filed under: Deficit Politics Economics 
June 25, 2012
"As my mother might say, in Yiddish: On Monday one third of the nation was ill housed, ill clothed and ill fed. And on Thursday, there were ten million people in the military making more than most had been able to earn before and two million civilian employees, and tanks, airplanes, ships, aircraft carriers, and hundreds of thousands of jeeps and trucks and other vehicles pouring out of the factories almost too rapidly to count. Suddenly there was enough for everything. Does all the credit belong to Hitler? Capitalism, my father probably would answer with a smile of resignation, as though for this humane socialist all of the evils of inequality could be clarified in that sinful single word. “For war, there is always enough. It’s peace that’s too expensive"

— Joseph Heller “Closing Time” (via nixonplumbingco)

(Source: huberthumphreydeathrally)

7:24pm  |   URL: http://tmblr.co/ZDZu3yO5lHyl
(Notes: 14)
  
Filed under: Joseph Heller Catch-22 Closing Time World War 2 inequality economics 
June 19, 2012

tobuildamountain:

So this is fun.

(via tobuildamountain-deactivated201)

10:01pm  |   URL: http://tmblr.co/ZDZu3yNjJ81r
(Notes: 3,183)
  
Filed under: Paul Krugman Krugman Economics Politics Colbert The Colbert Report 
June 7, 2012

geekykid1990:

Speaking of Newsnight, I found it really amusing how Paxman is clearly revelling in the fact that Paul Krugman is really ripping the opposing argument in favour of pan-world austerity to shreds. Also, I’m glad to hear someone finally challenge the odious and frankly ridiculous use of the household budget/national economy analogy, it’s so patronising and shows a complete misunderstanding of how the global economy operates.

Krugman said the other day that he was ‘sick of being Cassandra’ and wanted to be listened to for once. It looks like he won’t be getting his wish.
The Tory MP and the venture capitalist (Look, Euan’s favourite kinds of people! Together!) in this really do come over as the (intensely patronising) scum of the earth.

(Source: colourmeamazed)

8:43pm  |   URL: http://tmblr.co/ZDZu3yMxqOZ2
(Notes: 7)
  
Filed under: Economics Austerity Paul Krugman Jeremy Paxman BBC Politics 
March 23, 2012

The End of Capitalism? - David Harvey at the Penn Humanities Forum

A highly engaging lecture from the brilliant David Harvey, in which he considers the future of capitalism four years after the 2008 crash. I really love David Harvey, and I think he’s one of the best leftist writers working today (I’ll even forgive the fact he went to Cambridge).

Also, this makes a neat change from my ranting about British politics.

(Source: thegreatrobbery, via what-was-e-schatology)

8:00pm  |   URL: http://tmblr.co/ZDZu3yIRob_h
(Notes: 46)
  
Filed under: David Harvey Lecture Politics Economics Marxism 
October 31, 2011
J.K. Galbraith’s The Great Crash, 1929

I actually don’t care what you think of economic history, JK Galbraith’s masterpiece is none of the things that sprung to mind, (unless you’re creepy and actually like economic history). The Great Crash is as much a work that muses on the folly of humanity as an exploration of the causes of the 1929 crash - and hell, that’s why I got into history. I’d argue that if there’s one book everyone should read, it might well be Galbraith’s The Great Crash, 1929.

Galbraith of course knew that the market would crash again - he once joked that writing The Great Crash was the best thing he ever did, because every time the stock market wobbled, another run of his book would sell out. I don’t think I’d be exaggerating to say its the wittiest piece of history that has been written in the twentieth century. I think somewhere Galbraith says that economic history is great because you get all of the fallibility and folly of men with none of the bloodshed. There are some fantastic passages in The Great Crash, and I can’t reccomend highly enough the only book I know that combines serious history and black comedy. Perhaps that’s the most damning comment on 1929 - it never was tragedy, merely farce.

Two men jumped hand-in-hand from a high window in the Ritz. They had a joint account.

Galbraith died in 2006, but I feel certain that had he lived until 2008 he would have been disgusted and amused to see a repeat of 1929 - though causally they’re not at all comparable, I think that actually a lot of Galbraith’s analysis - as I said - goes further than analysing the specific situation in 1929, and addresses the financial system as a whole, a system that seemingly hasn’t changed much. Of 1929 he wrote that: 

The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.

Sound familiar?

8:31pm  |   URL: http://tmblr.co/ZDZu3yBLRPRQ
(Notes: 14)
  
Filed under: Economics History Galbraith 1929 Wall St 
April 19, 2011
Labour’s strategy seems to be a waste of Balls

To me it doesn’t make any sense, Ed Balls is pretty much the Keynesian giant of the Labour Party, he’s a good economist and a good politician too - and he manages to get George Osborne on the run often enough. But the Labour Party just wastes its opportunity. Instead of Labour unveiling something that could truly work (like a stimulus and some proper regulation) they just buy into the Tory narrative that the deficit is too big and we must cut it. The difference? We’re supposed to believe Labour would make the right cuts.

Wherever you look in history - and this needs to be the argument fielded by the Labour party - cutting doesn’t work. Ireland, a year ago lauded by Cameron as a model of economic prosperity, and the place where the Tories have drawn their economic plan from, has utterly collapsed. As has Portugal. And Spain’s on the brink. These are countries that bought into the myth that cutting the deficit should take priority. 

Or perhaps we look at the 1929 depression. H. Hoover comes to power and cuts. And guess what? The US economy got worse and worse. F.D. Roosevelt came to power afterwards, and unveiled a stimulus package. Guess what happened then? The economy recovered. And it recovered every year until FDR lost his political nerve and started cutting.

It seems paradoxical, but economics isn’t as simple as the analogy the Tory press touts about a household’s finances. Unlike a household, the government has the capacity to change its income through tax rises and the like (or even just collecting all that unpaid corporation tax!). Keynes noted that however counterintuitive it seemed, when there was a recession and private demand was being squeezed, it was the place of the government to spend money and stimulate demand.

So I’d like to see Labour offer something completely different. Ed Balls could and should set about turning the tables. The cuts are going to bite and then people won’t be quite so sure on Osborne. But more than that, Balls and Labour need to change the narrative that this is set in. They need to nail Osborne on his facts - our budget deficit is in fact historically low, and for 200 of the past 250 years, the UK has had a budget deficit. That cutting isn’t working now, but more than that, cutting has never worked.

The deficit is not the priority, and we can pay it down at our leisure. When the economy grows perhaps?

12:38pm  |   URL: http://tmblr.co/ZDZu3y4Qq2Mv
(Notes: 4)
  
Filed under: Labour Politics Economics Ed Balls George Osborne