John Harvey apie neoliberalizmą

Taip jau surėdyta, kad žmonėms reikia turėti nuomonę apie dalykus, kurių jie negali suprasti. Nebūtina aiškintis priežasčių, užtenka konstatuoti, kad nuo pat vaikystės turime keisčiausių nuomonių apie aplinkinį pasaulį, kurios mums visai netrukdo, o net padeda gyventi.

Šulinyje gyvena boba žaliaakė.
Vaikučius randa kopūstuose.
Valgyk košytę, augsi didelis.
Dovanėles atnešė zuikis nuo Kalėdų senelio.
 
... evoliucija tikėjimo tvirtybės išbandymui...
... oi, koks panašus į tėvelį...

Galime tikėti įvairiausiais dalykais, jeigu tai padeda ar bent netrukdo gyventi.

Naujienų filtre ką tik iškrito puikiai surašytas John Harvey paaiškinimas, kad neoliberalizmas jau visiškai trukdo.
Ireland: No more austerity (and dump the euro)

Just days ago, it was reported that Ireland appears to be in recession once again (Ireland falls back into recession). How can this be given the rapid growth of the Celtic Tiger just a few years ago? Actually, this comes as no surprise to many economists because the so-called solutions being implemented are a function of the very same principles that caused the collapse in the first place. Unless a significant about-turn is executed, stagnation, emigration, and unemployment will continue for years to come.

That culprit is the philosophy of neoliberalism. It argues, among other things, that unregulated financial markets efficiently price assets, higher profits are good for everyone as they lead to increased employment and wages (the so-called trickle down effect), and governments represent a net drag on economic activity. Neoliberalism has been a powerful force driving world economic policy since the 1980s and as such laid the groundwork for many of the problems we are experiencing today. Ireland was not immune to these influences and, as a consequence, policy makers lowered corporate tax rates, made transfer pricing rules business-friendly, and adopted a largely hands-off approach to financial regulation (even when improprieties emerged). Dropping the punt in favor of the euro was also seen as a sign of economic responsibility because it linked Irish policy to that of the fiscally-prudent Germans.

:(

Išgirtasis vokiškasis modelis

Bill Mitchell apie neoliberalizmo "laimėjimus" Vokietijoje:
(kopijuoju begėdiškai didelį teksto fragmentą, nenaudodamas 'blockquote')
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First, that 63-letter word. The Age reports (June 4, 2013) – Sixty-three-character word is now verboten that:

Germany’s longest word – Rindfleischetikettierungsuberwachungsaufgabenubertragungsgesetz, the 63-letter title of a law about beef – has ceased to exist.

That is a long word. Apparently, it was not in the dictionary but was in official usage.
What about this German word?
Austeritydoesnotgenerategrowthdespitewhattheneoliberalssaybutrathercausespovertyanddepression
That seems to be around 93 characters.
But other things are getting smaller in Germany as well.
The Wall Street Journal article (May 29, 2013) – ‘Minijobs’ Lift Employment But Mask German Weakness – tells us that the upbeat talk about Germany as a success surrounded by failure is somewhat mistaken.
It does have a relatively low unemployment rate (6.9 per cent in May 2013). But:

… nearly one in five working Germans, or about 7.4 million people, hold a so-called “minijob,” a form of marginal employment that allows someone to earn up to €450($580) a month free of tax.

Minijobs pay low wages and do not provide the standard statutory benefits (holiday pay etc).
The neo-liberal apologists claim the minijobs satisfy the preferences of workers for flexible casual work. But the reality is different.
They become just another rationing device when aggregate demand is too low and lead to rising inequality and diminished investment in human capital.
The official data shows that:

While Germany’s top earners among full-time workers who contribute to the social security system saw pay rise 25% between 1999 and 2010, salaries in the lowest quintile increased roughly 7.5% … After inflation of about 18% during that period, Germany’s lowest wages dropped significantly.

The minijobs were part of the Hartz reforms, which I briefly discuss below.
The neo-liberals also claimed they formed part of the “stepping stone” upgrading where a young person could first take a casual job and then progress up to more regular, high paid positions.
The evidence in Germany (and everywhere for that matter) disputes this claim.
The point is that part of the Euro crisis that is least reported is the way that Germany responded to the loss of its exchange rate. Previously, the Bundesbank had manipulated the Deutsch mark parity to ensure the German export sector remained very competitive. That is one of the reasons they became an export powerhouse. It is the same strategy that the Chinese are now following and being criticised for by the Europeans and others.
Once the Germans lost control of the exchange rate by signing up to the EMU they had to manipulate other “cost” variables to remain competitive.
So the Germans were aggressive in implementing their so-called “Hartz package of welfare reforms”. A few years ago we did a detailed study of the so-called Hartz reforms in the German labour market. One publicly available Working Paper is available describing some of that research.
The Hartz reforms were the exemplar of the neo-liberal approach to labour market deregulation. They were an integral part of the German government’s “Agenda 2010″. They are a set of recommendations into the German labour market resulting from a 2002 commission, presided by and named after Peter Hartz, a key executive from German car manufacturer Volkswagen.
The recommendations were fully endorsed by the Schroeder government and introduced in four trenches: Hartz I to IV. The reforms of Hartz I to Hartz III, took place in January 2003-2004, while Hartz IV began in January 2005. The reforms represent extremely far reaching in terms of the labour market policy that had been stable for several decades.
The Hartz process was broadly inline with reforms that have been pursued in other industrialised countries, following the OECD’s job study in 1994; a focus on supply side measures and privatisation of public employment agencies to reduce unemployment. The underlying claim was that unemployment was a supply-side problem rather than a systemic failure of the economy to produce enough jobs.
The reforms accelerated the casualisation of the labour market (so-called mini/midi jobs) and there was a sharp fall in regular employment after the introduction of the Hartz reforms.
The rapid increase in the minijobs is a reflection of these deep-seated changes and have created a situation where an increasing (and sizeable) proportion of German workers are now excluded from enjoying the benefits of national income growth in that nation.
The German approach overall had overtones of the old canard of a federal system – “smokestack chasing”. One of the problems that federal systems can encounter is disparate regional development (in states or sub-state regions). A typical issue that arose as countries engaged in the strong growth period after World War 2 was the tax and other concession that states in various countries offered business firms in return for location.
There is a large literature which shows how this practice not only undermines the welfare of other regions in the federal system but also compromise the position of the state doing the “chasing”.
But in the context of the EMU, the way in which the Germans pursued the Hartz reforms not only meant that they were undermining the welfare of the other EMU nations but also droving the living standards of German workers down.
And then the crisis emerged amidst all this.

Wynne Godley ir europietiškos problemos

Ralph Musgrave — European Commission tells the UK what do about youth unemployment.

That’s “European Commission” as in “we lot who have managed to create 50% youth unemployment in Greece, 50% in Spain and 36% in Portugal, so we obviously know what we’re talking about”.

See: Council Recommendation on the United Kingdom’s 2013 national reform programme

The European Commission’s – er – “advice” then descends from the ridiculous to the totally ridiculous: it tries to tell the UK what do about it’s deficit. Here it follows the standard IMF / OECD / Pete Peterson / Bowles and Simpson / Rogoff and Reinhart line, namely that a country should have a PLAN for deficit reduction.

The whole notion of a PLAN for reducing the debt or deficit is nonsense because it fails to get a point made by Keynes: “Look after unemployment and the budget will look after itself”.

In other words, a monetarily sovereign government should pitch it’s deficit (or surplus) at a level that reduces unemployment as far as is possible without exacerbating inflation too much. If the private sector happens to be in a fit of irrational exuberance, government may well need to run a surplus in order to confiscate financial assets from the private sector and quieten things down. Conversely, if the private sector is in subdued mood, government will need to run a deficit so as to boost demand and feed financial assets into private sector pockets.

And since it is impossible to predict what mood the private sector will be in in twelve months time (never mind three years time), it’s impossible to say what size deficit (or surplus) will be suitable in twelve months’ time or three year’s time.

Paskutinė pastraipa yra paprastas paaiškinimas, kodėl metinės BVP prognozės ir metiniai biudžetų planavimai negali būti "atsakingos" politikos dalimi. Prognozavimas tokiems laikotarpiams neveikia.

Jei kam įdomu, dedu nuorodą į 1998 metais publikuotą Wynne Godley ir George McCarthy straipsnį "Fiscal Policy Will Matter", kuriame jie

a) pademonstravo stock-flow consistent modelį, leidžiantį gana tiksliai prognozuoji JAV BVP pusę metų į priekį. Amerikos ekonomika didžiausia pasaulyje ir gana uždara, todėl tuos pusę metų galima laikyti ilgiausiu įmanomu prognozės laikotarpiu apskritai. Mažesnėms ir atviresnėms ekonomikoms prognozės būtų dar trumpesnės (jeigu dar būtų laiku prieinama joms reikalinga statistika;

b) suformulavo teiginį, dažnai vadinamą Godley teorema, pasak kurio bet kurios ekonomikos BVP augimui būtinas valdžios deficito plius eksporto santykio su mokesčiais ir importu augimas.

This concept of fiscal stance is not new. It is thirty years since Carl Christ, of Johns Hopkins University, had the brilliant insight that should an economy ever reach stationary equilibrium, all stock variables as well as all flow variables would be constant; and that if all stock variables, including government debt, were constant, government receipts would have to equal government payments. It would then follow that if the economy were moving toward stock-flow equilibrium and if taxes were levied as a proportion of income, the GDP of a (closed) economy would always be tracking, perhaps with a long lag, government outlays divided by the average tax rate – the very same concept that we call fiscal stance. Therefore, a necessary condition for the expansion of the economy, at least in the long term, is that the fiscal stance should rise: Government expenditure must rise relative to the average tax rate. If the tax rate were held constant, government expenditure would have to rise absolutely for output to grow; if government expenditure were held constant, the tax rate would have to fall.

Christ’s finding was confirmed in two famous articles, Blinder and Solow (1973) and Tobin and Buiter (1976). But this whole line of argument has never been influential in the policy discussion and now seems to have disappeared from the literature. Perhaps the notion of a stock-flow equilibrium is too much of a will-o’-the-wisp, and the lags that would lead the economy to it so long and complex that this concept of fiscal stance has been thought to have no operational significance. Our first major contention is that the Christ conclusion, suitably adapted, has a practical application of decisive importance.”

Jeigu jau pradėjom, pora papildančių nuorodų Michael Sankowski tekste:

The result of ignoring the accounting matrix is to forget we must have an ever increasing deficit in order to for the economy to grow. Reading through the papers by Buiter and Blinder, it’s easy to they knew this at some point roughly 40 years ago, but have forgotten it now.

(Update: Ramaman provides us the links to the papers Godley mentions. Blinder and Solow is here :Does Fiscal Policy Matter? (1972). Buiter and Tobin: Long Run Effects of Fiscal and Monetary Policy on Aggregate Demand (1974) )

Grįžkime prie eurozonos realijų. Žinomame 1992 metų straipsnyje Maastricht and All That Godley prognozavo dabartines eurozonos problemas

Some writers (such as Samuel Brittan and Sir Douglas Hague) have seriously suggested that EMU, by abolishing the balance of payments problem in its present form, would indeed abolish the problem, where it exists, of persistent failure to compete successfully in world markets. But as Professor Martin Feldstein pointed out in a major article in the Economist (13 June), this argument is very dangerously mistaken. If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalisation, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation.

ir nurodė gilumines priežastis

The central idea of the Maastricht Treaty is that the EC countries should move towards an economic and monetary union, with a single currency managed by an independent central bank. But how is the rest of economic policy to be run? As the treaty proposes no new institutions other than a European bank, its sponsors must suppose that nothing more is needed. But this could only be correct if modern economies were self-adjusting systems that didn’t need any management at all.

I am driven to the conclusion that such a view – that economies are self-righting organisms which never under any circumstances need management at all – did indeed determine the way in which the Maastricht Treaty was framed. It is a crude and extreme version of the view which for some time now has constituted Europe’s conventional wisdom (though not that of the US or Japan) that governments are unable, and therefore should not try, to achieve any of the traditional goals of economic policy, such as growth and full employment. All that can legitimately be done, according to this view, is to control the money supply and balance the budget. It took a group largely composed of bankers (the Delors Committee) to reach the conclusion that an independent central bank was the only supra-national institution necessary to run an integrated, supra-national Europe.

But there is much more to it all. It needs to be emphasised at the start that the establishment of a single currency in the EC would indeed bring to an end the sovereignty of its component nations and their power to take independent action on major issues. As Mr Tim Congdon has argued very cogently, the power to issue its own money, to make drafts on its own central bank, is the main thing which defines national independence. If a country gives up or loses this power, it acquires the status of a local authority or colony. Local authorities and regions obviously cannot devalue. But they also lose the power to finance deficits through money creation while other methods of raising finance are subject to central regulation. Nor can they change interest rates. As local authorities possess none of the instruments of macro-economic policy, their political choice is confined to relatively minor matters of emphasis – a bit more education here, a bit less infrastructure there. I think that when Jacques Delors lays new emphasis on the principle of ‘subsidiarity’, he is really only telling us we will be allowed to make decisions about a larger number of relatively unimportant matters than we might previously have supposed. Perhaps he will let us have curly cucumbers after all. Big deal!

Prieš dvidešimt metų pažadėjo, kad murkdysimės ir paaiškino kodėl. Deja, neapsiriko.

Neokolonializmas. Trumpai ir aiškiai apie Vokietijos euro politiką

Levy ekonomikos instituto bloge pristatomas C. J. Polychroniou straipsnis The New Rome. The EU and the Pillage of the Indebted Countries.

[...] with the eurozone mired in recession (the latest numbers from Eurostat are here) and a deep depression in Greece, it might look like a failed experiment.  But it only looks this way, Polychroniou suggests, if you think of economic growth and the wellbeing of the average worker as among the primary goals of the project.  The setup of the EMU is not the result of some set of technical errors or oversights.  It is consistent with a long-developing attempt, culminating in the Maastricht Treaty, at transforming a social market economy into a laissez-faire market economy:  “it stemmed,” Polychroniou writes, “from the very premises of the fundamentally neoliberal economic thinking that had begun to take hold of the mindset of European policymakers in the 1980s.”  If anything, he argues, the struggles in the eurozone, particularly on the periphery, are being seized on as an opportunity to accelerate this transformation, with Germany playing the role of “neocolonialist” in the process:

Germany has adopted toward the indebted eurozone member-states the same policy it carried out with regard to East Germany after unification: the destruction of its industrial base and the conversion of the former communist nation into a satellite of Berlin. The bank rescues masquerade as the rescue of nations, and are followed by the enforcement of unbearable austerity measures to ensure repayment of the “rescue” loans. Then comes the implementation of strategic economic policies aimed at reducing the standard of living for the working population and the shrinking of the welfare state, complete labor flexibility, and the sale of public assets, including state-controlled energy companies and ports. This constitutes the German strategy for pillaging the debt-laden economies of the Mediterranean region.