Metablogging

Light blogging ahead

John Quiggin11 Comments

Because of writing and travel commitments, I’ll be blogging less frequently for the next few months. I’ll try to put up some open threads – please keep discussion on these threads civil and friendly, so that I don’t have to intervene in their management.

11 thoughts on “Light blogging ahead”

  2. US pushing world’s number 1 rice exporter to embrace GM in face of “NGO and consumer groups continue to oppose biotech crops and foods (also known as genetically modified organisms or GMOs).”

    Tactics include using spin to try to tie it to climate change.

    If it is so great it should sell itself on its own merits without having to employ subterfuge.

    http://www.cablegatesearch.net/cable.php?id=10BANGKOK111

  3. The trick is to restrain oneself to one civilised comment and one civilised link… otherwise its off to the moderation bin. Like being drawn across the coals by a (nineteen) fifties matriach. Young man, we don’t mind what you say, but all things in moderation….

  4. Poor ‘ol Bernanke …. the recovery hasn’t happened, and all he can look forward to, is a hoped-for turnaround due to “pent up demand” or possible “additional monetary stimulus” (to be considered in September).

    From Jackson Hole Speech

    … Notwithstanding these more positive developments, however, it is clear that the recovery from the crisis has been much less robust than we had hoped. From the latest comprehensive revisions to the national accounts as well as the most recent estimates of growth in the first half of this year, we have learned that the recession was even deeper and the recovery even weaker than we had thought; indeed, aggregate output in the United States still has not returned to the level that it attained before the crisis. Importantly, economic growth has for the most part been at rates insufficient to achieve sustained reductions in unemployment, which has recently been fluctuating a bit above 9 percent. Temporary factors, including the effects of the run-up in commodity prices on consumer and business budgets and the effect of the Japanese disaster on global supply chains and production, were part of the reason for the weak performance of the economy in the first half of 2011; accordingly, growth in the second half looks likely to improve as their influence recedes. However, the incoming data suggest that other, more persistent factors also have been at work.

    Why has the recovery from the crisis been so slow and erratic? Historically, recessions have typically sowed the seeds of their own recoveries as reduced spending on investment, housing, and consumer durables generates pent-up demand. As the business cycle bottoms out and confidence returns, this pent-up demand, often augmented by the effects of stimulative monetary and fiscal policies, is met through increased production and hiring. Increased production in turn boosts business revenues and household incomes and provides further impetus to business and household spending. Improving income prospects and balance sheets also make households and businesses more creditworthy, and financial institutions become more willing to lend. Normally, these developments create a virtuous circle of rising incomes and profits, more supportive financial and credit conditions, and lower uncertainty, allowing the process of recovery to develop momentum.

    Maybe one of Bernanke’s staffers should tell him that a root cause of the crisis is too much credit and lending and that he’d better find some other basis for his “virtuous circle” (actually a ratchetting up of debt). Households are refusing to carry this credit and lending, but Bernanke misunderstands this as households supposedly “repairing theri balance sheets” (as their homes and cars are prepossessed). Its the banks companies that are protecting their balance sheets by throwing Americans into poverty, destitution, and homelessness.

    But I suppose Bernanke can always pray for exports. His so-called ” cyclical recovery in employment” appears to have a puncture.

    Of course there is always the Weimar/Zimbabwe solution:

    In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability.

    In essense Bernanke is saying – don’t look at me to save you, I’ve done all I want to do ….

    …most of the economic policies that support robust economic growth in the long run are outside the province of the central bank.

    So he throws the responsibility back onto government processes (which arfe being trashed by T-Party types)

    …To achieve economic and financial stability, U.S. fiscal policy must be placed on a sustainable path that ensures that debt relative to national income is at least stable or, preferably, declining over time. As I have emphasized on previous occasions, without significant policy changes, the finances of the federal government will inevitably spiral out of control, risking severe economic and financial damage.

    Well he got that right – whatever starts as a ratchet – inevitably ends up in a spiral.

    All this simply because we have not found means to control our capitalists who are raking in billions of profits, record profits for some, even as global society as a whole slides into penury.

    Now go back and look at our Budget Papers – Statement 2 – “Economic Outlook”. Where is their 4.25% world growth in 2011, and where is there going to be 4.5% world growth in 2012? (p2-11).

  5. Professor Quiggin: I will miss my Marxist diet. Hope you will find time between your writing to post the occasional blog.

  7. Chris, on this context “marxist” has the synonyms thoughtful, progressive, questioning, non-ideological, intelligent, analytical, educated. All of the things the neocons are not.

  9. “Economists” – ie, the talking heads on TV from the financial heart of the country who happen to have satisfied requirements on obeisance to the efficient markets hypothesis – nevertheless violate it every time they rail about ‘inflexibility’ in the labour market. Don’t they know that efficient markets employ workers until the marginal value product = the effective wage rate? More flexibility lowers the effective wage rate, therefore MVP is lower and less productive workers employed, therefore average labour productivity falls. Strangely, they all seem to argue that higher wages cuts employment, an implication of their theory, but they don’t acknowledge the other implication…
    Something to do with class interests overcoming analysis???

    (JQ’s ‘No hard and fast rules for workers’ suggests the ubiquity of the herd mentality afflicting mainstream economics)

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