Macroeconomics

A commentator here drew my attention last night to a new policy paper from the Restore Britain group that has been launched by former Reform MP Rupert Lowe, who now sits as an independent MP for Great Yarmouth in the House of Commons, and who, this weekend, launched his own political party.

That party is called Restore Britain, and sits further to the right than any other likely to attract media attention in the UK at present.

Entitled Mass Deportations: Legitimacy, Legality, and Logistics, this paper claims that the UK could remove every undocumented migrant now living in the country within a few years through sweeping legal change, administrative expansion, and a deliberately hostile environment designed to force voluntary departures. 

[…]

In short, it would be one of the largest state economic programmes in modern British history, put together with the deliberate intention of pursuing hate whilst imposing threats, fear, intimidation, incarceration and violent relocation on many hundreds of thousands, and potentially millions of people.

The supposed numbers involved are staggering. The suggestion is that up to 2 million people might be forced from the UK within three years. About 75% half of those would supposedly leave voluntarily due to the hostile environment the policy would create. That environment would undoubtedly target all migrants, regardless of their legal status. It would be totally foolish to think otherwise. The remainder, the report suggests, would be forcibly removed. Official estimates do not suggest that anything like that number of people are illegally resident in the UK.

[…]

We are often told that the state is powerless. That includes the claim that it is powerless to house people, powerless to fund social security, and powerless to invest in care.

This paper implies something quite differently. The implication is that the state is immensely powerful. The suggestion is that it is capable of tracking, detaining, transporting, and expelling millions. The contradiction is obvious, but it exposes something deeper.

The choice revealed is whether the state wants to do things that are good, to which the answer from the current political establishment is that, apparently, and for reasons that are not clear, it does not, or something straightforwardly evil, which is what this paper proposes, of which it is apparently thought to be capable.

The question is not, then, about whether the state has power. The question is about how that power is used, and to what ends.

In calls with more than 200 organizations Gownder said researchers found that some of last year’s large-scale job cuts were belt-tightening decisions, not the result of shifting work to AI.

“So then that's not losing a job to AI. That is a financial decision masquerading as an AI job loss. They're just saying: ‘Well, we're hoping we'll fill it with AI at some point.’ So that is a very different proposition than AI is actively stealing all these jobs.”

There is a real phenomenon of a frozen white collar job market in which corporations are not hiring for open roles as a hedge to see if jobs can be duplicated with AI, he said.

“But let's face it, when you have work to do, it's got to get done at some point,” Gownder said. “If the AI doesn't work out, they're either going to have to hire or they're going to have to find some other solution.”

Gownder said historically, the loss of industrial and manufacturing jobs in the USA’s “rust belt” was driven by globalization not robotics, and he sees a similar scenario playing out now with AI.

“Outsourcing is a very popular one,” he said. “They’re firing people because of AI, and then three weeks later they hire a team in India because the labour is so much cheaper.”

John Maynard Keynes, in a 1942 BBC address:

   Let us not submit to the vile doctrine of the nineteenth century that every enterprise must justify itself in pounds, shillings and pence of cash income … Why should we not add in every substantial city the dignity of an ancient university or a European capital … an ample theater, a concert hall, a dance hall, a gallery, cafes, and so forth. Assuredly we can afford this and so much more. Anything we can actually do, we can afford. … We are immeasurably richer than our predecessors. Is it not evident that some sophistry, some fallacy, governs our collective action if we are forced to be so much meaner than they in the embellishments of life? …

   Yet these must be only the trimmings on the more solid, urgent and necessary outgoings on housing the people, on reconstructing industry and transport and on replanning the environment of our daily life. Not only shall we come to possess these excellent things. With a big programme carried out at a regulated pace we can hope to keep employment good for many years to come. We shall, in fact, have built our New Jerusalem out of the labour which in our former vain folly we were keeping unused and unhappy in enforced idleness.

In the autumn of 1938, an internal memorandum was circulated among Reichsbank officials about the dire economic situation of Nazi Germany as a result of the frenzied rearmament policy through central bank monetary expansion. Warning against its inflationary effects, the memo suggested a “smooth landing” from a war to a peacetime economy. In the following months, seeing that instead of restraint there was a further acceleration of the armament race, Reichsbank President Hjalmar Schacht and the banks’ directorate decided to issue an official memorandum, which Schacht delivered directly to Hitler’s hands. Emphasizing that the Fuhrer himself had always “rejected inflation as stupid and senseless”, the letter stressed that “Reichsbank gold and foreign exchange reserves were ‘no longer available’”, that the trade deficit was “rising sharply” and that “price and wage controls were no longer working effectively”. With the volume of notes in circulation accelerating, state finances were bluntly described as “close to collapse”.

As Australia begins to plot a recovery strategy from the first recession in the country in decades, the Morrison government needs to examine what has worked well in the past.

Crises require strong leadership, national cohesion and a framework for carrying out recovery efforts on a grand scale.

As such, there is a case to be made for a new Commonwealth agency to lead the recovery effort, built on the model of the Department of Post-War Reconstruction that helped Australia emerge from the turmoil of the second world war.

In December 1942, Prime Minister John Curtin established the Department of Post-War Reconstruction. Even though the war was still raging, its task was to begin planning and coordinating Australia’s transition to a peacetime economy. 

The Household, Income and Labour Dynamics in Australia (HILDA) Survey is a household-based panel study that collects valuable information about economic and personal wellbeing, labour market dynamics and family life. It aims to tell the stories of the same group of Australians over the course of their lives.

Started in 2001, the HILDA Survey provides policy-makers with unique insights about Australia, enabling them to make informed decisions across a range of policy areas, including health, education and social services.

As always with a Galbraith at the keyboard, this is a delight. Taken almost verbatim from the lecture mentioned below:

Twenty-five years ago, on a brilliant winter day at Alta, I skied off the top of the Sugarloaf lift and heard a familiar voice asking for directions. It was William F. Buckley Jr. I pulled off my hat and went over to say hello.  Buckley greeted me, then turned to a small man at his side wrapped in a quilted green parka topped with a matching forest green stocking cap and wraparound sunglasses in the punk style. “Of course,” Buckley said, “you know Milton Friedman.”

Last fall, when I received an invitation to deliver the 25th Annual Milton Friedman Distinguished Lecture at Marietta College, my first act was to notify Buckley, already then quite ill. I warned that he couldn’t publish on it or the invitation might be revoked. The e-mail came back instantly, full of exclamation points, block caps, and misspellings. “Congratulations! What a wonderful opportunity to REPENT!”

Developing social workers’ capacity and engagement in collaborative community-based innovations to climate-driven and other environmental hazards better ensures progress on the Grand Challenges. Such inclusive solutions value community leadership and are culturally responsive and justice-centered. Multisolving, pioneered by Dr. Elizabeth Sawin, offers a framework to pair social work goals from the Grand Challenges with climate-responsive interdisciplinary solutions by tackling multiple problems simultaneously with a single investment of resources. Exploring multisolving case studies that align closely with the Grand Challenge to create social responses to a changing environment, the authors consider collaborations and share experiences teaching courses and workshops that integrate multisolving into the social work curriculum and align with professional ethics to achieve these goals.

It's the RBA. It's statistics.

This Article works to debunk the myth of finance as intermediated scarce private capital and offers an alternative, more up-to-date theoretical framework for understanding the structure and operation of our financial system. We argue that, contrary to contemporary orthodoxy, modern finance is not primarily scarce, privately provided, and intermediated, but is, in its most consequential respects, indefinitely extensible, publicly supplied, and publicly disseminated. At its core, the modern financial system is effectively a public-private partnership that is most accurately, if unavoidably metaphorically, interpreted as a franchise arrangement. Pursuant to this arrangement, the sovereign public, as franchisor, effectively licenses private financial institutions, as franchisees, to dispense a vital and indefinitely extensible public resource: the sovereign’s full faith and credit.