Archive for the ‘Political Economy’ Category

Adam Smith for our troubled times

Saturday, June 23rd, 2018

An old joke is that a classical book is one that everyone cites, but no-one reads. By this measure, each of the two books that Adam Smith wrote are classics. If his followers today took time to read then, they would disagree with much of what he wrote. (more…)

Italy’s economic woes

Wednesday, June 20th, 2018

Martin Wolf’s Wednesday column provides an excellent explanation this week of why Italy is in trouble. Italy should never have joined the euro. In theory, countries can avoid devaluation by increasing productivity and lowering wages. In practice, this is politically difficult. In the case of Italy, it is impossible. If Italy had kept the lira, it could easily devalue its currency and regain competitiveness with other countries of the euro zone (primarily Germany). (more…)

New Zealand’s universal pension is in danger

Saturday, June 16th, 2018

New Zealand has a universal pension scheme that is the envy of the world. It is simple, affordable, and eliminates poverty in old age. When a qualified resident reaches the state pension age, he or she receives a basic, flat pension, regardless of income, wealth or employment history. This benefit, called ‘Superannuation’, is financed from general government revenue. Earmarked taxes are not levied to support it, but benefits are taxable as regular income, so net benefits are lower for pensioners who have income from work or from savings. (more…)

the source of US power

Monday, May 28th, 2018

FT columnist Wolfgang Münchau explains that acceptance of the US dollar as a global currency gives the country extraordinary power. The United States alone can impose and enforce extraterritorial sanctions. This privilege is not available to other countries because no currency exists to replace the US dollar. (more…)

China’s view of the world

Tuesday, May 1st, 2018

FT columnist Martin Wolf recently participated in an international conference convened by the Tsinghua University Academic Center for Chinese Economic Practice and Thinking. He describes it as “franker than any I have participated in during the 25 years I have been visiting China”, and lists seven propositions that the Chinese elite expressed to their foreign guests:

1. China needs strong central rule.
2. Western models are discredited.
3. China does not want to run the world.
4. China is under attack by the US.
5. US goals in the trade talks are incomprehensible.
6. China will survive these attacks.
7. This will be a testing year.

Martin simply describes these three propositions, without criticism. I assume that he agrees with them, but perhaps he will express disagreement in a future column. Or, perhaps not. In the meantime, I pass along to you his description of proposition number two, which I found most interesting, and most disturbing for western states: (more…)

measuring economic value

Sunday, April 29th, 2018

Economists are frequently criticized for failing to include in their measures of output goods and services that have no price. A common example is household services done by parents – or children – without pay. Even worse, cleaning up bads – such as an oil spill – is counted as an increase in national output (GDP). FT columnist Martin Wolf reviews a new book by Italian-American economist Mariana Mazzucato that covers all this and more. (more…)

the new barter economy

Saturday, April 21st, 2018

FT columnist Gillian Tett explains, very well and concisely, that the ‘free’ services that internet companies provide in exchange for our personal data is the age-old system of barter. This system is difficult for economists to understand, because prices, measured in money, are absent. (more…)

multilateralism, rules, and their demise

Thursday, April 5th, 2018

FT columnist Philip Stephens has written an excellent column on the sad state of world affairs. Here are a few excerpts from it. Click on the link below to read the full column. (more…)

the real cause of trade deficits

Wednesday, April 4th, 2018

In an FT column, Megan Greene provides an excellent, concise explanation of why the US has a large trade deficit, and why tariffs on trade will not reduce it. President Trump should read this before his trade war harms the US and its trading partners. This is Economics 101, understood by nearly all trained economists but difficult for non-economists to understand. (more…)

a dining room set for Ben Carson

Wednesday, February 28th, 2018

US Republicans portray themselves as conservative, but in office they are not frugal, and show little concern with deficit spending that benefits them and the wealthy. Here is an example, from a department entrusted with the task of providing housing for low-income citizens.

The Department of Housing and Urban Development spent $31,000 on a custom hardwood table, chairs and hutch for Secretary Ben Carson’s office, records show.

The purchase in late 2017 came at the same time as plans to cut department programs for the homeless, elderly and poor. Mr. Carson “didn’t know the table had been purchased,” but does not intend to return it, a spokesman said.

On a tour of facilities for the poor last year, Mr. Carson warned of the effects of providing “a comfortable setting” for those on government assistance.

“Morning Briefing”, New York Times, received by email the morning of 28 February 2018. The briefings are archived at this link.