Error message

Deprecated function: The each() function is deprecated. This message will be suppressed on further calls in _menu_load_objects() (line 579 of /var/www/drupal-7.x/includes/menu.inc).

Curried Narratives: An Indian Revolutionary’s View of Japan

Published by Anonymous (not verified) on Sat, 31/07/2021 - 5:21am in

Published in Japan Forward 26/7/2021

Even during Tokyo’s Covid-induced state of emergency, there was a queue outside Nair’s Indian restaurant in East Ginza. Fortunately, the turnaround at midday is impressively rapid, and I didn’t have to wait long before a table became available.

I ordered the “teiban” (signature dish) known as Murugi Lunch. Excellent value at Yen 1500, it consists of a leg of chicken that has been softened by several hours of simmering, together with turmeric rice, cabbage and mashed potato.

NairJuly8 (2)

As I spooned up the multi-spiced and highly nutritious concoction, I reflected on how historical narratives differ according to who is doing the narrating. When it comes to the story of modern Japan, the signature dish was prepared by the western countries that were on the winning side of the Second World War. Let’s call it the Progressive Club Sandwich.

The Indian take is very different and likely to become more significant as India’s geopolitical footprint grows in line with its economy – which is on track to become the world’s third largest in 2030, according to Japan’s Center for Economic and Business Research. There could be no better symbol of an Indian alternative history of modern Japan than the founder of the restaurant in which I am sitting.

A. M. Nair, who died in 1990, opened his restaurant in the early years of the post-war American occupation. It would be interesting to know what he thought about the G.I.s then strolling around Ginza with their Japanese “pan-pan” good-time girls. It would be equally interesting to know what the American officers and bureaucrats who patronized his restaurant would have thought of their host, had they been fully informed of his personal history.

"Founded in 1948" “Founded in 1949”

In his memoir, “An Indian Freedom Fighter in Japan”, Nair declares that “my close friends used to whisper, after the war, that for fighting against Britain and encouraging my Japanese friends to do likewise, I should have been booked as War Criminal Number One, and that MacArthur missed out on me.”

Nair does not mention the identity of the friends who made this dark joke, but one of his closest military contacts, War Minister General Itagaki, received the death sentence at the Tokyo Trials, while another, General Umezu, died in prison.  Nair remained an Indian citizen all his life, but because of the espionage and undercover work he carried out, he was treated by Japan’s top military figures as equivalent to a major-general in rank.

Nair-san, as he was to be familiarly known, was a native of Kerala on the southwest tip of India. He arrived in Japan in 1928 at the age of 23 to study engineering at Kyoto University. Back home, he had already made a nuisance of himself, organizing India’s first school strike and agitating against caste restrictions and the British colonial authorities. Once settled in Japan, he was bowled over by what he saw.

“Here was a country which, in a matter of about a mere half-century, had progressed from a basically feudal set-up to the status of a great economic power… If Japan could do what she did, why should India at least not be able to break free from its colonial shackles?”

It is a testimony to the seriousness of Japan’s Pan-Asian ambitions that Nair, while still a hard-up student with less than perfect Japanese, was taken up by senior military men. General Yamamoto, commander of a division stationed near Kyoto, treated him “practically like a brother” and introduced him to other members of the elite.

On display in the restaurant On display in the restaurant

Soon he was lecturing far and wide and finding that his anti-British, pro-independence message was greeted with enthusiasm. As the clash of empires heated up, Nair was invited to Manchukuo (now Manchuria), the puppet state that the Japanese army had set up in 1932.

In the following years, Nair led a kind of Lawrence of Arabia existence, travelling through remote areas of Manchukuo, China and Mongolia, doing his best to damage British interests and promote Japanese influence. He disguised himself as a camel dealer, Moslem mullah and Tibetan “living Buddha.” Amongst other adventures, he foiled a British intelligence agent’s plan to map out a route to India across the Himalayas by setting ablaze the entire fuel supply for his vehicles.

When war broke out in the Pacific, Nair became the liaison officer of his mentor and fellow Japan-resident Rash Behari Bose, who led two important Japan-backed organizations, the Indian Independence League and the Indian National Army.  In his memoir, Nair makes it clear that he considers that the work of R.B. Bose has been unfairly minimized and the contributions of the more famous Subhas Chandra Bose, who took over leadership of the I.L.I. and I.N.A.in 1943, has been greatly inflated.

In contemporary India, Subhas’s stature appears to have increased, with Prime Minister Narendra Modi celebrating the 125th anniversary of his birth with a visit to his hometown earlier this year. There was even a series on Amazon Prime, The Forgotten Army, giving a glossy, heavily fictionalized account of the I.N.A.’s disastrous attempt to invade British India from Burma.

Nair is much less impressed. While esteeming Subhas’s charisma and patriotism, he slams his lack of realism and dictatorial tendencies.

Yet, as Nair notes, the I.N.A. indirectly helped to usher in independence. When the British Indian authorities attempted to try former members of the rebel army for treason, a storm of protest broke out nationwide and the Indian component of the Navy mutinied in Bombay. For British India, the writing was on the wall.

Nair chose to stay in Japan after the war, acting on several occasions as interpreter for Dr. R.B. Pal, the only judge at the Tokyo War Crimes Trials to find all “A-Class” (political) defendants innocent. Nair quotes Pal’s stinging counter to allegations of Japanese conspiracy to wage war: “Many powerful nations are living this sort of life, and if these acts are criminal, then the entire international community is living a criminal life.”

India was not one of the 49 nations that signed the US-Japan Peace Treaty in 1951. Nair had secured the unpublished text of the simultaneously effected US Japan Security Pact and brought it to the attention of Jawaharlal Nehru, India’s first Prime Minster. In the Indian view, making the Peace Treaty conditional on the Security Pact violated Japanese sovereignty. Instead, Nehru concluded a separate Bilateral Treaty of Perpetual Peace and Amity with Japan in 1952.

Nair was not an uncritical admirer of Japan. He deplored brutal behaviour in China, the degradation of Korean and Japanese women in the red light districts of Manchukuo and the inability to learn from mistakes. But he saw Japan’s “Asia for the Asians” drive as the key to Indian independence – and in that he was right.

Over time, Nair’s anti-British animus appears to have abated. In 1974, he and his Japanese wife attended a reception for Queen Elizabeth and the Duke of Edinburgh in Shinjuku Gardens. In his later years, he visited India regularly and seemed disappointed by the limited improvement in people’s lives. One wonders what he would have made of the much more dynamic India of today – and of modern Britain with four politicians of Indian subcontinental descent in Boris Johnson’s Cabinet and one of  Pakistani.

The Progressive Club Sandwich, with its assumption of Western moral superiority and Japanese backwardness, is still a popular comfort food. It has a long history, beginning with the “opening” of Japan by Commodore Perry’s gunboats in the 1850s and its influence can be found today in innumerable op-eds, books and academic papers.

Kerala cuisine is richly varied, reflecting the influences of vegetarian Hindus, first century Christians, Moslems, and the Portuguese traders who brought chili peppers from the new world.

Nair’s restaurant alerts us to a very different suite of flavours – and a very different narrative.

James Lindsay Versus the Postmodernists Who Think 2+2=4 Is Racist

No, I’m really not making this up. This is what some of the idiots who support Critical Race Theory actually believe. And it really does frighten me what will happen if this morons ever get the power they’re aiming for.

I came across the video from The Same Drugs in which host Meghan Murphy talks to James Lindsay. Murphy’s a feminist, who graduated in gender studies. She’s very definitely on the left and says that her views on welfare and the economy are socialist. However, she now describes herself as a liberal because of the immense importance of defending free speech and debate. Lindsay is also a man of the left. He’s a doctor of mathematics, although he says that he’s been away from the discipline for so long that he wouldn’t describe himself as a mathematician. He’s a member of the group with Peter Boghossian and Helen Pluckrose that attacks and refutes Critical Race Theory and the other forms of Postmodernism which reject rationality, evidence and reasoned debate because these are all supposed to be the oppressive values of White males.

I started watching this video, but didn’t get any further than about ten minutes because I was so astonished at what I was hearing. Lindsay apparently got into an internet argument with radical postmodernists and racial activists, who really do believe that 2+2=4 is a form of colonial oppression. Lindsay says the fight started when he put up a kind of Devil’s Dictionary in the tradition of Ambrose Bierce, giving satirical definitions of words sending up CRT and related ideologies. In this instance, it was about Critical Race Theorists rejecting 2+2=4 because by choosing four as the solution, other values were suppressed. This was then picked up by his opponents on the other side, who then posted on Twitter and social media that, yes, 2+2=4 was racist. One of these was the woman in charge of decolonising Seattle’s educational curriculum. Another was a Guardian hack, who snidely posted that it was rich of him to say that while using Arabic numerals. He points out that she couldn’t refute his mocking definition, because that really was what she believed. She could only respond by attacking him. And then he was met by a flood of people trying to prove that 2+2=5. When asked if you can do this, he replies by saying that it isn’t. All the proofs they’re using are wrong. This was then followed by people talking about how western traders cheated the various indigenous peoples around the world, who can’t count beyond three. Yes, they also exist. This was to show that 2+2=4 really was part of an ideology of imperialist and colonialist oppression. Lindsay states that the people arguing against him were maths educators rather than mathematicians, including someone on a science and technology course at Edinburgh University in Scotland.

This is genuinely frightening as it’s a rejection of one of the simplest, foundational sums of mathematics, and by extension, all maths simply for reasons of ideology. Of course people have been speculating that their might be other regions in the cosmos or multiverse in which 2+2=5 for some time. There’s a bit in the Tim Burton SF flick, Mars Attacks, in which Piers Brosnan’s scientist character explains this to a fashion journalist. Back in the 1990s I picked up a postmodernist book on maths, which claimed it was taking God out, and the body back in. And when I was at school there were various books for children which contained trick sums that gave stupid values for simple sums like 2+2=4. These were always based on a carefully concealed mistake.

Well, western maths goes all the way back to ancient Sumeria, Babylon and Egypt, and I’m very certain that these African and Asian cultures knew exactly that 2+2=4. As did the superb mathematicians of Islam, India, China and Japan. And I think it’s insulting to any Black people wishing to study maths and science that these idiots are now telling them that the foundational principles of western mathematics aren’t suitable for them and are a form of ideological enslavement which must be torn down in order to decolonise the discipline.

I am sure the people, who believe this nonsense regard themselves as intellectual sophisticates at the very cutting edge of maths and progressive politics. But I think they’re really just barbarians, who will wreck maths and science with pseudointellectual gibberish, destroying western civilisation for an intellectually bankrupt, racist ideology.

Five Years Later, Not Much Doom (Yet!)...

Published by Anonymous (not verified) on Mon, 28/06/2021 - 11:00pm in



J.W. Mason put out this snarky tweet that had a follow up that linked to one of my articles (that I have long forgotten about!): Olivier Blanchard Joins The “Japan Is Doomed!” Crowd. To be slightly fair to Blanchard, what I referred to was an interview with a journalist, and not long form content of his own.

NOTE: The Feedburner email service is being discontinued. If you wish to receive my articles via email, you need to sign up for my free Substack: https://bondeconomics.substack.com/

He was quoted as saying (which based on my experience, does not guarantee that is exactly what he said!):

One day the BoJ may well get a call from the finance ministry saying please think about us – it is a life or death question - and keep rates at zero for a bit longer. [...]

The risk of fiscal dominance, leading eventually to high inflation, is definitely present. I would not be surprised if this were to happen sometime in the next five to ten years.

As J.W. Mason noted, the first five years of his forecast horizon is up. Below, I update a chart I showed in the 2016 article (although the chart below is headline CPI, I used earlier a variant that had a longer history).

Although I am not pretending to be a forecaster, I would argue that my comments stood up relatively well.

If we take the notion of “revealed preference” seriously, we have to conclude that Japanese policymakers want to achieve a target of price level stability. As the chart above shows, if that is the case, they have achieved their objective. The price level (as measured by a non-standard CPI index, but which has a longer history than the headline CPI) has been in a band 5% since the early 1990s.

As part of my inflation primer, I hope to dig further into Japan’s post-1990 “inflation” experience, but it does appear to be an interesting example of a fiat currency achieving price level stability. This stabilisation is ignored for two reasons:

  1. western mainstream economists are convinced that 2% inflation is the “correct” level for inflation targeting, and they browbeat Japan for “deflation,” and

  2. everybody is predicting the imminent collapse of the Japanese yen into hyperinflation due to “unsustainable” fiscal deficits and “money printing.”

I do not make forecasts, so I normally try to avoid poking fun at forecasts that go wrong. (In fact, in the cases of recessions, my shtick is that they are inherently hard to forecast, not counting oddities like the 2020 recession). However, I will go after crackpot “fiscal collapse” and “out of control inflation” theories, particularly in the case of Japan. “Experts” have been consistently and totally wrong about the effects of Japanese fiscal policy (and “money printing!”) since the mid-1990s, and market participants were well aware of the “Widowmaker Trade” when I started in finance in 1998. There was no excuse to make the same ridiculous mistake in 2016.

Although I am thankful for J.W. Mason digging up this gem (and helping fill my content void!), this anecdote ties into what I have been thinking about as I am trying to re-orient myself with respect to current economic debates. I have not followed the economic data too closely since the pandemic hit, on the basis that it was too novel a situation for me, and the best use of my time was to focus on my books. Now that we are returning to something closer to normalcy, it will be easier for me to offer comments on the data flow with at least some form of confidence, even though I am not working full time as an economy watcher.

My concern is that I am very underwhelmed by the value of a lot of economic theory, particularly mainstream theory. To what extent mainstream economics has value, it is probably in the area of empirical work. (Post-Keynesians have complaints about that as well, but digging into that is not a priority for me.) Mainstream economic theory largely rides on the coattails of that empirical work, as well as the general deference to credentialism.

  • Blanchard’s discussion of “fiscal dominance” is an example of jargon overpowering anything resembling common sense. What is fiscal dominance, anyway? Why is it bad? What value did the stochastic calculus give Blanchard in making his assessment of risks in Japan in 2016?

  • What insights did neoclassical theory give us about the pandemic (and post-pandemic economy)? The importance of “inflation expectations”? If a significant portion of the population believes that inflation is “really 10%”, in what sense are “inflation expectations anchored”?

Although I enjoy dumping on mainstream economic theory as much as the next person, I will finish off by noting that I do not think that mainstream economics did as badly on a relative basis as was the case in the Financial Crisis. In the Financial Crisis (and its aftermath), the added value of neoclassical economics was negative — which helped push me in the direction of heterodox economics when I was still working in finance. In the pandemic, it was more of a question to reacting to the events, which economists of a wide variety of backgrounds were able to do with differing success. (The only obvious analytical failures were the usual suspects calling for hyperinflation).

With economic dynamics returning closer to normal, my gut reaction would be that the heterodox/neoclassical fault lines would revolve around the “mystery variables” (like NAIRU, r*, etc.) which are a core part of the neoclassical toolkit. However, the data deviations have obliterated the techniques used to estimate those variables, so we end up with a much more fluid theoretical situation where it is much harder to make generalisations.

Email subscription: Go to https://bondeconomics.substack.com/ 
(c) Brian Romanchuk 2021

Right-Winger Belfield Attacks Tesco Humanless Stores – And He’s Right!

Published by Anonymous (not verified) on Sat, 26/06/2021 - 8:13pm in

I’ve put up a number of posts commenting on videos produced by right-wing internet radio Alex Belfield. Belfield is a working class. He says he was born and raised in a pit village, never went to university and was therefore sneered at and looked down upon by his co-workers and superiors in local radio. He has a real chip on his shoulder about this, and is constantly denouncing the BBC and its staff, who are supposedly very middle class ‘Guardian-reading, champagne-sipping left-footers’. He hates the affirmative action programmes for Blacks and modern media identity politics, describing the Blacks and those of other ethnic minorities, as well as the gays, who fill them as ‘box-tickers’. He is particularly scathing about BLM, though there are many reasons why people, not just on the right, should despise them. He’d like the lockdown lifted, Priti Patel to start taking tougher action on the ‘dinghy divers’, the illegal immigrants coming over the Channel in leaky boats. I think he also thinks that many disabled people are just malingerers, and would definitely like the NHS privatised and handed over to private management.

But in this video, Belfield is exactly right. Tesco have announced that they are launching stores that don’t have tills. Instead, it seems, people will just pay for what they want using an app on their mobiles or other device. I can remember something about this on the BBC news a few months ago. In these stores there are to be no, or hardly any, serving staff. You simply walk in, take what you want and leave. There are cameras mounted around the store watching what you pick up, which is automatically deducted from your account.

Obviously there are a number of major issues with this idea. One is privacy. Everyone who comes into the shop is under electronic surveillance, another step towards the kind of totalitarian surveillance society that’s been introduced in China, as very chillingly described in the Panorama documentary ‘Are You Scared Yet, Human?’ a few weeks ago. Another major issue is joblessness. People are naturally worried about the effect further mechanisation is going to have on jobs. Despite assurances that the robot workers in car factories, for example, have created as many jobs as they’ve replaced or more, it’s been predicted that 2/3 of all jobs, particularly in retail, will be lost to technology in the coming decades. It looks frighteningly like the employment situation in Judge Dredd’s MegaCity 1, where, thanks to robots, 95 per cent of the population is permanently unemployed.

In this video, Belfield concentrates on another issue, loneliness. He points out that many people, especially older people, go to the shops because their lonely. These people are going to be made even lonelier by the lack of human contact with shop staff in these places. And this is apart from the fact that not everyone – again, particularly older people – don’t have mobiles or the other gadgets that will supposedly allow the stores’ computers automatically to make the transactions when you use them.

I’m not a fan of self-service tills for the same reason, although I admit that I do use them if there’s a queue. And to be fair, they’ve also been denounced by the Daily Mail, which called them ‘Daleks’ and demanded a return to human service staff when they first came out. I’ve therefore got absolutely no problem with putting this video from the mad right-winger up. He’s saying something that both left and right should agree on.

I’m also sceptical about these stores’ chances for survival. People need contact with other humans, and those businesses that have tried to remove them completely in favour of robots have come crashing down. A few years ago a Japanese businessman proudly opened a hotel operated by robots. There were robots on the welcome desk, including an animatronic dinosaur. I think your luggage was taken to your room by an automatic trolley, and you got your meals from a vending machine. A few months or a year or so later, the whole idea came crashing down. No-one wanted to stay. When journalists interviewed some of the few guests that actually stayed there, they said that it was actually very lonely. There were no other humans about, apart from the maintenance and ancillary staff. At a much less elevated level, a Spanish brothel that had opened with sex robots rather than human sex workers also closed.

It also reminds me of an episode of the revamped X-Files when that came back briefly a few years ago. This had Mulder and Scully eating in an similar automatic restaurant. Problems start when one or the other of them is unable to pay their bill. The automatic till demands payment, which for some reason isn’t going through. The machines working in the kitchen behave ominously. The two paranormal sleuths leave without paying, but they’re followed to their homes by a flock of angry drones. Meanwhile, their phones are continuing to demand the payment they owe the restaurant. Their fully automated, computerised homes start to disobey them and behave awkwardly. The domestic robots also start rebelling. And it looks like the duo will be on the receiving end of the anger of a full-scale robot attack force. Fortunately, this is stopped by one of the two finally getting the payment to go through. It ends with Mulder writing on his report that it matters how we treat our machines. Because how we do will determine how they will treat us in turn. It’s another example of Science Fiction as ‘the literature of warning’ and the threat of the machines taking over. But it does seem to be a reasonable treatment of the fears that such fully automated restaurants and stores provoke, as well as the frustration that occurs when the technology that takes your payment doesn’t actually work. I doubt that Tesco’s stores will automatically send squads of robot warriors after customers who have similar problems. But there will be problems when the machines make mistakes, and don’t charge people for the goods they’ve bought, or charge them the wrong amount, or otherwise go wrong. Which could lead to perfectly innocent people being wrongly accused of shoplifting.

Belfield is right about the threat posed by Tesco’s brave new stores without tills or attendant humans. This will lead to further unemployment, and a lonelier, more alienated society.

America’s Greatest Danger isn’t China. It’s Much Closer to Home.

Published by Anonymous (not verified) on Mon, 21/06/2021 - 5:37am in


China, fascism, Japan

China’s increasingly aggressive geopolitical and economic stance in the world is unleashing a fierce...

What Is behind the Global Jump in Personal Saving during the Pandemic?

Published by Anonymous (not verified) on Thu, 17/06/2021 - 12:36am in

Matthew Higgins and Thomas Klitgaard


Household saving has soared in the United States and other high-income countries during the COVID-19 pandemic, despite widespread declines in wages and other private income streams. This post highlights the role of fiscal policy in driving the saving boom, through stepped-up social benefits and other income support measures. Indeed, in the United States, Japan, and Canada, government assistance has pushed household income above its pre-pandemic trajectory. We argue that the larger scale of government assistance in these countries helps explain why saving in these countries has risen more strongly than in the euro area. Going forward, how freely households spend out of their newly accumulated savings will be a key factor determining the strength of economic recoveries.

The pandemic sent consumer spending into retreat, helping drive up saving

Consumer spending plummeted in the United States and other high-income economies with the arrival of the COVID-19 pandemic. The drop was sharpest in the second quarter of 2020, reflecting the strict lockdowns then in place. Spending picked up over the second half of the year, but the recovery was only partial. Consumption was still well below pre-pandemic levels at year-end.

A simple accounting identity can help clarify how changes in spending feed into saving. Since income is either spent or saved, changes in income must be matched by changes in spending and saving.

Change in Income = Change in Consumption + Change in Saving

If income is stagnant, a decline in consumption will result in an equal increase in saving. If income is growing, the same decline in consumption will translate into a larger increase in saving.

The chart below shows how this relationship has played out during the pandemic for the largest high-income economies: the United States, the euro area, Japan, the United Kingdom, and Canada. The triangles represent the percent change in personal disposable income—income after taxes and net transfers—comparing the first three quarters of 2020 with the first three quarters of 2019. The bars show how these changes in disposable income map into changes in consumption and saving, consistent with the identity above.

What Is behind the Global Jump in Personal Saving during the Pandemic?

While consumer spending weakened in all these economies, the magnitude of declines varied widely. U.S. spending held up best, dropping by the equivalent of 3 percent of pre-pandemic personal income. Spending in the United Kingdom fell the most, dropping by nearly 12 percent. Spending elsewhere was down 6 to 7 percent.

Household saving, in contrast, was up across the board, with increases ranging from 7 percent of pre-pandemic income in the euro area to 16½ percent in Canada. The counterparts to this increase varied widely. In the euro area and the United Kingdom, income stagnated, and higher saving came entirely from declines in consumption. In the United States and Canada, income grew strongly, and saving rose by more than twice the decline in consumption. In Japan, the increase in saving came about equally from lower consumption and new income.

Data through the end of 2020—available only for the United States and Canada—tell a similar story. Saving grew strongly, with the largest contribution from income, and a smaller but still sizeable contribution from lower consumption.

Notably, personal disposable income in the United States, Japan, and Canada grew by more than twice the average pace over the previous several years. The COVID-19 pandemic, of course, brought steep recessions to all high-income economies. This raises a natural question: Why did income growth hold up so well in the United States, Japan, and Canada?

Government support bolstered household incomes

Wages and other labor compensation account for the largest part of household income—more than 60 percent of income before taxes for the economies discussed here. The rest of income comes largely from private sources such as proprietors’ earnings, rents, and investment returns. (The line between labor compensation and proprietors’ income varies across countries, depending on differences in accounting practices and in how businesses are organized.) Net social benefits represent a final key category. This includes government-provided retirement benefits, unemployment insurance, income assistance, and similar programs, net of the taxes going to fund them. For some countries, net social benefits are typically a negative item for aggregate household income, with benefit-related taxes exceeding benefit payouts. What matters for our purposes, though, is how income streams changed over the course of the pandemic to yield the total change in household income.

The chart below provides a breakdown of disposable income growth, comparing the first three quarters of 2020 with the same period a year earlier. (As with our earlier chart, data through the end of 2020 are available only for the United States and Canada, and tell a similar story.) Again, the bars show contributions to this income growth. The gold bar labeled Earnings combines labor compensation, proprietors’ earnings, rents, and investment returns. The blue bar shows the net contribution from social benefits. The small green bar labeled Net other largely consists of changes in income taxes and in private transfers such as workers’ remittances.

What Is behind the Global Jump in Personal Saving during the Pandemic?

Nominal earnings growth was negligible in the United States and negative for all other economies—hardly a surprising development given steep recessions and the resulting sharp rise in unemployment and falloff in proprietors’ income. The positive outturn in the United States seems surprising, and can be traced at least in part to a less severe downturn: Real GDP for the Q1-Q3 period was down about 4 percent in the United States, compared to a decline of more than 6 percent elsewhere.

Higher net benefits made a meaningful contribution to income growth in all economies. But the magnitude of the contribution varied widely, ranging from just under 2 percentage points in the United Kingdom to more than 8 percentage points in the United States and roughly 10 percentage points in Canada. Absent the increase in benefits, disposable income growth would have been barely positive in the United States and Canada and negative elsewhere.

What would saving have been if there had not been these higher net benefits? It is impossible to say for sure. As an accounting matter, households could have maintained the same level of saving by making even sharper cutbacks in consumption spending. But consumption declines were already large and painful. More likely, the buildups in saving would have been substantially scaled back. Moreover, an attempt to maintain saving would be at least partly self-defeating. Deeper consumption cutbacks would have translated into steeper recessions, reducing incomes across the economy—and forcing further cutbacks in consumption or saving. The perverse feedback mechanism, whereby a general increase in saving makes everyone worse off, is known as the Paradox of Thrift.

Government support went beyond social benefits

Government pandemic assistance has gone beyond higher direct transfer payments. The United Kingdom, Japan, and some euro area countries have channeled wage subsidy payments to businesses rather than workers, which means these funds show up in household incomes as wages rather than social benefits. This arrangement helps explain why earnings declines have been small given the depth of recessions. Similarly, in the United States, Paycheck Protection Program funding shows up as proprietors’ income or indirectly as wages, not as social benefits.

A look at the government accounts serves as a check on the scale of support for household incomes. Countries’ integrated macroeconomic accounts show government outlays on subsidies to the business sector. These outlays have risen substantially—by roughly half as much as the increase in social benefit payouts in the United States, the euro area, and Canada, and by four times the increase in benefit payouts in the United Kingdom. No data are yet available for Japan, but indirect evidence indicates that the bulk of pandemic assistance there is captured in the household statistics.

Unfortunately, the data do not allow us to specify what fraction of these funds were eventually paid out to households. But the upshot is clear enough. Government support for household incomes and saving was larger than suggested by the increase in social benefits—dramatically so in the United Kingdom. The euro area continues to stand out for support that is large relative to history, but small relative to what has been enacted elsewhere.

Will households spend down “excess” saving?

How freely households spend out of their newly accumulated savings will be a key factor determining the strength of economic recoveries. Consumer spending would soar if households run down these funds aggressively when economies reopen. The potential upside is underscored by the fact that much of the buildup in savings is being held in easily spendable form. As the chart below shows, household deposit holdings for the five economies discussed here have risen by an amount equivalent to between 6.5 and 13.0 percent of annual disposable income.

What Is behind the Global Jump in Personal Saving during the Pandemic?

A recent Liberty Street Economics post, however, provides reasons for thinking that spending out of recent savings will be relatively modest based on how spending typically responds to an increase in the nation’s wealth. As noted in that post, goods consumption in the United States is already above its pre-pandemic trend. The same is true in other advanced economies. In addition, most consumer spending on services goes to essentials such as housing, utilities, education, and healthcare. There is only so much pop that pent-up demand for services such as travel, restaurant meals, and entertainment can deliver.

This isn’t to discount the upside potential for growth this year and next, particularly for the United States. Data in 2020 already place the scale of U.S. government support for households toward the upper end of the advanced economy range. The additional U.S. fiscal package passed in December boosted household incomes and savings starting in January, and the much larger package passed in March will add even more.

Matthew HigginsMatthew Higgins is a vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

Thomas KlitgaardThomas Klitgaard is a vice president in the Bank’s Research and Statistics Group.

How to cite this post:

Matthew Higgins and Thomas Klitgaard, “What Is behind the Global Jump in Personal Saving during the Pandemic?,” Federal Reserve Bank of New York Liberty Street Economics, April 14, 2021, https://libertystreeteconomics.newyorkfed.org/2021/04/what-is-behind-the...


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Government ‘Ministries of Loneliness’ Bridge the Gaps of Social Distance

Published by Anonymous (not verified) on Mon, 26/04/2021 - 6:00pm in

A Ministry for Loneliness might sound like a poignant literary creation from José Saramago, Haruki Murakami or Gabriel García Márquez. But this governmental office is non-fiction — an official response to “one of the greatest public health challenges of our time,” as former U.K. Prime Minister Theresa May put it in 2018 when she launched “the world’s first ministerial lead” to tackle loneliness.

The move was designed to address a widespread problem. Even before the pandemic, a Kaiser Family Foundation survey found that loneliness affected about one in four U.K. adults. The global coronavirus pandemic and its lockdowns have made loneliness even worse, particularly among groups that already suffered from it

Now, countries around the world are recognizing the public health effects of loneliness, which England’s national strategy defines as what happens “when we have a mismatch between the quantity and quality of social relationships that we have, and those that we want.” Such mismatches, according to the U.S. National Academy of Sciences, are “associated with poor physical and mental health outcomes, including higher rates of mortality, depression and cognitive decline.” 

Following the U.K.’s lead is Japan, which announced in February the creation of its own Ministry for Loneliness to coordinate efforts and promote policy across ministries and agencies to address loneliness and isolation. According to a statement from Japan’s Office for Policy on Loneliness and Isolation, the ministry “will act as a kind of control tower for efforts by the government as a whole to provide more appropriate assistance to those who need it.”

A “control tower” for loneliness

 Japan’s Health Ministry revealed that 20,919 people died by suicide in 2020, marking “the first year-on-year rise in suicides in more than a decade, with women and children in particular taking their lives at higher rates,” according to one media report. How many of these suicides had loneliness as a contributing factor is unclear. According to Tetsuya Matsubayashi, a professor at Osaka University who studies suicide prevention, “Loneliness is certainly an important determinant of suicidal risk, but we need more evidence to say it is more important than other major determinants, such as economic difficulties and family matters.” 

“The government,” observes Matsubayashi, “needs to continue to collect more evidence to develop an effective prevention strategy.” 

lonelinessA quiet street in Tokyo. Credit: Guiseppe Milo / Flickr

To this end, Japan’s new ministry has established a task force that will engage “in practical study toward future efforts” on loneliness and isolation. Following the creation of the loneliness initiative, an emergency forum was held in February to gather local input from organizations that assist efforts to combat loneliness. The government also held a coordination conference between ministries and allocated emergency funds of approximately six billion yen (USD$54.6 million) to nonprofits.

These steps represent a pivotal change in mindset in a country where social isolation has long been considered an issue to be dealt with personally. “In Japan, solitude can be seen as a virtue and something you are ultimately responsible for addressing yourself,” Junko Okamoto, author of Japanese Old Men: The Loneliest People in the World, told Nikkei Asia. “The government needs to swiftly conduct foundational research and craft strategy based on scientific evidence.” 

England’s experience

In its endeavor to craft such a strategy, Japan has, to some degree, borrowed from the U.K.’s approach. On December 7, 2017, a report from the British government’s Jo Cox Commission on Loneliness recommended that officials there implement actions and policies to alleviate loneliness and social isolation, including the appointment of a ministerial lead on the issue. The position was created the following month, a clear acknowledgment from the government that, through its strategy, it had a role to play in reducing loneliness.

This strategy, titled A Connected Society and unveiled in 2018, is an ambitious cross-departmental set of over 50 commitments laying the structure for long-term work on loneliness and changing how public services are viewed. It has three overarching goals: developing a national conversation on loneliness to reduce stigma, building evidence on loneliness, and driving a governmental shift so that relationships and loneliness are considered in policymaking.

lonelinessThe “A Connected Society” strategy aims to involve the public, government and many different stakeholders in combating loneliness in the U.K. Credit: HM Government

In England, where 45 percent of adults experience some degree of loneliness, the issue is both social and economic. A 2017 report by the New Economics Foundation found that loneliness costs U.K. employers £2.5 billion (USD$3.4 billion) per year in employee health problems, productivity losses and staff turnover.

To support organizations working to combat loneliness, the government announced £20 million (USD$27.5 million) in funding, including £11 million in grants to 126 organizations. It also made social prescribing one of its strategy’s central commitments, funding the recruitment of 1,000 additional “social prescribing link workers” within primary care networks by April 2021.

Social prescribing link workers — also known as community connectors, well being advisors, community navigators and health advisors — support non-clinical needs in a wide range of people, including those who feel lonely, according to England’s National Health Service (NHS). They are recruited for their listening skills and empathy, and may connect people in need to community groups and services for practical and emotional support.

In another of the strategy’s pledges, Royal Mail postal workers were tasked with checking in on older people as part of their delivery rounds and referring those who reported feeling lonely to appropriate support. An evaluation of this program by the Loneliness Action Group, jointly chaired by the British Red Cross and the Co-op Foundation, showed that “three quarters of people valued visits by postal workers” and “trial partners were exploring ways to scale-up the service.”  

lonelinessRoyal Mail postal workers in the U.K. have been tasked with checking in on older customers and referring them to support networks if necessary. Credit: Neil Moralee / Flickr

The government’s strategy also included collecting and tracking evidence to inform future policy, prompting the Office of National Statistics (ONS) to develop national standards for measuring and tracking loneliness — for instance, by surveying citizens with standardized questions on the topic, with variations on wording for children and detailed guidance on how to administer the surveys.

Still, quantifying progress on reducing loneliness can be difficult. One government campaign launched in 2019 called “Let’s Talk Loneliness” aimed to challenge the stigma surrounding loneliness by encouraging the importance of talking about it. The campaign was advertised across 20 big digital screens around the country and included a toolkit for organizations that help those experiencing loneliness. But according to the Loneliness Action Group, “little is known” about whether this or other types of public campaigns are effective in tackling loneliness. The report recommends measuring the impact of this campaign: “Using this data to inform future work will be vital.”

The Loneliness Action Group produced a one-year progress report on England’s strategy and found that while “progress has been made” in setting up the policy structures to drive action, there is “still more to do to secure tangible change in the levels of loneliness across the country.”

A tricky issue to tackle 

The All-Party Parliamentary Group (APPG) on Loneliness, established in 2018 to raise parliament’s awareness of loneliness, recently published a report echoing the Loneliness Action Group’s call for consolidating and building on what was learned from the pilots in England’s loneliness strategy, such as the Royal Mail initiative. 

“Most of these pilots have now been completed, but best practice has often not been shared or spread,” says Olivia Field, head of health and resilience policy at the British Red Cross.

Crushed by negative news?

Sign up for the Reasons to be Cheerful newsletter.

Progress across departments has been uneven. For instance, transport and housing require more concrete action on loneliness, according to the Loneliness Action Group’s report. The APPG notes that both of these areas play an important role in supporting people’s ability to connect, calling on the government “to ‘loneliness-proof’ all new transport and housing developments.”

“During inquiry,” Field says, “the APPG heard how poorly designed or unsuitable housing environments can make it harder for people to host visitors as well as get out and about.” In other cases, says the APPG report, “a lack of affordable and suitable housing forced them to move away from the communities with which they were most connected. For others, poorly repaired or cramped housing conditions made it hard to maintain social connections.” 

When designing new housing developments and transport, says Field, groups at risk of loneliness and exclusion should be consulted. “Simple things like putting in more benches, putting seating in apartment block corridors, communal gardens and warm lighting can help neighborhoods connect.” Survey respondents highlighted the role of lobbies, shared outdoor spaces and lounges, access to the nearest bus stop, and ensuring all residents have the same access — to play areas, for instance — to foster connection between neighbors.

Inequities, inevitably, play a role. “The inequalities exposed and exacerbated during the pandemic show the need to do more to support areas with higher levels of deprivation and limited community and social infrastructure,” says Field. “It has also further exposed the link between financial hardship, mental health and loneliness.”

One component to fixing this, as the government’s strategy envisioned, is the roll-out, currently underway, of social prescribing as a universal offer in health care by 2023. Field says the British Red Cross has seen first-hand how effective social prescribing can be in tackling loneliness. The organization’s evaluation “found this service helped two thirds of the people it supported to feel less lonely and 76 percent saw an improvement in their well being,” she says. 

Taken as a whole, England’s strategy reflects a growing consensus that, while loneliness may be something that happens to an individual, the remedies for it can be supported by policy and government programs. As the APPG report puts it: “While we know that it’s locally, in our own communities, that people make friends and find companionship, national leadership is vital in setting the strategic direction, providing the impetus for action, and funding the activities and infrastructure needed to connect.” 

The post Government ‘Ministries of Loneliness’ Bridge the Gaps of Social Distance appeared first on Reasons to be Cheerful.

How China Is Offering an Alternative to the IMF

Published by Anonymous (not verified) on Fri, 16/04/2021 - 7:45pm in

China has been setting up currency swap lines with many countries. But is this an idea that is ahead of its time?

Tories Once Again Demanding Clampdown in Schools for No Reason At All

Published by Anonymous (not verified) on Thu, 08/04/2021 - 8:49pm in

Why do the Tories hate schoolchildren? Why are they so determined to make school as miserable as possible? I ask these questions, ’cause yesterday Mike put up a piece on his blog about the education minister, Gavin Williamson. Williamson has claimed that there’s a lack of discipline in schools because children were allowed greater freedom during the lockdown. Mobile phones are a particularly destructive influence, and shouldn’t be allowed.

Now I agree with Mike about this, who does agree with Williamson. They shouldn’t be allowed in schools because of the danger that children can use them to cheat. Quite apart from the temptation amongst some pupils to play Tetris or whatever at the back of the class instead of concentrating on Miss trying to teach them trigonometry. But this isn’t a new problem. People have been talking about the problems caused by mobile phones in school ever since children started taking them into class in the ’90s. What is remarkable is Williamson going on about the lack of discipline among school students when there’s absolutely no evidence for it. I haven’t heard anyone complain about a decline in schoolchildren’s behaviour in my neck of the woods, and I’m pretty sure you haven’t either.

In fact, not only is there no evidence that the returning pupils are particularly badly behaved, there appears to be plenty of evidence to the contrary. One of our friends down here in south Bristol is a school governor. They told us that the children coming back to school had actually been better behaved. So where does Williamson’s claim that discipline has declined come from?

I think it’s partly due to an habitual Tory distrust of youth. Ever since the ‘youthquake’ of the 1950s and the emergence of modern youth culture, there’s been a particular distrust of young people on the right. This wasn’t entirely unwarranted. I remember the annual fights during the Bank Holidays between Mods and Rockers at Weston Super Mud and elsewhere in the country, and those were frightening. There was a rise in juvenile delinquency, and for years the papers were full of stories about the terrible lack of discipline and poor educational standards in many schools. These were real problems. Private Eye devoted a whole section in one issue to complaints from teachers about the problems they were faced with teaching entirely uninterested, disruptive and sometimes violent students, compounded with lack of support from the headmaster or the education authorities. I dare say in some schools this is still the case, but it doesn’t seem quite the issue it once was. But school discipline is something of a Tory ‘talking point’. School standards are breaking down, and it’s all due to modern, progressive schooling. Kids are being indoctrinated into rebellion by Marxist feminist teachers of ambiguous sexuality.

Except that I don’t think they are. I wondered if this was a response to events at Pimlico academy last week, when the children and some staff decided that the headmaster’s new dress code was somehow racist, as was the flying of the union flag, which some idiot decided to burn. I don’t support the protests there – I think they’re unwarranted and show instead a nasty streak of racism amongst the protesters. But as far as I can make out, it was an isolated incident that was a response to very specific circumstances that has not been repeated elsewhere.

But it also seems to fit with the Tory determination to remove any kind of joy from schooling. When the Tories took over ten years or so ago, they declared that they were going to enforce school discipline and make sure the children worked hard, introducing homework for primary school children. There does seem a determination on the Tories’ part to make school as grim as possible.

And this attitude is shared by some of the academy chains that have been brought in to run schools. Before I came down with the myeloma I did voluntary work listening to children read at one of the local school in south Bristol. This was a normal primary school, whose walls were decorated with the children’s work and paintings along with the usual school notices, and the usual hubbub when the children came in from playground or moved between classroom. It came across as a normal, happy British school, full of normal, happy children.

And then the school was handed over to an academy chain, whose headquarters, incidentally, were registered in Eire as the usual tax dodge. The whole ethos changed. When next I arrived, the walls were bare except for the school notices and children were expected to move from class to class in silence. The children still seemed to be as happy as ever, but a vital part of the school experience had been excised. The place seemed far more dour. I suppose this new austerity was to show that there was now an emphasis on learning and the importance of discipline. It now seemed actually rather joyless and forbidding. I think that putting students’ work up on school walls is enormously encouraging – it rewards pupils for their good work but putting it up for the appreciation of the rest of the school. Or the kids’ parents at parents’ evenings. Ditto with the art. I think it helps to create an attitude among schoolchildren that it is their school, and creates a sense of a common school community. It’s what makes a school a school, rather than a prison.

I think this dour, very authoritarian attitude to education comes partly from Tory authoritarianism. The people at the top set the rules, and the lower orders have to obey, work and suffer. Conditions must be made as hard as possible to encourage people to work and improve themselves. It’s an attitude they’ve introduced into the welfare system by trying to make it as hard as possible to discourage people going onto benefits. This means making benefits all but impossible to obtain and doing their best to hide the fact that people are dying as a result. Now they’re introducing it to education.

I think it also partly comes from the Japanese school system that the Tories are desperate to emulate over here. I got the impression that discipline is extremely strict in Japanese schools, with staff even checking the children’s underwear to make sure they’re the right colour. It’s so strict in fact that in one year in the ’90s, five school kids were beaten to death by their teachers. But this discipline, supposedly, has led to the Japanese and other far eastern countries leading the world in high educational standards. However, a friend of mine told me years ago that this isn’t quite the case. Yes, the east Asian countries do lead the world in their educational standards, but the discipline and extremely hard work are actually typical of a relatively few Chinese and Japanese schools, not the system as a whole. And seeing how hard the schoolchildren in these countries are expected to work, you wonder if something is being lost. Hard work is important, but childhood should also be a time for fun.

Except to the Tories and Gavin Williamson, who seems to be so obsessed with a decline in school discipline that he’s seeing it where it doesn’t actually exist. Perhaps it’s another attempt to put state schools down after the failure of the algorithm he introduced a year ago to predict exam results. This aroused massive outrage because it unfairly assumed that pupils from state schools were perform far less well than those from private schools. Mike and the peeps on Twitter have suggested that Williamson might be trying to revenge himself on schoolkids after one of them tore apart his wretched algorithm on social media.

Whatever the cause, the fact remains that there has been no decline in school discipline. In fact, I’ve heard that in some schools the kids were actually better behaved. This means, as Mike has pointed out on his blog, that children have actually developed self-discipline. And good for them!

As for Williamson, this just shows how out of touch he is with real conditions in schools, and how determined he is to push the Tory view that all schoolchildren and young people are ill-behaved and need the firm hand of authority to keep them in order.

Disabled Girl Gets Bionic Arms Based on Movie ‘Alita’s’ Heroine

Published by Anonymous (not verified) on Sat, 03/04/2021 - 8:02pm in

Okay, I’m sorry I haven’t put anything up for the past week or so. It’s the usual reasons, I’m afraid: I’ve been busy with other things and for the most part, I simply haven’t found the week’s news inspiring. I felt there was precious little I could add to the excellent coverage and analyses given by Mike and Zelo Street. And so, rather than simply repeating what they had to say, I preferred to keep silent. But there are some stories that do need further comment, and I certainly intend to cover them. But before I do, here’s a more positive, rather heartwarming piece I found on YouTube.

It was put up by the tech company, Open Bionics, which makes state of the art, and very stylish, prosthetic limbs. Narrated by Hollywood director James Cameron, it tells how the company created a pair of superb artificial arms for British teenager Tilly Lockey. Lockey had lost her arms from septicaemia caused by meningitis. But, as Cameron shows, she had never let her disability hold her back, and the video shows Ms. Lockey as a junior school girl painting using an artificial arm. Cameron’s best known as the director of such hits as Aliens, The Terminator, Terminator 2, Avatar and Titanic, but he was also the producer of the film Alita – Battle Angel. Based on the Manga of the same name, Alita is the story of a mysterious cyborg girl, found by a doctor rummaging around the rubbish dump below an airborne city in which Earth’s rich and powerful live, far above ordinary masses, who live in the city below it. The doctor repairs the girl, who has lost her memory. Slowly Alita begins to recover bits of her history, joins the other cyborg players in a murderous sports race, attempts to become one of the cyborg warriors fighting crime and evil in this future world, and is forced to confront the villains controlling this new society from the floating city above it.

Cameron points out that cybernetic limbs are expensive, but the company is working to make them affordable. They’re also trying to make them attractive, which is why they’ve based those they’ve give to Tilly on the arms of Alita’s heroine. As well as getting the arms, the girl also got to attend the film’s premier.

I have a feeling Open Bionics might be based in Bristol. If I’m right, they used to be part of the cybernetics lab at the University of the West of England, which has done some impressive robotics research. The lab set up a commercial company to produce artificial limbs based on characters from Science Fiction movies.

As for Alita, I think it got mixed reviews. Some critics were spooked by the character’s large eyes, but I think that was simply following the artistic conventions of Manga comics and translating it to a live action film. Some critics said that while it wasn’t that good, it was actually far better than some of the rubbish being produced by Hollywood at the time. I’ve got it on video and liked it. There are rumours of a sequel being made, which would be great if they were true. But unfortunately the Coronavirus lockdown has meant that many Hollywood projects have had to be put on hold. The release of Denis Villeneuve’s much-awaited version of Dune has been postponed to October, when hopefully the cinemas will re-open.

The video’s obviously a piece of corporate promotion, but it’s great that the company and its talented engineers are working to make technologically impressive artificial limbs at affordable prices, and that they’ve given them to this spirited young lady. I have a feeling she’s also one of the women featured on the Shake My Beauty YouTube channel, which features other disabled women talking about life with their prosthetic limbs. While also demonstrating that having mechanical arms and legs certainly doesn’t make them less beautiful or capable of enjoying normal, physical activities including sports.