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How hard is it for the government to create some jobs?

Published by Anonymous (not verified) on Thu, 09/07/2020 - 1:56pm in

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The – Report of the Special Rapporteur on extreme poverty and human rights – for the UN was released this week (July 7, 2020). It was Philip Alston’s last report in that role. It is a shocking indictment of the way neoliberalism has distorted our societies and the way the governments with the capacity to ‘move mountains should they wish’ have been co-opted as agents of capital and perpetuate those distortions. The Report is 19 pages of horror. It also resonates with the latest information coming out of Australia’s Closing the Gap campaign, which aims to bring indigenous Australians up to the material level of non-indigenous Australians. The first ten years of the campaign have been an abject failure. And the latest targets don’t inspire any confidence that the outcomes will be any different. A lot of talk. A lot of consultants. But little effective action – for example, like just creating some jobs to reduce unemployment, allow for income security and poverty alleviation. How hard is it for the government to create some jobs?

The UN Report brings all the issues to a head:

The world is at an existential crossroads involving a pandemic, a deep economic recession, devastating climate change, extreme inequality, and an uprising against racist policies. Running through all of these challenges is the longstanding neglect of extreme poverty by many governments, economists, and human rights advocates.

I could have ended today’s post there really.

All of these ‘threats’ are manufactured by the neoliberal order and the compliance of states, and, dare I say, progressives, the latter who would rather feel good about themselves throwing statues into canals than facing up to the reality that our traditional Left parties have completely abandoned the space.

The UN Report highlights a number of failures in the way the international community is dealing with poverty:

1. “COVID-19 is projected to push more than 70 million additional people into extreme poverty, and hundreds of millions more into unemployment and poverty”.

2. “More than 250 million people are at risk of acute hunger.”

3. “Poor people and marginalized communities have been the hardest hit in almost every country, both in terms of vulnerability to the virus and its economic consequences.”

4. “Climate change, temporarily eclipsed from the front pages, is also on target to exacerbate the phenomenon of ‘climate apartheid,’ ensuring that low- income people bear the brunt of unconscionable climate policies designed to protect the status quo.”

5. “And governments continue to pour money into repressive practices and carceral systems, while depriving poor communities of basic rights such as decent healthcare, housing, and education.”

Emphatically, the UN Report:

… criticizes the mainstream pre-pandemic triumphalist narrative that extreme poverty is nearing eradication

You know the story – ‘we are nearing full employment’, ‘never had workers had it so good’, ‘the Eurozone is about convergence’, etc

The UN Report argues that the only way we can claim any progress to eliminating world poverty is because we rely on a ridiculously and deliberately set low hurdle – the “World Bank’s measure of extreme poverty”.

Using more appropriate measures shows “only a slight decline in the number of people living in poverty over the past thirty years.”

Further the “Millennium Development Goals” and the “Sustainable Development Goals (SDGs)” are inadequate and set up to distort reality.

At the centre is the World Bank (surprise surprise) who use their “financial and intellectual clout” to:

… ensure that almost all of the most glowing accounts of progress use its IPL statistics.

IPL is their ‘international poverty line’ measure.

It is “not based on any direct assessment of the cost of essential needs” and is “well below the national poverty lines of most countries”.

So it is little wonder using the World Bank data that poverty declines are substantial. The reality is clearly different.

The UN Report talks about a “scandalous lack of ambition” and the IPL:

… is explicitly designed to reflect a staggeringly low standard of living, well below any reasonable conception of a life with dignity.

The World Bank’s response to the criticisms over the years has been to remain “resolutely ambivalent”.

The pandemic

In recent days, the Victorian government has introduced very harsh lockdown rules on some low-income residential towers in Melbourne. They say they are to protect the residents but they are also protecting the well-heeled who continue to enjoy more freedom.

The problem gets worse in poorer nations.

The UN Report notes that:

The public health community’s mantra for coping with COVID-19 encapsulates the systemic neglect of those living in poverty. The pithy advice to “stay home, socially distance, wash hands, and see a doctor in case of fever” highlights the plight of the vast numbers who can do none of these things. They have no home in which to shelter, no food stockpiles, live in crowded and unsanitary conditions, and have no access to clean water or affordable medical care. Far from being the “great leveler,” COVID-19 is a pandemic of poverty, exposing the parlous state of social safety nets for those on lower incomes or in poverty around the world.

And:

If social protection floors had been in place, the hundreds of millions left without medical care, adequate food and housing, and basic security would have been spared some of the worst consequences.

Why are these floors absent?

Neoliberalism.

Mainstream economists telling governments that fiscal surpluses are responsible when social housing is depleted, when people haven’t enough work, when public health is being degraded, and all the rest of it.

I doubt many of these economists, most with well-paid tenured positions, are doing it tough at present.

SDGs

The UN Report concludes that in relation to poverty, these goals:

… call for an ‘end to poverty in all its forms everywhere.’ Yet the targets set do not actually seek to eliminate poverty … [the] … targets are patently inadequate to actually end poverty, and the prospects of achieving them are rapidly receding.

The same can be said for the advancement of human rights.

The UN Report criticises the reliance on privatisation to deliver the goals, “especially for the most vulnerable whose inclusion may not be profitable”.

Reliance on private sector funding will not achieve sustained improvements. Where profit is the motive, social needs fall by the wayside.

Neoliberalism.

The UN Report talks about the “cherry picking, self-promotion and self-positioning” of participants to the international discussions.

Consultants everywhere.

I once did some work to develop a development plan for an indigenous community in Australia. They used my services because the main consultant in this exercise was moving through the remote communities with his ‘cut and paste’ finger well and truly exercised, producing multiple reports that said the same motherhood statements about ‘complexity of challenge’, ‘difficulty with x’ etc and just altered the name of the community and other specific references.

Growth and poverty

The UN Report makes the obvious point that while mainstream economists urge economic growth, particularly export-led growth as a way ahead:

… the promised benefits of growth either don’t materialize or aren’t shared.

Poverty rates rise as large energy and mining projects extract resources from poor nations.

Cash-crop agriculture displaces communities, “separating people from land they depend on for food, shelter and livelihoods, and resulting in impoverishment.”

etc.

The IMF and World Bank model for development is really a big vacuum cleaner sucking out resources and wealth and leaving nothing for the locals.

And then they impose harsh austerity on the government in return for debt enslavement which attacks public health, education and infrastructure.

The UN Report rejects the assertion by mainstream economists that:

… pro-market policies automatically benefit the poor …

The claim is “at odds with the evidence”.

They favour global corporations and harm citizens through:

1. “poorer labor conditions”.

2. “weaker labor rights”.

3. “decreased state capacity”.

4. “reduced healthcare access”.

5. “higher neonatal mortality”.

Pretty much everything we should care about.

The UN Report calls for a a return to a central role for government.

In – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, September 2017) – we argued that the government didn’t just vanish.

It was co-opted and reconfigured by neoliberalism.

It is still central but has succumbed to all sorts of demands for legislation to tip the balance to capital.

He also rejected the neoliberal ‘public-private partnership’ model for delivering prosperity.

The UN special rapporteur said that as governments had adopted austerity measures:

… multinational companies and investors draw guaranteed profits from public coffers, while poor communities are neglected and underserved …

Closing the Gap – Australia

In part, the ‘Black Lives Matter’ surge in recent weeks characterises the dilemma.

Yes, racism is horrid.

Yes, as a white male I don’t perceive the issues of colour from an experiential perspective.

I don’t apologise for my whiteness nor my maleness. I am constantly vigilent of my status though and watchful.

But all the around the world I have seen a lot of symbolic ‘middle class’ activity – flags being burned, statues ripped down, police departments being threatened with dissolution, etc – but not a lot of awareness of a sustained solution.

Why haven’t the middle class staged global street marches over the last 30 years to protest about mass unemployment and underemployment?

In Australia, we have had the – Close the Gap Campaign – which set out in 2008 to improve the lives of the most disadvantaged Australians – our indigenous people.

In many ways it illustrates all the things that Philip Alston was observing in his final report discussed above.

Lacking ambition in goals.

Flawed indicators and ridiculously low hurdles.

Lots of motherhood statements.

Consultants everywhere.

The – Closing the Gap Reprot 2020 – was released in February 2020.

When the campaign began in 2008, the goals by the end of 2018 in relation to employment were:

Halve the gap in employment outcomes between Indigenous and non-Indigenous Australians within a decade (by 2018).

The Report tells us that “The target … was not met”.

In fact, there was virtually no progress made over the decade.

Indigenous Australians have an employment rate of 49 per cent while for non-indigenous Australians it is 75 per cent.

The “gap has not changed markedly” over the decade.

On other goals:

1. Child mortality – “the gap has not narrowed”.

2. School attendance, reading and numeracy – the targets “were not met”.

3. Life expectancy – “closing the gap in life expectancy within a generation is not on track to be met by 2031”

4. Early childhood education and Year 12 targets “on track”.

The campaign has largely failed in other words.

In the last week, there has been a lot of publicitly about a new ‘agreement’ among leaders for the next decade.

Among the more bizarre targets to emerge was that the Campaign was considering a target to achieve parity in incarceration rates (currently heavily skewed towards indigenous Australians) across indigenous and non-indigenous by … wait for it … you couldn’t make this up … 2 …. 0 …. 9 …. 3. Yes, 2093.

It is almost too large a number for me to calculate how many generations of indigenous Australians will be locked up unnecessarily – usually for crimes of poverty – while banksters who defraud people of their life savings roam free enjoying the largesse that they illegally socked away in some legal trust or something similar.

Here is the data:

1. Indigenous Australians equal 3.3 per cent of the total population per the 2016 Census.

2. They make up around 29 per cent of the total prison inmates.

3. According to ABS data – Prisoners in Australia, 2019 – the imprisonment rate for indigenous Australians has risen by 60.6 per cent between 2009 and 2019 – the period since the Closing the Gap campaign began in 2008.

Non-indigenous imprisonment has risen by 44.4 per cent over the same period.

Withdrawing funds from the police would not seem to go to the heart of the problem.

Even imprisonment rates for non-indigenous are rising dramatically.

Why is that?

Neoliberalism has created a raft of losers.

In a world where aspirations are cultivated to mean success is a big house, huge SUV for driving kids to school, and all the rest of the mass consumption artefacts, increasing numbers of Australians are failing – perception wise.

Young people are being denied access to jobs.

And then they are called entrepreneurs because they drive around at break neck speeds on ill-suited scooters with big boxes delivering food and whatever to those too lazy to break with Netflix and go out.

For that they supply their own capital (scooters), earn a pittance, have no job security, no holiday pay, no sick pay, and no superannuation prospects.

They cannot access home mortgage loans because traditional lenders do not reward the precarious.

They cannot afford child care so how does that work?

And then to get the artefacts of success some realise that pushing drugs or selling their bodies pays well. Prison follows.

And this type of insecurity is creeping into the middle class.

After failing categorically to achieve the targets, the Closing the Gap campaign, which feeds a host of consultants, talks a lot, probably is now helping Zoom prosper, and all the rest of it, have a – new national agreement – which has been labelled an “historic new deal”.

The co-chair of the Joint Council, an indigenous woman, claimed that:

We are making history … A real game changer for this next phase of Closing the Gap is that the expertise and experiences of Aboriginal and Torres Strait Islander people on what works and what is needed is at the centre.

Apparently, the new targets on matters such as employment, will be achieved by “structural reform across government”.

You may ask what that buzz phrase means? For I don’t know.

The new “draft targets” under Economic Development are:

1. “65% of Aboriginal and Torres Strait Islander youth (15-24 years) are in employment, education or training by 2028.”

2. “60% of Aboriginal and Torres Strait Islander people aged 25-64 years are employed by 2028.”

So another 8 years.

Why, for example, are the targets so low? So drawn out?

What ‘structural change’ in government will allow these targets to be met?

Stand ready for failure to be announced in 2028.

The only change that the government(s) in Australia have to make is to take responsibility for ensuring that there is full employment.

Why wait until 2028? When in fact, we have been waiting for decades.

What do you think would happen if the Australian government just announced today that there was to be a Job Guarantee and anyone who wanted to work at a decent, socially-inclusive wage could get a job unconditionally?

The gap would close very quickly.

The only ‘structural changes’ necessary within government are to change the sign of Centrelink (the overseer of the unemployment industry) with a Job Guarantee office sign and send the staff inside away for some re-education to disabuse them of the sociopathological tendencies that the pernicious unemployment system has required them to exhibit when dealing with the most disadvantaged citizens.

I recall a meeting in South Africa where all sorts of high level officials were present describing the unemployment problem there as a ‘complex, multidimensioned problem’ that ‘evades solution’, etc. This sort of self-style narrative is often heard in these gatherings.

Consultants and officials from multilateral agencies talking big, making themselves sound erudite and committed.

At that meeting, when it was my time to speak, I asked what is complex and multidimensional about creating some jobs!

Anytime the government creates jobs, unemployment falls and workers can rise out of poverty.

Pretty simple actually.

Conclusion

I will write more about our plans under JUST2030 to offer real solutions and to better articulate the challenge that is faced in the coming weeks.

Our work is gathering pace.

And as the UN Report notes, we ned to:

… to avoid sleepwalking towards assured failure while pumping out endless bland reports

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

MMTed Q&A – Episode 6

Published by Anonymous (not verified) on Wed, 08/07/2020 - 7:02pm in

Here is Episode 6 in our weekly MMTed Q&A series. This is the second-part of my discussion on the Job Guarantee with Dr Pavlina Tcherneva and in this episode we discuss the central role that employment buffer stocks play in Modern Monetary Theory (MMT), a point that is often missed by those who think it is just a job creation program and of secondary (and dispensable) importance to the ‘banking’ aspects of MMT. As you will hear (and see), the Job Guarantee is an integral part of MMT and that status is derived from the elemental insights that MMT offers about the way a currency works. If a person thinks the Job Guarantee is an unnecessary add-on to MMT, then they haven’t understood the basics of MMT. It is as simple as that.

MMTed Q&A – Episode 6

This is Episode 6 in the MMTed Q&A series.

This week we continue my Zoom conversation with Dr Pavlina Tcherneva where we answered questions submitted by readers about the Job Guarantee.

Pavlina has just published a book – The Case for a Job Guarantee (published by Wiley) – which provides a really great entree into the world of the Job Guarantee.

In this episode we discuss the intrinsic importance of the Job Guarantee to MMT.

The video goes for 9:37 minutes.

Note the discussion is mostly via Zoom, which means at time the audio and video quality is less than first-class. But we are learning to live with that constraint.

This is the – YouTube link – for the video.

Call for MMTed Support

We are working towards beginning course delivery in September.

But we still need significant sponsors for this venture to ensure that we can run the educational program with negligible fees and to ensure it is sustainable over time.

If you are able to help on an ongoing basis that would be great. But we will also appreciate of once-off and small donations as your circumstances permit.

You can contribute in one of two ways:

1. Via PayPal – which is our preferred vehicle for receiving donations.

The PayPal donation button is available via the MMTed Home Page or via the – Donation button – on the right-hand menu of this page (below the calendar).

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Please help if you can.

How Deep is the Ocean

This recording is from 1965 and features pianist – Bill Evans and saxophonist – Lee Konitz – who is one of my favourite alto players.

Lee Konitz died on April 15, 2020 from COVID-19. He was part of the 1940s cool jazz school and by the 1950s was playing with Miles Davis and moving into bebop.

When I first heard him playing in the 1970s I was struck by the length of his melody parts during solos. That was a feature of his playing which set him apart.

Other players on this clip are – Niels-Henning Ørsted Pedersen on bass and on drums – Alan Dawson – both are also deceased.

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

We can have full employment again in a green world

Published by Anonymous (not verified) on Tue, 07/07/2020 - 12:40pm in

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job guarantee

Last Saturday, the Weekend Australian, Rupert Murdoch’s daily national newspaper, had a relative Modern Monetary Theory (MMT) avalanche, with two core MMT-style articles published and two that were supportive rather than hostile. That tells you something about the way the world is shifting. I have received a bit of flack for publishing an Op-Ed piece in that newspaper from those who style themselves as Leftists. It is the same old argument – dealing with the devil. And the same old reply – if you want to influence policy then you have to talk to those who make policy. It is easy plotting revolutions over lunch. There has been a lot of groundwork laid over the last several months to bring people into the conversation. It is quiet stuff. Discreet. And as things unfold I will make some of the developments public. At present, all I can say is that I have a document before the Prime Minister today and there is a lot of behind-the-scenes workshops/briefings going on at state-level. And, while activists spend a lot of time ‘pressuring’ this person and that person on social media, the big shifts that are going on at present, including the publication of Noel Pearson’s piece and my article, are not being helped by aggressive social media confrontations. Sometimes it is better to work in a subtle way and exploit networks where they are available. That is not to say that activism to promote MMT is not appreciated and helpful. But we do need to pick our path. Anyway, a number of people asked me to publish my article here because they cannot get behind The Australian’s paywall. So here is the penultimate version which is a few hundred words longer than the actual article, which I cannot provide due to copyright restrictions. I also cannot provide Noel Pearson’s accompanying and complementary article but it was magnificent.

Here is the link to Noel Pearson’s article – The case for a government jobs guarantee.

Here is the unedited text. The final version was cut a bit but didn’t lose anything in substance or flavour.

Text begins ….

Japan embraced the neoliberal excesses in the 1980s. In 1991, the excessive private debt caused a massive commercial property collapse. The government’s response pushed economic policies to the extreme of conventional limits – continuously high deficits, high public debt, with the Bank of Japan buying much of it. Modern Monetary Theory (MMT) tell us this was the correct response.

Most economists recycled predictions of high interest rates, accelerating inflation and bond market revolts. None came to pass. Japan has maintained low unemployment, low inflation, zero interest rates and strong demand for government debt.

Undeterred, these economists continue to promote their ‘fictional’ world, keeping citizens in the dark about the true capacity of government and the consequences of using that capacity to sustain full employment.

They manufacture fear about public debt and deficits, predict government insolvency, use the words – Weimar or Zimbabwe – to invoke fears of hyperinflation. They rehearse false moral arguments about today’s government spending burdening our grandchildren.

None of their predictions ever materialise for they were lies to begin with.

Which is why we are hearing more about MMT. It has an impeccable record of prediction and offers answers that the economic orthodoxy fails to provide.

Renowned British journalist Martin Wolf, commenting on MMT, recently wrote: “In my view, it is right and wrong. It is right, because there is no simple budget constraint. It is wrong, because it will prove impossible to manage an economy sensibly once politicians believe there is no budget constraint.”

MMT exposes these fictions but some still think it is better for the public to be kept in a state of ignorance.

In the real world, currency issuing governments have no intrinsic financial spending constraint. They can purchase whatever is for sale in their own currency including all unemployed labour desiring work.

Mass unemployment is a political choice. Imagine if all Australians understood that, rather than labouring under the current deception.

It was not too long ago when full employment was official government policy.

The 1945 Government White Paper on Full Employment begins with a commitment to the Australian people “Full employment is a fundamental aim of the Commonwealth Government. The Government believes that the people of Australia will demand and are entitled to expect full employment” This commitment was abandoned when the Whitlam Government changed course in 1975.

Australians knew it was government’s responsibility to maintain spending sufficient to sustain full employment. The purpose of fiscal policy was not to achieve a surplus or deficit. Rather, they judged government on how low unemployment was.

Unemployment was a policy target, not a policy tool.

Menzies nearly lost the 1961 election because unemployment rose above 2 per cent.

Australian used to maintain a buffer of public sector jobs that always provided easy employment access to our least skilled workers.

So when and why did Australians become so tolerant of systemic unemployment and its attendant ills – the accumulated human wreckage to use my friend, Noel Pearson’s term – that goes along with it?

The answer lies in the political and economic developments we now call neoliberalism. They were supported by a series of powerful but interconnected myths – promoted by economists to distort our thinking about money, the capacity of government, and our economy.

Politicians on both sides now claim that employability (preparing people for jobs) rather than full employment is the proper role for government. They claim the ‘market’ will take care of the jobs.

As a result. we have endured elevated levels of unemployment and underemployment, suppressed wages growth, massive household debt, and rising inequality.

The unemployed are ‘managed’ within Australia’s newest ‘industry’ – the unemployment industry – and churned through pointless training programs divorced from paid-work. They receive below poverty line income support and are coerced by pernicious work tests when it is obvious there are not enough jobs to go around. The Robodebt scandal obliges.

The victims of this policy failure are scarred with accusative nomenclature – cruisers, bludgers, job snobs – as a divide and conquer strategy aimed at creating social divisions – them (bludgers) and us (hard working Australians). Lifters and leaners.

Even in the last few we days there have been absurd claims that the JobSeeker scheme discourages the unemployed from seeking work. In May 2020, unfilled job vacancies declined by 43.4 per cent. On a national scale, there were 3 persons for each unfilled vacancy in February. Now it is 7.2. Adding in the 600 odd thousand that have ‘left’ the labour force after giving up looking as employment opportunities collapsed, gives 12 job seekers per job vacancy.

Any reasonable person knows this is a systemic lack of jobs.

MMT exposes these fictions and provides answers to support a new vision of collective prosperity and an environmentally sustainable future.

The current government crisis response has been massively inadequate. I estimate that Australia has over 25 per cent of available labour underutilised in some way.

The waste of human potential is staggering.

There was no reason for unemployment to rise.

The government should introduce what I have termed a Job Guarantee by making an unconditional job offer at a socially-inclusive minimum wage to anyone willing and able to work.

The buffer of jobs would normally be small and would shrink as private sector activity recovers.

No inflationary pressures arise because government would not be competing for labour at market prices. There is no market bid for the unemployed.

I know all the criticisms – painting rocks – and the like. They simply reveal a lack of imagination.

Research at the Centre of Full Employment and Equity (University of Newcastle) over 25 years has addressed these issues. We can articulate hundreds of thousands of productive jobs that would add meaning to peoples’ lives and add value to society.

The Job Guarantee would replace the ‘unemployment industry’. Productive replacing the unproductive. A guarantee of employment replacing a guarantee of unemployment.

Treasury said JobKeeper would require an investment of $70 billion over 6 months to reduce unemployment rate by 5 points (585 thousand jobs). Our modelling shows that a Job Guarantee that reduced the unemployment rate by 6 points would require net investment of just $53 billion over a year.

A no brainer!

It is, as they say, a no brainer.

The JG does not solve all societal ills, but it would be a significant improvement on the current suite of policies.

The scale of this disaster is so large that Australians will have to get used to very large fiscal deficits for a decade or more to support income and employment growth, so that households can reduce their astronomical and unsustainable debt levels.

Any attempt at ‘paying down the public debt’ or ‘getting into surplus’ will be catastrophic and undermine the opportunities of our current generation and those that follow.

And when we wake from the health crisis, the on-going climate crisis will occupy our fears and challenges.

We need a grand vision to replace the impoverished world that neoliberalism has created for us.

We can have full employment again. We can choose a Just Urgent Sustainable Transformation (JUST2030) that will future proof our economy and give all Australians the opportunity to develop and put to use the knowledge and skills we need today and in the years to come.

Noel Pearson has written a powerful accompanying piece today calling on government to take responsibility for the unemployment crisis and the social damage it causes.

We are working together now, economist and lawyer, academic and indigenous leader. And we will be writing regularly to expand on the JUST2030 vision that we believe is not only grounded in economic reality but also in basic human decency and care for the natural world.

Conclusion

Watch out for more action under our JUST2030 project.

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

White Paper: Modern Monetary Theory (MMT)

Published by Anonymous (not verified) on Sun, 05/07/2020 - 3:39am in

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Published online 4th July 2020

 

Full Document

 

Introduction

 

The purpose of this white paper is to publicly present the fundamentals of MMT.

What is MMT?

MMT began largely a description of Federal Reserve Bank monetary operations, which are best thought of as debits and credits to accounts as kept by banks, businesses, and individuals.

Warren Mosler independently originated what has been popularized as MMT in 1992.  And while subsequent research has revealed writings of authors who had similar thoughts on some of MMT’s monetary understandings and insights, including Abba Lerner, George Knapp, Mitchell Innes, Adam Smith, and former NY Fed chief Beardsley Ruml, MMT is unique in its analysis of monetary economies, and therefore best considered as its own school of thought.

 

 

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The post White Paper: Modern Monetary Theory (MMT) appeared first on The Gower Initiative for Modern Money Studies.

Book Review: The Case for a Job Guarantee by Pavlina R. Tcherneva

Published by Anonymous (not verified) on Mon, 29/06/2020 - 8:51pm in

In The Case for a Job Guarantee, Pavlina R. Tcherneva argues that a job guarantee that provides an employment opportunity to anyone looking for work, regardless of their personal circumstances or the state of the economy, not only makes good economic sense, but is vital for people’s wellbeing. As discussions of a universal job guarantee have never been timelier, The Case for a Job Guarantee is a deeply thought-provoking book and deserves serious consideration, writes Anupama Kumar.

The Case for a Job Guarantee. Pavlina R. Tcherneva. Polity. 2020.

In The Case for a Job Guarantee, Pavlina R. Tcherneva argues that not only does a job guarantee make good economic sense, it is also necessary to people’s wellbeing.

Tcherneva defines a job guarantee as ‘a public policy that provides an employment opportunity on standby to anyone looking for work, no matter their personal circumstances or the state of the economy’. Such jobs provide a living wage and decent working conditions. In her vision, a job guarantee is universal and voluntary – available to all people who wish to make use of it. For Tcherneva, a job guarantee is an end in and of itself, and governments should ensure that jobs are available to their citizens.

The first part of the book argues that a job guarantee makes good economic sense for governments. Tcherneva begins by pointing out that while the US economy may have grown, this has not translated into benefits for ordinary workers. She notes that in 2017, real incomes for the bottom 90 per cent of families were lower than they were twenty years earlier, while those of the top 0.01% had risen by a staggering 60.5%. Unemployment rises dramatically during economic downturns, but recovery is anaemic. For the most part, economic recovery does not create more jobs.

Governments have responded to economic downturns with fiscal stimuli, but these have tended to protect investments rather than jobs. Loan guarantees and bailouts help preserve corporate profits, rather than jobs for citizens. Instead, Tcherneva argues that a job guarantee ought to be treated as a countercyclical measure. A job guarantee would function like a buffer stock programme in agriculture, where the government ‘purchases’ surplus labour at a fixed price. Such a programme would address both inflationary and deflationary pressures from fluctuations in employment. Moreover, by providing steady employment, a job guarantee programme would soften the demand on other countercyclical social protection measures, such as unemployment insurance or food assistance. Finally, unemployment is expensive. According to one estimate, unemployment during the Great Recession that followed the 2008 financial crisis cost the United States $10 billion in output each day.

The more compelling argument, however, is that all persons have the right to decent work. This has been recognised as far back as the 1948 Universal Declaration of Human Rights. There ought to be no ‘natural’ level of unemployment, any more than there is a natural level of starvation or illiteracy. Tcherneva reasons that the inflationary effects of unemployment are vastly overstated, and that instead there are real costs to joblessness for individuals and communities. Unemployed individuals have shorter lives and more chronic illnesses than those who are not unemployed. These have effects not only for individuals, but on families dependent on them. Further, unemployment is contagious – mass layoffs in one area lead to chronic unemployment, which spreads to surrounding communities.

The author argues that the responsibility to hire workers cannot lie solely with the private sector. The private sector is in the business of making profits and not in providing jobs to those most in need of them. Nor are labour laws enough to ensure that workers receive a living wage and decent working conditions. At any time, there are more jobseekers than employers. In the absence of a job guarantee, workers will lack the ability to refuse unsafe, poorly paying jobs, as employers will always have the upper hand.

A job guarantee programme that assesses the needs of communities locally, and provides adults with employment within that community, can provide a solution to this. A bottom-up approach, which encourages people to participate in job creation, can work better than a top-down, bailout-led model. Moreover, a locally administered job programme can provide valuable services to the community, including preserving the local environment.

In proposing this theory of job guarantees, Tcherneva argues that most jobs today are not in manufacturing, but in services such as care work or education. These are jobs that cannot easily be replaced by automation – there is no substitute for a human touch in hospice care. In Tcherneva’s vision, the types of work a job guarantee would involve relate to services at the local level, in building community goods and public services and enabling environmental conservation (a Green New Deal). People making use of this programme would also acquire skills that would enable them to take up employment outside the job guarantee programme, thereby contributing to the economy. The job guarantee would, however, continue to hire people who do not move to private sector employment. The services provided by these jobs would also lead to a net benefit for the community around them.

While the book makes a convincing case, a deeper analysis of some questions would have been welcome. First, why is a job guarantee a better proposal than a universal basic income? While not explicitly stated in the book, the reasons for this seem to be that job guarantee programmes generate productive assets, reduce the burden of unemployment (psychological and otherwise) and create a sense of dignity for workers receiving a living wage for an honest day’s work. Would a UBI be able to perform some of these functions better, especially for those too ill or too old to work?

Second, is a short-term guaranteed job at living wage – but no more – enough to provide the skills to move to employment in the private sector? As Tcherneva notes, the private sector is not in the business of hiring people who need jobs, but in making profits. The types of services provided by the private sector reflect this. Today’s gig economy players such as Uber or Deliveroo essentially enable private contracts between individuals, and do not create the kinds of public goods a job guarantee programme might. Will private players now shift to sectors for which the skills acquired in a job guarantee programme will be useful? If not, will the public sector need to continue to provide jobs for workers? In Tcherneva’s argument, this is not a problem – providing jobs is a valid goal in and of itself.

Finally, Tcherneva’s analysis is specific to the United States. It would be interesting to examine the differences between job guarantees in the Global North, where there are well-established social security programmes, and those in the Global South. Tcherneva cites Plan Jefes in Argentina and the National Rural Employment Guarantee Act (NREGA) in India as instances of ‘successful’ job guarantees, but does not elaborate on how these are different from the circumstances in the United States.

In sum, discussions on a universal job guarantee have never been timelier. The Case for a Job Guarantee is a deeply thought-provoking book and deserves serious consideration.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 

Banner Image Credit: (Andrew_Writer CC BY 2.0). 

Feature Image Credit: Jobs Help Wanted.Taken for post on Innov8Social on job creation by social entrepreneurs (Innov8Social CC by 2.0).

 


‘What if the Public (really) Understood How Money Works?’ Just think what we could achieve!

Published by Anonymous (not verified) on Sun, 28/06/2020 - 5:54am in

Line graph with downward trend, virus image and word COVID-19Image by iXimus from Pixabay

“There’s something invigorating about people freaking out about modern monetary theory (MMT). They treat MMT as akin to the Ark of the Covenant in the first Indiana Jones movie. They are petrified that knowledge of the financial equivalent of the “holy of holies” will be released to normal people because they project their greatest terrors onto the possibility that the public will be transformed and empowered by their knowledge of matters that much of the financial world has understood for at least a century.”

Dr William Black

 

After having previously been ignored and disparaged for decades by mainstream economists and politicians, MMT has been making the headlines and finding its way into a growing public conversation.

Two significant publications over the last few weeks are challenging the very basis upon which government policy is determined; ‘does it fit with our political agenda, is it affordable’ and ‘how can it be paid for?’

The Deficit Myth’ by Stephanie Kelton was described by Professor Hans G Despain in a review in the LSE blog as a ‘triumph’ challenging, as he explained, the false idea that ‘deficits are irresponsible and ruinous towards the productive political activity of deciding which spending programmes should be prioritised’.

Hot on its heels came Pavlina Tcherneva’s book ‘The case for A Job Guarantee’ described by James K Galbraith as the ‘next big, common-sense idea for economic reform’. And in the words of Paul Prescod in the Jacobin Mag, the Job Guarantee ‘offers an inspiring vision of what society would look like if we utilized the various talents and skills working people possess’

Both these publications have stirred an already growing interest in that hitherto boring subject of economics, showing that far from being irrelevant to people’s lives it is critical to them in terms of human and planetary well-being.

Hitherto sceptical economists are now saying things like ‘well we knew it all along really’ and sovereign currency-issuing governments across the world have suddenly discovered the fiscal levers they denied us previously, to keep their economies from foundering as a result of the deleterious effects of Covid-19. Until now, there has been a depressing failure to make the critical connection between government spending and economic and societal well-being which are fundamentally two sides of the same coin. Whilst people may not make the technical connection, they are now beginning to understand the impact that government policies and spending decisions have on their lives. They live them every day.

Whether on the right, where politicians defer to the market as the wealth-maker, claiming that public services depend on a healthy economy to generate sufficient tax revenue, or the left, who scrabble for a limited pot of tax revenue, preferably from the rich, or through borrowing at low interest to deliver their political agenda, the orthodoxy prevails on both sides of the political spectrum.

After decades of being in the wilderness, MMT is happily beginning to make headway and that is very encouraging. However, over recent weeks, the Empire seems to have been striking back! Sensing a challenge to its economic and political hegemony, recent newspaper headlines are reinforcing the orthodox narrative of the public finances being like a household budget. Fake news to keep the population compliant in the false understanding that there are real financial constraints to public spending and to prepare them for the possibility of more austerity to pay back the enormous, eye-boggling sums spent by the government during the Covid-19 crisis.

In an article last month, the FT asserted that the Chancellor would ‘face tough choices’, and that ‘at some point, taxes will have to rise’. While tax increases would be an unpopular move, it said this ‘would send a signal that ministers are getting the deficit under control.’

And just this week, headlines aimed at eliciting a negative public reaction have dominated the news.

‘Britain nearly went bust in March says the Bank of England’.

And:

‘Borrowing cost set ‘set to rise’ as Bank sells off stock of gilts’

On the right, John Major waded in with a call on the government to ‘borrow heavily…to improve living standards’ and claimed that ‘taxes will eventually have to be increased to pay for an extremely expensive programme.’

And on the left, the Shadow Chancellor Annaliese Dodds said again this week that ‘it is only right that those with the broadest shoulders’, should make a bigger contribution as the UK recovers from the economic effects of Covid-19.

Whilst the IFS think tank couldn’t resist the following:

It is clear that the COVID-19 outbreak – and the public health response to it – will dramatically reduce economic activity in the second quarter of 2020. This in turn will depress tax receipts and add to government spending, increasing government borrowing and in turn adding to government debt […] A key issue is how quickly – and how fully – the economy, and with it the public finances, recover over subsequent years.

The economic pundits, institutions and politicians are reinforcing, as a deliberate tactic, that at some unspecified time in the future there will be a price to pay for all this spending. As Aldous Huxley, author of Brave New World said; ‘Sixty-two thousand four hundred repetitions make one truth’ the implication being that the more a statement is repeated, the more credible it is seen to be. And certainly, over the last decades in terms of discussion about the public finances, the household budget version rules in the public consciousness – even at the expense of its own well-being.

Just a quick look at recent headlines show the pernicious nature of such repetition on the health of the economy and its citizens, who compare the public accounts with their own finances.

It was reported this week that some of the UK’s largest councils may have to declare bankruptcy unless the government stumps up extra cash to cover the extra expenditure needed to deal with the impact of Covid-19. Nearly 150 authorities have predicted a combined budget shortfall of at least £3.2bn. Having already been struggling to deal with ten years of cuts to central government funding for local government, the chickens are now coming home to roost. Even the government’s proposed additional funding package will struggle with an already slimmed down local government infrastructure which includes people and services. However much money is allocated, local politicians and their officers will not be able to repair those losses to essential services quickly.

Also this week, the IFS reported that families who had become unemployed during the Covid-19 crisis would get £1600 less in benefits, on average, than they would have done without the damaging decade of Tory austerity. It warned that the UK, which had entered the crisis with an already less than generous welfare safety net combined with the worst decade for income gains since the 60s, would not ‘provide a good blueprint for a bounce-back’.

Pascale Bourquin, a research economist at the IFS, said that in the last decade the country had ‘witnessed the slowest growth in household incomes since records began as earnings and productivity stalled and working-age benefits were cut sharply’. And added that ‘we now have the dual challenge of trying to recover the ground people have lost in their careers and employment prospects and addressing the problems we already had’.

The narrative of household budgets is pernicious and yet it pervades the public discourse. On the one hand, the IFS recognises the damage austerity has caused and yet on the other still blathers on about the public finances and the national debt, hinting about the future cost we will all have to bear for this increased spending.

When Helen Barnard at the Joseph Rowntree Foundation, which funded the research, talks about ‘Finding a lasting solution’ she is demonstrating, just like the IFS, a woeful lack of knowledge about how governments actually spend. The solution is staring them right in the face.

The government has the power of the public purse to find solutions to unemployment, low productivity, poverty and inequality, not to mention the coming threat of climate change. It doesn’t matter which end of the political spectrum you sit on, whether you are on the right or the left, a healthy economy and societal and planetary well-being go hand in hand and should be a top priority for both.

This week the IMF warned of a deep global recession. This will, without doubt, lead to further poverty and inequality which will be worsened by the prospect of a world ravaged by human-induced climate change if we fail to act now. It is time for the public, politicians and institutions to put away childish analogies about how governments spend – that is if we really want to secure a stable future for those that will come after us.

In the words of Dr William Black ‘What if the public understood how money works?

Well, there might just be a revolution!

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The post ‘What if the Public (really) Understood How Money Works?’ Just think what we could achieve! appeared first on The Gower Initiative for Modern Money Studies.

To rephrase Mahatma Gandhi ‘The future will depend on what we do today.’

Statue of seven children using a lever to move the world“Together for Peace and Justice” by Xavier de Fraissinette, Parc de la Tête-d’Or, Lyon. Image by Ben Kerckx from Pixabay

Just a brief look at the news headlines in the last few weeks should be enough to set the alarm bells ringing. We are watching as the nation suffers a train crash of epic proportions.

The Institute for Employment Studies reported in May that the number of people claiming benefits principally because of being unemployed had risen by 860,000 in the month to 9th April to just over 2 million, and that not since February 1947, the year of the big snow, had unemployment figures risen so steeply. It went on to say that that that figure was now likely to be in the region of 3 million, the highest since the 1980s, and that it will take years, not months, to repair the damage.

According to figures released by the Office for National Statistics (ONS), 600,000 jobs have already disappeared and many face redundancy over the next few months as economic uncertainty continues and employers begin to make plans to reduce their workforce as the furlough scheme is phased out later this summer. The ONS also noted that that there had been a record fall in job vacancies between March and May and hinted at worse to come. Jonathan Athow, from the ONS, commented that ‘the slowdown in the economy is now visibly hitting the labour market’

The consequences of Covid-19 on the economy, and let’s not forget the impact of 10 years of cuts to public spending and welfare entitlements, are affecting every aspect of our lives.  Thousands of children have been plunged into poverty and UK food banks are facing record demand with more than 100,000 carers forced to use a food bank in the UK lockdown. Two-thirds of families on universal credit have been pushed into debt, having had to borrow money including using payday loans or credit cards to keep their heads above the water. Put bluntly, that means people struggling to put food on the table, money in the electric meter or pay their rent, not to mention the impact on the mental health of parents trying to provide the basics or educate their children at home for three months without adequate access to the internet or computers.

The Joseph Rowntree Foundation, in partnership with Save The Children, are shining a light on the experiences of families and children in poverty; calling on the government to ensure that families are supported, not just during this lockdown period but also beyond it, to prevent increasing numbers of children being pulled into poverty. It points out that too many children are going without, due to income losses and the pressure that the lockdown has put on already overstretched budgets.

Whilst one must commend those who have performed extraordinary acts of public service during this pandemic, those who have raised money for the NHS and charities and this week like Mark Rashford who through a steadfast public campaign shamed the government into continuing its vouchers for free school meals during the summer holidays, we now urgently need a frank national conversation about where we go from here.  Not just about the sort of society we want to live in now or in the future, but whether we even want to protect our children’s children from the devastating effects of climate change; the threat of which is hanging like a tsunami over our heads while we queue outside Primark or Nike Town!

We are a nation that has been divided by a toxic ideology which has, until recently, ripped to shreds any sense of collective responsibility. We cannot stick our heads in the sand and return to the normal many are hankering for. Too much is at stake.

The pandemic has revealed the shocking state of the Social Care system which is in a state of collapse, an NHS battered by 10 years of cuts to its spending with reductions in staffing, beds and facilities, a social security system which has removed the support pillars and left people in dire poverty and children hungry, living sometimes in temporary accommodation with no sense of security.

The greatest achievements of the post-war world are being dismantled or outsourced to profit and are being replaced by the so-called big society which ironically is also collapsing due to cuts government cuts. As previously reported by GIMMS, Covid-19 has left one in ten charities facing bankruptcy this year and many struggling to provide services in an economic environment which has its roots in austerity.

Instead of state involvement in the provision of the fundamental structures that form the basis of a healthy economy and society which benefits everyone (even if those structures are not perfect), we are being prepared through constant propaganda and messaging to accept a reset. One in which the state continues to pour public money into private profit but at the same time claims there is no money for publicly paid for and managed services and an adequately funded social security system.

Our society is being impoverished, not just financially but in terms of its public and social infrastructure, culturally and the safety net which protects people when through no fault of their own the economy tanks. All on the basis of claimed unaffordability. The monetary largesse of these last few months is already in question and we face a return to more cuts to public spending.

Just this week it was reported that Leeds Council is considering closing its museums and libraries as it can no longer afford to pay for them. This is not just a localised problem; across the country libraries and museums have already closed or rely on volunteers to staff them. The pandemic is revealing the brutal cost of previous cuts to government spending that have left local and regional councils, particularly in the north and south-west, impoverished and with insufficient infrastructure to even deal with the consequences of Covid-19.

Aside from the valuable input to GDP (which ministers seem to conveniently forget), our cultural life is under threat as our museums and libraries face more closures as local councils try to balance their books. Our national and local theatres, art galleries, orchestras and all those things we value in terms of human enrichment and education face if not oblivion, then severe retrenchment.

While public money finds its way easily into private profit at the blink of an eye to provide public services in the name of the lie of market efficiency, our society is being prepared to accept a reset in which charities, public donation and volunteering, not to mention the philanthropy of the Victorian poor law boards, decide who gets what.

Is that the sort of society we really want to live in?

To recognise the alternatives, we have to understand how an alternative vision can be paid for, as that is the perennial question always asked by the public and politicians alike. If we fail to do so the future looks pretty bleak for us all now and for future generations who will be paying not the financial cost but the very real human cost.

We need to start with a basic understanding of how the UK government as the currency issuer spends. It is regrettable that across the piece left and right-wing economists, along with politicians and institutions are still stuck in the household budget narrative of how governments spend. For the right, the constraints lie in a scarcity of money (which they use to justify their political agenda) and on the left the answer is getting the rich to pay through their taxes or borrowing at low rates of interest to fund our public services, pay for public infrastructure or fund a green new deal.

Only this week the ONS focused its report on the public finances on the through-the-roof borrowing figures and, shock horror, it is apparently £173.2bn higher than it was a year ago at £1.95 trillion and the UK’s debt-to-GDP ratio has pushed above 100%. Such focus is designed to put fear into the hearts of people who don’t understand the working of the economy and the public finances and it is likely to enable the government to justify further austerity at some point in the future.

Indeed, the Chancellor Rishi Sunak it has been reported is preparing to scrap the triple-lock on the state pension on the basis that the already high cost of the Covid-19 pandemic could make it unaffordable. Officials have claimed that a temporary suspension would be unavoidable if the government is not to be faced with paying a massive bill next year.  The Pensions Policy Institute has already warned, quite rightly, that such a move would have serious implications for already existing and future pensioner poverty and the amount spent on other means-tested benefits such as housing benefit, caring credits and disability premiums. It would also impact on low earners who would have to put in an extra £540 a year to avoid poverty in retirement. How would punishing people even further help the economy or indeed serve its already beleaguered citizens?

Torsten Bell from the IFS in an article in the Guardian claimed that a survey of economists had proved that they were not keen on cuts or more austerity to reduce the deficit, but favoured tax rises instead. He further claimed that economists were turning into a bunch of radical lefties these days. However, whilst their support for austerity has dwindled perhaps, they still see the public accounts as a household budget whereby taxing and borrowing (at low rates of interest) form the basis for government spending. That cannot be considered radical in any shape or form and unless they can get to grips with how a modern monetary system actually works and reject the notion that spending now will create financial burdens on future generations, then sadly we will see more of the same orthodoxy rearing its ugly head.

To put it bluntly, in an economy that is facing wipe-out and serious future economic consequences, the idea that paying more taxes to pay for government spending which will do yet more harm to the economy as it takes money out of the economy is nonsensical, especially when you know that government doesn’t need those taxes before it can spend.

We need to ditch this narrative if we are to make a better, fairer world which also puts the environment as a top priority. Indeed, at the beginning of this week, the leaders of some of Britain’s top charities wrote to the Prime Minister to demand as a priority a green recovery and urged him to use economic rescue packages to build low-carbon infrastructure and stimulate the creation of long-term green jobs.

However, if we allow that sticky question of monetary affordability to dominate the debate, any future actions will always at some point in time constrain a government’s spending decisions.

We don’t have to be economists either to understand monetary realities or challenge the current false narratives which pervade the discourse.

There are just a few things we need to know or consider:

  • The UK government is the currency issuer.
  • It neither needs to tax in order to spend, or to borrow to cover its deficit
  • Such a government whilst not being financially constrained does face real resource constraints when deciding its spending policies. These include the human beings that do the jobs and the physical resources needed to provide goods and services.
  • If the nation decides ultimately that it wants the government to take a greater role in public provision of services to serve the best interests of citizens, it will have to accept that the government will have to procure those resources and thus may have to deprive the private sector of some of those resources in order to do so.
  • A Job Guarantee is fundamental to this understanding of monetary realities. It not only provides an essential automatic stabiliser in the economy ensuring that people are not left abandoned on the unemployment scrap heap during its cyclical ups and downs and values their contribution to making a more stable society but also plays a vital role in controlling inflationary pressures.

In the coming years, with the growing threat to climate change, it will also provide an essential mechanism to implement a just transition as jobs are lost in polluting industries and we move towards a sustainable economy.

In such an environment we will have to entirely rethink and redefine what work is and what our societal values should be. We need to ensure that we can offer our young people a future with good, non-exploitative employment which pays good wages and offers decent terms and conditions within the context of creating that sustainable economy.

Let’s not leave the future in the hands of the neoliberal orthodoxy which has done so much damage, created so much poverty, inequality and societal division. We do have choices. We don’t have to accept more of the same.

 

 

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Nothing is written in stone. There is an alternative. Let’s make this the era of people power; we can do this!

Children wearing school uniform holding a chalkboard with the slogan "We are the future"Image by Gerd Altmann from Pixabay

‘Our economic and social prospects in the coming decade depend on today’s policies. The recovery will not gain steam without more confidence which will not recover without global cooperation.  Governments must seize this opportunity to engender a fairer and more sustainable economy. Prospects come from dialogue and cooperation at national and global levels.’

Laurence Boone – OECD Chief Economist

In the week that it was reported that in April the UK economy suffered a record slump with GDP plunging by 20.4%, the OECD suggested that it would likely suffer the worst damage from the Covid-19 crisis of any country in the developed world. It also noted in its most recent report that the global economy was now experiencing the deepest recession since the Great Depression in the 1930s, with GDP declines of more than 20% and a surge in unemployment in many countries.

It is clear that whilst many countries are now coming out of lockdown, the fear of a second wave and ongoing public and business uncertainty will continue to impact on future economic activity. Just this week there has been a slew of redundancy announcements.  BP is planning to cut its workforce by around 10,000 worldwide and in the UK British Gas by 5000 and the Chemicals firm Johnson Matthey by 2500. Heathrow is also launching a redundancy programme as the number of flights and passenger traffic has plummeted, with no sign of any recovery as travel restrictions continue.

This, unfortunately, represents just the tip of an iceberg threatening to sink economies around the world without continuing and adequate state intervention through increased spending. The ManpowerGroup, in its employment survey published this week, found that companies in all the major sectors of the economy are more likely to cut jobs than to hire over the next 3 months and revealed that it was the weakest forecast since records began in 1992. It has been estimated that the unemployment rate in the UK could reach 10% during the second quarter of 2020.

A report by Pro-Bono Economics also published this week reveals that despite the government bailout in April, one in 10 UK charities are facing bankruptcy by the end of the year as a result of financial shortfalls triggered by mounting demand for their services and lost fundraising income due to shop closures. The study said that two-thirds of smaller, local charities had made significant cuts to their services and one in eight were expecting to have to terminate their operations. According to the report it had also forced some big-name charities to use public donations to support those services provided under contract to local authorities and central government (we will return to this later on).

Alongside the economic consequences of the pandemic, Sara Caul, Head of Mortality at the ONS (Office for National Statistics) noted in the statistical report of deaths occurring between1st March and 30th May, that people living in more deprived areas had experienced Covid-19 mortality rates more than double those living in less deprived areas.

Not only are we faced with the very real tragedy of Covid-19 and its effects on the lives of those who have lost loved ones and those that have witnessed the ravages of the disease in our hospitals and care homes, the IFS (Institute for Fiscal Studies) in its Deaton Review observed this week how existing deep-rooted inequalities lay at the heart of the current disparities identified between UK regions.

The IFS then suggests that inequality can only worsen if ministers fail to act, and risks entrenching already deep divides. But confusingly and at the same time as recognising this, then goes on to suggest that the crisis is likely to leave challenging legacies for inequality given that the government’s capacity will be constrained by record peacetime levels of debt.

LET’S STOP RIGHT THERE.

Whilst the IFS deplores the existence of inequality and identifies some of its causes, it fails to grapple with the primary reason why inequality has risen and indulges in a false story which suggests that addressing it will be hindered by the already high levels of government debt.

What the report fails to mention, is that those disparities exposed via the pandemic are linked to the systemic frailty of a decaying economic paradigm. The decades of low wage growth which have left households unprepared financially to face involuntarily imposed unemployment as a result of Covid-19, the stark inequalities that have arisen as a result of an economic system which has penalised working people and impacted on access to good healthcare, education, housing and essential public services. It reveals how government, via its policy decisions and through a decade of austerity and cuts to public spending, has left a landscape ravaged by rising poverty and inequality. It has impacted communities across the country, particularly in the South West and the North, where cuts to local government spending, combined with increasing job insecurity and low wages have affected both poor white and ethnic populations to also create fear and societal division.

David Cameron’s big society, namely the charitable/voluntary sector, has also been affected by fallout from austerity, combined with the economic effects of Covid-19 on its finances.  Years of cuts to local government grants have, in their turn, affected many local charities who were already financially stretched. Closure of fund-raising avenues has left many faced with difficult decisions. This highlights what happens when government shifts responsibility for the provision of essential services to the charitable, voluntary sector whilst at the same time cutting public expenditure.

We are facing a disaster of monumental proportions. The economic fallout from Covid-19 is bad enough, but when combined with the threat posed to human existence by climate change, it is ethically and morally indefensible to hide behind false narratives which are designed to limit the actions a government can take to address these issues.  The crisis is systemic and it is incomprehensible that our leaders, along with think tanks such as the IFS and media hacks, are still working hard to keep the hierarchies of power in place with false narratives about how money really works whilst a credulous and uninformed public accepts the dominant paradigms as being unquestionable and unassailable.

For the moment the public purse has been opened to avert economic disaster but as GIMMS has discussed before how long will it be before the old narratives about unaffordability and paying the debt back creep back into the political and public discourse?

As Professor Prem Sikka wrote in a recent article ‘the right will try and push for a new round of cuts after this crisis. It would be economically illiterate to do so…It’s time to bust some neoliberal myths about debt’

If we continue to allow such myths to dominate, the consequences will be dire for the current and future generations.

As Covid-19 has dominated the news for weeks, it has already been made clear that health and wealth inequalities have played a tragic role in deaths, which combined with the future challenges posed by climate change will be a make or break moment for real and sustainable change.

In an open letter this week the UK Health Alliance on Climate Change, formed in 2016, urged the government to follow its six principles for a healthy recovery from Covid-19. It made clear its position that the health of the planet and the health of people are intimately connected and as such future government action must prioritise the health of both.

Whilst those principles are vitally important and essential to any future governmental policies it will be, as Prem Sikka has already observed, only be a matter of time before the issue of affordability and increasing government debt to pay for it will be raised.

However, without a sea change in the political market-led ideology which currently guides government policy, along with the acceptance of the very real resource constraints which all governments face when making their spending decisions, then those six principles will see little chance of being enacted to deliver those public purpose goals to secure the future.

Furthermore, whilst we remain mired in the household budget version of how government spending happens, we will equally accept its spending limitations and thus our own demise as a species.

This is our wake-up call to protect future generations, not from tax burdens as the orthodoxy prescribes, but from the burden of environmental decay and increasing climate uncertainty.

An economic recovery will depend on a new economic paradigm which puts people and the planet first – not more of the same with an environmental extra tagged on.  A Green New Deal combined with a Job Guarantee to allow a smooth and just transition is the way forward. That can only be underpinned by an understanding that government is not limited by money, but by the resources it has at its disposal to deliver its objectives. We can’t allow past narratives to dictate the future.

As a nation, it will be up to us to decide whether we go forward or stay stuck in the exploitative and destructive paradigm which is currently dictating the economic recovery in terms of more unsustainable growth, more futile consumption to feather the bank accounts of global corporations and more eco destruction.

Our future depends on understanding what is possible and what is not. And getting informed is the first step towards a better understanding of the choices we have.

As such, GIMMS can’t end this blog without a mention of two important books which were published this week, and which complement many others before them.  Firstly, The Deficit Mythby Stephanie Kelton shatters the myths that prevent us from taking action because we can’t get beyond the question of how we can pay for it. Whilst written for an American audience, it is equally applicable for the UK.

And secondly, ‘The Case for a Job Guarantee’ written by Pavlina R Tcherneva, which challenges the idea that unemployment is unavoidable and necessary for an efficient economy and invites us to imagine quite a different world where unemployment is eliminated and which has implications for the wider context of a Green New Deal.

And if you missed this first time around, readers interested in historical background and learning more about how money really works in the post-gold-standard era couldn’t do better than ordering Bill Mitchell and Thomas Fazi’s jointly co-authored book Reclaiming the State’.

And finally, don’t forget GIMMS website, which is a fount of information for anyone – from beginners through to those wanting more detailed information. Starting with our information sheet An introduction to Modern Monetary Theory’.

 

 

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To talk about the future is only useful if it leads to action now

Environmental protester at a demonstration holding a sign with a clean Earth and a dirty Earth and the slogan "You Decide"Image by Dominic Wunderlich from Pixabay

‘To talk about the future is only useful if it leads to action now.’

E F Schumacher: Small is beautiful: Economics as if people mattered.

The Bank of England in its Monetary Policy Report for May 2020 noted in its summary that the ‘unprecedented situation means that the outlook for the UK and global economies is unusually uncertain.  It will depend critically on the evolution of the pandemic, and how governments, households and businesses respond to it’.

Already, the consequences are being felt around the world and there remains great uncertainty about the future.

In April the price of oil plummeted into negative regions as world economies slowed due to COVID-19.

At the end of April, it was reported that two million Bangladeshi jobs could be at risk as western high street clothing shops closed their doors for lockdowns. Bangladesh is a major garment exporter and reliant on European and American orders with some 83% of its export revenue linked to the garment industry.

Factories across the textile sector in countries like Bangladesh and India are still struggling to stay afloat. There have been closures or reduced working hours which have had a devastating effect on jobs and income for those employed in a sector which already relied on poor wages and bad working conditions to compete.  The dependence of globalised trade on outsourcing and just in time logistics to be competitive is exposing structural weaknesses and emphasising its exploitative nature on both domestic and foreign populations. Pull one piece from the jigsaw and the whole edifice comes crashing down.

Since lockdown, many high street businesses have been forced to close their doors as well as those with a global reach.  Airlines have scaled down their domestic and global operations, grounding planes and staff with the prospect of thousands of job losses. Rolls Royce has also confirmed that it would be making significant redundancies in its civil aerospace business both here and abroad.

In response and across the piece fiscal interventions have become the ‘mot du jour’ not the least in the UK.

Whilst one can argue the detail about how it was done and point out the flaws of the schemes which has left many working people without support, Sunak’s fiscal intervention was the right thing to do. However, whilst the Chancellor acted quickly to protect working people, he did so in line with Conservative neoliberal ideology by channelling money into big business and not just through signing contracts with already discredited companies like Serco to provide government services with no accountability built in.

Last month the Treasury and the Bank of England, following a campaign by Positive Money announced that the names of those companies which have been bailed out through the Covid Corporate Financing Facility would be made public. The scheme allows ‘investment-grade’ companies to sell short term debt to the Bank of England thus allowing access for Britain’s biggest corporations to billions of pounds of cheap funding. Fran Boait from Positive Money said ‘“The Covid Corporate Financing Facility was serving as a secret bailout vehicle, allowing Britain’s biggest corporations to access public money without the public having to know.”

It has been revealed that among the companies which have benefited are Stagecoach, G4S, Rolls Royce, Easy Jet and Intercontinental Hotels. So far 152 companies have taken over £16bn with an expected total bailout of £67.7bn.

However, as the SourcenewsScot reported this week, one in five of firms receiving bailout money are airlines, oil and gas or car manufacturers and ‘the only strings which are tied to this cheap money is a request by the BoE to be restrained in paying dividends. It doesn’t matter if they are climate polluters or tax haven users or have exposed their workers to harm during the pandemic, the BoE will bail them out if they are making a ‘material contribution’ to the UK economy just so long as they are also corporate giants.’ So much for the government’s expressed commitment to a green economic recovery at a time when such commitment is vital.

Positive Money has also warned that it may not be long before they are back for more given that this crisis is unlikely to be over anytime soon.

It is yet again more evidence that the UK government with the power of the public purse can bail out whomsoever it chooses, just as it did the banks in 2008, with not a taxpayer in sight.

For many small high street businesses and medium-sized enterprises which are struggling and desperate to get back to some sort of normality, the future remains an unknown. The economic and employment uncertainty is likely to continue. This, along with the cumulative effects of reduced incomes on salaried workers and reliance on minimal state support for many self-employed (for those who are eligible for it at all) may cause people to be cautious about future spending.

Figures show that during lockdown consumers have been spending around £17.9bn less per month into the economy as spending habits shifted to accommodate the new normal. According to figures published by the Bank of England, in April households also repaid record amounts of debt accumulated on credit cards and personal loans amounting to £7.4bn. Whilst at the other end of the scale, figures from the Bank exposed a sharp increase in business debts as a result of the drop in sales.

At the same time, the New Policy Institute calculated that the richest 20% of UK households will have likely saved £23bn by mid-June, which is more than six times as much as the savings made possible by the poorest 20% of households. Even if the pandemic were to stop dead in its tracks or restrictions were to be eased or lifted, with so much uncertainty confidence may not return for some time yet.

Many businesses, with increased debt and little hope of regaining the sales ground they have lost, may yet go under, thus increasing unemployment. In the light of failing confidence, people may have no alternative but to continue to retrench and/or continue to save.  And those who have suffered cuts to their income, been laid off or furloughed or face the prospect of redundancy and who have never been in a position to save, will further be impoverished thus deepening the wide gulf that exists between the rich and poor and those of ethnic origin in what is an already divided country.

Shockingly it was revealed by the Health Service Journal (HSJ) this week that the government had removed a key section from Public Health England’s review of the relative risk of COVID-19 to specific groups which suggested that discrimination and poorer life chances were playing a part in the increased risk of contracting the disease amongst those with BAME backgrounds.

The HSJ noted Matt Hancock’s response articulated at a daily coronavirus briefing this week when he said that ‘he understood why many were ‘understandably angry about injustices’ and that he felt a ‘deep responsibility because this pandemic has exposed huge disparities in the health of our nation’ [saying also] that ‘much more work’ was needed to be done to understand ‘what’s driving these disparities’ before adding: ‘We are absolutely determined to get to the bottom of this and find ways of closing the gap.’

In the light of his response one has to ask oneself the question where has the government been? The last 10 years of government-imposed austerity, cuts to spending on public sector services, its ideological attachment to low wages and precarious employment to serve the business agenda had already taken their toll before COVID-19 even arrived into our midst. It is incomprehensible that politicians and their appointees don’t know where the inequality and poverty have come from! Wilful ignorance comes to mind.

So where might we be going now?

Rishi Sunak, the Chancellor, announced last week that the Coronavirus Job Retention Scheme (aka the furlough scheme) which has helped protect 8.4 million jobs is to be extended until October and those who were eligible for Self-Employment Support will be able to claim a second and final grant in August. However, his plan to taper pay-outs from August onwards from the current 80% will mean that employers will have to cover the difference.

The ending of the furlough scheme at such a crucial moment will, without doubt, have exactly the opposite effect to the one desired.  It is likely to lead to a steep increase in unemployment as businesses are forced to downsize their operations or go bust; making people redundant just at the time when the world is entering a recession, or worse. The UK does not exist in a bubble – it is also affected by world economic conditions, which are equally distressed.

The impact is likely to be devastating. An analysis published by The Institute for Public Policy Research (IPPR) this week suggests that by the end of 2020, 1.1million more people face poverty as a result of the coronavirus pandemic and that 200,000 more children will be among those expected to be below the pre-virus poverty line as job losses hit family incomes. It says that without urgent action to protect families from financial hardship it would bring the total number of children living in poverty in the UK to 4.5 million – an increase of almost 5%.

Its figures are drawn from Bank of England estimates that unemployment is likely to reach just under 10%, or around 3.3 million people, by the final quarter of the year. Claire McNeil, Associate Director of the IPPR, said ‘The government must apply the same level of ambition it had for supporting businesses and workers … to prevent a new generation of children and their families falling into poverty through no fault of their own.’

What we need now is the combined and continued power of the state and the public purse, to both stave off further damage and begin the vital move towards globally sustainable economies and the pursuit of a more equitable and sustainable sharing of global resources.

The economic policies of the preceding decades have been framed around three false narratives: That global corporations and financial institutions are the wealth makers and must be privileged, that the State is powerless to act in the public interest and that the public accounts are like our own household budgets with spending limited to income (in this case taxation) which requires a firm hand and iron fiscal discipline to keep them in balance.

We are now by dint of this tragedy discovering that the magic money tree, like the magic porridge pot, is showing no signs of running out of funds as Rishi Sunak is also apparently contemplating yet another package of measures to help the economy. The release of information about the details of this package have now been put back until the autumn as Sunak seemingly waits to see what happens. Perhaps he’s expecting an economic miracle!  It has to be said that this is a moment for bold thinking, not delay or prevarication.

In fact, what we now need is a revolution in thinking, not the stale economic orthodoxy which has already done so much damage down the decades.  It is disappointing when three former Chancellors of the Exchequer still frame their arguments in household budget terms when talking about the challenges ahead. It is also disappointing to read the OBR’s analysis of the furlough scheme which speaks in terms of costs to the public finances and debt, when the focus should be on the real benefits of government spending to the nation and its economic health at a crucial time and in terms of investment in the future.

In the case of Osborne, the architect of austerity, it was frustrating to note his continuing adherence to ‘handbag’ economics when he commented in an article in the Telegraph that ‘sadly we are poorer than we thought we were, and either we’re going to have to raise more in revenue or spend less than we were planning’.

It is clear that whilst the cash is being splashed for the moment, the magic money tree is likely to have a limited life or perhaps more accurately will only bear fruit to serve the interests of the global corporations and other wealthy elites. If this remains unchallenged it will not bode well for the future of the UK, not to mention the planet.

If some of us thought that COVID-19 might act as a wake-up call for the future, that scenario is still unclear. Not only in terms of the government’s priorities about who is to benefit from government spending but also looking at the general situation. Pollution levels are once again rising in China and it is expected that Europe will follow suit. The pictures of long queues outside Ikea paint a depressing picture as do the piles of rubbish left in beauty spots by people who travelled hundreds of miles in their cars to get there. It seems that while people were obliged to stay at home, they would bake, connect with one another through Zoom or contemplate a different way of doing things, they are still just as eager to pick up where they left off once the restrictions are lifted.

And yet while we are all dying to get back to normal there is still an existential threat to civilisation which we must address swiftly if we care at all for the fate of future generations whilst we still have some time left.

COVID-19 offers an opportunity to rethink everything and most importantly to challenge the received wisdom that ultimately there will be a financial price to pay for government spending too much! The price we will really pay for continuing with the narrative of financial unaffordability will be the health of our ecosystem and all those who depend upon its resources to enable and enrich their lives in every sense.

We can all play a part in bringing about positive change. However, it is only government with the power of the public purse and an understanding of the resource constraints that all governments face, that can demonstrate the real resolve through its legislative powers at national and local level to deliver public purpose goals. A green recovery is only possible with a government committed to real change in its spending priorities and through pursuing full employment policies. This could be through a combination of an expansion of the public sector combined with a Job Guarantee to allow the transition towards the green economy we need by providing the necessary economic stability.

Let’s not let this opportunity slip through our fingers.  It is only the people that can demand the change we need. It is only people with the correct knowledge that can pour scorn on politicians who continue to adhere to false narratives about how governments spend. The future is at stake now more than ever before.

If you want to know more the GIMMS website is a good place to start the journey to that challenge

https://gimms.org.uk/mmtbasics/

 

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The post To talk about the future is only useful if it leads to action now appeared first on The Gower Initiative for Modern Money Studies.

May 30, 2020 – we remember the release of the 1945 White Paper on Full Employment

Published by Anonymous (not verified) on Wed, 27/05/2020 - 4:52pm in

Some Wednesday snippets today. Tomorrow, I will write about what I have been thinking about the Eurozone. There has been a lot of hot air about the Franco-German accord that Emmanuel Macron and Angela Merkel came to recently. Hot air is the operative term. The fault lines in the Eurozone continue to widen and the policy dissonance is becoming more acute as they deal, not only with the health crisis, but also the 19 economies that have been starved of investment and infrastructure development. This Saturday (May 30, 2020) marks the 75th Anniversary of the release of the famous ‘White Paper on Full Employment’, which outlined the responsibilities that the Australian government took on to ensure there were jobs for all workers who were wanting work. This White Paper really defined the Post-WW2 consensus and began a period of low unemployment, upward social mobility, the development of public education and health, declining income and wealth inequality and stable wage shares as real wages kept pace with national productivity growth. It wasn’t nirvana because lots of issues were still in need of solutions (for example, gender attitudes, indigenous inclusion, etc). But it was a blue print for an inclusive society with growing material prosperity. The vision was abandoned sometime in the 1970s as neoliberalism took centre stage and political parties on both sides of the fence gave up talking about full employment. To restore full employment as a primary social goal and government responsibility is an agenda I have pursed all my career. We should all read the ‘White Paper’ and recast it in modern terms and fight like hell for a similar vision that is apposite for the times and crises we now face.

The 1945 Full Employment White Paper

I have received a lot of E-mails in the last week asking me why (if I did) I turned down an invitation to participate in a so-called 75th anniversary recognition of the 1945 White Paper on Full Employment, which is being organised this week by the think tank Per Capita.

The fact is that I was not invited. Whether I would have accepted an invitation is moot, especially given some of the actual invited speakers that are attempting to make political capital out of the event, when their track record suggests they have never supported true full employment.

A bit of history though.

Some years ago, it became apparent that it was very difficult to get access to the original White Paper.

So we (CofFEE) created a digital version and you can find it on my home page at – FULL EMPLOYMENT IN AUSTRALIA (The 1945 White Paper).

That was the only on-line archive of the document available and reflected my commitment to keeping these ideas in the public arena and the obvious commitment of my research centre – Centre of Full Employment and Equity (CofFEE) – to the issue.

From 1998, when CofFEE was inaugurated, we held 15 Path to Full Employment Conferences which combined with the National Unemployment Conference to promote the ideas of full employment.

We were largely a voice in the wilderness.

Most of the progressive voices were embracing the government’s training narrative, which I coined as the ‘full employability’ paradigm. It was clear both sides of politics had abandoned the Full Employment paradigm outlined in the ‘White Paper’.

We stopped running the conferences, which were resource intensive on my small staff, when it became apparent the Federal government was no longer allowing (encouraging, whatever) staff in the key departments – ABS, Department of Employment, Treasury, etc – to attend. We used get a good turnout of policy makers and researchers from those departments but then they stopped coming and it made the conference economically unviable.

Five years ago, I organised an event to recognise the 70th Anniversary of the release of the 1945 White Paper on Full Employment. We held that event in Sydney (rather than Newcastle) to make it easier for people to attend.

We sent a written invitation to the head of the Australian Council of Trade Unions (ACTU) Ged Kearney and her deputy at the time to be keynote speakers at the event as a symbol that the trade union movement in Australia was still committed to true full employment and the central role that the government has in maintaining that state.

Remember unemployment is a political choice.

We sent written invitations to many senior union leaders encouraging them to attend.

Ultimately, the ACTU didn’t participate in any way.

Think tanks like Per Capita, did not show any interest and none of their staff attended.

There was some union interest.

The NSW Trades Hall kindly gave us their auditorium in Sussex Street in central Sydney for free as the venue. I was very appreciative of that generosity.

And, we had a great contribution from the NSW Teachers Federation (a really committed union) who gave the audience a stark reminder of how fiscal austerity and the fake private competition in vocational education that the government had forced onto the public education sector had gutted the Technical and Further Education (TAFE) system.

A good audience attended, mainly, activists and some academics.

None of the politicians on Per Capita’s speaking list showed up to our event – all were invited.

Holding a 75th anniversary of the ‘White Paper’ with any speakers who believe in neoclassical NAIRU concepts is not a very inviting prospect.

Albert Alesina dies

The Harvard economist who has made a career on trying to prove the impossible – that austerity is good for economic growth and prosperity – died last week.

As the German physicist – Max Planck – observed:

A new scientific truth does not generally triumph by persuading its opponents and getting them to admit their errors, but rather by its opponents gradually dying out and giving way to a new generation that is raised on it. … An important scientific innovation rarely makes its way by gradually winning over and converting its opponents: it rarely happens that Saul becomes Paul. What does happen is that its opponents gradually die out, and that the growing generation is familiarized with the ideas from the beginning: another instance of the fact that the future lies with the youth.

So he was making the point that new paradigms (like Modern Monetary Theory (MMT), for example) do not emerge and take a dominant position by simply showing the shortcomings of the mainstream dominant paradigm.

There is no process of enlightenment for entrenched members of a dominant paradigm that is in decline.

Rather, it is a slow, intergenerational burn.

What Max Planck considered to be the way forward was that the senior members of the dominant paradigm (usually the professors of the discipline in question) had to die off and be replaced by new scholars, who had not yet been indoctrinated in the old ways, and, could be more open to the new ideas and cope with the cognitive dissonance that was a bridge too far for their senior professors.

I have written extensively in the past about this phenomenon in other disciplines.

That is what I thought of when I saw that Alesina had died.

Sack Cummings

And I supported Brexit!

3CR Segment on the Job Guarantee

Anne and Kelvin at the Melbourne Community Radio Station 3CR are hosting a regular series for the Unemployed Workers Fight Back every second Friday from 17:30 to 18:30.

Their home page has all the past – Episodes.

I have done some interviews for them and their latest episode is on the – Job Guarantee (broadcast Friday, May 22, 2020).

I also have done a Station Promo for the station.

3CR was one of the early community radio stations in my home town Melbourne that focused on political issues, trade unions, environmental issues and provided “community language-based programs” in a city that was very diverse in cultural terms.

In 1978, the conservative magazine ‘The Bulletin’ mounted a campaign against the station because it had aired content supporting the rights of the Palestinians. The Jewish Board of Deputies tried to get the licence revoked but a massive grass roots stopped that from happening.

Later in the mid-1990s, it was reported that Victorian Police had undercover cops infiltrating the station as volunteers to “gather information.”

MMTed update – developments to date

We are working on the MMTed Project and hope to start accepting expressions of interest for enrolments in July but we won’t promise that at this stage.

With limited financial support at present, we are cross-subsidising the development of the venture so far, mostly via funds and labour time from my research group – Centre of Full Employment and Equity (which is located at the University of Newcastle).

MMTed plans to offer educational opportunities in a number of different ways:

  • Open Lectures – typically streamed broadcasts that are unrestricted in terms of audience.
  • Tutorials – smaller, regular groups of registered students, supporting a particular course curriculum. Interactive technologies like Zoom are used.
  • MMTed Q&A – a weekly streamed program where experts answer pre-submitted questions – Details. See below.
  • Masterclasses – specialised topics available by subscription either on-line or in person – organised by MMTed on an irregular basis. Depending on the topic.
  • Specialised sessions with Professor William Mitchell via Zoom – fees will be charged for these services.

So far we have a functional on-line student system now in place and we are testing it for scaling and security.

We will start adding content soon.

We have successfully trialled live streaming and have developed the requisite broadcasting skills and have invested in some elementary software and hardware to make that possible.

We have been running Masterclasses to a number of organisations – in part, to elicit donations. The Masterclass I ran in London in February, which was open to all was fully subscribed, allowed us to trial material to gauge appropriate level of pedagogy. Several classes I have run have been private and aimed at building a network that might support the venture.

We have been developing topic-based presentations for our textbook (Macroeconomics – Mitchell, Wray and Watts) and will start filming small modules in the coming weeks to be integrated into the student system.

We also have filmed and are editing several lectures covering an introductory MMT course. Those lectures will be released around July when we start taking students formally.

With the shortage of funding, the progress has to be staged – we are doing the work around our other jobs and commitments (which have been rather intense the last several months).

MMTed Q&A

As part of the on-going development of our MMTed project, we are introducing – MMTed Q&A – which will be a weekly live program screening on Wednesday nights starting at 20:00 Australian EST.

This will be at:

10:00 Dakar
11:00 London
12:00 Paris
13:00 Helsinki
19:00 Tokyo, Kyoto and Dili
03:00 San Francisco
06:00 New York

The program will run for 30 minutes each week and the format will be around 5 questions will be answered with discussion.

Each week, we plan to bring in some of the MMT experts who can help answer your questions.

If you want to ask a question the process, as a trial, will be to submit your enquiry via the – MMTed Q&A – page.

We do not guarantee that your question will be answered but we will do our best.

Only submissions will valid E-mail addresses will be accepted.

We had originally planned to launch the program tonight – but logistics and time has prevented that.

We will be broadcast the first show next Wednesday, June 3, 2020 at 20:00 Australian EST.

The links to the live stream each week will be published in advance on the site and via Twitter and on this blog site.

Call for MMTed Support

As noted above, we are making progress in developing the capacity that will become – MMTed.

Courses are being designed and essential infrastructure is well on the way to completion, even though we have only a fraction of the funds we need to do this.

But we still need significant sponsors for this venture to ensure that we can run the educational program with negligible fees and ensure is sustainable over time.

If you are able to help on an ongoing basis that would be great. But we will also appreciate of once-off and small donations as your circumstances permit.

You can contribute in one of two ways:

1. Via PayPal – which is our preferred vehicle for receiving donations.

The PayPal donation button is available via the MMTed Home Page or via the – Donation button – on the right-hand menu of this page (below the calendar).

2. Direct to MMTed’s Bank Account.

Please write to me to request account details.

Please help if you can.

We cannot make the MMTed project viable on a sustainable basis without funding support.

We will always maintain strict anonymity with respect to donations received, except if the donor desires to be publicly associated with the venture and gives their permission in writing to appear on the Donors Page.

Another drummer to celebrate and remember

Earlier this month, I wrote about the death of Tony Allen, who is one of the greatest drummers to hit skins (see – BVerfG decision once again exposes the sham of the Euro system (May 6, 2020)).

Today, we reflect on the work of – Jimmy Cobb – who played drums with Miles Davis 6-piece band in the glory days.

I first encountered him through my regard for saxophonist Earl Bostic – Jimmy Cobb was his drummer in 1950.

And after that a litany of gigs with all the great jazz stars of the era – Cannonball Adderley (alto), John Coltrane (tenor), Bill Evans (piano), Wynton Kelly (piano), Paul Chambers (bass), Miles Davis (trumpet), and Jimmy Cobb (drums).

Cannonball Adderley gave him a reference which allowed him to join the – Miles Davis – in 1957. All the great players were in that band and they defined what has become known as the – Hard Bop – tradition.

This form was a derivative of the standard bebop and added the emerging R&B and electric blues influences that later underpinned the soul revolution.

In 1959, they released the momentous album – Kind of Blue – which even non-jazz followers seem to know about and like.

The piano playing of Bill Evans on this album defined the way that this form was evolving as did the simplification into modal playing by Miles Davis.

But it was also the very subtle and delicate drumming by Jimmy Cobb that gave this album such force.

I recommend putting on the album tonight and just concentrating on the drumming, particularly the hi-hat work. You may hear things you have never heard before.

Here is track 5 – Flamenco Sketches – which if you decompose really just consists of an exercise in different scaled solos, all exquisitively executed.

The UK Guardian carried an good obiturary of Jimmy Cobb (May 25, 2020) – Jimmy Cobb, drummer on Miles Davis’s Kind of Blue, dies aged 91.

Another one of the best drummers dead.

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

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