I am aware that I have an above average blog posting rate, even if the sample base is restricted to bloggers. But there are still things I think I might blog about that I decide to let pass by. I happened to reflect on that this morning. Three stories I ducked this week came to mind.
The first was Moody's down-rating of the pound because of weaknesses in the government's finances. I could have made a song and dance of that. I didn't. Their opinion is obviously well founded. And it just confirms what I have been saying for I do not know how long. There was little to add.
Then there was May in Florence. Three factors prevented this one getting a look in. First it wasn't news. Even the EU did not turn up. Second, she had nothing to say that really added anything to understanding of what was already obviously necessary. Third, she revealed no strategy worth discussing. So I moved on.
And then there is the pre-Tory party conference hype from HMRC about two million couples not claiming the £230 married couples allowance to which they're entitled because of some past petty point scoring between Osborne and the Lib Dems over who was more family friendly, subject to appropriate form filling by all concerned. Unless I wanted to point out HMRC playing very obvious party politics just prior to the Labour conference, or the stupidity of offering tax allowances that are too hard to claim, which clearly evidences that they aren't needed, then why would I do that?
Sometimes what you don't do matters. But it needs reflection. Of these three the last was worth pointing out, because there was something to say on that, after all. It's done now.
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Glad to read this – you’ve been a bit quiet recently by your standards. I thought that maybe you had some research deadlines to meet.
I hope that you and your family are alright. You do work very hard at this.
The day job is the issue….
Hello Richard,
Bear with me, could you help with my understanding? I thought you were always saying the government finances where never anything to worry about as it could spend as much as it likes and just create money to cover? Given that, aren’t Moody’s wrong to be worrying about it? (But you seem to say they are right in your blog?) I’m confused. Should the government spend, or not?
If you behave as if we tax and spend (and we do, even if we don’t) then the criteria of tax and spend matter for the real economy
Until we change them wrong thought processes matter
And so does assessment of them
Surely, from Moody’s point of view, a lot of the debt is held outside the UK. Until it is realised more widely that the economy and infrastructure are good investments, the pound will weaken. Of course, with a Brexit recession, it will weaken even more.
Therein lies a dilemma. 99% of the public commentary relates to an economic ‘system’ that doesn’t exist, hence further reinforcing it 😉
I would describe the adherence to the current neo-lib orthodoxy as ‘Faith Economics’ because people still continue to believe in it despite their overwhelming evidence to the contrary.
It’s like the much vaunted American Dream – to paraphrase one well known but deceased American comic – they call it The Dream because you have to be asleep to believe in it.
And please note: I’m not having a go at those who are religious. Religious faith is different because it attempts to address matters that are still unknown. But neo-liberalism? After 30-40 years – well look at us now?!
That’ll be George Carlin (RIP).