This, from an FT email just arrived in my inbox, is interesting:
Isn't the message clear: the recovery is being run for Wall Street and the City and not for ordinary people?
No wonder people are so disaffected. Why not, especially when there are alternatives? Green quantitative easing is one. I laid out others, here.
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“Both sides emphasise the extent to which conditions differ from those in 2007.”
Does this sound familiar?
The conditions are always different. That’s the funny thing about history. Doesn’t mean the outcomes will be different though…
This has been pointed out to you before. More than 50% of the revenue in the S&P 500 comes from outside the US. And for the FTSE 100 it’s even greater.
They are much closer to measures of the global economy than they are to domestic ones. And the global economy is doing quite well: thus the markets that reflect it are too.
The global economy has done quite well?
On which planet are you living Tim?
He’s right , Richard-if you are a neo-liberal wealth syphoner, everything is in good shape. When rapaciousness is seen as trickle down through a grotesque distorting mirror. This can be summed up as: ‘my corner’s alright-sorry about yours.’ They still believe in the bogus Benthamite myth that everyone following their own individual interests results in the collective good.
Global GDP growth, after inflation. 4.9% in 2010, 3.7% in 2011, 3.2% in 2012, 2.9% in 2013, 3.5% in 2014 (est and being revised upwards).
Not stellar numbers but sold growth all the same.
And much of it, you well know, because China is bringing more activity within the scope of GDP, which is not the same as saying there is necessarily growth at all
Measuring something using an arbitrary approach is not the same as saying that another activity, arbitrarily not covered, did not previously exist
In March 2009 we were presenting a paper to the opening plenary of the Economics for Ecology conference at Sumy Ukraine, drawing attention to the folly of QE:
“Thus the issue of ecology economics is not only ‘the third bottom line’, it might be more aptly renamed the economics of survival of the human species. That includes everyone, regardless of one or another economic hypothesis or theory they might prefer. We can endlessly debate and discuss von Mises/von Hayek free market economics/capitalism which proved successful except for the times it failed, and then study why it failed — repeatedly, the most recent failure in September 2008. We can endlessly debate and discuss opposing Keynesian government interventionist economics/capitalism, which proved successful except for the times it failed. That has been an alternating pattern for the past eighty years in Western capitalism. We can discuss the successes and failures of various flavors of communism and fascism. At this point, the simple fact is that regarding economic theory, no one knows what to do next. Possibly this has escaped immediate attention in Ukraine, but, economists in the US as of the end of 2008 openly confessed that they do not know what to do. So, we invented three trillion dollars, lent it to ourselves, and are trying to salvage a broken system so far by reestablishing the broken system with imaginary money.
Now there are, honestly, no answers. It is all just guesswork, and not more than that. What is not guesswork is that the broken — again — capitalist system, be it traditional economics theories in the West or hybrid communism/capitalism in China, is sitting in a world where the existence of human beings is at grave risk, and it’s no longer alarmist to say so.
The question at hand is what to do next, and how to do it. We all get to invent whatever new economics system that comes next, because we must.”
So we have to keep on trying
yes-that’s because economics pretends to be a science as Steve Keen points out-a lot of it rests on bogus assumptions. There’s a great (in my view) joke in his book Debunking Economics:
” Three people, a chemist, a physicist and an economist on a desert island with only a supply of tins of beans. The chemist says: ‘I can make something that will cause the tins to explode, releasing the beans’; the physicist says: ‘ I’ll calculate the beans trajectory so we can catch them’; the economist says: ‘let’s assume we’ve got a can opener.’
Well, I found it funny!
I’ve always liked that one
So true
I know what to do. Any world leaders reading this – drop me an email…
They probably have Matt. After the Inclusive Capitalism conference I’m sure they’re reading mine. For example:
http://www.businesszone.co.uk/blogs/jeff-mowatt/social-business-people-centered-economic-development/inclusive-capitalism-open-let
Good one
Apologies Richard but no, it’s not just China moving things from the shadow economy into the official figures:
“Economic growth picked up in Sub-Saharan Africa in 2013, supported by strong domestic demand, notably resource-based investments. Real GDP for the region grew an estimated 4.7 percent; excluding South Africa, its largest economy, growth was higher at 6 percent. Foreign direct investments continued to flow in the region, not only in the oil, gas and mining sectors but also in non-extractive industries. Net FDI flows were an estimated $43 billion in 2013, up from $37 billion in 2012.”
http://www.worldbank.org/en/publication/global-economic-prospects/regional-outlooks/ssa
The world really is getting richer.
I’m delighted
But that is not what is driving the FTSE and you know it
The FTSE and markets – and world GDP are disconnected and if you do not realise that you’re seriously misunderstanding in the world
Err, no. My original point was that UK GDP and FTSE, US GDP and S&P, are disconnected. Which they are, for both are more connected to global GDP than they are to domestic.
That is what I said, yes?
So, as global GDP continues to rise so do those markets.
To then come back and insist that what we both agree is happening, that global stock markets rise as the global economy does, is proof that global stock markets are not linked to the global economy is, …..well, it’s odd. Most odd.
Have you heard of QE Tim?
I’d Google it if I was you