When a refutation is anything but

For decades, many academics and pundits have pronounced that the 70s conclusively proved that Keynes had been completely wrong, and that it proved that Friedman had been completely right.

You see, there was a recession, and it should have created deflation, except if inflation was actually determined by expectations based on previous experience, in which case it would not be brought down by depression. Friedman went on to state that "inflation is always and everywhere a monetary phenomenon" which, if you think twice about it, is the most laughable statement.
And to this day, I keep reading articles, even by professors of economics in the UK, saying that the episode of inflation over 2% in the UK in the early years of the current Government is a clear indication that any stimulus would have had little to no effect, being swallowed by inflation.


That's what happens when you start believing that your model matters more than reality.

A tale of two demises

It's a bit in the past now, but since the year is not finished yet, not quite too late.
So, 2013 will have seen the death of two major international political figures, one at each end of the year. Indeed, Nelson Mandela (and I doubt that many will have begrudged him that) outlived by 8 months the 7 years younger woman who had called him a terrorist, although it's actually her spokesman who added that whoever thought the ANC could lead South Africa lived "in cloud-cuckoo land".

Some dreams

So, it's again one of those times of the year.

Oh, I don't mean festive food, long evenings with family and friends, and sharing of presents. All that's fine.

No, I mean one of those times when you are expected to lie.

OK, not to adults, not to most adults anyway. But you must be very, very careful not to say anything that may imply the non-existence of a certain fat beardy guy who, somehow, fails to ever be arrested for speeding (on a pretty hazardous vehicle, too) or trespassing, despite numerous alleged occurence, within earshot of a child who may not already be aware of the facts. On the other hand, nobody feels any hesitation in flat out lying in the face of kids who may not have been exposed to superstitious nonsense (and could very well start to believe it).

But the lying brigade has a ready-made explanation: kids need to dream. It is bad for them to learn some truths.

Well, I can't prove otherwise of course, but if they do need to believe in Santa to develop a balanced personality, that would mean that many, many generations must have been traumatised. After all, we are talking, essentially, of an early 20th century creation by the Coca-Cola company.

And it's some dream: if we are to believe the songs that we hear, Big Brother had nothing on him: he knows when you've been good, he knows when you've been bad, he knows when you're sleeping... And the idea is to reward that by an orgy of consumerism without meaning (there cannot be much meaning to a present if the person "presenting" it is supposed to be a mythical being with whom you've never had any contact). By the way, the only logical conclusion for a poor kid would seem to be that he has behaved a lot worse than the rich prat who got spoilt.

No, surely we should never let them imagine that presents might be thoughtgful gestures from people who make them because they love you and sought to convey some meaning through them. That would be nightmarish.

Anyway, I don't pretend to know for sure what's best for people of an age I haven't had in quite a while. But when I look around me, I don't get the impression that our society suffers from a lack of consumerism and an overdose of meaning. And I have to wonder whether shielding kids from the latter by pretending that the former is provided for by some magical being really improves things.

Slow, grinding torture at the hospital

No, nothing to do with a particularly painful treatment. It's merely allergy desensitisation.
However, this means that I need to stay in the waiting room for a whole hour after the injection, in case I have a bad reaction.

And they play BBC1, too loud to be completely screened out. Plus all the seats are facing the giant screen, it's always in your arc of vision.

And this is my typical ordeal:

Some thoughts on secular stagnation

Via Paul Krugman, I saw that Larry Summers had given a presentation on the topic of secular stagnation at the IMF conference (admittedly, I wasn't invited this year, well, the letter must have been lost in the post ;-) ). If you'd rather read than watch, Krugman's summary is a nicely written one, and adds a few comments which can be interesting in themselves.

Well, I have not usually been inclined of late to say nice things about Larry Summers, although that was probably more about Summers the political persona. His academic research deserves more credit. So, much of it is interesting, although some of the conclusions he derives (and here Summers the neoliberal may be showing, for instance when he suggests that proper financial regulation may be a bad thing in the context of stagnation, which is bonkers) appear to either be there purely for provocation sake, or to be pre-conclusions looking for a justification. Still, I would have a few things to add, and I believe that the conclusions fall short in a couple of ways.

A graph that says it all

This is a simple graph (via Paul Krugman) plotting industrial production in the Eurozone since the beginning of the crisis, and in the 30s, from the start of the great Depression.

Actually, Excel graphics make it look better than it really is: in the 30s we only had one point a year, and Excel will plot that in the middle of the interval -which is why the 30s curve does not start from the origin.
In other words, it is lagging by 6 months. So to really get a comparable point to now, you'd need to add 6 months of rebound from the 30s. We are actually much lower, not slightly lower, than at the same point 80 years ago, and of course the momentum is taking us further apart.

Amazing. And the Austerians are congratulating themselves. Hard to argue against that fitting the definition of sociopathy.

The real sovereignty breach

As so often, George Monbiot is a very welcome voice in sounding the alarm.

As we have come to know, the case for free trade agreements had been hyped, and even the honest assessments overstated -Paul Krugman is a notable case of a major enonomist observing that the outcome had been less positive than he had envisaged, in great part because very little if anything was done to address the distributional effects, and also because free movement of workers is mostly an illusion.

But at least you could make a case for it and put it forward as a policy option.

This is not the case of adding to the free trade agreement the creation of secretive (debates are not revealed to the public!) courts, where judges are corporate lawyers, that have power to supersede governments' decisions with no possibility of appeal.
This is pure Corporatist transfer of power slipped in a bill that was sold as facilitating transactions -ie, stealthily renouncing sovereignty. Democracy is becoming Corporatism without the people having a say.

Not what we need. And, I must admit from reading the example that George Monbiot exhibits, the consequences are even worse than I would have thought (for instance, a mine is by essence local. Forcing exploitation has nothing to do with free trade, it is a completely different thing from having deliberately restricted standards to prevent sales of foreign products).

Despite all the posturing about the EU (and it has, indeed, created huge problems in the way the Eurozone was created, but that's not what you hear from the UK press, for instance, since they are not in the Euro), the sovereignty threat is not so much between national and supra-national, but in this establishing a Corporate power that is becoming stronger than the States'.