The Volcker Shock was a great event in the late 1970s and early 1980s which reshaped the world and marked the decisive end to the post war period. It may be happening again.
By the end of the 1970s western political leaders were in a state of confusion. The fiscal and financial tools they had used for three decades to manage the economy, conceptualised as Keynesian demand management, no longer worked and everywhere both unemployment and inflation were going up at the same time. This was a new phenomena and seemingly no one knew how to deal with this. Until Paul Volcker was appointed the head of the US Federal Reserve.
Sounds odd doesn’t it? Jarring almost, perhaps a bit anachronistic?
Such is change. Why does it matter? It probably matters to those who consider themselves republicans and who would like to get rid of the monarchy. I am sure for republicans the explosion of ceremony and pomp around the Queen’s death and the accession of Charles III is pretty hard to stomach. Probably a fair bit of groaning, possibly some sneering, maybe even some despair. I suspect that republicans are over represented on the left wing and this article is an attempt to explore the issues of the monarchy in relation to the political project of progressives and the left wing of politics (I’m just going to call it the ‘Left’ from now on). I am worried that the Left is making political blunders, and these blunders speak to quite deep weaknesses in how the Left thinks about it’s own political project.
Putin was a child of the 1990s Russian collapse. The collapse was a child of Lenin
There is an enduring myth, popular on the Left, that the collapse of the Russian economy in the 1990s was caused by the importation of neoliberal ideology pushed by the west which resulted in the unnecessary shock treatment of a very sudden transition to a market economy which then caused the Russian economy to collapse. If that were true then the distortions of the post soviet regime and its mutation into the ghastly Putin ethno-nationalist autocracy can largely be laid at the door of the west, its neoliberal ideologies and the damage it wrought on poor prostrate post-Soviet Russia. None of that is true.
The argument is also put forward that when the Soviet Union collapsed there was another possible road that wasn’t taken. A road where the old Soviet planned economy was allowed to continue functioning for a while, thus avoiding economic collapse, and a gentle market reform process was initiated that would have eventually lead to a mixed economy much like in the west. Down this alternative road the kleptocracy by the robber oligarchs could have been avoided and Russia would now be a successful, prosperous, liberal and stable country and none of the unpleasantness in places like Georgia and Ukraine would have ever happened. This alternative route might have looked a bit like China after 1978. Because of western interference from neoliberals this supposed alternative road was not taken. None of that is true either. [Click to read more…]
The U.N. predicts disaster if climate change is not stopped. A U.N. spokes person has said “entire nations could be wiped off the face of the Earth by rising sea levels if the global warming trend is not reversed in the next decade. Coastal flooding and crop failures would create an exodus of “eco- refugees, threatening political chaos”, said Noel Brown, director of the New York office of the U.N. Environment Program, or UNEP. He said governments have a 10-year window of opportunity to solve the greenhouse effect before it goes beyond human control.
As the warming melts polar icecaps, ocean levels will rise by up to three feet, enough to cover the Maldives and other flat island nations, Brown told The Associated Press in an interview on Wednesday.
Coastal regions will be inundated; one-sixth of Bangladesh could be flooded, displacing a fourth of its 90 million people. A fifth of Egypt’s arable land in the Nile Delta would be flooded, cutting off its food supply, according to a joint UNEP and U.S. Environmental Protection Agency study.
All the above U.N. quotes about a looming climate apocalypse are real but they were actually said in June 1989, thirty two years ago. [Click to read more…]
If you are interested in, alarmed by, or politically engaged with the question of climate change then you really should watch this video. It’s not very long, just over 30 minutes, but it deals extremely clearly with two crucial aspects of the work of the IPCC (the central and most important UN body which coordinates the global analysis of climate change).
The video presenter is Dr Roger Pielke from the University of Colorado who has, amongst other thngs, spent the last 30 years studying extreme weather events. [Click to read more…]
Thirty thousand plus attendees are about to descend on Glasgow for the UN Climate Change Conference of the Parties (COP26). Hundreds of private jets will be flying in, lots of diesel engines have been installed in the five star hotels to power up the Tesla electric cars for the ride to conference. Most of Scotlands available big country houses have been booked for the billionaires, politicians, celebs and movie stars all wanting to be seen there to show off their green virtue. Meanwhile across Scotland since the year 2000 fourteen million trees have been cut down for onshore wind farm development. Sometimes apparently you have to destroy nature in order to save it. And after the COP26 crowd have jetted off lots of poor people across Scotland are going to be suffering and dying this winter because of energy price rises.
The article, “Unspeakable Truths about Racial Inequality in America”, by the black intellectual Glenn Loury is really excellent and basically encapsulates the critical conclusions I have come to about about the political programs associated with Critical Race Theory and BLM.
Many of the arguments are applicable to the UK: for example the fact that 50% of murder victims and perpetrators of murder in London are black is shocking but what’s more shocking is that this terrible tragedy is almost ignored by race campaigners, presumably because it’s a stretch to blame it on white racism. Campaigners around the issue of race in the UK seem to have little to say about the leading, in fact overwhelming, cause of violent death of black people.
I have been exploring another interesting angle of analysis about the racial disparity in rates of police killings in the US. Taken at face value the much higher rates of police killings of black people compared to population size seems to point to racial bias in the shooters being the main and overwhelmingly important factor (it’s obviously a factor, the question is how important is it). [Click to read more…]
As the graph below shows approval of Trump after the violence at the Capitol still remains strong at around 40%. This article from the New York Times explores the depth of Trump’s support in the Republican Party.
I am sure there is a block of senior Republican Party leaders who are appalled by where Trump has led them, but there is clearly another block who will opportunistically follow anything popular that can deliver them votes, and yet another block that are the true believers in Trump politics. It’s not clear yet what weight inside the party these blocks have. It seems clear there will be some sort of inner party struggle following impeachment and in the build up to the mid-term elections, that struggle will determine the fate of the Republican Party and of American politics for years to come.
I am not sure how the censoring of Trump by big (and Democrat inclined) tech companies, and impeachment and other legal actions against Trump and his supporters, will play into that inner party struggle. It will definitely fuel the conspiracy theorists. There’s a lot at stake. The last election was actually pretty close and a second Trumpist Presidency even if led by someone other than Trump will be extraordinarily damaging. A lot hinges on a) how well the Democrats govern (the must look competent, deliver some sort of new direction to the US and it’s economy, and try to win over parts of the Trump block, no easy thing), b) how the Democrats handle the tangle of legal actions that will unfold against both Trump and his supporters. Above all the Democrats must not write off Trump supporters and voters, no more comments about ‘undesirables’, instead without pandering to base politics they have to manoeuvre to unpick the Trumpist coalition and win over Trump voters.
Looking at the political situation in the US and trying answer the question “what is to be done?” I think it’s best to think in terms of short term, medium term and long term goals. [Click to read more…]
Since the beginning of the surge in government spending in the UK caused by the Corona virus most of the new bonds issued to pay for all the deficit spending has ended up being bought up by the central bank. Is the Bank of England (BoE) implementing a policy based on Modern Monetary Theory (MMT)?
What is MMT? Modern Monetary Theory macroeconomic framework that says monetarily sovereign countries like the U.S., U.K., Japan, and Canada, which spend, tax, and borrow in a fiat currency they fully control, are not operationally constrained by revenues when it comes to government spending. Put simply, such governments do not rely on taxes or borrowing for spending since they can print as much as they need and are the monopoly issuers of the currency. Since their budgets aren’t like a regular household’s, their policies should not be shaped by fears of rising national debt. [Click to read more…]
Former climate activist Michael Shellenberger has condemned alarmists for “terrorising school children” with false claims that the world is about to end. He recently published an an article in Forbes magazine – subsequently deleted – entitled “On Behalf Of Environmentalists, I Apologize For The Climate Scare”.
Why are Eurobonds so difficult? Although it seems to make sense on a superficial level to pool the issuing of EU government bonds so that the cost of borrowing by eurozone countries can be stabilised the issue of Eurobonds is not a technical one about how to finance public expenditure. In fact the issue of Eurobonds, the reason they haven’t happened yet, goes right to the heart of the structural problems of the European Union and the flawed architecture which was created when the European Union which was set up by the Treaty of Maastricht, when the European project apparently set out on the road to ever closer union.
The best way to think about the issue of Eurobonds, and in fact the entire concept of pooling the fiscal systems of the Eurozone, is to compare how the EU works, and what its severe limitations are, compared to how a national state works, and to try to understand why things are so different inside nation states compared to the EU. [Click to read more…]
In the post 2008 recession the global economy was significantly reflated by a huge credit boost in China which was spent on a truly gigantic investment program. This time the Chinese won’t be in a position to do that partly because this shock has hit them internally in a way that the 2008 shock didn’t but primarily because the entire Chinese growth model was already rapidly running out of steam just as the Corina Coach happened. This time round the Chinese probably won’t save the global economy. [Click to read more…]
This is an extraordinary global and national crisis. I don’t think anything as big, complex or significant has happened since WWII. The collapse of the post war settlement and of the communist block in the 1980s and 1990s, and the rise of Chinese capitalism weren’t as big as this event. The next couple of years […]
I voted Remain in the referendum not because I loved the EU but because I thought the UK outside the EU would produce sub-optimal economic results. During the referendum campaign, and especially after the result and in the tortuous build up to Brexit itself, many leftwing Remainers have been drawn into a mostly uncritical support […]
A wider context to Labour’s defeat, the map below shows the weighted share of the vote for Western European social democratic parties since 1950. Looks like the dramatic decline of the share of votes for social democratic parties started with the financial crisis of 2008. The generalised decline of European social democratic parties seems to […]
In the light of its historic defeat last week it’s worth asking “what is the Labour Party for?” The answer is not obvious. Historically the Labour Party has been the party of the working class, the clue is after all in the name. Labour was there to defend the interests of the working class against […]
The slogan ‘For the Many not the Few” looked for a while as if it was a winning popular campaigning position. But in the end its resonance has been shallow and Labour positioning of itself as fighting for the masses against the rich and powerful has turned out to be a losing position. In […]
The Volcker Shock was a great event in the late 1970s and early 1980s which reshaped the world and marked the decisive end to the post war period. It may be happening again.
