2010-10-05

Domens dag för budgethökarna närmar sig

och för den enfaldiga nyliberala ekonomiska dogmen att penningpolitiken, priset på pengar (räntorna), ska vara det enda styrmedlet för ekonomin. All finanspolitisk stimulans är av ondo enligt denna dogm. Men den tillåts förstås att mer än gärna för att strama åt ekonomin.

Joseph Stiglitz fears European 'austerity wave' will swamp the euro
One of the world’s leading economists has warned that the future of the euro is “looking bleak” and the fragile European economic recovery could be irreparably damaged by a “wave of austerity” sweeping the continent.

IMF admits that the West is stuck in near depression
Chapter Three of the IMF's World Economic Outlook more or less condemns Southern Europe to death by slow suffocation and leaves little doubt that fiscal tightening will trap North Europe, Britain and America in slump for a long time.

Capital controls eyed as global currency wars escalate
Stimulus leaking out of the West's stagnant economies is flooding into emerging markets, playing havoc with their currencies and economies.

Brazil, Mexico, Peru, Colombia, Korea, Taiwan, South Africa, Russia and even Poland are either intervening directly in the exchange markets to prevent their currencies rising too far ....
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"We're in the midst of an international currency war. This threatens us because it takes away our competitiveness. Advanced countries are seeking to devalue their currencies," he said, [Brazil's finance minister Guido Mantega]

Companies Borrow at Low Rates, but Don’t Spend
As many households and small businesses are being turned away by bank loan officers, large corporations are borrowing vast sums of money for next to nothing — simply because they can.
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Companies like Microsoft are raising billions of dollars by issuing bonds at ultra-low interest rates, but few of them are actually spending the money on new factories, equipment or jobs. Instead, they are stockpiling the cash
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The Fed’s low rates have in fact hurt many Americans, especially retirees whose incomes from savings have fallen substantially. Big companies like Johnson & Johnson, PepsiCo and I.B.M. seem to have been among the major beneficiaries.
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Corporations now sit atop a combined $1.6 trillion of cash, a figure equal to slightly more than 6 percent of their total assets. In the first quarter of this year it was 6.2 percent of assets, the highest level since 1964
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In the case of Microsoft’s bond offering, one factor might have been avoiding a big tax bill, ... If Microsoft had needed cash, it could have pulled some from its operations abroad, but “borrowing new money on the debt markets is now cheaper than bringing its own money back from overseas,”
Utbudsekonomismen i sitt esse.

För att få någon rätsida på det hela kan man förstås läsa ekonomiprofessor Bill Mitchells blogg:
The low interest rates were never going to stimulate strong rebounds in investment spending while the economic prospects remain so gloomy. Business firms will only invest if they think they can realise profits from the extra production. It doesn’t matter how cheap the loans are – if the output cannot be sold it is not worth producing.

The point is that quantitative easing and/or low interest rates will not stimulate aggregate demand to the degree necessary to overcome the private spending.
(...)
Each week new evidence emerges which demonstrates categorically that the fiscal austerity proponents have not clue about how real economies and monetary systems function. The world is not behaving as they predicted. The models and analysis they provided to governments as support for withdrawing fiscal support are bereft of any credibility.
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In the last few days, more economic information has come to light which demonstrates the lunacy of the current international approach to economic policy which is biased towards fiscal retrenchment. The only issue of debate seems to be how quickly the retrenchment should be and the scope of it.
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It is a fairly simple proposition [finanspolitisk stimulans] that has been tried and tested many times in our history. But in general, the conservatives ignore the obvious history and piece together a range of spurious and often unrelated or inapplicable historical events and mount cases that we are in danger of hyperinflation and harsh interest rate hikes.
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For example, fiscal austerity is being justified by empirically-failed notions of Ricardian Equivalence which alleges that the withdrawal of government spending will be more than replaced by consumer and investment spending.
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The theoretical models used to derive these results are from La-la land which then means we are not surprised that their main predictions have regularly failed when real world events have given the theory a chance to shine.
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I can produce any number of very stark empirical anomalies with respect to the key propositions of mainstream macroeconomics. The fact is that empirical evidence is never supportive of the deficit-terrorist claims. It isn’t even a matter of interpretation.
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there is evidence mounting that world trade is slowing rapidly. The Markit manufacturing exports data “fell for the fifth month running in September to hit a 14-month low and thereby signal a sharp slowing in global trade”
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… Asia ex-Japan has led the global cycle and points to further slowing in coming months … Taiwan’s exports fall, China’s stagnate … Trade easing likely to add to woes in countries tackling budget deficits … PMI data for the UK, for example, are already showing that export growth has collapsed … Exports from Greece and Ireland meanwhile also both fell back into contraction in September, acting as a drag on Eurozone exports, which rose at the slowest rate for ten months as a result. Outside of Europe, Japan’s export growth also slumped to near-stagnation in September, according to the PMI survey while, in the US, the ISM survey’s index of new export orders hit a nine-month low.

Get the message! There goes the export boom that was meant to replace the spending lost from the cutbacks in public spending under the fiscal austerity programs.
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With many nations cutting back the principle source of growth (net public spending) it was obvious that world export markets would be hit.
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The austerians got lost in the classic mainstream logical flaw – the fallacy of composition. They somehow thought that the rest of the world would boom and drag Ireland (or anywhere) out of the funk via exports. But exports are just a response to import demand which is a function of domestic income growth.

You can also find extremely disturbing evidence of deterioration in manufacturing in Spain, Greece and the Eurozone overall.
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4 comments:

Jan Wiklund sa...

Ja men vi måste ju spara, det vet väl alla människor! Vi är så fattiga att vi måste sätta oss med armarna i kors, stänga ner all produktion och vänta på att fattigdomen ska gå över.

Frågan är om ens kapitalisterna har nån långsiktig nytta av den sortens tänk. Och om inte, varför är det då det enda som hörs? Är inte regeringar till för att ta ansvar för hela kapitalismen och rädda den undan de enskilda kapitalisternas "dårhusmässiga visdom" som Wigforss kallade den för.

Teckentydaren sa...

Defensiv och kortsiktig är kapitalisten och ser inte längre än näsan räcker.

Jan Wiklund sa...

Eller åtminstone bokslutet räcker.

Men frågan är varför den kapitalistiska staten är lika kortsiktig. Är inte den till för att ta tillvara hela klassens intressen?

Jan Wiklund sa...

Här har för övrigt en samling franska ekonomer reagerat mot vansinnet: http://www.paecon.net/PAEReview/issue54/Manifesto54.pdf. När gör dom det i Sverige???

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