Given the fears generated by the prospect of a Corbyn-led government, just how radical is it likely to be? Should we really expect Britain’s first anti-capitalist government? Certainly not on the basis of what Corbyn and McDonnell and their cheerleaders have been writing and saying about their future Labour government. Read the full essay here.
Economic policy
When the next crisis comes, don’t blame the central bankers
President Trump’s tweets criticising the Federal Reserve bank, and the European Central Bank, draw attention to how prominent central banking has become over recent years. Central banking’s high profile today marks a significant shift from earlier times. Central banking used to be regarded as a necessary activity that most people knew existed, but few could get that excited about.
Increasingly over the past three decades the central banks have attained a much more prominent role, not only in the US but across the mature industrial countries. This has had nothing to do with changes to the calibre of central bankers, or to the development of new banking techniques. Instead, it was primarily a response to the exhaustion of Western politics that became more evident from the second half of the 1980s.
There are three important features of central banking in modern mature economies. First, the misleading fallacy of central bank ‘independence’. Second, the associated sheltering of politicians from responsibility for the economy. And third, the waning efficacy of central banking.
Read the full article here.
How to help British Steel workers
News broke last week that British Steel had been placed in compulsory liquidation, putting 5,000 jobs at risk. This has sparked debate on what to do about the ailing British steel industry and the people impacted upon. The best, and most honest, way the government can help the employees is to let failing steel plants go under and sponsor all the people affected during the transition into better and more lasting jobs that they should be doing much more to help create. Read the full article here.
Time to bust the No Deal myths
Leaving the EU without a formal Withdrawal Agreement does not mean ‘crashing out’ or ‘jumping off a cliff’, or any of the other pejorative phrases about the possible economic consequences. All leaving means, economically speaking, is that Britain will no longer be trading with, and its businesses connecting with, other EU countries on the terms set by the rules of the EU Single Market and Customs Union. This was always going to be the consequence of implementing the Brexit vote.
Government and businesses, as well as individuals, could and should have been preparing for that change ever since 24 June 2016. If, in places, this has not happened yet, that cannot be blamed on the Leave vote itself. It comes from the paralysis engendered by a collective fear of change. Since the 1980s a profound attachment to the status quo has taken hold in the Western world, which has taken many forms: in this instance, it is an attachment to the supposed comfort blanket of EU membership.
Read the full article here
2019: the economic picture isn’t rosy
Compared to the start of 2018, economic forecasters at the end of the years are much more gloomly about global economic prospects for the forthcoming period. Trade wars, the ‘end’ of cheap money, excessive emerging market corporate debt, and Britain ‘crashing out’ of the EU are some of the major risks identified in the turn-of-the-year economic projections. We’re told that sluggishness is taking hold again.
Despite the shift in tone there is still too much complacency about the deeper challenges we’re facing. Here are three that deserve more attention and discussion, not just by forecasters but by all of us: accumulating Western atrophy inflaming international economic unevenness; exorbitant debt levels in the mature nations; dysfunctional economic policies.
Read the full article here
Phil Mullan 