Well, How Did We Get Here? A Brief History of the British Economy, Minus the Wishful Thinking
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If efforts of governance are not perfect it perhaps does not mean that Darwinism is the only alternative. Else we are into TINA country. I fully support the professor's call for a fiscal council.
It really is long overdue. I cannot see there is anything "undemocratic" about a body that makes no spending or taxing decisions, but simply ensures that a government act in a fiscally responsible manner. No different, really, from the decision to allow interest rates to be set by by an independent monetary authority.
The principal goal is to run a properly constituted, sustainable, counter-cyclical economic policy. By that I mean we need to retire debt when times are good and be able to provide a solid fiscal stimulus when times are bad. The political process inherently supports the opposite. In prosperity, left wing governments will typically spend on welfare measures, right wing governments may cut taxes. Neither want to embrace the unpopular tax increases or spending cuts needed to pay for them.
When things go pear shaped they panic and only then decide to embrace austerity - exactly when it is not wanted. Of itself, this damaging pro-cyclical process can lead to the boom and bust scenarios we commonly see. A fiscal council, with oversight, could ensure the appropriate fiscal stance is maintained over the long term and help prevent these lousy outcomes. Lots and lots of advice readily available now. You give out lots of it. If it is just advice, with no expectation that the elected representatives must follow it, it wouldn't be anti-democratic.
That isn't what you want. The reason is thus. The premise of your response is wrong. Economic questions like this are just not like maths problems in the way you want them to be. In economic terms, I am quite happy to concede that fiscal councils are a great idea. That just isn't the point.
The may be an economics that appears or reappears where people's aspirations and what is right for the economy are unified. One where aspiration does not mean self-gain, but something that contributes to a group, such as a community or nation. But it is someway off. Until that way of thinking comes it will mean as SWL puts it, economics and wishful thinking being mutually exclusive things. Currently fashionable economic theory does not handle the contradictions and intangibles of humanity well, and for the moment, "rationality", markets, and obsessions with mathematics and gadgets guiding discussion will predominate.
You see, defining social goals is what politics should be about, just like picking, if there are many, the ways in which we should achieve them. However, regardless of your opinion, fiscal policy will always have an impact on the economy and only very few people have a good idea of what it might be.
If you let politicians make it an electoral issue, it can't be managed properly and ordinary citizens cannot filter bs out of their discourses. So, without telling governments how to attain a target deficit, there should at the very least be an independent council evaluating how big it should be to attain certain goals. I explicitly said that the giving monetary policy over to experts is just as bad in democratic terms.
A Brief History of the British Economy, Minus the Wishful Thinking eBook: Robin The banks have ripped us off, screwed the economy, and taken tens of billions . The banks have ripped us off, screwed the economy, and taken tens None of the three major parties are even thinking of doing anything serious to restrain A Brief History of the British Economy, Minus the Wishful Thinking.
When the newly canonized Gordon Brown did it, it was without consultation, and without it having been in the Labour manifesto. That doesn't meant that there are not other good countervailing reasons for doing it. Democracy has limits, as I said. Occasionally you get economists like JMK who are worth listening too.
But they are very, very, very rare. A discipline of unquestioned gadgets and gimmicks is no way to lead a democratic debate. The Scots have just squandered their chance. What, do you mean theories like optimal currency areas? Worse than that when you do strip the gimmick away from economic theory, even more so when we get to New Classical and New Keynesian economics, you do not even get common sense, let alone anything profound or substantial that cannot be understood by someone with an absolutely minimal level of literacy.
People forget that these countries had a history before the Euro. Speaking on Sunday about freedom of movement within the EU, Cameron said: Politicians on the right like to believe that tax cuts will pay for themselves, and it is boring economists who mostly point out this is not true. Loading comments… Trouble loading? Public accountability can be less direct than this. Of itself, this damaging pro-cyclical process can lead to the boom and bust scenarios we commonly see. You'd be much better off openly admitting that your views are anti-democratic they are but that you think other values outweigh the need for democratic accountability.
Rather than an emancipation of thought, this referendum was won by scaremongering. Scotland has not done very well over the last 50 years, even with oil. As long as the present ideas and powers dominate, it can look forward like the rest of non-London UK to at least another 50 the same. In what way was the IFS analysis scaremongering? This is an independent organisation with a reputation to protect.
The IFS is a credible organisation that put its arguments across for consideration. What I think is wrong is referring to "the" economic arguments as if there is one and it comes from a singular authoritative source. It is only one point of view. The real way Scotland may have got ahead was through a decentralisation of powers. A single currency for an example might have been a desirable transitional first step, purely for practical reasons given the tight integration of Scotland's economy with the rest of the UK.
A lot would have to be worked out and there are implications for all sorts of other institutional structures. But to deal with Scotland's problems political sovereignty was arguably a necessary first step. These are issues that have to be worked out. But instead we heard " inevitable economic disaster.
If you make the argument against single currencies, you could make the argument that separate monetary and fiscal policies should be set up in other parts of the UK; an expansionary macro policy mix that creates demand and hopefully jobs in the north creates housing bubbles in London. But before you get anywhere discussing what fiscal and monetary powers you have and how you do it you need the political sovereignty. Scotland will continue now to get governments and central bankers it does not want either way. For me there are parallels with the Euro debate. People forget that these countries had a history before the Euro.
They do not want to return to their pre-Euro days. But that history seems to be lost on the technicians. Now Scots have put their trust in Westminster to get genuine devolution. Let's hope they keep their word. I am glad they do not, economic theory and models are just that. The 'dismal science' tag has stuck but the meaning has been lost. As David Levy points out, the first economists, such as Mill, were branded 'dismal' by white supremacists, such as Carlyle, Ruskin and Dickens, because the former argued that that all men were created equal.
Introduction to “Well, How Did We Get Here?”
It was the progressivism that was tarred as 'dismal'. So the Yes argument was: We usedoil proceeds to jacj up the exchange rate, destroy british industry and exterminate the british working class, thus finally winning the class war in Britain, tha basic subject pf Karl Marx's writing. Ina few years, there will be no mmore oil and we will call you a peripheric, economically depressed area about which we won't do nothing. As a foreigner, do I read that right? Unfortunately because of spam with embedded links which then flag up warnings about the whole site on some browsers , I have to personally moderate all comments.
As a result, your comment may not appear for some time. Friday, 19 September Wishful thinking and economics. Economics is often called the dismal science, and the Scottish referendum showed why this description has stuck. The Yes side appeared full of hope and optimism about what could happen once the constraints of Westminster rule had been cast off, while the No campaign kept on going on about one problem or other, which usually involved economics.
Cameron's plan to rewrite EU treaties is wishful thinking, says Martin Schulz
The general meme is that this negativity was a tactical mistake by the No side, but it was a quite understandable mistake, because the economic problems were large and self evident. It is no surprise that the vast majority of economists thought Scotland would be worse off under independence see here , or her e, or here. They had looked at the numbers and issues, or looked at institutions they respected that had done so, and thought this does not look good. Even for some of those economists who are in favour of independence, like Joe Stiglitz for example , it is clear that the attraction is despite, rather than because, of the basic macro and fiscal numbers.
This is of course not new. Politicians on the right like to believe that tax cuts will pay for themselves, and it is boring economists who mostly point out this is not true. Politicians of all shades thought that austerity would not have much impact on output and growth, while the vast majority of economists knew better. One of the reasons for deficit bias is that politicians believe that their policies will galvanize the economy and raise the tax base, and most of the time the macroeconomy stubbornly refuses to be impressed.
Now it is tempting to say, given this evidence, that politicians will believe anything that suits them. But what the independence referendum showed us is that voters have similar problems. As the campaign progressed the stronger the Yes vote became, and there is some evidence that this reflected additional information they received. David Cameron's campaign to rewrite the terms of Britain's membership of the European Union is wishful thinking likely to be rejected by many other EU member states, said a frontrunner to be the new head of the European commission in Brussels.
The prime minister is sounding increasingly insistent that he will be able to secure a new EU deal for Britain by repatriating powers ceded to Brussels, through a renegotiation of EU treaties, before putting the proposed pact to an in-out UK referendum in if he is re-elected next year. Speaking on Sunday about freedom of movement within the EU, Cameron said: But there is little appetite in Brussels and other EU member countries for renegotiation and it is not clear if Cameron can deliver treaty change.
Schulz dismissed the attempt to cherry-pick the treaties to achieve bespoke membership terms tailored for individual countries. Rather than repatriating powers from Brussels, Schulz said he would be open to discussing "a re-delegation of duties" within the EU, arguing that the commission in Brussels was too big and tried to do too much.
This view coincides with that of Angela Merkel , the German chancellor. But he voiced mild frustration that Downing Street had yet to make clear what it wants from a proposed new dispensation.
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It is a view shared broadly across EU capitals. I don't believe it is good to say 'these are my points and if you don't agree I'm going out'. It is not in the interests of the UK to go in this direction. Let's be pragmatic and not look at it ideologically. Twice in the past fortnight, Cameron has threatened to veto future enlargement of the EU unless there are new curbs agreed on freedom of movement — a fundamental EU principle — for the acceding countries.