Dismal BREXIT results scorecard; Martin Wolf despairs at broken British economic growth; I may be Chair of UC Berkeley’s Library Committee next year; moral fault attaches to the honchos of the “New...
"Dictatorship" and "fascism" are not the same thing. Fascists are pretty much incapable of any strategy other than "world domination." (My reading of Arendt.) IOW, fascists can't pick their wars, and soon impel themselves toward the wrong foe. Dictators can be more selective. I'm much more worried about the mostly-rational Chinese dictatorship than the Russian mafia-state-with-fascist-characteristics.
Coyle: Tell me more but for the moment can we just collet a lot more revenue from them?
‘Francis: “Neoliberal” reforms like tight budgets focused on investment, accommodative monetary policy, and a devalued exchange rate to promote exports? [In other words, the kind of policy Sunak ought to have. 😊]
Gantz: He does not seem to have come across the argument about chronic deficits overvaluing the exchange rate/harming manufacturing. That was Perot’s issue.
Scaggs: Imagine if those profits were being imputed to shareholders' progressive consumption tax! Why with reasonable rates, we could close the non-SS/Medicare deficit. The VAT that replaces the wage tax would eliminate that part of the deficit.
Haldane: Falling deficits are prudent if achieve through increased taxes that mainly hit consumption. Reducing deficits by reducing investment are not. Sorry, but expenditures according to NPV>0 still makes sense.
I'd be cautious about squelching consumption. Consumption induces investment. Argentina, as noted here, limited its consumer market and that hurt its ability to compete internationally. I can understand Britain trying to limit the consumption of imports, but if it wants to export more, it might benefit from developing its internal consumers.
Admittedly I'm being quite simplistic, quite Y=f(K,L,t), but what is the more sophisticated model in which shifting fewer resources from C to I is not at least marginally growth promoting?
Tell me more about Argentina "limiting" it's consumer market. Is this a macro story where C was limited so much that it produced recession?
My worry is that the knee jerk "improve the economy by cutting C and increasing I" usually translates as "cutting taxes on the wealthiest and starving infrastructure", neither of which are formulas for improved economic growth.Increasing C is ruled out completely, and increasing G is considered anathema. The usual argument is that increasing C (or G) leads to inflation, though we've seen that increasing I leads to inflation at the high end with a stock market boom and soaring housing prices. Somehow, that inflation is acceptable even as housing becomes a larger and larger share of incomes further stressing C.
The UK has never had a robust consumer sector. The ruling class was more than glad to let strivers do well in the colonies, but strictly limited the rise of the middle class at home. Maybe I read too much Thackeray, Trollope and Jilly Cooper. Maybe it is time for some economic contrarianism, time to raise taxes on currently privileged types of income, tax land more aggressively, and spend more on infrastructure projects in transportation, alternative energy and public health. That spending could grow the consumer sector which, in turn, would encourage investment. It would also provide nice things.
Unfortunately, that kind of policy usually requires the ruling class to face an existential threat, either that or I read too much Pat Barker.
Not everything fits on the bumper sticker. To expand:
Reduce C with progressive consumption taxes and a VAT and tax on net CO2 emissions (= excise on fossil fuels in proportion to their carbon content subsidy to CCS in proportion to the CO2 sequestered). No way does that translate to reducing infrastructure spending (although such does have to pass an NPV test, not just be called "investment."
Per: "AI chip demand will eventually normalize once the initial training build has been completed…. Inference… require[s] less computing power than the training phase." - This seems to assume that the current version of AI is an end version. It is not even close. What we have is an un-intelligent averaging tool. Intelligent, creative, thinking AI is in the future, and will make even more demands on computing power.
I always wondered what happened to Argentina and, to a lesser extent, Uruguay. They were doing very well until World War II, then they fell off the charts.
"Thereby is again proved distinctly the old truth, that dictatorship is better able to wage war than democracy."
What a bizarre canard! Democracies have uniformly curb stomped fascism whenever the two have fought. But good luck avoiding the Library Committee.
"Dictatorship" and "fascism" are not the same thing. Fascists are pretty much incapable of any strategy other than "world domination." (My reading of Arendt.) IOW, fascists can't pick their wars, and soon impel themselves toward the wrong foe. Dictators can be more selective. I'm much more worried about the mostly-rational Chinese dictatorship than the Russian mafia-state-with-fascist-characteristics.
What is this mostly rational Chinese dictatorship of which you speak.
Yes, Democracies that implemented a virtually universal draft and a militarized command economy.
Coyle: Tell me more but for the moment can we just collet a lot more revenue from them?
‘Francis: “Neoliberal” reforms like tight budgets focused on investment, accommodative monetary policy, and a devalued exchange rate to promote exports? [In other words, the kind of policy Sunak ought to have. 😊]
Gantz: He does not seem to have come across the argument about chronic deficits overvaluing the exchange rate/harming manufacturing. That was Perot’s issue.
Scaggs: Imagine if those profits were being imputed to shareholders' progressive consumption tax! Why with reasonable rates, we could close the non-SS/Medicare deficit. The VAT that replaces the wage tax would eliminate that part of the deficit.
Haldane: Falling deficits are prudent if achieve through increased taxes that mainly hit consumption. Reducing deficits by reducing investment are not. Sorry, but expenditures according to NPV>0 still makes sense.
I'd be cautious about squelching consumption. Consumption induces investment. Argentina, as noted here, limited its consumer market and that hurt its ability to compete internationally. I can understand Britain trying to limit the consumption of imports, but if it wants to export more, it might benefit from developing its internal consumers.
Admittedly I'm being quite simplistic, quite Y=f(K,L,t), but what is the more sophisticated model in which shifting fewer resources from C to I is not at least marginally growth promoting?
Tell me more about Argentina "limiting" it's consumer market. Is this a macro story where C was limited so much that it produced recession?
Exactly what are you thinking about for UK?
My worry is that the knee jerk "improve the economy by cutting C and increasing I" usually translates as "cutting taxes on the wealthiest and starving infrastructure", neither of which are formulas for improved economic growth.Increasing C is ruled out completely, and increasing G is considered anathema. The usual argument is that increasing C (or G) leads to inflation, though we've seen that increasing I leads to inflation at the high end with a stock market boom and soaring housing prices. Somehow, that inflation is acceptable even as housing becomes a larger and larger share of incomes further stressing C.
The UK has never had a robust consumer sector. The ruling class was more than glad to let strivers do well in the colonies, but strictly limited the rise of the middle class at home. Maybe I read too much Thackeray, Trollope and Jilly Cooper. Maybe it is time for some economic contrarianism, time to raise taxes on currently privileged types of income, tax land more aggressively, and spend more on infrastructure projects in transportation, alternative energy and public health. That spending could grow the consumer sector which, in turn, would encourage investment. It would also provide nice things.
Unfortunately, that kind of policy usually requires the ruling class to face an existential threat, either that or I read too much Pat Barker.
Not everything fits on the bumper sticker. To expand:
Reduce C with progressive consumption taxes and a VAT and tax on net CO2 emissions (= excise on fossil fuels in proportion to their carbon content subsidy to CCS in proportion to the CO2 sequestered). No way does that translate to reducing infrastructure spending (although such does have to pass an NPV test, not just be called "investment."
The biographies of men brought down well before their time are decorated with "should the opportunity arise"
Run. Run like the wind....
Per: "AI chip demand will eventually normalize once the initial training build has been completed…. Inference… require[s] less computing power than the training phase." - This seems to assume that the current version of AI is an end version. It is not even close. What we have is an un-intelligent averaging tool. Intelligent, creative, thinking AI is in the future, and will make even more demands on computing power.
I always wondered what happened to Argentina and, to a lesser extent, Uruguay. They were doing very well until World War II, then they fell off the charts.