« Money tree economics | Main | The crisis of positive-sum capitalism »

July 06, 2017

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Peter K.

Any good histories of Britain “going cap in hand to the IMF”?

My cursory knowledge is that an advanced economy with its own currency/money tree wouldn't have to unless it *wanted to* for some reason.

Krugman on the record of bond vigilante attacks:

https://krugman.blogs.nytimes.com/2012/11/23/franc-thoughts-on-bond-vigilantes/

Blissex

«an advanced economy with its own currency/money tree wouldn't have to unless it *wanted to* for some reason»

Unless it “*wanted to*” pay for imports, that is :-)

The balance of trade and the foreign exchange value of the pound seems to have largely disappeared from the discussions of Economists. There must be a reason :-).

Blissex

«Older traders remember the “bond massacre” of 1994, when a widely-expected Fed tightening triggered a slump in the market.»

When the usual neoliberal Economists like B DeLong argue for a higher target inflation rate, while keeping nominal rates low, I try to remind them in comments that changes in the *real* interest rates too have a profound effect on bond valuations, and probably the central banks would have to backstop the losses of bondholders as well "absorb" their own. It is a matter of great delicacy.

Steven Clarke

Chris,

You have made the point before that the militancy of workers in the 1970s may have been caused by the passing of the generation of workers who lived through the depression years. That generation would have been too risk averse for pushing for wage rises, as in their youth they would have been grateful for steady work. Not so the younger cohort.

The younger generation now have grown up in the shadow of the post-2007 recession. Why has that not made them more politically risk averse?

Jill Murphy

I think kids who are told that £50k of private debt is a good thing and also have some vague idea about the BoE considering £400bn of QE also a good thing, aren't too worried about "the nation's overdraft", quite frankly.

And who can blame them, really?

Blissex

«the militancy of workers in the 1970s may have been caused by the passing of the generation of workers who lived through the depression years.»

That is indeed plausible. But in large part it was also that the oil price shock had reduced greatly the value of nominal wages, just like it happened after the 2008 debt crash; then the younger generation fought that by trying to shift the cost of higher oil prices onto the employers. In part it was because of "one more general strike" mindset from syndicalist-minded people, who were apparently funded and advised by the soviets, like the conservatives and their think-tanks were much more generously funded and "guided" by the americans (USA ambassadors and spies have colossal slush funds).

But we cannot forget that the 60s and 70s were in general a "countercultural" moment, across continental Europe, east and west too, not just the UK.
Sometimes I wondered how much of that "countercultural" moment was rooted in psychology, a consequence of the first couple decades of the constant terror of Mutural Assured Destruction and the repeated american attempts at setting up a first-strike position against the "godless" soviets.

e

@ Blissex It was a long time ago, but I think I'm right in saying, along with oil stoked inflation rate, many a 70's strike was secondary: a consequence of determination to maintain unskilled, semi-skilled and so on, wage rate differentials. In this sense very much of their time.

David

Maybe a false memory, but I remember most of the 1970 strikes arising purely from Government policy.
The unions were under attack, and employers were taking the advantage with legal backing. The strikes that lasted the longest, and made the most press, were not about pay or conditions but simply the right to union membership and secondary picketing.
The usual means of "progressing" the right wing agenda.... cause a crisis and then "solve" it to your advantage!

The comments to this entry are closed.

blogs I like

Why S&M?

Blog powered by Typepad