I unimpressed by Economists who call a spade:
A consumer durable that’s frequently deemed a minor capital investment because it significantly reduces labour costs by improving the efficiency of the human resources deployed to excavate, infill or move many forms of [frequently friable] terrestrial material.
I prefer Economists who can call a spade:
But these lucid and straight-talking Economists are thin on the ground.
This is particularly true in the arcane world of blackboard comedians where Economists are encouraged to waffle with big bonuses paid for incomprehensibility and obscuration.
But there are exceptions to every generalisation.
Mark Blyth (born 1967) is a British political scientist from Scotland and a professor of international political economy at Brown University.
He is best known for his critique of austerity, Austerity: The History of a Dangerous Idea, described by Salon and AlterNet as “necessary reading” and as simultaneously functioning as an economics explainer, a polemic, and a history book offering “insight into austerity’s lineage, its theories, its champions and its failures.” Blyth characterized the argument advanced by austerity advocates as “a canard” and “complete horseshit.”
And these exceptions can cover more ground in one [entertaining and thought provoking] hour than most blackboard comedians can achieve in three years of opaque waffle and omission.
Austerity: The History of a Dangerous Idea – Mark Blyth – Oxford University Press – 2012
Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse.
In contrast, they have advanced a policy of draconian budget cuts–austerity–to solve the financial crisis.
We are told that we have all lived beyond our means and now need to tighten our belts.
This view conveniently forgets where all that debt came from.
Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system.
Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer.
That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget.
The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea.
First of all, it doesn’t work.
As the past four years and countless historical examples from the last 100 years show, while it makes sense for any one state to try and cut its way to growth, it simply cannot work when all states try it simultaneously: all we do is shrink the economy.
In the worst case, austerity policies worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War: the Nazis and the Japanese military establishment.
As Blyth amply demonstrates, the arguments for austerity are tenuous and the evidence thin.
Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality.
Austerity demolishes the conventional wisdom, marshaling an army of facts to demand that we austerity for what it is, and what it costs us.
Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century – Mark Blyth – Cambridge University Press – 2002
Mark Blyth argues that economic ideas are powerful political tools as used by domestic groups in order to effect change since whoever defines what the economy is, what is wrong with it, and what would improve it, has a profound political resource in their possession.
Blyth analyzes the 1930s and 1970s, two periods of deep-seated institutional change that characterized the twentieth century.
Viewing both periods of change as part of the same dynamic, Blyth argues that the 1930s labor reacted against the exigencies of the market and demanded state action to mitigate the market’s effects by “embedding liberalism” and the 1970s, those who benefited least from such “embedding” institutions, namely business, reacted against these constraints and sought to overturn that institutional order.
Mark Blyth has argued the USA has a “revenue problem”.
You don’t really have a spending problem. You have a revenue problem.
But I think he realises the problems are far more fundamental and far more serious…