Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 15 belangrijke of informatieve artikelen en interviews die vooral de voorafgaande 7 dagen op economisch terrein verschenen op onafhankelijke sites.

De kop is de link naar het oorspronkelijke artikel, waarvan de samenvatting of de eerste (twee) alinea’s hier gegeven worden. Er zijn in deze rubriek altijd verschillende economische scholen vertegenwoordigd, en we streven er naar die diversiteit te handhaven.

We nemen wekelijks ook een paar extra links op naar artikelen die minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.

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Stripmining the Middle Class: Neoliberalism Comes Home to Roost – Charles Hugh Smith
6 Augustus
But once this last pool of wealth–America’s middle class– has been siphoned dry, then who’s left to stripmine and exploit?
Neoliberalism loves markets, because markets enable the wealthy to own everything that produces income and capital gains. Neoliberalism–the superficially attractive notion that opening local markets to global capital generates prosperity for all involved–is all fun and games when it’s stripmining some distant developing-world nation, but since opportunities have dried up globally, the stripmining machine has come home to America and its target is America’s middle class.
I have long called this the Neocolonial-Financialization Model: in essence, Neoliberalism is a new, improved version of the old Colonial Model, in which the capital-rich colonial power grabs the political and economic reins via force or subterfuge and proceeds to strip the colonized nation of its wealth and resources and exploits its labor force to manufacture cheap goods for home markets.
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Public Stimulus Plans Rarely Work: The Evidence Since the Early 90’s – Daniel Lacalle
7 augustus
Fiscal and monetary stimulus have become the new normal since the early ’90s. Governments and central banks implement significant deficit spending and monetary stimulus plans even in periods of growth. The purpose of this paper is to examine the effectiveness of those policies, regarding short, medium, and large term effects.
To do it, I think it is useful to consider not only macroeconomic and microeconomic figures but also the effects of the plans over debt and productivity. Any policy must be considered in the context of a cost-benefit analysis, that includes not only the current impact but also the structural changes that can appear in the economy.
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Fiscal-monetary crosswinds in the euro area: Convential and unconvential shocks – Lucrezia Reichlin, Giovanni Ricco, Matthieu Tarbé
5 Augustus
Monetary policy has fiscal implications since its effect on interest rates, inflation and output relaxes or tightens the general government inter-temporal budget constraint. Inflation dynamics is the result of both monetary policy and the fiscal response to it via the adjustment of the primary deficit. This column discusses estimates of the fiscal responses to monetary policy in the euro area. It shows that the more modest impact of unconventional monetary policy easing on inflation, if compared with the impact of conventional easing, can be explained by a more modest increase in the primary deficit in the former case.
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Savings Are the Foundation of Economic Growth – Frank Shostak
5 augustus
Most commentators’ regard savings as harmful to economic growth on the ground that savings are associated with fewer outlays. These commentators portray economic activity as a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual’s earnings.
If for whatever reason people become less confident about the future, it is held that they are likely to cut back on their outlays and hoard more money. Consequently, once an individual spends less, this worsens the situation of some other individual, who in turn also cuts his spending.
A vicious circle emerges—the decline in people’s confidence causes them to spend less and to hoard more money. This depresses economic activity further, thereby causing people to hoard more, etc. The cure for this, it is argued, is for the central bank to pump money.
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$1.1 Trillion Flood of Liquidity from Drawdown of Treasury General Account Peters Out – Wolf Richter
7 Augustus
And as the Fed pumps out cash via QE on one side, it mops up $1 trillion in cash via reverse repos on the other.
The $1.1-trillion tsunami of liquidity that has washed over the land starting in February through the drawdown of Treasury General Account (TGA) has just about run its course and is now petering out.
As of the Fed’s balance sheet for the period ended August 4, the TGA – the government’s checking account at the Federal Reserve Bank of New York – fell by another $31 billion from the prior week, and by $219 billion for the four-week period, to $506 billion.
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Globalisation, specialisation, and the division of labour – Nuno Limão, Yang Xu
7 Augustus
Production is increasingly specialised, with firms concentrating workers on certain tasks that take advantage of outsourced intermediate inputs. This column uses a new framework where firms can adopt intermediate-intensive technologies to study the relationship between globalisation and specialisation, and its implications for the labour share and income. It finds that an expansion in market size such as that resulting from globalisation increases production specialisation, decreases labour cost shares, and increases profit concentration.
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***Eco-imperialism: The West’s New Kind of Colonialism – Lipton Matthews
3 augustus
Globally, there is a movement to remove the residues of Western imperialism from all quarters of society. Throughout the world, monuments dedicated to Western explorers and statesmen are being toppled. Activists in the developing world and their allies in the West assert that developing countries must be permitted to chart a new course without the cultural interference of the West.
Yet the West continues a form a colonialism in Africa: eco-imperialism. Because the West’s progressives like this kind of imperialism, we rarely hear anything about it. Reasonable people do believe that developing countries have a right to self-determination, yet the eco-imperialist agenda of the West has failed to invite equal venom. In other words, the West has shown it has every intention of meddling in the internal affairs of developing nations in the name of environmentalism.
Western countries, on the other hand, were afforded the luxury of exploiting their resources and energy sources without encountering grim lectures about climate change, and African countries ought to be given the same privilege. African countries, for example, are routinely lectured by the West about the need to cut back emissions and use more expensive, less productive energy sources. This is costly to these countries and it limits local self-determination.
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What’s Behind the Inflation Hall of Mirrors? – Charles Hugh Smith
3 Augustus
The global economy may have finally run up against hard limits of “infinite substitution” and “infinite expansion” funded by central-bank free money.
We are in an interesting Hall of Mirrors moment: prices are rising, yet we’re assured by the Federal Reserve that this inflation is “transitory,” and other voices are insisting the primary forces of the economy (globalization, debt and automation) are all profoundly deflationary, meaning prices of everything will eventually plummet as supply will outstrip demand. At this same moment, others are declaring the start of a new secular inflation that cannot be controlled with Federal Reserve interest-rate manipulation / bond-buying.
What do you see in the kaleidoscope of reflected images? Here’s a few things I’ve seen in the Inflation Hall of Mirrors:
— A package of three rib-eye steaks in Costco for $65
— a Ford dealership with no new Fords on the lot and a scattering of used cars
— A Nissan dealership with no Versas, Ultimas, Leafs, etc.
— used cars with 140,000 miles carrying nosebleed asking prices
— a basic breakfast in a restaurant for over $20
— resorts charging $450/day, with surcharges and taxes on top
— utility fees rising 10% to 20% annually
One can argue all of these are examples of temporary inflation generated by an imbalance of limited supply and high demand. Perhaps. But it may also be the case that the costs of production have increased in ways that are not temporary.
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Of Common, Public, and Private Property and the Rationale for Total Privatization – Hans-Hermann Hoppe
8 augustus
I have three goals. First, I want to clarify the nature and function of private property. Second, I want to clarify the distinction between “common” goods and property and “public” goods and property, and explain the construction error inherent in the institution of public goods and property. Third, I want to explain the rationale and principle of privatization.
I. Theoretical Preliminaries
I will begin with some abstract but fundamental theoretical considerations concerning the sources of conflicts and the purpose of social norms. If there were no interpersonal conflicts, there would be no need for norms. It is the purpose of norms to help avoid otherwise unavoidable conflicts. A norm that generates conflict, rather than helps avoid it, is contrary to the purpose of norms, i.e., it is a dysfunctional norm or a perversion.
It is sometimes thought that conflicts result from the mere fact of different people having different interests or ideas. But this is false, or at least very incomplete. From the diversity of individual interests and ideas alone it does not follow that conflicts must arise. I want it to rain, and my neighbor wants the sun to shine. Our interests are contrary. However, because neither I, nor my neighbor controls the sun or the clouds, our conflicting interests have no practical consequences. There is nothing that we can do about the weather. Likewise, I may believe that A causes B, and you believe that B is caused by C; or I believe in and pray to God, and you don’t. But if this is all the difference there is between us nothing of any practical consequence follows. Different interests and beliefs can lead to conflict only when they are put into action—when our interests and ideas are attached to or implemented in physically controlled objects, i.e., in economic goods or means of action.
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Yes, More People Went Back to Work in States that Ended the $300/Week in Federal Unemployment Benefits – Wolf Richter
5 Augustus
In an economy screaming for labor, the data is becoming clearer, despite breathless media coverage to the contrary.
OK, it’s complicated, as they say, and the weekly unemployment claims data were never designed to be used as precision tracking tool. But it is important. So we’ll take a careful look to get beyond the noise.
Turns out, despite breathless media coverage to the contrary, ending the extra federal $300 a week in unemployment benefits, as over half the states have already done, is indeed encouraging more people to go back to work – in an economy that is screaming for labor.
For the US overall, “insured unemployment” or “continued claims” (number of people having claimed unemployment insurance for more than a week) dropped to 2.88 million in the current week, according to the Department of Labor this morning. It was the lowest since the employment crisis began in March 2020.
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Carl Menger Explains Value – Antony P. Mueller
6 augustus
The General Concept of Value
The value of a good results from the knowledge that each partial attainment of that good is linked with a satisfaction of wants. A good is valued with the knowledge that its use serves to satisfy our desires.
Noneconomic goods have no value. When there is enough supply to completely satisfy all the desires for this good, the partial quantity of that good is worthless. Therefore, noneconomic goods have not only no exchange value, but no value at all, and thus also no use value. Exchange value as well as use value are two concepts subordinate to the general concept of value, that is, concepts which are coordinated in their relation to one another. Accordingly, the general concept of value is valid both for use value and for exchange value.
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Macroeconomic indicators with real incomes: From the poorest to the richest Americans – Martin Ravallion
3 Augustus
Economists have long debated the most effective metrics for measuring poverty and inequality. This column presents analysis of the relative importance of three prominent macroeconomic indicators – the rate of unemployment, the inflation rate, and the growth rate of GDP per capita. Using evidence from the US, the author argues that higher unemployment rates unambiguously increase poverty measures, but that inflation matters more in the middle and upper-middle of the distribution than in the tails.
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Eco-imperialism: The West’s New Kind of Colonialism – Lipton Matthews
3 augustus
Globally, there is a movement to remove the residues of Western imperialism from all quarters of society. Throughout the world, monuments dedicated to Western explorers and statesmen are being toppled. Activists in the developing world and their allies in the West assert that developing countries must be permitted to chart a new course without the cultural interference of the West.
Yet the West continues a form a colonialism in Africa: eco-imperialism. Because the West’s progressives like this kind of imperialism, we rarely hear anything about it. Reasonable people do believe that developing countries have a right to self-determination, yet the eco-imperialist agenda of the West has failed to invite equal venom. In other words, the West has shown it has every intention of meddling in the internal affairs of developing nations in the name of environmentalism.
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State of the American Debt Slaves: Forbearance & Free-Money Phenomenon amid Soaring Prices of Homes & Autos – Wolf Richter
3 Augustus
Mass-forbearance is the best thing that ever happened to sweeping reality under the rug. But now, there’s a huge mess under the rug.
To the Fed’s great relief, hardy American debt slaves are finally going deeper into debt, after having made unnerving efforts in prior quarters at paying down their credit cards, the most expensive debts with the biggest profit margins for banks. What helped push up total borrowing were massive price increases that had to be financed – particularly homes and vehicles – and the loans to finance these purchases jumped even if the volume of purchases didn’t.
Total household debt – mortgages, HELOCs, credit cards, auto loans, student loans, and other debt – jumped by $313 billion in Q2, from Q1, according to the New York Fed’s Household Debt and Credit report today. This 2.1% jump was the biggest quarter-over-quarter jump in years, matching Q4 2013, and both were the biggest jumps since 2007. The total balance of debt reached nearly $15 trillion.
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The pandemic has boosted firm investments in digital technologies – Lutz Bellmann, Pauline Bourgeon, Christina Gathmann, Patrick Gleiser, Christian Kagerl, Eva Kleifgen, Corinna König, Ute Leber, David Marguerit, Ludivine Martin, Laura Pohlan, Duncan Roth, Malte Schierholz, Jens Stegmaier, Armin Aminian
5 Augustus
The Covid-19 pandemic has forced firms to adapt their work processes to the infectious dynamic and the public health measures to contain it. Using survey data of almost 2,000 establishments in Germany, this column shows that the pandemic has accelerated the diffusion of digital technologies, especially in combination with working from home. Investments are particularly prominent in large establishments, while small and medium-sized establishments are less likely to invest in digital technologies and more likely to face financial or logistic barriers to investment. Investments vary a lot across sectors, but are less influenced by the current economic condition of the establishment.
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Using Goods vs. Exchanging Them: Menger Explains the Difference – Antony P. Mueller
7 augustus
Exchange Creates Value
Different from Adam Smith who presumed in his Wealth of Nations that the division of labor was caused by the “propensity to truck, barter, and exchange” as a part of human nature, Carl Menger explains the practice of exchanging goods as the result of its usefulness for human well-being. There must be more to it than pleasure when humans exchange goods. In fact, it makes no sense to exchange goods of equivalent value. As Menger explains, the reason to exchange goods must come from the circumstance that the same good has different values for different persons. The voluntary transfer of one good from A to B in exchange for another good from B to A results from the intention to increase the individual degree of satisfaction of each participant in the exchange (Grundsätze, p. 156).
Exchange results from the same principle that guides people in their economic activity in general. Trying to improve one’s economic situation leads people to carry out the transfer of assets. The exchange of goods thus creates additional value for both partners. The principle behind exchange is the same one that guides all economic activity, that is, the search for the maximum satisfaction of desires. Success in improving one’s well-being through exchange therefore depends on three factors. First, the existence of different value estimates; second, the knowledge of this relationship; and third, the ability to exchange. In this perspective, the exchange of goods is a good in itself.
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A stylised quantitative assessment of Next Generation EU investment – Géraldine Mahieu, Philipp Pfeiffer, Janos Varga, Jan in ’t Veld
4 Augustus
Next Generation EU is an unprecedented tool that provides significant financial support for reforms and investment, resulting in a coordinated fiscal expansion across the EU. This column quantifies the effects of the additional investment expenditure for each member state by extending a standard macro model with a rich trade structure. The model suggests Next Generation EU investment can boost GDP by up to 1.5%, and that the effects are around one-third larger when explicitly accounting for the spillover effects from individual-country measures. A simple aggregation of the national effects of individual investment plans would thus substantially underestimate the growth effects of Next Generation EU.
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