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Best explanation of what's really behind austerity.

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"Austerity is, then, a dangerous idea because it ignores the externalities it generates, the impact of one person’s choices on another person’s choices, especially for societies with highly skewed income distributions. The decisions of those at the top on taxes, spending, and investment prior to 2008 created a giant liability in the form of a financial crisis and too big to fail and bail financial institutions that they expect everyone further down the income distribution to pay for. “We have spent too much” those at the top say, rather blithely ignoring the fact that this “spending” was the cost of saving their assets with the public purse.  Meanwhile, those at the bottom are being told to “tighten their belts” by people who are wearing massively larger pants and who show little interest in contributing to the cleanup. In sum, when those at the bottom are expected to pay disproportionately for a problem created by those at the top, and when those at the top actively eschew any responsibility for that problem by blaming the state for their mistakes, not only will squeezing the bottom not produce enough revenue to fix things, it will produce an even more polarized and politicized society in which the conditions for a sustainable politics of dealing with more debt and less growth are undermined. Populism, nationalism, and calls for the return of “God and gold” in equal doses are what unequal austerity generates, and no one, not even those at the top, benefits. In such an unequal and austere world, those who start at the bottom of the income distribution will stay at the bottom, and without the possibility of progression, the “betterment of one’s condition” as Adam Smith put it, the only possible movement is a violent one.  Despite what Mrs. Thatcher reportedly once said, not only is there something called society, we all live in it, rich and poor alike, for better and for worse."

file:///C:/Users/Home/Downloads/Mark Blyth - Austerity- the History of a Dangerous Idea.pdf

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18 minutes ago, dom said:

"Austerity is, then, a dangerous idea because it ignores the externalities it generates, the impact of one person’s choices on another person’s choices, especially for societies with highly skewed income distributions. The decisions of those at the top on taxes, spending, and investment prior to 2008 created a giant liability in the form of a financial crisis and too big to fail and bail financial institutions that they expect everyone further down the income distribution to pay for. “We have spent too much” those at the top say, rather blithely ignoring the fact that this “spending” was the cost of saving their assets with the public purse.  Meanwhile, those at the bottom are being told to “tighten their belts” by people who are wearing massively larger pants and who show little interest in contributing to the cleanup. In sum, when those at the bottom are expected to pay disproportionately for a problem created by those at the top, and when those at the top actively eschew any responsibility for that problem by blaming the state for their mistakes, not only will squeezing the bottom not produce enough revenue to fix things, it will produce an even more polarized and politicized society in which the conditions for a sustainable politics of dealing with more debt and less growth are undermined. Populism, nationalism, and calls for the return of “God and gold” in equal doses are what unequal austerity generates, and no one, not even those at the top, benefits. In such an unequal and austere world, those who start at the bottom of the income distribution will stay at the bottom, and without the possibility of progression, the “betterment of one’s condition” as Adam Smith put it, the only possible movement is a violent one.  Despite what Mrs. Thatcher reportedly once said, not only is there something called society, we all live in it, rich and poor alike, for better and for worse."

file:///C:/Users/Home/Downloads/Mark Blyth - Austerity- the History of a Dangerous Idea.pdf

What a load of self indulgent lefty gobbledygook. Wtf is 'a sustainable politics' - is it intellectual and clever to murder the English language? Cheesy and cliched. Written by a well renumerated academic professor too.

Edited by Si1

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11 minutes ago, Si1 said:

What a load of self indulgent lefty gobbledygook. Wtf is 'a sustainable politics' - is it intellectual and clever to murder the English language? Cheesy and cliched. Written by a well renumerated academic professor too.

😂

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Quick reply. The article is one dimensional; it could be summarised with "tax rich *****" and all would be better off for it, with no 2008 crash either.  It also stupidly considers "all those at the top" as people whose assets were saved by state spending, which is obviously ********.

yes, the banks were bailed out at huge cost to ALL, but the fabric of business and society wasn't. 

If I were a teacher my 14 year old student's essay on this would get a B.

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7 minutes ago, dom said:

I'm not even going to waste my time replying.

Why bother when you can copy and paste?

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5 minutes ago, stuckmojo said:

Quick reply. The article is one dimensional; it could be summarised with "tax rich *****" and all would be better off for it, with no 2008 crash either.  It also stupidly considers "all those at the top" as people whose assets were saved by state spending, which is obviously ********.

yes, the banks were bailed out at huge cost to ALL, but the fabric of business and society wasn't. 

If I were a teacher my 14 year old student's essay on this would get a B.

****** me, really? Tell us what would have happened to "business and society" if they weren't bailed?

I take it you've read the entire book?

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12 minutes ago, Aidan Ap Word said:

 

What was it that Si1 said that engenders the "Idiot or liar" response?

You too? You'd have to be one or the other to not see the complete truth in that.

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4 minutes ago, dom said:

****** me, really? Tell us what would have happened to "business and society" if they weren't bailed?

I take it you've read the entire book?

No, it's an opinion of an opinion.  From that excerpt, which is all I have time for right now, I can see that it revolves around "The decisions of those at the top on taxes, spending, and investment prior to 2008 created a giant liability in the form of a financial crisis and too big to fail and bail financial institutions that they expect everyone further down the income distribution to pay for. 

And it opens with "Austerity is, then, a dangerous idea because it ignores the externalities it generates, the impact of one person’s choices on another person’s choices, especially for societies with highly skewed income distributions. "

Which is in my opinion, ********. 

Corruption and failure to regulate and punish those who ******ed with market forces curtailed opportunities for those at the bottom, not the austerity witch. 

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3 minutes ago, stuckmojo said:

 

Corruption and failure to regulate and punish those who ******ed with market forces curtailed opportunities for those at the bottom, not the austerity witch. 

******ing hell, wow! You really believe that. So where do you keep the time machine? No, but austerity is the next best thing?

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That 'externalities' paragraph is utter nonsense. He may as well just be complaining about government, instead of wrapping it up in mumbo jumbo.

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1 minute ago, dom said:

******ing hell, wow! You really believe that. So where do you keep the time machine? No, but austerity is the next best thing?

I'm confused. What's that to do with a time machine? 

Last one from me on this, I am not pro-austerity per-se, if it is punitive and aimed at making the figures look good in the short term.  I'm just against government waste. 

But to build a whole book and by the looks of the website, an entire academic career based on the good of government spending, gives this guy the same credibility a second hand car salesman has.  

Hence the poor feedback from me. Very low level/high bias analysis going on there. 

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53 minutes ago, Si1 said:

What a load of self indulgent lefty gobbledygook. Wtf is 'a sustainable politics' - is it intellectual and clever to murder the English language? Cheesy and cliched. Written by a well renumerated academic professor too.

I think that Blyth favours a colourful way of expressing himself using the spoken word which when rendered into text doesn't read well but he's a good writer and his book, Austerity: The History of a Dangerous Idea is an excellent book. I posted a thread in the Economics sub-forum with him talking about the financial crisis earlier this year:

He was sharing the stage with Adam Tooze whose book Crashed: How a Decade of Financial Crises Changed the World was out at the beginning of this month and is probably worth checking out.

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5 minutes ago, Bland Unsight said:

I think that Blyth favours a colourful way of expressing himself using the spoken word which when rendered into text doesn't read well but he's a good writer and his book, Austerity: The History of a Dangerous Idea is an excellent book. I posted a thread in the Economics sub-forum with him talking about the financial crisis earlier this year:

He was sharing the stage with Adam Tooze whose book Crashed: How a Decade of Financial Crises Changed the World was out at the beginning of this month and is probably worth checking out.

Feel free to get these merged.

Nevertheless, populism as the system resetting itself is hardly an earth shattering conclusion. Nor is recognising that Something Bad Happened.

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Dom seems convinced that ad hominem are the way forward.

Mr Blyth's view that Austerity is a (or one of) the key mistakes of government ignores the differences between:

  1. illness and symptom
  2. medication and side effect

It is my view that the economy (and, by extension, an aspect of society) was seriously ill in the early 2000s (what's new, eh?). The symptom of that illness was the collapse in confidence which played itself out as a "crash".

The medication prescribed for some seasons (at various levels of dosage) since the crash were put in place in order to restore confidence (that is: deal with symptom).

The side effects of the austerity were (are!) a serious impact on the vulnerable in society. Whether these side effects were not expected, not understood or (simply) ignored by the TPTB is obviously an issue for debate. But it is a side issue.

No one seems to have the political will to deal with the illness (the original cause).

The illness of the the early 2000s remains in the system.

Worrying about anything else is dancing around handbags.

 

Edited by Aidan Ap Word
For clarity

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I think you should watch some of Mark Blyth's YouTube presentation / lecture videos. He makes a lot of sense to me. His view that Brexit, Trump and what is going on in Europe is populism is now the mainstream view isn't it?

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1 hour ago, Si1 said:

Oh come on, that kind of obfuscated nonsense can only come from a social science post-ism academic who's public sector money fountain has run dry.

+1

 

40 minutes ago, Si1 said:

That 'externalities' paragraph is utter nonsense. He may as well just be complaining about government, instead of wrapping it up in mumbo jumbo.

True

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11 minutes ago, Captain Kirk said:

I think you should watch some of Mark Blyth's YouTube presentation / lecture videos. He makes a lot of sense to me. His view that Brexit, Trump and what is going on in Europe is populism is now the mainstream view isn't it?

Happy that he might be worth watching.

Not happy that Dom dismisses myself as either a liar or an idiot simply because I feel that his content is a mix of:

  • impractical (especially in style and choice of vocabullary)
  • off the key topic(s)

... to the point where his pronouncements (accurate or otherwise) will have little real effect on a society that really needs to start voting more intelligently ... or at least more deliberately.

Edited by Aidan Ap Word
For grammar

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11 minutes ago, Si1 said:

Nevertheless, populism as the system resetting itself is hardly an earth shattering conclusion. Nor is recognising that Something Bad Happened.

The heart of the Austerity book is a two chapters of intellectual history of the of austerity, the first covering the period 1692-1942, the second covering 1942-2012 (the book was published in 2013) and a further chapter on how it has worked out in practice since 1914.

For example, from page 151 of the second chapter of the history of the ideas.

Quote

In sum, while Austrian theory is very insightful in some areas, especially covering the broad story of the credit cycle and the dangers of excessive debt, the Austrian policy proposal that follows from that analysis - "maximum austerity as quickly as possible" - makes little sense given what we know about how actual economies perform when they go through busts. Far from encouraging "self-healing", non-intervention and noncompensation can produce the politics of permanent austerity, as Europe is finding out. Politically attractive to some, especially to antistatist conservatives, such ideas resonate in theory, but they detonate in practice.

It's a bloody good book and whilst I can understand how people might be put of by Blyth's gobshite style when giving talks I'd strongly recommend it as he's much more measured when actually writing.

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15 minutes ago, Captain Kirk said:

I think you should watch some of Mark Blyth's YouTube presentation / lecture videos. He makes a lot of sense to me. His view that Brexit, Trump and what is going on in Europe is populism is now the mainstream view isn't it?

That was a pretty common view (if not quite mainstream) at the time too.

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3 minutes ago, Bland Unsight said:

The heart of the Austerity book is a two chapters of intellectual history of the of austerity, the first covering the period 1692-1942, the second covering 1942-2012 (the book was published in 2013) and a further chapter on how it has worked out in practice since 1914.

For example, from page 151 of the second chapter of the history of the ideas.

It's a bloody good book and whilst I can understand how people might be put of by Blyth's gobshite style when giving talks I'd strongly recommend it as he's much more measured when actually writing.

Balanced comment. But Keynesianism isn't a new idea, again.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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