Are there another people in Europe so determined to shoot themselves in the foot as the Greeks?
Against all the advice of other euro states, they elected — twice — in recent years leaders who vowed to reverse what little progress had been made to liberalize the Balkan nation’s economy. Labor market reforms came undone last year. Privatizations were canceled or pushed back.
The country only agreed to sustain reforms in return for a third, €86 billion bailout this summer when it, once again, teetered on the brink of default.
Now promises have already been broken and targets missed. Greece is typically slow to implement the economic policy changes it commits to undertake. Yet there seems to be no holdup in policies that make things worse. Read more “Greece Continues to Drive Businesses Away”
Economists aren’t neutral arbiters of policy. It is a point rightwingers have been making for years, especially when — as a 2003 survey found — left-leaning economists in the United States outnumber right-leaning ones three to one.
The Economist now recognizes as much, which is progress. But it takes away the wrong lesson from this, calling on economists to just try harder.
Mitch McConnell, the Republican leader in the United States Senate, argued on Thursday that a trade pact with eleven other Pacific nations should not be send to Congress for approval until after Barack Obama’s successor is elected next year.
“I think the president would be making a big mistake to try to have that voted on during the election,” he told The Washington Post. “There’s significant pushback all over the place.”
Even McConnell, a free trader who previously expressed support for the treaty, said he now has “serious problems” with the Trans Pacific Partnership Obama negotiated.
Whereas Bernie Sanders’ supporters look to the 1970s for inspiration, many of the Republican Party’s presidential candidates seem stuck in the 1980s.
In a debate on Tuesday, televised by the Fox Business Network, all of the contenders for the Republican presidential nomination called for more deregulation and tax cuts: a combination of supply-side economic policies that has served their party well in the past.
But James Pethokoukis argues in the Financial Times that big tax cuts, particularly for the wealthiest, do not work in an age of high inequality and heavy debt. “Republicans need an economic agenda that respects markets while also recognizing the challenges facing America and its anxious middle class,” he suggests.
Deregulation and tax cuts under Ronald Reagan propelled America into a new era of prosperity.
Wednesday’s Republican presidential debate hosted by CNBC was easily the worst so far this year. The moderators seemed more interested in catching the candidates in hypocrisies and discrediting their looniest proposals than encouraging a substantive debate — but at the same time let some of the most outlandish claims go unchallenged.
As Britain’s Labour Party seems determined to take the country back into the 1970s, it’s worth remembering what that decade was like.
Many of the party’s new leader’s supporters weren’t alive at the time to see what the big-state policies Jeremy Corbyn advocates wrought.
Corbyn — who was elected leader this month with the help of tens of thousands of young supporters flocking to the Labour Party — wants to print money to finance investment and welfare spending, nationalize industries and strengthen trade unions. Not only are his policies far to the left of Middle England; they have been tried before and failed.
In the 1970s, the postwar Keynesian consensus — that had seen the British state take over large industries, enact price controls, borrow to finance benefits and sustain consumer spending at times of economic slowdowns and allow increasingly militant trade unions a veto over labor policy — broke down. Unemployment started to rise. Power cuts became a daily occurrence as a result of industrial action. Inflation reached nearly 30 percent. There were riots in the streets. The government introduced a three-day workweek and tried to persuade the unions to limit their pay demands to a 5-percent increase. They refused. A “Winter of Discontent” followed that finally convinced the country to elect Margaret Thatcher in 1979.
Britain’s economy in the 1970s was so weak that James Callaghan, the Labour Party leader, foresaw a “breakdown of democracy” and said, “If I were a young man, I would emigrate.”
The country even had to apply for an IMF loan. It was the Greece of its day, the sick man of Europe.