NATO funding, arming, while simultaneously fighting Al Qaeda from Mali to Syria
2---Shrinking Germany, Guardian
Germany's economy has shrunk in the last quarter, according to new data that is likely to force the Berlin government to slash its economic growth forecasts for this year.
The German Statistics Office reported this morning that Germany's economy contracted by 0.5% between October and December, as the financial crisis hit Eurozone's powerhouse economy.
This means that Germany grew by just 0.7% during 2012, a sharp slowdown that does not bode well for 2013
3---European labor markets: six key lessons from the Commission report, Jonathan Portes, economists view
I haven't always been complimentary about the European Commission - either its economic analysis or itspolicy advice. So it's nice to be able to be wholeheartedly positive about the excellent report "Employment and Social Developments in Europe 2012"...
The report is really worth reading. But it's close to 500 pages, and the main messages deserve as wide an audience as possible, so I thought I'd try to highlight them with some commentary. To my mind, the key ones are the following:
1. Economic weakness in Europe, and the consequent rise in unemployment, are mostly to do with a lack of aggregate demand, which in turn is the result of mistaken macroeconomic policies - especially aggressive fiscal consolidation...
2. Although financial markets may have stabilized - who knows for how long - things are getting worse, not better, in the real economy of the crisis countries...
3. Countries with more generous welfare states, but also more flexible labor markets, have fared best...
4. Following on from this, structural reforms in labor markets are required in many countries - but they need to be based on evidence! Segmented labor markets are a problem and raise youth unemployment...
..and even in recession, minimum wages at a sensible level do more good than harm. ...
5. Where they were allowed to operate, the "automatic stabilizers" worked...(in both macroeconomic and social terms)...
...while where they were overridden, in the pursuit of "self-defeating austerity", things have got worse...
4---More on Retirement (In)Security, on the economy
Important piece by Mike Fletcher in this AMs WaPo that strongly amplifies points I stressed here the other day.
The Post reports that more workers, financially stressed by cash flows that fall short of their family budgets, are turning to early withdrawals from their 401(k)’s:
More than one in four American workers with 401(k) and other retirement savings accounts use them to pay current expenses, new data show. The withdrawals, cash-outs and loans drain nearly a quarter of the $293 billion that workers and employers deposit into the accounts each year, undermining already shaky retirement security for millions of Americans.5---A modest Proposal, Robert Pollin, back to full employment
With federal policymakers eyeing cuts to Social Security benefits and Medicare to rein in soaring federal deficits, and traditional pensions in a long decline, retirement savings experts say the drain from the accounts has dire implications for future retirees
...the single most important thing we can do to lower the fiscal deficit further is to push unemployment down. This will generate increased government revenues with people paying more in income and sales taxes, and it will reduce government payments on unemployment insurance and supplemental aid for health care and family support. The U.S. has the capacity to pursue a stimulus agenda now quite easily, precisely because interest rates and interest payments to creditors remain historically low.
6---Marxism and freedom, stumbling and mumbling
For Marx, the ideal society was one in which "the free development of each is the condition for the free development of all." This is a society that not only abolishes wage slavery, but which is hostile to, among other things, gender essentialism and transphobia.
Also, we must remember that there's a sharp distinction between the Marxist and non-Marxist left. Marxism is not about lifestyle politics. It doesn't think that a priority of government should be to tell workers what to eat or how much to save. Indeed, because Marxists believe that bosses are exploiters, they are sceptical of managerialists' claims to know what's good for us - because such claims to superior knowledge are an ideological cover for a claim to power.
Nor - unlike soft leftists such as Murphy and Toynbee - do Marxists think that Britain is a family with the wrong members in control, and all would be well if only people of courage, intellect and integrity were in government. (The fact that this has so rarely happened doesn't seem to trouble the soft left).
Instead, the Marxist view of the state - as a "committee for managing the common affairs of the whole bourgeoisie" - is much closer to James Buchanan's public choice theory than it is to the soft left's notion of the state as a tool for improving the lot of workers....
A second reason is that, in a market economy, the state is like everything else, there to be bought. The upshot is that, as I've said, crony capitalism is the only feasible capitalism.
For these reasons, freedom requires not just that people wise up, but that the basic power relations which generate unfreedom be abolished. As Marx wrote:
When, in the course of development, class distinctions have disappeared, and all production has been concentrated in the hands of a vast association of the whole nation, the public power will lose its political character.
You might object that this is improbable. True. But this doesn't invalidate Marxism, but merely tells us that real freedom is improbable.
7---When "going private" costs more, CEPR