Tuesday , November 5 2024
Home / Mike Norman Economics / Western economies can’t return to ‘business as usual’ after the pandemic, by Michael Jacobs

Western economies can’t return to ‘business as usual’ after the pandemic, by Michael Jacobs

Summary:
Today’s challenges demand radical action. The old orthodoxy of free markets and hands-off government won’t cut itThe Rentier economy and neoliberalism have failed to bring prosperity to our societies. Some of their ideas revive the economics of John Maynard Keynes, who saw that government spending is needed to stimulate demand for goods and services during a recession. More recently, most economists have recognised that in an era of ultra-low interest rates, fiscal policy – spending and taxation – should play a major role in how the economy is managed. Many also now acknowledge that there are no absolute constraints on public debt. As long as low interest rates keep the cost of borrowing affordable, and borrowing is used to fund investment (which raises future national income and

Topics:
Mike Norman considers the following as important:

This could be interesting, too:

Jodi Beggs writes Economists Do It With Models 1970-01-01 00:00:00

Mike Norman writes 24 per cent annual interest on time deposits: St Petersburg Travel Notes, installment three — Gilbert Doctorow

Lars Pålsson Syll writes Daniel Waldenströms rappakalja om ojämlikheten

Merijn T. Knibbe writes ´Fryslan boppe´. An in-depth inspirational analysis of work rewarded with the 2024 Riksbank prize in economic sciences.

 Today’s challenges demand radical action. The old orthodoxy of free markets and hands-off government won’t cut it


The Rentier economy and neoliberalism have failed to bring prosperity to our societies. 

Some of their ideas revive the economics of John Maynard Keynes, who saw that government spending is needed to stimulate demand for goods and services during a recession. More recently, most economists have recognised that in an era of ultra-low interest rates, fiscal policy – spending and taxation – should play a major role in how the economy is managed. Many also now acknowledge that there are no absolute constraints on public debt. As long as low interest rates keep the cost of borrowing affordable, and borrowing is used to fund investment (which raises future national income and therefore brings in more taxes), the ratio of debt to GDP will ultimately fall. By contrast, trying to reduce debt through austerity policies is self-defeating and harmful, as the last decade has proved.

Economic thinking is shifting in response to the climate and nature crises. It is no longer sufficient to use a few market-based environmental taxes and product regulations. To achieve net-zero emissions, the whole economy needs to be geared towards these goals. At the same time an active industrial strategy is needed to support greener technologies and consumption patterns, with job creation programmes for workers and communities adversely affected by the green transition.


The Guardian


Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

Leave a Reply

Your email address will not be published. Required fields are marked *