Utopia, you are standing in it!

The role of the Hawley-Smoot Tariff (aka Smoot-Hawley Tariff) in causing the Great Depression has been an ongoing subject of controversy for close to a century. Ron Batchelder and I wrote a paper (“Debt, Deflation and the Great Depression”) published in this volume (Money and Banking: The American Experience) that offered an explanation of the mechanism by which the tariff contributed to the Great Depression. That paper was written before and inspired another paper “Pre-Keynesian Theories of the Great Depression: What Ever Happened to Hawtrey and Cassell“) I am now revising the paper for republication, and here is the new version of the relevant section discussing the Hawley-Smoot Tariff.

Monetary disorder was not the only legacy of World War I. The war also left a huge burden of financial obligations in its wake. The European allies had borrowed vast sums from the United States to finance their…

Government estimates usually mean ‘not less than’, but this is worse than that. It’s supposed not to be possible to tie the hands of future governments on policy matters, but that’s what the Climate Change Act does, based on the notion that CO2 is ‘harmful’ – except for plant growth and in fizzy drinks.
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Brits were misled about the cost of the Government’s net zero carbon emissions target by 2050 after Whitehall officials played down the estimated £70 billion annual hit, says The Sun (via The GWPF).

In bombshell emails released after a two-year FOI battle, Treasury civil servants admitted to then-Chancellor Philip Hammond that the cost of going green would likely be £20 billion a year more than the £50 billion figure they were told to champion publicly.

Back in Cambridge, I naturally had to read the works from my renown lecturer, Dr. Ha-Joon Chang. One of them was his book Bad Samaritans: The Guilty Secrets of Rich Nations & the threat to Global Prosperity(Random House Paperback version). For those who don’t know, Chang in this book launches into a critic ofthe tenetsof the “Washington Consensus”. He further explores the economic history of today’s industrialised nations (some which he covered more extensively in his previous book, Kicking Away the Ladder) to argue that these nations did not develop based on pure market-based policies and ideas, but rather through active state-led actions. Written in a story tale style for laymen (non-economic readers), the book gained much praise from the development and non-development community.

In comes, William (Bill) Easterly, Professor and well-known author of The White Man’s Burden: Why the West’s efforts to aid the rest have done…

A Financial Times leader delivers advice that Finance Minister Grant Robertson should (but probably won’t) consider.

Essentially, the advice is to resist the temptation to  involve the central bank in the challenge of slowing the rise in house prices.

Changing regulation and reforming planning law is a smarter way to go.

The FT observes that – to many – it may seem obvious that the central bank quantitative easing programmes launched after the 2008 financial crisis have led to inflation, as money printing inevitably does.

But the inflation has has shown up in booming stock markets, high prices for art and collectibles, and surging cryptocurrencies.  Rather than higher consumer prices, cheap money has led to asset price inflation.

In this reading, the FT says, central banks should reconsider their stimulus policies because they are only delaying and deepening the eventual bust.

Furthermore, according to the critics, stimulus is increasing…

German Autobahn
EU politicians seem determined to hobble their car industry regardless of economic consequences, to save a few molecules of a harmless trace gas that’s essential to plant and tree growth.
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The European Commission’s proposed Euro 7 emission rules on cars, vans, trucks and buses would amount to “a ban through the back door” of internal combustion engines as of 2025, if implemented in their current form, industry has said, calling the proposal premature and “completely out of the question”. Euractiv reporting.

The ‘Euro 7‘ rules aim to ensure vehicles are clean over their entire lifetime, helping Europe to meet its European Green Deal emissions targets.

The exact details of the measure are still under discussion, but they are already creating jitters at VDMA, a German trade association representing mechanical engineering companies.

The  reverential   aura enveloping  the  Ardern government   is beginning to fade and ministerial  fallibilities are  emerging. Just as  suddenly, the  media  are  offering  some  space  to  critics  of  the  government.

Richard  Prebble  is  calling for a  Royal Commission into   the  government’s  handling of the pandemic response.  ACT’s  David Seymour  sees  the  government’s rollout of the vaccination programme  as  an “insulting lottery”.

The Prime Minister’s   famed  kindness  and compassion  did not extend to “Case L”  in Papatoetoe who, she said,  ignored instruction in going to work at  a  local KFC.  But  the PM’s  anger  was  misplaced: “Case L”  had  been told  she was free to go to work.   “Case L” is  said  to have been distressed  by  the  vilification she suffered  in social  media.

And  now it  is  becoming apparent how  the pandemic and the government’s response to it are wreaking  havoc among  businesses.  News media have reported  this week how  …

On balance, I think Rishi Sunak got more things right than wrong in Wednesday’s Budget. Let’s start with a couple of positives.

First, he extended the most important support measures, including the uplift to Universal Credit and the furlough scheme, until the end of September. This is probably longer than strictly necessary because the remaining lockdown restrictions could all be lifted by 21^st June. But it does make sense to continue this support in the meantime and to minimise uncertainty for businesses and households.

There was also a good case for asking employers to contribute more to the furlough scheme from July, as the Chancellor has now done. Continuing the scheme on its current terms after restrictions have been lifted could lock people into jobs that are no longer viable and delay the adjustment to the ‘new normal’, whatever that may be.

Some will still say that Rishi Sunak…

Over the three and half years that Jacinda Ardern has been Prime Minister and Grant Robertson Minister of Finance it has become increasingly obvious that not only do they have no serious ideas for turning around decades of productivity growth underperformance, and no intention of doing much on that score, but they have no real interest either.

Appointments are among the things that help reveal priorities. A couple of years ago they had the opportunity to look for a new Secretary to the Treasury who might revitalise the agency and start generating serious credible advice on fixing that economic failure – with all its ramifications for opportunities in other areas of life. They chose to pass up that opportunity.

More recently – and the focus of this post – there has been the Productivity Commission, set up a decade ago with some vision that it might offer medium-term analysis, research…

The list is provided by Gad Saad in his article and video Welcome To The Abyss of Infinite Lunacy.  Psychologist and author of “The Parasitic Mind: How Infectious Ideas Are Killing Common Sense,” Gad Saad, warns that society is descending into an abyss of ultimate lunacy. Text in italics with my bolds and images.

GAD SAAD: The rate at which our society is tumbling into madness is truly bewildering.

One, it is now racist for a white person to translate the work of a black person.

Two, it is now homophobic for a straight actor to play a gay role.

Three, it is now racist for a white therapist to treat a black client.

Four, it is now racist to have advanced high school programs.

Five, it is now transphobic for biological females to reject having to compete against trans women.

Six, it is…

Few people outside the Treasury think that now is a good time even to be talking about raising taxes, let alone actually doing so. Nonetheless, it seems almost certain that the Chancellor will start down this road in Wednesday’s Budget. This may not be as mad as it sounds.

The arguments against immediate tax hikes are well known. The UK economy is still in the midst of the worst recession in over three hundred years. The cost of borrowing is still remarkably low. Raising taxes prematurely could simply undermine the recovery and actually make it harder to bring the public finances back under control.

It would also be politically risky. Almost all independent commentators – as well as many on the Conservative backbenches – agree that fiscal policy should continue to focus on supporting growth. The financial markets are comfortable with this too. This is an open goal that Labour…

Denis Prager explores how to query a friend, relative or colleague to see if they are open to discussion, or locked into a fixed ideology.  His article is Questions to Determine Whether a Friend or Relative Is a Liberal or a Leftist.  Excerpts in italics with my bolds and images.

The great tragedy of our time is that liberals vote left.

Virtually every value liberals have held for a century is now held by conservatives and scorned by leftists. Therefore, America, in serious jeopardy of being lost, will be saved when people convince the liberals in their life that the left, not the conservative, is their enemy.

This process begins by establishing whether a friend or relative is a liberal or a leftist. If it turns out that he or she is a liberal, it is worth engaging in respectful dialogue on the issues of the day. If…

Our Beehive Bulletin

The news we expected to find – no, the news we thought we might find – was not there when we checked the Beehive website this morning.

It was an acknowledgement from our kindly PM that maybe she had been a tad unkindly when she failed to hide her frustration about the Covid-19 community case who had gone to work at KFC Botany instead of isolating at home.

What we did find was news that –

• The Government remains committed to hosting the Women’s Rugby World Cup in New Zealand in 2022 should a decision be made by World Rugby this weekend to postpone this year’s tournament.
• The Government has confirmed details of COVID-19 support for business and workers following the increased alert levels due to a resurgence of the virus over the weekend.  This extends the COVID-19 Wage Subsidy Scheme.

Here at Point of Order…