Ann Pettifor

On dresses, economists and ‘The Mighty Sparrow’…

It has been a long, lazy weekend, and shallow person that I am, have immersed myself in pictures of the outfits worn both to the wedding, but also to the White House Correspondents dinner (and by the way, recommend a listen-in to President Obama’s witty, but ruthless thrashing of Donald Trump at that event…)

To continue with the excuses: as a child and teenager my mother made and custom-fitted all my dresses, using a superb German-built Bernina machine….. so I have painful memories of being diverted from fun with friends, to spend long hours (so it seemed) standing on the dining room table, as she pinned up the hem of a new dress, and skilfully inserted darts and seams to show off what little shape I had then. Despite lingering resentments, I have therefore, a huge regard for, and interest in, the skills and hard work of the invisible seamstresses that painstakingly invest long hours (no doubt for little reward) into the construction, assembling and execution of those beautiful haute couture creations…

That’s my excuse anyway…back to the economy and dismal economists.

Brad de Long, a former assistant secretary of the US Treasury and Professor of Economics at the University of California, Berkeley, notes in his blog, that at the recent INET conference former Treasury Secretary and Obama adviser, Larry Summers was “asked to name….where to turn to understand what was going on in 2008.  Summers cited three dead men, a book written 33 years ago, and another written the century before last”…..Even though “economics knows a fair amount” argued Summers at Bretton Woods “it has forgotten a fair amount that is relevant, and it has been distracted by an enormous amount.”

(Do you think that Summers meant to say: “an enormous amount …..of money?” See Felix Salmon on the sums that Summers was paid….)

Brad concludes: “We need fewer equilibrium business-cycle theorists and more old-fashioned Keynesians and monetarists. (More monetarists?  Please, no. We have enough of those already.)

“We need more monetary historians and historians of economic thought and fewer model-builders.” Amen to that.

“Yet” he writes “that is not what economics departments are saying nowadays.”

Yep, Brad it’s worrying. Let’s hope that excellent think-tanks like the Levy Institute that welcomed e.g. Prof. Wynne Godley when mainstream economists ignored his warnings about economic imbalances, spot the gap in the market, and begin competing for students that really want to understand what is going on in the world.  Anyway, here is Brad de Long’s take:

I much enjoyed Martin Wolf’s interrogation and teasing of the hugely confident, and often pompous Larry Summers at the INET conference, Bretton Woods, a couple of weeks ago. As a result, I now read his columns with a little more attention – like this one in the FT (28 April), on the stagnant UK economy.  Note his pertinent question:  “why would one expect an investment surge in an economy currently some 13 per cent below its pre-crisis trend?”

(This column is behind a paywall…)

Warren Buffet’s colleague, Munger blames Wall St. for EU crisis. “Why should an investment banker go to Greece to teach them how to pretend their finances are different from what they really are? Why isn’t that a perfectly disgusting bit of human behavior?”

Quite so. Why isn’t it?

OK. What is it with those awful tornadoes? The debate rages about whether they are more frequent because of climate change…..

“Sleepwalking through America’s Unemployment Crisis” a blog by Mohamed A. El-Erian. El-Erian is CEO and co-CIO of PIMCO, perhaps the biggest bond-dealership in the world, and author of When Markets Collide.

“Rather than reflecting job creation” he writes, “much of the improvement in recent months… is due to workers exiting the labor force, thus driving workforce participation to a multi-year low of 64.2%…”

The United States of America has an awful lot of economically inactive people, and economists continue to overlook their exit from the labor force, as they cheer the unemployment numbers. That cannot be a good thing as the US girds itself up to compete with economies that have hundreds of millions of well-trained, educated and economically active people….

A good explainer from Foreign Policy on “How Goldman Sachs created the food crisis”. Essential reading.

Has the micro-finance bubble finally burst? Milford Bateman at the ODI on the scandal at Grameen Bank et al…I met Milford at a recent ICA event, and he confirmed a lot of my misgivings about the individualistic, ‘pull yourself up by your very own bootstraps’  approach to development of the microfinance community; but above all, by the very high rates of interest charged to poor women and men for micro-loans. I recommend his book: Why doesn’t microfinance work? This article summarises his analysis.

That’s all for today, folks. But here for your pleasure, is a musical diversion….on the theme of money, skulduggery and recession. From ‘the Mighty Sparrow’ it’s called: ‘Capitalism gone Mad’.  Am thinking of making this the ‘debtonation’ theme tune.

These are the opening lines…

“You got to be a millionaire or some kind of petit-bourgeoisie
Any time you living here in this country
You got to be in skullduggery, making your money illicitly
To live like somebody in this country
It’s outrageous and insane, them crazy prices in Port of Spain
And like the merchants going out dey brain
And the working man, like he only toiling in vain.

“You got to have heavy contact, know how to move up in society
To make any kind of impact in this country
You got to know how to gyp the field
How to scheme and swindle properly
Perfect the art of wheel and deal in this country
I say, survival in this land isn’t easy for no man
With unemployment and high inflation
Some of we go dead before the end of this recession.”


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