While politicians anxiously check the shifting weather-vanes of public opinion and scientists squabble over facts as well as interpretations, central banks are resolutely doing what they do best – wildly exceeding their briefs and trying to drown all problems in a flood of newly-created money. As ever, the underconsumptionists worry that a lack of demand will usher in deflation, in spite of all such efforts. Some of us, however, worry more about what it will do to supply. Here, we explain why [For those who would like a podcast version please follow this LINK]:-
Monthly Archives: May 2020
Free Lunch Finance
The poster girl of the voguish crankdom that is Modern Monetary Theory (“MMT”) – Stephanie Kelton, has been out pimping her new book – “The Deficit Myth” – with a great deal of help from the unofficial PR department which she seems to have, nestled within the House Organ of Davos, the execrable FT.
Here, Professor Kelton – for all the puffery about how fearless and radical is her approach – is pushing at an open door: a gaping aperture in the last bastion of economic rationality that is being held open by no less than Fed Chairman Jerome Powell, a man who recently went on record to boast: “We will never run out of money.”
Green Illusions
A recent, long post on Linked-In relates the story of how an attempt to set up a business recycling aluminium cans in the city of Toulouse in France failed for reasons of cost, lack of customer appetite, and ultimately out of the sheer technical impossibility of achieving the desired 100% ‘Green Loop’ for which the enterprise – ‘La Boucle Verte’ – was named.
Having delivered a fairly detailed case history of the business itself, the author – ‘Founder and President’ Charles Dauzet – then gives way to an even lengthier disquisition on what he himself describes as ‘the illusion of green growth’; a diatribe in which all the usual tropes of denialism are themselves lovingly and painstakingly recycled, complete with a supposedly telling graph showing that world GDP per capita tends to move in rough correspondence with total oil consumption (a relation which, in fact, shows we are collectively becoming more sparing in our usage).
Since oil is held to be a finite resource (and passing over the issue of whether, if it truly is so in any meaningful sense, it is the only one at our disposal), the righteous M. Dauzet jumps straight to the conclusion that we must abandon the very idea of material progress itself since, one day, we must inevitably exhaust the means to fuel it.
Oh dear!