Back to prose economics. . . particularly after a colleague devastatingly mentioned the Peter Lilley precedent . . . it is a slippery slope. And those kind people mentioning this blog in the same sentences as Dillow probably want more economics. If I was as good or diligent as Dillow, I would try somehow to link all the items in this title together.
Greece. First: how interesting what Barroso has said about the consequences of sending money to the PIGS:
Mr Barroso points to the anomaly that countries such as Greece, Ireland and Portugal, which have benefited in the past 20 years from tens of billions of euros in EU regional aid, are in a worse situation than ever in terms of relative competitiveness.
It seems similar to a theme explored in the discussion about Alison Wolf’s excellent paper. Read that paper and you might not be so confused. Sending a lot of money can help, but it can also just boost demand pressures and make a place within the same currency area less competitive in its private sector activities, so that it finds it HARDER to stand on its own two feet.
Charles Wyplosz has listed many facts and myths about the Greece situation. I particularly noted this:
Myth No.5: Contagion, already under way, would be destructive. . . Fact No.5: The real worry is the banking system. Some European banks hold part of the Greek debt and, if still saddled with unrecognized losses from the subprime crisis, some might become bankrupt
Fact No.8: Greece, along with Spain, Portugal and Ireland suffer from a loss of competitiveness due to continuing higher inflation. This partly explains their widening current account deficits until the crisis. Yet, the budget deficits are unrelated to this evolution.
Not all Tories are deniers. Paul Sagar praises Hague, and boils it down nicely:
Outrageous as it sounds, forget about the economy. The most important thing David Cameron must do over the next 5 years is defy his own grass roots and continue to stick to the science. If the Tories plunge into climate denialism, then we really are in trouble.
The Economist argues for not worrying about inflation:
This is a dangerous time for the global economy. Policymakers seem to be overestimating the return to stability. I’d say the argument for forgetting about inflation entirely until we see two quarters of core inflation at or above a 3% annual rate is quite strong.
I agree; the risk I have in mind is that politicians call “mission accomplished” too soon. Against the context of deflationary risk, this extraordinary suggestion for the printing of a permanent Etrillion does not seem so daft.
First gilt auction since the end of QE. FT Alphaville detect some signs of slightly higher yields. But they blame some of this on Labour’s latest recovery in the polls.
Demos are pushing hard for wealth taxes. I have not read the rest … apparently it argues for how important inequality is.
Good to see the Spectator taking aim at the consistent myth of the numbers bandied around for Iraq War deaths. As the ClimateHate discussions show us, you don’t strengthen your argument by exaggerating beyond reason: you merely end up having your integrity doubted. As one of the commenters puts it:
The independent (well left wing anti war, actually) Iraq Body Count puts the deaths at 100,000.
This is bad enough, so it beats me my people have to lie about it.