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I'm fond of big predictions.
Here's my biggest (ever): we are heading for a global debt deflation event and the biggest economic reset for 90 years. It will turn even Boris into a commie.
SARS-CoV-2 is not the cause; just the trigger.
#AllKeynesiansNow
Here's my biggest (ever): we are heading for a global debt deflation event and the biggest economic reset for 90 years. It will turn even Boris into a commie.
SARS-CoV-2 is not the cause; just the trigger.
#AllKeynesiansNow
2. I didn't pull this global crash theory from my backside.
The most important graph on the internet shows why it's inevitable.
https://go.epi.org/BAL The gap between productivity and a typical worker’s compensation has increased...
The most important graph on the internet shows why it's inevitable.
https://go.epi.org/BAL The gap between productivity and a typical worker’s compensation has increased...
3. The decoupling of remuneration from production is not just a US phenomenon.
It's global.
The result of overwhelming greed from people who already have more than they can spend.
And it will inevitably lead to some form of revolution.
#AllKeynesiansNow
It's global.
The result of overwhelming greed from people who already have more than they can spend.
And it will inevitably lead to some form of revolution.
#AllKeynesiansNow
4. I agree with Marx on a lot of things, including his understanding that capitalism will eat itself.
Because in a pure market economy, only the greediest can survive.
#AllKeynesiansNow
Because in a pure market economy, only the greediest can survive.
#AllKeynesiansNow
5. In a completely free market companies have to be ruthless. Pay their employees peanuts, automate their jobs away, or go bust as a more ruthless company takes their market share.
Until the early 1980s workers could use the state to protect themselves, but that is long gone.
Until the early 1980s workers could use the state to protect themselves, but that is long gone.
6. So here's the problem Marx pointed out. If capitalism impoverishes the majority, who buys the goods?
And if people stop buying, how can it continue?
My take: since 1980 it has all been borrowed money
#AllKeynesiansNow
And if people stop buying, how can it continue?
My take: since 1980 it has all been borrowed money
#AllKeynesiansNow
7. Neoliberal economists draw a distinction between private and corporate borrowing on one hand, and sovereign debt on the other.
Apologies for swearing, but that is bollocks.
A deliberate lie to enable theft.
#AllKeynesiansNow
Apologies for swearing, but that is bollocks.
A deliberate lie to enable theft.
#AllKeynesiansNow
8/ Private sector debt has risen massively in the last 40 years and is now above 100% of GDP in nearly every developed country. The story for corporate debt is very similar. This is entirely deliberate, and unsustainable.
#AllKeynesiansNow
#AllKeynesiansNow
9/ Borrowed money
#AllKeynesiansNow https://twitter.com/leadlagreport/status/1268262879691710466?s=20
#AllKeynesiansNow https://twitter.com/leadlagreport/status/1268262879691710466?s=20
Thatcher and Reagan allowed private debt to mushroom from 1980 onwards. It allowed them to enrich billionaires, without screwing the middle class.
Or, more accurately, without the middle class realising how spectacularly they were being screwed
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#AllKeynesiansNow
Or, more accurately, without the middle class realising how spectacularly they were being screwed
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#AllKeynesiansNow
Thatcher opened the floodgates on private debt by allowing the Big Bang of the 80s and following up with building society demutualisation. Two idiotic decisions which future generations will be asked to pay for.
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The main aim of the financial deregulation 1980-2007 was to allow easy lending;
which increased the money supply;
Which allowed the middle class to think they were getting richer, even as they were getting poorer
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which increased the money supply;
Which allowed the middle class to think they were getting richer, even as they were getting poorer
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Course it helps that financial deregulation also allows no end of larceny. The bankers make out like bandits, the billionaires loot unmolested, the middle class get conned, and the working class...
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#AllKeynesiansNow
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#AllKeynesiansNow
Has there ever been a more stupid asset bubble than residential property?
How did we ever forget that houses are for living in rather than for financial speculation?
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UK housing market 'bounces back' with biggest monthly rise in 16 years https://mol.im/a/8688799
How did we ever forget that houses are for living in rather than for financial speculation?
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UK housing market 'bounces back' with biggest monthly rise in 16 years https://mol.im/a/8688799
When food gets more expensive that is recognised as a bad thing, which worsens our quality of life.
Expensive houses are no different.
15/ https://twitter.com/DiMartinoBooth/status/1298861566759239682?s=20
Expensive houses are no different.
15/ https://twitter.com/DiMartinoBooth/status/1298861566759239682?s=20
The reason for the international housing bubble is because it's an easy target. Encourage banks to lend more, so prices shoot up. The increased money supply makes people feel richer. Exclude housing from inflation calcs; everyone's a winner.
Apart from.. you know.. people
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Apart from.. you know.. people
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High mortgage multiples and easy lending is what causes high house prices.
It's NOT the other way around.
Rein in lending and prices collapse tomorrow
(not just houses either, but all assets)
#AllKeynesiansNow
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It's NOT the other way around.
Rein in lending and prices collapse tomorrow
(not just houses either, but all assets)
#AllKeynesiansNow
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40 years of massive money transfer from poor to rich, perpetrated by all main political parties in Europe and North America, facilitated by borrowed money.
This is going to change in a big way: not because the politicians want that, but because they will have no choice.
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This is going to change in a big way: not because the politicians want that, but because they will have no choice.
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Even billionaires can't just steal money without some subterfuge. They need a convincing mechanism.
The one they've used for 40 years is globalism.
A lovely cuddly word for a system that destroys the pricing power of labour.
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The one they've used for 40 years is globalism.
A lovely cuddly word for a system that destroys the pricing power of labour.
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Globalism sounds so positive doesn't it? So similar to internationalism?
But the latter involves people working together to benefit humanity, and protect the planet we share.
The former is capitalists banding together to screw us all over.
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#AllKeynesiansNow
But the latter involves people working together to benefit humanity, and protect the planet we share.
The former is capitalists banding together to screw us all over.
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#AllKeynesiansNow
In all economies there is a constant battle between capital and labour (Marx again, but even Thatcher believed this)
Globalism - or, specifically, the free movement of capital and labour across political boundaries - changes the balance in favour of capital.
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Globalism - or, specifically, the free movement of capital and labour across political boundaries - changes the balance in favour of capital.
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Since 1980 nearly everyone in Europe and North America has been getting relatively poorer, especially after housing costs, and for most of that time didn't even realise it.
Borrowed money can hide anything for a while.
/22 https://images.app.goo.gl/yaRzLQbDHVxgARoX8
Borrowed money can hide anything for a while.
/22 https://images.app.goo.gl/yaRzLQbDHVxgARoX8
The collapse of living standards is most obvious in Europe and North America, but the idea that globalisation has improved life for working people in poorer countries is a myth
The story is the same everywhere. Either accept terrible pay and conditions, or see your job go
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The story is the same everywhere. Either accept terrible pay and conditions, or see your job go
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The main tools working people have to protect themselves are trade unions and democracy
Both now exist in name alone, which is why - uniquely in peacetime history - young people are poorer than their parents, and see no prospect of that changing
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Both now exist in name alone, which is why - uniquely in peacetime history - young people are poorer than their parents, and see no prospect of that changing
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The state has been captured by a handful of billionaires; by multinational corporations; and by the flunkies of big finance. It no longer serves the rest of us
Hence the huge rise in inequality
25/ https://www.cbpp.org/income-gains-widely-shared-in-early-postwar-decades-but-not-since-then-3
Hence the huge rise in inequality
25/ https://www.cbpp.org/income-gains-widely-shared-in-early-postwar-decades-but-not-since-then-3
Socialists complained about Harold Wilson & JFK, but compare their policies to the aggressive neoliberalism of Blair, Clinton and Obama
Even thinking about Starmer & Biden makes me depressed
They will not willingly change anything
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Even thinking about Starmer & Biden makes me depressed
They will not willingly change anything
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There are millions of people working in the UK shadow economy for less than £5/hour
Even those who are on minimum wage are stuck with zero hour contracts, or working conditions that steal some of their pay back from them
27/ https://www.telegraph.co.uk/business/2020/03/25/uks-army-hidden-workers-grey-economy-risk-spreading-virus/
Even those who are on minimum wage are stuck with zero hour contracts, or working conditions that steal some of their pay back from them
27/ https://www.telegraph.co.uk/business/2020/03/25/uks-army-hidden-workers-grey-economy-risk-spreading-virus/
One of the most egregious examples of the collapse in living standards in the UK is the disappearance of automated carwashes, and their replacement by hand carwashes
Human labour even in the UK is now literally cheaper than electricity
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Human labour even in the UK is now literally cheaper than electricity
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According to McKinsey & Co, "The labor share of income in 35 advanced economies fell from around 54 percent in 1980 to 50.5 percent in 2014." (since then the decline has accelerated)
They may well think this is a good thing. I don't
29/ https://www.mckinsey.com/featured-insights/employment-and-growth/a-new-look-at-the-declining-labor-share-of-income-in-the-united-states#
They may well think this is a good thing. I don't
29/ https://www.mckinsey.com/featured-insights/employment-and-growth/a-new-look-at-the-declining-labor-share-of-income-in-the-united-states#
Most people in the UK cannot survive by selling their labour, so are dependent on state top-ups of some form.
These subsidies are not ultimately for them, but for the billionaires and corporations who own our politicians
Even before COVID19 the labour market was broken
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These subsidies are not ultimately for them, but for the billionaires and corporations who own our politicians
Even before COVID19 the labour market was broken
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The academic apologists for neoliberalism try to tell us that this dystopia is normal
It's not
This isn't civilisation
It isn't even capitalism
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It's not
This isn't civilisation
It isn't even capitalism
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Economics was always a dismal science, but since the 1980s there has been something different
Neoliberal economists are paid to lie to us
Academic economists who point out the lies don't get funding. Many - other than the truly brilliant - lose their jobs
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Neoliberal economists are paid to lie to us
Academic economists who point out the lies don't get funding. Many - other than the truly brilliant - lose their jobs
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Any scientist can be wrong. It's part of the game
But neoliberal economists are something different. They know their theories have very little empirical evidence to support them, yet state them as fact rather than opinion
They know that trickle down is nonsense
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But neoliberal economists are something different. They know their theories have very little empirical evidence to support them, yet state them as fact rather than opinion
They know that trickle down is nonsense
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The thing about borrowing money is that you can't do it for ever. The only reason this is controversial is that most people don't understand what money is. The nature of money isn't taught in school.
That's deliberate IMO
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That's deliberate IMO
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One of the greatest difficulties I have with neoliberal economic theory is its vague and inconsistent approach to the definition of money
35/ https://theconversation.com/neoliberalism-has-tricked-us-into-believing-a-fairytale-about-where-money-comes-from-113783
35/ https://theconversation.com/neoliberalism-has-tricked-us-into-believing-a-fairytale-about-where-money-comes-from-113783
The marxist definition of value is much clearer than the neoliberal one, and probably closer to the right wing libertarian definition too
This is a great short thread by @asatarbair
36/ https://twitter.com/asatarbair/status/1296133492334444544?s=20
This is a great short thread by @asatarbair
36/ https://twitter.com/asatarbair/status/1296133492334444544?s=20
Value isn't identical to money, but for the purpose of this argument it is close enough. My point is that money primarily represents a call on labour: either past, present or future
(a lot of US economists spell labour wrong, but you know what they mean)
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(a lot of US economists spell labour wrong, but you know what they mean)
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If money largely represents (a call on) labour, then borrowed money is a call on future labour
In other words, you agree to work for someone in future in exchange for an asset now. Completely logical if you want to (for example) build or buy a house
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In other words, you agree to work for someone in future in exchange for an asset now. Completely logical if you want to (for example) build or buy a house
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The big problem with borrowed money arises when the sums become so large that they cannot be repaid in our lifetime. We are then "paying" for something by promising the labour of our children, grandchildren - or worse still - descendants not yet born
That's the world now
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That's the world now
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Why do we think that our unborn descendants will be willing to pay off our debts for us? (in Marxist terms: exchange their labour for our previous consumption?)
Would you do that?
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Would you do that?
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