Tuesday, July 29, 2014 Saturday, November 2, 2013 Tuesday, April 16, 2013

Eurozone countries have already provided object lessons in just how severe such effects can be: the incidence of mental illness has shot up, long-vanquished infectious diseases are making a comeback, and people have been driven to extraordinary lengths to obtain even basic medical supplies from failing healthcare systems (New Scientist, 26 May 2012, p 6).

Even in the cautiously optimistic US, researchers from the Center on Budget and Policy Priorities in Washington DC have warned that budget cuts mean up to 750,000 people living in poverty could lose access to a vital supplemental nutrition programme.

And as we report on “Cost of cuts: Austerity’s toxic genetic legacy”, the immediate consequences of austerity may give way to more enduring and insidious effects on health. It is plausible that protracted economic hardship will lead to increases in heart attacks, strokes and depression. Stress hormones are known to trigger or exacerbate these conditions, and it is hard to argue that those worrying about the security of their jobs, homes, families and finances are not experiencing high levels of stress.

The hidden costs of austerity
Wednesday, November 9, 2011 Tuesday, September 13, 2011 Monday, August 15, 2011
If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months," he said. "And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better—"

“We need Orson Welles, is what you’re saying,” Rogoff cut in.

“There was a ‘Twilight Zone’ episode like this in which scientists fake an alien threat in order to achieve world peace,” Krugman said. “Well, this time, we don’t need it, we need it in order to get some fiscal stimulus.
Paul Krugman: Fake Alien Invasion Would End Economic Slump (click through for video)
Thursday, July 14, 2011 Monday, July 11, 2011
This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so. And the closer you look, the more unprincipled the Republicans look. Earlier this year House Republicans produced a report noting that an 85%-15% split between spending cuts and tax rises was the average for successful fiscal consolidations, according to historical evidence. The White House is offering an 83%-17% split (hardly a huge distance) and a promise that none of the revenue increase will come from higher marginal rates, only from eliminating loopholes. If the Republicans were real tax reformers, they would seize this offer. Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans. Independent voters should take note. The Economist (via azspot)
Monday, May 16, 2011 Sunday, January 30, 2011
In an NBER working paper, Brown University professors J. Vernon Henderson, Adam Storeygard, and David N. Weil came up with an interesting proxy for GDP growth: the amount of light that can be seen from outer space.

In an NBER working paper, Brown University professors J. Vernon Henderson, Adam Storeygard, and David N. Weil came up with an interesting proxy for GDP growth: the amount of light that can be seen from outer space.


Friday, January 7, 2011 Thursday, January 6, 2011
The story runs as follows. Before the financial crash, there were lots of not-so-useful workers holding not-so-useful jobs. Employers didn’t so much bother to figure out who they were. Demand was high and revenue was booming, so rooting out the less productive workers would have involved a lot of time and trouble — plus it would have involved some morale costs with the more productive workers, who don’t like being measured and spied on. So firms simply let the problem lie.

Then came the 2008 recession, and it was no longer possible to keep so many people on payroll. A lot of businesses were then forced to face the music: Bosses had to make tough calls about who could be let go and who was worth saving. (Note that unemployment is low for workers with a college degree, only 5 percent compared with 16 percent for less educated workers with no high school degree. This is consistent with the reality that less-productive individuals, who tend to have less education, have been laid off.)

In essence, we have seen the rise of a large class of “zero marginal product workers,” to coin a term. Their productivity may not be literally zero, but it is lower than the cost of training, employing, and insuring them. That is why labor is hurting but capital is doing fine; dumping these employees is tough for the workers themselves — and arguably bad for society at large — but it simply doesn’t damage profits much. It’s a cold, hard reality, and one that we will have to deal with, one way or another.
10 Percent Unemployment Forever?
Monday, January 3, 2011 Saturday, December 11, 2010
Africa, in fact, is now one of the world’s fastest-growing economic regions. Between 2000 and 2008, the continent’s collective GDP grew at 4.9 percent per year — twice as fast as in the preceding two decades. By 2008, that put Africa’s economic output at $1.6 trillion, roughly on par with Russia and Brazil. Africa was one of only two regions — Asia being the other — where GDP rose during 2009’s global recession. And revenues from natural resources, the old foundation of Africa’s economy, directly accounted for just 24 percent of growth during the last decade; the rest came from other booming sectors, such as finance, retail, agriculture, and telecommunications. Not every country in Africa is resource rich, yet GDP growth accelerated almost everywhere.

Government reforms, greater political stability, improved macroeconomics, and a healthier business environment are now taking hold in a region long dismissed as hopeless. Inflation fell to an average of 8 percent in the 2000s after a decade during which it hovered at 22 percent. African countries have lowered trade barriers, cut taxes, privatized companies, and liberalized many sectors, including banking. Africa now boasts more than 100 domestic companies with revenue greater than $1 billion. And capital flows to the continent increased from just $15 billion in 2000 to $87 billion in 2007. With good reason: Africa offers the highest rate of return on investment of any region in the world.
The African Miracle: How the world’s charity case became its best investment opportunity
Monday, July 26, 2010
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