Government

Ann Pettifor has a new blog up: Do tax revenues finance government spending? It includes this memorable quote about balancing the books:

When the economy is powering along, when investment and employment and wages are high, when interest rates are low, and banks are supporting the real economy,  not just gambling on property price rises – then hey presto, the government’s books ‘balance’. When the economy is weak, when investment falls, and employment is low, or insecure, or low-paid; when private indebtedness and real rates of interest are high and the finance sector out of control – then government revenues from taxation will fall, and the government’s books will not balance. 

 Ann continues to inspire me with her insights into how money and the economy works.

Anti-Capitalist

Capitalism works best when capital is invested in enterprises that employ workers; and when workers are well paid and spend their wages on goods and services. It is a potentially symbiotic relationship.

Low wages and employment practices that are detrimental to productivity and the health of workers are anti-capitalist.

Treating labour as a cost of doing business, rather than as partners in creating profit is anti-capitalist.

Accumulation of uninvested capital is anti-capitalist.

Investments that do not create jobs are anti-capitalist (i.e. gambling on the future price of property, commodities, or currencies).

Removing protections and degrading governance so as to allow fraud and malfeasance on a massive scale is anti-capitalist.

So whatever has been happening as a result of the Neoliberal revolution is not capitalism. It's profoundly anti-capitalist.

Economists, Amazon, and Corruption

In my view, these tweets are some of the most damning indictments of economics in recent times. They show the kind of corruption that is rife in the field. Economists are seldom free agents or objective. They are in the pay of the companies who they are commenting on. In the case below it is Amazon who are promoting this form of corruption.

The problem w/economics is that economists do not self-police corruption. Example. Michael Mandel of the Progressive Policy Institute is one of the leading proponents that Amazon warehouse jobs are a net benefit to a community rather than a low wage disaster. Guess who pays him?

— Matt Stoller (@matthewstoller) February 3, 2018

Finally, this story by @lydiadepillis at CNN discusses the 'controversy' over the EPI study. And she actually notes that @MichaelMandel at PPI is funded by Amazon. Yay. https://t.co/FQD0RPy2lc pic.twitter.com/gfp5vQzovk

— Matt Stoller (@matthewstoller) February 3, 2018

The irony with Amazon, is that without the sales-tax exemption on internet sales in the USA, they would never have survived.

Amazon are in the news as they look for sweetheart deals to move their corporate headquarters and build new fulfilment centres. The left-wing US publication, Working In These Times, analyses this in a story titled: Cities Scrambling to Attract Amazon Because It “Creates Jobs” Are Being Sold a Lie.

They point out that Amazon's business model means that they have to build more warehouses anyway:

“If your business model is getting things to people within 24 hours, you have to be everywhere,” Jones said. In other words, paying a company to locate a facility they have to build anyway makes no sense."

The article also cites figures that show that the arrival of an Amazon warehouse has little or no effect on overall employment levels. They have a negative impact on wages and conditions:

A 2016 study from the Institute for Local Self-Reliance found that hourly wages at Amazon fulfillment centers are far below the typical warehouse worker, and employees work more hours to compensate.