Bill Mitchell — Europhile Left deluded if it thinks reform process will produce functional outcomes

A recent twitter exchange with some Europhiles who believe that it is better to wait for some, as yet unspecified, incremental reform process for the Eurozone rather than precipitate exit and the restoration of currency sovereignty was summed up for me by one of the tweets from Andrew Watt. In trying to defend the abandonment of sovereignty and make a case for continuing with the so-called reform dialogue, he wrote (October 27, 2017): “Unemployment in “periphery” was v hi before €. Fell rapidly. Then rose sharply, has now fallen somewhat. So picture very mixed.” I found that a deeply offensive claim to make and responded: “It is not a mixed picture at all. Youth unemployment has never been as high. Greek unemployment was never > 12%. Now > 20% indefinitely.” I also attached a graph (see over). I think this little exchange captures the essence of the delusion among many in the Left that we document in our new book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017). The Europhiles maintain a blind faith in what they claim to be a reform process, which when carried through will reduce some of the acknowledged shortcomings (I would say disastrously terminal design flaws). They don’t put any time dimension on this ‘process’ but claim it is an on-going dialogue and we should sit tight and wait for it to deliver. Apparently waiting for ‘pigs to fly’ is a better strategy than dealing with the basic problems that this failed system has created. I think otherwise. The human disaster that the Eurozone has created impacts daily on peoples’ lives. It is entrenching long-term costs where a whole generation of Europeans has been denied the chance to work. That will reverberate for the rest of their lives and create dysfunctional outcomes no matter what ‘reforms’ are introduced. The damage is already done and remedies are desperately needed now. The so-called ‘reforms’ to date have been pathetic (think: banking union) and do not redress the flawed design. And to put a finer point on it: Germany will never allow sufficient changes to be made to render the EMU a functioning and effective federation. The Europhile Left is deluded if it thinks otherwise.

Bill Mitchell – billy blog
Europhile Left deluded if it thinks reform process will produce functional outcomes
Bill Mitchell | Professor in Economics, University of Newcastle, New South Wales, and Director of the Centre of Full Employment and Equity (CofFEE)

Bill Mitchell — 4 years later – the European Youth Guarantee is an under-funded failure

I read a social media quip today from someone who said they had “been banned from their library for moving the books on trickle down economics into the mythology section”. That is pure class. The mover not the banner. But the sentiment is relevant to today’s blog on the latest evidence available on the European Commission’s much-touted Youth Guarantee, that was launched in December 2012 and became operational in April 2013. I say ‘operational’ although given the performance of the initiative that might be somewhat of an overstatement. The latest evidence comes from the European Court of Auditors, which is charged with assessing European Commission policy initiatives. The Report – Youth unemployment – have EU policies made a difference? – which was released on April 4, 2017, is not very complementary at all about the Youth Employment Initiative. In fact, one is not being unfair to conclude after reading it that the whole initiative has been an over-hyped (by the Commission) and grossly underfunded failure – as it was destined to be from the start. It is hard to put any other spin on it. None of the Member States involved have achieved their stated objectives to integrate the NEET cohort “into the labour market in a sustainable way”. The ECA found that the policy intervention has made only a “very limited” contribution and was not sufficiently funded from the start. Bad news but then it is hardly surprising. When the scheme was announced it was clear that its emphasis, design and funding commitments would lead to this type of outcome. One didn’t need to be a rocket scientist to be able to see that....

Bill Mitchell – billy blog
4 years later – the European Youth Guarantee is an under-funded failure
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — Latest news on European Youth Guarantee hardly inspiring

The European Commission released a new report yesterday (October 4, 2016) – The Youth Guarantee and Youth Employment Initiative three years on – which provides an updated evaluation of the progress of the policy framework designed to reduce youth unemployment. The results are as one would expect after taking into account the design limitations of the Youth Guarantee – pretty disappointing. We learn that for the 20 countries for which there is available data – “Of the 2.5 million young people that left YG schemes … during 2015, less than 0.9 million (35.5%) were known to be in employment, education or training 6 months after exit”. That is an appalling result really and signifies that the design of the program should be reappraised and changed to accord with characteristics of an ideal Job Guarantee program. These results are unsurprising, dismal though they are.…

Bill Mitchell – billy blog
Latest news on European Youth Guarantee hardly inspiring
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — Austerity is killing off the hopes of our youth

Sometimes, it is almost as if I have to pinch myself to establish that what I am reading is not a dream. A few reports lately have had that effect, not the least being the latest IMF report – Debt Sustainability Analysis (DSA) for Greece, which is forecasting unemployment will remain above 10 per cent for several decades to come. The latest Eurostat data on gross labour flows also paints a dire picture for a nation that has been deliberately ruined by neo-liberal ideology. And, the latest Eurobarometer studying Europe’s youth in 2016 tells us clearly how the next generation of adults feel about all this – they feel marginalised from social and economic life. The Troika and its corporate pals are doing a great job killing off the prospects for Europe’s children and their grandchildren, and further on – their grandchildren’s children. People in a few hundred years will reflect back on this period of history as being a dark age where power hungry maniacs dominated the people before the latter revolted and mayhem ensued.…

Bill Mitchell – billy blog
Austerity is killing off the hopes of our youth
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

David F. Ruccio — A generation in economic crisis

How to lose a generation. "It's the [lack of] demand, stupid."

Occasional Links & Commentary
A generation in economic crisis
David F. Ruccio | Professor of Economics ,University of Notre Dame

Evan Soltas — The Madre of All Bubbles

Unemployment, social unrest, failed currency union, household debt, real estate bubble — Evan hits the high points.

This is probably just the beginning of my work on the Spanish housing bubble. It may be the topic of my senior-year thesis. (Yes, the recent posts on rents and the Internet were me brainstorming.) We'll see.

Evan Soltas — Economic & Thought
The Madre of All Bubbles

Robert Kirchner — Russell Brand’s Revolution

Who would have thunk that the revolution would be spearheaded by Russell Brand. Robert Kirchner looks at Brand and his latest book, Revolution, from the vantage of an anarchist (of the left).

Why should anyone serious care about Russell Brand? Because culture shapes society and its institutions and celebrities and music shape culture, especially the culture emerging with youth.

So here's a celebrity who self-identifies with anarchism in a contemporary environment of high employment where youth sees its future disappearing, class power is coming to the fore, and populism is rising.

Turns out that TPTB are indeed taking note of Brand and not favorably.

Center for a Stateless Society

Russell Brand’s Revolution
Robert Kirchner

Sandwichman — Larry Summers Tells It Like It Is

We can debate whether it's the cause of dependence or whether it is caused by policies that promote dependence. But I think it is very hard to believe that a society in which the fraction of people in -- choose whatever your most prime demographic group is that should be working, whatever that group is, a society in which the fraction of them who are not working is doubling in a generation and seems to be on an upward trend is going to be a society that is going to function well, or at least function well without major social innovations. 

And I would want to leave you with that concern as there whether you think it's due to technology or whether you think it's due to globalization, or whether you think it's due to the maldistribution of political power, something very serious is happening in our society.

Econospeak
Larry Summers Tells It Like It Is
Sandwichman

Neil Wilson — Why not lower the retirement age?

If you look at political manifestos across the spectrum, none of them suggest lowering the state pension age as a goal - even those backing citizen's income ideas. I really can't understand that. It seems like a sure fire vote winner particularly if you sell it as a way of freeing up space so the young can get a job.

3spoken
Why not lower the retirement age?
Neil Wilson

Derek Thompson — The Real Reason That Young People Can't Find Jobs

It's fairly amazing to write an article called "Why Young People Can't Find Work" that doesn't include the word recession or the phrase going to college, but the Wall Street Journal's opinion section is nothing if not consistently amazing, in its own way. So no surprise that in an op-ed in this morning's paper, Andrew Puzder, a restaurant executive, uses the question as a shoehorn to slip smoothly into a familiar criticism of Obamacare, which he blames for everything from depressing employment to destroying entry-level jobs.

Rather than pick on Puzder, I'd rather pick on his shoehorn: Why can't young people find work, really? There are three reasons.

The Atlantic
The Real Reason That Young People Can't Find Jobs
Derek Thompson

Dian L. Chu — Carl's Jr CEO Explains Why Nobody Is Hiring Youth People

The problem? Low growth coupled with a minimum wage and cost of Obamacare.

The solution?

To get on the ladder of opportunity, America's young people need jobs. Creating disincentives to hire them diminishes the notion that "if you work hard and take responsibility, you can get ahead." The reality is that you can't get ahead if you can't find a job.

EconForecast
Carl's Jr CEO Explains Why Nobody Is Hiring Youth People 
Dian L. Chu