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Zoom Meetup – Bill Mitchell: The case for full employment and the end of austerity economics
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Unemployment is a political choice, says economist Bill Mitchell, and Covid-19 presents us with the opportunity to eliminate it. In this Zoom meetup, Professor Mitchell, a long time proponent of a job guarantee, shows what went wrong when economists began preaching austerity and why a state guarantee of full employment is central to fixing it.
About the Speaker
Bill Mitchell is Professor of Economics and Director, Centre of Full Employment and Equity (CofFEE) at the University of Newcastle. His seminal work on job guarantee schemes has attracted international attention and application. Bill is one of the founders of Modern Monetary Theory (MMT) which is causing a rethink of many of economics’ core principles. His recent books include Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World and Macroeconomics.
Organised by the Region 1 (Auckland/Northland) economic policy group and the NZ Fabian Society.
You can register here.
Dr Geoff Bertram - How to pay for Covid-19
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Over 350 people registered for this webinar with Dr Geoff Bertram on Saturday May 23. He started by debunking the dominant austerity narrative which says that government spending resulting in deficits must mean either borrowing or "money-printing", which respectively either is a "burden on future generations", or inevitably leads to hyperinflation. That leads to a confusing argument that it is a strong Crown balance sheet with relatively low debt that provides fiscal space to increase spending. But it is Covid, not low Crown debt, that has opened up the fiscal space.
The mistake is to treat core Government like a household, that can spend only if it has cash in hand or a loan available. A sovereign currency-issuing Government is not like a household - its spending does not have to be financed in advance, and in the current downturn money creation is not inflationary. The New Zealand Government has monetary sovereignty - it issues its own fiat currency and collects taxes in that currency, it has a floating exchange rate, and no significant foreign-currency denominated debt. One constraint is the economy's dependence on oil priced in US dollars, but the current price is low and there is an over-supply.
He discussed money creation and debt, concluding that the 'burden' is about distributional issues and those issues are important - ongoing transfers from taxpayers to rentiers may not be in the long-run interest of society. Faced with Covid, fiscal space has opened up, and what is now needed is injection of demand via direct government purchases and transfers of cash to private households and firms to enable them to purchase goods and services.
In future there might be inflationary pressure if the economy is pushed to genuine full employment (where it has not been for the past decade). He described five possible policy responses looking ahead to 2024. Treasury projections indicate a planned return to austerity. Bertram contends new Zealand needs to sustain a larger state sector which in his view means taxes on wealth, carbon and higher incomes to open up fiscal space. Preparation for those future tax changes needs to be done well before 2024.
This is but a summary of a fascinating webinar. You can watch the video of the webinar on YouTube here. Slides are here, and podcast is here.
Zoom Meetup – Fixing unemployment: Social insurance and a job guarantee
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10am–noon, Saturday 20 June 2020
Is it time to completely rethink how we deal with unemployment? We face a tsunami of job losses not seen in generations. The damage could be immense, especially if the devastation of people, regions and entire communities becomes entrenched. Many still haven’t recovered from the 1980s restructuring.
Two ideas — social insurance and a job guarantee — are gaining prominence as ways that could fundamentally change how we deal with the problem. One is intended to provide income protection for those who lose employment, the other aims for something bolder: the elimination of unemployment.
In this Zoom meetup, Dr Michael Fletcher of Victoria University of Wellington and Dr Bill Cochrane of the University of Waikato join us to explain and examine our options for change in these extraordinary times.
Speakers
Dr Michael Fletcher is a Senior Research Fellow at the Institute for Governance and Policy Studies at Victoria University of Wellington. He holds a PhD in Economics from AUT and has a background as an academic and policy adviser working mainly in labour market and social welfare research and policy.
Dr Bill Cochrane is Senior Lecturer in the School of Social Sciences, University of Waikato. He holds a PhD in Labour Studies from Waikato and has extensive experience as an academic and commissioned researcher. His current research is focused on local labour markets and low wage, low skill employment.
By failing to protect our water we have failed everything New Zealanders value
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We said we would try to bring content to the attention of the Fabians network through the lockdown and are working on several possibilities. Meanwhile, this is an article that caught my eye and in correspondence with the author we have come up with this package looking at the opportunity now presented to address the water quality problem in New Zealand.
The original article was this one by Tom Kay, the Freshwater Advocate at Forest & Bird, in The Guardian, 'By failing to protect our water we have failed everything New Zealanders value'.
Tom noted that Forest & Bird has continued its work to protect nature during the lockdown. You can find an update on what Tom has been working on during the lockdown here.
Tom also made a brief video for us answering three questions on a) the nature of his own research on freshwater, b) what policies and strategies we need so that we protect freshwater purity and the values we sustain as New Zealanders, and c) what we can do now at our local level for freshwater. The video link is here.
In the video, Tom mentions that F&B has come up with a raft of ideas for a sustainable economic recovery post COVID-19. Those ideas can be found here.
Finally, to support Forest & Bird’s work we have provided a link to their donations page. Please be generous in supporting their important work.
