Why it matters if the public has lost faith in government economic forecasts post-Brexit February 28, 2017 As chancellor Philip Hammond and US President Donald Trump begin work on their respective budgets, speculation is rife about changes to spending plans and taxes. Will there be significant infrastructure investment? How fast will government spending be cut, if at all? Underpinning all these decisions lies a modelling assumption with arguably much more significance than any [...]
The case for an infrastructure spending splurge rests on shaky foundations February 21, 2017 As the chancellor prepares his Budget and US President Donald Trump shapes his economic plan, commentators are urging both to engage in significant new spending on transport infrastructure. The conventional case was articulated well by Times columnist Oliver Kamm last week. Only the government can undertake the investment and planning necessary for complex projects such [...]
Want a more equal society? Be careful what you wish for February 14, 2017 Consider this thought experiment. You have been transported back to 1912 and have the power to change the course of history. You foresee a century ravaged by the effects of two catastrophic World Wars, with a resulting 100m casualties. You also know the effects of violent communist revolution and rule, with a death toll almost [...]
Government should let us make free choices, not subsidise our productivity February 7, 2017 Often the most misguided ideas in politics sound the most innocuous. If we were to hear a minister say that the government wanted to ensure that “every man or woman achieved their full potential”, it would be tempting to nod along unthinkingly. Who could disagree with such a positive-sounding goal? The problem is that things [...]
Fake news is troubling – but censorship is far worse January 31, 2017 We're in the grip of a fake news epidemic that is now poisoning our politics. That is the impression one would get from observing the tweets of the great and good. In the aftermath of Brexit in the UK and Donald Trump’s victory in the United States, it has been tempting for those who could [...]
Trump is wrong: Protectionism leads to misery, not prosperity January 24, 2017 Donald Trump tore up the broad consensus on international free trade with a miserable, protectionist inaugural speech on Friday. So explicit was his outlook that those of us who had become complacent about his economic impact – the “how bad can he be?” crowd – have had to sit up and reassess. In a pugnacious passage, [...]
Donald Trump’s business meddling: Crony capitalism to a Tea January 17, 2017 To understand why many large businesses and pro-market US policy wonks are anxious about a Donald Trump presidency, one has to understand the lessons of the Tea Party. No, not the recent grassroots phenomenon caricatured in the UK media. I’m talking about the Boston Tea Party of 1773 – in which American colonists, belonging to [...]
2016: A post-mortem of the year the UK’s “economic experts” failed December 20, 2016 The end of a calendar year and the start of a new one provides a chance for reflection. For the UK’s economic establishment, particularly forecasters, introspection is more appropriate. Complete with their New Keynesian models, most have been proven utterly wrong so far that voting for Brexit would lead to a short-term downturn. As the most [...]
Holdout Remainers’ “delay and pray” strategy is wishing the UK economic harm December 14, 2016 The strategy is perfectly clear. In fact, it has even been written down and elucidated on broadcast media for us. Jolyon Maugham QC (who is seeking to bring a case in the Irish courts questioning the revocability of triggering Article 50) and other hold-out Remainers are now looking to prevent Brexit by making Britain’s negotiating [...]
The Trump-Hammond-Keynesian consensus is wrong: Higher infrastructure spending does not equal greater growth November 14, 2016 To a man with a hammer, everything looks like a nail. Or when it comes to the UK economy: to an economist who believed in fiscal stimulus in 2011, every period of time looks like an opportunity for more government spending. In the aftermath of Donald Trump’s victory last week, even his most vociferous left-leaning economic critics [...]
