Debunking Economics - the podcast

Labour has romped to victory in the UK and they need to get cracking on all their election promises. One of those is the creation of Great British Energy. Keir Starmer points to the number of foreign interests owning energy generation in the UK. But, as Phil highlights this week, foreign companies are also heavily invested in energy distribution and retailing. The National Grid is suffering from a lack of investment. Doesn’t that also need to be brought into public hands. And what about all the energy retailers who dd nothing to the picture apart from extra marketing costs, confusing plans and the risk of collapse. Phil asks Steve whether, if you add all of this together, isn’t there a strong case to put the entire energy delivery chain into public hands, from creation to delivery. But that’s not what Keir Starmer is planning., even though its accepted wisdom in most parts of the world. Hosted on Acast. See acast.com/privacy for more information.

In the UK the proportion of the population aged over 65 has grown from 16 percent in 2000 to over 19% today. It’s a similar story throughout the western world as the population ages. That’s seen as an enormous liability for governments who will have to pay out pensions to their old folk. Hence the drive to get people to put money into private schemes. In the UK there’s over £2.2 trillion tied up in pension funds, more than AUD$3.4 trillion in Australia. So, what good is that money doing? It will be paid out sometime, but is it helping the economy in the meantime? Steve says it’ll doing a good job in driving up asset prices, but Phil suggests some of it is being invested in productive causes, like property development and private equity funding. The good and bad of private pensions on this week’s podcasts. Hosted on Acast. See acast.com/privacy for more information.

Carla Denyer and Adrian Ramsay recently launched the Greens Manifesto in the run up to the UK election. Phil and Steve discuss it on this week’s podcast and conclude the one thing that seems to have slipped down the priority list, is all the green stuff. They talk about fixing broken Britain, like every party, and correcting wealth inequality. They also promise that their ideas are fully costed, and can be paid for – for example, by a carbon tax. But they know they will never run government, so why pretend? Why not use their moment in the sun to return the debate to the fundamental issue of climate change. The future of the planet looks pretty sick when even the Greens push it down the agenda. Hosted on Acast. See acast.com/privacy for more information.

The podcast explores the impact of immigration on elections worldwide, especially the rise of right-wing movements and lack of viable solutions. It discusses the complexity of immigration's effects on job competition, public services, and wages. The hosts analyze recent global elections, electoral systems in various countries, and economic influences on migration patterns. The conversation also delves into austerity measures, wealth concentration driving immigration, and political exploitation of migrant workers.

Imagine if Keir Starmer, the UK Labour leader, had said, let’s not get too obsessed with government debt. If we go down that road we won‘t be able to provide the public services we need, our infrastructure will crumble further and we’ll simply see the country’s productivity erode further by the day. Unfortunately, he didn’t say that. Instead, he has pledged himself to the temple of fiscal responsibility, just like the Conservatives. That means, whichever party is in power the UK can expect something akin to the austerity that plagued the last 2010s. Phil asks Steve just ow much extra spending the government can get away with, though, when the Liz Truss experience suggests governments are answerable to the financial markets. Hosted on Acast. See acast.com/privacy for more information.

There’s been a debate brewing post-pandemic about how much inflation has been elevated by companies increasing their margins. The evidence of that is the increased profits, not just in the tech sector, which has helped increase the share prices of these companies, evidenced by record levels across the US share market indices. This week Steve Keen says its clear that is happening. Even before the pandemic, when inflation was lower, companies were still increasing their margins more than the level of wages, so workers were increasingly worse off. Hence the pre-pandemic stagnation. But companies need to improve their efficiency to fend off competitors and provided the rising returns that investors are demanding. So, isn’t the constant drive for higher margins simply an acceptable and necessary function of capitalism? Hosted on Acast. See acast.com/privacy for more information.

British Conservative politician Rishi Sunak discusses tackling productivity through infrastructure investment and education. Lack of funding hindered growth. Podcast critiques Tory party economics for failing to deliver on productivity strategies.

Steve is on hols this week, so Phil takes a look back at a couple of Debunking Economics podcasts from just before Donald Trump took office. In many ways he stuck to his promises. He tried to cut immigration, he introduced protectionism with hefty tariffs on China and he cut taxes. Now he’s promising more of the same, although Biden might have beaten him to it when it comes to heftier taxes on China’s EV exports. The first time around Steve suggested some of Trump’s thinking was right, although perhaps for the wrong reasons. Tax cuts to boost spending seems like a good idea, but he directed it at high income earners in the false belief that they would use this money to invest in jobs to grow the economy. Instead, tax receipts fell and the new jobs didn’t materialise.He is also hell bent on making America self-sufficient for energy. America’s domestic oil production has been steadily increasing since 2016. Can we expect this to accelerate, given he has repeatedly declared climate change is a hoax, and the likely funding support he is receiving from the fossil fuel industry? Hosted on Acast. See acast.com/privacy for more information.

Should we tax wealth more? The UK’s Shadow Chancellor Rachel Reevs wouldn’t be drawn o the question at an FT forum recently. She said the UK is already a high taxing country. But around the world the wealthy are getting wealthier. Is that a bad thing? Some would say that if they are making money creating growth for the economy, then why would you want to stop them. Jeff Bezos, for example, makes a small fraction of the wealth of the economic benefit he has created for broader society.  But does it make sense that income from wealth – primarily capital gains – is taxed less than I come from work? No, says Steve Keen. It should be the other way round. Listen in for a discussion about taxing wealth, that’s a little more nuanced than just saying tax the rich. Hosted on Acast. See acast.com/privacy for more information.

UK Labour leader Keir Starmer has said if he wins the next general election, within 5 years he will have re-nationalised Britain’s railways. Phil asks Steve whether it naturally follows that this will lead to an improvement in services and lower fares? Steve reckons you any need to look at government run services elsewhere in Europe to answer that question – but Britain’s trains weren’t so great even in the days of British Rail, when they were in government hands. This time there’s a chance one of the key areas of investment will remain in private hands, negating the advantage of public ownership.Railways are also an easy choice. Many franchise operators have fallen by the wayside, forcing the government to step in. Renationalisation was starting t happen by default. Ut what about water?  Nd, more significantly, what about the power industry. How can an industry that relies on making more money from customers operate in an environment where climate change is demanding we use less?Phil and Steve discuss how Labour’s plans only seem to scratch the surface.  Th direction of travel is right, but they don’t seem to be heading very far down the line. Hosted on Acast. See acast.com/privacy for more information.