Monthly Archives: January 2015

If you don’t understand the problem you cannot find the cure

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Every so often, you run across someone who puts a new perspective on how badly the American economy is travelling. The caps to spending that came with the sequester have slowed the rot, but the anvil that has fallen on productive activity has not been lifted. The title here is Don’t Believe the Hype—We’re Not Even Close to Full Employment. Where he uses the word “hype”, I might have chosen “lies”, but at least he can explain plainly how far below potential the US economy is performing.

Before the recession, the Congressional Budget Office (CBO) projected we would have 5 million more jobs at the end of 2014 than we actually do. It also projected that the GDP would be more than 11 percent higher in 2014 than it is now. This translates into a difference in annual output of roughly $2 trillion or more than $6,000 per person. They predicted that wage and salary income would be roughly 20 percent higher than it is today. Many economists had similar projections.

Measured against where these people expected the economy to be at this point seven years ago, the economy is indeed awful. Millions of people who should have jobs don’t, and those who do have jobs are working for much lower wages than would be the case in a healthy economy.

Alas, having noted that the economy is barely alive, and that the fact of growth is hardly remarkable in a market economy, he lays the problem on the absence of anything on the demand side to drive the economy upwards. You do have to despair at someone who sees how bleak things are but attributes it to a lack of demand. Demand is subdued because value-adding supply is subdued. Value-adding supply is subdued because there is no direction in which the American economy might move that is not blocked by government regulation and waste. It is a mess all round, but as long as even those who are even willing to notice are unable to see what must be done, how does it end? As bleak as the economy is, reading this kind of thing makes me think there is a lot worse to come.

On the road to cultural euthanasia

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future we thought we would have

This is David Solway in the same observation mode that I find myself in as well: Watching the World Fall Apart. He writes what I think. The following para is a very grim start, but if you read the whole article, you can find more of what we both think about the future. It is a dark age, which can no longer be avoided, but it is hard to find anyone with a wide public audience to sound the alarm.

The name of the game today is denial of the undeniable all across the spectrum of the major issues that afflict us. Denial that temperatures have been stable for the last eighteen years and that the diminution of sunspot activity heralds an age of global cooling rather than warming, as John Casey, president of the Space and Science Research Corporation, has decisively established in his recently published Dark Winter. Denial that Israel is the only democratic, morally legitimate state in the Middle East and that the Palestinian narrative of historical and cadastral residence is demonstrably false. Denial that Islam is a totalitarian entity and a religion of war that has set its sights on the ruination of western societies; and denial of the fact that Judeo-Hellenic-Christian civilization, for all its flaws, marks the high point of human political, social, cultural and scientific development.

The political creed of our time is progressive internationalism: collectivist central direction in a world of open borders. It won’t last long, but in the meantime our generation gets to be entertained by watching what has been built fall apart. The next generation will get to live amongst the ruins.

Mark Steyn and Judenrein

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The news is grim and a paralysis sets in. Cairo may yet become safer than Cannes. This is Mark Steyn on A Judenrein Europe:

Had they not died as part of the Charlie Hebdo killers’ final act, I wonder how much publicity the murders of Philippe Braham, Yohan Cohen, Yoav Hattab, and François-Michel Saada at a kosher grocery store would have attracted. An Islamic fanatic killed another quartet of Jews at the Jewish Museum in Brussels last spring, and it was a big story for a couple of days, and then faded away. Over the last decade, the Continent seems to have developed a certain psychological ease with the routine murder of Jews. What remains of Jewish communal life in Europe now takes place behind reinforced doors and barbed wire, and the actual extinction of an entire identity group’s presence is discussed as calmly as the long-range weather. Forty-five per cent of British Jews say Jews have no future in Britain, and 58 per cent says Jews have no future in Europe.

European leaders like M Hollande insist they’re able to protect the Jewish community – or at least hold the remorseless picking-off of their members to manageable levels. The leader of the continent’s biggest Jewish group is disinclined to take such assurances:

In a letter sent to interior ministries around Europe and obtained by Newsweek, Rabbi Menachem Margolin, director general of the Rabbinical Centre of Europe (RCE) and the European Jewish Association (EJA) – the largest federation of Jewish organizations and communities in Europe – writes: “We hereby ask that gun licensing laws are reviewed with immediate effect to allow designated people in the Jewish communities and institutions to own weapons for the essential protection of their communities, as well as receiving the necessary training to protect their members from potential terror attacks.”

The Jews are always the canaries in the coal mine, so they won’t be the last in Europe to discover that, when it matters, the state isn’t there for you. There is a memorable moment in Michel Houellebecq’s new novel Soumission, released the day of the Charlie Hebdo slaughter, in which the protagonist’s Jewish girlfriend Myriam decides it’s time to get the hell out of France and flee to Israel. And François says bleakly, “There is no Israel for me.”

Not many Frenchmen yet understand that. So they do not see the lesson for them in the dizzying and total de-normalization of Jewish life on the Continent in the 21st century. Here’s what I wrote on the subject just under three years ago:

If the flow of information is really controlled by Jews, as the Reverend Jeremiah Wright assured his students at the Chicago Theological Seminary a year or two back, you’d think they’d be a little better at making their media minions aware of one of the bleakest stories of the early 21st century: the extinguishing of what’s left of Jewish life in Europe. It would seem to me that the first reaction, upon hearing of a Jewish school shooting, would be to put it in the context of the other targeted schools, synagogues, community centers, and cemeteries. And yet liberal American Jews seem barely aware of this grim roll call. Even if you put to one side the public school in Denmark that says it can no longer take Jewish children because of the security situation, and the five children of the chief rabbi of Amsterdam who’ve decided to emigrate, and the Swedish Jews fleeing the most famously tolerant nation in Europe because of its pervasive anti-Semitism; even if you put all that to the side and consider only the situation in France… No, wait, forget the Villiers-le-Bel schoolgirl brutally beaten by a gang jeering, “Jews must die”; and the Paris disc-jockey who had his throat slit, his eyes gouged out, and his face ripped off by a neighbor who crowed, “I have killed my Jew”; and the young Frenchman tortured to death over three weeks, while his family listened via phone to his howls of agony as his captors chanted from the Koran… No, put all that to one side, too, and consider only the city of Toulouse. In recent years, in this one city, a synagogue has been firebombed, another set alight when two burning cars were driven into it, a third burgled and “Dirty Jews” scrawled on the ark housing the Torah, a kosher butcher’s strafed with gunfire, a Jewish sports association attacked with Molotov cocktails…

Here’s Toulouse rabbi Jonathan Guez speaking to the Jewish news agency JTA in 2009: “Guez said Jews would now be ‘more discreet’ about displaying their religion publicly and careful about avoiding troubled neighborhoods. … The synagogue will be heavily secured with cameras and patrol units for the first time.”

This is what it means to be a Jew living in one of the most beautiful parts of France in the 21st century.

Well, you say, why are those Jewish kids going to a Jewish school? Why don’t they go to the regular French school like normal French kids? Because, as the education ministry’s admirably straightforward 2004 Obin Report explained, “En France les enfants juifs — et ils sont les seuls dans ce cas — ne peuvent plus de nos jours être scolarisés dans n’importe quel établissement”: “In France, Jewish children, uniquely, cannot nowadays be provided with an education at any institution.” At some schools, they’re separated from the rest of the class. At others, only the principal is informed of their Jewishness, and he assures parents he will be discreet and vigilant. But, as the report’s authors note, “le patronyme des élèves ne le permet pas toujours”: “The pupil’s surname does not always allow” for such “discretion.”

Metropolitan Toulouse has a population of 900,000 or so, about the size of Jacksonville, Fla. Imagine if, in Jacksonville, synagogues were firebombed, and kosher butchers shot up, and Jewish schoolkids gunned down, and, in the dull, placid months between the spasms of front-page attention, the cold, ongoing Jew-hate were so routine that it was no longer safe for a Jew to walk his own city with any identifying mark of his faith, or for his child to reveal his Jewishness at school.

In Toulouse, much of the Jewish community arrived after the religio-ethnic cleansing of French North Africa in the Sixties and Seventies. What they fled has followed them to the Midi-Pyrénées, and now it’s time to move on again — as it is elsewhere in Europe. “Jews with a conscience should leave Holland, where they and their children have no future, leave for the U.S. or Israel,” advised Frits Bolkestein, the former EU commissioner and head of the Dutch Liberal party. “Anti-Semitism will continue to exist, because the Moroccan and Turkish youngsters don’t care about efforts for reconciliation.”

Thus, posterity’s jest. Pre-war Europeans would never have entertained for a moment the construction of mosques from Malmö to Marseilles. But post-war Holocaust guilt, and the revulsion against nationalism and the embrace of multiculturalism and mass immigration, enabled the Islamization of Europe. The principal beneficiaries of the Continent’s penance for the great moral stain of the 20th century turned out to be the Muslims — with the Jews on the receiving end, yet again.

And now Glenn Reynolds adds this: France’s demographic bad luck, in which he writes:

Now European nations are facing population deficits, and they’ve replaced those missing Jews with Muslim immigrants who — unlike the Jews — are for the most part far less educated, don’t really consider themselves part of European society, and have no particularly strong desire to integrate into it, which bodes poorly. As Eugene Volokh — himself an immigrant to the United States — observes, in a democracy, when you let in immigrants, you are letting in your future rulers.

Harvard Economics Final Exam 1953

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This was provided by Ric Holt at the Societies for the History of Economics discussion thread. I suppose I should just preface this by noting how thoroughly modern it is (Samuelson plus Schumpeter), except for the historical knowledge that is presumed in the way the questions are framed. How many economists today would have a clue about David Ricardo’s theory of profit? Anyway, it’s a long piece so I will leave off. To better understand the nature of the exam, Ric, in discussing the context, wrote the following:

This was the general written examination for undergraduate students. The exam was for three hours, broken down into two areas. At the option of the examiner, an oral examination could be given, “if the mark of the student is in doubt.” Requirements for the economics major in the early 1950s included: 1) the completion of a certain number of courses in economics, government and history; 2) To choose a concentration in a special field of economics and take a number of courses in that area. There were five major “special fields” the student could choose from: a) Economic Theory, b) Economic History, c) Money and Finance, d) Market Organization and Control and e) Labor Economics and Social Reform; 3) To submit a plan of study for general courses, one’s special area of concentration and to participate in the tutorial program; 4) pass the general written examination in economics at the end of the senior year. For Honors besides answering more questions on the general exam the student had to hand in a thesis. What’s interesting with the questions is that they would be considered to be heterodox today, and probably could only be passed in a heterodox economics department, but at that time they were considered to be very mainstream questions. This supports my view that the mainstream is constantly changing — for the better that’s up for interpretation.

Here is the exam itself.

DEPARTMENT OF ECONOMICS
GENERAL EXAMINATION

(Three hours)

Please note on the front cover of your bluebook the number of each question upon which you write, in the order followed in your book, and HONORS or NON-HONORS.

PART I
(One hour)
Economic Analysis

HONORS candidates answer ONE question taken from questions 1- 4.

l. “Depressions are caused by the exhaustion of investment opportunities and the rigidity of saving.” Discuss.

2. “Keynes’ theory may have undermined the neo-classical theory of the price level but it has left intact the neo-classical theory of relative prices.” Discuss.

3. “The basic criteria of anti-trust policy with respect to product markets are the same whatever the competitive structure of labor markets may be.” Discuss.

4. “Despite all the changes that have taken place in economic theory the profit motive continues to occupy the central role which it had in Ricardo’s theory.” Discuss the role of profit in (a) Ricardo, (b) neo-classical theory, (c) Schumpeter’s theory.

NON-HONORS candidates answer ONE question taken from questions 5-8.

5. “Future historians may well write the epitaph of our civilization as follows:

From freedom and science came rapid growth and change.
From rapid growth and change came economic instability.
From instability came demands which ended growth and change.
Ending growth and change ended science and freedom.”

Discuss this alleged conflict between economic growth and measures to secure economic stability. In your answer refer to the views of some of the great economists, for example, Schumpeter and Keynes, on this problem.

6. In explaining business cycles most economists place crucial emphasis on fluctuations in investment or capital goods.

Discuss the determinants of investment and the manner by which these factors operate upon investment to produce fluctuations in National Income.

7. The basic economic questions any society must somehow answer are: ( 1) What consumer and capital commodities shall be produced and in what quantities? (2) How shall the goods be produced, i.e., by whom and with what resources? (3) For whom are goods to be produced, i.e., how is the national product to be distributed among individuals? Outline the way in which these questions are answered in a perfectly competitive, free enterprise economy.

8. In addition to wages, interest, and rent, economists often talk about a fourth category of income: profit. What do economists mean by this return? What are the causes of profit and its function in a capitalistic system?

PART II
(Two hours)

All students are required to choose TWO of the four fields in Part II of this examination and to answer two questions in each selected field. Thus a total of four questions are to be answered in Part II with an allowance of a half hour per question.

A. Economic History

9. “The very increases in the possibilities of unrestrained competition of the past seventy-five years,through developments in transport, technology, the size and organization of firms, etc. – may in themselves partly explain some of the restraints on price competition that have appeared in this century.” Discuss both the developments and their alleged effects.

10. “In the past 150 years the United States economy has radically altered its relationship to the world economy and at intervals has been a seriously disturbing factor.” Discuss, including references to periods in the 19th as well as the 20th century.

11. “In spite of the waste, apparent exploitation, and graft, the railroads more than paid for themselves in terms of American economic growth.” Discuss.

12. Why did Hamilton favor a central banking system? What was the subsequent history in the 19th century of the issue that he poses? How satisfactory, in terms of the needs of an expanding economy, were the alternatives to a centralized banking system that existed
prior to 1912.

B. Money and Finance

13. What are the relations between a country’s balance of payments and its internal monetary and fiscal policies?

14. From a fiscal policy standpoint, what do you consider would be the best budgetary policy for the federal government to adopt in order to combat a growing deflationary trend?

Indicate the relative advantages and disadvantages involved in the policy you propose.

Indicate practical as well as theoretical considerations.

15. “Classical economists tended to view the amount of taxes paid by the private sector of the economy as measuring the amount of ‘burden’ which the government imposed on the private sector.” Do you agree with this view? If you do, what is the justification for your position? If you do not, what are some possible alternative ways of measuring the ” burden” of the government on the economy, and for what purposes can they be used?

16. “Older business cycle theories emphasized fluctuations in prices while modern ones emphasize fluctuations in income.” What is the theoretical and empirical justification for this change in emphasis?

17. What role did the Federal Reserve System play in financing the Second World War?

Discuss the impact of this experience upon money and banking in the United States.

C. Market Organization

18. The spread between prices paid farmers for products used as food and prices paid for these foods at retail was 55% of the consumer’s dollar spent for food in 1910-14. It was 54% in 1952 . Account for the failure of this spread to increase in spite of the great increase in processing, services, and transportation sold with the food.

19. Although price discrimination generally is regarded as being contrary to the public interest, it is expressly sanctioned in railroad rate-setting under another name: the “value-of service” principle.What cost and market characteristic of railroads might lead you to justify the use of discriminatory pricing in their case?

20. Bituminous coal is a “sick” industry. What are the causes of this “sickness”? What attempts have been made to impose “healthier” conditions on the industry?

21. Various techniques are used by oligopolistic industries in attaining stable and desirable price and production conditions. Explain at least three ( 3) of these techniques and discuss the possible reasons for using any one over another.

D. Labor Economics

22. What role did the courts play in labor-management relations in the latter part of the nineteenth century? How far was this situation changed subsequent to 1930?

23. What is collective bargaining? Is it a process of communication and education leading to agreement based upon mutually accepted and recognized goals and standards, or is it a temporary truce based upon balance of power with conflicting basic objectives?

24. Has organized labor “distorted” the wage structure and wage level of the country at the expense of the unorganized or the weakly organized and at the expense of the recipients of other functional shares?

25. How would you handle the problem of national emergency disputes?

If you are interested in finding out more, you can contact Ric at rholt@sou.edu

1500

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It’s actually 1515 but who’s counting? This began mostly just for me to say things away from anyone else so that I at least would have a record. And as a way to discuss things with my son (Hi, Joshi). It’s now a bit beyond that, and there are others who I am pleased to see wander by. But every so often, I am linked to by someone at the heavy-duty end of right-side blogging and the number of hits explodes. It is astonishing on those days, but even then I am reminded of two things. How little influence most of us have, but more importantly, how little influence any of us have. We are, almost entirely, just talking amongst ourselves. But that is why each of us do it. We are so clearly right about most of the issues that matter, that you need the company of others like ourselves just to keep from going mad.

But the other side of this blog no longer being just between myself and a few friends is that there are some things I regrettably just can no longer say. The debate over free speech misses the most important issue, which is such a devastating problem that it cannot even be stated. One day I might write about it. I will now only note that there are more ways than putting someone in a gulag to discipline what others write and say. And I don’t mean threatening to chop their heads off, which is hardly a threat to any of us. You really have to be Charlie Hebdo to get into that league. But there are other things for which the costs are so massive relative to any possible good one might do, that it just isn’t done.

There is an interesting argument that I think belongs to Leo Strauss, in which he says many of the great philosophers cannot be read straight, but must be seen to have written in a kind of secret messaging code, because to say exactly what they meant would have landed them in serious trouble. I am not amongst the great philosophers, but I know just the feeling. There are some things I don’t say, and others that are said in a way that is intended to diminish the dangers such thoughts must cause. No one is infinitely brave. We all wish to see another day. But we know the kind of world we are in and hope to shape things for the better. And so we write, but on some things are not entirely straightforward. But this much I can say. Everything I have written represents what I personally believe.

And with that, I will leave off.

Not as wild as you might think

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Some background on Cheryl Strayed, the woman who wrote the book that has been turned into the film, Wild, starring Reece Witherspoon:

Strayed married Marco Littig on August 20, 1988. They were married for six years. In 1999, Strayed married filmmaker Brian Lindstrom. They have two children and live in Portland, Oregon. Her daughter, Bobbi Strayed Lindstrom, played the younger version of Strayed in the film adaptation of Wild. A long-time feminist activist, Strayed served on the first board of directors for Vida: Women in Literary Arts.

Conventional as her life may seem, I take it then that the film is intended to portray a feminist icon, although I must confess to having been quite shocked by the way the story went. I am a first-stage feminist going back to the 1960s. The moment the word “zipless” appeared, I knew exactly where I was. Indeed, I am a nineteenth century feminist, in that probably the greatest influence on my thinking has come through John Stuart Mill and his The Subjection of Women.

Still, what astonished me about the story was the role that men played in saving her at each of the main turning points in her life, at least as portrayed in the film. I won’t say where, but you can watch for it. The final moments, when a group of chaps tell her the trail name others have given her – something like Queen of the PCT (that is, Queen of the Pacific Crest Trail where she was hiking) – was due to the way everyone had bent over backwards to help her out as if she were royalty, made me think this was supposed to be a parody of the self-contained, independent woman. But it’s not.

One final point. Her mother dies of some unspecified form of cancer, but in the actual account she dies of lung cancer, and had presumably been a smoker. Not mentioned, nor do I recall seeing her mother with a cigarette. In Hollywood, positive characters are not permitted to have negative characteristics.

One of the great scandals in the history of science

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That the promoters of global warming are prone to exaggerate if not actually lie has made me sceptical of any of the recent nonsense that this is the warmest year ever. It is, unfortunately, a full-time job to keep an eye on the weather-gauge, and with Andrew Bolt on leave, who’s around to do it. Luckily, John Hinderaker at Powerline is onto it. His latest article is Was 2014 Really the Warmest Year Ever? I’ll give you a hint: it wasn’t. First he goes back over the long series back a few thousand years, which makes the present one of the coolest periods in the planet’s history. Then he turns to the recent record:

Moreover, contrary to the activists’ claims, 2014 wasn’t even the warmest recent year. The “warmest ever” designation came from NASA and NOAA, which are run by global warming activists. They have distorted surface temperature records by surreptitiously “adjusting” historical records to make the past (e.g., the 1930s) look cooler and the present warmer. This is one of the great scandals in the history of science, which we have written about repeatedly. Since the activists won’t say what changes they have made and why they have made them, their records must be considered hopelessly corrupt. Beyond that, they aren’t even adjusted for the urban heat island effect, which obviously exists. Most temperature recording stations are in urban areas, and they have gotten warmer in recent decades as a result of economic development and population growth, not carbon dioxide.

The only global temperature records that are fully transparent are satellite records in the lower atmosphere. These go back only to 1979. They show no warming during the last 18 years. The satellite records, interpreted by two different groups, find 2014 to be either the third warmest or the sixth warmest since 1979. But the real point is that the differences are infinitesimal. The uncorrupted atmospheric data show that no significant warming is going on.

The corruption, driven as it is by an anti-capitalist, anti-free-market band of vandals – who nevertheless are in large part in it for the grant money it allows them to collect – is merely one of the ways we are being ruined, but as important as any of the rest. The left used to say that capitalism would make the workers poor. Now that we have seen that capitalism has made the workers extraordinarily well off, the left are determined to make sure we all end up poor, and they will certainly succeed if we let them.

MORE REALITY TO ADD TO THE REST: This is from a climate blog linked to at Drudge:

Climate Depot’s Marc Morano: ‘Claiming 2014 is the ‘hottest year’ on record based on hundredths of a degree temperature difference is a fancy way of saying the global warming ‘pause’ is continuing.’

Astrophysicist Dr. Dr David Whitehouse: ‘The NASA press release is highly misleading…talk of a record is scientifically and statistically meaningless.’

Climatologist Dr. Roy Spencer: ‘Why 2014 Won’t Be the Warmest Year on Record’ (based on surface data)– ‘We are arguing over the significance of hundredths of a degree’

Climatologist Dr. Pat Michaels debunks 2014 ‘hottest year’ claim: ‘Is 58.46° then distinguishable from 58.45°? In a word, ‘NO.’

No Record Temperatures According To Satellites

Physicist Dr. Lubos Motl: ‘Please laugh out loud when someone will be telling you that it was the warmest year’

Climatologist Dr. Roger Pielke Sr.: ‘We have found a significant warm bias. Thus, the reported global average surface temperature anomaly is also too warm.’

Climatologist Dr. Judith Curry: ‘With 2014 essentially tied with 2005 and 2010 for hottest year, this implies that there has been essentially no trend in warming over the past decade.’

Unbroken – an absolute triumph

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Don’t watch the video until you’ve seen the movie. But then you should watch it to see how true to his story the film really is. Or, you can watch the video anyway, and then decide for yourself. But I went just because we wanted to see a movie tonight and we’d seen everything else. I went with no expectations – actually I was somewhat reluctant – and it turned out to be a film I would not have wanted to miss had I known what it was about.

As for the film, I won’t tell you much, but I will say this. Not nominating Angelina Jolie for best direction is a scandal, and is only because this is one of the most conservative movies you are ever likely to see. It also has one of the best war sequences I have also ever seen, absolutely harrowing. You are in the plane, and you are asking yourself (a) how will they survive and (b) how does anyone ever go into battle in the first place, never mind get back in the plane the next day, and then the day after that?

My last point, which is not a spoiler. The left will not tolerate a positive story about religion, where a believer in God is treated as a normal human being with genuine virtues that come from that belief. You don’t find it in films very often, but you do find it here. “Based on a true story” comes with all the usual caveats. But it is also an amazing film, and if you want some idea of how true or not it is, you can watch the video, either now or when you come back.

Rotten Tomatoes: critics 50% / audience 73%
IMDb: 7.2.

Finally note this: Joel Coen (screenplay), Ethan Coen (screenplay). As far as storylines go, it doesn’t get better than that.

Maybe this austerity stuff works after all

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There is only so long you can avoid reality, although Keynesians can go on for a very very long time. This is about the latest observations on the UK economy by Christine Lagarde, the head of the IMF.

The head of the world’s economic watchdog delivered a stunning endorsement of the coalition’s record last night – saying Britain was setting an example to the rest of the world.

Christine Lagarde, director of the International Monetary Fund, said in much of the world growth was ‘too low, too fragile’.

But completing an extraordinary volte face on the Government’s austerity measures – which as recently as 2013 were being attacked by the IMP as ‘playing with fire’ – she called on other countries to look to the UK’s example.

Look all you like, but how would you explain it? Of course, with the modern textbook version of economic theory, this is all in the realm of impossible, just as they forecast in 2013. The story continues:

‘Certainly from a global perspective this is exactly the sort of result that we would like to see: more growth, less unemployment, a growth that is more inclusive, that is better shared, and a growth that is also sustainable and more balanced.’

Miss Lagarde’s endorsement will be greeted with delight by senior Conservatives and Liberal Democrats, who were angered by previous IMF criticism of their policies.

In 2013, the organisation warned that persevering with strict austerity policies risked denting Britain’s economic prospects.

Olivier Blanchard, chief economist at the IMF, said George Osborne was ‘playing with fire’ by pressing ahead with austerity, insisting: ‘In the face of weak demand it is really time to reconsider an adjustment to the fiscal consolidation plans.’

What would Blanchard know, anyway? Meanwhile, for the rest of the world’s economies, here is Ms Lagarde once again:

Strong headwinds from weak investment, substantial debt burdens and high unemployment are preventing a pickup in global economic growth despite a strengthening U.S. recovery and tumbling oil prices, International Monetary Fund Managing Director Christine Lagarde said.

A healthier U.S. and cheaper energy “won’t suffice to actually accelerate the growth or the potential for growth in the rest of the world,” the head of the emergency lender to nations said in a speech Thursday at the Council on Foreign Relations in Washington.

“If the global economy is weak, on its knees, it’s not going to help,” said Ms. Lagarde in remarks previewing the IMF’s latest forecasts for the global economy due out on Monday.

The eurozone, at risk of a third recession in six years, continues to struggle with the fallout from the 2008 financial crisis. Japan is also mired in low inflation, high debt and anemic growth. And output in many major emerging markets—economies that have provided most of the gas for global growth over the last decade—is slowing faster than expected.

However, there is the US, which has been suffering under sequestration and restrained public spending since 2013:

Nonetheless, the IMF is upgrading its forecast for economic output in the U.S., one of the few advanced economies bucking the weak global-growth trend. But the world’s biggest economy and a shot in the arm from cheaper gasoline aren’t cures for deep-seated weakness elsewhere, Ms. Lagarde said.

If you think in terms of aggregate demand, my only message to you is that you will never understand how an economy works. You certainly could not explain the relative success of the UK and US.