Coppola Comment

At the Battle of Ideas last Saturday, a panel on "populism" spent an hour and a half discussing everything except economics. Sherelle Jacobs of the Telegraph called for the Tory party to replace what she called a "twisted morality of sacrifice and dependency" with the "Judaeo-Christian" values of thrift and personal responsibility. And when a brave audience member asked "shouldn't we be discussing economics?" Tom Slater of Spiked brushed him off and carried on talking about cultural issues. Economics be damned, populism is all about morality and culture.  But important though morality and culture are, it is economics that really matters. Rudiger Dornbusch's work on macroeconomic populism shows that populism eventually fails because the economics don't work. And when it does, the people who suffer most are those the populists intended to help.  In this study (pdf), Dornbusch and Sebastian Edwards define macroeconomic populism thus: Ma

Earlier today, the Governor of the Bank of England, Andrew Bailey, gave a speech at the Resolution Foundation outlining the nature of the Covid-19 crisis and the challenge that it poses for monetary policy. But as his speech progressed, it became clear that the Bank faces a much larger challenge. Covid-19 hit the UK economy at the end of a dismal decade. Returning to "where we were" before the pandemic won't be good enough.  Just how dismal the 2010s were is evident in this chart from Andrew Sentance:  Even before Covid-19 struck, average GDP growth was well below its historical average and heading downwards. The 2010s were, to put it bluntly, a decade of stagnation.  The 2000s were slightly worse, but that was because they included the deep recession after the financial crisis, during which the economy shrank by 6%. For the 2010s, there was no such excuse.  So Covid-19 hit an already under-performing economy. As a result, Sentance's forecast for the 2020s is frankly

Remember Friday Night Is Downgrade Night , from the Eurozone crisis? It's back. Last night, Fitch Ratings downgraded the UK to AA-, negative outlook. Here's their rationale : The downgrade reflects a significant weakening of the UK's public finances caused by the impact of the COVID-19 outbreak and a fiscal loosening stance that was instigated before the scale of the crisis became apparent. The downgrade also reflects the deep near-term damage to the UK economy caused by the coronavirus outbreak and the lingering uncertainty regarding the post-Brexit UK-EU trade relationship. The commensurate and necessary policy response to contain the COVID-19 outbreak will result in a sharp rise in general government deficit and debt ratios, leading to an acceleration in the deterioration of public finance metrics over the medium term. The Negative Outlook reflects our view that reversing the deterioration in the fiscal metrics beyond 2020 will not be a political priority for th

It's been pretty quiet in Lafferland since the Brexit referendum. All the talk has been of trade and sovereignty, not deregulation and tax cuts. But there's nothing quite like a Tory leadership election to bring supply-siders out of hibernation. So here is Sajid Javid singing an old sweet song to attract the votes of Tory party members: Cutting tax rates could bring in billions of extra revenue, which would mean: More nurses 👩‍⚕️👨‍⚕️ More teachers 👩‍🏫👨‍🏫 More police 👮‍♂️👮‍♀️ "I would cut [top rate] if it brings in more revenue and gives us better public services" - @sajidjavid #TeamSaj pic.twitter.com/MxVUVcI5q2 — TeamSaj (@TeamSaj) June 2, 2019 Cutting taxes for the rich in order to generate more public revenue. The Laffer curve is back. Not that it has been absent for long, really. Seven years ago, to much applause, George Osborne cut the top rate of tax from 50% to 45%. When the cut took effect there was a large increase in tax take.

On Saturday, I watched Ken Loach's 2016 film "I, Daniel Blake" for the first time. The following evening, I watched the second episode in the BBC's adaptation of Victor Hugo's 19th century novel "Les Misérables". And here is my unpopular opinion. I think that as a parable of the U.K. today, particularly the difficulties experienced by single parents, "Les Misérables" beats "I, Daniel Blake" hands down. Why? Because Fantine's story is closer to the experience of single mothers today. True, we don't (yet) have a market for hair and teeth, and women today are much less likely to die of undiagnosed tuberculosis than they were in the 19th century. But the exorbitant cost of child care, and the fragility of employment, that were so disastrous for Fantine - these are all too often the reality for single parents today. Sadly, "I, Daniel Blake" highlighted neither. Contrary to popular opinion, the vast majority of sin

I haven't written a post for a while. I wanted everyone to read the post I wrote in November about my niece Annie's suicide . Writing new posts drops older ones down the list, and I didn't want her memorial post to disappear off the radar until after her funeral. Annie's funeral was last Tuesday, 18th December, the day after her 29th birthday. Now, it is time to write again. But not yet to move on from the issues that Annie's death highlights. This post is about the link between mental ill health and homelessness. Particularly, "street" homelessness, or in common parlance, "sleeping rough". Homelessness and rough sleeping have risen hugely in recent years. Government statistics show that between 2010-15, estimates of the number of those sleeping rough rose by 102%. This is partly due to changes in methodology to correct suspected under-reporting of the problem. But the Government admits that there is a real and considerable increase in th