Thursday , February 25 2021
Home / Chris Dillow: Stumbling and Mumbling

Chris Dillow: Stumbling and Mumbling

Stumbling and Mumbling is a personal blog of Chris Dillow, an economist who spent eight years with one of Japan’s largest banks. He blogs about British politics and provides thoughtful analyses on the British economy and sports.

Why Labour should talk about productivity

If you buy a goldfish, you shouldn’t be disappointed that it doesn’t catch mice. It is therefore pointless to criticize Starmer’s speech yesterday for being insufficiently critical of capitalism. There is however one curious but important omission from his speech – one which is odd for a technocratic social democrat. I’m referring to the lack of any discussion of, or remedy for, our productivity problem. Just before the pandemic, real wages were actually lower than they were in 2007. The...

Read More »

It’s not the 90s any more

Sir Keir Starmer wants to party like it’s 1999. That seems to be his motive for seeking the advice of Peter Mandelson. There is, however, a big problem with this. It’s not the 1990s any more. There have been huge socio-economic changes since then, which require very different policy responses. One of these is that the economy is now stagnating. In the 20 years to May 1997 labour productivity grew by an average of 2.3 per cent. In the 12 years before the pandemic, however, it grew by only...

Read More »

Choosing charlatans

People choose to listen to charlatans even when it is against their interest to do so. That’s the message of some recent experiments. Aristotelis Boukouras and colleagues got subjects to take a multiple choice exam during which they could choose to take help from one of two computerized advisors. One of these was an expert, who gave the answers that a panel of economists would. The other gave the answers that had been most popular with other people who had taken the test. They found that...

Read More »

Labour’s patriotism problem

Patriotism might be the last refuge of the scoundrel but it is the first refuge for a politician wanting to avoid the reality of the need for radical change. That seem to be the message of the call by some “branding agency” that Labour should appear more patriotic. Which poses a question. How is it that Labour’s patriotism has come into doubt? For reasonable definitions, it is Labour that is the patriotic party more than the Tories. Let’s define patriotism as love of one’s country, and...

Read More »

Hedge fund humbugs

At the end of the Wizard of Oz the wizard is revealed not to be somebody of superhuman powers but “just a common man”, “a humbug”. Hedge fund managers are like that. Whereas their enemies, such as some of the posters on Wall Street Bets and indeed many on the left generally, sometimes pretend that they are evil geniuses the truth is much more mundane.  Data from Hedge Fund Research tell us this. They show that the average hedge fund has made 5.6% a year in the last five years. That might...

Read More »

On attitudes to risk

There’s a nice juxtaposition between two of the biggest stories of recent days: retail investors piling into Game Stop; and the reluctance of ethnic minorities to take Covid vaccines and the slowness of the European Medicines Agency to approve them. The thing is that these are all stories about extreme attitudes to risk. Small investors buying a dodgy company looks like risk-loving behaviour, whilst refusing to approve or take the vaccine looks like high risk aversion. What explains such...

Read More »

The death of economic policy

One of the great and under-appreciated changes of recent years has been the disappearance of serious economic debate from Westminster politics. For decades the big political divide was about economics: the causes and cures for the UK’s relative economic decline; the precise mix of state and private sector; what to do about industrial relations; monetarism vs Keynesianism; how to achieve macroeconomic stability; how to redefine social democracy in the 90s; and austerity after 2010. Today,...

Read More »

Endogenous policy

In a justly criticised piece in the FT, Morgan Stanley’s Ruchir Sharma says: My team also found a statistically significant link between periods of rising government debt and slow GDP growth. These studies cannot show causation, but the consistent link between growing deficits and weakening growth is unlikely to be coincidence.  True, it’s unlikely to be coincidence. What is likely, though, is that the causality runs from a weak economy to rising government debt. Slow growth...

Read More »

Character, context and work

It is fitting that Donald Trump should leave office in the same week that Phil Spector died, because both remind us that the quality of a man’s character is not the same as the quality of his work. As a human being, Mr Trump recalls the words of the great Fred Thursday: he’s worth nowt a pound, and shit’s tuppence. As a president, however, his performance wasn’t quite as disastrous as his character. He didn’t start any new wars (though he did continue old ones); broke the confines of...

Read More »

Debates, fake and genuine

There might not be any general purpose experts, but there are general purposes idiots. That’s one inference from Ipso’s ruling that one of Toby Young’s Covid denialism columns was “significantly misleading.” In fact, though, this episode tells us something more general about the nature of capitalist power. The thing is that Young is not an isolated fool. There is a small industry of Covid-deniers, as Neil O’Brien (one of the few Tory MPs brave enough to make a pubic display of...

Read More »