Suggested reading

Why DSGE models have a conservative bias

Why political reforms are so hard in the wake of crises

Your right arm for a publication in the AER? (ht: Antonio Mele)

Book review: Treasure Islands by Nicholas Shaxson

Treasure Islands is a book about tax havens by a journalist who’s written for the FT and The Economist. It claims that tax havens and the whole offshore finance system is the reason behind all of the world’s ills including rising inequalities (the rich don’t pay taxes), the financial crisis, and poverty in Africa (oil, mineral and foreign aid money is welcomed with open arms in Geneva and the City of London which can hide it using its web of offshore satellites (Jersey, Cayman Islands, Bahamas etc…)). While the book can sometimes be vague and repetitive, it is full of interesting anecdotes, historical facts, and is a fresh reminder that something is rotten with the world economy. We no longer live in democracies but rather in plutocracies where money determines policies. This explains why offshore finance is “legal” and rich people pay no taxes while governments try to suck as much as possible out of the average joe. Tackling tax havens should be a priority, and it’s a much better idea than cutting pensions to reduce the debt burden of Greece. According to the book, 99% of deposits from Greece in Switzerland are undeclared to tax authorities.

Stand Up Economist

Many of our beloved colleagues are currently going through the hideous job market process......if all else fails (which I'm sure it won't!!!!!!!!!!!!), they could follow in the footsteps of this guy and become a stand up comedian.

I'm working my way through the vids, but my favourite so far is his take on the age old phenomenon of 's***t happens'.

How to express your love

Fourteen ways to express your love.

Spending Cuts In Greece

In all the drama about the Greece debt mess, here is something that I'm really surprised hasn't been well publicised. According to this article, apparently austerity cuts don't apply to the Greek defence sector. That is is, in the current talks, Germany and France are forcing Greece to continue to shell out billions of Euros on fighter jets, tanks and other defence related materiel as a condition of receiving further bailout funds.

A couple of questions come to mind:

1. Why does Greece even need to buy so much weaponry in the first place? It doesn't really face any potential aggressors in the region, and even if it did, NATO's collective action clauses mean they are shielded by the security umbrella of the rest of Europe and the USA in any case.

2. Why force the Greek people to bear the full costs of cuts, while meanwhile fully shielding the defence sector? If you have to make cuts as Greece does, everyone should be affected. Moreover, you should try and trim the fat in places you can while doing the least harm that you possibly can to people. Seems to me that the defence sector should be a prime candidate to cut in this fashion, since buying guns and tanks is not even productive investment, while cutting social expenditures is certainly harmful for welfare.

Whilst the motive for French and German authorities is obvious - it is to protect the bottom line of companies in the German and French defence industries and by extension the jobs of people in these companies - for me there is something sickening about forcing Greece to buy these (totally unecessary) machines of death and therefore forcing ordinary Greeks to bear the full brunt (and an unfair portion) of austerity cuts.