- Im very happy with this manifesto. I try to influence the opion making in The Netherlands for years already. see my blog: www.pietkeizer.nl. I will discuss this manifesto on my blog, of course
- Money is just bearer contracts for labour. http://allweneedismoney.blogspot.com.br/2012/06/what-is-money.htmlMonetary sovereign nations can create this money/contracts at will, up to the point of full employment, with no negative effects whatsoever. When the money/labour contracts exceed the available pool of labour, inflation starts creeping in, but at the moment we are very far from that – 10-20% ish away, as per the unemployment figures.Dear governments, as per this manifesto, create money and spend them, only good things will happen!
- The false theories about how to fix the economic crises show the politics behind the decisions of policymakers. The economists should awake and not get scared of trying new ideas.
- A great value of this is that it gives us a brief that can be circulated, and that it will help provide a consistently repeated vocabulary used to advocate for effecting changes in policy.
John B. Stubblebine, Ph.D.
- More austerity in a context of slow or even negative growth can not produce more employment and wellbeing; if any, it is exactly the opposite effect.
Alonso de Gortari
- This manifesto could be the basis for a class discussion.
- I great idea!, to star changing the focus of our points of views of economic assumptions
Marco Escobar Valenzuela
- We need a new public discouse on: austerity;recovery; public spending; and the long term drivers of prosperity like skills and innovation.
- This professorial intervention is in the collective interest of humanity and more narrowly, the Economics profession;it is therefore enobling. The basic starting point is the need to appreciate the fact that theory is to explain reality and must change as the latter changes. What has been on offer in neoclassical economics is a fruitless and expensive attempt to make reality subservient to prejudiced theoretical economic postulates.
- I would merely add to what the authors have said the following: the recent crisis has shown that nominal wages are sticky downwards, and that “internal devaluations” do not work. This has obvious implications for what ECB policy should be, and for the desirability of other countries joining in this experiment.
- It is time to learn from history, both of the 20th century and the 21st century. The “austerity” approach has not worked, has never worked, and–it is logical to conclude–will never work. Its time to face the facts.
- Agree. Public deficits were fuelled by heavy public financing and rescue of private banks. Remedies are killing taxpayers spending, increasing unemployment and reducing budget receipts.
Fernando Jorge Cardoso
- There may well be real supply-side constraints waiting in the wings (most likely increasing cost to access oil), but that won be clear until we get demand back on track, so thats the first objective.
- “History teaches us that no-one has learnt from History” – Hegel
- Does not help that one of the men incharge of setting up policy is not exactly knowledgeable about economic policy. However this manifesto clearly underlines the problems that have resulted in the policies set out.
- My coauthor and I have introductory text (McGraw-Hill-Ryerson) that has been Keynesian throughout its 7 editions.
John E Sayre
- Competitive markets can maximize economic benefits and keep prices aligned with costs of goods and services. Unfettered markets will tend to drive out competition and deliver disproportionate benefits to the market makers. A key role of government in markets is to assure that they remain competitive through proper regulations so that they deliver pricing signals that are in kilter with costs of goods and services. Concentration of pricing power in markets leads to just the kind of boom and bust situation with which we are currently dealing. Ironically, truly free markets require constant oversight to keep them competitive.
- Let wisdom prevail. Thanks
- It is indeed crucial to give these arguments a higher profile in the public debate. Its a piece of enlightenment in times of obscure moralist reasoning and growing nationalist reflexes.
- My career has been in IT and programming, but over the last year or so Ive immersed myself in reading about MacroEcon issues. Ive forced myself to plow through cognitive dissonance, switched views on some issues a few times, but ultimately Ive become convinced that the PK and other Keynesians have the most accurate and verifiable views on the economy, and more specifically how to end this recession most swiftly and effectively.
- This is just common sense. We need to listen to those of us with specific experience and intelligence in this area.
James W. Bracke
- If they keep on with this kind of policies, they will lead us toward totalitarism. Extreme right is already rising everywhere…
- I agree that austerity measures alone will not solve the current financial and economic crisis. But the international community needs more responsible public fiscal and monetary policies–especially within the EU–than we could witness until now, beside investments and economic growth.
- The sub-prime credit induced financial crisis was mainly the result of too little public sector control over the activities of financial institutions. To turn the disaster into an opportunity to trim the power of the public sector still further has perhaps been a brilliant stroke of lobbying by persons who do not need the states ordinary public services (or perhaps just ideological path dependence), but it could have tragic consequences for the many, hard-earned rights and entitlements ordinary people have secured to level the playing field during the 20th century.
- Could you tell Mrs. MERCKEL with 7% interests, economic reforms do not work, SPECIALLY WHEN YOUR COMPETITORS ARE PAYING ALMOST ZERO%. What is being saved by lowering wages is spent on higher interests, so improved competitiveness, in this environment is a big lie.
josé joão fonseca
- The debate definitely needs a sound economic foundation. But, the next question is: what is preventing the policymakers from recognizing the widely-agreed economic principles?
- I agree with the broad thrust and the depression concern underscored in the manifesto. However, as usual the devil might be hiding in the details. I for one would have liked to see some discussion on the importance of the composition of demand. Consider the case of Turkey, not an advanced one, but a largish emerging economy which pulled of an impressive growth record amidst a global recession. This is attributable to the surge in internal demand and was facilitated by the ability to finance large current account deficits. During this time the government followed prudent fiscal and monetary policy, and improved tax collection. Wisely it did not follow the stricter austerity proposals of the IMF but did not try to stimulate demand either. The growth was accompanied by a real estate boom and an unprecedented increase in private borrowing. These developments provide the markings of a bubble. This particular combination of internal demand surge and deficit financing strikes me as something which is not sustainable. Returning to the manifesto, I have to ask “building what?”
- Good to see some common sense . Economies would do well to follow it although experience so far suggest it will be hard to shift approach given that austerity is an approach taken by the rich and powerful at the expense of the poor, disadvantaged and powerless
- I agree that the world is acting drunk on credit. Most nations are also terrified of taxes. When will we learn that countries can run without funding and that most funding comes from taxes, from residents, but also from the corporations who seek tax benefits or off-shore their funds to avoid paying their fair share!
Carole Campbell, Ph.D.
- The supply side will not spend while there is no demand. Recovery can only start when the demand side is stimulated, and that means people with jobs and money in their pockets.
- Thank you for making this important statement to out policy makers. Hopefully they will listen and respond with stimulus measures.
- The present policies are all the more puzzling because they represent electoral suicide for the parties pursuing them (my field of research is electoral behaviour).
Professor Paul Whiteley
- To a physicist or engineer Keynesian fiscal policy makes perfect sense. It is called negative feedback – suppresses or mitigates all sorts of instabilities. If we had paid down some of our debt during the Bush years, as Al Gore advocated we would be in less trouble today.
David W. Ross
- It makes no sense to strangle economic recovery with misplaced cost-cutting.
- The current crisis, a significant cause of which was inadequate financial regulation, has been seized upon as an opportunity to push a conservative political agenda.Cuts in government spending are dismantling many public sector institutions that support the most vulnerable (as well as average citizens) while the wealthy are enjoying tax cuts that incentivise work.What makes this all so much worse is the way that politicians are quite simply lying to the public on a day to day basis – and getting away with it.
Agnes Norris Keiller
- Hopefully one day they will diagnose the problems we are facing correctly and address them adequately.
- I have no economic background at all but even I can see the unfortunate pattern we are repeating. Thank you for trying, we have got to get those in power to open their eyes and stop the damage.
- We have to take closer look and analyse the reasons why the drachma devaluations against the dollar at a rate 15% in 1983 and 1985 did not have any positive effects on GDP and why the Greek exit of the euro and return to drachma will not have the same effect now.
- As you so clearly emphasize, the austerity policies currently forced upon our european neighbours cause unnecessary human suffering and confuse the causes of the crisis. They endanger the whole post-war european project of peace and mutual understanding. Please make your voice heard.
- Economists and well-informed politicians know that a balanced budget expansion has an expansionary effect on aggregate demand. If this is achieved through taxes on CO2 and investments in sustainable energy production, public transportation, housing insulation etc., it will help to combat global warming and unemployment in one stroke. That is my recommendation.Richard Murray
- We need more data driven decisions.
James Carneal, Ph.D.
- An investor should hope policy makers will target Net GDP growth and employment and start seeing inflation as a side effect.
- should mention work sharing as a way to keep people employed. There is nothing wrong with more leisure, people may find they like it and it could change long-run growth patterns.
- The longer the depression persists, the lower the growth of productive potential because investment is postponed and cancelled when prospects remain poor. Any policy of reflation (in the form of extra demand needed to reduce unemployment) is an opportunity to shift the growth of productive potential towards a more sustainable and equitable structure. This can be done by emphasising “green” investment, especially employment-intensive investment such as insulation of buildings, and shifting demand towards low-income groups, who tend to have lower savings rates. However, the underlying problem is one of trust in the banking system and in the money created by the banks. This cannot be restored by demand reflation, but requires the open market valuation of bank assets, such as derivatives and property loans, rather than a protracted period of banks avoiding such valuations. The massive accumulated debt must be written off in some way before the system can return to previous growth rates.
- Historians will look down at our times dismayed by the mediocrity of the present political and ruling class who did nothing to avert the approaching disaster. They will also wonder in amazement how a pervasive and fallacious ideology could have blinded all and cause all this suffering.
- The only problem I see here is that we need reality based responses to much more than just our economic problems. Things like energy, climate, health care and foreign relations are all areas where current policy seems to be driven by delusion and wishful thinking coupled with a willful dismissal of fact and reality.But, I guess its best to fight one battle at a time.
Don Richter M.S.
- I would stress that the maturity profile of UK gilts has a long average life (some 12 years), that the major holders of UK gilts include the Bank of England (it buys through QE rather than sells) and that UK pension funds are heavily weighted in equities and have to retain gilts to reduce risk.The confidence argument of the coalition is weak. Moreover,overseas central banks still regard UK as a safe haven.Yields are very low (near zero in real terms) which makes it most unlikely that a reduction in the present speed of deficit reduction will upset the market for gilts.
- I’m not an economist but I agree wholeheartedly with the analysis. My fear is that it’s very convenient for our government in the UK to recommend austerity as they see it as a way of reducing the public sector, and indeed events have conspired against public sector workers in the UK to make them appear as scapegoats for the problem as we are seen as overpaid and unproductive. The country needs to be constantly reminded that the cause of the problem was unregulated private sector borrowing , not the salaries of hardworking public servants
- Thank you for the manifesto! Sadly, such simple, obvious truths need to be restated in the face of our obtuse policymakers.
Ignacio Gomez Montejo
- I don believe those who favor austerity to foster growth are being honest. What they really want to do is “starve the beast” and thus foster less government. Oh, I wish these issues were publicly debated with people stating their real intentions.
- I agree with the substantial contents of the article. We need to have a new orientation to resolving most of our economic crises.
Usman M Balkore
- From a collective point of view on the economy, money must keep flowing, such as a flow in an (almost) closed-system.Austerity plans create artificial wells preventing it from keeping flowing.Even I, who has no clue when it comes to these subjects, was able to come with this simple analogy which shows that the current decisions are not relevant.
- Thank you for doing this!
- My business used to support me comfortably. Now, I struggle every day to make ends meet. If I and every other small business owner were making more money, wed pay more taxes, buy more stuff, and hire more people. Those people would spend more money, pay more taxes and so forth and so on until, what do you know, any investment the government had made in stimulus would pay off.
- Government spending cuts at the state and local level are resulting in many layoffs for school teachers that negatively impact economic growth now and for their students future.
- Unfortunately solutions have been focused on politics and satisfying the wealthy without any consideration for what has worked and what hasn in the past. Great work and good luck.
- I think that the manifesto is a great idea and everyone who wants to help the unemployed should sign up immediately.
Carlos Castaneda Waack
- I support every line of this manifesto.
- There is no doubt the debt in Spain is private: banks overextending loans and big corporations (building and construction). Budget cuts and austerity lead nowhere
- Puzzling – to say the least – why this appears so difficult for so called leaders to comprehend. It really is nowhere remotely in the vicinity of rocket science. I do think my cocker spaniel could probably get it. Heres hoping the manifesto helps the penny to finally drop!
- We are bereft of political leaders of vision at a time when that lack of acuity risks hurling Europe over the precipice. Plan A could never work and isn working, instead it is part of the problem -Plan B is long overdue.
- We are experiencing a failure of proper government in the UK, part of which is ideologically driven (private sector good, public sector bad) and part is out of ignorance of the economics of enabling and sustaining a recovery in current conditions. I agree entirely with the analysis of Paul Krugman and Richard Layard and hope that, even at this late stage, the government will listen.
- Finaly we begin to have a debate on principles of economic theory based on recent history.
- People are at their best when they struggle and a struggle for a common good is better still.
- This manifesto points clearly what is important and what is not to overcome the deepening of current crisis. I agree with it in 100%
- Something like this may not turn the tide quite yet, but it can certainly change the conversation for the better.
- The solution to the Latin American debt crises taught us taught us that international cooperation and leadership are needed to find the way out of an obscure tunnel. Brady program brought back the region from the lost decade.
- We need public policy based on facts and analysis. Many U.S. leaders, particularly on the extreme right, have put ideology above the public interest. The debt ceiling circus of August 2011 is a striking example. We must organize to stop them.
- Monetary policy across the G10 should be working far more aggressively to counteract the deflationary impact of fiscal contraction.
- Speaking from within perhaps the most crucial of the ailing sectors of the US infrastructure, the field of education (higher education in my case), I can say that I am already seeing destructive results of the panic response outlined in the manifesto. Underfunding of education has of course been endemic in the US since the 1970s, but it is currently reaching a point where I fear that the transmission of skills and knowledges to the younger generations may be fatally compromised. There is no going back from such an outcome, if it transpires. Historical precedents, grim as they are, have not included the failure of maintenance and control of anything so dangerous as nuclear weaponry or a climate in full transformation.
Mary Baine Campbell
- I taught Macro in a local high school for thirty years, as Mr. Krugman has reiterated numerous times this is “Economics 101”.
- Im not an economist, but I do own a business. Im 66 so I grew up in progressive America. Im also a Viet Nam war vet.
- Although I agree entirely, I wish the manifesto had been written so that it were clear to the average reader. It would not by any means to clarify fiscal and monetary policy and especially “structural imbalances”. After reading more than half dozen economics books (including Krugman’s Conscience an articles of Stiglitz) I was still unprepared for structural problems. And beyond terminology, there is too much vagueness, e.g. “private sector borrowing”, which covers a lot of territory.
- I fully agree with your analysis. My only concern relates to a re-starting of traditional growth patterns against a context of climate change and similar. A return to norm may be equivalent to jumping from the frying pan into the fire. Can we have green intervention and green growth please?
- It is important that as many economists as possible sign up to this general statement to make it clear to politicians and policymakers that they do not have our support.
- A solution exists under our noses in the going from strength-to-strength on the local scale of employee ownership (eg John Lewis Partnership) and Co-ops. As Joseph Stiglitz has convincingly argued, it is the near-exponential increase in inequality that has destroyed the broadly prosperous post-war consensus economy. A responsible government should be seeking every possible means of encouraging the former, while restraining the latter.
- Im a rising freshman at Penn and have been raised in the demand-side of economics. Im furious at Republicans who insist on implementing policy detrimental to recovery and Democrats who refuse to unify in support of their own ideals. Only things like this will show those in power what their constituents want.
- Fear and uncertainty is reducing both consumption and investment decisions, which at the individual level is completely rational, but at the macro level is reducing aggregate demand and worsening government finances. This, in addition to a banking crises, that is sapping confidence in much of Europe, requires concerted and coordinated fiscal policy to stabilise the situation and embolden capitalisms latent entrepreneurial animal spirits to lead us out of this austerity ridden darkeness.
- Excelente . Necesario, imprescindible para ir consolidando las nuevas formulaciones alternativas de una nueva teorìa econòmica .
- I agree in particular with the focus on the banks – they must be forced by law and regulations to anticipate more and to share more of the burden of their potential failures. Also, the focus on maintaining effective demand in a severe economic crisis is well taken.
- I am unemployed in spite of holding a 2/1 honours degree. Am embarking a masters course on the hope this will reverse my fortunes.You e so right Paul, there is no reason why youth unemployment should be so high with such an educated workforce. Im fully behind your campaign to change government economic policy which is quite frankly folly.
- Keynesianism works. It worked in US in the 1930s, in Germany in the 1930s and throughout the Golden Age of the West (till the 70s.) It’s high time people gave Keynes a bit more respect.
- Please leaders of the US and Europe, make common sense politically feasible.
- Je ne suis pas un économiste, juste un bibliothécaire, un historien et un wikipédien, et je rejoins les conclusions de ces économistes. Not an economist, just a librarian, historian, wikipedian, and I agree.
- Os recursos do planeta são finitos e portanto o seu uso tambem deve ter limites e devem ser usados de forma sustentável. Mas, o que se observa por toda a parte é o desperdicio jamis visto em toda a história da humanidade. É preciso colocar em prática o uso sustentável dos recurspos excistentes.
- One of the greatest revisionist con tricks in history is the transfer of deficits off private sector bank balance sheets onto the public sector balance sheet only to be explained away as public sector profligacy! Beyond belief!
- I am an economic historian, who studies the history of capitalism, slavery, and similar issues. All empirical and historical evidence supports this manifesto.
- I hope your appeal will be heard. Signed : a desperate french man !
- DeLong, 1998: “A world in which the Great Depression had not cast its shadow over post-World War II fiscal policy would be a different world. It might be a world in which many post-World War II macroeconomists called themselves Hayekians rather than Keynesians, discoursed on the “monetary overinvestment,” and argued that deep recessions were a necessary price for the dynamic growth efficiencies of market-led economic development. It might be a world in which many governments responded to depressions by cutting spending and raising tax rates to keep the budget balance and so prevent investors from losing confidence and making the depression worse. In such a world an outbreak of inflation—like that seen in the 1970s—would have been highly unlikely. In such a world a repeat of the Great Depression would have been somewhat more likely. To the extent that the social and economic costs of the outbreak of inflation in the 1970s were low relative to the probability cost of another episode like the Great Depression, we are no fortunate indeed that the post-World War II fiscal policy has been made in the shadow of the Great Depression.”Title: Fiscal Policy in the Shadow of the Great Depression Volume: The Defining Moment: The Great Depression and the American Economy in the 20th Century
Retrieved from NBER at: http://www.nber.org/chapters/c6888Heath Nieddu, Information Security Analyst
- Broadly agree with the recommendations listed here, but I have a problem with your explanation of the cause of the crisis. From an Irish perspective – yes, the crisis was caused by reckless lending and borrowing in the private sector. But thats only half the story. Our government balanced its books by stealth – it encouraged the public to borrow recklessly, then taxed that borrowing to fund its own activities. In other word – the government did indeed borrow irresponsibly, but it got a second party – the public – to do its borrowing for it, then set about inflating the earnings of public servants. In the end, the point is moot – demand has fallen off a cliff, and our governments must find a way to take up the slack. But I will say this – the crisis is a global one, requiring a global solution. And if over-extended governments borrow today thinking they can repay tomorrow when groth returns, they may be living in a dream world, because unless a new model of capitalism found to replace the faulty one we have, the much hoped for return to growth we all depend on may not materialise.
- Have we forgotten the lessons of the 1930s? Don cut government spending when the private sector is cutting. Don create more obstacles to trade when trade is falling.
- To summarize in a sentence and to paraphrase Einstein “We can not solve problems by thinking like when we created them”
Antonio Garcia Leal
- Now more than ever, rational, dispassionate, (directly) disinterested minds must prevail so as to avert a global credit market train wreck. Mismanaged banking and sovereign debt on a grand scale, threaten to destabilize the entire credit system in the developed world. Tax revenue needs to be both raised and collected to both stimulate demand for goods and services, and to generate technological innovation, infrastructure development, and cheaper, renewable, sustainable energy. These are prerequisite in order to stimulate sustainable GDP growth throughout the developed and developing world, including emerging markets. A manageable level of inflation will preserve asset values, assuage the debt burden, and buoy tax revenue. Lets get to it.
- The manifestos position on a need for increased government stabilization of western economies is sound and reflects a consistent analysis of the failures during the great depression. Why make the same mistakes again because of ideological posturing?
- I am a mathematics professor with a strong interest in economics. I sincerely hope leaders around the world will take a look at this manifesto and the ample empirical evidence supporting it!
- We all have to try to change the rules of economic trade all around the world, therefore international policies must have to change too.
- I fully agree with the contents and objectives of this manifesto.Time as come to put an end to this insanity that is driving the world economy (and our social organization) to the ground.
Vivaldo M. Mendes
- Evidence-based approaches to our ailing economy and our unfolding environmental disasters don get enough air-time in our societal discourse. Entrenched interests and limp political will stand in the way of real solutions that are easily within our grasp. Retooling for a green revolution which quickly abandons the burning of fossil fuels altogether is just the stimulus we need to drive our collective economies forward. Quixotic? Perhaps. Necessary? Absolutely!
- Très bonne analyse, il est temps que nos hommes politiques de tout bord sorte la tête du sable et soient un peu plus à lécoute des vrais spécialistes. Courage vous êtes sur la bonne voie. Salutations
- Our population now has the mind-set that characterized the 1920s. We are such slow learners.
William H. Davis
- I’d have included failure of the regulatory systems,in evaluating the various players, as also a huge factor, but this is a start.
- I sincerely hope that rational analysis will win out over partisan gamesmanship. Good luck tring to get information to the disinformed. They have Fox and Drudge and Talk Radio working the propaganda campaign, and much of the rest of the media clueless or trying to achieve a phony “balance.” May truth, reason, math, science, and the plain old decency of most people win out!
- I have read the manifesto and agree generally with the premises. With interest rates at todays levels, the government should borrow, invest, and earn a rate of return higher than its borrowing costs, which are again at historic low levels. This seems more Finance 101 than Economics 101 to me; as long as the rate of return exceeds the cost of borrowing, economic value is created.
Mark A. Sherman
- When a recession lasts years, it seems a daunting fictional theme to actually not give macroeconomic theory a chance. The manifesto should include at least 4 or 5 policies towards reducing debt + augmenting demand in the US (with numbers, not just words), as an example to the world.
Pablo García de Paredes
- Economics isn quite a science; at best its an art and at worst a revealed religion. Religious fundamentalists tend to cling more tightly to an article of faith when it doesn line up with reality.Its tragic that a degree of regulation and fiscal responsibility during 2000-2008 would have prevented the bubble from forming. But it did, and here we are. Increased deficit spending isn nice to think about, but what FDR called pump-priming is necessary for money to flow again. Without it we shall continue to drift in the doldrums indefinitely.
Reginald Stocking II
- A rational approach to the problem. Politics have failed us.
- Could an economist, preferably one to whom the NZ government listens, please advise in simple terms, how an austerity programme which increases business risk and therefore unemployment is supposed to overcome a recession. Unemployment increases with the attendant benefit costs on government,income tax drops because people don have jobs, business drops because people don have money to spend, which puts more people out of work and the spiral continues. Or is it all smoke and mirrors aimed more at power and control, than creating jobs and income.
- We need the government to stop picking winners and losers and go back to taxing all forms of income the same. We need to stop government subsidizing of profitable companies like those in the oil and gas industry, the big agriculture companies, and the private health insurance industry, to name a few biggies. We can only afford lower taxes when we have fair taxation and government responsive to people rather than money from powerful I interest groups.
Mark S. Krasnoff
- It was the turn of the century, and I was arguing to anyone who would listen that the economy was in a classic asset bubble and that taxes needed to be raised to improve fiscal positions and improve the long-term funding of the welfare state, and my province preferred to cut everyone a cheque and flatten taxes… now, of course, having starved the beast, they complain the beast is so weak, it can do little for those needing the most help.Never again.
- It is tragic to see this incredible mismanagement at such a crucial period in world history – let us hope the manifesto will be listened to.
- Let’s go back to the left side of Keynes:1) The Insufficiency of the Demand.2) The Repartition; as a valuable way to create an efficient economy and a valuable society.
- I saw the ICT and stock crises coming and I did not buy a house at the end of 2006 because I heard the same things. I have tried to describe the problem on my website (linked below). Basically it boils down to word “in the public” that a lot of money can be made with a certain thing (like ICT, stocks, houses) that everyone starts buying into, raising values, even though there is no real long term demand for those items.http://www.koosswart.nl/Main/Economics.htmlIf everyone would make a lot of money on for example ICT, it would create inflation. There is a limited amount of money in circulation because there is a limited amount of commodities and goods for sale and there is no way that a lot of people can make a lot of money on the same thing. It is impossible.
I hope this helps, I had the web page out anyway as I noticed this every time.
- This makes sense to me; I only wish that prominent members of the Labour Party here in the UK would sign up.
- As a student, as a representative the upcoming generation I speak. To those in power I state: Stop destroying my future with your orthodoxies on market capitalism. When I vote I for democracy. I do not vote for a federal institution that narrows down politics to the economic integration of the Eurozone in favor of those that have money to invest in ways that it will return in consumer demands the quickest. I am a citizen and i wished to be approached as such. The political debate as such has been an insult to my intellect and to my generation. I fear that my children will get to read history books narrating the story of how the most wealthy and technologically advanced civilization instead of focussing on sustainable solutions for income distribution and production applied ancient economic measures that have proven to not work in order to keep the world order the way it was as much as possible. I want change because thats the choice we have now. Change or lose everything we have. Thank you!
- All that I would ask is that we make policies based on evidence and not simply to achieve our political ends.
- As a German lecturer in Economics and a professional economist for an industry association and a convinced European citizen I strongly support this manifesto for Economic Sense and declare my opposition to the disastrous policies of austerity in times of crises, mass unemployment and public underinvestment.
Kai van de Loo
- Because of misattribution of origins of the Asian financial crisis, the IMF also made mistake by imposing excessive austerity measures as conditions to aid. the IMF today should be more proactive and reveal what economic policy responses should be to kill the crisis especialy in the EU
- Just as the gold standard was the fetish that brought the European economies to disaster between the wars; budget and debt fetishists risk the same for own age. There Is An Alternative.
- I agree with every detail of this manifesto.
- The economic system needs more stabilizing feedbacks – thats Systems Analysis 101 – and only governments can provide them. It is really hard to understand why so many politicians and business leaders find it so difficult to grasp the obvious. Would that Keynes and Rooseveldt were still alive!
- Thank you for relentlessly trying to get the message out.
- Fully agree.In fact, you may be understating the problem. Austerity may not only be socially very expensive – it probably will not work at all in likely circumstances, or be counter-productive. Happy to expand!
- I agree with the manifesto.
Flavio M. da Silva
- Totally agree with the board. Greece, the most suffering EU country, has given the proof to the whole world that austerity measures lead to nothing but harder contraction of economy from year to year and worsening socio-economic situation as well. What really surprises is incomprehensible stubbornness of key European Union country leaders to follow austerity, their genetic fear of inflation and calmness to upcoming total unemployment across continents.
- Brilliant initiative, could it need an addendum on (Euro-) political newspeek turning econ101 upside down by redefining the latter concepts? (ex: fiscal integration = enforcing budget controls)
Antonius van Oosten
- Agree with the broad thrust. However it is obvious that the demand/supply causal argument doesn factor in globalisation in two ways : 1. Discounts supply of goods from Asia where arguably unemployment is low and the Chinese economy is stretched even at a GDP growth rate of 6-8%. Relative to the time period of 1992 – 2008 Supply is being constrained. Just look at the massive amount of resources being imported to China from Australia, Brazil etc. in order to sustain this supply. This is not to mention the gerry built industrial machinary pooring toxic fumes out whilst trying to keep up. The boom times of this earlier period relied on cheap and sustainable supply of goods imported from China which is no longer happening. 2. Discounts the fact that the boom of the earlier period of 1992-2008 required huge investment of Chinese surplus dollars into U.S. and Europe. The Chinese are wary of these investment avenues and are now seeking alternative investments away from Europe and U.S.What Europe and the U.S. both need is massive governement stimulus not in sectors supplying their domestic economies, but in the sectors producing exports. Middle Class welfare in both countries needs to be drastically slashed and export industries heavily promoted in order to restore the balance of trade. The “service economy” is dead. Thats right corporations in the Western world have accumulated more “dead wood” than at any time in the last 100 years. The best paid people in many U.S Corporations contribute little or nothing to exports and their jobs exist solely on the basis of government bailouts and lax regulation of markets across all sectors. Yes, real competition is dead. People are being rewarreded for bing inefficient and non-competetive. All this needs to change and fast. The people in the U.S congress Im afraid need to vote themselves and may of their constituents out of their current jobs. Thats right vote in stimulus measures for export industries and vote out middle class welfare.
- Thanks, I am glad to hear the argument made by so many of the working and unpaid working public are shared by economists.Lets make it count.
- I could not agree more with the basic message in the Manifesto. Too many countries are shooting themselves in the foot. Nonetheless, we should recognize that some countries (certainly not the US) have reached or are near their limits on borrowing–and that almost all countries need a long-run plan to return to sustainable deficits. Also, I do not agree that central banks can always fund deficits with “the bond market unaffected.”
Alan S. Blinder
- An excellent initiative. One may disagree about the detail, but the overall thrust is 100% right, absent a non-Capitalist alternative.
- This cannot be happening worldwide by accident. There has to be a steering force.
- New Keynesians are accurate. Neo-Classicals, Monetarists, and Austrians are obstructionists to recovery.
- Simply, in 2008, when retirement plans dropped 50% in value and the housing bubble burst, people saw that what was adequate savings and security was not. The new perspective highlighted the need to increase private savings, and plan on longer working lifetime. This squeezes the economy and the younger workforce. Add the response of a lower public safety net, in both support for future retirees and health care reduces risk taking for those who would want to “go out on thier own.” This does not serve a progressive forward thinking society.
Eugene R Oberst
- I have taught Intro to Macro at Cornell for quite a few years now and tie my course quite closely to news reports on the economy and current policies. It is striking that a semester of macro based on a mostly Keynesian text (I use Case and Fair) gives students a better understanding of what is going on in the economy than most politicians or TV pundits seem to have. It is important to give them a good vision of how the economy works in the intro course because they are going to get the New Classical version of “reality” in the upper level courses that follow. It is hard to fight people whose intellectual capital relies on continuing to believe the fairy tales we all saw in grad school but I have one major advantage: the data are on my side.
- A read as essential as Happiness – Lessons from a new science (Layard 2005). Another piece of common sense in a world of confusion, denial and imposed austerity.
- I sincerely hope, now that the FED (and partly even ECB) has given such strong response and support, that the people responsible for the fiscal state of the world take the baton and deliver what the whole globe needs. Confidence. Clarity. Sanity.
- I have been writing about this for several years in my columns. Thank you for presenting this forum.
- I am a US citizen living and working in India as a hospital administrator. I came to India as even the US healthcare industry is weak in terms of demand for people with my skills (two Masters degrees and a track record of positions with increasing responsibility). I would like to come home if the US economy ever started producing competitive jobs that would be appropriate for someone with my talents.
- I am an economics editor in a newspaper myself and I think that we need this kind of new thinking and we need it badly!
- Keep in mind that the problem we have is also the direct result of the concentration of wealth in the hands of a few. Capitalism works best when all levels of society have access to money.
Ronnie L Goodson
- Very clear exposure of politics and economics
- All those who believe, as I do, that policy-makers should look to the evidence base in managing the economy, and that this principle applies as clearly at the macro-level as it does when designing micro-level interventions, should endorse this manifesto. It summarises, in clear, non-partisan language, what the evidence implies, on the causes of and solutions for the current economic and employment crisis.
- I am not an economist but have studied all sides carefully and agree with the Manifesto.
- Important and obviously correct. I do consider it generous to proceed on the assumption that our economic decision makers are mistaken in their choice of medicine. I appreiciate that the manifesto covers a wide breadth of nations, but in the UK especially the choice of austerity sits nicely with our incumbants predeliction for demonising the poor and slashing public spending.
- I strongly support this message and say “bravo” to those who have authored it.
David M. Brown
- Remember, money is just paper. It is all about the the incentive in people. If people drive themselves forward, work a little bit harder, try different ideas, pick themself up if they fail -that produces growth. Spending is a way to start this upward spiral.
- Maybe European economists could do a similar manifesto with a focus on the euro crisis. There might be a more urgent need for that.
- Deficits should be paying for infrastructure (investment in the future)while tax revenue should be paying the bills.
David W Truslow
- We need to get across the message that the era of lightly regulated uber-liquid financial markets, low consumer goods inflation combined with real estate price inflation, and heavy “financialisation” of mainstream economics is over and that historically this state of affairs was a very short, unsustainable blip.
- We should not let the economic nonsense and evidence-free policy exhortations spouted by our political masters continue to go unchallenged.
Peter J. Hammond
- In 2 years at Bocconi University I have never heard the name Keynes in any of the economics courses I have attended. Shame on them.
- Clear and uncluttered with technical language – this manifesto should be the frame through which all my colleagues in journalism view the crisis. May I add one point: making more profits with fewer workers has been the private sectors approach to business for decades. A few words on the social responsibility of the private sector in maintaining employment even in downturns should be included in an appendix to this otherwise excellent statement.
- It would be such a no-brainer if not for the people with closed-minds.
Peter H. Santschi
- Keynes brilliance was in demonstrating that macro-economics can be counter intuitive. Surely poltical leaders are intelligent enough grasp it – but they need to do so soon!
- I fully agree with this demand-side demonstration against the so-called mainstream supply-side receipe.
- We the people need to stand together for financial justice.
- This manifesto is a powerful wake-up call for three sets of people: IMF senior managers who despite their own researchers evidence insist on deep austerity now in return for puny (and expensive) short-term funding; U.S. Republicans who are both bent on destroying the Obama presidency and on shrinking further an already low U.S. public sector; and some European politicians from countries that managed wisely their economies in the last decade (but with gradual phase-in of fiscal and structural reforms) and now demand from the others the same discipline and structural reforms, only here and now instead of phased-in over 3-5 years. Germany, Finland, and the like must relax their intransigence on the timing of the necessary fiscal consolidation for profligate countries and must help concretely other countries that have adopted and are implementing tough fiscal (including primary balances) and structural reforms but that nonetheless are pushed by markets towards unsustainable levels for refinancing their outstanding debt.
- Brad DeLong, Krugman, Simon Johnson, James Galbraith,Joseph Stiglitz…Martin Wolf why I sign is due to informed citizen knowing good policy.
- Well as the only economist that ever really made sense to me was Keynes, I have to from a very humble position agree with Krugman. However, as I run a very small business I realised that there was going to be a lack of demand in March last year with the crisis in Japan. Unfortunately I have been proved right. So from the street….
- Einstein defined insanity as doing the same thing over and over again and expecting different results. Since the Reagan administration we have been following the same policies of “trickle down” economics, deregulation, and blaming the poor for their being poor with devastating results to our country and the world. During the post-WWII period till Nixon we had much higher taxes, government investment in our country, and worked to end racism and poverty. Since Reagan we have proven that our current policies not only do not work but they exacerbate the pain for the vast majority of us. It is time to give the policies that were working a new lease on life and see if they will help us prosper once again?
- I agree with the bulk of your argumentation, although I think in this crisis there is a high proportion of vested interests in its origin.
Alfonso Lasso de la Vega
- We need policies like these that will actually aid in recovery, not just provide cover for continued looting by the elite.
- I strongly support the manifesto: its economic arguments are sound.
- Especially in Europe there is basically a political crisis when ECB is not allowed to act as a normal central bank. But lately there has been signs that this aspect is becoming better understood. Unfortunately it has not been discussed much in public, where nationalists are able to gain votes by warning for a federal development, which decrease independency of the nations.
- Politicians and decision makers in the US, Europe, and elsewhere who believe taking no action will lead to recovery have in fact made things far, far worse.
- Outstanding! Wonderful to see that some of our preeminent economists have the courage to try to organize to force governments and other organizations to wake up and think more rationally in their approach to such important and central issues. I hope many more economists get on board: its their chance to correct a lot of wrongs and effect tremendous positive change for so many people.
Dr. Frank Wolf
- There is, and never has been, such a thing as an expansionary fiscal contraction. Says it all!!
- Los causantes de la crisis -más allá de las políticas a implementar- no soportan sus consecuencias; la sufren las clases medias. Es injusto.Y no se denuncia suficientemente, Sr. Krugman
Luis Fernandez de la Buelga
- While I agree with the broad thrust and purpose of the manifesto, it still, unfortunately, advocates the same neoliberal thinking which caused the crisis in the first place (loanable funds theory, existance of the money multiplier etc.)http://goo.gl/x1mc3
- I can only stress the famous caveat by George Santayana: “Those peoples that forget their History are bound to repeat it here”. And here we are again, throwing away 60 years of European integration, meant to avoid the mistakes and catastrophes of the 1930s.
Javier de la Puerta
- The arguments and analysis contained in this Manifesto are substantive and, more importantly, sensible. Simply put, if the private sector balks, then it is up to the government to step in to get the ball rolling again and this means unleashing capitol. If both balk, then disaster ensues.
- It is a mighty task to push through the formidable barrier keeping many elites from reason. Ignorance is one thing. Doggedly holding on to demonstrably perverse notions and falsehoods by those who should know better must be an illness. It is hard to overestimate the power of darkness.
- I wholly endorse this Manifesto.
The Austerity Agenda is totally inappropriate as a means of addressing unemployment and inadequate pay and benefits for most of those who are lucky enough to have a job.Bill Painter
- Lets move towards rational policy
- The Manifesto should have come much, much earlier. I hope it helps to debunk the Big Lie on government “deficits”, fiscal policy and the role of the State in the economy trumpeted as religious dogma by vain, ignorant soi-disant economists and pundits for the last 30 years or so.
- I hope that not only economists will sign the document! So, heres one from a particle physicist…
Dr. J. Blouw
- Some debt writedown might be required to help households/businesses/currency users.
- Sadly, denial, ignorance and the downright egotism and masochism of leaders and other supposedly intelligent people are wrecking the lives of tens of millions. Common sense has never been in shorter supply. Thanks for putting this together
- It is time to turn the page. The thought that even a tiny number of return-to-the-gold-standard thinkers exists is frightening.
William Mark Parson
- by “policy should act as a stabilizing force, attempting to sustain spending. ” i include that that Fed should be nominal GDP targeting.As a long term budget solution, I would generally like to see federal and state&local expenditures limited to less than 1/3 of GDP over the business cycle, somewhat similar to Miles Kimballs idea.
- Unemplyment should be considered a loan people without work make, and it should be repayed with interests.
- The real test for economic policy is whether it works in the real world. The results are in and Keynes was right.
- The other side refuses to admit that there are collective actions that can be done by the goverment to help our nation. They are solely focussed on the individual so much so that I actually wonder what their concept of a nation is!
- The last two years have seen a tragic waste of economic potential and loss of output due to politically driven austerity. It is time for sense!
- I am profoundly concerned about how the continued mismanagement by and short-sighted policies of todays decision makers will effect the future of my two children. The United States is more than a short-term, profit driven economy and policy makers must act accordingly to benefit a great majority of its citizens today and in the future.
Elaine A. Needham
- The case for greater public spending as a response to the current economic situation has shown to be a better and more appropriate way to deal with the current state of the economy not only in theory (where it has been, historically, quite successful), but from a variety of actual economic data that has been compiled by a number of economists (Paul Krugman – not the only – but a good example). In addition, fiscal austerity has proved to be self defeating in many cases in which it has been thoroughly implemented; take Ireland for instance. This is a time for the government to take advantage of low rates to balance the de-leveraging process of the private sector.
Gustavo Gomes Pereira
- We need to be investing in renewable technologies which will not only create jobs and therefore growth but also sustainable growth which doesn damage the earth. This can also create energy security which in turn reduces the possibility of wars over resources.
- Agree but would like to see the urgent need for decarbonisation taken seriously and added to any economic plan.For a UK perspective on this economic mess AND a vision for the future see Will Hutton’s excellent ‘Them and Us’.
- While I do not agree with all details of the manifesto and think that reducing public spending would be a good thing in countries such as Italy, the broad thrust is correct and urgent.
- As an UK IFA & Investment Adviser, the impact on peoples financial well-being I see every day. Unintended consequences of this policy are really beginning to bite and soon many more people will suffer the financial consequences of this austerity policy.
- I may not be a professional economist, but the need for a sensible countercyclical fiscal policy, based on long-term stability rather than short-term gain, is not exactly rocket science.
- Prof déconomie à la retraite,je partage tout à fait votre analyse, et minsurge contre ces politiques daustérité qui ne font que précipiter un peu plus les pays concernés dans la récession, le chômage et laugmentation des déficits. Je vous remercie de cette initiative.
- My only criticism is that by labeling Greece as a rare exception, it still perpetuates the myth that the Greek citizens were lazy/reckless/etc., when in fact many investment banks (Goldman et al, of course) played a large role in creating the problems we see today.
- It is more than clear that the policies of austerity are destroying lives. Its time for the public sector to do its duty by the people and invest for the betterment of all.
- One can only agree with this manifesto and hope it is widely disseminated and heard by policy-makers.
What however is missing is how to address unemployment – especially of youth – and growing social exclusion, in the EU and the US.Hedva Sarfati
- International acceptance and agreement to act on the thrust of this manifesto is essential, for example to prevent implosion of the Eurozone economies.
Professor David Rae
- The policies of the german government are guaranteeing as the head of the ECB, Mario Draghi, has indicated the most expensive fix to Europes problem possible. This is assuming that the euro currency as a whole remains intact. Forcing the southern tier of euro nations to effectively revise their currency downward through mass unemployment destroys wealth, the productive capacities of nations, and inflicts untold (and unnecessary) human suffering.
- It is time for a true United States of Europe, in many dimensions. And it is way past time to rebuild/modernize the USAs infrastructure. And time to get corporations and big money out of all politics. Read Republic, Lost by L. Lessig, and then Why Nations Fail by D. Acemoglu.
- Policy makers seem to be too proud to replicate something that worked in the past. Instead, they choose to replicate something that did not work in the past. Is “pride” the correct word?
- I sign this manifesto with total agreement to the arguments in favor of no, or less, austerity.
Luís Henrique Reis
- Despite being a Medicine student and having only an amateur economics training, I feel obliged to support anything which may stop disaster this current economic downturn is.
- I am not an Economics Expert but Ive followed Dr. Krugmans arguments for several years now and agree completely with the statements in this Manifesto. Viva la Revolution!
- Please bring the MMT folks into this.
- Concordo pienamente, le scelte politiche di Merkel & Co. sono sciocche e suicide, per lEuropa, per la democrazia, per leconomia e anche soltanto per il buon senso comune. O costoro sono rimbambiti del tutto o perseguono incoscienti obiettivi opposti a quelli proclamati. E ora di fermarli prima che sia troppo tardi.
- This “Manifesto for Economic Sense” Is another welcome, if brief, statement regarding a few of the shortcomings of the global politico-socio-economic system(s). It lists a few of the causes of these shortcomings; is essentially devoid of any specific, but contains only general, actions to be taken to correct the painful and unnecessary problems; and properly begs for more specifics and thoughtful action.The important questions are (1) what, specifically, is to be done, and (2) what about all the other myriad problems confronting humanity? After all, simply increasing “demand,” without regard to the environment, global population, etc., in a vulgar and blind attempt to increase “growth,” won’t resolve humanity’s numerous problems but rather simply transform them to a different yet just as deadly mix.I, for one, wish to complement most all the Commenters for their worthy remarks, as well as using their real names. It does help to keep the conversation and project focused on the important matter.
I wish to respectfully introduce Socioeconomic Democracy, which speaks directly to the concerns of this Manifesto, as will as at least many dozens of other societal problems produced by mal-productive contemporary politico-socio-economic systems.
Socioeconomic Democracy is a theoretically consistent and practically implementable socioeconomic system wherein there exist both some form and amount of locally appropriate Universally Guaranteed Personal Income and some form and amount of locally appropriate Maximum Allowable Personal Wealth, with both the lower bound on personal material poverty and the upper bound on personal material wealth set and adjusted democratically by all participants of a democratic society. This is trivially accomplished with elementary Public Choice Theory; that is “single-peaked personal preference distributions”.
The intimately intertwined and serious societal problems Socioeconomic Democracy will eliminate or significantly reduce include (but are by no means limited to) those familiar ones associated with: automation, computerization and robotization; budget deficits and national debts; bureaucracy; maltreatment of children; crime and punishment; development, sustainable or otherwise; ecology, environment, resources and pollution; education; the elderly; farcical “free-market” fantasies, the feminine majority; inflation; international conflict; intranational conflict; involuntary employment; involuntary unemployment; labor strife and strikes; sick medical and health care; military metamorphosis; natural disasters; pay justice; planned obsolescence; political participation; poverty; racism; sexism; untamed technologies; and the General Welfare.
A few, of many, relevant links:
Socioeconomic Democracy: An Advanced Socioeconomic System (Praeger Studies on the 21st Century, 2002)
“A Democratic Socioeconomic Platform, in Search of a Democratic Political Party”
“Socioeconomic Democracy: A Nonkilling, Life-Affirming and Enhancing Psycho-Politico-Socio-Economic System” PelicanWeb’s Journal of Sustainable Development
“Introducing a Socioeconomic Democracy” Prepared for Pakistan Futuristics Institute Silver Jubilee Publication: 4 Islamabad, Pakistan, 8 May 2011.
This article includes an analysis of the many similarities and a few minor differences between Socioeconomic Democracy and Zakat, one of the Five Pillars of Islam.
“Socioeconomic Democracy and Sustainable Development”
“Socioeconomic Democracy” International Journal of Science, vol. 1, February 2012 (pp.33-48).
“Socioeconomic Democracy: a Progressive Societal Arrangement” Studies of Changing Societies: Comparative and Interdisciplinary Focus, vol.1, June 2012.
A list of the historical development of the ideas of Socioeconomic Democracy, as presented by this writer, starting in 1968, is available at
We welcome and encourage feedback to this outreach, and look forward to working with all those interested in further peaceful development and implementation of these and other necessary changes aimed at the betterment of all humanity and the total planet.
Robley E. George Director, Center for the Study of Democratic Societies http://www.CenterSDS.com Coordinador, Nonkilling Economics and Business Research Committee http://www.nonkilling.org/node/7