‘Yes, we have been hit by offshore headwinds … we’re coping a hell of a lot better when Labor was in government,’ treasurer tells parliamentJoe Hockey has said downgrades to world growth and volatility in financial markets have had an impact on confidence.

Officials say power use and rail freight increased in August promising a more rosy outlook and helping shares rise across the regionThe turbulence buffeting global stock markets eased on Monday after positive data from China boosted confidence in the world second biggest economy.China’s power usage, rail freight and property market have all shown improvement since August, indicating that the economy is stabilising, the country’s top economic planning agency said on Monday.

What if a re-reading of the data reveals the Reagan and Clinton years actually boosted the wages of blue collar and middle income households?One of the statistical touchstones for left-leaning economists is the run of figures showing that US workers have suffered three decades of flat wages. There is no better way to illustrate how capitalism, marching to its own tune, fails most of America’s 160 million workers than wage data that hardly moves from year to year after inflation is taken into account.Nobel prize winner Joseph Stiglitz and best-selling economist Thomas Piketty often characterise the 1980s and 1990s, as well as the 2000s until the financial crash, as periods of stellar growth that bypassed the average worker. This story of workers slaving, only for corporations to reap the benefits is allied to Piketty’s history of wealth accumulation, which puts a figure on the astounding riches in property and savings amassed by the most affluent 1% in recent years. Continue reading...

Chancellor confirms nomination and says Robert Chote is ‘undoubtedly best person’ to chair Office for Budget ResponsibilityRobert Chote, chairman of the budget watchdog the Office for Budget Responsibility, has promised to continue shining a light on “the darker recesses of the public finances” after the chancellor gave him another five-year term in the job.The OBR was set up by George Osborne in 2010 to make independent forecasts of economic growth and the public finances, and provide a check on the Treasury’s tax-and-spending plans. Continue reading...

Jeremy Corbyn’s ‘people’s quantitative easing’ for house building was derided by many, but to keep a roof over all our heads in the face of climate change it is time for fresh economic thinkingIf your house was slowly falling down, in serious danger of catching fire or getting repossessed you’d know something was wrong and needed changing. Yet, tens of millions of homes are at risk globally according to Nasa’s latest research on sea level change, because of ice loss from Greenland and the Antarctic, melting glaciers and the thermal expansion of the warming oceans.Oikos, meaning household, and nomos, meaning roughly a set of rules, are the generally accepted Greek roots for the word economics. Hence, stripped of its own wilful obfuscations as a discipline, economics is the art of good housekeeping. But, as the Nasa research shows, economics is failing lamentably at the level of planetary housekeeping, just as it is in the UK at the more prosaic but also important level of the housing market. Continue reading...

The Coalition has failed to deliver on its election pledges including a return to budget surplus, cutting government debt and having a pro-business strategyIf the next federal election is fought on economic management and economic outcomes, Labor will romp in. The economy remains moribund, with each hopeful snippet of good news quickly shot down by a flood of mediocre or downright bad news. Consumers, and that means voters, are starting to suffer financial hardship which is one reason the Coalition should find any issue other than economic management to fight the upcoming election on.

A mad system in which the west’s workers make up for poor wages with cheap credit from China is drawing to a close. Good riddanceClad as it is in jargon and technicalities, financial meltdowns can often seem like an elaborate spectacle taking place in a foreign country. So it is with the trillions wiped off shares since 24 August’s “Black Monday”. Obviously it’s a huge deal, but beyond the numbers on Bloomberg terminals it’s hard to put into perspective. Yet one way to think about what has happened in China over the past couple of weeks is the drawing to a close of an entire system for running the world economy.Over the past two decades, globalisation has fired on two engines: the belief that Americans would always buy the world’s goods, of which the Chinese would make the lion’s share – and lend their income to the Americans to buy more. That policy regime was made explicit during the Asian crisis of the late 90s, when Federal Reserve head Alan Greenspan slashed US borrowing rates, making it cheaper for Americans to buy imports. And it was talked about throughout the noughties by central bankers fretting about the “Great Wall of Cash” flooding out of China and into western assets. The first big blow to that system came with the banking crisis of 2008, which made plain that the US could no longer afford to continue as the world’s backstop consumer. The latest dent has been made over the past couple of weeks in China. Because the debacle in Asia’s number one economy has blown a hole in a string of hitherto long-held beliefs. Continue reading...