The Real World
An Australian economic commentator has pointed out that Japan has bucked economic orthodoxy to become “a model of Modern Monetary Theory”:
Japan is the crazy uncle at the economic Christmas barbecue, laughed at pityingly and ignored, while we all get on with discussing serious matters, like the Taylor Rule, which is the theoretical formula central banks use to calculate what interest rates should be for a given inflation and growth rate. But the truth is Japan’s doing fine, and is not crazy at all. Everyone’s happy, unemployment is 2.5 per cent and has been under 3 per cent for five years, politics is stable and polite and there’s no shortage of infrastructure or housing—house prices have been fairly stable for 30 years. … The Japanese government has owed more than 200 per cent of GDP for more [than] a decade but has been happily running massive budget deficits the whole time, no pressure to balance the books, either politically or economically … because the Bank of Japan buys most of [that debt], using freshly created money, to keep the interest rate low.
It turns out that one of the most infamous Euromyths wasn’t a problem after all.
Brexit has continued its steady erosion this year of much of what once made Britain work. You can still buy food and consumer goods—although some once-familiar imports have disappeared—but many small businesses relying on exports to the EU have gone under. Much of the bureaucratic impact is invisible to most, but it’s feeding into inflation and the general difficulty in doing things that used to be straightforward. Opportunities for young people in the UK to broaden their horizons in the EU via study or seasonal work have been curtailed. Musicians touring in both directions have been badly affected.
Since late last year a solid majority in polls have said that Britain was wrong to vote to leave, but the impacts of the pandemic and the Ukraine War have muddied the waters enough that Brexit defenders can claim that the current mess is nothing to do with their baby. The idea that there can be multiplier effects seems to have escaped them.
There’s no serious discussion of rejoining the EU by the political class yet, but the majority of voters want to start winding Brexit back:
YouGov polling showed that 57% of Britons would now support joining the single market even if that meant the resumption of the free movement of people, a policy which led to millions of families and workers moving to Britain during the country’s membership. One in five people opposed it.
Masha Gessen’s excellent New Yorker essay on the implications of Israel’s destruction of Gaza, In the shadow of the Holocaust (archived), has led to the sponsor of their Hannah Arendt Prize withdrawing funding, which is about the clearest demonstration there could be of the dynamic that Gessen describes.