9 ms·

Amartya Sen: The economic consequences of austerity

75 points by MaysonL 11y ago

ekianjo 11y ago
> GDP per capita has risen far more slowly in the UK than in the US and Japan (not to mention some of the faster-growing Asian economies). Oh, I don't think you should cite Japan as any example anywhere. The financial situation over here is catastrophic, and there's not telling when the country actually hits the wall, but when it will it will hit it BAD. Demographic decline, Productivity stagnating, retirement paid by workers (less and less of them), humongous debt (spelling out default of hyper inflation in the mid term) - and a Nobel laureate should know that GDP growth is far from a good economic indicator... > and austerity, as Keynes noted, is essentially anti-growth Huh, does the author seriously believe that Keynes was constant in his beliefs? The guy changed his mind about many things thoughout his life: http://www.economist.com/blogs/freeexchange/2013/11/economic-history-2 http://www.economist.com/blogs/freeexchange/2013/11/economic...
- conistonwater 11y ago
  > Oh, I don't think you should cite Japan as any example anywhere. The financial situation over here is catastrophic, and there's not telling when the country actually hits the wall, but when it will it will hit it BAD. Demographic decline, Productivity stagnating, retirement paid by workers (less and less of them), humongous debt (spelling out default of hyper inflation in the mid term)... Wait, if the UK, which doesn't suffer from these problems quite as badly, still has lower GDP growth than a country that does, that says something bad about UK's growth. So it seems clear then that the UK has done something badly wrong. > GDP growth is far from a good economic indicator It should be good enough. For one thing, large systematic movements in any indicator can be used to measure things, and the indicator doesn't have to be totally precise for it to be useful.
  - ekianjo 11y ago
    > still has lower GDP growth than a country that does Even if GDP was an effective indicator, the author is completely wrong about his assumptions: the GDP growth for the UK and Japan during 2000-2008 is almost identical: http://www.tradingeconomics.com/japan/gdp-growth http://www.tradingeconomics.com/japan/gdp-growth Just add the UK at the bottom to compare, you will see both lines are on top of each other's.
  - mohawk 11y ago
    Ah, Japan & GDP growth numbers, the perfect example :) Are GDP numbers a good indicator of the success of economic policies? They aren't that useful if you ignore all the details. Here is an example when comparing US and Japan GDP growth numbers: http://research.stlouisfed.org/publications/es/article/10011 http://research.stlouisfed.org/publications/es/article/10011 "In summary, three structural factors seem to account for the difference in GDP growth between Japan and the United States in the post-1990 period: (i) the slow population growth in Japan, (ii) the employment rate, and (iii) the decline of average hours worked in Japan from a very high level to the level in the United States. It seems useful to consider these findings when Japan’s experience is used to draw policy conclusions for the United States." And yet we have been lectured by numerous economists (sometimes with Nobel medals on them) about the implications these raw GDP growth numbers supposedly have for economic policy.
- notahacker 11y ago
  Care to point us to a text written by Keynes advocating austerity in an economic downturn?
paulsutter 11y ago
Austerity yes/no is the economic equivalent of a bikeshed argument. All the arguments about printing more or printing less money completely sidestep the real issue: how do you improve the productivity of the Greek economy. Economists have opposing theories that it's either really good, or really bad, to drop money from helicopters or just outright give it to banks. None of these people are looking at the Greek economy saying "this is how they can double tourism", etc. Over the long term these are the decisions will create actual sustainable growth. As for getting back the €360B, well, I wish all parties better luck with their decisionmaking next time. Seems like they need aid more than they need loans.
- deleted 11y ago
  [deleted]
- tim333 11y ago
  >Austerity yes/no is the economic equivalent of a bikeshed argument. Well not really - it effects millions of people lives and billions / trillions in economic output and in the 1920's case led to Hitler and WW2. It's not like what colour to paint the bike shed.
mohawk 11y ago
Fascinating how the meaning of the word 'austerity' has drifted away from the meaning of 'austere'. A balanced budget doesn't seem very 'austere' to me. Many people arguing against balancing budgets (or 'austerity' if you will) do so because the first budgets to be slashed are usually things where the benefits are long-term, such as education. But it's a false dichotomy that these are the only choices. Then there's the economists, who will pull out some toy model and claim xyz is good/bad. Too me it seems more like religions (being a Keynesian, Austrian, etc), where people search for facts that confirm their positions. The problem with most macroeconomic theories is that they ignore too many important details. So for example, you can borrow money to invest in the future which is usually good in the long run, or you can spend it on things you don't need such as hosting international sports competitions, ineffective military equipment, ... This means you can come to completely different conclusions as to the effectiveness of government spending. In the words of Warren Buffet, we don't talk about 'quality' of GDP enough. There's a nice paper by Mankiw on the topic of science vs engineering in economics: https://www.nber.org/papers/w12349 https://www.nber.org/papers/w12349
- toyg 11y ago
  > But it's a false dichotomy that these are the only choices. I agree. Unfortunately, these are the only choices that are typically envisioned by people advocating balanced budgets, so they are automatically associated to the concept. It's the responsibility of such advocates to come up with alternative choices; alas, as we've just seen, they don't seem willing to entertain the possible existence of alternative paths. > The problem with most macroeconomic theories is that they ignore too many important details. So for example [...] you can come to completely different conclusions as to the effectiveness of government spending. Among the many important details these theories ignore is the actual identity of people responsible for such spending.
  - mohawk 11y ago
    A politicians' goal is to get reelected. If not, their party will quickly replace them with someone who has that goal. Budget cuts, when they are made, are done in the places where they will minimise the political damage to the party making the cuts. It's not that nobody can come up with saving money in the bureaucracy, military&secret services, government subsidies, etc. It's just that they are costly in terms of political power and therefore not discussed at all. And the easiest things to slash are things your own voters don't care about and the easiest taxes to increase those that your voters don't pay. I doubt that any kind of economic thinking goes into these decisions.
gadders 11y ago
"Similarly, at the international level, the global free fall following the 2008 crisis was largely halted by the move, under the visionary leadership of Gordon Brown, for a meeting of the governments of the newly formed G20 in April 2009 in London, each promising to do its best not to feed the downward spiral by domestic complicity." I think that is the first time I've heard Gordon Brown described as visionary. He's normally considered one of the worst post-war Prime Ministers.
- eterm 11y ago
  You probably read too many UK newspapers, each of which decided to make a sustained attack throughout his leadership.
  - gadders 11y ago
    Well, living in the UK, yes I do. And Brown decided to wage his own childish sustained attack on Tony Blair for the whole time he was Chancellor of the Exchequor as well. But on top of all this, Brown was a bully to his subordinates as well.
    - toyg 11y ago
      He also understood economics better than the current bunch will ever do. But hey, they smile better on tv, so here we are.
      - gadders 11y ago
        Yes, that's why the economy was in such great shape when he left office.
        toyg 11y ago
        Considering we went through the biggest crash since the 1920s, which was triggered overseas, yes, we did quite well out of it. In fact, without his choice of semi-nationalising some of the biggest banks in the land (and in the world), today we'd probably be begging for a bowl of porridge. Most people outside the UK understand this, including pretty much everyone Brown worked with during those crisis meetings, which is why Sen is saying what he's saying. He made missteps in other areas (PFIs, the privatization drive, and from a leftist point of view, the choice to leave basically intact the banks he acquired), but he understood macroeconomics better than most. Unfortunately for him, Murdoch did not trust him not to come after his interests, so here we are.
jackgavigan 11y ago
Sen is being disingenuous when he compares the ratio of debt to GDP in 1948 (200%) and 1957 (120%), with 2010 (70%). The reason that, as he puts it, "the scare was not there from the late 1940s through the 1960s" is because the UK's debt level at that time was a legacy of WWII. The UK's national debt ballooned during WWII, peaking at 237% in 1946-47, then declined rapidly to less than 50% in 1973.[1] He also fails to distinguish between the degree of austerity imposed in the UK and Europe. In the UK, the Conservative government has taken steps to balance the budget by reigning in public spending (benefits in particular) in order to cut the deficit. It is a world apart from the extreme measures that were imposed on countries like Ireland[2] and Greece[3]. For context: The New Statesman is a left-wing publication. The left-wing in Britain are deeply opposed to the (right wing) Conservative government's austerity policies. 1: http://www.ukpublicspending.co.uk/uk_national_debt_chart.html http://www.ukpublicspending.co.uk/uk_national_debt_chart.htm... 2: http://www.independent.ie/business/personal-finance/the-10-worst-budget-blows-since-austerity-hit-30656061.html http://www.independent.ie/business/personal-finance/the-10-w... 3: http://www.newyorker.com/business/currency/what-austerity-looks-like-inside-greece http://www.newyorker.com/business/currency/what-austerity-lo...
- toyg 11y ago
  > the Conservative government has taken steps to balance the budget by reigning in public spending Steps that pretty much failed spectacularly, considering current levels of debt. However, the markets trust this government will keep cutting ad infinitum in order to pay back their debt, so they trust them enough to lend them more money at decent rates. It's like a lender trusting a borrower willing to prostitute or sell his children above an unwilling one. "Market trust" is a big joke, and also what underpins the whole economic structure of our times. It's insane.
  - jackgavigan 11y ago
    > Steps that pretty much failed spectacularly, considering current levels of debt. People often confuse the national debt and the budget deficit. The national debt is like a credit card bill. To pay off that debt, you need to spend less (including the interest on the money you owe) than you get paid, so you can give the surplus to the credit card company, thereby reducing the amount you owe them. If you spend more than you get paid, your credit card debt goes up (i.e. you're running a budget deficit). In other words, the budget deficit must be eliminated (i.e. turned into a budget surplus) before the government can begin to reduce the national debt. In 2008, the UK government spent ~£150bn more than it earnt, so the national debt grew by that amount. Last year, it spent about £90bn more than it earnt, so the national debt is still rising. The good news is that the deficit is falling. The government aims to eliminate it by 2020, at which point they will be in a position to start reducing the size of the national debt.
vegancap 11y ago
Keynes's record on matters of public spending and monetary policy is a shaky one (see broken window fallacy). Not only is any level of public debt a threat to long-term stability, it's immoral. Generally speaking it's not us, in the present economy, or the politicians who allow the debt to rise who have to pay it back. It's our children and grandchildren. Inter-generational debt just isn't right. New Statesman should have read some Hayek.
- stkni 11y ago
  Nah, don't think so. Keynes might not have been right about everything but I think some of his ideas are the closest we've come to what could be described as a 'just' economy. Indeed if we're going down this road then the broken window fallacy contains a contradiction (and so must be false) because it assumes full employment to reach its conclusion. Something that, should it be true, would probably cause the problem we're trying to solve to disappear.
Htsthbjig 11y ago
Good piece of economic propaganda from first word to the last: "Nobel Prize-winning economist Amartya Sen considers the alternatives." There is no such a thing like Nobel price Winners. There are Winners of Central bank's created Nobel Memorial price that of course say what the Central Banks want. To say that the crisis that we have today is the consequence of austerity is like saying that because you feel bad when sober the morning after getting drunk, the problem is being sober in the first place. There is no Western country today that is austere at all. All of them are spending more money that they have, most of it on bad investments. This always has ended on one place: destruction of capital. It should had been done in an ordered manner but they decided to kick the can ignoring the problem but making it worse in the future. Instead of removing the bad investments from the system, they had used the working part of the system to save the bad, actually rewarding the bad actors(that made a killing at the start of the bubbles.e.g 20% profits per year in Greece real state). When Greece was bankrupt years ago, the problem was not solved giving them more money, and indebting them even more. The proper solution was to bankrupt Greece as soon as they could not pay. Of course this would have bankrupted the irresponsible French and German banks that lend money to Greece in the first place. "Saving Greece" was in fact saving French and German banks and allocating the losses on public hands.
Symmetry 11y ago
It's worth noting that austerity is strongly correlated with GDP decrease only for those countries without an independent monetary policy (i.e. the eurozone). People have been worried about the zero lower bound but it doesn't seem to have had much of an effect in practice. http://www.themoneyillusion.com/?p=29692 http://www.themoneyillusion.com/?p=29692
welshguy 11y ago
To quote Margaret Thatcher: "You soon run out of other peoples money"
petercooper 11y ago
Does Britain really have "austerity" when the total central government spending in 2015 is 39.4% higher than in 2007 at the height of our supposed prosperity?
tim333 11y ago
Having just finished the article a day or so later it occurs to me a lot of the problems occur because the situation is too darn hard to understand. 99% of people if asked to explain why increasing government borrowing in a financial crisis is a good thing in general if you have your own currency but increasing your personal borrowing is often bad would fail to give an answer that would pass an economics exam. Most elected leaders also. Hence the mess we have.

75 points by MaysonL 11y ago

> GDP per capita has risen far more slowly in the UK than in the US and Japan (not to mention some of the faster-growing Asian economies). Oh, I don't think you should cite Japan as any example anywhere. The financial situation over here is catastrophic, and there's not telling when the country actually hits the wall, but when it will it will hit it BAD. Demographic decline, Productivity stagnating, retirement paid by workers (less and less of them), humongous debt (spelling out default of hyper inflation in the mid term) - and a Nobel laureate should know that GDP growth is far from a good economic indicator... > and austerity, as Keynes noted, is essentially anti-growth Huh, does the author seriously believe that Keynes was constant in his beliefs? The guy changed his mind about many things thoughout his life: http://www.economist.com/blogs/freeexchange/2013/11/economic-history-2 http://www.economist.com/blogs/freeexchange/2013/11/economic...

conistonwater 11y ago
> Oh, I don't think you should cite Japan as any example anywhere. The financial situation over here is catastrophic, and there's not telling when the country actually hits the wall, but when it will it will hit it BAD. Demographic decline, Productivity stagnating, retirement paid by workers (less and less of them), humongous debt (spelling out default of hyper inflation in the mid term)... Wait, if the UK, which doesn't suffer from these problems quite as badly, still has lower GDP growth than a country that does, that says something bad about UK's growth. So it seems clear then that the UK has done something badly wrong. > GDP growth is far from a good economic indicator It should be good enough. For one thing, large systematic movements in any indicator can be used to measure things, and the indicator doesn't have to be totally precise for it to be useful.
- ekianjo 11y ago
  > still has lower GDP growth than a country that does Even if GDP was an effective indicator, the author is completely wrong about his assumptions: the GDP growth for the UK and Japan during 2000-2008 is almost identical: http://www.tradingeconomics.com/japan/gdp-growth http://www.tradingeconomics.com/japan/gdp-growth Just add the UK at the bottom to compare, you will see both lines are on top of each other's.
- mohawk 11y ago
  Ah, Japan & GDP growth numbers, the perfect example :) Are GDP numbers a good indicator of the success of economic policies? They aren't that useful if you ignore all the details. Here is an example when comparing US and Japan GDP growth numbers: http://research.stlouisfed.org/publications/es/article/10011 http://research.stlouisfed.org/publications/es/article/10011 "In summary, three structural factors seem to account for the difference in GDP growth between Japan and the United States in the post-1990 period: (i) the slow population growth in Japan, (ii) the employment rate, and (iii) the decline of average hours worked in Japan from a very high level to the level in the United States. It seems useful to consider these findings when Japan’s experience is used to draw policy conclusions for the United States." And yet we have been lectured by numerous economists (sometimes with Nobel medals on them) about the implications these raw GDP growth numbers supposedly have for economic policy.
notahacker 11y ago
Care to point us to a text written by Keynes advocating austerity in an economic downturn?

paulsutter 11y ago

Austerity yes/no is the economic equivalent of a bikeshed argument. All the arguments about printing more or printing less money completely sidestep the real issue: how do you improve the productivity of the Greek economy. Economists have opposing theories that it's either really good, or really bad, to drop money from helicopters or just outright give it to banks. None of these people are looking at the Greek economy saying "this is how they can double tourism", etc. Over the long term these are the decisions will create actual sustainable growth. As for getting back the €360B, well, I wish all parties better luck with their decisionmaking next time. Seems like they need aid more than they need loans.

deleted 11y ago
[deleted]
tim333 11y ago
>Austerity yes/no is the economic equivalent of a bikeshed argument. Well not really - it effects millions of people lives and billions / trillions in economic output and in the 1920's case led to Hitler and WW2. It's not like what colour to paint the bike shed.

mohawk 11y ago

Fascinating how the meaning of the word 'austerity' has drifted away from the meaning of 'austere'. A balanced budget doesn't seem very 'austere' to me. Many people arguing against balancing budgets (or 'austerity' if you will) do so because the first budgets to be slashed are usually things where the benefits are long-term, such as education. But it's a false dichotomy that these are the only choices. Then there's the economists, who will pull out some toy model and claim xyz is good/bad. Too me it seems more like religions (being a Keynesian, Austrian, etc), where people search for facts that confirm their positions. The problem with most macroeconomic theories is that they ignore too many important details. So for example, you can borrow money to invest in the future which is usually good in the long run, or you can spend it on things you don't need such as hosting international sports competitions, ineffective military equipment, ... This means you can come to completely different conclusions as to the effectiveness of government spending. In the words of Warren Buffet, we don't talk about 'quality' of GDP enough. There's a nice paper by Mankiw on the topic of science vs engineering in economics: https://www.nber.org/papers/w12349 https://www.nber.org/papers/w12349

toyg 11y ago
> But it's a false dichotomy that these are the only choices. I agree. Unfortunately, these are the only choices that are typically envisioned by people advocating balanced budgets, so they are automatically associated to the concept. It's the responsibility of such advocates to come up with alternative choices; alas, as we've just seen, they don't seem willing to entertain the possible existence of alternative paths. > The problem with most macroeconomic theories is that they ignore too many important details. So for example [...] you can come to completely different conclusions as to the effectiveness of government spending. Among the many important details these theories ignore is the actual identity of people responsible for such spending.
- mohawk 11y ago
  A politicians' goal is to get reelected. If not, their party will quickly replace them with someone who has that goal. Budget cuts, when they are made, are done in the places where they will minimise the political damage to the party making the cuts. It's not that nobody can come up with saving money in the bureaucracy, military&secret services, government subsidies, etc. It's just that they are costly in terms of political power and therefore not discussed at all. And the easiest things to slash are things your own voters don't care about and the easiest taxes to increase those that your voters don't pay. I doubt that any kind of economic thinking goes into these decisions.

gadders 11y ago

"Similarly, at the international level, the global free fall following the 2008 crisis was largely halted by the move, under the visionary leadership of Gordon Brown, for a meeting of the governments of the newly formed G20 in April 2009 in London, each promising to do its best not to feed the downward spiral by domestic complicity." I think that is the first time I've heard Gordon Brown described as visionary. He's normally considered one of the worst post-war Prime Ministers.

eterm 11y ago
You probably read too many UK newspapers, each of which decided to make a sustained attack throughout his leadership.
- gadders 11y ago
  Well, living in the UK, yes I do. And Brown decided to wage his own childish sustained attack on Tony Blair for the whole time he was Chancellor of the Exchequor as well. But on top of all this, Brown was a bully to his subordinates as well.
  - toyg 11y ago
    He also understood economics better than the current bunch will ever do. But hey, they smile better on tv, so here we are.
    - gadders 11y ago
      Yes, that's why the economy was in such great shape when he left office.
      - toyg 11y ago
        Considering we went through the biggest crash since the 1920s, which was triggered overseas, yes, we did quite well out of it. In fact, without his choice of semi-nationalising some of the biggest banks in the land (and in the world), today we'd probably be begging for a bowl of porridge. Most people outside the UK understand this, including pretty much everyone Brown worked with during those crisis meetings, which is why Sen is saying what he's saying. He made missteps in other areas (PFIs, the privatization drive, and from a leftist point of view, the choice to leave basically intact the banks he acquired), but he understood macroeconomics better than most. Unfortunately for him, Murdoch did not trust him not to come after his interests, so here we are.

jackgavigan 11y ago

Sen is being disingenuous when he compares the ratio of debt to GDP in 1948 (200%) and 1957 (120%), with 2010 (70%). The reason that, as he puts it, "the scare was not there from the late 1940s through the 1960s" is because the UK's debt level at that time was a legacy of WWII. The UK's national debt ballooned during WWII, peaking at 237% in 1946-47, then declined rapidly to less than 50% in 1973.[1] He also fails to distinguish between the degree of austerity imposed in the UK and Europe. In the UK, the Conservative government has taken steps to balance the budget by reigning in public spending (benefits in particular) in order to cut the deficit. It is a world apart from the extreme measures that were imposed on countries like Ireland[2] and Greece[3]. For context: The New Statesman is a left-wing publication. The left-wing in Britain are deeply opposed to the (right wing) Conservative government's austerity policies. 1: http://www.ukpublicspending.co.uk/uk_national_debt_chart.html http://www.ukpublicspending.co.uk/uk_national_debt_chart.htm... 2: http://www.independent.ie/business/personal-finance/the-10-worst-budget-blows-since-austerity-hit-30656061.html http://www.independent.ie/business/personal-finance/the-10-w... 3: http://www.newyorker.com/business/currency/what-austerity-looks-like-inside-greece http://www.newyorker.com/business/currency/what-austerity-lo...

toyg 11y ago
> the Conservative government has taken steps to balance the budget by reigning in public spending Steps that pretty much failed spectacularly, considering current levels of debt. However, the markets trust this government will keep cutting ad infinitum in order to pay back their debt, so they trust them enough to lend them more money at decent rates. It's like a lender trusting a borrower willing to prostitute or sell his children above an unwilling one. "Market trust" is a big joke, and also what underpins the whole economic structure of our times. It's insane.
- jackgavigan 11y ago
  > Steps that pretty much failed spectacularly, considering current levels of debt. People often confuse the national debt and the budget deficit. The national debt is like a credit card bill. To pay off that debt, you need to spend less (including the interest on the money you owe) than you get paid, so you can give the surplus to the credit card company, thereby reducing the amount you owe them. If you spend more than you get paid, your credit card debt goes up (i.e. you're running a budget deficit). In other words, the budget deficit must be eliminated (i.e. turned into a budget surplus) before the government can begin to reduce the national debt. In 2008, the UK government spent ~£150bn more than it earnt, so the national debt grew by that amount. Last year, it spent about £90bn more than it earnt, so the national debt is still rising. The good news is that the deficit is falling. The government aims to eliminate it by 2020, at which point they will be in a position to start reducing the size of the national debt.

vegancap 11y ago

Keynes's record on matters of public spending and monetary policy is a shaky one (see broken window fallacy). Not only is any level of public debt a threat to long-term stability, it's immoral. Generally speaking it's not us, in the present economy, or the politicians who allow the debt to rise who have to pay it back. It's our children and grandchildren. Inter-generational debt just isn't right. New Statesman should have read some Hayek.

stkni 11y ago
Nah, don't think so. Keynes might not have been right about everything but I think some of his ideas are the closest we've come to what could be described as a 'just' economy. Indeed if we're going down this road then the broken window fallacy contains a contradiction (and so must be false) because it assumes full employment to reach its conclusion. Something that, should it be true, would probably cause the problem we're trying to solve to disappear.

Htsthbjig 11y ago

Good piece of economic propaganda from first word to the last: "Nobel Prize-winning economist Amartya Sen considers the alternatives." There is no such a thing like Nobel price Winners. There are Winners of Central bank's created Nobel Memorial price that of course say what the Central Banks want. To say that the crisis that we have today is the consequence of austerity is like saying that because you feel bad when sober the morning after getting drunk, the problem is being sober in the first place. There is no Western country today that is austere at all. All of them are spending more money that they have, most of it on bad investments. This always has ended on one place: destruction of capital. It should had been done in an ordered manner but they decided to kick the can ignoring the problem but making it worse in the future. Instead of removing the bad investments from the system, they had used the working part of the system to save the bad, actually rewarding the bad actors(that made a killing at the start of the bubbles.e.g 20% profits per year in Greece real state). When Greece was bankrupt years ago, the problem was not solved giving them more money, and indebting them even more. The proper solution was to bankrupt Greece as soon as they could not pay. Of course this would have bankrupted the irresponsible French and German banks that lend money to Greece in the first place. "Saving Greece" was in fact saving French and German banks and allocating the losses on public hands.

Symmetry 11y ago

It's worth noting that austerity is strongly correlated with GDP decrease only for those countries without an independent monetary policy (i.e. the eurozone). People have been worried about the zero lower bound but it doesn't seem to have had much of an effect in practice. http://www.themoneyillusion.com/?p=29692 http://www.themoneyillusion.com/?p=29692

welshguy 11y ago

To quote Margaret Thatcher: "You soon run out of other peoples money"

petercooper 11y ago

Does Britain really have "austerity" when the total central government spending in 2015 is 39.4% higher than in 2007 at the height of our supposed prosperity?

tim333 11y ago

Having just finished the article a day or so later it occurs to me a lot of the problems occur because the situation is too darn hard to understand. 99% of people if asked to explain why increasing government borrowing in a financial crisis is a good thing in general if you have your own currency but increasing your personal borrowing is often bad would fail to give an answer that would pass an economics exam. Most elected leaders also. Hence the mess we have.