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Samuel Brittan

Samuel Brittan at FT


More by Samuel Brittan, EMU and all that

Eurointelligence puff:
From the man who single-handedly invented the whole concept of economic commentary in newspapers
comes a very clear-sighted column on why he thinks the eurozone will ultimately collapse

If something cannot go on for ever it will stop.
Why the eurozone will come apart sooner or later
The single currency has failed to become the harmonising force that it was supposed to be
Samuel Brittan, Financial Times, August 8, 2013

On a visit to the London School of Economics last November, the Queen asked why no one saw the financial crisis coming. For if people with enough authority and influence had foreseen it, some preventive action would have been taken and either the crisis would not have occurred, or it would at least have taken a different form.
Samuel Brittan, FT, August 6 2009

People have been known to bet on when Samuel Brittan would write his next column on nominal GDP targeting
We feel the time may have arrived for this idea, especially as an alternative to austerity
Eurointelligence 11 May 2012

The main object of Alistair Darling, the British chancellor, is to inject more spending power into the British economy by a mixture of tax cuts and spending increases
The most frequent objection is to ask: “Where will the money come from?”
The short answer is: the Bank of England printing works in Debden.

Samuel Brittan, Financial Times, November 20 2008

The big difference in diagnosis is between those who still think in terms of a conventional business cycle with output fluctuating in familiar snakelike fashion around a stable trend given by “supply side” factors, and those who believe that something more apocalyptic has happened.
Samuel Brittan, Financial Times, November 6 2008
Higlhly recommended

“inflationary expectations”
William White, until recently economic adviser to the Bank for International Settlements
has resisted heroically the temptation to say: “I told you so.”
Samuel Brittan, Financial Times, August 14 2008

Friedrich Hayek once said that he knew few people who had made money from acting on economic forecasts, but a good many who had made it from selling them. It is difficult for those in any profession to stand out against the spirit of the times, Samuel Brittan FT

Varför stoppade ni inte den vansinniga utlåningen?
- Vi hade inte någon glaskula att titta i. Och vi hade blivit utskrattade.
- Det är svårt att vara olyckskorp när allt går som smort, sade en av hans högre medarbetare Stig Danielsson.
Bankinspektionens tidigare chef Hans Löwbeer, intervjuad i Aftonbladet 13/10 1992

Of course we need a functioning banking system.
But what matters at a world level and for countries is
that total nominal demand should be rising fast enough to support a sustainable rate of real growth
but not so fast as to generate runaway inflation
Samuel Brittan, Financial Times, July 31 2008

The financial crises of capitalism
The beginning of wisdom is to recognise that financial booms and busts have been a feature of capitalism from the very start.
Indeed they are as deep-rooted as human gullibility and greed.
Samuel Brittan, FT May 8 2008

The issue here is not whether there is going to be a recession in the world or individual countries,
but what governments and central banks could do about it.
There are many problems about policies to maintain activity,
but lack of policy instruments is not one of them.

Samuel Brittan, January 17 2008

It it is far from obvious that we face a major worldwide recession.
Samuel Brittan, FT January 31 2008

Samuel Brittan: Watch the dollar, not the euro
The biggest flaw in the world economy is the US current account deficit,
Financial Times, October 12, 2000

The burden of supporting the world economy can hardly rest indefinitely on the shoulders of Anglo-American shoppers and home owners.
Samuel Brittan 11/5 2007

There are certain issues the mention of which acts as a conversation stopper for most people. An example is: “Should central bankers target asset prices?” But the problem will not go away. What is at stake is the long-run credibility of central banks.
Even more important are the questions that it raises about the duration of the present happy combination of world economic growth and low inflation, which the National Institute of Economic and Social Research sees as the “strongest since the early 1970s”.
Samuel Brittan, FT, July 28 2006

After a couple of decades in which the money supply almost
disappeared from view it is now coming back

A new paper by Tim Congdon
Samuel Brittan, Financial Times 14/10 2005

Asking about the implications of a dollar collapse is a different ball game from predicting its likelihood or timing.
Instead of hopeless crystal ball gazing we can ask what this event would mean and what kind of policies should be adopted in response.
Samuel Brittan, Financial Times, 16/6 2006

I am still more worried by half-baked “solutions” to world imbalances than the imbalances themselves.
An increase in the US savings ratio seems more likely to come from a housing market shake-out than from a correction of the budget deficit
Samuel Brittan 2/6 2006

The recent agreement that the International Monetary Fund should investigate global imbalances and publish its report has been widely hailed. But I have my doubts. It will be less difficult for the established industrial countries to form a consensus on exchange rate changes than on the domestic measures that need to accompany them. If the dollar were to depreciate further without an increase in the US savings rate, the main effects might be a modest upward nudge to inflation in the US, a downward nudge in the rest of the world but a disappointing effect on the payments imbalances.

What I found most interesting in the new OECD Outlook was a chart showing that the relationship between the so-called output gap and national inflation rates has become much weaker. Central banks use this gap as their main tool of analysis to decide whether the underlying inflation rate is rising or falling.

My own main worry is still on the energy front. Suppose there were to be a sustained period of oil at $100 per barrel.

Full text


US Savings rate
A long wave of credit stimulation has been allowed to obscure the underlying problem of capital accumulation in the United States.
We are paying a price, but not solving the problem.
American Thinker 4/8 2008

End of Oil Era


The most basic index of performance is real gross domestic product per hour worked ("productivity").
The gap between USA and Europe appeared early in the 19th century and continued to widen until about 1950. For most of the subsequent period Europe has been catching up.
Samuel Brittan Financial Times 29/7 2003

European output per hour is now 93 per cent of that in the US while output per capita is a much lower 77 per cent. The difference between the two measures is attributable to longer hours in the US, to lower unemployment there and to higher labour force participation. If the differences merely reflected a European preference for leisure or early retirement by individual citizens, there would be nothing to complain about. Prof Robert Gordon's guess is that a third of the difference reflects voluntarily chosen leisure and the remaining two-thirds reflects laws and practices that have priced European workers out of the labour market.

At Prof Gordon's level of aggregation, the difference between, for instance, the eurozone and the other European countries disappears. A superficial glance at the indices suggests that the UK has the worst of both worlds. It has roughly the same output per capita as Germany and France but this is achieved, despite lower productivity, with longer hours, longer working lives and less leisure, on American lines.

The history of successive British governments' attempts to close the productivity gap should make one cautious about any rush to emulate some fashionable model, whether that of Germany in the 1970s, Japan in the 1980s or the US today. It should also make the British government cautious about lecturing other EU countries about its supposedly superior economic performance.

My own assessment is that the US and at least north-west Europe have now reached a stage of development where there is little to choose between them in economic performance and where growth is no longer the most sensible policy objective. If the "European social model" is to be criticised, it is because it restricts freedom of choice.

Two Centuries of Economic Growth, CEPR discussion paper 4415


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