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Hey Richard, thanks for the video. What do you think about the import/export difference with the rest of the world? When we buy cars from Germany but don't sell them back the same price stuff back, who gets that debt?

Economics does acknowledge and offer remedies for externalities. Economic policy can deal with externalities by ensuring that all costs and benefits are internalized by households and firms. This can be done through government intervention, which can include policies such as taxing pollution, thereby internalising the cost of pollution.

Having to buy houses and pay rent for illegal imagrants will be the end of people's ability to survive financially. Many People need 25% increase in take home pay labour will go the other way, with inflation not helping, stagnation of wages and increase in rent and energy, people will not be happy being made homeless while others get a gravy train.

I want to mention that it is a good time to put a bit of love into alternate social media over X. You have 11k followers on Mastodon, which usually means *more* active engagement compared to X, even with much larger followers. The platform is driven by human interaction not a program choosing to show your posts to cranks.

Worse micro doesn’t compose into macro. I nice fetid mess.

so many lies

The individual may not be fully rational, we all see that, day to day. The government is even worse though. letting the government decide what is good for the individual is the road to HELL. If I want a beer, I'll bloody well have one. I don't need a prick from the government trying to stop me.

My short answer is, Yes.

You have a phalanx of people on this site who have no idea of business!!!!!

Not real labour Tory,s in another life same ideology neoliberalism very unlikely reeves change interest payments even tho proven save 55 billion rather hand more power obr cosy up to Treasury keep straight jacket but where Rachel reeves go badly wrong bit just Thames valley her growth plan if slashing infrastructure projects increasing capital gains inheritance drives away investors due cutting infrastructure projects shrink economic growth before gets it did have surplus torys blew it up by hiking up interest on government dents when dishy rishi was chancler wasted 11 billion less u do this tax wealthy end subsidizing banks walk into austerity

The problem is government runs on polls & focus groups to manage expectations rather than putting forth an argument why A, B or C is the right thing to do. The Labour government will not say "Brexit is a disaster!" for fear of the right-wing media that spouts lies, distortions & propaganda: so what it needs to do is strengthen OFCOM to stop the gaslighting of the public BUT it will not do that. That is why we can have an honest debate about too many subjects & why we are lied to about the economic decisions that are taken or not.

Imagine equally foolish people basing macro weather patterns on micro weather observations ...

Do you think that Freeports and SEZs will benefit the UK economy? I am confused by Labour's enthusiasm for them.

The government’s past and present a gold medalists at creating money to give away to then punish the poorest with austerity to fund it all.

Perhaps! It is not unique you know. For example Germany has the self same thing. G.mbH (Gesellschaft mit beshraenkter Hartung)

Absolutely agree. The DSGE modelling has so many assumptions that make it a fiction. Macro requires systems thinking and theory, not micro…

bit harsh to call it garbage! It has real value to assume people are maximisers, but it assumes a certain level of intelligence from the audience (always dangerous). It gives a sound theory but you have to understand it is only theory. It is useful to know what a min/max playthrough would look like to better understand why certain actions may be chosen. It's like democracy - terrible but better than alternatives (I believe this less and less every year I get older)

Ahhh. So all this was adding up this mmt bs. Ill pass

He makes it seem like govt overspending is a goood thing.

You’re talking about “joined up thinking”. When has that EVEN existed within government?

Trying to scale micro up to the macro sphere, setting aside the fact that micro itself is based on flawed premises, turns out to be a giant composition fallacy. At the individual level, it makes sense to save more than we spend, to buy low and sell high. But that is impossible at the macro level, because if one person saves more than he spends, someone else has to spend more than he saves. If one person buys low and sells high, someone else has to buy high and sell low. One person's toxic emissions are another person's or region's toxic inflow. Neoclassical economics is worthless.

0:31 Good insights! Isn’t this “information asymmetry” broadly what made Stiglitz et al Nobel laureates over two decades ago? Not to mention shaking Adam Smith’s 230 year old “axiom” on rational (economic) behaviour? 😊

Our democracy has been captured by Neoliberals. Nothing can change.

GIGO!

Is the nation in fact stumbling along macroeconomically in the dark, or is the way macroeconomics is applied working out very nicely, thanks, for some?

I like the channel. There is nothing wrong with Richard’s analysis. May I suggest that it is necessarily incomplete as to being a solution to the problem with externalities. It is incomplete as Richard is an economist. For example Richard makes the comment that Wes Streeting can legislate to deal with things like excess sugar consumption. In my opinion, Wes can’t as he is subject to political forces. Politics is upstream of economics. It goes further those that apply political forces and pressures are motivated by philosophical positions (including morality). Richard’s thoughts, for me, make so much sense, but they do not address the root cause of the problems we face. The issue goes further, politics is informed by philosophy and perhaps we should consider sociology and psychology. I’m not suggesting all of all these disciplines, that would be nearly impossible (a job for AI perhaps) but to use them to develop a line of sight between individual economic behaviour and how we find and pull the right policy levers to move us towards dealing with externalities within a nation state. (However, I’m probably not done as I feel we are in the process of dismantling the nation state, not in any malign way, but it is another context to consider). Very happy to hear any thoughts or disagreements as I know my own thinking must be incomplete.

Piggy bank economics ruin our lives.

It's really the other way around. Microeconomics SHOULD be based on macroeconomics. Not considering the externalities is dishonest. When businesses ignore the effects of their activities on the environment or communities, they are effectively passing on costs to others.

Absolute garbage!! Trumps 4 years in office was a great success!! people must realise that a businessman is always best to run a country's economy!!!Cutting taxes for the rich is so important to an economy!!!!When the rich have taxes cut they have more to invest, thus clearly helping jobs & working class people!!! You talk so much crap! And I am a poor working class citizen!!!

This guy is obviously a Socialist . and so is clueless about economics. . A 'successful socialist economy' is as true as ' a kamikaze pilot on his third successful mission'.

You mentioned that a company may not have paid Corporation Tax, VAT, and PAYE. Am I right in saying that if an employees PAYE has not been paid to HMRC, depite the money being deducted by the employer, then the employee is still liable to pay it?

If there is no 'microeconomics' then there is no macro economics. One is ENTIRELY dependant on the other. This is a fake economics channel. The guy is clueless.

Microeceonomics is ahead of financial and management accounting which completely ignores externalities. If businesses had accounts based on the true cost,including externalities, they would be entirely different particularly in areas like highly processed foods,tobacco,sugar,oil production where the financial and human consequences of such production have enormous unincluded costs to society if not the firm. It is hard to see you account for all the externalities,the macro total, without adjusting individual firms' accounts.

Managing externalities has a conflict; an authoritarian government can do so- by removing freedoms. The fundamental issue is around personal responsibility and consequences. If you have a welfare state and a free health system, unconstrained freedom transfers costs from individuals to society. How to balance? Laws vs costs is the battleground.

590 viewer

If there was one lesson I learned from studying Economics, it was precisely this. Unfortunately I came to realise as I got older that political considerations will always outweigh financial imperatives.

Not 'built on completely irrational foundations'. Quite the opposite- but members of society are the irrational ones. Ask any advertising executive. More, the very existence of betting shops proves it. You can gamble on the stock market, where the odds are in your favour, or at a betting shop where they are against you. And many choose the latter.

Government buys the lie of worshipping the market: this mythical thing we have created and can't tamper with because we don't fully understand cause and effect. In parallel, government resists tampering with personal choices and uses the word freedom to justify any lack of intervention. Meanwhile we are viewed as greed-obsessed consumers and worker ants, or lazy buggers who are not working, by economists expert in mathematical models based on flawed assumptions. What a way to run an economy...

Why would we expect politicians to do anything that doesn't maximise their wellbeing? Im sure Wes has got a board position on a private healthcare company or lobby firm lined up for him in the future if he tows the line...

As long as we (humans) keep treating running a country like running a business the complete collapse of society might be in my lifetime never mind my children’s 😐

The odd thing is when there is a small business, it's almost impossible to borrow from the bank without directors personal liability. However, large companies are welcomed by the banks to borrow millions, and if they go into liquidation, the bank will happily lend the new company millions. Again, it's the old boy network and who you know.

!!I recently sold some of my long-term position and currently sitting on about 250k, do you think Nvidia is a good buy right now or I have I missed out on a crucial buy period, any good stock recommendation on great performing stocks will be appreciated.

Richard is of course complete right about the absurdity of the assumption in classic economics of the rational man, although I would argue that, like the perfect markets theory, the assumption is nothing more than a useful simplifying tool to understanding. Rational people will often come to very different conclusions based on the same set of facts, something which classic microeconomics cannot abide, for the simple reason that each person weighs those facts differently based upon their own personal biases and desires. That is why behavioural economic theory exists. Not that Richard discusses that. Similarly the perfect market theory so beloved of classical economist is and always was understood as a theoretical or hypothetical assumption that did not exist in the real world. It was used solely as a simplifying aid to understand basic economics or if you prefer the fundamental tenets of classical microeconomics before you move on to apply those insights to the real world. Indeed economists have been developing the imperfect markets theory for the last century and probably well before that. But again Richard ignores that entire branch of economics. So the entire initial Richard rant is complete BS which completely, probably deliberately, misunderstands economics. Then Richard moves on to macroeconomics and makes an even bigger hash of his argument. Let us consider a classic example of macroeconomics in action which was based on classic microeconomic theory - the reduction in the prevalence of cigarette and other tobacco use. That was achieved in the UK by government action, in part through a consistent education campaign over decades and in part by using the microeconomics principles of price rises through imposition of tax reducing demand - and even at the beginning it was understand that demand was, because of the addictive qualities of tobacco products, less price sensitive that for other products. I could also give the Scottish example of minimum alcohol pricing which again has used the pricing mechanism to successfully reduce alcohol consumption. Then we get to the Richard rant about Wes Streeting - Richard is incapable of understanding that Wes has no power over whether a sugar tax is imposed, it is not part of his ministerial portfolio, it is Rachel Reeves who has that power. The concept of governments being in thrall to some macroeconomist myth that you cannot change things on a macro level because you cannot change things on a micro level is total BS. The truth is in fact the complete opposite, you change things at a macro level by changing the micro level - taxing tobacco or alcohol more highly changes price of those products which in turn changes individual decision making. Even though I am very critical of Richard, his daily videos are always a great watch in the morning

You can't base truth on lies Richard!

I suspect that there are very influential seriously wealthy people that government is mindful of and is inhibiting government's ability to take the big picture view. They have the capability to be bold and transformative but all we are seeing at present is feeble.

Well, the sugar lobby has plenty of money to grease politicians with. And the majority of politicians; are in it for the purks and not because of a burning disire, to contribute positively to society. Socialist seem to have a completely different approach, to the habits, that have a degrading effect on society generally. They are a capitalise nightmare!!

I absolutely agree with the conclusion, but I fear your explanation risks commiting. the Fallacy Of Composition. Just because a larger system is comprised of smaller parts does not mean that the smaller parts are in some Metaphorical way mirrored or reiterated by the larger system. Again, I completely agree that microeconomics is based on erroneous assumptions, but that in and of itseld should not necessarily invalidate the macro.

Now how do we get MPs to see this & then take the next step into something that _does_ work?

I'm favoured financially with Bitcoin ETFs, Thank you buddy. $63,700 biweekly profit regardless of how bad it gets on the economy.

Glad you mentioned Steve Keen. Whilst I think MMT is for the birds, I get where he is coming from in terms of his work on Minsky. Stability is destabilising! As I see markets (equity, property) rising by 10-15% a year post 2008 I see a Minsky Moment around the corner as investors face margin calls.