How about the value of economic blogging then? Let us compare some of the stars of the UK blogging scene. On the one hand you have the academics, like Simon Wren-Lewis and Steve Keen. They use their blogs to explain to the world how economic theories work, or don’t work. Or explain what models should be used instead, to make sense of the world. However you do not have to be an academic to chip in into the economic debate. Many others do, either with the help of others as a small economic think tank (Prime Economics), or as valiant fighters for the truth and diggers-up of complicated back-ground information, like Frances Coppola. Generally, I think, they are on a public service mission, to educate and inform, and the only pay-back they will get is the number of clicks or decent comments on their blog pages. Financially, I would think the rewards are 0. Although Frances Coppola and Steve Keen blog for the FT and Forbes, so I guess that will now be paid.
Increase in GDP: 0, or minimal per blog post, I guess
Tax Research UK
Now, I genuinely thought Richard Murphy with his blog Tax Research UK falls into the same category. His mission is to change the tax laws to get mainly corporate tax evaders to pay their fair share. I guessed he had other income, as the bloggers above, from which to subsidise his blogging. I was therefore a bit surprised, to read that he is sponsored by various public bodies, and has been for a while. So he has always been very open about it, I just missed this information, and the view now is of the sponsoring bodies that he should receive the equivalent in sponsorship as a university professor. “Good on you, Richard, let somebody pay for your valuable work.” I did, however, miss a trick there, and should have called my blog “radical economic research” as that obviously seems to help to get sponsorship!
Increase in GDP: Professor salary (£65,000+ ?)
Columnists in Media
Arguably, bloggers do not do anything different from newspaper reporters or columnists. Good ones, like Ambrose Evans-Pritchard from the Daily Telegraph can obviously command top rates. His columns are always trenchant, thought-provoking and entertaining. You might not agree with a word he says, but you will have enjoyed the ride, as he takes you through his usually provocative train of thought.
Increase in GDP: £100,000+ columnist salary?
Free Lance Reporters
On the other hand you have the reporters doing digging around on the ground. Paul Mason, the Channel 4 economics editor, seems to have moved to Greece permanently, but others have to travel there and spend sometimes their own money to write lengthy reports on the background to the Greek crisis. The Austrian blogger Robert Misik at the beginning of his excellent piece says that money is needed to allow him to research and write the report. I have sent Euro 10 because I think it is worth it. Unfortunately it is only in German.
Increase in GDP: Crowd Funding?
The German Ministry of Finance
Now, let us take another organisation providing economic analysis on the Greek crisis. The German finance ministry. If we look at the output over the last 5 months, the only thing which obviously springs to mind is the Schaeuble plan, which miraculously appeared on the week-end of the final negotiations with Greece, on the 12th July. So after five months of detailed negotiations and having looked at Greece for five years, the only thing the German Finance Minister could propose to end the Greek crisis was contained in one A4 piece of paper, the total of perhaps 500 words. (Sad, isn’t it. In contrast my total detailed analysis of Greece here on this blog in tightly argued and substantiated proposals: 40,000 words. Written in 6 weeks.)
The details of the Schaeuble Plan you can read here, or if you cannot be bothered, I have summarized it for you:
Ve vill have all your assetz in ze Trust Fund governed by ze German Finanz Minister zet up in Luxemburg, or Greece vill have to leave ze Eurozone for 5 yearz on a temporary Grezit!
Now, that was in total the German economic solution to the Greek question, and that was then used to pummel Greece into submission. The Schaeuble plan, the economic equivalent of the Schlieffen plan, a German plan to allow military dominance in Europe prior to WW1.
Now, it would not have been so bad, if there had actually been an economic value attached to this piece of paper. But unfortunately it is otherwise.
Decrease in GDP: The asset sales, although now governed from Athens under troika control, will sell in a depressed Greek market, therefore well below value. If there is indeed 50bn of assets to be sold, they would only fetch about 25bn or less. So there is a loss of value of 25bn attached to this plan. This loss is from the taxpayer to subsidise to the private sector buyer of the airports or harbours being sold.
The loss of value through Grexit, which is still preferred by Schaeuble, is even greater. The loss will be 320bn of unpayable Greek debt, plus 120bn Target 2 liabilities for Greeks banks. The European taxpayer will lose out, ultimately it will be the Greek’s taxpayers’ gain.
So a loss of Euro 25bn to Greece (asset sales), and/or a loss of European tax-payer money through of Euro 440bn.
Radical Economic Thought
So we come to my blog. I try to provide some thoughtful ideas to help Greece out of the current impasse. All of the ideas could work and would, in contrast to the Schaeuble plan, actually increase Greek GDP. My blog does not cost anything to run, but it is not cost free. The economic concept of opportunity cost comes into it, and it is probably best if my wife explains that to you, as she explains it to me:
For goodness sake, come off that computer and do something useful! The grass needs cutting, the garage needs to be tidied up, the kids need to be taken to the park/swimming-pool/tennis court, and you still have not started getting things together for next week’s holiday. Or, at least find a job and stop wasting your time with your silly ideas about Greece!
Clearly, she has a point.
So, in an effort to bridge that gap between my wife and myself, can I suggest the following? If you enjoyed reading my blog over the last 6 weeks, found something interesting, or learned something, or even if you thought it was all ridiculous nonsense, look up my account number in the “About” bit on the top of the page, and transfer a fiver into my bank account.
This is strictly by income, though, and if you happen to belong to the 1%, I suggest an appropriate amount of crowd funding would be 500, either, Euro or £, both payment options are available.
If you are out of that league, and George Soros, or equivalent, I suggest 50,000 would be a fair amount.
(And if you have a holiday place in Italy, which for some reason is still free in the beginning of August, you can throw that in, too, as we are looking for something!)
What if you are the Greek government reading this and possibly thinking to implement some of my ideas?
Well, it is all out there, the Greek government can of course just take the ideas and run with them. Or I will explore them further, and there is other ideas, and I will continue this blog as and when I can, the pace will slow down, somewhat, though.
If the Greek government decides, I should be paid 1 Euro for each 1,000 Euro of benefit my proposal brings to the Greek state, I would settle for that. Again, none of these proposals are completely unworkable, even the most ridiculous would be completely sensible when compared to the Schaeuble plan. For example I suggested right at the beginning of these series of blogs, that Greece could pay all its money Euro 240bn to its public sector creditors back over a 12 year time frame, as long as the European creditors buy things from Greece. So Europe contracts into an arrangement to buy goods and services (ie, mainly holidays) from Greece of Euro 20bn a year more, in addition to the current level.
Increase in GDP: 20bn a year, through increased exports (My share would be 20 million if I take 1 in every 1,000)
Or my idea to run with parallel currencies, and introduce the G-Euro:
Increase in GDP: at least 8bn (so my share would be 8 million)
All other ideas in my blog will have a positive economic value attached to them. And anything which will help Greece will in the end help Germany, as Greece can pay its money back, A win-win situation.
Clearly, all of this is pie-in-the-sky thinking, but that should not mean that nothing will ever come of this. And other people have got crowd funding, even Greece. So if you want me to be able to convince my wife that I am not wasting my time, send some money!
If not, in the end it will have to boil down to the normal sources of finance, here. It will be like the Greeks, who will also have to live from the pensions of their parents if they are unemployed.
Mum and Dad, do not say you have not been warned! I will see you in a couple of weeks!