Full employment and low taxes in Europe – Radical transformation, austerity and the troika

English: A map showing European membership of ...

English: A map showing European membership of the EU and NATO. EU member only NATO member only Member of both Česky: Mapa zobrazující členství evropských států v EU a NATO. státy pouze v EU státy pouze v NATO státy v NATO a EU (Photo credit: Wikipedia)

Over recent months I have pondered over the following questions about Europe:

  1. How should national Governments and the EU reduce unemployment and create full employment?
  2. Is there an alternative to the over-arching policy of austerity?
  3. Are full employment and low taxes mutually exclusive?

Regular readers of this blog will know that I favor a balanced approach focusing on growth and medium term fiscal discipline.

What worries me most about austerity is that it is both damaging and ineffective in the context of many European countries.

I have consistently argued in favor of a gold standard for policy-makers, namely:

  • Strong leadership
  • Overarching vision
  • Coordinated and carefully analyzed strategy, and
  • Fully risked assessed, properly costed  and effectively managed delivery plans

For me, the troika of the ECB, IMF and the EU have the wrong priorities. The ECB and the national central banks should have their powers extended to resemble the US Federal Reserve and include responsibility for full employment, as well as inflation management.

In my judgement, National governments and the EU need to undertake a comprehensive strategic review, and then embrace my proposed “gold standard”.

Most importantly, a zero-based review is required of the national Public Sectors and EU bureaucracies, radically transforming public services across Europe:

  • Embracing a customer focused strategies, based upon my radical innovation and continuous innovation proposals
  • Achieving top decile performance consistently in global bench-marking
  • Eliminating restrictive labor practices and outsource all non-strategic services

For more comprehensive suggestions see some of my earlier blogs, incuding:

This, of course, is very much a “stawman” proposition.

What do you think?

Please share your views, whether you agree, disagree or have a completely different perspective..

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3 responses

  1. Pingback: Full employment and low taxes in Europe – Radical transformation – Rodney Willett Team UK « Dr Alf's Blog

  2. My first thought is that you are right in saying that to be effective the ECB should, in partnership with the national central banks, have their powers extended BUT that is tantamount to creating a unified nation without having a plebiscite. That, in my opinion, could easily lead to violence as passions flare on
    both sides of the north/south divide. I really do feel that there has to be a period of retrenchment and time to allow the people of Europe to determine their own future rather than having matter stuffed down their throats by (frankly) dishonest politicians. Get the politics right and a united currency follows – as in the US.

    There is a clear need for living within one’s means. In many ways that is best achieved by lowering taxes but that can be done only if people can be weaned off the nanny state which has taught them that they have a right to everything they need (not want, a very different thing) with no effort on their part.

    For any nation to love within its means it must export goods and services valued at no less than the goods and services it imports. That may mean that here, in the UK, we will have to look towards providing more for ourselves including power and food. Too big a subject for here.

    Within the nation people have to learn to live within their means – a concept that surely requires no elaboration.

    Still within the nation we need to see more people actively employed in doing those things that need to be done here rather than imported, in looking after our infrastructure (horrid word but you know what I mean) and caring for those of our population unable to care for themselves. This is an area where the UK government could be acting with a positive result. If all the money poured into QE had, instead, been used to ensure that everything used by any state owned or controlled business was home produced wherever possible and that there were a multitude of small (and therefore quickly planned and started) initiatives to make the place better and cleaner plus a change in the way we care for people much could have been done by now.

    Here I know we do not agree. My problem with the centralist view is that macro initiatives carry a huge amount of inertia that has to be overcome before any action occurs whereas micro initiatives can be fleet of foot and in there doing before there is time for circumstances to change and invalidate any proposal (either in part or in whole).

    Rodney Willett

    • Rodney,

      Many thanks for a thoughtful and very interesting response which I have taken the liberty of re-blogging in the interests of widening the debate.

      It seems that we agree on the the need for radical reform to stimulate full employment. We also agree on the need for maintaining national democracies.

      However, we differ in how to achieve the goals, I would suggest.

      I for my part, am a “demand-sider”, arguing in favor of central intervention to stimulate demand (at both national and European levels).

      It would seem that you are a “supply-sider”, arguing in favor of stimulating the micro-economies. Do you agree?

      Alf

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