Von der Leyen wants to counter US subsidies – Article (German)
Der Spiegel, 01.02.2023
US President Biden is fighting inflation with billions in aid. In response, the President of the EU Commission has now presented a package of measures that gives priority to green technologies.

We should stop talking about growth – Column (German)
Mark Schieritz, Die Zeit, 01.02.2023
Can the economy still grow in the face of climate catastrophe? That is the wrong question – capitalism is, after all, adaptable.

No confrontation – Guest article (German)
Armin Steinbach, Die Zeit, 01.02.2023
US economic policy is protectionist. But the EU should not let itself be provoked by it. It is more dependent than ever on its allies.

The market regulates nothing. It only enforces its logic mercilessly – Article (Paywall, German)
Christian Baron, Sueddeutsche Zeitung, 01.02.2023
The “Billy” shelf from Ikea is no longer a bargain: what it tells us about inflation, crisis and class injustice.

For the Common Good – Blogpost
Mariana Mazzucato, Project Syndicate, 27.01.2023
Tackling our biggest challenges and reversing the undue concentration of wealth and power will require a fundamental change in political economy. Currently, the principle of the common good is seen as merely a corrective for the current system’s excesses, but it should be the system’s primary objective.

Yesterday, the European Commission has presented its answer to the US Inflation Reduction Act: the Green Deal Industrial Plan to enhance the competitiveness of Europe’s net-zero industry and support the fast transition to climate neutrality. The Plan aims to provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s ambitious climate targets.

Problematic is the long-term funding, as a “sovereignty fund” has been so far categorically rejected by Germany. As a bridge in the short term, unused credits from the Corona aid fund should be tapped and used differently.

Whereas up until now, the focus had been on the deployment of clean technologies, now the supply side is at the heart of the proposal: broad support to mass production. An informative thread by Claudio Baccianti on the plans of the European Commission:

The US’ Inflation Reduction Act (IRA) has put the finger on some sore spots in Europe. Suddenly weaknesses of the EU Green Deal became apparent, compounded by the energy crisis. Here a thread about why we are back discussing the need of more EU funding.

— Claudio Baccianti (@c_baccianti) February 1, 2023

How much industrial policy is necessary? In a recent Handelsblatt interview (Paywall) Jens Südekum and Lars Feld argue about the right way to go.

“Diese Gewinne gehören der Gesellschaft” – Artikel
Meike Schreiber & Markus Zydra, Süddeutsche Zeitung, 27.01.23
Die Zentralbank zahlt Banken Zinsen, wenn diese ihr Geld dort lagern. Warum eigentlich? Die Milliarden würden den Menschen zustehen, sagt ein Ökonom.

How Not to Fight Inflation – Article
Joseph Stiglitz, Project Syndicate, 26.01.23
A careful look at US economic conditions supports the view that inflation was driven mainly by supply-side disruptions and shifts in the pattern of demand. Given this, further interest-rate hikes will have little to no effect – and will cause far-reaching problems of their own.

New fans for new EU debts – Article
Björn Finke, Süddeutsche Zeitung, 23.01.23
The European Union wants to react to the massive green subsidy programme of the USA and distribute more subsidy money. Where this should come from, however, is controversial. But Council President Michel already has an idea.

Martin Wolf: in defence of democratic capitalism – Essay
Martin Wolf, Financial Times, 20.01.23
The marriage of liberal economics and democracy has brought immense benefits to the world, but faces its toughest test in decades. What needs to be done?

Joseph Stiglitz: tax high earners at 70% to tackle widening inequality – Article
Rupert Neate, The Guardian, 22.01.23
Joseph Stiglitz, the Nobel prize-winning Keynesian economist, has called for the super-rich to be subjected to taxes as high as 70% to help tackle widening inequality.

A New International Economic Order (NIEO) Against Financialisation – Blogpost
Ann Pettifor, Progressive International, 19.01.23
Ann Pettifor argues that the global inequalities produced by capitalism’s financial and trade systems have their root in domestic policy that favours capital over labour.

If there is such a thing as guiding principles that direct politics and people in a country, then for a few decades it was the idea that problems can best be solved through free markets, more globalisation and deregulation. This was still the case at the time of Agenda 2010, when privatisation and deregulation were the order of the day. Today, hardly a day goes by without a call for the state: to rescue banks or energy companies, to issue energy lump sums, to set up special funds for the German armed forces – or to pass gas price brakes. A new fashion, as supporters of the market doctrine have since been muttering? A fleeting zeitgeist against economic reason?

It may have something of a fashion phenomenon. What has been happening for a few years now is probably much more than that – it is driven by a much deeper-seated attempt to develop a new guiding principle that replaces the market as the ultimate remedy. Not because it is the spirit of the times. But because the dogma has reached its limits.

Whether such a new socio-economic paradigm is emerging – and at what stage it is – was the subject of an extensive study that has just been published. According to this study, such guiding principles are important for guiding politics in practice – and for creating a basic trust in politics. And it is precisely this basic trust that has dwindled with the failure of the market-liberal dictum, as several evaluations have shown since then – at the latest since the financial crisis of 2008, which acted as a revelation for the supposedly so efficient financial markets and banks.

Read the whole article here (in German).

In a recent column, Mark Schieritz wonders to what extent the land tax on real estate could serve as a model for a possible reform of the wealth tax. As a result of the reform initiated by the Constitutional Court, standard land values on which the tax is based must be recalculated and adjusted. Which is nothing other than a valuation of assets. However, this is precisely a popular counter-argument in discussions about the feasibility of a wealth tax.

Since the real estate assets of private households are about three times as high as assets in bank accounts and share deposits, they are an important component of wealth, while at the same time the evasion effects are likely to be smaller. Why not expand the property tax into a kind of wealth tax?

The political stipulation is that the reform of the tax must not lead to additional revenues for the state. That is why it has been constructed in such a way that the amounts to be paid should not change very much in the end. But that could be changed. With a few tweaks, it could be expanded in such a way that the wealthy would participate much more in the financing of the state’s tasks. The corresponding data are being collected right now. Another practical aspect is that the increase – or decrease – in the value of a property could be taken into account in a relatively uncomplicated way when calculating the tax. One would then simply have to query the value on a regular basis.

The whole column can be found here.