Angrynomics

The authors cherry-pick economists who's theories support the their thesis of economics. They make untruthful or biased statements throughout the book without citing sources for the information, and are either ignorant of, or hiding critical information. When read critically, much of what they say falls apart through their own statements and data that are contradictory. I will give only one example of many to see the disngenuousness of the book.

Trickle-Down Economics: You’ll notice the authors don’t reference economist Arthur Laffer in the examination of trickle-down economics or any other economist who includes features of trickle-down economics as part of an economic theory.

The authors don’t even admit or discuss that trickle-down theory is commonly associated with supply-side economics, and there is no single comprehensive economic policy identified as trickle-down economics. Any policy can be considered “trickle-down” if the following are true: First, a principal mechanism of the policy disproportionately benefits wealthy businesses and individuals in the short run. Second, the policy is designed to boost standards of living for all individuals in the long run.

Instead, they make the statement that “the problem is that it is all trickling up.” Of course, supported by economists who echo that idea with no real analysis as to the veracity of the claim over a period of time required for trickle-down to fully take effect.

They point out that the bottom 50% of the global income distribution “…only captured 12 percent of the total growth. While the top 1 percent made off with 27 percent of the total growth.” The first question is – what happened to the other 61 percent of the total growth that is missing? Using their numbers, only 51 percent of the people are accounted for – the bottom 50% + the top 1%. This means that their analysis is missing 49 percent of the people; who must represent middle-income and that this group got the greatest benefit or 61 percent of the total growth. Isn’t THAT a convenient omission? They also don’t address how the bottom 50% got to improve their lives through the 12 percent of the total growth. Do they think the bottom 50% would be better off without the 12 percent growth?

The authors’ own statistics disprove the statement they’ve made, “the problem is that it is all trickling up” is untrue. If only 27 percent of growth went to the top 1 percent. That means 73 percent of the growth DID trickle down to the remaining 99 percent. So, it appears that the authors have a problem with either math, facts, or the truth.

The book provides a primer on why the world is the way it is today and describes the problems caused by the West's embrace of neoliberalism. The authors claim that 60% of American workers have not had a real pay rise since 1979 but the costs of higher education, healthcare, and housing keep rising. The authors argue that “weak wage growth, a dwindling share of national income for workers, tax-dodging elites and rocketing pay for chief executives were undermining the social contract before Covid-19.” They are worried about where we are headed as a nation. They also describe the growing anger of ordinary people throughout the West and offer some solutions. Eric Lonergan is a hedge-fund manager and Mark Blyth is a professor of economics at Brown University. I am a big fan of Blyth's work having read his book "Austerity" and listened to his lectures on YouTube. The two authors engage in a series of dialogues about the current state of the West.

The authors believe we have trickle-up economics. The rich get richer and the poor get poorer. The benefits of economic growth are not being passed onto ordinary people. Since 2012, the top 1% have made off with 90% of the income gains. Forty percent of American adults said they would not be able to cover an unexpected expense of $400. Between 1981 and 2017, Britain’s GDP doubled, while the use of food banks rose by 1,000 percent. We need a better way of sharing the wealth in the West because the people at the bottom are getting angrier. Trump is a symptom of that anger.

The authors put most of the blame on neoliberalism. They do not believe that globalization has paid off for most ordinary people. It has weakened organized labor and reduced the bargaining power of workers. They argue that globalization has resulted in smaller countries in Europe losing their national sovereignty. Blyth argues for the nation-state and is skeptical about organizations like the EU. Politicians should be accountable to the people who elected them. They believe that Trump, Brexit, and the rise of populism are all symptoms of growing dissatisfaction with the way things are now. The people want change but the political establishment ignores them. Polls show that a majority of Americans believe that the biggest problem facing the U.S. is a corrupt political class. Trump is telling potential voters that they have never had it so good because the stock market is at record levels, but ordinary Americans, without a stock portfolio, are struggling.

Many seem to believe that populist anger is explained by racism. There is obviously some racism in every society, but the authors believe that is another symptom of a bigger problem: “It is easier to chastise the poor for their racism than do anything about their poverty.”

The authors have come up with some interesting solutions. They do not believe that higher taxes would be acceptable to the political-media elite. Eisenhower had a top income tax rate of over 90%, Nixon had a top tax rate of 70%. Those days are gone. The wealthy have powerful friends in both parties and in the media. They have also perfected the art of tax avoidance.

The authors want to create a national wealth fund like the sovereign wealth funds in Singapore, Norway, and the Gulf states. In 1998, Hong Kong’s monetary authority put $15bn into the Hang Seng to prop up equity prices. It was initially pilloried for interfering in the markets but won eventual praise after earning huge returns. Wealth funds hold assets on behalf of the state, to accumulate savings and wealth on behalf of the public. The intention is to give workers more ownership and security. We live at a time when governments can borrow at real negative interest rates. When the cost of borrowing is lower than GDP growth, governments should issue bonds and invest in diverse assets. They suggest borrowing 20% of GDP. The money could be invested and earn real returns of 4-6% per annum. Over 20 years this will be a sizable pot of money that can be used to fund education and health for individuals. They suggest these investments should be held in trust for all citizens and be professionally managed. The proceeds of a national wealth fund would redistribute wealth without raising taxes on the rich.

Another idea is a data dividend in which the big technology companies pay for the private data they use. This would allow governments to force monopolistic firms such as Google, Facebook, Amazon, and Apple to pay to use our data, which over time would become a kind of universal basic income. Again, this would be much easier politics than breaking up the tech giants — and far more lucrative for ordinary citizens. Silicon Valley also has friends in high places and taxing them has proved difficult. European countries who have tried to tax them have incurred the wrath of the U.S. government.

The authors believe that the EU is fundamentally flawed and its economic policies are hurting ordinary people in southern Europe. They argue the EU has a very hierarchical 19th century way of thinking about the world. It seeks to create something that resembles the old Habsburg Empire, which the allies dismantled at the end of World War One. Technocrats at the center make the rules and the individual nation-states have to obey. Greece lost nearly 30% of its GDP because it handed over control of its economy to the EU and the IMF, who pursued misguided economic policies. The authors like the nation-state and believe that smaller political units are more accountable and innovative. The authors do not believe the eurozone is working for southern Europeans and they suggest it should be scrapped. The euro operates like the Gold Standard in the 1920s.

Blyth believes that Greece and Italy would be better off if they could print their own money. He believes that we know how to cure recessions and Greece, Spain, Italy, and Portugal have been punished unnecessarily. Youth unemployment is over 30% in these countries. The main problem is that the Germans do not believe in Keynesian economics, they have claimed in the past it triggers inflation. The Germans decide economic policy for the EU. The authors note that China has deployed classic Keynesian infrastructure spending and it has been doing quite nicely since 2008.

The Covid-19 crisis has produced yet more evidence of inequality, with the rich able to escape the cities to their second or third homes. The authors imply that our political class has been bought and paid for by Wall Street and big business. The $64,000 question is what happens if the system is not reformed?

I found “Angrynomics” very refreshing. A Must Read in my opinion. The authors have the Brexit and European perspective also, which was very clarifying to me. Their discussion explains so much of what is happening in the world in simple terms, which I can understand. Not only do they explain the origins, and types of anger, we all see shaping our world, but they also give us some very creative solutions to the economic situation we find ourselves in.
I remember reading Progress and Poverty by Henry George when I was in my twenties ( the 70’s) and wondering why our society can’t deal with the economic powers that control us. This book gave me a similar excitement. This book is a MUST READ. In these deeply troubled times we have a tremendous opportunity to make meaningful changes that address the growing inequities we face. This book gives me hope.

I really liked Mark Blythe, but was surprised at how unimpressive this book is. It makes some good points about the manipulation of legitimate moral outrage in the face of anodyne non-solutions from both the right and the left being channeled into tribal aggressiveness again each other rather than the source of the moral outrage itself. Unfortunately, the possible economic solutions offered surrender to making the best of continuing a horrendously broken economic system and even feeding it more. They claim the highest priority in the global ecology, but propose solutions that will only perpetuate growth and more pollution. I was hoping for a truly new paradigm. This wasn't it.

Blyth and Lonergan's book dives into anger and its various forms, when talks about how we might move forward. There are a few interesting asides, like the growth of CCP in the wake of the financial crash. If you are unfamiliar with Professor Blyth's work, I can't think of a better place to start.

Such a great book! Would recommend.

Angrynomics explains in plain language the current state of affairs.

I was disappointed in this book as it tries to sway opinions by using words such as average and how the average is effected by the wealthiest person in the group but every economist knows that the average is not used by the median. It’s the median income that is the standard for economic growth never the average. This among other things is a subtle way to try to manipulate the reader into agreement with their opinions all while claiming to be unbiased

This book is really helping me to understand how we got to where we are in today's global economy. It can every difficult to know how to interpret how our daily lives are effecting with quietly moving market forces, but these fellows really give you an eagle's eye view of the last 100 years, and most importantly the last 30 years.

Easy to read. Very informative.