That point is that “a dearth of domestic investment opportunities” and “stagnant real wages for the 99%” are the same thing, both in the sense Chris means it – if there is nothing that looks interesting to invest in, there won’t be much investment, and therefore no growth and no wage growth – and in the opposite sense.

In an economy where the biggest component of national income is wages and the biggest component of national expenditure is consumption – to put it another way, where the biggest flow is from wages into consumption – how many investment opportunities can there possibly be if real wages are stagnating?

The only way your investment could pay off would be by grabbing market share from competitors, or by leading the way in grinding down margins. Alternatively, there’s the option of an investment that won’t pay off if you look at it in a normal fashion, i.e. moving ahead with the Minsky cycle towards Ponzi finance. I think it’s defensible that precisely these things happened in the 2000s. Free Google searches and very expensive houses.

(Distribution is also an issue – growing inequality might lead to a higher marginal propensity to save across the economy, which would suggest a third option, selling luxuries to the rich, and also that it wouldn’t be enough.)

The interesting point here is that the same principle is at work however you cut it, which is the basic Keynesian insight that demand determines income. Further, the mechanism is the same, and is just as Keynesian – demand determines income, and it does so through investment. The entrepreneur’s assessment of an investment necessarily involves an estimate of demand for whatever it produces. This is evidently influenced by the macro-environment. Nobody ever said “My customers have no money. Time to buy!” Only an economist could think otherwise.

But the way we look at this is an ideological question. You can stand at the slot marked “management” and you’ll see that wages seem too high. You can stand at the one marked “entrepreneur” and you’ll see there are no investment opportunities. You can stand at the one marked “labour” and you’ll see that wages are too low. All three are observing the same phenomenon.

You can also stand at the one marked “contrarian” and you’ll see that there is no solution except, perhaps, for listening to your good self.

Of course it’s possible that there is something wrong; we’ve finally arrived at the great Marxist crisis of the falling rate of profit, we mean it this time, or we’ve finally invented everything there is to invent and therefore it’s not my problem, or we’ve reached Peak Concrete and only ineluctable metaphysical decline that somehow teaches all my enemies a lesson remains. But you can’t reject the hypothesis that the problem is the bastards from this data – a hypothesis well discussed here.

In June, 2011, Adam Smith, Hunt’s special adviser and the man who took the fall for his boss, attained a gatekeepership score of 1.42 – that is to say, people who lobbied him achieved a 42% greater improvement in their influence as measured by weighted network degree than the average lobby achieved. He did this on a personal weighted network degree of 0.175, which is piss-ant. His score on the West Point GREEDY_FRAGILE metric, which calculates how much more or less centralised the overall network would be without him, is -6.21635100991e-06.

In May, 2011, his colleague Sue Beeby achieved an even higher gatekeepership, 1.56, and the month before, she was actually the most powerful gatekeeper in the system after excluding the Scottish and Welsh Offices, at 1.928 on a network degree of 0.0875, and a GF of -7.92399753226e-06.

Who was getting this access? The answer is in Smith’s case, “big sport”, the FA, the ECB, and the RFU, although the Rugby League did manage to see him too. It turns out Beeby is far more interesting. In the first 6 months of 2011, she saw The Times 37 times, the Sunday Times 37 times, and Sky TV 8 times.

She also met “sports journalists”, the Daily Telegraph, the Financial Times, the English Cricket Board, and a PR company called Good Relations which only occurs in the dataset 5 times, all meeting her in March of that year. In the aggregate, the vast majority of influence going in here came from Murdoch.

She moved on with Hunt to the Department of Health, and lists herself on LinkedIn as a Conservative Party press officer. I don’t remember there being anywhere near as much fuss about her, though, as there was about Smith.

(Inspiration, of course, here.)

Via Simon Wren-Lewis‘s blog. You see the flattish bit from 2002 to 2008? When people like Hopi Sen talk about “spending out of control”, that’s the bit they mean. This is some weird use of the word “control”, huh?

In fact, the only period on the chart where the budget wasn’t either busting or booming out of control was…the period of roughly stable close to full employment between 2002 and 2007-8. It’s like the man said: look after unemployment and the budget will look after itself.

Gavin Kelly is of course right. But I wonder if this is actually the mark of a deeper truth. If you want a tough fiscal rule, it might just be “full employment, dammit”.

One of the things I remember being dissatisfied with was how to reconcile the long-run aggregate supply curve with the idea of economic growth. If growth is a thing, it means the production possibilities of the economy are increasing. Therefore, the long-run aggregate supply curve is shifting outwards, and further, it’s also dependent on economic growth in the past. If you think capital formation is important – i.e. you’re either a capitalist or a Marxist – I don’t think you can convincingly deny this.

If the LRAS is actually vertical, and therefore stimulating the economy just means inflation, how can the economy be growing? Now, you could argue that perhaps it’s not. Perhaps it’s a zero sum activity. But the people who are most aggressively capitalist are also the ones who deny the most vigorously that this is a problem.

Logically, if you think we’re permanently on the historic planetary production-possibility frontier, you ought to be a super-deep green who believes that economic growth is harmful.

And because of the limitations of System Two, it is no solution to pull more issues into the domain of slow-path reasoning. Rather than trying to figure out how the con works, it’s better to feel intuitively leery of the deal and walk away. In that sense, Kahneman’s book reminded me of Freud and the Viennese modern in general in the respect it had for the passions, for the emotional world, and for the uses of apparent irrationality.

‘Bradford has just opened two more schools for children with Special Educational Needs,’ he writes. ‘On some measures nearly half of all children in the area qualify for special help.’ No source. However, the Department for Education publishes the statistics, and it turns out that in Bradford, the proportion of children who ‘qualify for special help’ is about 21 per cent. Well, 21 per cent is not ‘nearly half’. It is, in fact, only slightly higher than the national average of 20 per cent. And it is significantly lower than in some other, mostly white places. Nationally, the highest figure is 27 per cent, in north-east Lincolnshire

Goodhart is trying to claim that half! of children in Bradford are classified as having special needs, because they’re all Pakistanis up there and they marry their cousins. It’s probably worth pointing out that Bradford isn’t actually a majority-minority city here, but it’s perhaps more interesting to note that he’s literally arguing that we’re descending into the nightmare of racial degeneration due to inferiors having too many kids and all being perverts.

As I keep saying, the fundamental fact about Goodhart is his radicalisation.

Meanwhile, yesterday’s Grauniad ran this advertorial:

“These are the unintended consequences of the great idealism of Cathy Come Home,” added David Goodhart, director of the Demos thinktank. “The 1977 Housing Act made need the main criteria. Teachers and police officers used to live on public estates, but they became full of people who were ill, unemployed or had big families.”

Ill, out of work, or had more kids than Goodhart’s inner eugenist estimates is the correct number for your generation? You should be homeless. David Goodhart hates you more than you think.

Actually, this piece is remarkably revealing. Boris Johnson’s chief of staff and deputy for housing, Sir Edward Lister, thinks 1950s and 1960s council planners made the mistake of building in areas of high unemployment:

“It’s all very well building the housing but we need to have the jobs to go with it,” he said. “What we must not do is recreate the mistakes of the 50s and 60s and create vast estates of social housing where nobody stands a chance of getting a job.”

Presumably he also wants to demolish hospitals, because so many people in them are ill. Why did they put them in such unhealthy locations?

Sean Griffiths, director and co-founder of Fat Architects is also confused.

Estates were often built without clear pathways, instead forcing residents through menacing concrete underpasses, aerial walkways or public spaces that had long fallen into disrepair.

The public spaces fell into disrepair before they were built. Some trick!

Anyway, I’m beginning to think that we need a regular Goodhart Watch. Something does not work with this man. Perhaps I should bid for a PREVENT grant to fight extremist radicalisation among the opinion elite?

The security services, whose halfwitted attempts to recruit one of the killers couldn’t have been more disastrous, instantly announced that they needed more power.

GCHQ, taking advantage of its special direct access to the prime minister, announced that it needed more power via the Communications Data Bill, although it seems unlikely that anyone will achieve much SIGINT detection against what was basically a kebab-shop stabbing.

Hazel Blears, acting as spokeswoman for the parallel intelligence/counter-radicalisation system set up in DCLG under the Prevent strategy, instantly announced that DCLG needed more money and more discretion to act.

The prime minister convened COBRA and started appearing on TV a lot.

The extreme right immediately picked a fight with the cops and started setting fires.

People like David Goodhart started banging on about immigrants.

Tell Mama, which AFAIK started out as something to do with bullying at school, suddenly became front-and-centre in the fight for social cohesion.

I could go on. But can’t all these people just fuck off? The whole exercise is nauseating, and has the side-effect that I just don’t care. And if fascism is alive and well in Muswell Hill, like Elvis, I probably should care. Apathy is imposed on me.

“This is the only place to hang out here,” says Yavuz Selim, 17. “And everything is very expensive. As students we cannot afford it.” His friends agree. “We are quite bored here. There is nothing to do for us.”…

While the municipality has increased local transport over the past year, the last buses leave at 10pm and many of the families living in Kayaşehir cannot afford cars.

“We feel isolated from the city centre here,” Yusuf Sari, 16, points out. “A bit cut off, really.” Analysts say this kind of segregation changes the idea of a city – a space where different parts of society coexist – and will create long-term social and economic problems.

“It is very likely that these will end up like the banlieues in France,” said Adanalı. “Spatial isolation and the social concentration of certain segments of society will create discontent. This discontent, too, is isolated from the rest of society. People start to feel that they cannot escape this isolation, which makes matters worse.”

Actually, then, it’s not an urban development but a suburban development, or perhaps more to the point, an anti-urban development. As Jamie Kenny says:

Historically, the whole thing has a 19th century French feel to it, in the sense of government dominated by a pious, provincial bourgeoisie wanting to tame the big city antinomians. But reading about this stuff it’s amazing how well a certain type of – in this case – Islamic piety dovetails with neoliberal concepts of modernization. Maybe that shouldn’t be so surprising when you look at places like Dubai, but it’s remarkable how exact the comparisons are. The same basic suspicion of ‘urbanity’ in the widest sense of the word, the dislike for forms of life, commerce and culture perceived to be messy or low prestige, the way in which a form of commercial standardization seems to complement or substitute for a repressive moral code and the way in which the only unthreatening secular activity that the economic, political and in this case religious establishment can imagine is shopping.

Or, over here:

They started sinking their teeth into Taksim first by imposing a table ban two years ago: No tables on the streets. This deceptively simple move instantly drained much of the spirit of Taksim, since much of the charm was just walking around in seas of people who felt like your friend simply by virtue of being there, and probably were if you dug deep enough. That shattered the sense of community.

This reminded me of my review of The Spirit Level, and specifically this bit.

The states of the Deep South are reliably terrible. They are highly unequal, and they get the effects – but they are far off to the top right of the trendline. In a sense, their marginal productivity in terms of inequality is unusually high – for every extra point on the Gini coefficient, they manage to produce a sharply higher degree of suffering than the national average.

On the other hand, there’s the importance of being urban. The more metropolitan the state, the less it suffers from the impact of inequality – New York has the social problems of the average, despite being very unequal.

There are good reasons for this. Big cities tend to be unequal because they have some rich people. This does not preclude having a well-funded school system; in so far as the rich want to live there, it may be possible to squeeze some tax out of them. Further, there are limits to how far you can send the people off to the suburbs for the whole thing to work. It is hard to opt out completely in town. You may take a cab to the bank headquarters, but you’ll still curse in traffic.

Pulling this together, people fight over urbanity because it’s a sort of substitute for equality. In some ways, it’s real equality, as the institutions of the city are often open to all. In others, perhaps more important, it’s potential equality – we can all be the minority, we can all fall into the path of a tube train, the mob is out there.

From a protest in Turkey (via fb) twitter.com/DarthNader/sta…

— Nader (@DarthNader) June 2, 2013

This draws out different responses. One is an intense identification with the city, which turns out to be a latent coalition across all kinds of groups. Another is a deep horror of the mess of it all. Erdogan, like the mayors who went after Occupy, is constantly whining about needing to clean up and vandals and did you know some of them have dogs? Better to move out to somewhere on the motorway.

I met this response back in 2001, on the scene of a long-term occupation protest. Austrians, or possibly more importantly, Viennese who didn’t want Jörg Haider in government had set up a camp called the Concerned Citizens’ Embassy (BBB in German) outside the prime minister’s office in part of the old imperial citadel. Others held demonstrations marching there every Thursday. I remember vividly that on one of these, people carried a blank banner and pulled a projector on a supermarket trolley, throwing a documentary someone made about the campaign itself up on the banner so we could watch it.

Suddenly, the Fortress Captain – that was his title, the guy in charge of the Hofburg, a school friend of the prime minister – discovered that there was some rubbish lying about, it was ugly, there were rats, he had to clean it up, I quote. This completely circumvented the various legal protections of protest. The rubbish, of course, was us. There was stuff, nobody claimed to own it, and the imperial stormtroopers moved in.

We whined and sued and marched harder, but it was the finish. Anyway. We’ve established the motive. Here’s a piece about the characteristic protest style that goes with it. It doesn’t seem to work. Perhaps because the theory of victory for such a campaign is a flash revolution, like something from 19th century France?

And that reminds me of Pierre Mauroy, who died last week. As French prime minister, he insisted on sticking with European fixed exchange rates, but also on (as he said) holding out on the ridge line at 2 million unemployed. Looking back, it seems unsurprising given the first point that he lost the ridge and resigned. He then set about pulling money towards his home town and power base, Lille, specifically through the Euralille megaproject around the TGV station.

I have never seen a grimmer public space. It seemed to symbolise the combination of Euro-austerity macroeconomics and the effort to build shinier things on top of the city, as two halves of the same project. Similarly, the empty neon of Budapest’s EU-membership centre the last time I was there howled with blankness.

Tankman, zoomed out; that’s a complete regiment of Type-59 tanks he’s holding up. The ground would have been physically shaking.

More tankman.

The neural-feedback controller for the Atari 2600, never deployed due to lawyers. This guy has plans but I can’t help finding it almost as creepy as Google Now popping up “Time for Work!” or the rest of the current Silly Valley fixation for prod-and-badger interfaces. At least this one is open source, and I guess he means well.

The latest candidate for the Great Leeds Band, the Mount Impossible of British music. It is not there to be achieved, but to be strived for. Or even striven.

A case that the Afghan government is at least as sound as the one the Russians left.

This is awful. The Socialist Worker seller crying “Fascism is alive and well in Muswell Hill!” still begs the answer “Like Elvis!”…but really.

Cool.

Turkish protest photo; even better photo.