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Wednesday, August 23, 2017

Economists blame the crisis

Remember the old Soviet anecdote about officials gorlanova? “What is it?” — asked in amazement accompanying a foreign visitor, looking at the nondescript gray column of the officials involved followed by columns of military hardware on red square. “It’s Gosplan — the most terrible weapon,” I say to him.

A good anecdote. But if without jokes, in the current economic crisis who is to blame? Officials? Maybe economists? What was offered is probably not what is necessary, and that the country finds itself in economic crisis. Prices are rising, living standards falling.

You can certainly easily look for external causes: the sanctions, the fall in world oil prices. One problem: the Russian economy was clearly to slow down and actually enter into a crisis before all these external shocks of mid-2014. In December 2013, the presidential address to the Federal Assembly mentioned that the main causes of economic difficulties are not external, but internal.

Of course, low oil prices and sanctions have played a negative role, but still, it turns out that they themselves are guilty.

“Yourself” doesn’t mean that the people to blame. “Themselves” means that you have to figure out with those who influence the adoption and implementation of major economic decisions.

How do management decisions? I would point out two subjects. First — officials, that is, those who invests the prepared solutions in the form of orders, directives, regulations, laws, etc. and accepts them. Second — scientists-economists.

Of course, in the life of the proposed division seems not so clearly, because enough decisions are prepared only by the employees of ministries and departments. They do not attract.

But if our trouble is in incorrect or late decisions, who is to blame that their adoption did take place? Of course, the managers responsibility is always. If the decision was wrong, and ordinances, decisions, etc. were signed, so officials have been unable (or unwilling, or intuition failed) to objectively assess what they napadisylate.

The responsibility lies on the officials always not only because they take the ultimate decision. Responsibilities also because it depends on them how is living in the country economic thought. If the latter is not popular, then what do you want from economists?

In this respect it is interesting to compare the present situation with that of, for example, during the late Soviet Union, in the second half of 1980-ies of the last century. Indeed, economists then tried to suggest to the authorities that would help to prevent the decline of the economy during the crisis. I remember a scientific conference at the faculty of Economics of Moscow state University. M. V. Lomonosova of the time: the Apple was nowhere to fall, people in the aisles was sitting on the floor listening to Popov, L. Abalkin, G. Yeghiazaryan, etc. Worked so that the “seething brains”. Yes, not everything worked. Yes, the authorities delayed the adoption of radical decisions. But I’m on the other: economic research community felt the request for a private activity, and it tried to do everything that it was capable of.

There is nothing like this today. Conferences are held, but the relevance of what is being said to them by scientists, remains low. They are often the same officials and report on the work done and, at best, that still want to solve it.

Yes there conference! Do not actually work even expert councils created at the highest level. You heard, for example, on the activities of the Economic Council under the President of the Russian Federation? Not heard?

After all, there is a, established in July 2012. Since he was going only two (!) times: in the same July 2012 and December 2013. Well, actually, since the last meeting, the country managed to slip into a full-blown crisis. What? And nothing, but recently there appeared the information that you want to resume the meeting of the Presidium of the Economic Council (pay attention: not the Council itself, but only its Presidium). Blabbed on about why suddenly remembered. It turns out that we have the presidential election in 2018, so someone needs to work on a new economic program for this election.

I note, incidentally, that the Economic Council, according to Statute, is an Advisory body under the President of the Russian Federation aimed at preparation of proposals on main directions of socio-economic policy of the Russian Federation.

Abroad, by the way, the attraction of economists to elaborate government decisions exist not only on paper but quite real. Good work with experts at the highest level, for example, in China (which, incidentally, attract the best experts from other countries).

Does all of this, including against the background of comparisons with foreign practices that our economists completely innocent, they are innocent? No, it doesn’t.

There are decisions that only one administrative apparatus to develop not. Here attract scientists and forces. Do you think everything that happens with the same, for example, the current pension reform invented officials? No, of course, it worked and economists-researchers. Do they, in this case, their share of the responsibility? Of course. But in this case, the responsible are primarily officials, because they ultimately make the decisions.

Finally, there is another side — the scientists whose ideas were not popular. Well, they definitely do not bear any responsibility, by definition, that is called.

Conclusion: the deepening economic crisis to blame managers and economists, whose ideas have been implemented. But why, why weren’t implemented the correct economic ideas? Why we come down eventually to the economic crisis?

Because that is the level of professionalism of our managers that I’ve had to write before. Because there were some incorrect economic ideas. Because of the independent economic analysis was unclaimed.

There is after all, what other important feature there is. Customer studies of macroeconomic nature is primarily a state. Well, not the private business will all to enjoy. The state in this scenario is the same officials. What to order, or they define themselves, or with the help of those economists with whom I work. There will be a demand for independent research and analysis? No, of course.

For example, Russia obviously slept through the “shale revolution” in the United States. Overslept because officials have been unable to assess the seriousness of new technologies in the twenty-first century. But if they were sure in advance that all this is nonsense, whether there is a demand for appropriate analytical studies? No, it’s not. The result is known: Russia is suffering increasing economic hardship because the economy remained commodity and oil prices plummeted, and is a long time.

And remember, carried out the so-called monetization of benefits, how painful this process was for millions of people? That it was impossible to think of everything in advance? Can.

Another example: the increase in social insurance contributions for individual entrepreneurs in 2013. Increased, traders (individual entrepreneurs) began to close down. Then tried the whole thing to play back: the amount of the contribution reduced, but the enterprise was already a serious blow.

Who is to blame for this decision? I think that this is the case when officials in General no one was interested to develop one. Themselves just went for it, well got a negative effect.

Take the day today. What to take? That’s tax initiative. To date, the authorities had not announced a single initiative to raise taxes after 2018: removal of thresholds for the payroll accrual for the previously mentioned social insurance payments, increase these payments to individual entrepreneurs (Yes, again on the same rake), etc. And they believe that the promise not to raise taxes until 2018 much calm business.

You know, don’t need to be an economist and sociologist, in the current situation to make the obvious conclusion: no one will invest, to invest in such promises. In my opinion, that without the involvement of economists is clear.

That’s why I disagree when people say that the economic mess is to blame academic economists. It’s not “eggheads” nachudili, it is primarily the heads of today’s nareshal. Sometimes with the help of serving power economists.

That’s why we are in crisis, with its rising prices and unemployment, falling living standards of the people.

I wrote all this not to somehow out of a sense of corporate solidarity to deflect the righteous anger from fellow economists. When guilty, then guilty. But still, the responsibility for what is happening in our economy, rests primarily with those who are today empowered to take appropriate management decisions.

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