I've mentioned one bankrupt idea this morning, and here are some more.
This diagram comes from the New Economics Foundation paper 'Why we need a new macroeconomic strategy':
As NEF say:
Over time, Britain's economic landscape has become more and more uneven. As Figure 3 shows, the spread between the UK's poorest and richest region is now much larger than elsewhere in Europe. Inner London is the richest space in the EU, but the Welsh valleys are poorer than Slovakia. London as a whole is the most unequal city in the OECD.
Growth over the last decade has not helped close this gap. Crudely put, it has been growth of the wrong sort, concentrated in the wrong sectors. Huge expansion in our financial services sector, for instance, has favoured London and the southeast and bypassed everywhere else, with forty five per cent the sector's output now being produced in London.
So what are the bankrupt ideas?
First, that inequality does not matter. It does.
Second, that trickle down works. It doesn't, very obviously.
Third, that utility is a useful economic concept. It isn't. Distribution matters.
Fourth, that light touch regulation produces favourable outcomes for an economy as a whole. It doesn't.
Fifth, government intervention to correct regional imbalance is unnecessary. It very obviously is.
I think that's enough for now. But I'm open to suggestions.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
How about that the non-government sector is efficient?
That’s used to justify all sorts of horrors.
The non-government sector is very *ineffective* at providing for society
That’s why there are five million without work that want it.
That’s why even though we need loads more affordable housing and lower end services at the moment, the private businesses that are created and survive are about providing services and products for the wealthy.
Individually of course that makes sense – the wealthy have the money and you build a business based upon what you can sell to people who have the money to buy your products.
Collectively though it is a disaster.
Economics is very simple. We produce and we distribute. It can’t be beyond the wit of man to solve that for the benefit of all.
Indeed
The Dutch seem the healthiest. Is this because they tax the poorer off less and there is a 52% tax over 55,000 Euros?
Probably
They’re also a tax haven though
Bankrupt ideas? 1) That it makes sense for money creation and through it control of the public money supply to be gifted to a privately-owned cartel. 2) That the bulk of the land be allowed to stay in the ownership and control of a minority who only have it as their ancestors stole it in the first place. 3) that the cost of mortgages being many, many times inflated by numbers 1 and 2.
I have a suggestion for a new sign that the successor to the UK Border Agency can put up at “Arrivals” at all our airports and ports
“Welcome to Serfdom”
Nice to see that I’m not the only one taking a particularly bleak view of the world today 🙁
Trickle down, or giving tax cuts to the wealthy so that the supposed wealth they create “trickles down” to benefit the rest of us, was always fantasy economics that was latched onto because it obviously benefited the rich every time.
The rich either speculated with it or simply pocketed it! Also, the issue of tax cuts has to be considered. That money has now been lost to the government. How does it now balance the books? When you read about hospitals closing or public pay frozen or benefits cut or frozen or public borrowing rising, that might give a clue about how the government claws back money from tax cuts.
And, as stated on the film “Four Horseman”, the investment banks and the rich often manage to obtain money cheaply. By the time this new money filters down to us, it has probably caused inflation to rise and made things more costly.
Tax rises on those who can best afford it is the best way to stimulate the economy, not tax cuts!