This letter is in the Guardian this morning:
Larry Elliott is right to be sceptical about whether the trillion-euro dose of QE will solve Europe's economic problems (Report, 21 January). Like its £375bn UK predecessor, it will buy government bonds from banks and, as happened here, that money won't generate economic activity in the real economy, but instead will doubtless benefit the banks and the asset-rich by inflating property prices, the stock market and commodities. What is needed is a Europe-wide debate about what kind of QE can actually help its flagging economy. The Green New Deal group paper Europe's Choice — How Green QE and Fairer Taxes Can Replace Austerity proposes the introduction of “green infrastructure QE”. This would fund investment in the continent's renewable energy supplies, ensure all buildings are energy efficient and revitalise local and regional public transport links. Paying a living wage would help to boost governments' tax revenues and address climate change. Another huge revenue source could come from tackling the non-payment of taxes that we estimate might cost the governments of the European Union €1 trillion a year.
Caroline Lucas MP, Colin Hines Green New Deal group, Richard Murphy Tax Research UK
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I doubt it’ll get much coverage beyond The Guardian, Richard, but at least Caroline, you and the green new deal group keep pushing. As you note in your other blog today, socialism for the rich it is, as was the UK example, and indeed the US case too.
Leaving aside the “coincidence” of the timing of the announcement, it’s clear that what appear to be the strings attached to this QE are a pretty blatant attempt to try to influence the Greek election, and thus undermine what looks very much like the election of a left wing, anti austerity, government. Funny that, as I’ve always understood it to be an unwritten (or perhaps it’s actually written down somewhere) rule of the EC and EU countries’ governments, to avoid becoming involved in/influencing elections in another EU state. Clearly the ECB feels it’s above such niceties. But then that shouldn’t surprise us at all. It confirms what many of us have recognised for a long time now – that the agents of finance and banking really do consider themselves to be a race above and apart from mere politicians and citizens, and that ultimately they will do anything in their power (which is, of course, extensive) to stop any development that may challenge their hegemony.
I sincerely hope that the Greek people will not be cowed by this contemptible attempt to pervert the process of democracy, and we’ll see the will of the people win through on Sunday.
I too am hoping for Greece
And I am told by up informed sources the awareness of Green QE is growing even if almost all of it begins here
I am not giving up yet!
You mentioned in a comment the other day that you were a pessimist, Richard. If so you’re the most positive pessimist I’ve ever come across. 🙂
And an inspiration to all pessimists (me), by the way.
But that is excellent news on Green QE.
“Paying a living wage would help to boost governments’ tax revenues and address climate change.”
On the contrary, raising the minimum wage to the living wage will worsen climate change. Minimum wage earners have the highest marginal propensity to spend (i.e. they’ll spend the extra money rather than save it), so consumption will increase. All things being equal, higher consumption is bad for the climate.
So you advocate poverty as a policy solution
Might you confirm?
I’m not advocating any policy; I’m merely highlighting the problem. Higher wages will lead to higher consumption – indeed that’s the whole point of raising wages! To simultaneously achieve a reduction in climate change, we would need higher taxes on carbon-intensive goods & services. This will push the extra income into low-carbon purchases instead.
More tax on UK-based CO2 emissions would be a good start, but we’ll just end up shifting CO2-intensive manufacture overseas. We already have a problem with embedded/outsourced CO2 emissions in imported goods. Unfortunately we’re bound into a myriad of trade treaties so we can’t impose new trade tariffs. I can’t see any way to resolve this. This is where you come in. As the nation’s tax expert, how can we design a tax policy to reduce our carbon footprint without hurting the poorest?
Redistribution will more than compensate for any risk you highlight
You seem to have ignored that fact
Whilst having labour at woprk can substitute for excessive capital spending – and that is very sustainable
Andrew,
Professor Kevin Anderson, of the University of Manchester and the Tyndall Centre for Climate Change Research said…
‘”50% of emissions come from 1% per cent of the population.” This 1%, says Anderson, includes climate scientists and nearly everyone at the UN talks and just about all the rich.’
http://www.theguardian.com/environment/2013/nov/21/climate-change-2c-rise
Of course at the same time as Green QE, we also need an overarching policy that is aimed at reducing emissions from all sections of society, both rich and poor.
Agreed
Stephen,
Thank you for the information, but I’m afraid you have confused two different sets of numbers. When you refer to the top 1% being responsible for 50% of emissions, that’s the top 1% globally, not in the UK. It’s obvious that the top 1% in the UK (whether by income or by wealth) aren’t responsible for 50% of the UK’s emissions: they aren’t heating their stately homes to tropical temperatures, nor are they lighting their homes to football stadium brightness. Even if they drive the most inefficient cars, those only emit three times more CO2 than the most efficient cars.
If the Green party wins the election, they’ll only be able to set policy in the UK, not the rest of the world. Making a few thousand rich individuals downsize their cars will make virtually no difference to emissions: the rich tend to save their money, not spend it. By contrast giving more money to the poor will increase consumption and hence emissions.
I’m not advocating mass poverty as a solution to climate change (although it would work). But we need *additional* measures to ensure that the money handed to the poor doesn’t get spent on swapping bus passes for superminis and cranking up the thermostat at home. Otherwise, when the earth overheats, we’re all toast.
All this just to point out that the original sentence is logically incorrect: raising the incomes of the poor in the UK will not “address climate change” – quite the opposite.
Ritchie – Substituting labour for capital may be “sustainable”, but that’s not the same as “addressing climate change”. Sorry to nit pick but if the Greens won’t do it for themselves then the media will tear them apart, as per the Andrew Neil interview yesterday.
Oh dear
It almost sounded reasonable until you used the term Ritchie
And then you revealed yourself as a Worstallite
Don’t call again
Put simply this is the depressingly familiar conflict between productive and non-productive investment. Productive investment should improve sustainability, investment in non-productive entities certainly doesn’t. Liberal Democrats are strongly in favour of long term productive investment. This QE will merely strengthen the move towards 1% domination.