This letter was in today's Observer:
It is now clear that plan A isn't working. Wave after wave of economic figures from HM Treasury, national and international economic institutions such as the OECD, the IFS and the IMF have all concluded that the British economy is faltering. The UK jobless total is now at its highest for more than 17 years, while growth has all but stalled.
We urge the government to adopt emergency and commonsense measures for a Plan B that can quickly save jobs and create new ones. A recovery plan could include reversing cuts to protect jobs in the public sector, directing quantitative easing to a green new deal to create thousands of new jobs, increasing benefits to put money into the pockets of those on lower and middle incomes and thus increase aggregate demand.
This could in part be paid for by the introduction of a financial transactions tax. The government could do far more to create the space for new and innovative industries and companies to flourish. One idea is a British investment bank, to leverage and back investment in low-carbon sectors such as housing, transport and renewable energy.
Doing nothing is not an option. We therefore call on the government to put the national interest first and hold an emergency budget that would instigate a Plan B for jobs, fairness and sustainability to rapidly get the economy moving again.
Dr Ha-Joon Chang, Faculty of Economics, University of Cambridge; Prof Sir Tony Atkinson, Nuffield College, Oxford; Howard Reed, Landman Economics; Chris Edwards, senior fellow, economics, University of East Anglia and 96 other economists, including me.
I'm delighted to have helped draft the Plan B in question. I had a big role in drafting the tax section but other ideas I have been heavily engaged in developing including the Green New Deal, the Tax Gap, Green Quantitative Easing to pay off PFI and to fund a national investment bank and pensions reform to provide ongoing capital for investment in the UK economy all feature prominently in Plan B, so I offer my thanks to Compass for including these ideas in the report.
The full report is available here and the summary here.
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Great stuff from “the Observer” yet again spot on regarding the hostility of the other centre right media to Plan B (supported by 100 economists) , Will Hutton on the ecomomic anti-European hysteria and Andrew Rawnsley on the plutocrates & the St. Pauls protest. Lets see if the BBC and other impartial TV news media report this event of the 100 economists in the same way they reported the recent ecomomists’ Higher tax letter & the bosses National Insurance letter before the last election both of which seemed to have high exposure.
100 leading economists? Pull the other one. They were mostly the same Labour Party shills that got us into this mess in the first place. Actiually there were only 99 because they counted one of the names twice Kitty Ussher was never an economist and neither were half of the social scientists on the list.
What do the governments of Portugal, Ireland, Greece and Spain have in common? They are all bust, and they have all been run by Socialists for the last 10 years. We don’t need any more left-wing ideas about how to stimulate the economy thank you very much.
Actually all in their different job titles are economists
Only a pedant or a lawyer would argue
I note you seem likely to be both
Prof the Baroness Ruth Lister of Burtersett, Loughborough University; Labour Life Peer. She is a Professor of Social Policy, not economics. She lists her academic research interests as ‘Citizenship, gender, poverty and social exclusion, social security, welfare, reform, children and young people’.
Prof Ken Spours, Institute of Education; Head of the Department of Continuing and Professional Education at the Institute of Education, University of London.
Prof Dave Byrne, Durham University; Professor in the School of Applied Social Sciences at Durham University.
Prof Jonathan Rutherford, Middlesex University; Professor in Cultural Studies in the School of Arts and Education department of Middlesex University.
Gez Sagar, head of strategy, economy communications centre, HM Treasury (2009-2010); former Head of Media for the Labour Party.
Prof Richard Grayson, Goldsmiths, University of London; Prof Richard Grayson is the Head of History at Goldsmiths. He was formerly Director of Policy of the Liberal Democrats and Liberal Democrat candidate for Hemel Hempstead in 2005 and 2010
Prof Paul Thompson, Strathclyde Business School; Prof Thompson is a professor of Human Resources at the University of Strathclyde.
Prof Diane Elson, University of Essex, chair UK Women’s Budget Group; Prof Elson is in the department for sociology at Essex.
Prof Alan Finlayson, University of East Anglia; Describes his specialist subjects as “Political theory, British Politics, Labour Politics, Conservatism, Northern Irish politics, rhetoric, media, communication, poststructuralism, discourse theory, democratic theory, continental political thought, asset-based welfare, cultural theory, cultural studies, interpretive methodologies”.
Dr Heather Savigny, University of East Anglia; She is a Senior Lecturer at the University of East Anglia and lists her teaching interests as ‘political communication; popular culture; British politics’.
You show a remarkable lack of understanding of the reality of economics
The fact is that if you want to study the economy as if human beings mattered now you will study sociology, broader social sciences, even geography these days – plus history (after all, what shapes it?)
You don’t study economics because in that so called discipline there is no room for dissent or discussion. UNabated neoliberalism rules – dominated by a mathematical model of the economy that is fundamentally flawed – as all the evidence shows
So of course those dog the new, innovative, creative, important thinking that will get us out of the mess that economists of that sort got us into are not in so called economics departments where the only thing tha matters is tha the maths is co lex despite the fact it bears no relationship to reality
It will be some time before plan B is mainstream again in economics departments. But that’s a strength, not a weakness
And all these these are, of course, elaborated in the Courageous State. you may want to buy a copy.
How typical of rightwing neo-liberals.
Their model of economics smashes into the wall and somehow that is the fault of “socialists”!!
Here’s a counterfactual – how come the USA suffered so badly through the credit crunch even though it was run by a rightwing neo-liberal cabal at the time, eh Bernard?
Its the exact nature of ‘the national interest’ that is in question.
On the present path, Barclays, the biggest corporate fianncial controller in the world, makes £5b profit while unemployment is at a record high.
Where does the national interest lie?
The US has a jobless recovery – shares doing well while unemployment soars. It has been shown that the main factor in corporates flourishing at this point, is the downward pressure on wages, inttertwined of course with the unemployment that forces people to accept low wages and work ever harder.
All the signs are that the same policy is being covertly pursued here, except here we have a huge additional factor of legalised free flow of migrant labour, both from within the EU and brought in by corps from outside the EU, undermining workers and any worker organisation.
I am happy to accept the list of economists. I don’t accept their failure to identity this major factor in corporate takeover. Or their use of ‘national interest’ without interrogating what it means, as a starting point.
If people want to be seen as ‘important’, they need to do what is important.
Knowing some of the people on this list, or their work, I can guess that there is no mention of the overriding international trade agenda anywhere in your Plan B – without which it’s a waste of time, and ditto the movment of labour.
You would not have included anyone who knows about the trade agenda in your drafting group,and none of you would have mentioned labour migration – cos its not ‘nice’.
Why waste your time and everyone else’s on such red herrings? It really is counterproductive.
i think the point is richard that you can argue that those people listed by Bernard arent “leading economists” – they might have something worthwhile to contribute, but to call someone who is a professor of cultural studies a leading economist is not accurate and frankly misleading.
And respectfully – I disagree
No one says Niall Fergusson as a historian may not discuss economics as he is right wing
Ditto for the left
The problem is in your mind but is a just a deliberate effort to avoid the real debate
In other words the comment is pure cowardice
your comment is cowardice as you fail to address my point – he is a historian, not an economist – so to say 100 economists signed this letter is factually incorrect. Unless we are saying that anyone making a comment on economics is an economist (in which case I might as well call myself one even though I only have an A level in economics).
I am not attempting to avoid the debate, i conceeded that they have valid points to contribute.
Go on then, define an economist
OED says it’s an expert in economics
No qualification required
No regulation involved
Not even a barrier to entry in sight!
But it seems the free marketeers want to regulate the term. I think that proves my hypothesis
Just one question, no cynicism intended, I just want to know,
Just where in the whole world is Plan B working?
After all no point re inventing the wheel, where is our working model?
Just one question
Where in the world is neoliberalism working?
It is the prevailing norm and has failed. Are you really saying we keep it simply out of fear of change? That seems to be your message
The “prevailing norm” is working just fine in India and China. The problem with western economies is that whereas the private sector has had to accomodate competition from the east largely by cutting costs or exiting lower margin industries, governments and the public sector have failed to respond to this by lowering their costs.
The Blair/Brown government was no different from many other left of centre European governments and have similar positions – a stagnant porivate sector and stubborn budget deficits. No amount of additional government spending is going to solve the problem, because the problem is not a lack of demand but the erosiion of western competitive advantage that made all the high cost public sector services affordable.
Ah, so now I get it
Your model is simply called the maximum exploitation of labour paid below subsistence wages
That’s pleasant
you answer the question with a question.
his question which you failed to answer is – is the current plan B the right one, is there evidence of plan B working elsewhere.
Alternatively – is there a plan C which is working somewhere else that we should be thinking about?
why do you assume the contributer is promoting neoliberalism just because he is seeking some working examples of plan B?
The contributor had previously revealed his hand
And the closest thing to Plan B working was the enormously successful post war consensus – that worked better than neoliberalism ever has
And the New Deal, of course
“Just where in the whole world is Plan B working?”
Venezuela, Argentina, China, Brazil….in fact anywhere that is doing the polar opposite of austerity measures.
The entire system works on debt. If either government or industry do not borrow in order to spend, there can be no growth.
Government would receive a return on its money if it borrowed and spent on the real productive economy. The entire country would benefit if money went towards real productivity instead of being creamed off for the casino economy who blow up financial bubbles for their own profit at the expense of everybody else.
Isn’t it time for Plan C as suggested by Bill Mitchell? See
http://bilbo.economicoutlook.net/blog/?p=16719
“Your model is simply called the maximum exploitation of labour paid below subsistence wages”
No my model is “people won’t buy your iPhones if they can buy them more cheaply elsewhere”. Obviously those people in China and India who are willing to work in factories choose to do so because they earn more than they would elsewhere. They probably earn considerably less than people are used to earning in the west, but the simple fact is that neither you, I nor any western government can do anything to stop them if they want to work for $10 a day and that is what is undermining private sector pay in the west.
Ultimately that will lead to lower revenues for western governments and budget deficits, the evidence for which lies in the €1 trillion eurozone bailout.
I think I’ll take that as your agreement that my summary of your thinking was right
No other interpretation is possible
And you’re wrong about no choice being available – that’s just a myth competition lawyers (a contradiction in terms, as I am sure you understand) create
“I think I’ll take that as your agreement that my summary of your thinking was right”
Not at all. My thinking is that the Observer article is completely wrong headed. Plan B is summarised as:
– An immediate halt to cuts, to protect jobs in the public sector.
– A new round of quantitative easing to finance a “Green New Deal” to create thousands of new jobs.
– Benefit increases to put money into the pockets of those on lower and middle incomes and give a boost to spending.
– A financial transaction tax to raise funds from the City to pay for investment in transport, energy and house building.
With the exception of the last point (which is as unworkable as it is muddle-headed), this is just a continuation of the left-wing policies that led the eurozone and the UK into the current fiscal mess. To have a bunch of Labour Party hacks sign a letter and claim that they are all “leading economists” is nothing short of dishonest.
And respectfully that’s the last comment from you on this I will post since it is clear you are simply intent on hurling abuse of various sorts and have no intention of being constructive in any way at all
Bernard –
Seriously, you think people in India and China who work in assembly factories for next to nothing per week do so because they choose to? Is that really what you think? Newsflash – they don’t. They do it because they’d starve otherwise. The booming industries in China which led to this year’s economic growth of… what was it, 9% or thereabouts, did not translate into a massively better off population enjoying all the benefits of a successfully capitalist economy. It led to the creation of more new millionaires and billionaires than anywhere else on Earth. The poor sods sewing training shoes and assembling electronics are still hovering around the poverty line as they always were… the only difference is they get to wear a corporate sweatshirt instead of Party Overalls. I can guarantee that none of them, as you say, “want to work for $10 a day”. They simply have no alternative. Frankly, shame on you for making out that the worst part of that is the impact on western corporations ability to exploit them further. Shame on you!
When will the penny drop with free marketeer capitalists that the ‘trickle down’ bit of your doctrine is just NEVER going to happen? The massive profits that are only possible as a result of the financial oppression and fiscal disenfranchisement of massive blocks of ordinary people will NOT find their way back to those workers who generate them. The fruits of those labours will remain with those at the top of the tree. We’ve seen it time and time again with the imposition of free market thinking on countries who didn’t know the damage it would cause – just look at the post war rape of Iraq by Halliburton and the Carlyle Group. they went in and bled that country dry before running for the hills! Same thing in Poland, Russia, most of South America… the history of latter 20th century economic activity is nothing more than a litany of Chicago School driven raids on emerging economies, all made with the promise that the benefits of capitalism would ‘trickle down’ to the general population.
Well, they haven’t and they clearly won’t. Why free marketeers don’t admit that, I don’t know. There’s nothing wrong with the pursuit of wealth, but to promise whole populations that they’ll benefit when you know for a fact that they will only suffer is, to my mind, completely indefensible.
And that’s why right wing economists and the Friedman Gang make my blood boil.