This week the Bank of England is very likely to reduce interest rates.
It might also resume conventional QE.
Neither will work. They are failed monetary policy.
What we need is fiscal policy.
VAT cuts would be a start.
Acceptance of more debt would help (and conventional QE only makes sense as a backstop to this).
But most of all we need People's Quantitative Easing, or Green Infrastructure Quantitative Easing as it was when I proposed it.
Tinkering at the edges of the financial system cannot solve the mess we're in.
Getting people to work in every constituency - releasing a Carbon Army to bring out energy systems, transport, housing and more into the 21st century - is the way to solve that mess in a way that will change real lives.
And we would do it now.
It's the Green New Deal.
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I agree.
And the Dutch have pointed the way with: http://www.energiesprong.eu/.
(disclaimer – I have zero contact with this org)
If there was a full blooded programme (10 million house renno programme), properly funded enforcement (by local gov) of minimum wage legislation & a requiremnt that only companies that paid a living wage would be eligible for contracts, & a focus at the start on high unemployment regions – the UK would be a much better place & indeed, we would have the making of a “Carbon Army”.
Richard, don’t you get tired of posting and complaining about the current state of politics in the UK? Why don’t affluent people like yourself actually get into politics and do something about it?
Because those in the Commons tell me I have much more influence doing this and suggest I carry on doing it
I believe this completely. Keep up your brilliant work!
When it comes to visions for directly addressing the current state of economic malaise for the great majority of people, the Green New Deal really seems to be the only game in town at the moment – thank you for advocating it!
I was wondering if you could elaborate on the long-term plan for this. If I understand it correctly, PQE/GIQE is only advisable under certain conditions, in particular a low rate of inflation and at least some unemployment. Selling gilts could become expensive again if we move away from the extremely low interest rates we are at now.
Is there a risk that the very high levels of state spending needed to maintain this huge workforce (the ‘carbon army’) could become suddenly unsustainable once macroeconomic conditions change? Conventional QE can be cut back fairly easily if the rate of inflation rises, but will we be able to do that if millions of jobs directly depend on it? Could this lead to an inflation overshoot?
Or is the idea that once the real economy picks up again following the state spending boost, PQE or gilt-selling can be cut back again gradually?
If the economy picks up these investments will scale back
That is why they need to be smaller scale – this gives flexibility
But remember too that if the economy picks up tax will pay
Indeed, that is the intention
Seriously?! Considering the ongoing economic nonsense in the UK, I think they are lying to you.
Who is lying about what?
The people in the Commons who tell you that they are listening to you are I think lying to you about this. Otherwise a lot of your decent ideas would be implemented by now.
You know who said it the most?
This is a great idea and I do hope it will become a major part of the Progressive Alliance Manifesto.
It is unlikely to be adopted by the Tory’s but Theresa May will need new ideas; we can always live in hope.
Sadly the Tory Green policy particularly towards PV has been a disaster; Immersun has been a recent casualty https://www.immersun.co.uk/
@Gytyu We need coherent well thought out policies on the left. Very few people have the analytical skill set. Even fewer (including Richard) can do synthesis. I very much doubt the country would be better served by Richard going into politics even if he is “Affluent” – though he was described as mad by one of my former University College Dublin colleagues when I was over last week!
I’ve been described as mad at UCD?
What did I do to deserve that?
Not sure I would worry too much; this was a Physics reunion not an economics one. I just mentioned that the UK would need new economic ideas particularly after the Brexit vote and mentioned your name. The person certainly was not an Economist (former head of the UCD computing centre) said something like “He’s the author of Corbynomics, 70% of what he says is absolutely fine but then he draws wildly wrong conclusions -he’s mad.” He is not someone I know well – only said hello for a few minutes as he was with my former MSc supervisor (MSc by research; very rare these days).
Nearly all the night was spent with other people and catching up with old friends. There was considerable discussion of Brexit. The main conclusions were
Stupidity of holding a referendum particularly with a 50%-50% threshold as there was bound to be a considerable protest element
Surprise that the result was taken as anyway definitive without at least a 60%-40% result
Very pessimistic about the UKs future; sadness and pity towards Britain were the dominant emotions
Strong support for the UK in getting a favorable deal but certainty that the Brexit “sex with the ‘ex” negotiating position was not realistic.
Amused
The PV thing is quite typical: Renewable energy is a Good Thing (actually and politically)
PV companies pitch to the gov “Reward people who install rooftop PV, you will get the kudos and, best of all, it will be paid for by a levy on leccy bills so no cost to the treasury”
So people who live in Surrey and have £5k spare will get a guaranteed return for 25 years paid for by people who live in Cambuslang in tower blocks.
And, clever PV installers, we`ll add a little codicil to the legislation that says only us `registerd` PV installers can do the installing – no going to B & Q and buying your own panels any more.
Result! Jobs for the boys and a lot of pleased middle England punters being given a bung and an extra dollop of smug.
The market will always find a solution!
(PS Immersun overpriced and over complex. Simpler alternatives are available)
A touch cynical
Brian
I hope Richard can indulge me as this is my 3rd reply on this thread.
Not sure if Northumberland qualifies as middle England and I do have a 3 kWp PV system; designed and installed by myself (I am a CEng amongst other things) and a few of my current and ex-students in 2009. I’m no fan of the way the FIT was implemented – think MCS accreditation was a bit of a stitch up; though I benefited greatly through the RO-FIT scheme. A pure DIY model might be a bit dangerous as DC is more deadly than AC and the voltages can be high (about 700V DC in my system).
My objection is the way the scheme was managed which was an exercise in how not to do things. Overgenerous rates to begin with (they were warned by “experts”- including one of my colleagues) lack of proper monitoring of the install rate. Panic slashing of the rate when the install rate was much higher than expected; apparently the figures they were using were months out of date. This happened a few times. However the scheme was set up it would have been very easy to put in install thresholds. When for example the total PV install reaches 1 GWp the FIT rate will drop to 20p per kWh for example. Using a timetable e.g. rate will drop to 21p after 1st September was a crazy way of setting things up.
Agree Immersun was overpriced and complex (I could easily have designed a better and cheaper system); just used it as an example as it folded in the past week.
The greater the truth, the greater the cynicism.
However my point is that if gov wanted to improve the UK`s Solar Power capability then it could have done a couple of things:
Build a solar panel factory or 10.
Use its huge bargaining power to buy from existing suppliers and push the price down.
Make it a legal requirement that people with suitable roof space will accomodate solar panels – they`d get cheap leccy in return.
Etc, etc.
But what do they do? Take up a scheme that enriches some ex double glazing specialists and costs a fortune.
As with solar Power, as with PFI etc. IE the business of government is to subsidise business, usually under the guise of `efficiency`.
Of course there are photovoltaics in t` north and even in Scotland. But in general the winners are the affluent south.
Personally I`ve got a waterwheel…..
A Green new Deal would seek to make very building a powerstation
Then you may well waste a lot of money on north facing roofs and wind turbines beset with turbulence.
This is the Thatcher inheritance: all expertise is now privately owned.
The best we can hope for is a self publicist like Dyson.
Nuff said.
Brian
the devil is in the detail. Richard is an Accountant and Economist not an Engineer or Scientist. Your points are well made. Ten to five years ago the Navitron Renewable Energy forum was an excellent place to discuss such matters – I was a prominent member at the time and still contribute occasionally (look for StBarnabas).
I disagree regarding the private sector; the private sector (with some honourable exceptions) seems largely clueless in terms of Science or Engineering but intent on making a fast buck.
It is absolutely true that tactics and well implemented subsidiarity is vitally important but this is a strategy blog. If QE is done again possibly you would trust the bankers more?
Now we know May will be our next PM, what do you think of her speech? Assuming she doesn’t backtrack.
This is from the FT:
[i]She made a series of criticisms of George Osborne’s tenure at the Treasury, saying he had neglected productivity problems and suggesting that government-backed project bonds could be used to boost infrastructure.
Mrs May also called for a “proper industrial strategy” and a plan to develop all of Britain’s great cities, implying Mr Osborne had concentrated on boosting “one or even two of our great regional cities” – a reference to his focus on Manchester.
There was a familiar call for the government to take more powers to block predatory takeovers of key companies – citing Pfizer’s failed bid for AstraZeneca – and another promise to tackle corporate tax evasion.
Her speech made it clear that she saw high executive pay, irresponsible corporate behaviour and a widening gap between London and the rest of the country as significant factors in the Leave vote.[/i]
I would be interested in an expert’s view (not that ‘experts’ are supposed to know much these days).
It was good
Let’s be blunt, I wish I’d heard many from Labour say it
It’s not quite a McDonnell speech
And I will wait for the detail, of course
But she got a lot right
I have to say that I pulled over my car on the way home and listened to this.
It sounds too good to be true – a neo-lib Tory party with a new leader admitting that it needs to change tack?!!!
Let’s keep watching…………….
She may be very clever on day 1
Day 101 counts for more
agree
What richard says is true and would be helpfull for both people and busines, as would be the citizen’s income also good for people and economy. The citizen income is in some ways like working tax credits except for all without the application and so people would be taken out of the benifit trap and it would give a level field to immigration and locals alike.
Green Deal – yes – lets try to electrify all the main railway routes (and others) the Tories promised they would and then didn’t to get us away from dirty diesels (a fuel which can only go up in price as it gets harder to dig out of the ground) and maybe give hard pressed commuters a bit of a break with their transport costs.
And what about diesel car amnesty to get rid of all the cars fitted with lying devices about their emissions?
And a 50 year plan to expand tram networks in our cities – a form of transport that should never have been got rid of in the first place.
Thatchers’ ‘great car economy’ is truly over.