The FT has just reported Theresa May's speech on her effective promotion to prime minister in which they report she said:
In a series of criticisms of George Osborne's tenure at the Treasury, Mrs May said he had neglected productivity problems and suggesting that government-backed project bonds could be used to boost infrastructure.
That's the foundation of People's Quantitative Easing by another description by the sound of it.
Last September I asked what George Osborne would call this idea when he used it. He won't but his successor will and wow we know: Project Bonds.
I can't complain: I created the idea to be used. I think it will be.
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I will reserve my real enthusiasm for when I see exactly what they will spend the money on but prima facie this is good news and promising.
Well Richard, let’s hope she actually means it and, assuming she does become PM, actually implements it. I’d rather this be done by a progressive party of government, but …………perhaps the ghastly idiocy of the referendum will have a silver lining. All power to your elbow.
The better solution to the investment bank is to basically restart the original creations of 3i Investors In Industry which was very wisely set up with two investment banks one mainly on manufacturing the other something else.
Why two competition as they could brush aside competitors sledging by saying that the other bank would lend if they didnt.
Why the focus on industry – because manufacturing is long term has generally weak economics ie profit margin of 10% but spends about 20% on reinvestment and R&D. Their accounts are overstated because depreciation never matches up to the new higher cost of the replacement items – so they pay tax on profits that were not made.
Also as they tend to own land the increase in land value becomes a powerful incentive for asset strippers as land goes up with inflation.
Why the manufacturing and weaker industrys instead of investing in media, app builders, house builders and banking – well because their economics are far superior ans so the need for safe trustworthy long term bank managers like Handlesbanken or Natwest of old is essential.
Building the network of support and contacts is just like 3i showed costly and time consuming and not great business per se BUT is great for the entire geographical country until you sell it off. Whereupon they fire big % of workers and concentrate on the big safe high margin businesses and neglect the little ones.
As for taxation George was probably deliberately omitted from being told the True and fair view of taxation of old that is still incorporated in GAAP. Tiny to nil tax rates are neither true nor fair views of the sales per country, revenues and profits. Yes sqweels and howls but hey its fair taxation and given CEOs pay and power I doubt their bonus or pay would go down.
So, a National Investment Bank
As I have long argued
There needs to be two in my view one majoring on farming machinery and another majoring on industry with manufacturing. Both industrys with generally poor economics but hey both contribute to the national wealth a bit like railways. They aint great as a business but by gum do they make commuting quicker!
I noted that. Isn’t this hypothecation by another name? No mention of a National Investment Bank, or the like; no mention of QE-style repurchase by the BoE, or NIB, or however it may emerge – she may (I hope that pun is the last) only mean a relaxation on the amount of bond-issuance in time of “great national change”. You may know more than you’re telling. And I’ll have to change the way I write sentences because of this politician’s surname. I could also become “Don’t Call Me Theresa”. At least during the week…
Let’s see…
This may be nonsense by the time it sees the light of day
But at least she said something hinting at progress in the right direction
Well if it happens, Osborne will also be gone, there will be employees representatives on boards and restrictions on CEO pay! Brexit might almost have been worth it….
Especially if we manage not to leave LOL.
The Tories have realised how disastrous their economic plan has been, and Brexit is the price extracted from Cameron and Osborne for their failure.
Perhaps she has borrowed rather than stolen from the Emperor Caracalla of Rome.
So she’s enlarging the tax base, increasing the pay of the military, or building a whacking great public baths? Or doing away with her opponents? We can only guess at this point. Watch this space.
I assure you I will be
As what May said this morning was still campaign talk, pre Leadsom stepping down and almost entirely not in the tory 2015 manifesto it seems interesting hyperbole and perhaps a deliberate shift away from the Cameron/Osborne era, but I would think easily pushed into the long grass now she’s actually won the PM role without any contest.
Let’s se
I will be surprised if she delivers along those lines
But who knows?
Representatives on corporate Boards ie becoming actual Directors is a misguided disaster without reference to what happens from the past. The same idea was in having non executive Directors and pay etc accelerated!
Far better to have a separate elected at the AGM Shareholders Nomination to the AGM committee with the powers to at company expense find alternative candidates for board posts and know what terms etc are involved before the contract has board approval and the might of the company behind it. Have the Chairman of the board as an adviser and away you go multiple solutions and just a lot of upset failing Chairman, mask painted CEOs and cheers from those with business rather than political skills. Shareholder Forum like with a twist and add the worker with inside knowledge and a great self interest in having a good leader.
Rigging things in other words?
Its very very hard for any single investor to rig such a committee as they only get one vote. If their proposed ‘man’ fails they get outvoted in proposing another!
The chairman also only convenes the meeting then acts as a member of the meeting giving his advice and inside knowledge.
What about an apology from this opportunistic wretch? The years of unnecessary suffering and, in some cases death. I would have some respect for her if she did that, These people simply change direction without any compunction for the policies they supported prior to the damascene conversion.
I’m certainly not complaining if there are positive changes but some holding to account is needed.
Well, that’s great. Now the general idea has the potential of precedent, full bipartisan acceptance and no significant opposition.
Yvette Cooper’s absurd QE scaremongering from the Labour leadership debate now looks more ridiculous than ever.
Correction: I meant ‘PQE scaremongering’, eh, you know what I mean…
Is Theresa May’s statement a pack of lies that she will never implement or a genuine statement of what she will push for as prime minister? Trust in politicians has been so under-mined by the lies of Cameron, Osborne , Blair and Brown that it’s hard to muster much enthusiasm. It seems to me that the first litmus test of May’s sincerity will be getting rid of George Osborne since he would be sure to oppose any large scale use of “Project Bonds” because he’d get called out by the Dinosaur mainstream media on how he would reconcile such large amounts of unfunded government money creation with his commitment to run the UK sovereign government like a household budget balancing the books and preferably run a surplus. We shall see!
Who knows?
It would be good if it was true, but I suspect there will be any other policies I nay have problems with
mmm… The words of Mrs Thatcher on winning the General Election- ‘Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope’ She then went on to trash manufacturing industry, public services, the unions, working people in general and contributed hugely to the causes of the financial crash. Who can trust the word of a Tory politician ?
I agree
But isn’t that any politician?
Just to clarify – is she proposing infrastructure funded by ‘overt monetary financing’ backed by the BoE, as you effectively were, or, a conventional bond issue involving conventional govt. debt?
It’s not clear
But all debt will be available for QE
Richard, would you consider joining the Conservative Party? There would be many benefits to you and your agenda. Let’s just talk.
I am not incluned to join any party
I have talked to the Conservatives and served on a Treasury committee at their request
What gives? You sound like you’re in an angst about this.
Are you saying that ideas like QE funding hypothecated for investment have rightful owners and use of them should be acknowledged or even paid for?
And are you saying that nasty people implementing policies with which you agree is still a worse outcome than the right kind of people implementing policies with which you disagree?
I’m not saying that at all
Remember the Tories have used my ideas before on a GAAR and CBCR
That sounds confused, angsty and a belief in the ownership of ideas to me. Who could fail to contrast Corbyn’s ‘borrowing’ of ideas during his campaign to be Opposition Leader with May’s ‘stealing’?
You are reading too much into this
On a GAAR? When? I thought you were critical of the whole thing?
Yes
I wanted a general anti-avoidance principle
But the idea came from there
Baxter,
You are full of it. When you say that he sounds like he is ‘in angst’ you mean that you wish he was because that would fit more neatly your pre-concieved world view.
Please point out the angsty bit Richard’s post as your the only one who can see it.
Well, well: it sounds as if Osborne’s agenda to maximise the concentration of wealth is out of fashion.
Or successful enough, by now, for Number 10’s new incumbent to consider it done.
Theresa May is no longer an authoritarian Home Secretary with a pink jacket and a long suit in surveillance, detention and deportations.
We don’t know what she is now: I would guess that she is whatever it is that makes her secure and successful in her job.
‘Successful’, that is, in a worldview and an agenda that we can only guess at from her speeches. At face value, the speech, so far, is encouraging.
Grayling in the Treasury worries me: I hope that the rumours are the product of the Daily Mail rather than a credible political threat: he was an abominable Minister of Justice.
On the other hand, it may well be that sending in an ignorant and brutal commissar is exactly what is needed at HMRC.
Grayling at the Treasury would be dire
Bringing HMRC to state what is the true and fair view of the accounts to the top 2,000 corporations would be very worthwhile. google and Amazons share of retail spending is getting huge in America and you can be sure that its light on tax like Apple!
For a bit of Tuesday morning amusement enjoy this music video from Cassetteboy via the Canary.
Theresa May – I’ll be watching you!
https://www.youtube.com/watch?v=D2fSXp6N-vs
Dire?
You do him a disservice: Grayling’s not a politician, he’s a commissar – turns up at your farm and calls it a collective, packs you off to the labour camps and shoots the tractor.
There are uses for such men.
In a just world, he would have a shovel and a business card: “Sanitary solid waste relocatory consultant”.
I am leaping to conclusions this morning, but was puzzled to hear on the BBC business program that the US has had 7 quarters of declining corporate earnings, and yet the stock markets continue to rise. That is an unusual contradiction, except that it gives a good indication of where the money flows are heading.
On reading a bit more about this, it looks to me that real corporate America may be about to hit the rocks again which will no doubt have a huge knock on effect to the rest of the world (UK included).
As May has some background and knowledge of financial markets (he husband may also have helped educate her and perhaps be more alert to any impending real economic crash), her very surprising speech may (or may not) be eluding to the new state actions that will be required if/when the conventional QE and interest rate reductions have clearly failed dismally to deliver real economic growth.
There is one good thing about the US – it is usually a very good indicator of financial disasters on the horizon, if only you can look through the fog of financialised market data that is only out there to confuse and distract from the real troubles below the surface.
http://www.forbes.com/sites/investor/2016/03/19/the-fiction-of-earnings-growth/#3f4c9edc641d
Markets aren’t rising because of earnings
They are rising solely because interest rates are so dire that dividends look good