An FT editorial this morning says, in conclusion to a discussion on the European conventional QE programme, and having noted that the programme in question is on hold but not reversed as yet, that this limits scope for further ECB action to provide stimulus to the economy and asks what might be done about this. Its response is to say:
One measure the EU could be preparing is a substantial, high-quality investment programme in green energy and infrastructure to provide both near-term stimulus and lasting benefits. The EU's European Investment Bank could be used for such a purpose. If it printed bonds backed by all member states, there is no reason the ECB should not buy them. If they are to ensure the future safety of the euro, EU policymakers need to put more instruments at their disposal.
This is, of course, FT editorial backing for the Green New Deal backed by People's or Green QE. This was an idea Colin Hines and I, both members of the Green New Deal Group, first promoted in 2010, and developed since then to the point that Jeremy Corbyn used it to secure the leadership of the Labour Party before then backing out of it.
The idea is, of course, MMT in practice.
It is time for central banks to take note. the Fed, Bank of England and ECB are all without policy tools with any impact now. Green QE is what the need. And now the FT agrees.
Sometimes it takes time for an idea to gain acceptance. This one may be arriving just in time.
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I gave a talk on Green QE as part of the EU’s energy transition to some Belgians yesterday. General support.
There was also an article recently in one of the Flemish newspapers by Paul de Grauwe (LSE) which argues for much the same thing (ECB – EIB bonds etc). I guess the question is: when will it get traction both within the EC and the othjer institutions – ultimately, it will be the Euro group of finance ministers that will need to call the shots to the ECB – EIB. If I consider the situation this time last year – Green QE seems to have raised its profile – more people are now saying veyr much the same thing.
Let’s hope so…..
Richard,
I think there’s a crucial typo is this.
You say “Jeremy Corbyn used it to secure the leadership of the Labour Party before then backing it.”
I think – knowing what you have written previously, that this should read:
“before then backing OUT OF it.”
You are right…..
Amendment coming up….
I’m all for the GND – but we need dozens, if not hundreds of them throughout the world. At the very time when emergency action is required we have the worst possible politicians in charge – among other political disasters “the most powerful man in the world” says global warming is a hoax.
I’m reading a book which every politician and green activist (and deniers like Lawson) should read, because it’s much worse than we think: “The Uninhabitable Earth” by David Wallace-Wells. He says:
“In 2003, Ken Caldeira, now of the Carnegie Institution for Science, found that the world would need to add clean power sources equivalent to the full capacity of a nuclear plant every single day between 2000 and 2050 to avoid catastrophic climate change. In 2018, MIT Technology Review surveyed our progress; with three decades left to go, the world was on track to complete the necessary energy revolution in four hundred years.”
I believe we can do it
I do not underestimate the challenge
Graham Hewitt says:
“I’m all for the GND — but we need dozens, if not hundreds of them throughout the world.”
One that demonstrably works will do. The others will follow on. It just takes one courageous state to have the cojones to get on with it. FFS it’s obvious to anybody with half an eye that QE was brilliant….for the financial industry (I use the term industry loosely in describing an industry that produces nothing), how much wit does it take to see that a similar injection of money into the real economy could be similarly effective and do something useful to solve real economic problems.
Over and over we’ve had nay-sayers on here (and plenty of other places) who think it’s clever to ask, and scores them a point, ‘If it’s such a good Idea why is nobody else doing it.’
With that attitude we’d all be still living in caves and we might not have candles yet.
At least we’ve got over having to hear PQE dismissed as ‘helicopter money’. Except from the occasional bearded reliquarian fanatic.
I was in London on Thursday for a conference and exhibition about new build technology and products and I could not believe the amount of new high rise building I could see from the DLR.
There were cranes everywhere.
I just wondered who was going to live in these new blocks – most of which seemed to be private?
It just came across as a summation of a massive misallocation of money to me, an investment that we might very well regret. Money invested to chase money. But where from?
For crying out loud – how many more luxury apartments in London do we need before we come to our senses about what is important?
Private investors always invest well behind the curve….
Email Address Supplied says
” — how many more luxury apartments in London do we need ….”
Private capital mostly doesn’t invest, it speculates.
Come the revolution, luxury flats will be affordable housing, Tovarishch! 🙂
According to one financial guru, announcement of the latest ‘Worlds Tallest Building’ announces the next financial crash.
Stripped down a luxury flat is very very similar to a normal flat just a few expensive fittings and a smooth shower hose.
Yes it’s about time for GND and 2 years ago and without Brexits impulse I do wonder if it would have momentum. Well done again Richard thank you and your buddy for creating it. Remember that in marketing brands evolve and ‘mature’ I would also recommend and suggest that you make additions and references to Wikipedia pages on GND and MMT with your name as that is the go to first reference for policy checkers and ideas merchants/implementers.
‘It’s Better to be looked over than overlooked’ like Mae West and have some strong influence upon the ongoing narrative before it goes off track.