Jeremy Corbyn is no longer leader of the Labour Party.
Like it or not, I have to accept my role in his selection for that job. As the FT reported in August 2015 in an article that discussed whether I was, or not, Corbyn's economics guru:
Mr Corbyn is one of a number of people who has backed the idea of a “people's quantitative easing” in which the Bank of England would print money to fund a national investment bank that would invest in capital projects such as housing, roadbuilding and green technologies.
Richard Murphy, a prominent advocate of people's QE, told the Financial Times the idea works only if the current government's plan fails badly. “People's QE is necessary only if George Osborne's plan comes off the rails pretty fast, which it almost certainly will,” he said. “There is a significant risk of another recession.”
As they noted then, and which I did not dispute:
The idea of people's QE was floated during the depths of the [2008] crisis but some economists say that if it was used during more benign conditions, it could cause inflation and undermine the independence of the central bank.
Howver, as they added:
But Mr Murphy said on Thursday that people's QE would be essential by 2020 because the economy would probably have taken a battering by then. “ China's currency devaluation is likely to export deflation, to prick the housing bubble and to prick the investment bubble,” he said. “But if it is not China, it will be something else – there are significant other problems which the chancellor is doing nothing about.”
In any case, he added, if Mr Osborne's plan for the economy was successful, there was no chance of Mr Corbyn or any other Labour candidate becoming prime minister in 2020. “There isn't going to be a prime minister Corbyn – or Burnham, or Cooper, or Kendall – if George Osborne delivers his plan. If you deliver bright, shiny blue skies, then arguing about whether Corbynomics works is irrelevant.”
The simple fact is that I was right. There aren't, you may have noticed, shiny bright blue sky now. The economy has instead taken a battering, as the FT has acknowledged today. And the time for People's QE - which was always direct monetary funding (DMF) of government spending by central banks - has arrived.
Now let's get on with it.
The FT should be applauding now.
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Is Keir Starmer pro People’s QE/UBI? I had understood that Rebecca Long-Bailey had taken to the cause.
We do not know as yet
Let’s ee
We have no idea who will get the shadow chancellor role, but there are lots of rumours
We’d need PQE even if there was no Covid-19.
Covid-19 is what has broken the camel’s back and revealed how short termist we have become as a species.
So yes – I believe your claim to be true.
The journalists at the FT back in 2015 weren’t the smartest. The decision that the Bank of England should use its powers to create reserves out of thin air was taken in the fourth quarter of the 19th century to act as a Lender of Last Resort to private sector banks that kept failing for one reason or another. The BoE therefore became a reserves backstop to the payment settlement system. Having taken this step it was obvious it could use its reserves creating powers to buy up government gilts and it did so surreptitiously as you illustrated one time:-
http://www.taxresearch.org.uk/Blog/2017/08/09/the-first-world-war-was-partly-paid-for-with-quantitative-easing/
Once the UK had abandoned the Gold Standard in 1931 it then became a commonplace for the BoE to use its reserves creating powers to buy government gilts to fund the governments deficits. This activity was suddenly dramatically revealed with the BoE’s Market Notice 19 released last month although why I’m uncertain since it was a commonplace activity:-
https://www.bankofengland.co.uk/markets/market-notices/2020/apf-asset-purchases-and-tfsme-march-2020
Notably in nearly 150 years of this reserves creation activity it hasn’t caused hyper-inflation with the exception of government schemes egging on private banks to cause house price hyper-inflation since 1970.
Well noted
Did you predict covid19 as well?
No
But I did say the downturn could be for a wholly unknown cause
From Starmer’s credentials i say no, not a chance. While chaos reigns in the economy he will see the current situation as abnormal and not sustainable. In other words Starmer likes to look at the long term, which means anything to get in power. I cannot see him remotely backing universal basic income as it is too socialist for his ilk.
Darren
Agree with your appraisal of Starmer.
But UBI is not a socialist construct. It’s creation is the answer to the Capitalist productions lack of demand and is supported by many Corporatists leaders.
The only way it can work is if you allocate all the robot hours as a wage to all and share out the remaining human work hours, lets say 15 hour working week plus the UBI to even out the differences. But that can only happen if the current system is dismantled.
The most important thing that humans can do in society is to contribute to the progress and sustainability of future generations, as it has always been. To turn 20% of the population into passive consumers is to deny their value to a meaningful contribution.
Before UBI first start by ensuring Full Employment, max 2% unemployed, the between jobs and the unemployable. This was a priority in the 50’s & 60’s until Monetarism took over. This is achievable using fiscal & capital controls in the current system. I You want socialism after this then at least You are one step closer.
UBI is a guilt trip of the wealth earning middle classes offered to them by the capital owning classes.
Read Guy Standing
As far as I can see everyone of Corbyn’s policies has proven to be sound and if followed would have left the country in a far better place than it is at the moment.
I find the attacks upon his character to be distasteful, often based upon a visceral hatred of the man by people who cannot articulate their reasoning. In office he was sober and curteous in contrast to the rake in charge of the country at the moment, who incredibly is enjoying a 50% popularity surge.
It’s an English problem rather than a British one based upon a sense of cultural superiority. The succession of incompetenceies associated with the management of the virus is staggering and should have dented the confidence the English seem to have in public schoolboys..
In my professional life, post Enron, I had to construct a risk managemnt plan each year and have this critiqued by auditors. I ask the question – what were the risk management plans of the NHS Trusts saying for the last ten yearsand what was the response of the Government. Inadequate funding and a fictional loan programme that reduced spending each year by debiting a loan dividend to the operating cost, that led Trusts to delay payments to creditors and spead the penny pinching philosophy across the institution.
I find it difficult listen to the posh voices praising the Tories whilst villifying Corbyn.
FWIW (not much!)
I thought Rebecca Long Bailey didn’t do a good enough job of explaining people’s QE and Green New Deal.
The new shadow chancellor, Anneliese Dodds, did a good first interview on Radio 4 this morning. With a bit of experience in public speaking/broadcasting, she could become someone who achieves public trust. Converts on here need to put ourselves into the position of the ordinary person, who instinctively believes in the Micawber Principle for public finances. They need clear, credible and well constructed argument. That will take time to develop/emerge.
Keir Starmer, is, I think, open to persuasion and systematic evidence based argument. He has already come out in favour of public ownership of e.g railways, and in speaking out on antisemitism it was in my view a good place to start.
Hopefully Starmer will engage with a broad spectrum of people.
The argument for peoples SE/UBI has been tried and tested over decades. Most of the trials show great benefits and usually curtailed due to political issues. It’s a radical solution yes (quite literally as it delivers financial fertiliser to the roots as opposed to the top of the tree with current QE).
So much work has been done and a lot can be found on the Basic Income Earth Network site at https://basicincome.org
It has support from all political wings and is neither socialist nor capitalist (probably why most people can’t get their heads around it as it is effectively an economic system in it’s own right).
The only argument against it, that I have accepted, came from a Futurologist author and friend of mine Callum Chase, who argues against UBI because of the word ‘Basic’. Developed nations with sufficient automation can afford a UCI, Unconditional Comfortable Income. So for me UBI is a forerunner of UCI.
If no current political party puts UBI as a core manifesto pledge then the UBI network needs to set up its own political party to push the issue (in a similar way to Farage pushing Brexit, but in this case with a far more beneficial outcome). If Kier Starmer doesn’t support UBI I’d consider leaving my current political party and founding the UBI party 😉
Let’s get UBI done!