Rumour has it that Johnson's announcement to the nation (England, in this case, let us not forget, for there are limits to his authority) today will have limited impact. And that is not because there are limits to his authority in England. It will, instead, be because he is choosing to limit his impact.
Although it is apparent that Covid 19 infection rates, as well as death rates, are rising exponentially again it is clear that the so-called hawks are ruling the roost within the government. Delay, prevarication, and budget fetishism are all driving policy right now, as they were in March.
We paid a heavy price for that then. Many did so with their lives. And it is entirely foreseeable that this will happen again, which makes no sense when it is now known that if lockdown is to happen it has to happen quickly, or the effort has rapidly diminishing returns.
So, why won't they learn? What's the obstacle? It is, of course, money. There remains the belief that there is a finite supply of money, as if we were still on the gold standard. But we're not. And when private sector created money is going to be in decidedly short supply the government has a duty to step in and fill the gap in the economy, and literally make the money that makes the world go round.
Our trouble is that the Treasury does not believe this. And it fabricates the evidence to support its claims (on which I hope to have more to say soon, because this is the focus of my energy at present). And the result is that because few are willing to challenge them they get away with their claims that we cannot afford to manage our economy in the way that is needed.
And so it is still planned that furlough should end.
And Brexit is still, apparently, going ahead without a deal.
And it is suggested that when we get to the point where comprehensive testing is possible then this public good will have to be privately paid for because the government cannot, apparently, afford it.
It's true that we are still facing a pandemic.
But it's also true that we are facing a poverty of thinking that is at least as dangerous.
And despite that the Opposition remains vey largely silent, barring hints of fiscal prudence.
The reality is that we're a long way from being out of the woods. And that's not just because of medical failings. It's because we're lacking a vision of a functioning economy underpinning a functioning society, with the result that we have not got one.
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All good, but did you hear Anneliese Dodds’ speech yesterday? I only caught a short report on R4 while I was doing something else. It could have been BBC spin. But the essence seemed to be that the Government had spent too much on Covid 19 and there was a need to return to austerity. What there wasn’t was a vision of a post-Covid functioning economy. Indeed the point seemed to be that Labour was setting itself against even asking the question as to what that might look like.
I’ve been critical of the new Labour regime before on here, and your response has always been that what they are doing is good politics. Is this still your view when they say things like this?
As far as I can recall I’ve said wait and see, nit that there was good politics going on
I was not impressed yesterday
It seems that John McDonnell’s dedication to austerity is to be perpetuated
And on the strength of the performance of my local MP – the shadow foreign secretary – on Today this morning, the whole purpose of “making Labour fit for purpose again”, is to enable a Labour government of the right people ( clearly in both senses of the term), to further alienate what should be, at the very least, their natural constituency of all wage and salary earners, and further wasted years of Conservative government.
It is typical that, on the economic battlefield of the current culture wars, the first weapon in Labour’s armoury is surrender to the framing myths of the enemy.
You are right
When will it build its own narrative
Dammit, some of us have been trying to do that, and we’re ignored
Labour cannot win always playing away but they choose to do so
I didn’t hear the whole of Dodds’ speech, but I heard this clip and report in the Independent. I thought it was very good, as far as it went. It didn’t seem to me to be calling for more austerity – rather, signalling the reverse, since she criticised Sunak for ‘the language of restraint’ and said that this meant more cuts where they weren’t needed. What she did criticise was wasting money on failed and unchecked providers of outsourced services – quite right too. https://www.independent.co.uk/news/uk/politics/labour-conference-anneliese-dodds-speech-coronavirus-covid-keir-starmer-b512451.html
I found it baffling that the Guardian, for example, didn’t even report the speech, as far as I can see. I don’t see how it is fair to criticise the Opposition for invisibility when it is the media – even the Guardian – who fail to report cogent attacks on the government.
My reaction was that it was all terribly safe….and accepting of constraints that do not exist
Not as bad as McDonnell’s maxed out credit card, but not good enough either
I heard Ms Dodds yesterday,
To be fair, she pointed out that the Govt had been very wasteful in its spending on the pandemic; e.g. tens/hundreds of millions on dodgy contracts to Tories’ pals and donors. She called for better targeted spending.
But she is still punting the deficit myth, talk of responsible borrowing blah, blah. Labour must adopt MMT as a tool for policy formulation, or it faces oblivion.
That seems like a fair summary to me
Perhaps so but this Last Past The Post lame horse government (elected under a crazy First Past The Post electoral system which suffocates fresh ideas) may be so bad Starmer gets into office on a national revulsion vote but the country continues bumbling along its economy continuing to decline because its full potential isn’t being harnessed.
If they are planning to continue the mandatory restrictions on the entertainment sector that make it impossible to operate, and to reintroduce restrictions on the hospitality sector that make it uneconomic, surely to goodness they need to extend furlough, at least on a sectoral basis. How many thousands work in clubs, bars, restaurants, theatres, etc?
Coming on for a million…..
Add in nightclubs and it’s many more
My unemployment forecasts continue to look horribly likely and I wish that was not true
Even if you ignore the MMT funding – This chart shows that there is not a choice between the economy and health – the choice is between competence and incompetence. Most of what the government has been doing remains woefully incompetent, unfortunately for us …
https://ourworldindata.org/grapher/q2-gdp-growth-vs-confirmed-deaths-due-to-covid-19-per-million-people?fbclid=IwAR1hcAyDgmB1EJXAM4vCxM2XAMcTxMK5zn2VawUceyRJ6dcCk20C7BBc9uY
I read recently that a poor Government thinks only in, and of, the short-term but a good leader thinks of the next generation. If that is true, we have had a succession of poor Governments and very few good leaders. I don’t think, in my lifetime, I’ve ever known a Government as ‘world-beating’ as this one at failing to act in the national interest of our group of nations and one that displays manifestly such evidence of corruption.
What do today’s politicians think the role of ‘the State’ is? In whose interests, if it acts, should it act?
What do people think is the role of ‘the State’? In whose interests, if it acts, do they think it should act?
What does the concept of accountability actually mean? Why is the concept of ‘austerity’ and the harmful consequences of its implementation again being ‘considered’ by Rishi Sunak, when it is absolutely the last thing that is needed now?
If the people are sovereign, why then are powerful lobby groups allowed so much access to the corridors of power and lobby groups like ER branded ‘terrorists’? One seeks to maintain and extend the status quo (a state of affairs that is threatening the lives of everything on this planet), the other to disrupt and change it (in order to preserve life on this planet).
I wonder sometimes if I am inhabiting a parallel universe where up is down and down is up. Where the rhetoric rarely matches the reality (if it ever did). It very often feels like that these days. 🙁
Keir Starmer 2020:-
“Never again will Labour go into an election not being trusted on national security, with your job, with your community and with your money.”
https://labour.org.uk/press/full-text-of-keir-starmers-speech-at-labour-connected/
Margaret Thatcher 1983:-
“One of the great debates of our time is about how much of your money should be spent by the State and how much you should keep to spend on your family. Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay–that “someone else” is you. There is no such thing as public money; there is only taxpayers’ money.”
and
“When our opponents start demanding more spending on hospitals, schools, roads or for the old folk, I do not hear them at the same time calling for more income tax, or an extra 5 per cent. on VAT or even more on local authority rates.”
http://www.margaretthatcher.org/document/105454
It does all have that horribly familiar feel of ‘taxpayers’ money’ about it
You’re a nutter. You really have lost the plot. I look back at the good stuff you did fifteen or so years ago, and I keep asking myself, were you such a nutter then too, or is it just in recent times that you have turned into being such a tit? Either way, you’re going to be continued to be looked over. Which is a shame. Because on a good day, when you leave the chip on your shoulder behind, you tend to have good insights.
You do know that fifteen years ago people said exactly the same thing?
And they confidently predicted I would achieve nothing as a consequence
I think we can safely conclude that they got both things wrong
And I will do they same with you
The ‘if only you were a nice chap and one of us’ argument really does not work with me
Jim I’m so tired of evidence free childish rants like yours. Ranting behaviour makes you part of the problem not the solution. I doubt you’ll understand this!
🙂
I agree with Helen.
I think the situation is clear neither Keir Starmer nor Anneliese Dodds understand the “alchemy” by which “inactive or “future” reserves creation in the form of UK treasury bonds (gilts) are turned by Bank of England “active” or “current” reserves creation into money the Treasury can spend into the economy. Indeed I very much doubt they understand the UK operates a reserves based monetary system and the historic reasons this came into being:-
https://www.bankofengland.co.uk/markets/market-notices/2020/apf-asset-purchases-and-tfsme-march-2020
http://neweconomicperspectives.org/2019/10/the-peoples-money-part-1.html#more-11600
http://neweconomicperspectives.org/2019/10/the-peoples-money-part-2.html
http://www.levyinstitute.org/pubs/wp86.pdf
http://pages.ucsd.edu/~jlbroz/origins_CBs_IO.pdf
To be honest, all of your posts of late have become particularly vindictful and even fuller of anti-Tory hyperbole.
Your partisanship and, I’m sorry to say, growing extremism, make you easier to dismiss remember.
I wouldn’t say ‘nutter’ as your previous poster rudely suggested, but you do seem to have crossed a line for a number of people on a growing number of occasions.
But, your blog, your rules I guess. Why would you listen to one of us ?
Sure, I am anti-fascist
What else would any sane person be?
I’m not sure where anti-fascist came into that (unless you seriously conflate being Tory as being equivalent to being a fascist) but the problem of late seems to be that you are anti so much, and eventually the negativity just becomes less and less compelling to keep reading.
Has something happened to you of late to make you so overwhelmingly negative ? Perhaps there are people who could offer some helpful guidance ?
Let’s consider this
Tories undermine the rule of law
Grant contracts to their cronies
WEnt to restrict the franchise
Cram the Lords with their mates
And want to break up the country
Whilst undermining peace
And you don’t think any of this is an indication of fascism?
Please explain how any of this is Tory, as we could define that idea in, say 2017?
An can you pease explain why it is acceptable now?
I wouldn’t say the majority (or perhaps any) of those traits applied exclusively to the Tory party. I could apply most of those to politicians in general over the last 50 years, including at times both Labour and Tory governments.
But I do understand of course your funding sources must influence your views somewhat. We all have masters to serve. I for one hope for A return to your more constructive posts in the future
You show yourself to be deeply misinformed
I have no funding with any links to organised politics
I also have no party allegiance
You, on the other hand, are trolling
I do love Miriam Margoyles. Here she is on fine form.
https://dorseteye.com/miriam-margolyes-message-to-the-nation/?fbclid=IwAR0O-Likdj2dwYojZn04t3deluftwl2fhPBTFbDYVi2Y0Ony7M1nF-cyhmA
Without wanting to belittle Richard’s advocacy, the number of people with a sophisticated understanding of MMT is probably extremely small. Even among accountants and others dealing professionally with money and economics, I would guess only a minority have even an outline understanding of its implications and possibilities. And among listeners to a party conference speech, a very very small minority. Without that understanding, a shadow minister proposing a policy based on MMT would get as much credibility as one based on a perpetual motion machine.
There needs to be a way of explaining to those who base their economic understanding on their familiarity with household budgets, why it can be beneficial for a government to spend money without becoming obsessed about future taxation or austerity. The right investments in the future will be paid back by the increases in general wellbeing and prosperity.
Then Labour has to talk to people about what is possible
One upon a time people did not get the universal franchise, or the NHS or even the mimum wage
But now, apparently, Labour has to play entirely on terms the Tories set
It’s a way to get Tory government forever
Fair enough. It is difficult when Covid seems to dominate, but essentially if the Labour Party is to get anywhere it has to set a new (and optimistic) agenda.
I agree with that
Jonathan
How many decades has the Labour Party fumbled on refusing to make the effort to understand why this country developed a reserves based monetary system and what the implications are for the supply of public goods and services? I would make it nearly nine decades since the UK went off the Gold Standard in 1931 and nearly five decades since it became a fully floating fiat currency when the United States ditched its Gold Standard in 1972. The Labour Party has the alacrity of a snail in figuring out how to best serve the workers it purports to represent. If this is dynamic socialism in our Neoliberal age give me life in a Stone Age hunter/gatherer society any time!
If offering you some polite constructive criticism is trolling, then guilty as charged, please continue to preach the same message in the same way to the same audience ad-infinitum.
Such a shame you are so convinced of your own infallibility on every subject.
Adding another person to your banned list should help things along nicely, rather than taking a tiny bit of somebody else’s advice.
Why would I want to take the advice of someone whose suggestion is that I change everything I think, believe and say?
And who won’t answer questions on whether he supports fascist policies?
“There needs to be a way of explaining to those who base their economic understanding on their familiarity with household budgets, why it can be beneficial for a government to spend money without becoming obsessed about future taxation or austerity.”
There is the problem: it is the place of politics and political parties to lead as well as follow. You cannot ever lead anybody or anything anywhere if all you do is follow everybody else, because you think that is the only safe thing to do or say. The circularity of dependency is eventually, under real life pressures of policy or crisis, is eventually going to lead to such “leaders” (blind followers) being ‘found out’. Once that proposition is stated the failure of politics in Britain is revealed; so you have done a splendid job of revealing just how profound the inadequacy of British politics, politicians and parties has become.
Think of this, if it helps understanding. Scotland was never likely to leave the Union for trivial reasons, for sentimental reasons, or no reason at all. From the second half of the 18th century, and throughout the 19th century, the 20th century, and into the 21st century Scotland was the single part of Britain that was, beyond dipute the most deeply committed of all to the Union and Empire (the two; the mindset they inspired as a single thought, are inseparable – sooner or later they also fall together). When Scotland chooses to leave the Union, this merely demonstrates that Britain hasnot only completely lost its way, but the failure is not redeeemable, and British politics has shown it can no longer either understand or cope with, still less adequately meet, the the challenges of the modern world.
Agreed
And I convinced by the mindset argument too
Is the penny beginning to drop this is serious?
https://www.theguardian.com/business/2020/sep/22/new-covid-19-restrictions-mean-uk-unemployment-will-get-much-worse
Is the main stream media starting to understand the country needs a No-Deal Brexit like a hole in the head?
Is Brexit now in need of life-support?
I had lunch with Larry yesterday
This issue was discussed
Next time to you have lunch with Larry (Elliott?) can you find out why the wimpy, supposedly ‘progressive’ Guardian is not supporting/promoting a debate on MMT?
The silence from that rag is deafening. The lifestyle magazine editor they now have is clueless – she seems happy to just roll out left and right wing tropes that just get us no where.
And in the media, they are framing it as death by Covid versus the death of the economy – and that that is the only choice!!!
They report, would be the response
And MMT is not in the news
I assure you, it was discussed
Even if you don’t believe in MMT (and I do believe in it, because it’s how governments which control their own currencies actually do operate now) and buy into the notion that government expenditure is the same as household expenditure, with a finite limit, there is STILL no excuse for the way the Westminster government has been behaving.
It’s not how much money you have, it’s how you choose to spend it.
The SNP government is a good case in point. The Scottish government ARE stuck with a finite budget, because they don’t have control of their currency and have to accept what Westminster doles out to them in the form of the Barnett Formula. They do have to balance their budget.
However, within that finite (ever-shrinking) budget (which is a fraction of the wealth Scotland actually produces) they have managed to keep the NHS ticking over to a high standard, have supported infrastructure projects that benefit the country as a whole (Queensferry Bridge, etc), have supported people in financial difficulties, have provided assistance to the elderly and the handicapped, have provided tuition-free education through university for the citizens of Scotland, have mitigated the Bedroom tax, have provided support (financial and otherwise) to people who are forced to isolate due to Covid-19, have provided free prescriptions to all, free bus travel for the elderly, school meals, support for new parents, and etc.
Yes there is always a lot more that needs to be done, but, given the paltry budget they’re ‘allocated’ it’s clear the SNP government ARE attempting to make the lives better for the people who live here. It’s why the support for independence is at an all-time high just now, and will continue to grow, once the disastrous effects of Brexit hit home and the so-called ‘status quo’ no longer exists.
Given the fiscal control the Westminster government has (and uses when it suits them) what’s their excuse? Why can’t they provide the same level of support for ordinary people that the SNP government does?
It’s because they choose not to do so. For whatever their warped reasons may be.
First week of Uni and daughter just sent me this message –
Just reading my social policy book and watched the lecture and in both they said the state taxes people and spends money on their behalf on social welfare
My younger son has been told that Richard Lipsey is his economics text book
I despair
At least there are 2 sceptical young folk…
Indeed! There must be more…
That is shocking.
We’ve known that Universities have been responsible for peddling economic bullshit since 2008.
No wonder not even our middle class don’t get MMT. They just don’t believe you when you bring it up.
Thankfully it is only a relatively small part of his course