As everyone with any economic sense knows, trickle-down economics does not work. Growth has, over the last forty years, only led to increased inequality as wealth has been ever more concentrated in the hands of a few.
Reeves had this to say this morning:
Without economic growth, we cannot improve the living standards of ordinary working people, because growth isn't simply about lines on a graph. It's about the pounds in people's pockets, the vibrancy of our high streets and the thriving businesses that create wealth, jobs and new opportunities for us, for our children and grandchildren.
We will have succeeded in our mission when working people are better off.
Without a plan to redistribute the supposed benefits of growth, those are just meaningless words. She has actually delivered a plan to deliver more wealth to a few. She has done nothing to ensure a benefit for everyone, and she apparently hopes we will not notice.
I have.
Others will.
Her hope is in vain.
We will point out, time and again, that this plan reinforces inequality between people and between regions in the UK.
What is more, we will point out that this is deliberate because no one with any economic knowledge could not know that, and she claims to possessed of that knowledge.
I could add some invective at this point. I won't, but feel free to add your own.
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There was little Government investment above the level of the trivial, for Scotland. Whisky and salmon as vital exports, were simply used to justify – a 3rd runaway at Heathrow. Why does salmon (crucially a product that sells on freshness), whisky, and indeed Scotland have to rely on London to export to the world. It is expensive, sup-optimal and time-wasting in the 21st century, for Scotland to require to transport to London to connect with the world. Madness.
And Oxford-Cambridge is to be lavished with help to build a ‘Silicon Valley’ (close to London, and reinforcing the past). Did I miss the reference to the Edinburgh supercomputer investment long promised; or like everything of real value to Scotland – does it just join everything else in Scotland; betrayed and forgotten by Labour, because the votes were delivered, and Scotland no longer matters. As far as I can see AI investment will be kept close to London; can’t afford to lose that. This is what happens to Scotland by Conservative and Labour. Killed off early.
This has to stop. The Scottish voter needs to wake up.
Much to agree with
Between 1996 and 2002 I worked for Sun Microsystems in the Netherlands. My function was managing the relationship between our logistics hub (NL) and our manufacturing centre: Linlithgow. In the silicon-glen.
Ah! Silicon Glen. Ferranti (during WWII). Scotland developed a very strong semiconductor sector by the 1980s; including significant development operations (not just manufacture), with IBM or NCR. It all fell apart after the dot,com false start redirected energies (and disinterested flatfooted Governments, all full of earlier political versions of the hopeless Reeves or Badenoch clone stereotypes).
“In 2002, the value of computer equipment exports [in Scotland] was £5.6bn, when electronics accounted for 28% of Scotland’s exports. By 2014, that was down to £1.1bn, and 4% of exports.” (BBC, “Whatever happened to Silicon Glen?”, 2015).
Allow me to spell this out. Scotland is just a convenient, disposable outsource, with the advantage of offering no real, substantive threat to any Government of Britain. So they take the huge benefit to the trade deficit provided by products they cannot move by any means (of which whisky and salmon are the most obvious – if they could rob Scotland of them – and numerous of others with huge exports – they would; they just can’t figure how to do it). And they can’t move oil, or renewables either. But they don’t have to; they just teke everything, and invest almost nothing.
Metrics used to measure inequality don’t agree with your conclusions. Why is this?
Because they have no way of measuring inequaloty created by extreme wealth
If you knew anything about this issue you would know that
The wealth of billionaires has skyrocketed while people’s real wages have stagnated or declined and housing prices have gone up. Seems pretty obvious what’s happening and if the models don’t reflect that, the models are the problem…
I am of the opinion that inequality measurements only make sense when there is relatively little inequality. And there is agreement about the meaning of inequality. I don’t believe we are in this type of environment.
Most people no longer have ‘pounds in their pockets’, a phrase that dates back to Harold Wilson IIRC, they have pieces of plastic that they use to buy stuff on credit, and frequently sink more and more into debt trying to service them. There are few vibrant high streets anymore other than countless barbers, nail bars, tattooists and coffee bars, and any businesses that are now thriving are creating wealth only for their owners, as any job opportunities that arise are often on poverty wages where said owners expect the government to make up the difference with working tax credit. Etc. Rachel from Accounts is living in fantasy land.
Why do we need so many barbers?
Good question.
The suggestion is money laundering or looking at the origin of the term should it now be money barbering?
On my cycle home, which is basically a 3.7km straight road, there’s a 1.4km stretch laden with shops.
I did a count last summer and in that short section I counted:
29 barber shops
12 nail and beauty shops
6 eastern massage & wellness shops
You know it’s money laundering, pure and simple.
It has to be money laundering – along with vape and some other type of shops. A friend couldn’t go out for a week and asked me to go to a vape shop to get something for him last Saturday. I couldn’t find it in the first one so went to about 6 vape shops in the city centre. All in prime positions, not small shops, with two or three people behind the counters – and all completely deserted on Saturday late morning – which I assume would be a prime shopping time. I couldn’t find what he was looking for, so had to order it on-line anyway – but how do these shops survive if this isn’t money laundering?
I wish I knew
I have to admit I have my suspicions…
Oh for decent local tax offices
@JohnA
“Rachel from Accounts is living in fantasy land.”
So are many others!
It is indeed a sad day when Oswald Mosley, scumbag that he was, had a better grip on macroeconomics over 100 years ago than Reeves, Starmer or Trump do now.
Rachel from accounts isn’t very good at shilling for the rich is she, she’s so transparent! Same goes for Starmer one broken pledge after another! They need to go back to Deception School!
I’ve already added some invective to a lengthy comment I left for one of your other blogs. But, happy to add more: absolutely moronic behaviour. Evidence free nonsense based presumably on what Reeves and Starmer are being told by advisors from the sectors who’ve already milked this country dry of any economic vigour – and, yes, growth – except in terms of rent seeking and the financialisation of one productive economic entities.
I said in a comment some weeks ago that despite Reeves’s claim that it was Thatcher’s cuts that got her into politics she was a Thatcherite based on her love of the household analogy for ‘balancing the books’ of the state. Well, if there was any doubt then believing in ‘trickle down’ should blow that right out of the water.
We have a Thatcherite Labour Party. Who would have thought it?! I hope some Labour MPs are waking up and realising this is what they’ve signed up to.
I think most Labour MP’s have signed up to suck on the teat of the state plus the freebies available for shilling for the rich! Dreadful state of affairs that’s been going on for decades. Mother of Democracy? No! What democracy there is being smothered at an accelerating pace!
Peter Mandelson is Britain’s new ambassador to America. His sucking up to Trump has began. Absolutely sicking and disgusting behaviour. PM talks a lot about the problems of post truth politicians, but he is one himself.
Agreed
The only evidence you need to show that trickle down does not work, is the last 40 years since Margaret Thatcher started selling off British assets.
See also:
The “Trickle-down” Myth by H. W. Arndt in Economic Development and Cultural ChangeVolume 32, Number 1 (1983) https://www.journals.uchicago.edu/doi/abs/10.1086/451369?journalCode=edcc
I am not aware of one academic paper that supports Trickle Down.
Nor am I.
I really wanted this government to come good, if only in relatively small ways to start with. However, their treachery is becoming clearer by the day. Economically it has been clear for a while that they do not know what they are doing and when the do it is about prioritising business over people. Elsewhere they are simply following on from the previous government, instead of re-establishing the right to peaceful protest they continue to legislate. It could be possible in the near future that simply criticising police tactics and methods could get you labelled as an extremist.
Compounding all of this is the glaring lack of choice and the lack of accountability of any of those in power.
I have been reading a book about justice, called Three False Convictions; Many lessons; The psychopathology of unjust prosecutions. Waterside Press 2016. The second chapter includes a section called “psychopathy and the justice system” It explains in considerable and comprehensive detail the characteristics of lawyers, and how the system keeps recruiting similar types. It points out that professional prosecutors have to put any empathy they may have on hold during the prosecution process; and that to that extent they are psychopathic.
We have an ex professional prosecutor as PM, and he has recruited a sidekick who appears to share at least some of his pathology. I fear no amount of rational argument will convince those two that they might be wrong. I had assumed he was on the Asperger spectrum, but this seems more likely. Too bad and too sad; she will carry on messing up, presumably.
“Compounding all of this is the glaring lack of choice and the lack of accountability of any of those in power.”
All we have in this country are “Shilling for the Rich” parties who seize on every opportunity to “depoliticise” (avoid democratic accountability) wherever they can. The use of unaccountable quangos is a favourite depoliticising device (Anybody for the Green Party’s banking committee to decide how much money should be created?). Bill Mitchell and Warren Mosler in Chapter 9 of their book “Modern Monetary Theory: Bill and Warren’s Excellent Adventure” point out that Dennis Healey was an early adapter of depoliticisation on behalf of the Labour Party in the 1970’s when he told the British people the country had run out funds and would have to borrow from the IMF! Another depoliticisation ruse will be the use of the AI tool to pan MMT by accusing it of being inflationary whilst not pointing that private sector banks for decades have been allowed to blow an inflationary house price bubble. Governments had to bail out these banks in 2008 but they’ve been allowed to carry on inflating home prices. Now there’s a housing crisis in both the UK and USA.
I don’t think Bill Mitchell is soemone whose politiucal judgement I trust.
Mitchell and Mosler were right about Dennis Healey.
That won’t make me change my mind.
Bill Mitchell has remarkably poor judgement on politucs.
Here’s there argument in full:-
https://billmitchell.org/blog/?p=33907
“Trickle down” = “Crumbs from the rich man’s table”
Professor Ted Wragg called it Piston Economics. We have been here before: this is a nightmare where all the doors back to the real world are slammed shut in our faces, this time by LINO.
I quite like these illustrations of trickle-down:
https://www.mmt.works/the-trussonomics-is-a-form-of-mmt-myth/
(From my own web site)
https://www.quora.com/Why-does-the-theory-of-trickle-down-economics-sound-good-on-paper-but-never-works-in-practice
And Gary Stevenson has a good video on trickle down
https://www.youtube.com/watch?v=bTQxd6rhF6I
Thanks
It seems prescient that yesterday I read Why north England is poor https://tomforth.co.uk/whynorthenglandispoor/ which was thought-provoking, and struck many true notes as I have lived in north, south, and midlands, and with friends in Scotland, where visits showed the points made in the essay.
And here she is, perpetuating the stoking of the rich south east to the loss of the rest of all the nations.
Thanks
and building Oxbridge in, as though they needed Government help. Not even good Tory economics.
As each day passes I am shocked and stunned to the point of embarrassment that I thought for one moment that this Labour government might govern with competence and actually serve. What do we get? Household budget analogies and trickledown neoliberal economics from a happy to called iron chancellor. And I fear the lady is not for turning. She’s got to go. I give her until October
As the late Tony Benn so accurately put it, “Wealth doesn’t trickle down, it bubbles up.”
Here’s a lovely Stephanie Kelton sentence which beautifully links MMT and “trickle down economics”:-
‘Trump and Republicans in Congress, she said, “did not allow perceived budget constraints to stand in their way” of a $1.5 trillion tax cut package which was passed in late 2017 and pushed the federal debt beyond $22 trillion.’
https://www.businessinsider.com/mmt-may-be-democrats-economic-cure-but-only-trump-got-the-memo-2019-8