As the FT reported last night:
Why did they say that? Because there has been a massive lobby against Ed Miliband getting this job, and he is now expected to be Foreign Secretary instead.
But let's just imagine what this means for a moment.
Mahmood is known to be from the far right of Labour. She is someone who, as Home Secretary, has tried not just to out-Tory the Tories, but also to out-Reform Reform. We can assume, therefore, that her economic thinking is very right-wing inclined, although the truth is that, as a lawyer, we have little idea what her economics are. She has never said much on the subject that I can find, but as a representative of Blue Labour I think we can safely predict that she will focus on:
- maintaining credibility with financial markets
- keeping borrowing under control
- respecting fiscal rules, at least until there was a political reason to alter them
- pursuing gradual rather than significant reform, if she does reform at all.
Is she, in that case, the Chancellor we need given the crises Burnham's government is going to face? The answer is, of course, that she is not. She is exactly what we do not need.
This country is facing many economic crises. We need radical thinking, a whole new economic framing based on modern monetary theory, and someone who puts people and not markets first at this moment, and it looks as though we are going to get someone who will do exactly what the deeply neoliberal thinkers in the Treasury tell her to do instead.
The next three years will be a disaster if she is in No. 11.
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Absolutely correct. Mahmoud will have no insight into macroeconomic policy, perhaps very limited knowledge of the subject, if any. She will take her orders directly from the Treasury and we know only too well what they believe.
The only ray of hope is that JIm O’Neill might have some input. We know he’s a neoliberal, but we can assume that he’s at least heard about MMT and hence will be aware of alternative thinking. That said, on past form, I don’t expect him to suggest the changes that are propogated by this blog. Sooner or later, events will surely dictate a complete change of the economic system and a realisation that it can only be made to work if they face the facts.
The country is not a household and it cannot, ever, go broke.
Your faith in Jim O’Neill is touching
As a Goldman Sachs ba nker I cannot see him embracing MMT
“All aboard the Burnham bus, there’s no change to the route”.
Andy Burnham can succeed and have a positive impact. Whether he will succeed is an entirely different matter. The jury is out, but past experience is not hopeful.
We shall know on Monday. If Andy Burnham appoints Mahmoud then I fear the worst. He could not logically justify that decision when Miliband’s CV is clearly vastly better for a chancellor. Politically it would signal continuity government and, hence, no progress.
Agree that the portents don’t look great, but maybe give her a chance before calling her (likely) appointment a “disaster”? No Chancellor operates in a vacuum and, as you say, we don’t really know what her economic instincts are, even if her social ones are worrying.
She is Blue Labour – which is opposed to equality. I think we can judge in advance.
Apparently Mahmood’s legal specialism was in professional indemnity. Which always strikes me as the art and rhetoric of arguing how anything that goes wrong is always someone or something else’s fault…
At last a PM who’s a Cambridge graduate (albeit an English major); but yet another Oxford Chancellor
Yes Mahmood is Blue Labour which is supposedly a postliberal marriage of social conservatism and left wing economics, the hitherto untapped holy grail of providing a feasible and popular politics. As championed by Paul Embery the Blue Labour platform does look attractive. Alas the problem for some of us is that Blue Labour’s left wing economics are missing in action, what counts as ‘left’ seems to be the most inocuous of interventions. Whilst breakfast clubs and similar fare undoubtedly provide meaningful help it is hardly a defenestration of neoliberalism. Whilst Dr Glasman waxes lyrical about his protege, we can remind ourselves of another luminary of Blue Labour – Morgan McSweeney.
And Glasman’s friend, JD Vance
I have only marginal knowledge of economics, but am so impressed with the humanitarian aspect implicit in MMT.
That said, given that all the large economies, the various transnational monetary organisations and institutions are decidedly in the neoliberal camp would it actually be possible to implement MMT in the UK without serious consequences to the pound and interest rates (re the latter. Hope I got that right).
Thanks again for your incredibly informative posts.
Regards