Horrors!

I’m in a hurry in a Parisian hotel room. When the Chancellor will be speaking today I will be at the OECD. I will miss at least four broadcasting opportunities. Country-by-country reporting demands it.

That’s a couple of hundred quid in appearance fees that won’t be received then.

First, if Theresa May really meant she was governing for everybody she should have re-read her Adam Smith and realised that tax has to be equitable: the bill has to be biggest for those most able to pay.

Quite so, more than in proportion to their income.

That is not true in the UK. We have a ridiculously low corporation tax rate, and capital gains tax is much the same. Inheritance tax is almost wholly avoidable for the richest. And we have no wealth tax.

It’s more than in proportion to their income. Anyone want to try denying that higher incomes pay a higher rate of income tax in the UK?

Well, yes, obviously, someone would. Spud.

Second, this should be a budget for spending: masses of government spending financed by near zero cost borrowing. Any business person would agree. But it’s not going to happen. Just when we have the chance to start building the post Brexit economy we won’t. As an economist it’s almost painful to watch such incompetence.

Would anyone like to point me to the spare capacity that could be utilised by this borrowing? What’s the unemployment rate for example? What’s the spare construction capacity maybe? OK, so this is over in the US but even Larry Summers and Paul Krugman are now agreeing that the stimulus argument there no longer works. And there’s obviously a point where it doesn’t here either.

He’s missed an important part of Keynes, hasn’t he? That when the facts change I change my mind?

21 comments on “Horrors!

  1. In the UK, if Wren-Lewis is typical, academic macro has not advanced beyond the 1960s. He even claims that all academic economists are keynsians.

  2. As an economist it’s almost painful to watch such incompetence.

    How would he know?

  3. I don’t know. I read “I’m in a hurry in a Parisian hotel room” and thought I was in for right Flashmanesque feast of ripping naughtiness.

    Terribly disappointed!

  4. Well, I have plenty of spare capacity to do software development, but I’m so fed up of being thirty years older than recruiters are prepared to employ that I’m directing my finances at removing myself from the workforce.

  5. I think he just wants spending for his pet projects: he’s not making a Keynsian argument for spending. Obviously that means wage rises for construction workers and crowding-out of private sector work, but to Murphy that’s a feature, not a bug.

    I can imagine him gloating at the vindication of his policies: It’s a good thing the government employed all these construction workers: private sector demand has collapsed!

  6. Country-by-country reporting demands it.

    Heroic self-sacrifice.

    As an economist it’s almost painful to watch such incompetence

    He has missed out the “I imagine” at the start of that sentence.

    The rest is just the usual drivel.

  7. For those wondering what the Murphatollah would have said if he HAD been commentating on the budget, here’s a summary;

    “Everything the Chancellor is planning is wrong.

    Everything everyone else says is wrong.

    I am right about everything.”

  8. Wouldn’t his promoting country by country reporting be in his role as an accounting professional not as an economist?

  9. BniC, neither, it would be in his capacity as virtue-signalling halfwit. Country-by-country reporting will prove to be a damp squib. The results will be impenetrable. And if like, say, Unilever, BT or Barclays you have operations in 200 countries the world is going to be deluged with financial crud.

    The thing is that Rio Tinto already gives a detailed breakdown of its tax position on a country-by-country basis and post it on its web-site. I wonder how many hits it gets? You just get overwhelmed with the level of detail.

  10. @Diogenes

    Yes. Rio Tinto. They had been using country by country reporting in the extractive industries since before Murphy “invented” it.

    Odd that.

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