Tempting fate from Spudda

It’s time this country understood economics

Hmm.

There is much discussion in the media this morning on Amber Rudd. The rumour is she will replace Philip Hammond as Chancellor after the election.

Well, that is terrifying, yes. But:

First she made allusion to Monopoly, implying (without giving any hint that she had ever played the game) that there was a finite supply of money. I tweeted in response:

Richard Murphy‏ @RichardJMurphy 13h13 hours ago
More
I have news for Amber Rudd: there is a magic money tree. It created the £435 billion used to fund QE, entirely without cost to the taxpayer

Ah, yes. And that’s where we have to get back to all that stuff about base money, wide, credit, and the monetisation of debt. Because there is still this horrible mistake at the heart of Ritchie’s understanding here. For you can indeed create as much base money as you like at zero cost. But if you go and spend it into the real economy – note QE specifically and deliberately did not do that – then you will have a cost. Soaring inflation. This is the Zimbabwe/Venezuela plan.

And Ritchie will come back with Aha! MMT! We just tax back that excess money creation to avoid the inflation!

And taxing it all back will not be a cost to the taxpayer, eh?

But he, as ever, gets more delusional:

Sean Danaher has suggested over on Progressive Pulse that now is the time for work on an Economics 101 programme and I agree with him. But I wonder if the implicit assumption, that this be pitched as a basic undergraduate course, isn’t too advanced. This country is nowhere near GCSE understanding on economics right now.

I think a year 9 course would be much more appropriate than a text at an undergraduate level introduction as a consequence. But that is actually quite tough to think about. That requires very precise structuring, the introduction of big ideas in small chunks of text, and yet the integration of the themes into an overall narrative. The prize may be worth the effort. But I have noi idea if I have the time.

It’s not your time we’re worried about matey. It’s your knowledge of the subject under discussion.

Perhaps if we mentioned that the writers of basic GCSE textbooks make vast sums of money he’d go and do that instead of bothering the rest of us for vermine?

30 comments on “Tempting fate from Spudda

  1. Yep, got a couple round here, jacked teaching in when they were in their early thirties I think, just after their kids were born. They do about a couple of days a week (though apparently it can get frantic in March, when deadlines loom), writing and editing school textbooks.

    Absolutely raking it in.

    They moved from a large five bed just down the road from us, to a six bed farmhouse, converted barns and oast houses, about 20 acres of land, last year. Paid cash. Rolling in the stuff. Unbelievable.

  2. integration of the themes into an overall narrative

    As a general rule it’s probably a good idea for students and schoolchildren to be spared exposure to subjects that have a “narrative”.

  3. Noel,

    They’re barking mad, as usual. Economics 101 is things like opportunity cost, incentives matter, cost/benefit, etc. Fiat currency is 200+; capital controls, naked trades, and QE should be in the 300s.

    It’s hard to understand the more advanced stuff when they haven’t grasped the basics.

  4. OK, I’m clearly missing something here.

    What is the point of the government issuing loads of new money and then taxing it all back to avoid the inevitable inflation? What purpose does that serve? What good does it do? Can someone please explain?

  5. “It’s time this country understood economics” Murphy

    “Physician, heal thyself” a wise man.

  6. Look, nothing can go wrong with a flat out naked socialism.

    It’s done wonders for Russia. Well, East Germany. Um, OK,wait, what about Zimbabwe? Venezuela, then.

    Ah! Wait! None of those countries had the towering intellect of Murphy to advise them!

    Whew, everything will be alright then. Go Jez! Make us all trillionaires.

  7. “integration of the themes into an overall narrative”

    That is a very revealing phrase Spud uses there. He wants to spread a story – in other words, to turn economics into ideology and propaganda. He wants so much to believe that there’s a magic money tree because otherwise he would have to accept that his socialist tyranny would be impossible without it. Among leftists, it is a commonplace that you can’t run a nation’s economy as if it were a household, but few can give any content to this vague notion.

  8. @Theophrastus “Among leftists, it is a commonplace that you can’t run a nation’s economy as if it were a household..”

    Ah but if you read the latest from Murphy, it is clear that you can run the economy as if it were a game of Monopoly.

    I always liked being the Top Hat. And buying the orange ones. Vine Street etc.

  9. But that is actually quite tough to think about. That requires very precise structuring, the introduction of big ideas in small chunks of text, and yet the integration of the themes into an overall narrative.

    Given that Spud habitually introduces small ideas in large chunks of text, I sense he would find the project daunting.

  10. Imagine the examiners’ guidelines. No marks for students using bullet points, it is mandatory to use the words: Firstly, Secondly, Thirdly, Fourthly, Fifthly…etc. No marks at all if the word “Candidly” does not appear at least once in every answer.

  11. Monopoly does have a finite supply of money. Unless you alter the rules it’s perfectly possible for the banker to have nothing and for all the cash to be in players’ possession. What you do at that point is up to you. My Dad, ‘cos he was awesome, had the bank raise capital by issuing bonds, with a hefty coupon. But then, humble bank employee though he may have been, he understood how things worked.

  12. But but but… you are just all wrong as some commentator on the Grauniad threads told me. Open your eyes to the truth and read what this chap recommended to me…. Try not to cry when you read that money is just numbers on ledgers so we can create more on a whim and that letting inflation won’t be a problem as we can just tax it anyway. Why don’t we just let people keep the money they get paid in the first place then?

    http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

  13. I imagine every exam in Spud’s Economics 101 course must end with the teacher shouting “You’re wasting my time. Your time here is up”.

  14. @Tim W,

    Amber Rudd. The rumour is she will replace Philip Hammond as Chancellor after the election.

    Well, that is terrifying, yes.

    Very terrifying. She is not suitable for any ministerial position.

    Of the top of my head, Gove may be a good choice.

  15. Pcar
    I agree, broadly. Rudd is feeble. Gove has the intelligence to be Chancellor, yet he seems to lack political nous. Of course, he might well have learned something from recent events: people do develop – even politicians.

  16. the mansa fuckwit and hypocrit. he seems to be a big fan of vibrancy but makes sure he lives in some of the least vibrant towns in the uk – first downham market and now Ely. I would have some (albeit only a little) respect for him – if a)he could conduct an argument with someone who disagreed with him without calling them an idiot b) wasn’t such an arse sniffer c) knew what he was talking about – wasn’t determined to bankrupt the country with his free money tree nonsense. If it’s such a no brainer as he suggests why hasn’t the world adopted this policy wholesale ?

  17. @ Moqifen
    “Idiot” is one of his more polite descriptions of those who point out that he is wrong.

  18. Gove as Chancellor would be … interesting. He could do it.
    He does know how to say ‘no’ which is pretty much the main requirement.

  19. “Bloke in Costa Rica

    Monopoly does have a finite supply of money”

    Indeed it does.

    “it’s perfectly possible for the banker to have nothing and for all the cash to be in players’ possession. What you do at that point is up to you.”

    Or you could follow the advice given in every set of Monopoly and “use slips of paper to keep track of each players banking transactions” until the bank has sufficient cash again.

    People rarely play by the actual rules of Monopoly – one of the reasons the game drags on so long. The rule that if followed speeds up play immensely is that if a player lands on an unowned property and doesn’t want to (or can’t) buy it, it is supposed to be put up for auction by the bank. At any price.

    The rules allow for a player to land on (say) Mayfair, decide not to buy it but then bid for it in auction. If you’re the only one with spare cash you could pick it up for less than full value.

    On the other hand a bidding war could break out when a property goes out to auction, with players wanting to complete a set – or stop someone else completing a set. You could end up paying twice the printed cost of a property.

    Much faster game.

  20. So now the Tim Worstall line (after bellowing the complete opposite) is that there is a magic money tree and the only problem in taking it off the commercial banks (exposed as frauds for charging interest on money they have, in fact, created) is that there may be inflation.
    But we have Economy- paralysing inflation of property values under the present system .As Timmy explains elsewhere (cap X) this can be remedied by Land Value Tax, his enthusiasm for which he conceals from his numpty fans on here who may become dangerously confused.
    It is no solution to the money tree problem/opportunity to take the always irate Amber Rudd’s attitude that its existence is imaginary.
    As for the study of Economics; what kind of subject lets practitioners believe blatant lies about the origin of money and where there are now, in the UK, no tenured academics making a case for LVT? A modern discipline that still accuses people of heresy?

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