Listen to me! To Me! TO ME!

In 2015 Jeremy Corbyn adopted the policy of People’s Quantitative Easing when seeking to be leader of the Labour Party. He borrowed the idea from me. Since being elected he and John McDonnell have little used the idea. This is hard to understand since it was probably the most distinctive part of his whole economic appeal in 2015, letting him suggest that the funding to build the new infrastructure this country required would always be available if the physical resources to deliver it on the ground existed.

Well, yes, OK.

So, in other words, all the legal and structural arguments against People’s Quantitative Easing fall away: it has already been authorised and is already legal. Labour could say so and they would be entirely right in doing so.

The question then is why aren’t they doing so? After all, we are still not living in ‘normal economic times’, whatever that might mean now. And there is not a shadow of a doubt that we are suffering underemployment that is resulting in low productivity and so under-usage of capacity which only needs the availability of credit (which is, note, the reason for QE) to bring it into use. This is exactly what a National Investment Bank could deliver. That Bank could, of course, offer its bonds to the market, most especially as a form of National Savings, I suggest. But the backstop for its funding could and should still be People’s QE.

The result would be that in every constituency those ‘shovel ready’ jobs that we know need to be done could be funded.

Great, now, hands up everyone who thinks there are available physical resources in he building trade these days?

Quite so……

35 comments on “Listen to me! To Me! TO ME!

  1. Given that you only get 4.8 zloty to the pound these days, I’d wager that most of the resources in the building trade have gone back to Poland (or gone to Germany).

  2. I hate to think how many times I have made this very point to Capt Potato, Wrong-Lewis, Coppola and all the other people who bitch about the need for infrastructure spend. It always falls on deaf ears despite all those official stats about how much lack of capacity there is in the construction industry

  3. So they are shovel ready, he wants buy shovels, but hasn’t considered who is going to use the shovel.
    Given current planning and other regulations I very much doubt there are many shovel ready projects in the sense he is thinking of.

    Would love to see the howls of outrage if this scheme went ahead and the first thing it did was build something like new nuclear plants

  4. We use track hoes in the U.S. Shovels are low productivity. But if you want make work jobs, why not use spoons?

  5. ‘the funding to build the new infrastructure this country required’

    This craptastic appeal is universal. Yet building a new road or bridge is not going to cause a new business to be built. *Nowhere* has enough bridges to it already.

  6. ‘And there is not a shadow of a doubt that we are suffering underemployment that is resulting in low productivity and so under-usage of capacity which only needs the availability of credit (which is, note, the reason for QE) to bring it into use.’

    Word salad, devoid of meaning.

  7. And there is not a shadow of a doubt that we are suffering underemployment

    Unemployment rate (as of March 20th): 4.3%.

    Such underemployment, indeed, that Murphy and friends demand huge immigration to do the jobs that would, er, otherwise go to the underemployed in the UK.

  8. “funding to build the new infrastructure this country required ”

    let me guess – eg High speed rail link from Ely to London and superfast broadband to Ely’s outskirts?

  9. Let’s be parochial about this ask which projects in the Bath constituency he thinks are shovel-ready. The A46/A36 link road? The Eastern park and ride? Building on Bathampton meadows? All of those face massive local opposition and planning constraints. So where is he going to magic a project from?

  10. They might want to see some of the fun and games they’re having in Sydney. Big infrastructure splurge on…tearing down not-very-old sports stadiums and rebuilding them.

    The soft urban left (who had been shouting for more infrastructure spending) is up in arms that the money should be spent on other things that they like.

  11. Ritchie sounds increasingly desperate. He has burnt his bridges with McDonnell and has no way back until Labour has a new leadership team, which doesn’t seem likely until after the next election which is probably 4 years away. I wonder if his City University post will survive Brexit, I think it is part EU funded?

  12. Its all well and good saying do infrastructure projects but what ones work?
    Will having a half hour cut from the journey to London by train mean I go to London more often? No. If its more expensive than slower train then I’ll take the slower train when I need to go. So that infrastructure project benefits from me in what way?

    How about the northern expansion of that new train service – been many years since last went north on the train. So again no benefit to me.

  13. i thought it was green Quantative easing the other day. It’s now Peoples quantative easing – same plan different name. I might have some sympathy if he was suggesting filling in the innumerable potholes in the roads, but that’s not grand enough for him – i presume a 300ft high stature of the Lord High Potato would be the top of his list. His whole plan is spend like a drunken matelot on shore leave after 6 months at sea followed by tax, tax and more tax.No doubt some of this spend would be spent on excessive consumption which he wants to monitor eveyones bank account for . Welcome to the new stasi. Ridiculous vile man

  14. I don’t get this National Investment Bank business. Surely they are a pointless intermediary, and if the aim is infrastructure financed by PQE in every local authority then just give every local authority the power to print the money they require for the projects they desire. ( Including cross-border projects like roads and railways ).
    When the economy is at capacity in each LA then they turn the spending taps off.
    The role of central government should merely be to define when the economy is at capacity, but central government setting up committees to spunk the funds on suitable applications is less productive than letting LAs do it, especially as they already have the capability ( to spunk money ) in place.

  15. Construction has the highest gender pay inequality of all work sectors, so what you do is double the workforce by recruiting exclusively women, I’m sure step two is obvious so I’ll pass quickly over it, and then bingo, step three, schools, hospitals and motorways all round!

  16. Would you want to live in a house built by Ritchie?

    He wouldn’t finish the training, declaring using cement and overlapping each row as neoliberal and the only way to build is using Modern Build Theory, which he invented,

  17. Inflation is low, so he tells us.

    So, in MMT-speak, the actual tax take must be sucking out of the economy just the right amount of tax to counteract the money that has been printed.

    Therefore we should celebrate the tax gap. Because it represents the amount our government tried to screw up the country, but – thanks to tax avoidance – their idiotic plans were thwarted.

  18. I see Spud is now claiming that KPMG said he “would” make partner. Nice crsytal balls they’ve got there.

  19. BiND “using Modern Build Theory, which he invented”

    His inventions are odd.

    He invented country by country reporting a year after a report about country by country reporting, which itself had followed several years of discussions on the idea.

    He invented the tax gap 2 years after HMRC published figures on the tax gap, with HMRC referencing work done in Sweden and the US on their tax gaps in 2000 and 2001.

  20. We did the people’s QE back in 2008 under that socialist genius Zapatero.

    €50,000 million spunked up against the wall. A three month drop in unemployment as town councils everywhere ‘found’ shovel ready jobs such as pavements going nowhere, roads and lights for industrial estates with NO occupiers 10 years later.

    Ah, the sign makers made a fortune. All the projects had to have big signs. Even when it was about adding half-a-dozen benches to a park. Yes, some claim that sometimes the signs cost more than the ‘project’.

    Two real effects: a jump in the debt which contributed to the massive sovereign debt problem several years later which nearly led to intervention by the EU and….

    Investigating judges are looking at the illegal party financing of the Socialists back then from false invoices; what a surprise!!!

    This is the most stupid idea ever mooted and for the Man in Ely that is saying something!

  21. Given that the Left oppose nearly every infrastructure project on ‘environmental’ grounds, such calls should not be taken seriously. They are intended as a bait and switch – if you agree to magic money from nothing to pay of this, the Left will say “Aha! You have conceded the principle we can do this. Now we’ll spend the money on stuff we like (us)”.

  22. Rob: Are you saying that the left would rather spend the money on producing plays about the class and sexual struggle of lice invested bag ladies rather than new airport runways?

  23. I would very much like a builder to come to my house & do some work… So far, the ones we have spoken to are clearly too busy to care (v. high quotes & won’t start for months).
    Maybe I shouldn’t be so surprised when unemployment is <5%… But I still wish I could find all those underemployed builders Ritchie knows!

  24. Lots of young people with media and other useless degrees could be used to dig ditches. All they require to be “shovel-ready” is shovels, so let’s give them one. They are all socialists so will relish this State initiative.

  25. Anecdata alert: I was speaking to a developer at my rugby club’s annual dinner who was pointing out that he was suffering from a lack of availability of skilled tradesmen (particularly carpenters) and that there was a significant lead time for ordering materials he’d normally expect to be off-the-shelf, eg a month for bog standard concrete blocks.

  26. “..town councils everywhere ‘found’ shovel ready jobs such as pavements going nowhere, roads and lights for industrial estates with NO occupiers 10 years later.”

    Bilbaoboy’s not wrong, here. I use one of these areas as short cut. Turn off the autoroute, km of narrow road & I’m on dual carriageway with roundabouts, parking bays, side-roads that lead to nowhere, streetlamps rusting away unlit. Everything you’d need for an urban area, bar the urban bit. Bottom of the hill it peters out into a virtual goat track, puts me on the coast road. Looks like a set for a post-apocalypse movie.Been like that for 10 years, that I know of. And there’s places like that all over Spain. There’s a complete airport, up Castellon way, has only ever seen one plane.

  27. “Bloke in North Dorset

    I see Spud is now claiming that KPMG said he “would” make partner”

    Complete and utter balls.

    He left soon after qualifying?

    No-one is ever told they ‘will’ make partner in the big firms until they are made partner.

    Even the brightest and best, at senior manager level will only get to go on partner assessment courses. And you are only told that you might be made partner if you pass these assessments.

    Utter bollocks.

  28. BiS I stayed a night in a hotel near Zaragoza Airport about 10 years ago. Loads of big roads and roundabouts, land plots and incomplete buildings. The only finished building on the whole estate was the hotel. It was weird. I sometimes wonder if the estate was ever completed. There was no construction activity apart from on one building about 100 yards away. Everything else was deserted

  29. True brilliance from the sage of Ely :

    Paul says:
    April 12 2018 at 11:15 am
    I have read many of Kelton, Wray, Mitchell, et al’s papers. I’m guessing you haven’t read many, otherwise you would probably be able to answer some questions about MMT rather than regurgitating lines from basic MMT blogs.

    I am still to find a quantitative or empirical treatment of MMT.

    Being an economic expert, I am sure you could provide one yourself, or a link to a paper, or something? Surely?

    I mean something with equations, numbers and statistical tests on them, rather than just waffle.

    Richard Murphy says:
    April 12 2018 at 12:00 pm
    I have told you where to look already

    It’s boring to be trolled twice on the same issue

    Which is why I will be deleting your other trolling comments

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