It’s as if he’s never read Keynes

We are twentieth. And ignore Ireland: its GDP data is so distorted by being a tax haven even Walt Disney would dismiss it as incredible.

We are also the slowest growing country in the EU.

That is not a coincidence.

Tax rises? Bring them on, I say. We will all be better off.

It is the deficit – or surplus of course – which is stimulatory or contractionary. For tax is, as MMT says, taking money out of the economy, reducing demand.

So, the MMT man tells us that more tax is going to make us better off.

Hmm.

Oh, and those places which do send more of GDP through government. Are they better off than we are? Hungary? Croatia, Greece?

40 comments on “It’s as if he’s never read Keynes

  1. What’s been the real effects of “austerity” (it isn’t, but in this period of not throwing even more cash at a lot of the public sector)? And not “less police officers”, but a measurable outcome?

    Maybe I’m a bit shielded, but when I look at the roads around here, I don’t see much difference in pothole maintenance. The bins get emptied. Crime is falling. The local parks are as well maintained as ever. The roads seem to be gritted. Our foes aren’t unleashing an armada because we cut the armed forces. Kids are getting record exam results.

    The only things I can visibly see are a few arts things. The museums and libraries that no-one goes to have had their hours cut back or a few of them closed.

  2. Tim – i think this quote i stole from somewhere else sums him up – “have you ever looked at someone and knew the wheel was turning, but the hamster was dead ?” I think I’ll refer to our intellectual colossus as professor dead hamster.

    As for his lickspittles (especially psr) you have to wonder if they realise how fucking dumb they come across.

  3. EU

    The EU Is Treating Britain’s Constitution with Contempt

    Agree. EU is hellbent on revenge and punishment regardless of cost to EU’s imprisoned citizens

    .
    Leading German MEP, Hans-Olaf Henkel, a former IBM executive, has warned that a ‘No Deal’ Brexit would hit the European Union hard, and that the bloc should not be too keen to pursue a “masochistic” negotiating strategy.

    Great. However, EU & Barnier’s position is UK must never have a competitive advantage.

  4. Not enjoying the latest version of feudal aristocracy, are we?

    Couldn’t have seen that one coming, eh?

  5. Why doesn’t he advocate taxes at 100% or even 150% of gdp ? if he’s so sure of his thesis – intellectual coward. We’d be so well off we would be the envy of the world (or even the galaxy) – we know he thinks Laffer is an intellectual pygmy compared to his super brain.

    The hamster remains dead, but the wheel keeps turning

  6. @Rob

    Denmark, with a much higher tax take, currently has a GDP which is shrinking.

    I pointed it out to Spud. He deleted my post.

  7. I wonder if it occurs to Capt Potato that the economies of the PIGS are still barely larger than they were 10 years ago, thanks largely to the Troika. If they were not growing faster than the UK, they would be in a dreadful state today, even worse than they currently are. As an example, my partner is being cared for by a 62 year old nurse from Portugal who works in the UK to support her family back home – 3 boys in their 20s, unable to live off their earnings in Portugal. Has anyone asked him where the UK stands in terms of GDP per head in the EU… About 10th from memory, with powerhouses such as tax havens like Eire and Luxembourg, or Belgium, the home of all those bloated agencies such as NATO and the EU, or the Netherlands – still small enough to survive by exporting gas, tulips and bull semen while benefiting from the Rotterdam effect – ahead of us. If only May had the balls to go all out for fracking!

    Obviously it doesn’t occur to him. The vast majority of EU countries are still damn poor, if only little Bremoaners would realise if they actually set foot outside these islands.

    A few years ago I was chatting to an elderly German in a bar in Granada. He was obviously a Euro apparatchik and he quite candidly (;) said that all the big under utilised roads in Southern Europe had been paid for by people like me. The thing is that when Poland and the Baltic states acceded, they thought the money taps would flow as well. To be 50% better off when you were milking cows by hand 20 years ago still leaves you relatively poor compared with the core EU members. It takes a lot of growth for many years to catch up with the UK.

    Compounding: another topic Potato doesn’t understand.

  8. Yes, my first thought was growth is relative, maybe they fell further, started from a lower base, doesn’t mean anything without a lot of context

  9. To be clear, to be “damn poor” in EU terms is still infinitely better than living in Africa or SE Asia or China. Especially when Big Uncle EU puts on pressure for Amazon to open a warehouse in your country.

    The Emerging Markets stock Index is totally dominated by 5 corporations :
    Tencent – China Internet
    Alibaba – China amazon equivalent
    Samsung Electronics
    Taiwan Semiconductors
    Naspers – South African media

    Why doesn’t the EU have an equivalent of any of these 5 companies?

  10. you could just as well argue that denmark/france/germany are doing better than us because they speak danish/french/german. So i propose we all have to learn these languages- or else (offf to the reducation camp for you boys)

  11. Diogenes,

    Shouldn’t that be 4? Naspers’ profits are primarily from its 34% stake in Tenden.

  12. Tim

    Thought you would find that entertaining – one thing – you could lose the ‘Keynes’ from the article title and either replace it with ‘anything’ or simply remove it and it is still a valid article title.

    Murphy is an intellectual void incapable of saying anything either accurate or perceptive unless by accident , like a stopped clock.

  13. @Diogenes

    “Tencent – China Internet”

    Funny thing about that company (HQ is in BVI) is that along with Amazon, Google and Facebook they are the four largest investments by the BBC pension fund. The BBC that’s always running stories about what terrible tax dodgers theses internet companies are.

  14. “Why doesn’t the EU have an equivalent of any of these 5 companies?”

    I sometimes think there’s an effect of adversity. When life is tough, you have to work hard, do something useful. You get a serious work ethic. And even after you’ve succeeded, this lasts a few generations. The South Korean kids today have grandparents who lived in real poverty. They’d have made their kids work hard at school, do a good job.

    A lot of Europe is entitled. And they keep supporting more entitlement. They create labour laws based on entitlement: minimum wage, working hours directives, maternity and paternity leave. Try and find anyone who is against this stuff. You say you’re against extended maternity leave and you’re a cruel bastard. Never mind that it means businesses will move teams elsewhere to avoid it.

  15. BiND, Naspers is shown as a separate company in the index and many, if not most, emerging market funds hold them both. Most of those funds are closet tracker funds

  16. Back in the 1950’s I was with people who had known Keynes well both in academic and personal terms. What is often said about him and his thinking today is somewhat at variance with what was known and thought then.

  17. Tim

    in the words of Eminem – ‘Guess who’s back, back again’

    The Great tuber has been busy on the Radio apparently and possibly contributing to the manufacturing industry in his spare time:

    ‘What is to be learned? The main claims my challenger made are the usual ones:

    The government has no money of its own;
    The government cannot make money;
    The government wastes money;
    No one wants to pay tax.

    More particularly:

    There has been no austerity;
    In that case whatever austerity is it has not worked as debt has risen.

    Faced with the claim that there has been no austerity you realise you are up against what might best be described as a small world, and decidedly selfish, view of economics. Compound that with a belief that value as created by teachers, health workers, etc., does not ‘make money’, which as a result appears to be solely equated with profits and wages paid in the private sector, plus a cast iron certainty that government only subtracts value, and you end up with little prospect for sensible debate. And that’s what we got.

    What really frustrates me is the arrogance of this type of radio presentation. If you ask someone on for an opinion at least listen to them before disagreeing. I have to say LBC does that now it has got rid of its worst presenters to Talk Radio. You can probably tell that early on I thought of pulling out of this call. That may have been just as useful as carrying on.’

    And more sensibly

    ‘Maybe I should have just taken a coffee break instead.’

  18. And to quote from Shed Seven (or Brooks and Dunn) ‘It’s getting better all the time’

    ‘Leave aside all issues regarding rents, inter-generational equality, and so on, and just think tax for a moment. What this comment makes clear is that if there is anything like a competitive environment (and in rents there is) then the incidence of taxes on rents is not on the consumer but on the owners of capital, as of course it should be.

    I would suggest that the observation (not set up as an experiment, but by chance offering a large scale observation of actual behaviour as if an experiment was intended) is capable of extrapolation. Whenever suppliers are price takers (as in competitive markets they should be) taxes on suppliers will always be paid by suppliers and the suggestion that they are passed on to others makes no sense at all. This is now seen to be true for rents. I think it will be elsewhere.

    So the next time you hear some rightwinger argue that tax is not paid by capital but is passed on to consumers or workers just note that what they are actually saying is that there are non-competitive markets in existence and that this fact should be their real focus of concern. But oddly, it never is. Right wingers are the last people who want competitive markets. They do not permit abuse, after all.’

    A veiled swipe at your good self among others who have the temerity to point out basic facts about cost incidence that he seems unable to grasp…..

  19. Tencent are only big becauae of wechat where the government in China banned all of their competitors. I remember reading that the highest paid executive at Tencent is the government liason officer.

    That company would barely exist if it wasn’t for the government picking it as the winner.

  20. If the Donald really wants to turn the screw on the trade war he could start banning Chinese companies from the US in industries where China do the same to foreign companies.

    Close the Chinese banks and block Wechat. Sit back and enjoy the tantrum as all the Chinese in the US have to put up with the same crap we do in China.

  21. I would turn the statement on its head, candidly, so it would no longer be:

    “it’s as if Murphy has never read Keynes”

    but

    “it’s as if Keynes has never read Murphy”

  22. DJ the stuff you say about Tencent is just one of the things that makes me wonder about the emerging markets stock Index. Are those Chinese companies really worth that much? Are all those Chinese banks really sound? Etc etc At the risk of sounding like Spud, it looks like a crash could happen at any moment especially when just about all the collective investment vehicles seem to own essentially the same portfolios

  23. Warren Buffett said never invest in an industry you don’t understand.

    Spud clearly follows that mantra as he doesn’t invest on the stock market at all.

  24. What really frustrates me is the arrogance of this type of radio presentation. If you ask someone on for an opinion at least listen to them before disagreeing.

    Lol, he actually said that? Is there a less self-aware person in the entire world?

  25. Diogenes, China is Crony capitalism on steriods. However, the country is seeing such massive catch up growth and the government so autocratic they can probably kick the can down the road for decades until the inevitable splendid crash like the world has never seen. Which will be blamed on ‘Capitalism’ naturally…

  26. Murphy’s ego knowing no bounds, he’s put on his website his encounter with Mike Graham of Talk Radio, even though he is made to look a right twat during it.

  27. Diogenes

    “DJ the stuff you say about Tencent is just one of the things that makes me wonder about the emerging markets stock Index. Are those Chinese companies really worth that much? Are all those Chinese banks really sound? Etc etc”

    Have you seen this? China vs US: GDP, Monetary supply & GDP per capita
    in units of Trillions of US dollars. Watch the Chines money supply (middle bars) after 2009.

    I’m not a macro economist but it doesn’t look right to me.

  28. Definitely something odd there, BiND…

    @Noel Scoper, thanks for that. A great read. So Alibaba owns 60 million sq feet of office space!

  29. “Why doesn’t the EU have an equivalent of any of these 5 companies?”

    Er, could it be because the EU is not an emerging market?

    There are plenty of global market leaders in the EU, admittedly few of them in the former commie bloc. Because, communism, duh.

  30. Big, last time I checked, Poland, Hungary, Greece, Czech Republic etc were both in the EU and the FTSE Emerging Markets index

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