Is realisation beginning to dawn?

So money is not an issue. Let me be absolutely clear about that.

A shortage of building materials may be.

A shortage of skills might be as well.

And both will be constrained by our desperately conventional view of how houses must be built.

But let’s be clear: if you asked me for the money to build these houses and if I was in the Treasury I promise I could deliver it.

So, err, printing the money doesn’t solve the problem, does it?

So, not the law either then

In other words, when it has been decided that a devolved nation has the right to decide on an issue then its consent is sought to Westminster legislation if it relates to that area of activity. There is, of course, a corollary. Because we now have EVEL – English Votes on English Law – Scottish MPs cannot vote on English legislation. So, Scotland is ring fenced from English decision making. Legal Consent Motions might be seen as ring fencing English MPs from Scottish decisions.

And in that case, and because Brexit very clearly does impact Scotland in ways Scotland may not want then of course it is right that Scotland must have the right of veto in this issue. Without EVEL I would find that vey hard to justify. But Cameron demanded EVEL. And his party has to live with the consequences. Whether or not we leave the EU may be down to Scotland. And it’s all Cameron’s fault.

Note the leap there. From “has a right to decide upon” to “should have the right to decide.”

The Scottish P gets to vote on things which we have already decided the Scottish P should get a vote on, even if the legislation is going through Westminster. Is Brexit already a devolved issue?


This will be a surprise to Spudda

He’s entirely insistent that only the Magic Money Tree can aid us, for exports just aren’t going to change at all:

Britain’s factories are experiencing their strongest performance in nearly three decades as the fall in the pound gives exporters an advantage abroad.

The CBI said order books in June had climbed to their highest level since August 1988, while export demand hit a 22-year high. Economists said the findings raised hopes that a manufacturing boom might offset the slowdown in consumer spending and steady the economy.

One of Spudda’s problems is that he’s got absolutely no economic hinterland

He just doesn’t get that other people have chewed over these problems before him and that they also had some useful insights. This isn’t written by Snippa but he endorses it:

The first thing to understand is that land is not like other forms of capital in the economy: it has unique qualities which have to be understood. Land is finite – there is a limited supply of it – and it is permanent – it does not depreciate.

This means it is a uniquely desirable type of capital; as long as populations continue to rise it is likely to rise in value too. As Mark Twain said over a century ago, “buy land, they aren’t making it anymore”.

Land therefore plays a very different role in market economies to capital: whereas Apple will produce more iPhone’s to meet demand, more land cannot be produced to meet housing demand.

This gives land and property owners special power in the economy: their monopolisation of the fixed supply of land can mean they extract the surplus value produced by growth in the economy through charging rent on use of their land.

Sigh, this is just Ricardo on rent. Everything just ends up as land rent in the end. Something which we now know to be empirically wrong. Because we do make more land, by trading with it. The steamship, the railway and the opening up of the prairies and steppes did more to destroy the great aristocratic fortunes than anything else, certainly more than any tax or government intervention. It’s even in the Saez and Zucman work on the subject.

Remarkably, the unique role of land in the economy is ignored in mainstream economics:

Bollocks, it has been endlessly chewed over.

From the late 1970s and early 1980s to today, a great transformation has taken place in housing – land and property values have gone through the roof. The rise in property value has significantly outstripped rises in incomes and growth.

This has created a surge in wealth inequality between property owners and renters, and is the central finding of Thomas Piketty’s globally renowned book, Capital, which used historical data to show that asset price inflation now outstripped profit, making capital investment in the real economy a loser for any business man or woman compared to rentier exploitation.

Twattery. One of the great failures of Piketty’s thesis is that he doesn’t account for the rise in property wealth at the household level.

This transformation has been driven by financialisation – the turning of social goods into financial assets. UK banks’ main role used to be as lenders to businesses. While lending to non-financial corporations has remained fairly static, mortgage lending directly to workers has surged, from 20 to 60 per cent of GDP.

Mortgage lending is now the main function of British banking. Once again, mainstream economics is unequipped to understand the role of financialisation in the modern economy.

Banks’ role is seen as recycling savers’ money to borrowers as credit for productive investment, oiling the wheels of the economy. But what the banks do with mortgage loans has little to do with investment, and even less to do with existing money in circulation.

Idiocy. The “Anglo Saxon” financial system uses public markets, equity, to fund business, not bank loans as with the Continental system. Sure, we can argue about which is better but not to note this is just idiotic.

First, it’s important to understand not all of the world is like Britain. While rising house prices has been a global trend, in countries like Japan and Germany house prices to earnings have been in decline since the 1970s, the reverse trend of the UK.

Germany is a society where most people still rent in a well-regulated sector, the mortgage market has more strict limits on it and most banks are public or co-operative owned and do not engage in land speculation.

The point is that there is different ways to do things, and if we want things to change we have to be open to thinking fundamentally differently about how we do things in Britain. Tweaks will be insufficient.

Fuckwittery. Germany and Japan have “can build” planning systems. Want to build a house on your land? Go ahead. Make the British system like that and we’d be settled. What’s the one thing they don’t advocate? Freer planning permission. Fuckwittery.

Which universe was this phoned in from?

Fourth, some shibboleths need to be faced. Grenfell Tower is already symbolic, but it also represents a reality in UK housing policy. This now subsidises private landlords and not tenants. It is biased towards home owners and not those who aspire to a secure home for their families. It promotes the myth of property as wealth, and not as homes. It does, therefore, divide society. The best indictation of change will, then, be the willingness of people to not only become involved but to also demand that these divisions be removed. So the question is whether or not politics can move from being about reinforcing the power of particular interest groups to an alternative based upon the promotion of broader communal values.

There will be very obvious indicators that will suggest if this is happening. So, for example, will funding for social housing be made available?

A tenant managed block of council flats went up in flames. After said council had spent £70,000 per flat tarting it up. Within a fortnight a local council (The City Corporation) had bought replacement flats in the locality to offer, as social or council flats, to all those displaced.

This shows subsidy to private landlords, does it?

Won’t this piss Spudda off

So, Grenfell tenants will be rehoused in Kensington. In flats, social housing flats, coming from the affordable homes part of a development already near completion. No need for a suspension of civil liberties therefore.

Oh, and the financing part of it is coming from the City Corporation. You know, those appalling types who give away the entirety of their rates income and live purely off the land value tax they gain as the owners of much of the freehold of The City.

Just about everything he didn’t want, isn’t it?

Letter in the FT

Political choice is not a question of what we can afford, it is only a question of what kind of society we desire. After all, as a matter of fact we know that money is not scarce: quantitative easing proved that forever.

Charles Adams

Professor of Physics,

Durham University, UK

Richard Murphy

Professor of International Political Economy,

City, University of London, UK

Two people who know nothing about economics then.

Because it’s not money that is scarce, never has been, it’s resources. Changing the number of pieces of paper chasing the resources doesn’t change the number of resources. Just the number of pieces of paper you need to gain the resources.

Dear Lord

Ritchie is actually proposing the declaration of a state of emergency over the Grenfell Tower fire.

No, really, he is:

I was phoned by the PM programme on Radio 4 at 4.40pm this afternoon and asked what I thought about requisitioning property for the people of North Kensington to live in following the Grenfell Tower fire.

He points to this as justification:

Civil Contingencies Act 2004

He’s arguing for something tantamount to martial law. And even if not quite that he’s insisting on the suspension of civil liberty.

Grenfell Tower qualifies as an emergency

s22 (3) (b) does not require compensation be paid

There are some 200 fire incidents each and every day. From that we can confidently predict that the stock of people displaced from their dwelling at any one time is larger than the 120 households now out of Grenfell Tower.

His argument here is therefore one that leads to a viable insistence that civil liberty should be suspended in the UK forever.

D’ye think he had his black footy bags on when he vinegared out this one?

He really is a cretin, isn’t he?

It is quite interesting to note that there is quite widespread anger that Kensington and Chelsea council has reserves available for it to use of £274 million according to its last accounts.

As a matter of fact local authorities need reserves. They are solely dependent upon revenues they can raise from local taxes, central government and the supply of services. They can borrow, but only with difficulty in most cases. And the reality is that they face unpredictable demand for their services and central government has a poor record of responding to their needs in times of crisis. So, they have reserves. These are, literally, a contingency fund for the unforeseen.

Kensington and Chelsea has made this fact visible and it seems that people do not like it. What they resent is that they have paid tax without a purpose. But let me put this in context. All that the council is doing is what George Osborne wanted to do with government and which the Tory right still wants. It is living within its means. It is balancing books. It is building the roof for the rainy day whilst the sun shines. It is being a good householder. This is prudence at work. And people resent it.

And the answer is that they are right to do so. Why, they ask, should government save for us? The sentiment that has been hit upon is the feeling that this is government taking people’s money and putting it out of action. And that is right. That is exactly what running a government surplus, at any level, does. It takes money out of the economy and enforces saving and the result is less economic activity than there should be.

What the fuck does he think K&C do with their reserves? Ski down the piles of cash?

They’re out in the money market, being borrowed by other people. Seriously, what is this goddamned cretin talking about? You can see “interest received” on their bloody accounts!

For fuck’s sake. This is a man who teaches sodding economics to people?

This man values democracy, oh yes, candidly, he does

Today the government commences Brexit negotiations.

There are four possible outcomes.

We can leave entirely.

Or we can leave the EU but stay in the Customs Union.

Alternatively we can leave the EU but stay in the Customs Union and the Single Market.

Or we can stay in the EU.

The only option that doesn’t harm the UK is staying in.

All the others cause harm. The only question is how much and how long we can defer the time until it hits.

He’ll justify his own wishes by saying that people vote for them, however good or bad they are. But other peoples’ wishes, voted upon, which do not accord with his are to be rejected.

One man, one vote, Spudda being the man with the vote.

Isn’t this Ritchie’s mate?

The one with the Fair Tax Mark who didn’t pay minimum wage?

The boss of one of the UK’s biggest energy companies has been given a 72% pay rise, just weeks after arguing against consumers having their bills capped to save them £100 a year.

Alistair Phillips-Davies, the chief executive of SSE, will be paid £2.92m in 2017 after receiving the maximum possible bonuses for leading a “robust performance” by the supplier last year.

Imagine the scene

And I met Damian Green, our new First Secretary of State, skulking in the Archduke at Waterloo last night (an old lefty plotting ground) and he too seemed incredibly reluctant to engage with the public, but I assure you, I tried.

You slip in for a quiet pint before the train and find yourself being approached by a lecturer from Islington Technical College.

Question, how keen are you to engage?

Tears, tears to my eyes

First, the Bank of England seriously considered increasing interest rates in May. If that happens the proverbial will be mingling with the fan faster than you can imagine: the UK is sitting on a mountain of private debt that many can barely afford.

And people are already under enormous pressure. Retail sales volumes fell by 1.2% in May as rising prices depressed consumer spending growth.

It’s not just that austerity mixed with Brexit does not work: it is now an outright disaster.

Bring on the Green New Deal: it was designed for situations like these.

Richard Murphy, professor of practice at Islington Technical College, is suggesting that we should have both fiscal stimulus and monetisation of spending to deal with rising inflation.

I’m just not sure whether they’re tears of sadness, rage or laughter at this howling idiocy.


Refurbishment that is more about putting in a cladding to make a tower block visually acceptable to Notth Kensington makes a lot less sense than making it safe. If the cladding is flammable (and according to those interviewed on Radio 4 last night the requirements are lax) then the prettification is wholly unacceptable.

The cladding was part of your Green New Deal you fool.

Ritchie misses the Fed’s point

The US Fed has raised interest rates. Let’s not get overwhelmed: the range is now 1 to 1.25%.

But, let’s ask why. The US is not facing an apparent inflation threat. QE has not delivered price increases as all the hawks said it would. Nor is the US economy over-heating on any measure bar climate abuse.

So why increase rates now when there is no apparent need to do so?

The interesting part of their announcement was their laying out how, why and when they are going to reverse QE.

You know, that reversal of QE which SnippaSpud has been insisting will never, never, happen?

The Colin Hines solution

To do this Jeremy Corbyn must revisit and vigorously shake his people’s QE “money tree”. This could pay for real economic activity on the ground via decentralised infrastructure projects to make the nation’s 30 million buildings energy efficient, ensure a shift to localised renewable energy, and the building of local transport systems.

Older people with significant saving should be offered “housing bonds”, paying, say, 3% interest to help fund a massive council and affordable homes programme.

Why borrow if you’ve the magic money tree?

Plus, of course, inflation is 2.9% (?) you’re offering 3% interest and the magic money tree will drive inflation higher.

Can’t see it being all that great a deal myself.


As the FT notes the real explanation is falling incomes.

OK, UK incomes are down from 2007/8.

More than that though, it has imposed specific costs. Nurses, teachers, the police, and so many other key workers people depend upon and value have said that austerity and their consequent penal pay awards has gone far enough and they can take no more. And people agree with them: these key workers are very obviously only saying what is reasonable and justifiable.

Hmm, I wonder. If all of our incomes have fallen then shouldn’t theirs too?

Really, Snippa Spud hasn’t got it

Those reports assume that the state is limited by its capacity to tax and borrow
​This completely ignores the fact that the state need do neither. It need not tax to spend. And it need not borrow. It can instead create all the money it needs at the stroke of a computer keyboard. The government asks the Bank of England, which it owns, for a loan and technically it can provide it in unlimited amount. We know this is true. £435 billion of quantitative easing proves it.
We do tax though. That is to prevent new money causing inflation.
And we do issue debt. Partly that’s because EU law, which is a slave to defunct dogma, demands it. Partly it’s because a century ago when we were on the gold standard we had to borrow and no one in the Treasury has noticed the world has changed as yet. And partly it’s because the banking, pension and savings systems needs to be underpinned by a safe place to save – which is government debt. But it’s just a convention and remember that right now the real rate of return on government debt is negative.
So in fact money is no obstacle to social care. We can have as much money as we want and need. And we only need to tax enough to stop inflation. And both are subject to the real constraint, which is having enough available people. If we have them we can afford to look after the elderly. If we haven’t we can’t. But the IFS ignore this economic reality, and even real need, and show their neoclassical economic roots by thinking money is the issue. They also show their neoliberal roots by implying that we can only look after the elderly if private wealth creates the means to pay through tax, which implies they think there is no value in itself in looking after the elderly or those needing social care.
But this is nonsense: the act of creating the money to create the employment to provide the care will also create the means to pay the tax to balance the equation, and if interest gets to be too much, don’t worry: QE wipes out debt and interest. If you doubt me, rest assured that not a penny of interest is now paid on the £435 billion of its own debt the government repurchased.
So, we can afford social care.
And we can afford to pay people to provide it.
All we can’t afford are bankrupt economists who produce nonsense because they don’t understand money or tax, even if the do call themselves the Institute for Fiscal Studies.

We’re not allowed to monetise spending without a Hard Brexit.

Nope, Spudda still hasn’t got it

Re-regulating and restricting the international finance sector to transform national economies and the global economy. Finance will have to be returned to its role as servant, not master, of the global economy, to dealing prudently with people’s savings and providing regular capital for productive and sustainable investment. Regulation of finance, and the restoration of policy autonomy to democratic government, implies the re-introduction of capital controls. These are vital if central banks and governments are to fix and determine one of the most important levers of the economy – interest rates

You can’t do that without Hard Brexit now, can you?