Ritchie doesn’t understand his own proposal

So, next downturn, we’ll get People’s QE. Huzzah!

Ambrose Evans Pritchard:

The Bank would buy the bonds as needed in any future QE. It would inject the stimulus directly into the veins of the economy through public works. The bonds could be sold again later to drain excess liquidity. This is how quantitative tightening has been working in the US.

The reality is the bonds will never be sold again: the point is inconsequential. What is relevant is that he appreciates that there is a real need to do this

If the bonds are never sold again – or rebought, to be accurate – then it’s not QE. It’s straight monetisation of the deficit. Which, in extremis, might be a good idea. Milton Friedman certainly thought so.

But then if it’s an old idea then it’s not Ritchie’s is it? And if it is some new idea then it’s not QE anyway.

People hire managers, therefore capitalism isn’t working

So, capitalism means that the peeps with the money run the show. But if they just hire managers to do that then the system doesn’t work, does it? Because managers just isn’t the same as real involvement?

Therefore socialism, obviously.

The issue is a simple one to summarise. Apparently about two thirds of all private owners of quoted shares in the UK now own their shares through nominee pooled funds. As such they are not recorded as the legal owners of these shares. They have no voting rights. And no right to attend shareholder meetings. They don’t even have the right to accounts. And they have given an institution, who does not own the shares in reality, the right to exercise their vote in the company.

This matters for a number of reasons.

First, this makes a mockery of shareholder capitalism. The company has no idea who its shareholders are. And it is wholly unaccountable to them. The idea that somehow shareholders are at the centre of corporate concern is shown to be a sham, yet again, by this.

People hire managers therefore capitalism doesn’t work.

Now we’re to change the entirety of accounting!

A lot of yesterday was spent on work I have been doing seeking to reconcile financial accounting as it is right now with the demands of climate change. The work has been done at the invitation of Rupert Read at the University of East Anglia and Aled Jones of Anglia Ruskin University. And, in a nutshell, I have not been able to achieve that reconciliation.

I will publish more on this next Thursday when I will be making a presentation on this issue at the Institute of Chartered Accountants in England and Wales. For now suffice to say that accounting as it now cannot survive if we are to bring the impact of climate change within it. Quite literally, IFRS accounting and accounting for climate change are at such odds with each other that only one can win, and it has to be the need to account for the consequences of climate change.

It’s actually very simple indeed. Stick on a carbon tax of the right social cost of carbon. All prices in the economy now reflect climate change, costs, benefits and risks. Thus all accounting done at market prices includes climate change.

This is rather the point of the carbon tax, that by the one change in market prices we’ve now incorporated climate change into every decision.

It’s OK for people to leave a political construct if they want to

Second, irrationality has become the norm. Although I have still to meet anyone who can actually explain what the benefit if Brexit might be, barring a mistaken belief that this will give us back the control over migration we have always had and not used, the Tory membership is apparently willing to impose substantial economic cost on everyone to secure that non-existent gain. Rational thinking has, then, departed. Blind faith in mythology is taking its place. That is the foundation for toxic populism, and worse.

Third, this is a gift to Scottish, Welsh and Irish nationalists. The repair being observed is very largely English. My belief that the Union is nearly over grows by the day. And I am increasingly convinced that Scotland at least will not wait for English permission to depart.

Anyone not English can leave the English dominated political construction. The English aren’t allowed that freedom – seems to sum it up really.

To a point Senior Lecturer

Normally I have a lot of time for the Public Accounts Committee. Over the last decade few committees have done better work. But this is far from its finest hour. There are three reasons why the NHS is in trouble. They are:

The internal market, which creates massive costs and enormous inefficiencies
A lack of funding
Brexit, which has harmed recruitment

Just to address 1).

NHS England has more internal market than NHS Wales and NHS Scotland. NHS England has been getting more productive faster than NHS Wales and NHS Scotland. A reasonable conclusion thus is that internal markets improve productivity.

That is, the costs and inefficiencies of internal markets are less than the benefits they bring.

Someone who knew economics would know that…..

That Green New Deal and travel

I have mentioned I was out and about whilst doing some thinking today. One of the things I was sketching out were the objectives of the Green New Deal. I came up with this. Comments welcome:

The objectives of the Green New Deal shall be:

To create a net zero carbon economy
To protect against habitat and biodiversity loss
To ensure every building in the UK is as energy efficient as feasibly possible, and generates power if that can be accommodated within its design
To promote public transport for all journeys, including and most especially local ones
To encourage the building of new low and no-carbon housing to meet social need
To invest in new methods of power generation, transmission and distribution
To encourage alternative and reduced forms of consumption that reduce the demand on the natural resources of our planet

Etc, etc. Written by the man who did this:

It was pretty wet in Aberystwyth this morning. So, with plenty to read and a couple of computers in tow I caught the train to Pwllheli just to have a cup of tea. More than six hours of train ride for £8.50 – and amazing views.

6 hours on a diesel train for a cup of tea – to save the planet.

Once again, getting MMT wrong

This is pure ‘bond fairy’ nonsense. Even Paul Krugman (when not writing about MMT) has debunked this sort of scare-mongering, time and again. But let’s be clear why. First, people can’t dump money. Ultimately, it’s what they have to make exchange. So the idea that they exit money forever is absurd.


Money’s convenient, sure, fiat money works as long as it is so. But that money is a medium of exchange does not mean that fiat money of one particular flavour or government is the only medium of exchange available. It’s tough to buy things with confederate dollars these days. OK, so, the government doesn’t exist any more. The Feds do and continentals aren’t worth much either. Zimbabwe is still a country, still has a government. The $Zim 100 trillion note doesn’t buy much. How many zeroes have they knocked off the Soviet ruble now?

We might even concede that that departing money forever is difficult but that doesn’t mean that leaving behind one specific fiat currency is.


I think not:

In the seventies, it was recognised that accountants had an obligation to produce accounts for all those who had an interest in a company, not merely the shareholders. But Murphy believes that those standards have fallen since he qualified as an accountant in 1982


After which, let me assure all Lexiteers, there will be no upsurge of socialist support in which Corbyn will be swept to power. A government fully committed to a fascist narrative, that it will only amplify when in power, will exist.

Now, as a matter of objective reality, who is the more fascist? Nige or Jezza?

On that Curajus State

As a rule, the people who became commissars were the ones who couldn’t find another job. They were not very smart but were very conceited, self important individuals, especially after they had been given a taste of power, and especially over other people. Those who were thinking about a career in the party system, who could speak loudly and authoritatively from a podium, and who curried favor with the boss, these people could climb the party ladder quickly, and high up.

The necessity for green bonds

My recent suggestion that fund managers wanted the government to issue green bonds in response to investor demand received short shrift from someone who, I think, thought he knew how markets worked. His claim was that such bond issues were not necessary, or desirable, despite my agreeing that they were.

I am, then, slightly pleased to note that the FT is firmly on my side,


Michael says:
May 21 2019 at 1:41 pm
These aren’t “Green” bonds as such. They are issued by the Dutch government, and repaid by the Dutch government – not through the proceeds of “Green” investments.

The only thing that makes these bonds “Green” is that the money raised will be used for environmentally friendly projects.

Which is fine, but they are just like any other government bond, where the proceeds could also be used for similar things. The only difference is in the name.

Richard Murphy says:
May 21 2019 at 2:03 pm
And the monitoring

That is quite emphatically not the same

Tee Hee.

Oh Aye?

Robin Stafford says:
May 19 2019 at 10:24 am
Not surprisingly it prompted a typical response from Tom Worst(of)all – https://continentaltelegraph.com/economy/an-entirely-hilarious-letter-to-the-guardian-on-angus-deatons-inequality-inquiry-for-the-ifs/
I thought CapX was bad but the Continental Telegraph sets an equally low bar for right wing ravings.
However it does highlight an issue for those working on inequality, that the data is open to be spun or abused selectively. As a for instance, the right are fond of saying that global poverty has come down significantly whilst ignoring that this is overwhelmingly driven by China. Similar games are played on incomes and wealth.
There’s a useful piece of work to be done to unpick all those right wing assertions

So, how about that assertion then?


Richard Murphy says:
May 19 2019 at 11:11 am
I suspect there is no one who takes Worstall seriously and the CT is simply a front for him

I am not sure the Telegraph are amused. They got rid of him long ago

Did they?

29 Mar 2019, 10:33am
Comment: The EU is shutting out views that do not chime with the Brussels elite. We can’t leave too soon


Ritchie on financial markets

Richard Murphy says:
May 18 2019 at 10:24 am
These people are market makers

They are trying to create a market in such bonds

That makes then market makers

You are playing technical pedantry

It is unappealing

Tee hee. Even snigger.

Except, of course, this bloke teaches at City University….economics, too.

El Twatto fails to realise…..

One of the first campaigning documents I ever wrote was on the need to issue bonds to finance green investment. It was then good to see this in the FT this week:

It’s taken some time, but now the finance sector realises that what we need are bonds to finance a Green New Deal. So why won’t the government deliver what the market wants?

El marketo, eh?

Joshua Kendall, senior environmental, social and governance analyst

Simon Bond, director of responsible investment portfolio management

You mean fully signed on activists who have secured comfy berths ask for government to make their jobs easier?

The potato interrogates Nigel Farage

How will you deal with the Northern Ireland border?
What trade deal do you want with Europe?
How will you manage a trade deal with the USA when they say none is possible if there is a hard border in Northern Ireland?
What EU law are you going to repeal if we Brexit as you wish? Would that have also been possible under May’s deal?
Why do you want to use WTO rules when no one else in the world does?
You know that the WTO is a seriously discredited organisation, don’t you? Why do you want to use its rule?
No deal is technically impossible, as I am sure you know. If we say there are no rules the reality is everyone else will impose their rules on us. How are you going to manage that?
How are you going to manage the disruption of a Hard Brexit?
How many people will die in the UK because a Hard Brexit will deny them the drugs they need?
Every credible organisation offering a Brexit forecast says it will cost UK jobs. How are you going to replace them?

As someone who used to develop policy for Nigel Farage – not with, for – perhaps I can answer some of these

1) Exactly as we do now.
2) We’ll declare unilateral free trade. What they do is up to them. For details see Patrick Minford’s worked through and costed example.
3) See 1)
4) CAP, CFP are two for starters. REACH will follow.
5) Because we don’t really care about the rules others impose upon our exports. The value of trade is in what we can import, see 2)
6) What are you talking about you silly little man?
7) See 5)
8) Same as we’ll manage any opther diusruption. As bestg can be done.
9) None, see 2)
10) Government doesn’t create jobs. Private enterprise does, within the rules set by government. As we’re going to relax much of that regulation that job creation will be easier, won’t it?

This is hilarious

Julian Richer funds a tax whingeing protest group led by Ritchie’s friend, Brooks.

Julian Richer has just sold his company using a structure that means no capital gains nor income tax liabilities on the sum received.

No, really:

Isn’t This Tax Abuse? Julian Richer Sells Richer Sounds Without Paying Capital Gains Tax

But of course this is different. Entrepreneur cashes in his life’s work without paying capital gains or income tax. Yes, that’s obviously different because reasons.

Julian Richer is entirely and absolutely obeying the law here. What’s going to be interesting though is the reaction from those tax campaigners who complain so bitterly when others do exactly the same, entirely and wholly obey the law.

Think about Arcadia, Taveta and all that for a moment. Tina, Lady Green, does not pay UK tax on the dividends she receives. This is loudly condemned. It has most certainly been called tax abuse, tax dodging and tax avoidance. The reason she doesn’t pay that UK tax is because she’s a foreigner living in a foreign country.

But this is different because, right? Even, tax abuse and tax compliance all depend upon who is doing it?

Politicians should have much more power

And this is the malaise within politics. People with ambition, but without a shred of wisdom, nor still a philosophy or a sense of public duty to direct it, now populate many of our political parties, and all of those on the right. But pure self-interest and political aspiration are poor bedfellows. They never combine to create either good policy or sound government because they are compromised from the start by the inherent conflict within them.

Both statements from the same bloke. Amazing what you can believe if you set your mind to it, eh?