Today\’s Ritchie!

The man\’s quite wonderful.

Removing the stimulus will involve pain; lower growth, higher unemployment and political unpopularity. But policy-makers don’t like lower growth, higher unemployment and political unpopularity. They enacted the stimulus in the first place to avoid it! At what point will they decide they do want lower growth, higher unemployment and political unpopularity?

Given the choice, they won’t, ever. So it will be imposed on them (and therefore us) by a suddenly less generous bond market via a government funding crisis.

That\’s a comment from Societe Generale. Essentially, politicians would like never to have to make either spending cuts or tax rises because to do so creates political unpopularity. OK, this isn\’t the most refined example of an exegesis of public choice theory but it\’s fair enough for all that.

And what will force choices upon the politicians? The running out of money to borrow in a less generous bond market. Note that all this takes is people being unwilling to purchase bonds at the prices that the government would like to sell them (ie, they\’d like a higher interest coupon attached than the govt would like to attach). If the government can\’t roll over old debt nor issue new debt to cover new deficits then interest to be paid on the debt rises and eventually (at some point, maybe close in time and maybe far away) all the govt income is being spent on interest on the bonds and the whole structure collapses. Of course, before that actually happens (although there are governments which have gone down that way) there\’s a change of behaviour forced upon the govt by the realisation that they cannot keep borrowing at anything like sensible prices. Retrench or trigger either a complete collapse of their borrowing capability or trigger a massive hyperinflation by attempting to finance the deficits by printing money.

Note that this doesn\’t require any power grab by bankers, doesn\’t require even collusion. All it requires is that, \”umm, you know, UK PLC isn\’t offering me enough money to take the risk of future inflation. Naah. I\’ll stick it in France PLC instead.\”

Now Ritchie\’s reaction:

So there we have it: banker’s attitude to democracy is stuff electorates, we’ll get what we want by imposition.

Have no doubt about it – the fight with bankers is about who rules. And the antidemocratic elites of finance (for that is what they are – in banking, accountancy and the legal profession) want to rule. Democracy is not for them. And they’ll precipitate a crisis in it to get what they want.

Aren\’t you happy that someone with such a clear eyed and rational view of The City and government debt is advising the TUC on their suggestions for both tax policy and City regulation?

This is also good:

The Masters of the Universe are clueless. All they know they want is the power to continue to purloin assets for their own benefit at cost to the rest of it. So long as they can do that, by capturing our savings, our pension funds, our bank accounts and our tax revenues for their own benefit, then they’re happy. If they can’t, they’ll impose their demands on us.

But the politicians still listen to them – so granting them power. And the time has come for bankers to lose that power. They have to loose the power to create money, the power to dictate markets, the power to impose policy, the power to ravish economies.

Connect that with the above and the most important phrase is \”the power to dictate markets\” when in fact what is meant is the power of markets to dictate to politicians. Markets of course simply being us voting with our cash: that is, Ritchie\’s not in favour of us, by the simple act of deciding what we do with our own property, being able to tell politicians that their latest bright idea is in fact a pile of shite.

Which of course is why he advocates capital controls: none of us should be allowed to take our money out of the ambit of British politicians. For it\’s not really ours at all: no, no, how simplistic, it\’s society\’s, to be used as society, distilled through the wisdom of those like Ritchie, determines.

He\’s also praised Anne Pettifor\’s idea that the government should just pass a law saying that banks have to lend to the government at very low interest rates. Yup, that\’s another one. We should get less for our savings because Gordon Brown is fiscally incontinent.

There\’s a phrase to describe this sort of policy: \”financial repression\”. And it\’s just as bad as any other form of government repression.

Now, aren\’t you really glad he\’s advising the TUC?

9 thoughts on “Today\’s Ritchie!”

  1. “And the time has come for bankers to lose that power. They have to loose the power to create money.”

    I accept that some people can’t spell very well, but spelling a word correctly and then incorrectly is just plain daft.

  2. “The Masters of the Universe are clueless. All they know they want is the power to continue to purloin assets for their own benefit at cost to the rest of it. So long as they can do that, by capturing our savings, our pension funds, our bank accounts and our tax revenues for their own benefit, then they’re happy.”

    And who’s fault is that, exactly? Blaming the banks for taking a bailout from the government is like blaming a child for eating chocolate that you put in their hand.

    It was in the government’s power to bail out or not. If people want to point the finger it should be in their direction.

  3. Hmm, on the one hand we have a Government playing fast and loose with with our money in a self serving way to stay in power so they can be even faster and looser with our money.

    On the other hand we have banks who want to use our money and give it back with interest and in the process make themselves a nice fat bonus.

    I’m with the banks and if as part of the process they bring some discipline to our ruling elite so much the better.

  4. Ah, capital controls. I don’t think people can remember what it was like in the 1970s to have to record holiday money in your passport and be allowed to spend only so much – just like the communist countries pre-1989.

    The only hope is that we as a nation have reached the zenith of our tolerance for socialist fuckwittery and that our journey back to the 1970s stops in a few months.

  5. He’s not just wrong, he’s stupid. Capital controls? That will end as badly as it did last time.

    He’s trying to deny the laws of economics, rather like Canute denying/being ignorant of the laws of physics. The government simply cannot increase it’s debt forever. It’s not the bankers being mean. It’s just impossible. The man’s an idiot.

    Your point about us voting with our cash is a good one, Tim.

  6. “All they know they want is the power to continue to purloin assets for their own benefit at cost to the rest of it. So long as they can do that, by capturing our savings, our pension funds, our bank accounts and our tax revenues for their own benefit, then they’re happy”

    Reading that for the first time, I thought he was talking about Brown and Darling.

  7. Quibble as you may ,the banks do have to lose the power to create money. Two commons: land and money. Cameron and the Bullingdon Club is right:we ca n’t go on like this ( with the profits of money creation and land value creation going to private hands/does n’t work any longer.)Land taxers should be attacking Murphy,not for this Greenshirt stuff but for his stoopidity over LVT.

  8. Mark:

    He wasn’t sure of the spelling and didn’t want to look it up, so he just did the next best thing: served it up both ways so you could take your pick.

    That reminds me: though it may be true that every man has his wife, the ice-man has his pick.

Leave a Reply

Your email address will not be published. Required fields are marked *