Rumour has it that David Cameron has a first in PPE from Oxford. The E stands for economics. However, the only way that’s possible is if he did what all creeps do: read the set texts and never ask a question. Why do I say that? Because there is no sign at all that he actually learned anything from the process.
So sayeth the man with an accounting and economics degree from Southampton, the man who agrees that halfway through the first term he switched off on the economics as it was all obviously rubbish.
So universal debt reduction is a massively bad idea.
So sayeth today the man who said on 16 th September 2011 that:
And second, we can do what else that is really needed: which is massive cross cancellation of debt so that balance sheets of countries and banks are deleveraged all at the same time in an act of mass debt forgiveness – the ultimate Jubilee.
This is also good:
Sixth, you introduce capital controls.
We\’re in the European Union. Free movement of capital, recall? Good luck in rewriting the EU Treaty, which is what would be required.
The other, perhaps even more disturbing, thing about capital controls is that Ritchie doesn\’t seem to understand the most basic point about capital flows. He\’s arguing for capital controls so that Brits don\’t send pots of money elsewhere. Meh, argue that one out as you wish.
But the thing is, Brits don\’t actually send pots of money elsewhere. Not in aggregate they don\’t, for we\’ve been running a trade deficit for the past 30 whatever years. This means that we must (for balance of payments does balance, it\’s an accounting identity, something an accountant who skipped his economics classes should be able to grasp) be running a capital account surplus. As we have been for the past 30 whatever years.
Capital controls will mean foreigners not sending us that lovely money which gets invested in UK business and thus raises productivity and wages.
Paying attention in economics classes is sometimes useful.