These people are idiots, aren’t they?

Larry Elliott is right to be sceptical about whether the trillion-euro dose of QE will solve Europe’s economic problems (Report, 21 January). Like its £375bn UK predecessor, it will buy government bonds from banks and, as happened here, that money won’t generate economic activity in the real economy, but instead will doubtless benefit the banks and the asset-rich by inflating property prices, the stock market and commodities. What is needed is a Europe-wide debate about what kind of QE can actually help its flagging economy. The Green New Deal group paper Europe’s Choice – How Green QE and Fairer Taxes Can Replace Austerity proposes the introduction of “green infrastructure QE”. This would fund investment in the continent’s renewable energy supplies, ensure all buildings are energy efficient and revitalise local and regional public transport links. Paying a living wage would help to boost governments’ tax revenues and address climate change. Another huge revenue source could come from tackling the non-payment of taxes that we estimate might cost the governments of the European Union €1 trillion a year.
Caroline Lucas MP, Colin Hines Green New Deal group, Richard Murphy Tax Research UK

They want to deal with a lack of aggregate demand by collecting more tax.

What?

48 thoughts on “These people are idiots, aren’t they?”

  1. Paying a living wage would help to boost governments’ tax revenues and address climate change.

    I was going to ask what the mechanism is between a higher living wage and a cooler earth, but I know in advance it will be pseudo-scientific bollocks.

  2. Boilerplate socialistic ordure but astonishing that they acknowledge that printing money=inflation. Then they call for “Green QE” but it seems that even morons are being forced to accept some basics.

  3. Paying a living wage would help to boost governments’ tax revenues

    So they’re endorsing your long-standing campaign about the difference between minimum and living wages being entirely tax?

    And then the the cunts think it’s a good thing (a feature, no less) that poor people are paying so much tax.

  4. Indeed so Tim. I also noted that Ritchie’s colleagues Colin and Caroline seem to believe that governments impose taxes to raise revenue:

    “Another huge revenue source could come from tackling the non-payment of taxes that we estimate might cost the governments of the European Union €1 trillion a year”

    Yet as Ritchie’s and his MMT friends can tell us, that simply isn’t what tax is for, no no no!

    I commented about this on his post, but he deleted my comment! Why? I’m hurt.

  5. No, we’re completely missing the point by calling them “idiots”. Potentially, they aren’t even ignorant of the dichotomy (although that is probably being unreasonably ‘fair’ to the LHTD. He does appear to honestly believe that collecting more tax boosts the economy. But not all deluded people are actually idiots. Although he probably is.)

    If a policy proposal, even if it is nonsense under objective analysis, gains you publicity, support and votes, then it can be sensible, even clever, for a politician* to propose it.

    If you get power, provided that it helps you to keep your base support, it may even be sensible to implement it.

    * The couple of these vermin whose day job isn’t officially ‘politician’, are political lobbyists. Which is like ‘politician’ but without even the faint veneer of ethics which politicians occasionally adopt to confuse the electorate.

  6. Greens, feminists, lefties, etc basically can’t think. Green investment may well be justified, but that question is entirely separate from the question as to whether stimulus should take the form of QE or traditional fiscal stimulus.

    I.e. if green investment is justified, then we should go for it even if NO STIMULUS AT ALL is needed.

  7. you could say Europe has two problems – aggregate demand and fiscal deficits. It’s not that stupid to propose boosting AD by 10, increasing taxes by 5, resulting in net AD boost of 5, if that solves both your problems. This is not to endorse the specifics of what these people are saying, which I haven’t even read.

    Actually the point that QE could be done in ways to make it more effective, do more than just changing asset mix, push up bond prices. ideas include this:
    http://www.economist.com/blogs/freeexchange/2014/11/economists-roundtable-euro-zone-3
    but also rather than buying EU govts debt in proportion of ECB shareholding, they could have concentrated fire on the distressed peripheral economies and said they will roll over those debts until economic conditions in those countries improve, but Germans no likey

  8. It is a crock of socialistic shite which will do zero for Europe apart from driving up prices and making an already failing system even shakier. If fuckwit pseudo-Kenysian fiddling could sort out economies ( leaving aside that that is what fucked ‘ em up in the first place) we would all be living in a prosperous paradise now–not a failing debt-ridden down-bound train.

  9. Good to see Ragging on Ritchie back. For a moment yesterday I thought he might have been busy lecturing in Davos.

  10. €1tn a year in evaded tax?!! Really?

    In Europe, probably. I’d happily pay Ritchie’s flight to see him go to southern Italy to name and shame tax evaders.

  11. Luis

    By all means go and read the specifics, just make sure you eat something light first. In fact The Green QE is nothing more than pure fiscal stimulus – not really QE. And it’s actually aimed at the UK with no account taken of the economic cycle at all. The Eurozone QE is just a convenient opportunity for the chancers to seize some publicity.
    As for their tax evasion line: that is in fact a separate thing. They are talking about closing deficits with the sums they’ll collect; not linked to increasing AD at all (they would of course dispute this analysis).

  12. Ironman: but he deleted my comment! Why? I’m hurt.

    I know how you feel. He deleted one of mine when I said he was courageous and was proud to say “Je Suis Richard”.

    There’s no pleasing some folk!

  13. Ironman,
    Yes it’s strange how he’s using QE in the Eurozone to advocate measures in the UK. By all accounts the UK economy is roaring: unemployment at rock bottom, house prices up, etc.

    He then goes on to talk about the Living Wage. I don’t pretend know the specific issues for every country and region in Europe, but certainly France could do with a lower minimum wage, not higher.

  14. I don’t pretend know the specific issues for every country and region in Europe, but certainly France could do with a lower minimum wage, not higher.

    It’s not the wages that are the problem in France, it’s all the shite piled on top which employers end up paying for. I’m an expatriate with housing paid earning a (pretty much) 6 figure tax free salary and my employer is obliged by law to provide me with a year’s supply of cinema tickets subsidised to the tune of 50%. And that’s just the beginning. I also get half-priced, employer-subsidised “book vouchers” which I can use to buy iPads. I swear I’m not making this up.

  15. @Tim Newman
    “It’s not the wages that are the problem in France, it’s all the shite piled on top which employers end up paying for. I’m an expatriate with housing paid earning a (pretty much) 6 figure tax free salary and my employer is obliged by law to provide me with a year’s supply of cinema tickets subsidised to the tune of 50%. And that’s just the beginning. I also get half-priced, employer-subsidised “book vouchers” which I can use to buy iPads. I swear I’m not making this up.”

    Why? Please provide a link or something because I find that to believe

  16. I’ve pointed out the logical fallacy to RM and even tried to suggest some helpful alternatives, but he’s unable to see it. There’s no teaching him.

  17. Idiots? They’ve discovered a way of getting control of lots of money without much work, which has a reasonable chance of happening, and they’re going for it. Plenty of bad words to describe them, but not idiots.

  18. Why? Please provide a link or something because I find that to believe

    It’s called the Comité d’entreprise, or CE for short. For companies over 50 people, a percentage of the payroll cost must be set aside to provide employees with leisure, sport, travel, and cultural benefits. This takes the form of the company paying for subsidised tickets: SNCF journeys, operas, 6-Nations rugby, UCG cinema, gym membership discount hotels, ski holidays, reimbursable flights to select countries, and vouchers for FNAC, a French bookshop-cum-multimedia store. In theory, it is supposed to provide low-paid employees with benefits and each employee has a QAF coefficient which is higher if you are low-paid or have loads of kids. But everybody gets to participate, even the board-level managers: just they receive less benefit. In effect, each person is allocated a pot of money which they can spend on the vouchers, tickets, etc. each year; the higher your QAF, the more your pot is. Mine is in the region of 1,000-2,000 Euros per year, and I’m the lowest QAF.

    In a company the size of mine with tens of thousands of employees, the CE is an enormous labyrinthine affair with an unfathomable website and administered by dozens of functionaries who occupy half a floor of our tower. If you can manage to untangle the bizarre web of rules, requirements, and forms it is actually of some benefit. For example, I get something like 500 Euros worth of SNCF vouchers half price.

    Other than to keep more people employed (the expected function of most French businesses over and above making money or adding value), it is hard to see how this system is more efficient or beneficial than paying each person a number of vouchers with the word “Euro” on them that can be exchanged for goods and services in tens of millions of participating outlets and calling it a “salary increase”. But it ensures employees are paid in vouchers that can only be used in certain businesses, thus keeping those businesses with a steady supply of customers (which is probably the only reason FNAC stays afloat).

    It might be of benefit to the very lowest paid, but most French I know would prefer a higher salary. The inefficiencies in such a system, repeated across every major company in the country, must be enormous.

  19. Ironman

    See his responses to people advocating a ‘helicopter drop’ type policy in the second post ‘The wrong type of QE’ – basically, not only does he control how the money is disbursed he wants control over how, even in ‘the right peoples’ hands, it has to be spent in a certain way. Could be apposite for GlenDorran to post once again his excellent summary of what Ritchie is.

    Truly unbelievable. In a Facebook debate yesterday with one of his ‘Gang of Four’ acolytes – exactly the same disregard for counter-argument, utter contempt for individual rights and disregard for basic economics. To echo Richard, these people are far from being idiots – in their wilful disregard for norms of civilisation, they are amongst the most dangerous in Britain, if not the world.

  20. Andrew M

    You’re trying to be sincere with him; stop it at once. You’ll find your time much more productively spent making fun of him. Eventually, when it dawns even on him that your are cleverer than he is, he will label you a troll, or neoliberal if you’ve really shown him up and then ban you.

    He keeps on banning me until my taunts about the Courageous State running away from me get to him. Fun.

  21. His book is out soon! “The Joy of being a Twat”

    Or something.

    Except it’s not soon at all, it’s now expected out August, not March.

    Do ewe thnik it woll be prof read and fact chceked or jsut his usyall stnndrd of shyte?

  22. Ironman: My mistake is in assuming the man has some degree of intelligence. In future I shall take great care to not address more than one aspect of an argument at a time.

  23. The Meissen Bison

    I know how you feel. He deleted one of mine when I said he was courageous and was proud to say “Je Suis Richard”.

    🙂

  24. Andrew M

    (Assume climate change) – Your point to him on CO2 was completely clear and understandable; his response was just non contextual gibberish!?

  25. €1tn a year in evaded tax?!! Really?

    First thing to do with these headline figures is to divide the figure by the population of the geographical area to which they are supposed to apply. Then do the same exercise for the number of taxpayers.

    1T divided by 500M is EUR2000 per year, per man, woman and child.

    Assuming that half the population is earning and in a position to evade tax, that makes EUR 4000 per taxpayer. At a tax rate of 25%, this would be EUR 16k of undeclared earnings (overly simplistic I know, although of course all tax is ultimately paid from the pocket of a natural person).

    However, looking here http://en.wikipedia.org/wiki/List_of_European_countries_by_average_wage we see that what’s being undeclared is above the average net income in every former Sovblok country and Portugal.

    Making it even less plausible.

  26. bloke (not) in spain

    Thanx profoundly for the education, TimN. I’ve now the context to understand the assumptions I’ve been lacking in some conversations I’ve had with assorted Frogs. Couldn’t understand what the f**k they were talking about. The whole concept seems so unlikely, I’d never have guessed it.

    I note the idea essentially dates back to Vichy. Quelle surpise.

  27. Another funny thing about France is that its direct income tax rates are actually quite low. A professional typically loses 1-1.5 months “gross” pay in tax, i.e. 8.5-12.5% in tax. A rate that I’m sure that Ritchie would disapprove of were he aware of it.

    However, the “gross” salary has a whole bunch of “social charges” heaped on it for the employer, which head towards 100%, all included (SS, health insurance, pension, employer’s employment tax etc). So to pay someone 50k, the employer has to front almost 100k….

  28. Andrew M

    ‘Redistribution will more than compensate for any risk you highlight

    You seem to have ignored that fact’

    Playing ‘Ritchie’s advocate’ – this part of his response to you seems to be that redistribution of income and reduced consumption by the highest income people in society would compensate for the risks you outline. Given the tax increases are aimed at the top 1 -5% whilst the wage increases are (allegedly) aimed at the bottom 30 – 40% this seems on a basically arithmetical basis to be wrong. I’m sure other scions on this thread can punch holes in this bizarre conjecture which are the size of Venezuela.

    Even better is this:

    ‘Whilst having labour at woprk (sic.) can substitute for excessive capital spending – and that is very sustainable’

    Again playing ‘Ritchie’s advocate’ – if we move people into jobs at the expense of capital expenditure, then the relative compensation for ‘civil society’ will be a greater sense of worth in that the worker will have a job. It will be similar to the overmanned industries from the Soviet era – they might not make anything exportable but at least they will be in employment.

    Surely you have been on his blog before? – However, if it is your first time, welcome to ‘Ritchie’s world’ – be interesting to see how long before you’re A: called a ‘NeoLiberal’ or ‘Troll’ B: subject to an outright ban

  29. Ironman

    Check out the follow-up from, this time, Ivan Horrocks:

    ‘You mentioned in a comment the other day that you were a pessimist, Richard. If so you’re the most positive pessimist I’ve ever come across. 🙂

    And an inspiration to all pessimists (me), by the way.’

    Truly nauseating stuff towards the man who ‘suffered the same trauma’ as the Charlie Hebdo cartoonists from the followers of this blog…..

  30. The Meissen Bison

    I know how you feel. He deleted one of mine when I said he was courageous and was proud to say “Je Suis Richard”.
    🙂

    I don’t know why TMB gets the credit. I actually got a post through with that very phrase. So there.

  31. Jack C: Well done! I think we have the makings of a great new game here.

    What was the context? And unless it’s breach of house rules, is there a link?

  32. PF,
    Thanks, and yes, I’m assuming CO2 emissions need to be reduced for the purposes of testing Ritchie’s ability to understand logic.

    Van_Patten,
    Thanks for the analysis. Yes, I came to the same conclusion: Clobber the rich and you’ll prevent a few 4×4 sales, but pour money on the poor and they’ll be snapping up superminis like there’s no tomorrow. Since the Green party basically want to ban cars anyway, it’s a moot point.

    As for labour substituting for capital expenditure, he’s just changing the subject. My point (stolen from Tim Newman) is that raising the minimum wage won’t address climate change. His supposed rebuttal is nothing to do with that.

  33. Van_Patten,
    Oh and I’m deliberately toeing the line with Ritchie, because so many others have been banned from commenting.

  34. Andrew M

    Good luck – I did my best to try and adhere to the ever-mutating comments policy for about three weeks but in the end it wears you down.

    Having to ‘toe the line’ with somebody whose outlook matches that of a particularly unpleasant functionary in the 1930s Soviet Union is too much to stomach, even before the car crashes that were the Maugham blog and the ‘Feel the Charlie Hebdo cartoonists pain thanks to my criticisms from Tim’s followers’ post – but I wish you best of luck in seeing how long you can survive..

  35. Let’s see if this gets past his comments policy:

    You seem to have that slightly wrong, Murphy old mate. My understanding is that it does go on sale in March but gets REMAINDERED in August.

  36. Jack C,

    A quick (“off earth”) question for you?

    I get house chores and things like washing up (obviously), but every now and again I start thinking about the circus?

    Circuses have always inspired me, to put it mildly, but I can’t see how it would be possible (technically, as well as the effort involved) – although every now and again I am left wondering…:)

  37. Abacab:

    “So to pay someone 50k, the employer has to front almost 100k….”

    I think it isn’t far off that in the UK, though the exact composition of the employer costs probably varies.

  38. But haven’t Progressive labour laws priced the low paid so highly that they are replaced by capital (machines) instead?

  39. There seems to be more pressure these days to pay the Minimum Living Wage rate. Ok, so planning on getting a couple of part time staff in September for a few months – rather than the rate was planning to pay them can instead pay the Minimum Living Wage rate and reduce hours employed so that expected wage bill isn’t any higher. Everyone will be happy then? Rather than 25 hours a week paying instead 22 hours a week or whatever it works out as…. employee earns more per hour, rabid campaigners are happy with the hourly rate and I’m happy not to pay more out in wages. Just got to get more work done….

  40. JC

    Yes, actually, thinking about it now – way, way too cryptic (obscure)..:) I didn’t want to blow any covers, maybe I’ll come up with a different question sometime..!!

  41. @Rob Tolpuddle Martyrs weren’t executed! Sentenced to transportation. If you are worried about machines replacing manual labour (see later),so were they .Not that you concerns would be reflected on here where the mill-owner mentality lives on.

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