Interesting statement

…of all the Labour leadership candidates Jeremy Corbyn is the only one offering a credible economic policy right now …..

Invoking the magic money tree is credible these days, is it?

48 thoughts on “Interesting statement”

  1. “Invoking the magic money tree is credible these days, is it?”

    To somebody who believes in the magic money tree, yes it is.

  2. The person responsible for writing Corbyn’s economic policy (or some of it, and allegedly) says it’s the only credible economic policy. I’m gobsmacked. And oh FFS, he posted this too,

    “The publisher of my 2011 book, The Courageous State, tells me it is doing rather well in the last couple of days and book sale web sites seem to confirm its popularity. Available from here. And other places. And, please note, the Joy of Tax is coming soon.”

  3. The joy of tax has been posited for some time – I agree the title seems oxymoronic to anyone with a modicum of intelligence but we are talking about arguably the most stupid blogger on the UK intellectual scene let’s not forget….

  4. I reckon it’s almost, I stress almost, worth buying a copy of one of his books, just be to be able to post a critical review on Amazon as a confirmed purchaser under one of the despotic names he seems to be unable to spot on his own site.

  5. Luis

    It shouldnt just be infrastructure and capital investment. We should spend on measures to deal with social exclusion and improving the life chances of the poor – an investment with a potentially high return. And if I could work out a way to improve the English education system I’d spend on that too*.

    * It’s clearly not academies. The evidence on this is clear and not just from the UK, The only problem is that it is also clear that it is not giving more money to the state education system, which has failed for a lot longer. Education would probably be improved if we fired all the lefty teaching union activists.

  6. Luis

    I’d protect it from reduction in downturns using the same money spigot that you want to fund capital expenditures with…

    The problem with this is that you can see where it would end up – everything is a priority. But I still say my “investment” is a sensible one, probably more so than new roads or railways.

  7. ken

    oh I see … but if some of that comes from central government (rather than being handled by a special purpose vehicle like a national development bank) would that amount to ring fencing your chosen expenditures and then allowing direct monetary financing of government expenditure under control of the BoE? Not saying it’s a bad idea, just trying to understand what you have in mind.

    I suppose I wrote of a national development bank or a ministry of works. If the latter, then I guess we would be talking about the same thing – direct monetary financing of central government but earmarked – i.e. we give you £X and spending *there* must rise by £X (relative to what counter-factual? to offset cuts what would have otherwise been made, that’s unobservable and a licence for govt to just treat £X as thrown into the pot. Fungible nature of money hard to defeat!)

  8. BraveFart

    I am working on production of a complete refutation of ‘The Courageous State’, similar to the work Tim did on Ha Joon Chang – the difference being that Ha Joon Chang, for all his flaws, at least had some intellectual substance. Section 2 of the Courageous State (in particular) fades into the famed ‘Venn diagrams’ and is almost impossible to digest it’s so convoluted. Perhaps the leading gem from Section 3 is a complete ban on advertising, putting the UK into North Korean territory…..

    I am asking for a copy of the Joy of Tax as a present from someone who admires Murphy as I see that as someone buying his work who would have bought it anyway, rather than me contributing to his coffers….

  9. of course this is partly correct. Labour doesn’t have an economic policy, credible or otherwise. Its (the main reason) why they lost the last election. The other 3 are largely toeing the party line on this, which leaves Corbyn as the only one offering an economic policy of any kind.

  10. …and he shows again today that he knows nothing about Scottish politics or the rise of the SNP. Will he take the blindest bit of notice? Will he fuck.

    @Van_Patten: that is a Herculean task. Dealing with that amount of shite will be a bigger job than the Augean stables. If you do go ahead with this, please check in here regularly to confirm you’re ok. I worry what prolonged exposure to Ritchie’s writings does for your mental health.

  11. “Andy Burnham’s pledged to renationalise the railways. This whole thing is made of awesome.”

    Except as Guido points out, he hasn’t really – he’s just recycling Miliband’s electoral policy. So he’s got himself into even more of a mess.

    There isn’t enough popcorn for this.

  12. Andi Eye-make-up is being an even bigger fool than his idiot belief in socialism shows him to be. Just because Corbyn(e) is foul flavour of the month that does not mean it is time to start drifting leftward. Any candidates best shot would be to hold their ground and wait for ZaNu’s few ounces of common-sense to pull thro. They maybe be sick, deluded scum but there must be enough power-seeking twats amongst their ranks to know that turning even more left=suicide.

  13. Ian B

    ???

    for most economists the cycle is *defined as* random ups and downs. Models are include some sort of stochastic process. Counter cyclical policy means doing something differently in the downs that in the ups.

  14. A stochastic process isn’t a cycle. A cycle implies periodicity. The proper response to such situations is not the same. Which is why counter-cyclical economics doesn’t actually work.

  15. Just about everyone in British politics believes in the magic money tree if they didn’t do you think our debt would be where it is today? True, Corbyn’s lunatics believe in it a lot more then the Tories, but I don’t see some huge ideological gulf here, a battle of opposites.

  16. Ian B

    ah yes, we’ve had this sort of discussion before. You think a term from economics means something other than what economists think it means, refuse to accept otherwise.

    listen, it’s just a fact that when economists think about countercyclical policies they do so with models that include a stochastic process (apart from a few that use models that feature deterministic cycles or fluctuations (chaos stuff)). You might think the word cycles has certain connotations, that doesn’t alter the fact that economists think in terms of random shocks hitting the economy.

  17. Luis,

    The problem is that the entire paradigm of counter-cyclical policy is indeed predicated on a “cycle” and has been since Keynes. Yes, you can write impressive mathematics-y papers tweaking it, but the presumption is written through it.

    If there is no cycle, there is no basis to the whole policy. Because you cannot predict the next random number (specifically, offset) from the previous one. It just cannot be done.

    This, and that the economy isn’t aggregate statistics, which we’ve also been over before. There isn’t any “macro”.

    Which is why government forecasts are always pure comedy gold.

  18. Great comments on the first two posts on TRUK today by ‘John Appleseed’, ‘Len Ripley’ and ‘Dennis Thomson’ – Murphy of course failed to deal with any of their valid objections. I’m not sure if someone is using a random name generator to post hostile comments but either way, keep going – his inability to defend his beliefs against even mild criticism is likely to be picked up by the Spectator, Mail and Telegraph (amongst others) which will shatter what modicum of credibility he has amongst a wider audience. Great work!

  19. Ian B

    right. So for the last 50 years or so, economists have been studying counter cyclical policy in which “you cannot predict the next number” and so hence none of it is predicated on being able to do so, but you’re here to tell us that means “there is no basis for the whole policy”. Richard Murphy levels of self-certified expertise there.

  20. Luis,

    Well, the standard Austrian view, so I cannot claim credit. Feel free to now accuse me of blindly repeating others’ words; one cannot win.

    Faulty but persistent paradigms are not unusual. See 100 years of marxism in sociology, etc.

    PS, anyone making any assertion in a discussion or debate is implying that they have sufficient “self certified” expertise to do so. Even you.

  21. Economics is great at “predicting” the previous crash / bubble.

    No good at predicting the next one though…

    Could a red-noise model do worse?

  22. Brilliant: Kevin Hague is currently demolishing Ritchie’s “SNP = anti-austerity” narrative. He’s using charts and graphs. Kevin has spent two years dealing with Nat zoomers: Ritchie doesn’t know what he’s up against.

  23. Van P

    Comedy Gold in the comments from Murphy again.

    Two more logical and informative critics scythed down in their prime by a Murphy out of his depth, assailed on all sides and unable to refute their points.

  24. Ian B said: “Which is why government forecasts are always pure comedy gold.”

    Sounds like the difference between weather and climate. With sufficient data and experience short term predictions are possible. Longer term you’re talking projections (like the Bank of England’s fan charts for inflation) rather than predictions because the limits of data and understanding have been passed.

  25. abacab

    Economics is poor at predicting the future, but models are useful in telling us what the consequences of a policy will likely be.

    In addition, economists understood the problems of bank regulation well before the crisis and they predicted there would eventually be problems. Basically LTCM back in 1998 made it clear that Basel II was a crock of s**t. Everyone knows that the zero risk weighting on government bonds is a disaster waiting to happen. What economists cannot tell you is when things will happen.

  26. people, counter cyclical policy is not based on being able to predict the future! it is either automatic (i.e. tax profits so tax burden falls in downturn) or it is reactive (cut taxes after recession hits)

  27. Luis

    Except of course for the latest fad in bank regulation – all hail macroprudential regulation… Here regulators are going to predict the future. (well not totally, but there is an element of that to it).

  28. God! I’ve just read those comments on his blog. The man is clearly a sociopath. Scary stuff. Imagine if he had any real power.

  29. Andy Burnham’s pledged to renationalise the railways. This whole thing is made of awesome.

    Awsome is one word for it, i can think of others. He intends to nationalise line by line, who knows what he really means, he certainly doesn’t. He asked Evan Davis if he could explain why no government bid for East Coat rail was allowed, simple, there was no process for such a thing in the franchising structure and no government organisation or agency to do it. Furthermore the whole idea is ridiculous, how could you have a government department, presumably the Department for Transport, bidding for a franchise when the DfT makes the final decision ? The man is a hopeless lightweight.

  30. Can’t see any comments from Kevin Hague on that thread.
    Are they elsewhere? Or deleted?
    Lots of bans today- for asserting the right to copyright in a private email,arguing on QE.
    Must be easier than answering.

  31. Sorry, meant to say that someone pointed to me to Kevin Hague’s Twitter feed. Some classic exchanges with Murph, including the immortal line “Of course facts matter. But the Scottish electorate believed the rhetoric. That’s what mattered”

    So lying rhetoric is ok provided you get the right result. Grubby little fascist.

    Other smart people are tearing him apart for this as well.

  32. “I’d rather be delusional than not see reality.” Richard Murphy 5 August 2015

    Can’t argue with that.

  33. “I’d rather be delusional that not see reality”

    Lol.

    Forget the Spectator or the Telegraph. One day this clown is going to be on the Sun’s front page. He will soil himself.

  34. Luis Enrique
    It would cost fewer pints to cool down my rage if you avoided statistical terms when you posted junk.
    It is possible to have stochastic processes but not in a cycle BECAUSE a cycle, by definition repeats itself 100% of the time and a stochastic process calculates the probability of any state (including reversion to the staring state) which will not be 100% – otherwise it is a deterministic process, not a stochastic process.

    I find you grossly offensive when you kick sand in my face. I was, when young, an 8 stone strongling and I should have taken you to pieces without a Charles Atlas course. Do not talk about “stochastic” in front of me if you do not know the difference between determanistic and probabilistic.

  35. @ ukliberty
    You have got it absolutely wrong
    The last time I went to Witherspoon’s was to buy my wife a coffee (I had one as well, but that was not the purpose).
    One of my pals drinks Stella – I don’t.
    If you bothered to read what I actually wrote you might realise that I am less vicious after a pint or two than before it.
    If you actually did read it before your stupldly offensive post then you are demonstrably stupid.

  36. Ian B

    “This, and that the economy isn’t aggregate statistics, which we’ve also been over before. There isn’t any “macro”.”

    Indeed, the whole premise of macro is bogus. It’s the illusion that the maths of economics actually matters.

    As Alfred Marshall said;

    (1) Use mathematics as shorthand language, rather than as an engine of inquiry.
    (2) Keep to them till you have done.
    (3) Translate into English.
    (4) Then illustrate by examples that are important in real life (5) Burn the mathematics.
    (6) If you can’t succeed in 4, burn 3

  37. John77

    man, you really have a screw loose, it was me pointing out that stochastic processes are not cycles in sense Ian meant, and that economists do model business cycles using stochastic processes (see any text book), therefore when economists talk about cyclical policy they are not using the word cycle in the “repeats itself” sense (in simplest form the models get their ups and down because the stochastic process is assumed to be stationary, mean zero, but models do get into non-stationary components, markov switching etc. – if Ian had written that counter-cyclical policy is complicated by presence of non-stationary factors, I might have agreed with him)

    your megalomania really is spinning out of control. “do not talk about “stochastic” in front of me”? This is the internet, not your front room.

    an example. The famous Smets Wouter model has seven stochastic processes:
    https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp722.pdf

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