Rudi Havenstein says:
August 28 2015 at 8:12 pm
I’ll ask the question again because clear answers are still coming on one of the most basic principles of how PQE is meant to function. If a local or regional government wants some money for an infrastructure project that is deemed desirable, it can presumably go to this National Infrastructure Body for some money. Will the money it gets be a loan or a grant?Richard Murphy says:
August 29 2015 at 7:46 am
NeitherIt will administer a project whose owner will be the NIB
Think of it like a lease
Or, dammit, PFI
So hard to imagine?
So who is taking the equity risk? The risk that the project will be badly done, late, over spec or any other of the myriad things that can go wrong with a project?
What we’ve got here is an LA gets to get free money from the NIB in order to build something. A bureaucracy building something without financial constraints just isn’t going to deliver value for money, is it?
Candidly, project risk is neo-liberal sophistry designed to hide the theft of tax in anti-Courageous funding mechanisms such as PFI and gilts.
Buy shares in civil engineering companies and outsourcers then I’d say, as they are going to make out like bandits. Its going to be think of a number, add 50% and double that for the bill for these projects. It’ll be like Christmas everyday for them if this came to pass.
There’s a lot to be said for the Pusillanimous State!
The equity is presumably coming from the NIB but how is the NIB to be remunerated and, by extension, the poor saps whose pensions will be derived from the NIB. Or have I missed something?
Oh, all right, I’ll just bar myself and delete my next comment.
Seen the extraordinarily personal and angry attacks on Frances Coppola and Paddy Carter.
He is now arguing that he’s had a big impact in development, as well as everything else he turns his hand to.
“If a local or regional government wants some money for an infrastructure project that is deemed desirable, it can presumably go to this National Infrastructure Body for some money.”
The local government will have to show NIB that it voted Labour in the last election, or at least the official with hat in hand contributed to Corbyn’s campaign.
NIB is new spelling for “slush fund.”
No, no, no.
Before the infrastructure projects they are doing home insulation because they can be implemented quickly like the successful Australian schemes.
When it is pointed out that the Oz experience is treated as a warning (there were 100+ house fires, a number of deaths, allegations of fraud and demotion of the Minister), he says HE is learning from mistakes, but we’re not.
Huh? 10 minutes before he was describing it as a success!!!
He is then told there have been earlier schemes, CERT, ECO and the earlier ones – the easy-to-find projects have been largely done, but to him it is nonsense.
http://www.taxresearch.org.uk/Blog/2015/08/26/shovel-ready/#comment-area
The man is as mad as a box of frogs.
Posted at cityunslicker a few days ago;
If you find that your audience does not understand PQE (and judging by the comments I’ve seen on the wobbly wobbly web, that’s 90% of the population) argue from a different viewpoint.
You want to promote a bit of economic activity, you need a new bathroom and you’ve just received £50,000 lump sum from your pension scheme.
You invite 3 plumbers to quote. To each you say; “I have a great deal of money to spend and I want to spend as much of it as I can. I know nothing about bathroom construction and I don’t give a toss how long you take to build it. I am also really crap at project management generally, but I would like to have a progress meeting with you every afternoon at which I shall probably change my specifications for the bathroom. This may involve ripping everything out and starting again, for which I will pay you extra.”
Given that you have just outlined every government supervised project from the aqueduct at Segovia to the NHS computer systems, ask yourself how much your bathroom will cost and when will it be finished?
My cards on the table. I’m an electronic engineer so know next to bugger all about this level of economics. But my God, having read the link Adrian posted, the man is such a gold plated tit.
I used to see his type in the mid 80’s trying to get in on computer hardware maintenance. Basic chancer’s with no real understanding but enough bullshit to convince the unwary they knew what they were talking about.
Arrogance and unswerving self belief are a lethal combination in idiots.
“That is just nonsense
Yours day here are done
Please don’t waste my time again”
PQE – political queen enrichment
@gamecock
Part-Qualified Economist shurely?
I thought the National Investment Bank was going to be capitalised by ending corporate subsidies, closing the tax gap and by strong-arming pension funds, rather than by PQE.
Just how much is he wanting to spend?
Hmmm, correct if I’m worng here [like you need an invitation] but PQE is simply another form of deficit spending which may or may not be used for infrastructure projects.
So,there are times when Govt doesn’t want to pay any interest. It may be trying to force down long term IR so doesn’t want to issue bonds to the market. More bonds means lower prices for those bonds which means higher IR. Instead, it can then just instruct the Bank Of England to create cash and swap that cash for a govt bond.
This is frowned upon as “printing money” of course. But surely the point is that all money is printed, so the discussion should be about HOW MUCH is printed rather than IF it should be printed.
You’re all thick
@KJ
You’re all thick
Thank you for clearing that up for me. You need to do the rounds of the Economist and other media who have looked askance at Corbynomics and elucidate likewise.
@ The Meissen Bison
You’re welcome and yes, I should be able to squeeze that in during my lunch break…
There are mathematical papers from the 1940s ( here’s one http://www.jstor.org/stable/1906924 ) which have integrated consumption functions across populations depending on various levels of government expenditure.
They’ve made a few assumptions like stable population and equal consumption propensity across income groups, and they found the blatantly obvious answer which is that the benefit of the government to the economy is maximised when the budget is balanced against tax receipts.
You could tweak the results for a little population growth, and richer people having more money which gets unspent and sometimes lost forever, and conclude that printing 1-2% a year is ok.
Since BoE ‘independence’, QE so far is about 1/5th of one year’s national income, and 18 years have elapsed, so about 1% a year on average of national income. I think we could get away with a little more QE for 50bn or so.
Murphy though wants to print 50bn GBP a year for 20 years, make massive changes to who controls departmental spending and who approves what is worthy of that spending.
KJ
If you are Richard Murphy (as the ‘You’re all thick’ phraseology seems to suggest ) why post pseudonymously?