Ritchie gains more media coverage

Richard Murphy is seen as the “brains” behind Corbynomics.

But until recently many leading economists had not even heard of him.

The chartered accountant and tax expert, from Downham Market, Norfolk, is set to become one of Team Corbyn’s key advisers on policy in the coming years.

Dad-of-two Murphy, 57, works mainly from home, but was a fixture on Corbyn’s campaign trail, often warming up audiences with fiery speeches attacking tax avoidance and high executive pay.

The former Southampton University economics graduate claims “People’s QE” is just “part of an armoury” of policies aimed at creating new jobs.

But last night economists cast doubt on his standing.

Prof den Haan admitted: “I’ve heard very little of him.”

When asked if he was a big name among leading economists, he replied: “No, definitely not.”

Prof Yates said: “He’s well known now, extremely well-known in the last few weeks and months because of his blogs and Twitter posts.

“But I think on the issues of ‘People’s QE’ and renationalisation, he’s potty.”

Welcome to the big leagues…..

28 thoughts on “Ritchie gains more media coverage”

  1. He also warned rail passengers would not see any big drop in ticket prices, while operators would slash investment if they feared they were to be nationalised.

    What does an NPV calculation look like for some nice capital investment while pricing in a possible nationalisation in a 5-10 year timeframe?

    Pretty sh1t, I’d imagine…

    But then that could always be blamed on “wreckers”, couldn’t it? Funny how fluffy Socialist régimes seem to have them in spades whereas evil capitalist ones don’t…

  2. This line is particularly entertaining:

    ‘When asked if he was a big name among leading economists, he replied: “No, definitely not.” ‘

    However we already have Murphy furiously backtracking and saying he is a political economist and not an economist

    – http ://www.taxresearch.org.uk/Blog/2015/09/07/economics-and-political-economy/ – As per Tim I don’t link directly to TRUK

    Additonally I don’t think he will be that fazed. He once stated that he doesn’t speak to ‘The Sun’. Initially it was due to Hillsborough but only later did he choose to make party political capital out of it by referring to Andy Coulson.

    Link to the post here (Apologies Tim)

    http://www.taxresearch.org.uk/Blog/2014/06/26/the-sun/

  3. Putting the word brains in inverted commas is libellous as it implies he doesn’t have any. I’m sure a retraction will be demanded. Lucky for the Sun his Ian’t the litigious type.

  4. Sanjay

    That was a great thread – I am particularly looking forward to him trying this classic comment with the Sun (Or Mail, Or Express or whatever other ‘Neo-liberal’ mouthpiece asks him ‘inappropriate’ questions)

    ‘This engagement is taking us precisely nowhere and it is clear I am not the only one to think so

    In that case I am calling your time here to a halt’

  5. @ Sanjay

    I thought about (trying) to post there, but ultimately decided against as frankly regardless of what is said and how much evidence there is behind it, he would have simply ignored it or found some half-baked MMTer’s piece to say the opposite then declare the debate closed.

    Suffice to say, the ECB published a piece about money supply and inflation, finding money supply growth can and does affect inflation. Likewise the FED seems to be concerned about money supply growth, and we’ll find out if they do something about it tomorrow.

    I am also doing some work regarding the same thing and so far it looks like money supply growth can be highly correlated to pass through inflation.

    The MMTers argument stems from saying that a government can never default if it has control of it’s own currency – removing credit risk. The next step is to say that if there is too much money supply then the oversupply will force rates down to ZIRP – believing the only place to put excess reserves if back with the central bank. Then they flip back to classical macroeconomics to suggest that ZIRP means there can’t be any inflation – because low rates means low inflation, right?

    Of course, they miss the big externality. A bank with excess reserves in a ZIRP environment is unlikely to simply place them back with the CB. It will lend them out – again increasing money supply, it might buy assets/property, especially if it thinks it might be a good inflation hedge, or it can simply convert the currency into a foreign one of similarly high grade and place the money on deposit elsewhere, driving down the value of the local currency and again pushing inflation.

    Basically, MMT only works in a closed system. As soon as there is leakage from the system the whole thing breaks down.

  6. “often warming up audiences with fiery speeches attacking tax avoidance and high executive pay.”

    Utter nonsense. Tax avoidance is legal; executive pay, whether “high” or low, is none of the government’s business.

  7. “former Southampton University economics graduate” manages to imply that Southampton has withdrawn his degree: that would doubtless be a cause of widespread celebration, but I suspect we’d have heard had it happened.

  8. Compare and contrast:

    “[Murphy]is set to become one of Team Corbyn’s key advisers on policy in the coming years. …[he] was a fixture on Corbyn’s campaign trail, often warming up audiences with fiery speeches attacking tax avoidance and high executive pay.”

    WITH

    “[Friends Provident Foundation] will NOT fund:….

    •Activities to promote a specific political party.”

  9. Maybe we can score this guy. Points mean prizes !

    Baez’s Crackpot Index for contributions to physics

    http://math.ucr.edu/home/baez/crackpot.html

    I am sure this can easily be adapted to economics, or even “political economy”.

    My father, a scientist, used to receive, through the post, green-ink alternative theories of the universe and everything. He would laugh and file them in the circular filing cabinet. Why is Richard Murphy getting any airtime at all?

  10. It’s funny, but looking at Team Corbyn now I’m reminded of Series 1 of ‘The Wire’, when Maurice Levy visits Orlando Blocker in jail:

    ‘You wanted to be in the game? Congratulations. You are now in the game’.

  11. Hodmadod,

    Why is Murphy getting any airtime at all? Because so few journalists have numeracy skills, so they accept his statements at face value and don’t question them.

    Also, unlike your scientist father’s correspondents, economic claims are much harder to disprove. If I claim I can build an air-powered car*, the next question is “well where is it?”. But if I claim that companies are dodging £93bn in tax, that’s much harder to disprove.

    (* although even that stupid air-powered car idea keeps doing the rounds every couple of years)

  12. Sackcloth and ashes:

    I have an image of a representative from the various charities funding his activities acting in the same fashion as Maurice Levy – visiting him down and out on a beach near Downham Market asking him to sign a piece of paper rescinding his right to their grants for breaching their legal obligation not to use charitable funds for political purposes…….

    To quote the episode ‘The Wire’ (also in Season 1) Maybe he is getting ‘points on the package’ for every time his name is quoted as the author of ‘Corbynomics’……

  13. This coherently summarises his thought on PQE

    “Mary Snell says:
    September 15 2015 at 12:09 pm
    What incremental growth rate do you think PQE could deliver and would it be sustainable? Current growth rates for the UK seem to average out at 2.5% but that’s before PQE.

    Richard Murphy says:
    September 15 2015 at 5:26 pm
    If you understood macroeconomics the. You would know the chance of sustained 2.5% is remote
    So I do not accept the premise of your argument
    It may be that when it is used 100% of growth may be due to PQE
    Remember I have said this will be used in downturns in the main – so the last pint may be right

  14. You can see how Corbyn and TBD get on so well. If TBD doesn’t like a question, he shuts you up.

    The day Corbyn got elected, he went up to some Old Bill and asked them to deal with some people “bothering” him. They were journalists that JC didn’t want to talk to.

    Of course, the ultimate extension of this is that you don’t bother doing this online or via the OB.

    Hence the gulag…

  15. In one of his recent posts, which the comment above is from, he praises an article that nails criticism of PQE
    Yet reading it I saw

    Criticism: PQE is inflationary
    Conclusion: yes, but only when you spend the money

    Now given that the whole point of PQE is to spend the money that seems a really nitpicking distinction

    Yet to him this is a wonderful conclusion that is in different league from his writing and he could never have managed to produce something so brilliant. Though admitting you can’t even defend your own ideas properly doesn’t seem to be an issue for him

  16. Please don’t quote The Wire in relation to Richard Murphy, it implies we take him more seriously then it is possible to. He’s more like the arse end of a bad Family Guy joke than anything from The Wire.

  17. Snortle:

    Richard Murphy says:
    September 6 2015 at 10:52 am
    Not at all

    Ceterus paribus is concept used by economists who presume the world is a mathematical model wholly unrelated to reality

    It has no practical application

  18. The man’s a cunt. A snide, horrible, low motherfucker who deserves no airtime whatsoever. He has absolutely no redeeming features whatsoever.

  19. the comments on his blog are getting almost orgasmic in intensity. You would think he had achieved something more significant than being an adviser to a guy who looks like a failed geography teacher.

  20. Tyler,

    Purchases of assets by banks, or additional loans by banks for that matter, don’t result in reserves leaving the system. Reserves simply move from bank to bank. It is therefore in reality incorrect to say that banks “lend out reserves”. They don’t.

    The Bank of England says that excess reserves put downwards pressure on interest rates. This is the reason for paying interest on reserves.

    http://www.bankofengland.co.uk/markets/Documents/money/publications/redbookreserves.pdf

    For the record, I share your scepticism about MMT and externalities. Indeed I wrote a whole post about this myself last week. But that has nothing to do with the technicalities of how the monetary system works.

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