As to the fourth? Munchau mentions helicopter money. I am not sure why he just doesn’t call it tax cuts. But neither mention People’s Quantitative Easing. And what that shows is that there is still a reluctance to think that the state really does have a role in the real economy by having an industrial and economic policy that engages with the physical reality of tangible wealth creation. That reluctance is the problem we really face and in this sense Larry Elliott and Wolfgang Munchau really are as much a part of the problem as they are of being any part of the solution. Calling for Plan B and not having a clue what it might be is not helpful.
Helicopter money isn’t a tax cut. It’s printing new money and giving it to people to go spend. This increases inflation/reduces deflation and it does so quickly.
As opposed to PQE which depends upon everyone waiting half a decade to get planning permission for their shovel ready projects.
You see, we’ve already played this game. Bush and Obama did seeral different attempts at stimulus. Giving people large chunks of cash runs into Ricaridan equivalence, they save them, pay own debt. Giving people small sums of money means they go out and spend. And 7 years later I don’t think any of that $800 billion in stimulus has actually been spent on building anything.
Helicopter drops are preferable to PQE because they work.
Two others of the ghastly fat fvcker’s blogs are more interesting than the one from which the above comes.
First, he is clearly still seething at Cameron’s joke at his expense as he has penned a further blog criticising Cameron’s poor taste humour.
Second, he has hinted in another blog that he has been asked to write a new book on austerity.
“Calling for Plan B and not having a clue what it might be is not helpful.”
His most un-selfaware comment ever, a category in which there is ceaseless and ferocious competition.
‘Helicopter drops are preferable to PQE because they work.’
Work? Work to do what, temporarily stimulate the economy, and make politicians appear to be doing something, rather than fixing the real problems?
BF
That post was a ghastly one wasn’t it ‘Cameron’s best ever day – has been and gone’ The lack of self-awareness is truly mindblowing – can anyone in reality be that stupid?
Nevertheless,I’d think twice in fairness before getting on the wrong side of Murphy. If he gets a similar power to his German ideological compadres from the 30s (which is his clear goal) I think everyone on this blog would be sent for ‘reeducation’ at best barring a couple of Trolls!
A truly nasty piece of work…..
“That post was a ghastly one wasn’t it ‘Cameron’s best ever day – has been and gone’ The lack of self-awareness is truly mindblowing – can anyone in reality be that stupid?”
Yes, VP, when his brain-dead minions applaud him so vigorously. But I think it more likely that the Murphatollah’s best ever day has been and gone rather than Cameron’s.
“Giving people large chunks of cash runs into Ricaridan equivalence, they save them, pay own debt. Giving people small sums of money means they go out and spend. ”
This reminds me of a press conference I was sure Gordon Brown gave at the height of the financial troubles in which he said money would be given to those that need it and will spend it. I have long been trying to find any remotely related report about it and may have found what I was thinking of. Not the sort of policy announcement I thought it was, more a general comment from him about how to best stimulate the economy. From 2008:
Gordon Brown has signalled that he regards help for people on low incomes as the most efficient way to stimulate the economy.
What do you do if you’ve already had years of that kind of economic stimulus before the shit hits the fan?
Will be interesting to see what happens here in Canada following the recent election of a deficit budget, infrastructure spend, more money for middle class, government.
With the proviso that election promises aren’t worth the paper they are written on of course
@ Theo
Indeed – his fans like Andrew Dickie and Simon Q are appalling. AD’s bio is interesting – mega qualified but actually done Sweet FA in the real world.
@Gamecock They work in the technical sense, in that they achieve what they were intended to achieve. Desirable or not is a matter of opinion.
Right, lets not knock the helicopter money! Or preferably we could have something like Social Credit where the state creates money just the way the banks do now (out of nothing) and gives everybody an unearned monthly income supplement sufficient to buy all the goods the country can produce working at full capacity.I agree : Murphy style PQE is not wild enough.Glad TW is coming out of his shell.
FFS, that’ Major Douglas’ Social Credit again. Doesn’t work because we can’t calculate it.
DBCR outs himself as full bore Fascist and bore.
He never seems very numerate. Has he never noticed the gap before GDP is announced and the time span to which it relates? My guess is no.
gives everybody an unearned monthly income supplement sufficient to buy all the goods the country can produce working at full capacity.
Just out of interest DBC, how would we pay for all the goods the country can’t produce, such as enough food ?
“He never seems very numerate.”
https://www.youtube.com/watch?v=76RrdwElnTU
Why would the country bother working at all if everyone is given an unearned monthly income sufficient to buy all that?
According to the lefties I’ve asked, people who are given enough money to live decently on without doing anything will continue going to work to clean public toilets because they just love cleaning toilets.
@TW
Yeah right: the banks can calculate, right now, how much money they should create can they? That’s why 85% of their newly created money goes into landed property , which ,absent LVT ,leads to property bubbles that crashed the system last time.
In fact,there were quite ingenious methods of matching newly created National Dividend money to goods actually produced: for instance a discount system whereby goods were sold at cost and the monetary authorities forwarded the producers a profit margin on their receipt of the tickets off completed sales.
Of course we don’t have to worry : we are doing so well under the present regime of economic competence aren’t we? All we need is a work experience Chancer of the Exchequer who has no idea where new money comes from and we can’t go wrong.
In fact,there were quite ingenious methods of matching newly created National Dividend money to goods actually produced: for instance a discount system whereby goods were sold at cost and the monetary authorities forwarded the producers a profit margin on their receipt of the tickets off completed sales.
Call me unimaginative but that’s not my idea of an ingenious method. If goods are sold at cost where is the surplus to pay for all the stuff that doesn’t involve actual production coming from ? Salaries for all those extra bods calculating the profit margin for example, I’m buggered if I see why having the state short circuit market pricing like this is a good thing. Why do you need a National Gividend anyway, if according to you we can just print money without ill effect then why have this tractor production planning as well ? I’m genuinely baffled here.
DBC
I can think of one company that matched this method of production, well one I know something about anyway, that was London Transport.
Lord Ashfield believed that shareholder profits were an irrelevant nuisance as far as public transport was concerned and that the correct approach was to use profits to improve services. He pursued this policy with the Underground group and the London General, seeking a monopoly in fact. This found favour with both the unions and the government and the policy came to fruition with the LPTB in 1933. This was all fine and dandy as long as public transport was growing and there’s no doubt it produced a very good transport system for London but as some people pointed out at the time the consumer was as irrelevant as the shareholder. When times got much tougher after the war the system was too inflexible to respond properly, this was even more apparent in the bus services outside of London, where the effects of the 1930 Road Transport Act and area agreements had effectively fossilised the industry. It’s an example of what happens when the market is not just interfered with but all but removed, the consumer and the workers suffer the fate that the shareholders suffered first.
@Th
It doesn’t take much to calculate the imputed profit margin: just a matter of a set percentage.
I don’t get this criticism of tractor production planning: the system I described is a laissez faire free for all with no” targets”.
(Of course not having targets ,letting the gods of the markets
decide, works really well in that most simple and basic markets viz housing doesn’t it? Extraordinary demand and still the developers don’t build .Well I never; anybody would think we had a case of what Adam Smith calls “monopolists… keeping markets constantly undersupplied “)
Come on DBC we all know it’s the planning system that is the major impediment to house building.
the system I described is a laissez faire free for all with no” targets”.
It’s the bit about producing goods at cost and the central determination of the profit margin. This is hardly laissez faire and the tractor production reference is because this way of thinking inevitably ends up with production loosing touch with consumption. This is my big beef with all the ideas you are keen on, Distibutism, social credit, whatever, they all set out to solve a problem that doesn’t exist.
Going back to our discussion of the Chesterbelloc, this is why I think they got it wrong with Distributism, they sought to free the ordinary people from the current excesses of capitalism, as they bsaw them, by constructing an economic system based on their romantic interpretation of catholic, particularly English catholic, history. So their basic premise was wrong and their solution unworkable. I say that despite having a great admiration for their willingness to tackle corruption and stand up against the prevailing orthodoxies.
Sorry missed out the quotes
the system I described is a laissez faire free for all with no” targets”.
I am not that keen on Distributism but it is, at least, internally coherent. Stemming from Pope Leo xiii’s Encyclical Rerum Novarum which kind of sacralised private property, Belloc and then Chesterton took the view that if property and particularly real estate , shops, factories were such a good thing then everybody should have a fairly equal share i.e property should be distributed not monopolised by big business or the collectivised State.It is an intriguing solution to the problem of wealth distribution but you have decided there is no problem with the existing arrangements.
The Social Crediters, whom you also disparage, started from the basis that, if the banks could create money ,the State could do so more efficiently and get production up to full capacity .Again you see the existing situation wherein the banks lie to customers that they are lending money when they are creating it on the spot as no problem. Odd, when we only have a deficit because the government is forced to borrow off the banks (who don’t have the money to lend).
PS I do not fall for the simple-minded jibe that the problem with the housing market is restrictive planning.See Jim Claydon president of RTPI February 2007″ All landowners including housebuilders maintain land values by managing supply.”
Belloc and then Chesterton took the view that if property and particularly real estate , shops, factories were such a good thing then everybody should have a fairly equal share i.e property should be distributed not monopolised by big business or the collectivised State.It is an intriguing solution to the problem of wealth distribution but you have decided there is no problem with the existing arrangements.
I didn’t say there was no problem with existing arrangements there are always problems with existing arrangements. What I don’t believe is that those problems require solutions which attempt to second guess individual choices, or the market as we call it.
Let’s deconstruct this,
Stemming from Pope Leo xiii’s Encyclical Rerum Novarum which kind of sacralised private property, Belloc and then Chesterton took the view that if property and particularly real estate , shops, factories were such a good thing then everybody should have a fairly equal share i.e property should be distributed not monopolised by big business or the collectivised State.
Here’s the problem. The Pope produces an encyclical, Belloc and Chesterton as good catholics treat it seriously and believe they have an obligation to defend it, particularly Belloc who was always looking to shoehorn catholic belief into political theory ( in so far as he had a coherent political theory ). However they have to reconcile its paternalistic view of society with their existing radicalism. They also have an intensely personal, romantic attachment to Englishness and the English catholic past. So, in common with people like William Morris, they come up with an anti industrial and commercial economic and social policy, with a particular animus against financiers ( ie Jews ). It’s also shot through with the notion that modern society has somehow debased the sensibilities of the proletariat, who need guilds, handmade goods, beer and catholicism to see them right ( they were correct about the beer ). It’s the bit about fairly equal shares that gives the game away, an inevitable result of viewing the economy as some kind of giant cake.
So it’s not that I think everything is just peachy but that I decline to base my thinking about economics on fantasy.
It’s a pity that Belloc and Chesterton are remembered for this tosh, they were much better than that. Just as Kipling was much better than the Imperialism he is so identified with.
Blimey…have looked at Social Credit and Major Douglas and it is really barking woof woof mad.
“Douglas collected data from more than a hundred large British businesses and found that in nearly every case, except that of companies becoming bankrupt, the sums paid out in salaries, wages and dividends were always less than the total costs of goods and services produced each week: consumers did not have enough income to buy back what they had made”
If you forget imports, exports and added value etc….I wonder if he thought about the role of the civil service and army etc.
I can see the attraction of his thought for the Murph…compensate for this imagined difference by giving citizens the difference….wow…let’s generate hyper-inflation!
“The criticism that social credit policies are inflationary is based upon what economists call the quantity theory of money, which states that the quantity of money multiplied by its velocity of circulation equals total purchasing power. Douglas was quite critical of this theory stating, “The velocity of the circulation of money in the ordinary sense of the phrase, is – if I may put it that way – a complete myth. No additional purchasing power at all is created by the velocity of the circulation of money. ”
That does for DBCR. Even he believes in the idea of velocity of circulation…and yet he propounds social credit. Another Flash Gordon at the stump.
@Barrelman,
So you now support Silvio Gesell and the successful Chiemgauer project to increase the velocity of money.Well done!
Douglas was hardly the last word on the application of Social Credit: Aberhart in Alberta came to power on a Social Credit ticket and promptly introduced Velocity Money (a Gesellian variant )instead.
BTW Canadian hot-shot lawyer Rocco Galati is suing the Bank of Canada for departing from its no-doubt Social Credit influenced remit to supply the Canadian Government with interest free loans.This will no doubt strike everybody as a quaint personal crusade but these loans got the St Lawrence Seaway and Trans Canadian Road built.With interest free loans a deficit would be more manageable as it would be if the banks weren’t in charge of creating the country’s money.
Don’t worry your little head: we are in safe hands for another crash at the hands of public school know nothings with a heavily inculcated sense of entitlement and the best degwees
money can buy.This is clearly what you feel most confident with:business as usual .