Ritchie will be pissed

So, a round robin letter which he wasn’t asked to sign. Arguing that the BoE should really do something about this recession:

A fiscal stimulus financed by central bank money creation could be used to fund essential investment in infrastructure projects – boosting the incomes of businesses and households, and increasing the public sector’s productive assets in the process. Alternatively, the money could be used to fund either a tax cut or direct cash transfers to households, resulting in an immediate increase of household disposable incomes.

So, on offer is Ritchie’s PQE and Milton Friedman’s helicopter money.

I think we’ll go with St Milt, don’t you?

Not just because he’s not Ritchie. But because infrastructure in today’s UK has a what,m 5 year, 10 year lead time? And the construction industry is facing capacity constraints right now anyway.

We could also go with JM Keynes as an alternative. Cut national insurance…..

Better than Ritchie either way….

It’s also a bit of a cheat to describe David Graeber, Tim Jackson and Fran Boait as economists (Fran studied Natural Sciences at the University of Cambridge and went on to complete a PhD researching carbon dioxide storage.)

28 thoughts on “Ritchie will be pissed”

  1. “After seven years of ineffective unorthodox monetary policy”

    We have lower unemployment, higher growth and (not sufficiently) lower borrowing since 2010. How has policy been ineffective?

    Also, unless I have missed 2 quarters of GDP figures, we are not in recession.

    Maybe Keynes would have us thinking of running a surplus about now, to prepare for the next downturn?

  2. …I really do have a twin brother…

    OT, but I find the thought that the Murphatollah has a twin brother rather depressing.

  3. Well, now we know. Murphy’s twin is the one that was allocated the capacity for rational thought.

  4. I am no economist but my logic tells me that if PQE worked, which I seriously doubt because then every nation on earth could do it. The end result would be that there are no more poor countries. They could just do PQE every time they wanted to create jobs and improve standards of living. Some clever person I am sure can explain where I am wrong in my thinking on this.

  5. So. Helicopter money it is then. Bound to happen. Will supply demand for robot factories: all those ideas mooted early in the last century. Pity about all the world wars and destitution in between. Still it kept all the slightly autistic people happy, in fact atremble with plans to sort out the emotional mess that everybody else was happy to make of their lives.

  6. Infrastructure investment is pointless not only for the reasons outlined above, but because the Left will block every single scheme with legal challenges and site occupations, despite being the ones calling for infrastructure investment.

  7. What Rob said.

    Talk to a young leftist and you will hear the following.

    YL: Young people can’t buy a house. We need more houses!

    ME: OK. Great. Let’s build more houses.

    YL: No! That would destroy the Environment. We just need to give young people more money to buy the houses that exist.

    ME: So, more money, chasing the same number of houses? Here’s a dictionary. Look up the definition of inflation.

    YL: Aarrgh! You’re just an evil NeoLiberal.

  8. @Rob, it was Tory councils that did all the legal challenges that ended up sticking the better part of £10bn on the HS2 bill to buy off the NIMBYs. Outside of Camden, the Left has been much more solidly in favour of that biggest infrastructure project in the UK.

    What we should do is get all the planning approvals and design work done for a bunch of roads and railways and then stick them in a drawer until we want to pump-prime the economy. But that means taking all the political pain of planning permission without the payoff of opening a shiny new road or railway.

    One obvious one is a tunnelled M67 between Manchester and Sheffield (under the Peak District National Park, which is why it needs to be in a tunnel).

    Another is motorway-upgrading the A1 from the M62 to Edinburgh – there isn’t a motorway to Newcastle, and the Newcastle-Edinburgh route is a joke compared to the M6/M74 the other side of the country.

    Neither needs to be done next week or next year or next decade, but they’d be beneficial, they wouldn’t be too bad as traffic generators (because they run through places that no-one lives and where you can’t really build) and they’re exactly the sort of thing that the plans don’t really change much with time.

    On rail, that high-speed Liverpool-Hull line they keep talking about could be sat in a drawer to pull out. So could a proper HS line from London to South Wales and the South West (London-Bristol; branch to Southampton; extended from Bristol to Cardiff and Bristol to Exeter/Plymouth).

    Would cost a few tens of mill to do the proper engineering design and push the planning through and then you’d have one or two hundred billion in projects to pull out if you need to kick-start the economy sometime.

  9. DBC Reed

    It’s true that I think an LVT would be a better idea as it offers a cure for cancer and the prospect of the key to life, the universe and everything. It’s all true and I know this because Carol Wilcox said so, with her usual grace and good humour…..

  10. Antisthenes:

    ‘I am no economist’

    Neither is Richard Murphy by any realistic definition of the term so you’re not alone – and your comments about People’s QE are spot on – it’s an old idea and one that has been comprehensively proven to be disastrous….

  11. There soon will be a motorway to Newcastle – and soon as in a couple of months. For a couple of decades North Yorkshire Council have been quietly working away motorway-ising the A1 in the face of central government indifference and lefty-enviro-opposition. Twice the government has tried to cancel the funding and NYCC has just said: ok, we’ve got the money to do this much, send out the diggers, in the meantime, send the accountants to fight for the next bit of money.

  12. A good number of the signatories are from institutions not based in the UK and, as the letter seems to be focused on UK effects of Brexit, not world or other country effects, what is the reason for their interest beyond self-publicity?

  13. I think the thing about the Letter to Thatcher which this is clearly trying to emulate is it was unprecedented. I must have seen about two dozen of these since the coalition began in 2017 so as the excellent BF points out, what is its purpose save for the self-publicity? Of the signatories I have heard of most of them but the seem to be very much of the ‘Meh’ Centre/Centre Left type whose sole response to any slowdown is ‘the state must spend moar taxes’ – it’s in the letter’s favour that it isn’t signed by the most stupid man in Britain today but that does not mean it is any good per se…..

  14. “It’s true that I think an LVT would be a better idea as it offers a cure for cancer and the prospect of the key to life, the universe and everything. It’s all true and I know this because Carol Wilcox said so, with her usual grace and good humour…..”

    Very amusing, V_P, very amusing!

  15. From Noel’s second link

    ‘It was clear from an early age that Jonathan Murphy was due to be a broadcaster in later life, he spent a lot of time talking to the radio in his childhood. He later blamed his behaviour on being constantly ignored by his twin brother through their school days.’

    Talking to the radio sounds better than talking to Ritchie!

    ‘His brother was very successful at school, went on to University, and took up a respectable career and has since become hugely rich.’

    I don’t think so given his recent downsizing!

  16. Would cost a few tens of mill to do the proper engineering design and push the planning through and then you’d have one or two hundred billion in projects to pull out if you need to kick-start the economy sometime.

    What you’d find is the engineering company would serve up a dog’s breakfast safe in the knowledge they’ll not get found out until years in the future. The construction company would then be invoicing for billions in change orders to fix the engineering. There’s a reason why the oil companies insist on the same company which does the engineering also does the construction and commissioning. When you do a Front End Engineering Design, I.e. early engineering with no associated construction, quite often you end up with a dog’s breakfast because it won’t get found out until their own contract is fully paid out.

  17. Bloke in Costa Rica

    An intercity rail line from the south coast to meet the East Coast Main Line at, say, Stevenage or Peterborough would be a lot more useful than this ruddy HS2. You should be able to get on at Portsmouth Harbour and get off at Waverley. And getting from Bath to Brighton shouldn’t take the better part of a day.

  18. To criticise our host’s Americanisms, I can’t really imagine Murphy getting pissed.

    Pissed off, yes; I would guess irritation with the world around him is his natural state. But he doesn’t seem normal enough to get drunk.

  19. Ah, ‘infrastructure investment’ from the government that gave the UK aircraft carriers with no aircraft. That’s sure to work out well.

    Even if they didn’t have a proven record of failure, setting out to build roads, railways and airports today would be the equivalent of ‘investing’ in building massive stables across the country in 1920, to hold the ever-increasing number of horses. None of them will be ‘essential infrastructure’ in twenty years, after VR and local manufacturing eliminate the need for most travel and transport.

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