Idiot is idiot once again

I am at a conference at Manchester Business School today. Prof Sheri Markose of Essex University has argued this morning that the UK is simply not investing enough in new capital formation to maintain an effective. The argument is fairly compelling. The following data on gross capital formation comes from the World Bank.

Three relatively straightforward observations: first, the world has, broadly speaking a rate of about 24% post 1995.

Second, the UK, in contrast, has a markedly downward trend over the same period, and the rate has declined from around 20% to about 17%. We may be 7% short on the world at large for maybe 20 years: it’s a staggering deficit.

The global number includes, quite obviously, a number of developing countries. Who are building out the infrastructure for an economy for the first time.

We’ve already done that, we’ve got roads and ports and railways and airports and…..

That’s one reason that richer countries have lower gross capital formation than the world average.

The other is that of course there are diminishing marginal returns to the process. That’s another reason why richer countries have lower gross capital formation than the world average.

The UK number here is not markedly different from Germany or the US. Both of which are below that global average.

There is only solution and it is the state. We need green infrastructure quantitative easing to address this. I cannot see anything else that will.

Well, there’s always the possibility of understanding what the fuck you’re talking about.

34 thoughts on “Idiot is idiot once again”

  1. “There is only solution and it is the state”

    Stunning revelation. You could have prefixed that with any problem in the entire world and that would be the answer. Here’s one possible candidate:

    “I am feeling a bit constipated this morning”
    “There is only solution and it is the state”

    Feel free to add your own.

  2. Rob

    ‘I had a rather ropey shit this morning, possibly because of Trump or Brexit – There is only one solution – Green Quantitative Easing’

    I sometimes wonder if Murphy is related to the great DBC Reed sometimes of this parish. In both cases they fixate on one thing as the solution to all the world’s problems…..

  3. “Green Quantitative Easing”

    Eating green apples will certainly ease matters on the toilet front in substantial quantities.

  4. I was about to say that this is yet another proof that the law of diminishing returns is one of the least understood laws of economy. Then I realised that the fact that Ritchie doesn’t understand something hardly indicates that that something is difficult to understand

  5. Yup. That old thing of the left being the most conservative force in politics means they’re still obsessed with infrastructure long after we did most of it.

    There’s a few odd bits and pieces that might make some sense. Some real “quick wins”, like better roads to the Welsh coast or into Wiltshire and Dorset, a good connecting train from Heathrow to the Great Western line, but most of it’s done. If you want better stuff, it’s spending money on people that matters – more nurses rather than newer hospitals.

  6. “I cannot see anything else that will.”

    Well yes of course you can’t.

    Probably have the same problem with hearing.

    Oh, and reading comprehension too.

  7. A quibble: UK roads are congested frequently to the point of parking lots and potholed; rail is expensive, crowded and unreliable; London airports, except perhaps City, a long running experiment in passenger abuse. It’s all very well to say we have infrastructure but it has to be adequate for an enlarged population.

  8. DocBud

    Technically a redbrick 1960s university. Never a poly.

    Ranked between 151-200 in the world in economics by QS
    Ranked 38th in the UK in the Complete university guide. (City is 46th).

    Not sure why this woman is talking about macro investment since she seems to be a financial stability bod.

    Alma mater to the cretin Varoufakis.

  9. Just remind me how long Cross rail has taken so far, or HSBC, or the new runway for London. Whenever an idiot such as Spud or Simon WL starts banging on about infrastructure investment, I wonder if they ever bother to read the newspapers or look out of their windows. The upgrade to the M3 seems to have taken over 13 years so far and it is still the same 20 mile stretch that is coned off. Just what are they doing?

  10. Diogenes

    ‘The upgrade to the M3 seems to have taken over 13 years so far and it is still the same 20 mile stretch that is coned off’

    This did make me laugh uncontrollably. Drove down there the other week and had to marvel at the idiocy. If I was living in Hampshire I would be seeking out the bureaucrats responsible and getting to work on that multi person gallows that I know Tim (and most of us) would like to see liberally deployed….

  11. Prof Sheri Markose of Essex University has argued this morning that the UK is simply not investing enough in new capital formation to maintain an effective.

    Maybe it’s me not understanding economics lingo but it seems this sentence is missing an ending.

  12. @Dongy John

    It’s to allow you to fill in your own. e.g.

    “Prof Sheri Markose of Essex University has argued this morning that the UK is simply not investing enough in new capital formation to maintain an effective roster of gold-shitting unicorns.”

  13. It hasn’t happened yet, but it’s bound to…….

    Moron on Murphy’s blog:

    Richard, I agree with everything you have said.

    Murphy:

    Agreed.

  14. Andrew

    LOL, hilarious thanks. I’m willing to bet you’re wrong though. I’m sure he must have said something pretty close to that.

  15. Infrastructure? Bring it on. As a public procurement lawyer, I will be in well paid work for the next 800 years.

    What Ritchie doesn’t understand is how his proposals will fill the boots of people he hates. He has visions of thousands of unionised long term unemployed slugging it away Depression-era style with sledge hammers, as if it is still 1932.

    And I’d like a new train station in my city please. And maybe a waste disposal plant somewhere near Ely. Need to put them somewhere, don’t we.

  16. Bring back the missing words.

    “the UK is simply not investing enough in new capital formation to maintain an effective.” She’s not investing enough nouns to make a coherent.

    “There is only solution and it is the state” There is only number, but it is missing.

  17. it is in England’s shittiest county after all.

    What about South Yorkshire or Merseyside? And the north of Essex is rather charming…Thaxted…etc

  18. There is a perverse campaign by the CPRE for a Dorset and East Devon national park, aka the Jurassic Coast park. If successful of course a visitor centre and some road development to it will be needed. Have they no idea that the place became and has remained pretty without their interfering.

  19. If capital formation is not high enough, doesn’t that imply that corporate profits should be higher, and taxes lower….? I bet the Left would welcome that!

  20. “If successful of course a visitor centre and some road development to it will be needed.”

    And also a lockdown on house building so their thatched cottages will be worth millions in 20 years.

  21. The southern M25 and the M4 around Heathrow are a national embarrassment, and a drain on productivity, and a huge waste of energy.

    I don’t suppose Murphy would like to improve things though.

  22. Theophrastus: Merseyside isn’t a real county, it always has been and always will be part of Lancashire. The bit between Liverpool and Manchester, non-inclusive, is quite nice.

  23. Matthew L,

    Lancashire and Cheshire actually, the latter having the nicest bits. A walk out to Hilbre Island when the tide’s out takes some beating, particularly if you get to spot a few seals.

Leave a Reply

Your email address will not be published. Required fields are marked *