Ragging on Ritchie

Hold the front page!

Fascism is here!

Deviation from the Tory Party line is no longer allowed

Deviance from the Party line is not allowed.

A threat to the person follows for those who might contemplate it.

This is the world that we now live in with the government that we have.

Party whip enforced! Fascism!

Projection

The proto-fascist road to fascism in the UK is not now just clear. It is readily apparent that we are a long way down it. Far enough in fact to say that we now have what looks on the basis of all reasonable analysis to be a fascist government.

Of course I worry about saying this. That is the clearest sign that my claim is justified.

But if we do not call out what is happening now who and what will stop it?

Well, all we’ve got to do is stop enacting the policies of The Curajus State and we’ll be moving away from fascism, won;t we?

Quite astonishing economics

The pound is already falling as a result of the decision to break international law. That is rational, and reasonable. It is also incapable of being addressed by any fiscal or monetary policy. This revaluation reflects a potentially permanent change in the terms of trade that will significantly increase the cost of UK imports even if tariffs are not applied whilst substantially increasing the cost of our exports, dramatically reducing demand for many of them as a result, with consequent further job losses in the UK.

Actually, quite astonishing logic.

A falling £ makes both our imports and our exports more expensive?

And this man used to teach economics in a British university…..

My answer is that I think it is. My belief now is that the government wants massive economic failure in the UK because this is its route to the destruction that it thinks will preface the state Cummings imagines that we need to fulfil his fantasies.

Nursie needs to make hate with that lithium bottle.

This’ll piss Ritchie off

Mr. Murphy really hates the Washington Consensus. For it’s a set or largely sensible rules which say less Curajus State an more markets. So, of course, he hates it. It also works:

Sustained economic reform significantly raises real GDP per capita over a 5- to 10-year horizon.


Despite the unpopularity of the Washington Consensus, its policies reliably raise average incomes.


Countries that had sustained reform were 16% richer 10 years later.

They don;t actually mean 16% richer. They mean 16% richer than places which didn’t follow the Washington Consensus.

Oh Aye?

As for reporting anyone: no I have not. I have never reported anyone, and I know precisely to what you are referring. It is sad that you do, which I presume is solely for the purpose of stirring up hatred. But it is you who has this wrong. A person was found guilty of gross professional misconduct for abusing me, by his employer who began and closed the investigation without any involvement by me, at all

I don’t recall it being explained that way to me…..would Mr. Richards care to comment?

High Horse

A certain Mr Murphy getting very high horse here:

A government that breaks the law ceases to have purpose or function. It is illegitimate.

Yadda, yadda.

The last time the UK government did this?

There are clear precedents for the UK and other countries needing to consider their international obligations as circumstances change. I would say to honourable members here, many of whom would have been in this house when we passed the Finance Act 2013, which contained an example of treaty override, it contains provisions that expressly disapply international tax treaties to the extent that these conflict with the general anti-abuse rule.

That’s right. The last time the UK government said “Sod you international law” was when they enacted the very tax change that Richard Murphy worked upon.

Stocks and flows, stocks and flows

The estimation of how many unemployed there will be:

But even without having to extrapolate the data very much it is apparent that if most companies took Covid loans and maybe 10% think they might close then with the private sector engaging approximately 25 million people in the UK at present that might be 2.5 million jobs to go, and more given that many other companies are warning about their growth plans. My suggestion that more than 5 million people might be unemployed still looks to be depressingly realistic,

Snippa’s failing to distinguish between a stock and a flow. The stock is the total number unemployed at any one time. The flow is those moving into that state – and also the number moving out of it. It’s possible to note the occasional story about this or that company hiring people to work in warehouses for example.

So, what Snippa is doing is saying that all those made unemployed will be unemployed, all those currently unemployed will also be so and that’s that, he gets to his stock. And he’s completely ignoring the flow of people out of unemployment.

Just to give a rough idea of the size of those flows, around 10% of all jobs every year are destroyed, around 10% of all jobs every year are newly created. That’s just something an economy does.

Or, you know, 3 million new jobs every year. That flow out of unemployment will rather cut the stock of it, no?

What excellent logic

Despite that trolls are claiming the experts are wrong because the GFA makes no reference to the EU single market and customs union. There is, however, good reason for that. It’s because they were as much issues taken as read, and beyond the need for definition, within that agreement as was the calendar used for the purpose of defining dates. There comes a point when drafting any agreement when what is obvious does not need to be defined: it simply is.

The trolls are right but!

And now Johnson wants to put that border back in place

Well, actuerlly, it’s the EU insisting upon the border.

Oh, that’s interesting

We are used to political incompetence in the UK. But what we’re not used to is corrupt government. In the UK we believe government is about using power for the common good. In that case using the power of government for self-interest is corrupt. And that’s what’s happening.

So a Labour government that uses power to aid trade unions – which are not the common good but are self-interest – is also corrupt then.

Cool.

Erm, why not just forgive the debt?

As recipes for economic suicide go this is a good one. What we have is a Conservative government apparently planning to force banks to act on its behalf to force a majority of UK businesses to close as a result of the debts that they are unable to repay the government, incurred because of coronavirus which was beyond their control, when it is within the power of the government to turn those debts into capital stakes in the companies in question that might not just let them, and the jobs that they provide, survive, but might also allow them to prosper in a way that is for the long term benefit of the country in which we could all share through ownership stakes managed for the State through a National Wealth Service.

After all, the loans have already been paid for through QE and the QE doesn’t need repaying. Indeed, if we use the logic about Scotland’s contribution to the national debt, that post partition they should only repay if as and when the rUK does, then why should business ever have to repay – given that the QE never will be?

To aid, as ever

I tried to summarise modern monetary theory in a Tweet this morning

So, let us do that:

Free government!

Because that is the underlying message. We can give up ever more direction of our lives to government and it won’t cost a thing.

That there will be costs – government control of us – is the bit not being said.

How revealing

which has a stable tax system and so enjoys the rule of law,

It’s the “so” which reveals.

Sure, so raising the corporation tax rate to 24% would not be a stable tax system so if Rishi does that, urged on by Snippa, then we lose the rule of law – which is fun. But apparently the claim is deeper than that. Only if tax is stable do we have the rule of law. Eh?

Panto season

This week, especially because it’s the week of GERSmas, I am delighted to be joined online by Professor Richard Murphy. Richard is perhaps best known in Scotland for his work on the GERS figures, but he has a wealth of experience in tax policy. He is a chartered accountant and political economist who campaigns on issues of tax avoidance and tax evasion. He is currently a professor of International Political Economy at the University of London.

Oh no he isn’t!

Oooopps

The Treasury Committee of the House of Commons issued a call for evidence on Tax After Coronavirus (TACs) shortly before the summer recess, with submission requested by 28 August 2020. I have on behalf of Tax Research LLP, and the Tax After Coronavirus (TACs) project that it runs, submitted evidence in response to that call.

That submission is here. Since the whole submission is 13,000 words it is not possible to summarise it all in a post.

Ahem:

Jon Davis says:
August 28 2020 at 9:36 am
From your summary.

“the UK should consider removing the exception from filing a corporation tax return provided to companies who claim to trade only outside the UK.”

You’ve misunderstood this issue. There is no exemption from filing a UK tax return for a UK company which trades only outside the UK.

I suspect you vaguely half-remember the possibility of a UK company electing to exempt profits (and losses) of foreign branches and you’ve become confused by it. That exemption doesn’t mean the company doesn’t need to file a corporation tax return, it still does. I hope you haven’t gone in to too much detail on this in your report, it will make it look like you don’t really understand what you are talking about.

I can imagine someone at HMRC saying “What’s he on about? There is no exemption. He’s suggesting rule changes and doesn’t even know what the rules are!”

Tee hee.

Quite right solo professore

As the Scottish government says:

The headline estimates of Scottish public sector expenditure and revenue in GERS embrace two key principles:

1. Public sector revenue is estimated for taxes where a financial burden is imposed on residents and enterprises in Scotland

2. Public sector expenditure is estimated on the basis of spending incurred for the benefit of residents and enterprises in Scotland

I added the italic, bold emphasis.

GERS compares tax paid in Scotland with spend for Scotland. That earns the following are ignored:

Scottish income taxed outside Scotland e,g. rents, interest, profits, royalties and maybe more, all of which can be significant;

Well, yes. Suppose it does. And as an independent country Scotland won’t be able to tax those incomes accruing to people outside Scotland. So it seems a perfectly reasonable basis upon which to base the economics of an independent Scotland, no?

Oh

I think that locates £74.4 billion of liability: it is currency in issue.

So money is debt then? Is this Wednesday?

Doesn’t the idiot bother to find stuff out?

It might be said to be the graphical presentation of failure. It’s hard to interpret it any other way.

Well, people who knew some economics might instead say it’s because ONS is the only national statistical authority trying to measure GDP properly. The provision of both education and health care has fallen substantially this year. Everywhere. Only ONS has included the loss of such government provided services in their GDP estimation. Therefore, by design – and probably a good one too – the UK is showing a greater loss of GDP than everywhere else.

Of course, we don’t expect every peep on the street to grasp such details but professors of economics – even visiting ones at a technical college – might be expected to at least tug a forelock to the truth, no?

Well, no, they’re not

So what do we really have here? In effect, this is The Economist saying MMT works, and the processes it describes should, it says, be used to prevent mass joblessness linked to deflation, which it sees as the new risk (with which I agree).

I don’t care about the Phillips Curve. I do care about real people. And I do care that there should be people-centred economic policy making, in which context it is good that The Economist is proposing this.

It’s just a shame that they could not say they were describing a job guarantee through a national investment bank and the processes are described by modern monetary theory. That would have really been useful to the educational goal of the article, but somehow it still seems to be the case that to utter the three letters ‘MMT’ with a positive connotation attached is to ask too much. But that will change.

Actually, what they’re saying is that monetisation of fiscal policy can work in avoiding deflation. Something which even Milton Friedman would agree with – he did indeed talk of helicopter money.

OK, cool. And the point of calling it monetisation of fiscal policy, not MMT, is that the first phrase also comes freighted with all the examples of where it has gone wrong – Weimar, Venezuela, Argentina several times, Zimbabwe – which is indeed rather useful when we’ve the loons declaring MMT to be the bees knees with no downsides at all.