To continue, I returned from a robust riverbank walk on Sunday to discover a comment on the blog from what purported to be a solicitor suggesting this piece was potentially libellous if I could not evidence my claims. As it happens that evidencing was not difficult. But, whenever such suggestion is made the first, cautious, reaction is to take the post down whilst the claim is investigated. So, this I did.
I completed my investigation of the claim yesterday by phoning the solicitor whose name, address and email were given in the comment posted to the blog (which will not be published). It transpired he knew nothing of it. The comment used his identity, but falsely. He now has the information and is considering whether to refer the matter to the police, I understand.
The post is now live again.
I have three responses. First, this evidences the degree of tension inside the SNP right now. I am sure that there was good reason for someone within it to comment as they did, even if fraudulently.
Ragging on Ritchie
In the post I suggested that Andrew Wilson had claimed SNP policy to be something that it is not in his FT article. As those who follow this issue well know, the SNP leadership was defeated on this issue of sterlingisation in 2019 and a motion from Dr Tim Rideout became policy instead, setting the SNP on a policy of securing a Scottish currency as soon as practicable after independence, with no tests prior to adoption being attached.
That’s not what others say. Like, say, the FT:
The unexpected vote by delegates on the first day of the SNP conference in Edinburgh followed fierce debate over the currency policy the party should use as the basis for a renewed push for independence from the UK.
The 781 to 729 vote highlights dissatisfaction among many SNP members at the relatively cautious approach adopted by party leaders, who worry that moderate voters would be put off by the prospect of any rapid replacement of the UK pound.
Party leaders welcomed the conference’s rejection of more radical amendments to their original proposal that Scotland should aim to “be ready to make a decision on a new currency by the end of the first term of an independent parliament”.
Keith Brown, deputy SNP leader, warned before the vote that any amendment of the leadership resolution would “carry risks”.
But afterwards Mr Brown said party leaders could “work with” the conference’s demand the government must “aim that the [new] currency be ready for introduction as soon as practicable after independence day”.
“I don’t think it causes us any problems,” Mr Brown said.
The new policy retains a set of economic and policy tests that must be met before Scotland would create a new currency, raising the possibility of potentially extended period in which it would continue to use the UK pound, an approach widely known as “sterlingisation”.
Timothy Rideout, a delegate from the SNP’s Dalkeith branch, which proposed the more urgent approach backed by delegates, pointed out that sterlingisation would leave Scotland unable to act as lender of last resort for its financial sector and with no control of monetary policy.
Looks like Rideout’s proposal retains tests then. But what should this matter to a political economist for whom facts and reality don’t matter?
Trevor Howard says:
February 2 2021 at 8:40 am
“I would describe myself as pretty good at company law”
And yet you were unaware of the rights that shareholders have. Claiming that they were “incredibly limited”. And when I am able to quote the actual legislation which shows that shareholders have significant rights you seem be claiming that just because you haven’t personally been involved in a situation when they are exercised, the rights can’t be real.
Richard Murphy says:
February 2 2021 at 9:39 am
I am well aware of the rights shareholders supposedly have
But these days I work mainly as a political economist, and in that capacity what I have said is an accurate observation of the truth
The FT has an editorial this morning in which it argues that the London Stock Exchange needs a revamp, post Brexit.
The argument is insipid, at best, and is mainly a lament to the fact that London has not attracted tech stocks and ends up with mining companies instead. But underneath the existential angst there are suggestions.
These include the suggestion that rules be waived unilaterally to attract the right flotations. In other words, favours should be done.
There is also a strong recommendation that ‘dual listings’ be permitted, with two classes of share from one company being allowed, which is a mechanism invariably used to reinforce control by a power elite within a company.
No, it’s “dual-class” not “dual listing”.
Dual class is where there are two stocks, each with different voting rights and which can indeed be used to embed power with favoured insiders. Dual listing means being listed on two stock exchanges – say New York and London, or Oz and London/SA and London which is popular with miners and so on – at the same time.
This is the Tre Professori, the P³, who would tell us how financial markets should work who gets this wrong. It’s just flat out ignorance which isn’t a good start to an analysis, is it?
Richard Murphy says:
January 31 2021 at 9:58 am
But that does not explain how there is a bigger market than there are gilts available
Where do the rest come from?
The concern is that the banks have perhaps £200 billion in gilts but use them to support perhaps £400 billion in repo. So, there’s more repo than there are gilts!
Don’t worry if this is actually true or not, or whether the numbers are right. Just think for a moment about this.
The country’s leading – nay, one of the world’s! – Modern Monetary Theory theorist is finding it difficult to grasp the idea of the velocity of money. That the same piece of money might be in use several times. Even, simultaneously.
And yet this is the most basic point about money, isn’t it? MV=PQ after all, and the M there is that base or narrow money supply. He also tells us, all too often, that banks just create money by making a loan. So, there’s a multiple, again, to narrow money which then makes up wide money.
But when it comes to repo all of this is ignored. There must actually be the bonds for all – the idea that chains occur, that the same debt might be in multiple uses just doesn’t cross the mind.
It’s like the same person being a professor at three different institutions. Just cannot happen, eh?
This, of course, is blatantly untrue. The SNP policy, agreed by the Party in conference, is not that at all. The actual SNP policy is to go for an independent currency as quickly as possible, and there are no tests attached.
That’s the P³.
According to the BBC at least the party in conference agreed the following:
The aim should then have been for the Scottish Parliament to take a decision on whether to establish a new currency “by the end of the first term of an independent Parliament”.
Pleas from the leadership not to amend the motion were ignored by a majority of party members, who voted by 781 to 729 for a new currency to instead be introduced “as soon as practicable”.
However the amendment, by the SNP’s Dalkeith and District Branch, kept the vast majority of the leadership’s proposals – including the use of six key economic tests that will “guide” the precise timescale for a new currency.
These were set out by the party’s Growth Commission, and include an independent Scotland having a “sufficiently strong and credible fiscal position in relation to budget deficit and overall debt” before a separate currency is introduced.
And there would need to be evidence that the new currency would “meet the ongoing needs of Scottish residents and businesses”.
The tests were kept despite activist Timothy Rideout, who spoke for the amendment, describing them as “rubbish”.
Can’t see that they changed this at the November virtual conference.
But then who are we to believe? That tax funded and therefore entirely impartial BBC or some loon on the internet?
And yet there is no sign that we are seeing what would, in effect, a war style production approach to the production of these vaccines being put in place. Even if some drug companies are likely to profit considerably from this crisis, there is no reason at all why the production of these vaccines need be limited to their production facilities. It is impossible that there are no other facilities that could be used for their manufacture.
So why isn’t that happening?
Well, the major reason the government doesn’t need to act is that that’s exactly what is happening. The vaccines are being licenced across the world to those who have the ability to manufacture them.
But then facts and reality don’t play much part in demands for government action, do they?
And, thereafter the aim is to silence those who might criticise who then appreciate that they will be treated the same way.
This is, of course, a standard far right technique. Experts are not trusted, because they might tell the truth, as Prof Pagel does. But beyond that the aim is to silence them, using whatever means necessary.
This from the bloke who threatened to pull out of a conference if I was invited to speak….
Here’s the shorting the bond thing for anyone who’s nose starts bleeding when they try and grasp it: you give me £10 and I go out and buy you a coat, and I say yeah yeah yeah, you’re coat is in my wardrobe, I’ll give it to you later. But THEN –
It’s stocks they were shorting, not bonds. Well done to the P³ for showing his financial market knowledge there.
P³ is insisting that QE has created lots of idle cash sitting around. Therefore we’ve got to mobilise that cash to invest in lovely stuff:
My logical conclusion, based upon this analysis, is that there is a massive market for what look like cash based savings products but which are related to real economic activity, which is precisely what I am trying to promote for the combined reason of tackling the cash glut that exists, and to provide the capital that society needs for the economic and social transformation that it must undertake.
The problem with this being that as soon as that idle cash gets spent upon real investment then it’s necessary to reverse QE and suck the cash back into the BoE. Or, obviously, have significant inflation:
Such an account would lock money up for, for example, five years at maybe 1% at present, or 10 years at maybe 1.5%.
He just doesn’t get economics, does he?
It’s precisely because that £800 billion of new money isn’t being spent that we’ve not got massive inflation. As soon as it is, we do.
So, ISAs must only be allowed in future if the ISA funds are invested in bonds that in turn fund activities that can be shown, without doubt, to produce new jobs that support the required transformation of the UK.
And the interest would be covered by government. Suppose the rate might be 1%.
So will they work? In terms of attracting funds I have not a shadow of a doubt. I think people would be queueing to get them.
The worlds is just packed with people who want 1% bonds, right? And bonds and bonds only are the way to fund investment and pensions, right?
Sheesh, if only P³ understood the first thing about finance. Or savings. You’ve got to have an equity layer in a project. Further, 1% bonds, when inflation is 1.7%, just ain’t the way to be saving. Finally, who the hell wants to buy these things when the government can’t even sell its own gilts – that’s why the BoE owns £800 billion of them.
There is also another factor that the FT notes today. Foreign workers are fleeing the UK as the coronavirus pandemic and Brexit impact on job prospects. I have read the data underpinning their findings, which rightly says the figures are uncertain, but it is likely that 1.3 million people have left the UK in little over a year, with 700,000 leaving London alone.
As I’ve been pointing out for some years now the reserve army of the unemployed for the UK economy resides – often enough – in Wroclaw and Bratislava…..
But, the debt narrative is preventing the possibility of investment programmes at the scale that we need, and so in this video I explain how we can use the ideas in green QE to re-orientate those savings towards productive use, and so to fund the Green New Deal.
The proposal is pretty dramatic. What I suggest is that by getting people to own the debt, quite literally, we completely change the narrative, and turn what is at present an obstacle into an opportunity to unleash the potential within the economy to deliver the good that we need.
So, QE. In order to beat the problem of all that money speculating we should….
We should issue NS&I bonds at 1% and people will flock to buy them, then we use the money to invest!
The reason the Bank of England currently owns £800 billion of 1% bonds is because no other fucker wants to buy them……
The wrong thing, in the form of cuts and tax increases, is dogmatic and solely about party politics.
A government doing what its voters elected it to do – have a smaller state – is mere party politics these days, is it?
That, I think to be true. Have already culturally appropriated all that is British for the benefit of the European Union within his article, the willingness of Osborne to simply ignore the human rights of the people of Britain to determine their own future is nothing less than a suggestion that the deliberate enslavement of a country for the benefit of another should take place, facilitated by the denial of the expression of free will to the people of Britain.
In that context to describe the attitude as colonial was not enough. That would imply economic exploitation might continue, but Osborne has, I think, gone further. In his article he made clear that he knows a referendum would almost certainly be won now. So his argument was that Westminster should simply refuse one, ensuring as a consequence that the people of Britain will be held against their will, and with their rights ignored. What else is that but the attitude of a slaver?
It is, indeed, a very weak argument against a Brexit referendum, isn’t it?
The question was raised yesterday in a comment on the blog as to whether I was willing to accept guest posts from those who have proved their ability as regular commentators.
What is it that gets proven? Skill at sycophancy?
I have worked hard to ensure that this blog is open to a wide range of opinion, and take a lot of flak for doing so.
Err, yes. ‘Allo Rajiv.
So, the question is, should that role of lead writer be shared? And who would want to offer a contribution? I would, I admit, retain full editorial rights, but there are many here who can write well and have valuable opinions.
And to the interesting question. Given the commentators there will guest posts increase or, Lord Above, reduce the quality of the posts?
January 20 2021 at 9:20 am
This is the best political economy blog on the net, due entirely to your hard work and intellectual rigour. It offers a clear explanation of the issues and a solution to many of the problems we face.
If someone criticises your analyses in a positive manner, you are happy to debate, and that makes for interesting reading.
See what I mean?