pongo Posted September 14, 2015 Share Posted September 14, 2015 What does McDonnell want to do? Get the reins back so he can force the BoE to print billions to pay for increased government spending? Presumably to plug the huge gaps in the economy caused by increased taxes on anyone and anything earning over minimum wage. Lunacy. Yes as far as I know. Although I doubt he would see it like that. The left does tend to fall back on a belief that a govt should be able to control the money supply by both taxation and by politically setting interest rates. And here is another thing which would be worrying if this lot stood any hope of forming a govt. Some of them around Corbyn are beginning to be attracted towards the nonsense that is Modern Monetary Theory. They believe that governments create money by spending it and destroy it by collecting it in taxes. They believe that the value of a currency is significantly linked to that fact that govts collect it as tax. And that, by collecting taxes, govts destroy money. Some of that would be sort of vaguely true - but this has been extrapolated into a grand political and economic theory which, long story short, means govts can spend free money. It's worth Googling the analysis into why this is bonkers. Because a lot of people are starting to believe this heresy. It's the new big thing amongst the sort of people who might once have been attracted to big socialist ideas. Link to comment Share on other sites More sharing options...
P.K. Posted September 14, 2015 Share Posted September 14, 2015 From my Saturday Grauniad a piece on Corbynomics which I found worth a read. Link to comment Share on other sites More sharing options...
woolley Posted September 14, 2015 Share Posted September 14, 2015 @ Pongo: They believe that the value of a currency is significantly linked to that fact that govts collect it as tax. And that, by collecting taxes, govts destroy money. They're right. They've destroyed plenty of mine that way. Link to comment Share on other sites More sharing options...
Chinahand Posted September 14, 2015 Share Posted September 14, 2015 Goodness gracious (from PK's article): Bank [of England] independence “has always been a charade” and was introduced to “appease the bond markets”. If international investors took fright, driving up the cost of serving the UK’s £1.5trn in government debt, he would simply order Threadneedle Street to start creating money and buying up gilts. “We could sit out the bond markets for as long as we wished. We would simply restart QE.” [Murphy] insists there would be no sterling crisis if Corbyn were swept to power in 2020: another deep-seated dread of Labour politicians who fear the wrath of the City. “The sterling crisis would pass very quickly, because everything reverts to the mean, and the mean would be ‘what are the fundamental trading levels for sterling?’” says Murphy. Link to comment Share on other sites More sharing options...
woolley Posted September 14, 2015 Share Posted September 14, 2015 Murphy is on another planet as far as economics is concerned. His business - like most economists - is telling people what they want to hear for a fee. He's been doing stuff for the unions for years. Link to comment Share on other sites More sharing options...
the stinking enigma Posted September 14, 2015 Share Posted September 14, 2015 I'll say one thing for corbynn - he's got the daily mail smearing department working overtime..panic stations Link to comment Share on other sites More sharing options...
HeliX Posted September 14, 2015 Share Posted September 14, 2015 I'll say one thing for corbynn - he's got the daily mail smearing department working overtime..panic stations This certainly isn't panic. It's a well calculated gameplan. If Labour start to jump in opinion polls you'll see panic. Right now this has no more gravitas than the opening move in chess. Link to comment Share on other sites More sharing options...
woolley Posted September 14, 2015 Share Posted September 14, 2015 Too many people have too much to lose. Corbyn and his ilk only appeal to the have nots and the dreamers in society. Yes, they have loud mouths, but when it comes to the ballot box, people vote in their own interests. Link to comment Share on other sites More sharing options...
Andy Onchan Posted September 14, 2015 Share Posted September 14, 2015 From my Saturday Grauniad a piece on Corbynomics which I found worth a read. At the heart of Murphy’s project to reinvent Labour economic policy is what he calls “people’s QE”, a policy of using money created by the Bank of England to invest in public infrastructure projects, at the same time as boosting employment and economic growth. That sounds very reminiscent of an early economic policy of the National Socialist Party of 1930's Germany. It'll be a vote winner for sure.... But I predict that if he gets into government there'll be a massive exodus of capital, the likes never before witnessed. What will happen after that will be anyone's guess. Link to comment Share on other sites More sharing options...
woolley Posted September 14, 2015 Share Posted September 14, 2015 It'll get worse before it gets worse................ Link to comment Share on other sites More sharing options...
P.K. Posted September 14, 2015 Share Posted September 14, 2015 To form a government in the UK you have to attract the voters in "the middle ground" for want of a better description. Corbyn has just widened "the middle ground" by a substantial amount. One of the reasons they lost so badly was because Labour completely failed to throw off the tory claim that they would mess up the economy. Corbyn has just reinforced that claim. Expect the middle ground to stay tory while Corbyn is leader... Link to comment Share on other sites More sharing options...
Andy Onchan Posted September 14, 2015 Share Posted September 14, 2015 If international investors took fright, driving up the cost of serving the UK’s £1.5trn in government debt, he would simply order Threadneedle Street to start creating money and buying up gilts. “We could sit out the bond markets for as long as we wished. We would simply restart QE.” Meanwhile, lending rates will have gone through the roof and companies will be unable to afford to borrow. And people will get laid off. The guy's a nutter! Link to comment Share on other sites More sharing options...
Declan Posted September 14, 2015 Share Posted September 14, 2015 I'm not sure he even wants to be PM. Shake up the party, shake off the Blair and Brownite policy wonks, energise the youth, make it a mass movement and chuck out the focus groups. Then step back and then a new centrist leader will take over. Link to comment Share on other sites More sharing options...
GD4ELI Posted September 14, 2015 Share Posted September 14, 2015 I'm not sure he even wants to be PM. Shake up the party, shake off the Blair and Brownite policy wonks, energise the youth, make it a mass movement and chuck out the focus groups. Then step back and then a new centrist leader will take over. Link to comment Share on other sites More sharing options...
Lxxx Posted September 14, 2015 Share Posted September 14, 2015 I'm not sure he even wants to be PM. Shake up the party, shake off the Blair and Brownite policy wonks, energise the youth, make it a mass movement and chuck out the focus groups. Then step back and then a new centrist leader will take over.Sounds about right. Link to comment Share on other sites More sharing options...
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