It's Wednesday and there are a few topics that caught my attention this week as…
My brief comment on the British election
It is Wednesday and I am travelling a lot today. So just a collection of short snippets today that I have collected over the last week or so. First, the British election is tomorrow and the Tories have been successful in confining the focus to Brexit. My view on the EU and Britain’s decision to exit is well known. Labour should have been leading that process given the majority of their elected MPS come from Leave majority seats. Instead, they gave out a mixed message, with many senior Labour politicians claiming they would vote remain in another referendum. This is despite both major parties guaranteeing to the people in June 2016 that they would implement the vote to leave. The information we have at present is that that position on Brexit is probably going to cost them office. Which means the Tories survive when they should not but finish the Brexit process which they should. Then Labour will have to reinvent itself to take advantage of the renewed sovereignty that Brexit will bring. To do that it has to expunge its ranks of the neoliberals. One other matters, Leonard Cohen’s last album was released recently. We hear a song from it.
British election
I do not get to vote in tomorrow’s British election nor bear the direct consequences of the outcome. So how I would vote is not a point of interest here.
I also note that the opinion polls are not foolproof but the consensus as of yesterday was that the Tories will win.
Something weird might happen, but as a statistician, I doubt it.
The Guardian report (December 9, 2019) – Corbyn plays all the old favourites in Bristol but no one’s dancing – was a sadly evocative account of how things have changed for Jeremy Corbyn since the 2017 election.
And as Larry Elliot opined (December 8, 2019) in his article – Economic conditions favour the left, so why is Labour not expected to win with ease? – everything about Britain at present should have given the Labour Party a massive shoe-in majority.
Except one thing.
Brexit.
I have been making the point regularly, see – Impending British Labour loss may reflect their ambiguous Brexit position (November 28, 2019) – that the Labour Party’s meandering position on Brexit, to satisfy its Europhile urban members, would damage them, given that the majority of their members of parliament were elected by Leave majority constituencies.
Remember all the predictions from the middle-class, cosmopolitan Labour pundits about the City selling off the pound if there was thought of Brexit materialising?
As the polling suggests the Tories will win and Brexit will finally happen, why hasn’t the pound collapsed instead of strengthened?
Seats not votes win elections. It doesn’t matter if the majority of Labour voters are Remainers, if there are spatial disproportionalities in the vote spread.
Both major parties committed to honouring the outcome of the 2016 Referendum. The Labour Party has reneged on that commitment.
The Tories are the Brexit Party and have narrowed the election down to that issue – largely.
They have to do that because, as Larry Elliot says, on every other issue Labour win hands down, given the appalling way the Tories have managed the economy and government.
I have been critical of Labour’s Fiscal Credibility Rule, but most people don’t understand that argument anyway and it is not a factor in the election.
While not a voter in the election, I am very informed of the issues given the flood of information we get in Australia on matters British (ex colony, shared head of state, history, culture, etc guarantee that).
My perception is that the Tories have been fairly successful in the campaign in keeping the focus on Brexit.
And in doing so, the typical Labour voters who are also Leavers are feeling disenfranchised by the Labour position on Brexit.
I sense the election tomorrow is really, implicitly, the second vote on Brexit.
And if the Tories win (as they should not), the UK will leave the EU (as it should) and the natural anti-neoliberal Party, Labour will wonder why they are not in office.
They should start with their Brexit position, which will lead them to the Blairites and the cosmopolitans, and that should cause the Party to take action and clean out this element.
They wont and as a consequence will stay out of office while blathering on about fake news, BBC bias and all the rest of it.
And when the UK doesn’t fall into the North Sea after leaving the EU, then it might become clear to them what all this was about.
And good luck to Chris Williamson in Derby North and Claire Jackson-Prior in Sutton and Cheam. Two great candidates.
Increasing MMT coverage in Australia
There has been increasing coverage of MMT in Australia in recent weeks.
1. In case you haven’t seen it, the UK Guardian article published an interview with me over the weekend:
Turning the economic tide: could a radical monetary theory fix Australia’s woes? (December 7, 2019).
2. An ABC program about MMT:
Modern Monetary Theory and its challenge to Neoliberalism (December 1, 2019).
Download – Audio.
3. Related ABC analysis:
Modern monetary theory is gaining traction. But can it knock out free market capitalism? (December 2, 2019).
The ridiculous dishonesty of neoliberalism – NZ style
There was a story in the New Zealand media last month (November 19, 2019) – Crown company borrows money for infrastructure from Crown entity at rate of 5.37% for the sake of keeping debt off government books, when the Government could’ve issued bonds at 3% – that epitomises the dishonesty of neoliberalism.
The article starts with a sensible statement “New Zealand needs infrastructure, as much as it needs more houses”.
Then loses the plot about how are these essential needs going to be paid for – there is no consensus for higher taxes or deficit spending.
Why, well for a start there is the “aesthetically pleasing surplus” that would have to be foregone.
Aesthetics is the study of the nature and appreciation of beauty.
How far have we descended into meaningless when we ascribe a fiscal surplus as a thing of beauty.
It might be an essential anti-inflation stance if the external sector is delivering so much revenue to the nation that it can provide first-class public services and infrastructure and generate enough income growth to allow the private domestic sector to meet its desired overall saving ambitions.
But that position hardly applies to New Zealand – even by dint of the opening statement – not enough infrastructure, not enough houses.
It also runs an external deficit, which means that there is a drain of income leaving the nation and not being recycled back into domestic production.
And when we consider that around 23 per cent of children in New Zealand live in poverty after housing costs are deducted (Source), it isn’t rocket science to conclude that fiscal surpluses are the anathema of responsibility and sense.
But the NZ lunancy gets worse.
The article reports that the government has come up with a plan to raise:
… money to pay for infrastructure, which keeps debt off local and central governments’ books, and therefore hidden from voters.
The plan?
They are going to set:
… up a company that takes out a loan to pay for infrastructure in a new subdivision, which is repaid by levies charged to property owners in the area.
And even by mainstream standards this would appear to be a daft proposition.
1. The new ‘off-the-books’ company will borrow long-term at 5.3 per cent via an arrangement with a government-owned development company.
2. The facilitating development company, of which the ‘off-the-books’ company will be a subsidiary, will also get equity in the subsidiary.
3. A private development company will then be contracted to build houses in Auckland.
4. “The loan and equity investment will be repaid using levies charged to property owners in Milldale over 30 years.”
5. The levies will increase annually at a rate above the expected inflation rate.
6. Overall, “roughly $159m will be collected to cover the cost of a $48.9m infrastructure investment.”
7. Meanwhile, back at Government HQ, it could issue debt to the tune of $48.9m at less than 3 per cent over the 30 years.
The article asks the obvious question:
But one has to ask whether it’s worth a Crown-owned company taking out a loan from a Crown entity at 5.37%, for the sake of keeping debt off local/central governments’ books, when the Government could issue bonds at a much lower rate.
While the New Zealand government could fund this without issuing any debt at all, the arrangement the Government is taking is complex, lacking in transparency, and pushes a massive and unnecessary cost onto those who will ultimately live in the dwellings created.
Even if one believed the taxpayers fund government spending myth, one should realise this arrangement rips the ‘taxpayers’ off to by more than 80 million dollars.
Dishonest and ridiculous – but demonstrates how far neoliberalism has gone to hide its failure.
Call for financial assistance to make the MMT University project a reality
If I am to get the – MMTed Project (aka MMT University) – up and going to provide formal courses to students in all nations to advance their understanding of Modern Monetary Theory then I need financial assistance.
We have established the – Foundation for Monetary Studies Inc. – aka The MMT Foundation to serves as a legal vehicle to raise funds and provide financial resources for the MMTed Project.
The Foundation is a non-profit corporation registered in the State of Delaware as a Section 501(c)(3) company. Its legal structure allows people can make donations without their identity being revealed publicly.
Some sponsors have already offered their generous assistance.
We need significantly more funds to get the operations off the ground.
Please help if you can.
We cannot make the MMTed project viable without funding support.
Leonard Cohen’s last album
I was entranced by Leonard Cohen as a teenager in the late 1960s and bought all his albums, learned all his finger style patterns on nylon guitar, and read all his books.
In the meantime, I have seen him perform and bought all his records.
He is one of the common threads in my life to date.
And last week, I purchased his last album (released November 22, 2019) – Thanks for the Dance – and immediately started working out the piano parts this week.
The album was recorded in 2016 in the last days of his life. Some of the songs had him sitting in an invalid chair he was so sick.
Here is the first song off the album – Happens to the Heart.
Beautiful and sad to think this is the last of him.
That is enough for today!
(c) Copyright 2019 William Mitchell. All Rights Reserved.
NZ really shows a lot of comparison with the Netherlands with a well-meaning population caring about social issues and a pernicious neoliberal government thrift that defies elementary rationality. Maybe its people is too friendly. In France there would be millions in the street.
I was very pleasantly surprised while driving home recently listening to CBC radio, and hearing the voice of Bill Mitchell! CBC was broadcasting the ABC interview across Canada.
Great to hear this information getting out here via mainstream media!
Bill, I’m more than please you have mentioned NZ as I think you are likely to have a very positive influence on our Labour party.
Bill …..if the bush fires get to you, you would be more than welcome to relocate…. I would welcome you at the airport!
The NZ Labour Party brochure “Making progress on what matters” brags that “Through our careful economic management (we) chose to deliver a $3.7bn surplus in Budget 2018 to use for a rainy day”. Total madness on top of much lack of action or spending in now two years in office. All we have is St Jacinda of the photo opportunity, and little else.
Dear Rob (at 2019/12/11 at 3:51 pm)
Thanks very much.
In the post yesterday, came a box full of P2 Masks that we ordered so that we can continue to go running, walking etc outside.
The air quality is now very dangerous.
As long as we stay clear of volcanoes, NZ is probably much safer now.
best wishes
bill
Surely the more likely prediction is that the blame will be put on Corbyn. He will be ousted in short order, and the party will return to the “centre ground”.
Do not trust the Guardian reports about Corbyn’s campaign. They have a quite obvious bias against him
Hi Bill
(Feeling depressed) “My perception is that the Tories have been fairly successful in the campaign in keeping the focus on Brexit.” I don’t think you really appreciate how much this country is controlled by the tory media. There are 6 dailies which take their feed directly from tory central office. Apart from the tabloid Mirror there is only one daily which consistently supports Labour and that is the Morning Star, with the smallest circulation. It matters not one whit that most people do not read a newspaper because the headlines scream out from every high street and those headlines set the news agenda for the day, including the BBC. I’ve woken up every morning for the last 6 weeks to the first news item which is invariably anti-Corbyn. The TV press reviews never feature the Morning Star (although I did once see Ben Chako on the review panel!). The Guardian should be ashamed of their coverage of antisemitism in the Labour Party and plenty of other anti-Corbyn nonsense. They’ve always been a fair weather friend.
See this from George Monbiot a couple of days ago: https://www.theguardian.com/commentisfree/2019/dec/10/break-embargo-expose-press-lies-labour. I don’t think that this will be the main cause of Labour’s failure to win this time. However in 2017 the Labour Labour Land Campaign also complained to IPSO and succeeded in getting agreed retractions from the 6 tory rags. The week before the election they all ran stories based on gross misrepresentation of a paper I co-wrote on implementing LVT which was on our website – this because of a one line mention of LVT in the Labour Party manifesto. I had tried unsuccessfully to contact the person writing the manifesto, who was a member, to warn him not to mention LVT. Our President had written another paper entitled “Why would turkeys vote for Christmas?”. In the last few days before the election the tories circulated thousands of leaflets warning of Labour’s ‘Garden Tax’. I believe that it lost us that election. Of course the retractions appeared only online many weeks after the election. Our Chair offered advice to Monbiot on handling the IPSO complaint.
Dear Carol Wilcox (2019/12/11 at 8:01 pm)
I am very sorry as I sense your frustration and depression.
I do appreciate the role the British media plays as I lived in Britain for some time while studying for my PhD. I saw impoverished areas in Manchester cheering Margaret Thatcher on as she undermined their well-being in any number of ways.
When I said that the Tories have been fairly successful in focusing on Brexit, they have been clearly aided by the way the media has treated the campaign, the unbelievably shocking intervention by the head rabbi guy, the relentless Guardian stuff on anti-semitism (there is more on that in today’s edition), and the rabid pro-European disdain for the Leavers from with the Labour party itself.
Jeremy Corbyn never really stood a chance when his own colleagues have been white-anting him relentlessly for the last few years.
I hope there are better days ahead for your progressive views.
best wishes
bill
@ Carol Wilcox
Perhaps – just perhaps – defeat (if they are defeated, which their repudiation of their pledge to implement the referendum result causes them to richly deserve to be) will bring about some genuine soul-searching leading to a radical leftward re-positioning of the Labour Party – following a purge of the Blairites.
Well-wishers can but hope so – not only for Labour’s own sake but for the health of the British polity as a whole. Right now it’s a toxic swamp.
Hi Bill (& Carol),
I would not be too downheartened at the moment – the polls are tightening and are rife with biases that all go in just the one direction.
As Craig Murray has pointed out today, there are apparently large swings in many constituencies, but we only hear the ones going left-to-right.
https://www.craigmurray.org.uk/archives/2019/12/the-largest-vote-swings-in-british-general-election-history-censored-out-by-the-bbc-and-mainstream-media/
I’ve been canvassing for Labour on the south coast in a constituency with large Leave voting areas & a 6,000 previous Tory majority – that’s number 71 down the list of targets and our doorstep results have it too close to call at the moment.
Obviously I would have prefered to be supporting a properly Leave supporting party, but we simply cannot afford another 5 years of the Tories.
I’m expecting a hung Parliament with Labour as the largest party (currently available at 12/1 at the bookies – well worth a punt imho).
I think there is actually a high chance of a hung parliament, rather than an outright Tory victory. (There is almost no chance of an outright Labour majority). The polls have been narrowing, although most still showing a Tory lead (except in Wales, where Yougov shows a Labour lead of 3% at present).
Johnson was supposed to be the great campaigner; in fact he’s proved a dud, time after time. After a cheesy stunt with him delivering milk bottles, he then ran and hid in a fridge to avoid an interview, with one of his aids swearing at the TV crew live on camera. Not a good look.
Corbyn on the other hand, like in 2017, has proved himself a good campaigner. Happy and at home with the crowds; cool, calm and collected. The kind of man you can respect, and want to vote for. Pity about his (or his party’s) Brexit policy.
Brexit is dead, anyway. In the event of any form of coalition with Labour, the SNP, and possibly the Lib Dems, killing Brexit will be the price to be paid, which Corbyn will be happy to pay. He’s already put down the deposit.
In the event of a tiny Tory majority, Brexit will die a slow death, as Johnson fails to get whatever might be needed through parliament. It will be a re-run of the summer, albeit with a hopefully more honest speaker of the House of Commons (Lindsay Hoyle).
Even in the event of a larger Tory majority, Johnson will probably still have his work cut out getting things through parliament. There will still be plenty of Remain-oriented Tory MPs, and Labour, the SNP, and the LibDems will be even keener to kill Brexit than ever before. And Johnson’s “deal” is a re-heated version of May’s deal. Hard to distinguish from “Brexit in name only”.
So what with a dead, or zombie Brexit, and a screwed-up NHS, there is not too much to be optimistic about. On the subject of the NHS, Off-Guardian has published an article about a film by John Pilger. It sounds excellent (though depressing), but has come too late in this election to have much impact). It is called:
“The Dirty War on the NHS” – A film by John Pilger
See also: “The Great NHS Heist” and “Full interview with Dr Bob Gill – harsh truths about the NHS” (both on youtube). I will leave people to use their search engine of choice, rather than include moderation-inducing links. 🙂 (Though I may put links in a separate posting).
Of course, what Labour doesn’t like people to remember is that it was New Labour who started the rot of NHS privatisation, and if Blairites, or people like them, got back into power, they would probably continue it, Labour government or not. Although Corbyn has proved himself to be a survivor, in spite of all the odds, I think that even if he became PM in a majority Labour government, he would find himself being eased out, and a more “moderate” leader/PM would be installed. Then it would be back to “business as usual”.
Dear Carol, Bill and the legion of similar minded Labour supporters.
There is always something to complain about isn’t there, some bias that represents repression of the true socialist inclination of the British population – and of course there is always the Brexit enigma upon which to lay a sense of eternal grievance.
Whether there is any justifiable sense of prejudice emanating from the press or other right-wing fraternity is by now counteracted by the utter contempt that the majority of the population has for politicians in general (all of whom are out only for themselves, according to the street level I circulate in).
And If you dig a little deeper you will find a genuinely inherent fear of an economy controlled largely by the state. This has been apparent over two world wars, various levels of depression, corrupt international communism and British nationalisation that, despite its employment support generated a reputation for inefficiency that resulted in ideological humiliation.
As voters go reluctantly to cast their apathetic choice tomorrow, their loud resent at the absence of an ideologically uplifting message means that whoever wins faces the deepest of democratic cynicism .
The fact is, voters both detest Boris and his subterfuge and are scared stiff of Jeremy because of his true socialist beliefs – and that’s before they have even heard of “Socialism for a Sceptical Age” by Ralph Milliband, never mind read it.
This time on Friday is when Labour voters realise if remain voters had honoured the brexit result 3 years ago. With brexit done 3 years ago.
Labour would have won tomorrow.
“And If you dig a little deeper you will find a genuinely inherent fear of an economy controlled largely by the state. This has been apparent over two world wars..,”
I would dispute that any inherent fear of an economy controlled largely by the state was in evidence in either WWI (after Lloyd George became PM) or WWII. I think it was after WWI had ended that the phrase “war-socialism” was coined, and it was descriptive not pejorative. It expressed the popular mood that such was a temporary expedient, but one that (like women taking over “men’s jobs”) was essential for victory and which once that was achieved began immediately receding into history. WWII saw a far more pervasive war-socialism ethos taking over, which even the middle class didn’t in general resent still less oppose (witness ex-public-school types, drafted as miners – “Bevin boys” – instead of as they might have expected becoming officer-cadets, buckling down to “doing their bit”).
There are always exceptions to any generalisation but my recollection of WWII doesn’t at all accord with your assertion.
On the other hand I share your strictures about the nationalised industries, although I’d still hope (forlornly perhaps) that next time around the right lessons might have been learned and the same mistakes perhaps not repeated.
“Labour should have been leading that process given the majority of their elected MPS come from Leave majority seats.” Whether one agrees wth that statement or not, it is necessary to understand that the majority of Labour MPs do not want Corbyn as leader and do everything they can to undermine him and stop him becoming PM – witness the disgusting behaviour of Jon Ashworth, who was only offered Health because it was necessary to remove him from the NEC in order to replace him with a good MP. The NEC has caused massive damage. The new crop of Labour MPs will not be any different and it will be difficult once again for Corbyn to form a decent shadow tream. But we should at least get a better Deputy Leader.
MMT Made it on the BBC website today Bill.
Business section ?
https://www.bbc.co.uk/news/business-50579897
GROUPTHINK never dies.
https://www.theguardian.com/commentisfree/2019/dec/11/brexit-tax-cuts-spending-conservatives-labour
Unbelievable that he can write this after all the debates over the years. Is this really the state of mainstream economics Bill ?
A complete refusal to believe the accounting facts. Will never escape the neoliberal framing.
Dear Derek Henry (at 2019/12/12 at 11:13 am)
Same old stuff from him. It will not be a winning approach but every factor, but his sort of analysis (Fiscal rules, Brexit scaremongering), will be to blame.
Disregard his nonsense.
best wishes
bill
Dear Bill, I just have a chance to read this post of yours on how the British would vote. It feels uncanny to learn/see that you writing/analysis is spot on!!! How do you do that? What i feel frustrated about is when i continued reading on, most comments i read are too complex and difficult to understand, so i gave them all a miss after few sentences. What I really want to say is that i feel most of comment writers have not the foggiest what they are talking about. Their analyses are quite confusing. They mixed all the issues up – big and small, plus the analytical approach itself. So at the end, why no clear meaning can be grasped.
Reason maybe it is because you are looking at Brexit from a distance, whereas most of the commentators live in the system. Thus, difficult to see all issues clearly, and in clear perspective??
Have a nice weekend to everyone!
vorapot
Hold your diagnostic horses Bill the UK’s Independent paper carries an article which argues if the UK had a PR electoral system Britain would now have a hung Parliament!
https://www.independent.co.uk/news/uk/politics/general-election-results-pr-alternative-voting-system-tories-labour-hung-a9246661.html
Jo Michell is trying hard to prove with his neoliberal pals that they were right all along. Ref: his Twitter page.
Dear Liz Frankey (at 2019/12/15 at 11:21 am)
Better, I think, to ignore characters like him. He has zero credibility in all of this. All sorts of spurious additions of the votes won’t get around the obvious facts about the election. The Remain gang better get used to queuing at borders to get into Europe.
best wishes
bill
Following on from my comment above, unfortunately the blaming of Jeremy Corbyn and the push to the right is already well underway. Case in point this opinion piece on the BBC news website:
@ dnm:-
“Following on from my comment above, unfortunately the blaming of Jeremy Corbyn and the push to the right is already well underway”.
Concerning the first part your’e right of course.
But is the corollary as inevitable as you paint it? And must the right necessarily come out on top in the end? Is there no counter-push from the left?
Personally I have no idea.
Sadly I suspect if Corbyn and McDonnell had publicly endorsed MMT and abandoned their invalid fiscal credibility rule, they would have been denigrated even more in the mainstream media and lost by an even bigger margin in the recent election. Their policy position was therefore approproate.
Corbyn said he would have negotiated a Brexit deal and put it to the people to vote on in a referendum. A reasonable position I would have thought.
I feel sorry for Jeremy Corbyn and Labour supporters who I genuinely believe would have set the foundations for reversing much of the damage of the neoliberal era.
The Tories will intensify all that is bad in Britain and Labour will likely re-adopt Blairite policies which I believe will push them into irrelevance just like all the other global social democratic parties.
Dear Andreas Bimba (at 2019/12/16 at 9:47 am)
I agree with you that Labour would have been denigrated if it announced an MMT understanding without preparation.
That is why the day they lost the last election they should have been running workshops to educate the population on the capacities of a currency-issuing government.
And they should never had employed economists who were in the New Keynesian camp or somehow thought a neoliberal fiscal rule was smart.
best wishes
bill
Thanks for the reply Bill.
I hope the UK Labour Party will be able to maintain some integrity, maintain the ‘Corbyn Socialist’ policy direction that was I assume still popular with the grassroots and adopt an MMT macroeconomic understanding but it looks more likely the Blairites will try to retake control and will probably succeed.
It seems such a paradox that so many northern industrial Labour seats went over to the Conservatives who appear to have rejected the neoliberal policy direction of the EU but not that of their own national governments which were/are way more influential.
The Scots are also crazy for rejecting Brexit and for supporting national independence when the rest of the UK is by far a bigger trading partner. If they adopted their own currency then national independence could perhaps make some sense but they are probably ignorant and crazy enough to instead join the EU and adopt the Euro.
Education of the electorate may eventually offer a path to better governments but unfortunately the corporate oligarchy has far more resources and will probably continue to maintain the ascendency here as well.
With the first past the post duopoly electoral system eventually enough of the electorate must become bored or disillusioned with the terrible Conservatives and switch over to the other team provided they remain acceptable to the electorate which suggests the small target popular figurehead approach is more likely to succeed for Labour.
The global warming crisis necessitates that the global neoliberal corporate oligarchy lose their total control over politics especially starting in the US. If Trump or an establishment Democrat like Biden wins in 2020 we are all stuffed.
What does Bernie Sanders need to do to win the 2020 US presidential elections?