The Corbynomics Thread

[Executive Sadman]

Corbyn may hit on an election winner by promising to make the big international corporations pay a fair share of tax. Of course, saying it is one thing. managing to do it, another..

Does he even describe what he thinks 'fair' is?

Does he, like the entire left (and, with their inability to debate, the right just accept), mention the evil amazon, while ignoring the fact that while amazon may have billions in revenues, their profits are historically slim to non-existent, which is what of course corp tax is based on.

Corporation tax should be abolished everywhere. Corporations are essentially taxed on revenues by VAT, and on profits by dividend yield taxes. Both are easy to localize.

To reduce inequality we just need stop subsiziding the banks/London. And stop driving down wages with the importation of labour and exportation of jobs.

[digestive]

Corbynomics: money printing for the people

Next, he has proposed a “People’s QE” (who the last round of quantitative easing was for exactly, if not the “people”, is not quite clear). In any case, the People’s QE, according to Corbyn, would involve the Bank of England printing money that would be used directly to fund government spending. The Bank would “be given a new mandate to upgrade our economy to invest in large-scale housing, energy, infrastructure and digital projects”.

Most of us probably thought the Bank had enough on its plate with monetary policy and regulating finance – but according to Corbyn, all you have to do is print lots of money and you can use that to build social housing without any inflationary impact on an economy already running close to full employment.

Hang on, if I'm not mistaken, isn't this policy similar to what the Austrian school of monetarist say? i.e. the government should issue non-interest bearing currency directly into the economy (missing out the banking system with their interest load in the middle). This is the sort of thing that was done in the Collonial Scrip across the pond with great results. This is exactly what the Bank of England should be doing in an ideal world, so all cred to the Corb!

[billybong]

and of course not to forget that before NuLabour were elected in 1997 Blair and Brown etc were whiter than white with amazing new policies and look how far backwards they took the UK during their tenure.

Maybe it'll be different if Corbyn takes control/gets in - some hope.

Edited August 2, 2015 by billybong

[scepticus]

Clueless Torygraph article re Corbynomics roundly trashed by a variety of commenters :

http://www.telegraph.co.uk/finance/economics/11773610/Why-we-should-all-start-feeling-nervous-about-Corbyn-omics.html

As we have discussed Corbynomics has multiple 'issues' (I'm still waiting to find out where the Reverse Gear of the Positive Money/Atkinson solution or whatever is), however the just-add-water torynomics wisdom of the article's author is without doubt far more risible than anything Corbyn has come up with - and rightly rubbished by a commentariat that is clearly better informed about economics than in the past.

Have they forgotten how Osborne promised if he was elected, to immediately end the 'irresponsible policy of QE' when he was in opposition???

[wonderpup]

From abolishing tuition fees, to raising taxes, to printing money to pay for infrastructure, Mr Corbyn is pushing an agenda that is not so much from a different political tradition as from a different planet. Even a few of his ideas would wreck the economy.

The problem is that none of these ideas is really that far fetched- there are perfectly rational arguments to be made for all three- even if you disagree with them.

The reason that Corbyn seems so utterly alien to the prevailing order is not because his ideas are irrational but because they are heretical. Of course to a true believer heresy is by definition irrational- but that simply makes Corbyn's arguments more relevant - his point is precisely that the current way of doing things is not working for large numbers of people, so to attack him for not supporting the status quo is itself irrational since to oppose something you must first, of course, disagree with it.

The assumption that anyone who disagree's with you is a fanatic is itself symptomatic of a certain kind of fanaticism.

At some point in the past decades economics made the transition from an obscure academic sand pit to a fully fledged religion, complete with it's saints, sinners and holy texts- and in this theology of money the role of Corbyn is that of the Anti Christ- the fact that he has a beard only lending credence to the tale.

[BlueRat]

Last night he addressed a rally in Croydon, south London, where he took to the stage to rapturous applause.

...

He joked that he had an 'old fashioned belief' that people who teach children in classrooms should be qualified, before insisting that 'everything this Government is doing on housing is wrong'.

http://www.dailymail.co.uk/news/article-3185592/Corbyn-suggests-Blair-face-trial-war-crimes-Iraq-Comments-set-fuel-tensions-leadership-battle-hundreds-flock-rally-South-London.html

Jeremy Corbyn’s plan for council house building

Full PDF on the link:

http://www.jeremyforlabour.com/housing

Jeremy Corbyn’s plan for council house building

Posted on August 05, 2015

Labour leadership candidate Jeremy Corbyn MP publishes his plans to comprehensively address Britain's housing crisis as part of his Vision for Britain 2020. Jeremy believes a secure and affordable home is a basic right. His housing manifesto proposes a radical rebooting of home construction permitting councils to be house builders and providers in order to meet the demand for affordable housing in their own areas

Giving to councils the right and the means to commission new homes is the most efficient way of achieving the minimum of 240,000 new homes our country now needs to build each year to meet demand and reverse the current housing crisis.

Short supply of affordable housing fuels high rents which, alongside unobtainable mortgage deposits, mean the dream of having a home of your own is now beyond the reach of too many people. And too many parents are now dealing with the fact that their grown children cannot afford to fly the nest.

"Under my ‘Vision for Britain 2020’ Labour will promote major council-funded, desirable energy efficient building projects to provide our young people with a good start in life, to stop paying exorbitant rents and the opportunity of a home they can at least call their own," said Jeremy Corbyn.

"It has become clear that when housing provision is left purely to market forces most of our young people simply cannot afford to get a foot on the rung of the market's so called housing ladder."

"It also makes economic sense, as today's housing document outlines."

“Housing has reached crisis point: families are shunted from council house to B&B to hostel, hundreds of miles away from support networks and denied stability or security; council homes are emptied, regenerated and sold at prices well out of the reach of normal people, causing the social cleansing of our cities."

Other points highlighted in the document:

• The pernicous bedroom tax and the benefit cap must be scrapped. For every £1 spent on housing construction an extra £2.09 is generated in the economy.
• Lower regulated rents and better housing conditions in the private sector.
• Private rents linked to local average earnings levels.
• Tenants should have the right to longer tenancies.
• Licensing and regulation of private landlords to ensure decent housing conditions.
• Four in five London employers say the lack of affordable housing is stalling economic growth in the capital.

NOTES TO EDITORS:

A first time buyer today requires ten times the deposit they did in the 1980s, according to the National Housing Federation. Fewer than 150,000 homes were built in every year of the coalition government, compared with 190,000 homes a year under New Labour, which was itself a low for a post-war government. Britain has the highest proportion of households of OECD countries receiving cash allowances to support rent, and we now spend around £10 billion on housing benefit for in-work households; and the eviction of tenants is at a record high. Official figures show that sleeping rough in England is up 55% since 2010 (and up 78% in London); while families in temporary accommodation are increasing too.

[scepticus]

The problem is that none of these ideas is really that far fetched- there are perfectly rational arguments to be made for all three- even if you disagree with them.

The reason that Corbyn seems so utterly alien to the prevailing order is not because his ideas are irrational but because they are heretical. Of course to a true believer heresy is by definition irrational- but that simply makes Corbyn's arguments more relevant - his point is precisely that the current way of doing things is not working for large numbers of people, so to attack him for not supporting the status quo is itself irrational since to oppose something you must first, of course, disagree with it.

The assumption that anyone who disagree's with you is a fanatic is itself symptomatic of a certain kind of fanaticism.

At some point in the past decades economics made the transition from an obscure academic sand pit to a fully fledged religion, complete with it's saints, sinners and holy texts- and in this theology of money the role of Corbyn is that of the Anti Christ- the fact that he has a beard only lending credence to the tale.

Agreed - the heresy versus irrationality point is well made!

[billybong]

As a bit of an aside the year 2020 seems to have some level of symbolism (it's been targeted and included in various policy agendas etc etc for quite a few years now e.g Horizon 2020 Projects under eu auspices) so maybe some changes to the norm including some of Corbyn's ideas might be planned to come about then. Just saying.

Edited August 5, 2015 by billybong

[scepticus]

FTAV post on Corbyn's "Peoples QE" soundbite:

http://ftalphaville.ft.com/2015/08/06/2136475/corbyns-peoples-qe-could-actually-be-a-decent-idea/

Hopefully the debate is here to stay and will remain lively.

Some comments on the FTAV post echo my own disquiet about the lack of a reverse gear.

[XswampyX]

It reminds me of this thread.... http://www.housepricecrash.co.uk/forum/index.php?/topic/204644-what-will-labour-do-now/?p=1102717804

Get rid of income tax.

Have a land value tax.

Just outright print next years budget deficit.

Remove fractional reserve banking.

Free health care.

Free tuition at all levels.

Have a points based system for our borders.

and

Keep left.

[Meerkat]

Clueless Torygraph article re Corbynomics roundly trashed by a variety of commenters :

http://www.telegraph.co.uk/finance/economics/11773610/Why-we-should-all-start-feeling-nervous-about-Corbyn-omics.html

As we have discussed Corbynomics has multiple 'issues' (I'm still waiting to find out where the Reverse Gear of the Positive Money/Atkinson solution or whatever is), however the just-add-water torynomics wisdom of the article's author is without doubt far more risible than anything Corbyn has come up with - and rightly rubbished by a commentariat that is clearly better informed about economics than in the past.

Have they forgotten how Osborne promised if he was elected, to immediately end the 'irresponsible policy of QE' when he was in opposition???

Two wrongs don't make it right... nothing better than cajoling a thief or a zombie?

[R K]

Wren-Lewis on The Ethics of Helicopter Money

http://mainlymacro.blogspot.co.uk/2015/08/the-ethics-of-helicopter-money.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed:+MainlyMacro+%28mainly+macro%29

I suspect many different ideas are going to ultimately become associated with "Corbyn" and could end up being distilled/agglomerated into a single meme (like, for instance, "Red Ed") largely by the right wing media but also the so-called Blairites which will stifle the "debate" (is there even a debate outside a few rather technically obsessed macro economists & a handful of navel-gazing financial journos?)

[DabHand]

The problem is that none of these ideas is really that far fetched- there are perfectly rational arguments to be made for all three- even if you disagree with them.

The reason that Corbyn seems so utterly alien to the prevailing order is not because his ideas are irrational but because they are heretical. Of course to a true believer heresy is by definition irrational- but that simply makes Corbyn's arguments more relevant - his point is precisely that the current way of doing things is not working for large numbers of people, so to attack him for not supporting the status quo is itself irrational since to oppose something you must first, of course, disagree with it.

The assumption that anyone who disagree's with you is a fanatic is itself symptomatic of a certain kind of fanaticism.

At some point in the past decades economics made the transition from an obscure academic sand pit to a fully fledged religion, complete with it's saints, sinners and holy texts- and in this theology of money the role of Corbyn is that of the Anti Christ- the fact that he has a beard only lending credence to the tale.

Good post!

[Guest TheBlueCat]

When it comes to economic policy it's best to look at the history of the left wing the world over which is, regardless of the actual policy details, very bad. I think it stems from their belief in the Marxist hypothesis that capitalism is ultimately self destructive and will inevitably give way to true socialism when it finally collapses under its own contradictions. Why worry about the effect of your economic policy when what you really want is financial ground zero anyway?

[interestrateripoff]

Jeremy Corbyn would cost every British family £2,400 a year

Exclusive: Tory analysis of Labour leadership contenders shows Left-winger's policies would carry a £42bn price tag

• Toby Young: With Corbyn, the unions are digging their own graves
• Liz Kendall calls for block voting to stop Corbyn's surge
• Cooper attacks, but gets a kicking from her own audience
• Matthew Hancock: Any Labour leader will cost British families dear

So a £42bn price tag, far far cheaper than bailing out the parasites in the City which has run into hundreds of billions requiring decades of debt servicing. Clearly his policies are a bargain in comparison.

[sPinwheel]

How much are the Tories currently costing every family? How much is high rent/mortgages costing the unlucky generation? How much extra debt did the Tories add on in their first 5 years of power?

Dont expect the Telegraph to ask those questions.

[Meerkat]

I think it stems from their belief in the Marxist hypothesis that capitalism is ultimately self destructive and will inevitably give way to true socialism when it finally collapses under its own contradictions.

+1 - this is one shabby secret of Marxists. On the one hand, the theory propagates the inevitability of socialism arriving. On the other - and in the practice, it never happens by itself because people a.k.a. as free markets are quite happy and well-off self-organising economic matters. Hence, the history of hard core Marxists resorting to violence, expropriation and all that to bring their "inevitable" social organisation about. And to Wonderpup - two wrongs don't make it right. That I criticise Corbyn for his fantasies does not necessarily imply support for the status quo that is only marginally less heretical and will indeed fail in the end. Not because of its capitalistic features, but exactly because of its socialistic/crony capitalism features. The question what happens first - natural abandoning of these market unfriendly features or, indeed, through a rise of proper fascist state that I sense Corbyn is quite a fan of. Note the definition of the ultimate state of fascism - state completely guiding the direction of private enterprises/employees thru effectively deciding how much everybody should be earning for his/her contribution. (Communism differs that even the nominal ownership of capital is transferred to the state.)

[Meerkat]

How much are the Tories currently costing every family? How much is high rent/mortgages costing the unlucky generation? How much extra debt did the Tories add on in their first 5 years of power?

And how much of that Corbyn is planning to retire?

[sikejsudjek]

The ultimate irony of Corbyn is that by scrapping trident, probably scrapping hs2 which he voted against, and enforcing taxation on multinationals he will save far more money than the Tories. Not only that, but there is no reason in principle why rail can't be renationalised cost free when franchises run out, returning a profit to the treasury. The big advantage of this program is that unlike the austerity cuts from the Tories, it doesn't harm growth. The real loons are the present Government who have very little support for their policies from top economists.

http://krugman.blogs.nytimes.com/2015/08/04/corbyn-and-the-cringe-caucus/?_r=0

To quote Krugman

"First, it’s really important to understand that the austerity policies of the current government are not, as much of the British press portrays them, the only responsible answer to a fiscal crisis. There is no fiscal crisis, except in the imagination of Britain’s Very Serious People; the policies had large costs; the economic upturn when the UK fiscal tightening was put on hold does not justify the previous costs. More than that, the whole austerian ideology is based on fantasy economics, while it’s actually the anti-austerians who are basing their views on the best evidence from modern macroeconomic theory and evidence.

[Meerkat]

The ultimate irony of Corbyn is that by scrapping trident, probably scrapping hs2 which he voted against, and enforcing taxation on multinationals he will save far more money than the Tories. Not only that, but there is no reason in principle why rail can't be renationalised cost free when franchises run out, returning a profit to the treasury. The big advantage of this program is that unlike the austerity cuts from the Tories, it doesn't harm growth. The real loons are the present Government who have very little support for their policies from top economists.

http://krugman.blogs.nytimes.com/2015/08/04/corbyn-and-the-cringe-caucus/?_r=0

To quote Krugman

"First, it’s really important to understand that the austerity policies of the current government are not, as much of the British press portrays them, the only responsible answer to a fiscal crisis. There is no fiscal crisis, except in the imagination of Britain’s Very Serious People; the policies had large costs; the economic upturn when the UK fiscal tightening was put on hold does not justify the previous costs. More than that, the whole austerian ideology is based on fantasy economics, while it’s actually the anti-austerians who are basing their views on the best evidence from modern macroeconomic theory and evidence.

Got to be laughing - and no, i don't support the present status quo - but the so called top economists you may be referring to would be known as charlatans if they were doctors.

[Steppenpig]

there is no reason in principle why rail can't be renationalised cost free when franchises run out, returning a profit to the treasury.

As others have already said, I believe these would have to be out to tender under EU rules, although maybe there is some way of wrangling it.

I'm in favour of a unified rail system of some sort, but I doubt there would be "profit" from it.

Edited August 14, 2015 by Steppenpig

[billybong]

It would be helpful if Krugman explained the diifference between his so called austerians and his so called anti-austerians as in the UK they both seem to be profligate and extreme debters and spendthrifts.

Maybe it's the difference in where the money is being spent on he doesn't like but he should clarify that. Maybe he should call it something like people's austerity if that's what he means - because the increased debt and general profligacy is certainly going somewhere. He should give more detail - they never do of course.

Edited August 14, 2015 by billybong

[sikejsudjek]

As others have already said, I believe these would have to be out to tender under EU rules, although maybe there is some way of wrangling it.

I'm in favour of a unified rail system of some sort, but I doubt there would be "profit" from it.

Depends which bits of the rail industry you include in the calculation.

Got to be laughing - and no, i don't support the present status quo - but the so called top economists you may be referring to would be known as charlatans if they were doctors.

You can't get away from the fact that the present austerity policies are going to harm growth. They will also kill people. I've already lost one family member to these daft Tory policies, and the fact that so few economists back them or can show they will work is a damning enditement of the 'loony right' that are running the show. Yesterday we heard about a new library with no books, we have aircraft carriers with no planes, immigration policies with no one to enforce them - and that's before the utterly insane cuts Osborne is going to inflict.

[zugzwang]

It would be helpful if Krugman explained the diifference between his so called austerians and his so called anti-austerians as in the UK they both seem to be profligate and extreme debters and spendthrifts.

Maybe it's the difference in where the money is being spent on he doesn't like but he should clarify that. Maybe he should call it something like people's austerity if that's what he means - because the increased debt and general profligacy is certainly going somewhere. He should give more detail - they never do of course.

Austerity vs anti-austerity.

In reality, big govt and big finance are indivisible.

[Meerkat]

Depends which bits of the rail industry you include in the calculation.

You can't get away from the fact that the present austerity policies are going to harm growth. They will also kill people. I've already lost one family member to these daft Tory policies, and the fact that so few economists back them or can show they will work is a damning enditement of the 'loony right' that are running the show. Yesterday we heard about a new library with no books, we have aircraft carriers with no planes, immigration policies with no one to enforce them - and that's before the utterly insane cuts Osborne is going to inflict.

Man.. my condolences - this is another thing many people don't realise how many unnecessary deaths Marxian & crony capitalist policies have brought about. In fact, probably the 2nd biggest killer after religions?

Second, here is other problem that was observed by an economist proper, von Mises, long time ago and ever more valid nowadays: "To a considerable extent, without knowing it, many people are philosophical Marxists, although they use different names for their philosophical ideas." Dare I suggest that the current leaders of Tories fall into this category? I.e. their actual policies for 90-95% are the same if compared to labour, i.e. they are philosophically socialists in their heart no less though more of the interventionist breed with the remaining 5-10% being crony capitalism ideas. In that sense, yes, there is a difference - whereas someone like Corbyn is openly admitting his beliefs (and to his credit), most of the tories are masquerading as free marketeers only to suggest to the gullible they have a real choice.

Third, the bureaucracy below the superficial government level is the same. That folk hardly changes independently of who ascends to the power. Consequently, not the same lunacies maybe, but you are guaranteed them nevertheless under the alternative you suggest.