Another Tory policy? Basic Income (without Government Debt)

Shock! Horror! The Tories have stolen Labour's public spending policies. Chancellor Rishi Sunak has started to undo the austerity that his own party imposed for a decade which, as Headley Stone  wrote (FT letter 15 Feb) 'has brought the UK's public services to its knees' . 

Commenting on the budget in the FT on 11 March,  Martin Wolf wrote: 'It makes sense for the government to borrow to spend, especially on investment. I have been arguing this for a decade. The decision to cut investment right after the financial crisis was a classic bit of Treasury idiocy. Now ...with employment high ...no longer the ideal time....But it is still a risk worth running provided the money is well spent which one has to doubt, given the hurry.' 

What is it about our party politics that had George Osborne, a Tory chancellor imposing harsh measures for a long time to the detriment of the common good and now has a successor from the very same party determined to undo it?  Left-leaning polices have now become the centre ground but have been cleverly captured by the politicians of the old right. At long last, new enabling fiscal policy that for so long has been proscribed, will be relaxed, but if Mr Wolf is right not with the best timing.  Incidentally the investment will benefit bankers and large funds as the money will be borrowed from them. It need not be that way, as sovereign governments can create money debt free.      

The huge impact of Covid-19 on the economy and on households will surely need 'helicopter money' for every citizen and the news is that President Trump is planning to 'send out cheques to every American within two weeks' to achieve a boost. There are people calling for such a measure in the UK. A UK petition is running with an ambitious plan to set a basic income at £1000 per month, sign here: Basic Income .   This: QE for the People  explains how it would work without raising new government debt.  

What may well be started as an emergency measure to plug depleting household budgets by a free handout, needs to become a standard fact of life for every citizen. Everyone needs sheltering from the whirlwind caused by Covid-19 and the usual rollercoaster of flip-flopping politicians who play with our livelihoods through shortsighted policies.     


Posted by Charles Bazlinton author The Free Lunch - Fairness with Freedom £3   

Welby's Wish List for fairness. A new mandate from the IPPR rooted in the common good.

The IPPR (Institute for Public Policy Research) has published its interim report 'Time for Change: A New Vision for the British Economy'. Archbishop Justin Welby is leading the publicity with an FT article 'What sort of British economy do we want for our children?' [Digital title: British society deserves an economy rooted in the common good']. He continues the May/Corbyn themes (our last blogpost):
Theresa May, PM: 'We will make Britain a country that works not for a privileged few but for every one of us.'
Jeremy Corbyn, Opposition Leader: 'For the many, not the few'.

Welby calls for comprehensive economic justice - socially, regionally, generationally, environmentally - and from the IPPR report highlights his priorities: the need for reform of the education system; a fairer tax system; decarbonisation; improvements in public and private pay and the expansion of the housing stock. He believes most people want a system working in the service of human flourishing and the common good and asks why are we hearing 'Why are so many people so poor when others are so rich?' and 'Why are young people going to be poorer than their parents? 

An interesting aspect of the report is its criticism of recent economic policy.
We have experimented with bold monetary policy, but are constrained by pre-Keynesian fiscal orthodoxy. It points out the significant cuts in public spending due to government austerity programmes and says that austerity has not worked well. It suggests that monetary policy has been majored upon but helpful fiscal policy has been neglected. It wants government-initiated investment for growth and monetary policy to be coordinated to redress this, with the Bank of England advising on the integration of monetary and fiscal policy. Personal note: Ask a high official at the Bank (as I have done) if it would be possible to  invest in an industry by creating money in the QE manner - at no interest and no repayment - and they will affirm that it can be done. The IPPR obviously thinks so too and wants a change. It wants the hands of the Bank untied so that it can join in to help the economy in new ways. 

Most items on the Welby Wish List could benefit from ideas promoted on this blog over the years. Some of these are indeed mentioned in the report, which is a strong vindication of the views of book The Free Lunch- Fairness with Freedom. Such as: Education reform using monetary policy to fund education grants (Prof. Richard Werner); improving pay by  universal basic income ; a fairer taxation system which also helps the expansion of the housing stock through the incentive for development through a new land value tax .

Under the final heading (IPPR p81-83) 'Inequality and public purpose'  the report challenges the way we have measured success over the last 50 years and includes: 
'..inequality is largely a result of the ability of economically powerful groups in society to extract ‘rents’ or incomes beyond those earned by their economic contribution'. 
This gets to the heart of the matter in the way of the principles of The Free Lunch. In the vital matter of banking  (IPPR p80):
 'new insights into how the banking system creates money in modern economies, and therefore the role and limits of government or central bank monetary policy'.
The IPPR needs to look further into Richard Werner's New Paradigm in Macroeconomics who is arguably the first modern economist to have this insight. 

A banking problem from the report shows how only 5% of UK bank lending goes for businesses (15% in the Eurozone) with most going to land and property lending:
'The bulk of real estate loans and mortgages do not increase the productive capacity of the economy or contribute to growth; instead their primary effect is to drive up asset prices'.

To redress the bank lending imbalance the IPPR wants regional banks with 'geographically bounded  mandates to support the local economy' . 
It is happening already! The Hampshire Community Bank is likely to be the UK's first such regional bank and it is designed to that pattern. Additionally, being owned by a charitable foundation it will use its profits for the common good in its area and not for the high staff salaries and bonuses so roundly criticised in the IPPR report and by Archbishop Welby. Hampshire Community Bank in its whole ethos, aims to change banking for the better. Banking for the common good.  The bank, whilst not open for business yet, is currently in its licence application stage under the Bank of England's PRA. Such distinctive banks are needed across the UK. These new banks will play one part in a greater fairness for all.

With political parties broadly united over the fairness theme, and with the IPPR's excellent report spelling out some telling home truths over broad areas of economic life, the prospects that something serious for fairness will be done, are good.

Posted  by Charles Bazlinton. Author : The Free Lunch - Fairness with Freedom.  Director: Local First CIC which is promoting Hampshire Community Bank.

Prof David Llewellyn: 'Most serious banking crisis ever'. Are we safer now? Answers at ECOBATE 2016?

The 4th European Conference on Banking and the Economy (ECOBATE 2016) takes place on Wednesday 12th October in Winchester with its mix of academic seminars and free public meetings.  This year for the first time the University of Winchester's Business School (West Downs Campus, Romsey Road, Winchester) is hosting the academic side until mid-afternoon and then from 3.45pm the free public session is back across the city in its usual place - the Bapsy Hall at Winchester's Guildhall.

Up to 60 academic research papers are expected to be presented on banking and finance covering a wide range of topics from 8.30am at the University's Business School.

At the Guildhall (free to the public) Prof David T Llewellyn of the University of Loughborough is a keynote speaker. On a YouTube film (2015) speaking on the financial crisis of 2007/8 he considers that we have experienced:  'the most serious banking crisis ever on record' and his work is to help lower the chance of it happening again and to protect bank customers and save taxpayers future costs if it does. He has worked as an economist with Unilever, the UK Treasury, the IMF, Halifax Building Society and the Stakeholder Group of the European Banking Authority. He is highly respected for his banking research and regulatory advice.

Sir Vince Cable another keynote speaker was Secretary of State for Business Innovation and Skills in the UK's Coalition Government to 2015. He regularly features in the media as an independent commentator on finance and the economy and political issues.

Among current topics expected to to be addressed at ECOBATE 2016:

• Negative interest rates
• Cash - are they trying to ban it? 
• Cybercurrencies 
• Monetary reform and monetary policy
• Ethics - who are the stakeholders in our financial systems & who is profiting?
• BREXIT and its effects on the economy
• Economic growth and the lack of it.  

See the Eventbrite registration website   for more detail.

The ECOBATE conferences have been running from 2011 and are the brainchild of Professor Richard Werner who has chaired them. He is leading banking academic (Chair International Banking, University of Southampton). One of his current projects is the formation of Hampshire Community Bank a pioneering venture to create a new culture of banking for the common good in the UK.

ECOBATE  travel: There is no onsite parking at either venue but there are efficient park-and-ride schemes on the edge of Winchester. The main line railway station (Winchester) is about a 20 minutes walk away from both venues. See the conference websites for late updates and for more details on speakers.

Sir Vince Cable: Brexit - causes and outcomes

Sir Vince Cable came to Winchester last week for the Winchester Festival and said we may see him around a bit in that city as he is now involved with local people who are setting up Hampshire Community Bank, a non-profit bank as per the German Sparkassen model.  On Thursday he was in Winchester to promote his book: After the Storm, which is an insider account of his time as minister in the coalition government from 2010 to 2015.

On the recent Brexit vote to leave the EU he referred us back to a paper he wrote on the politics of identity - see this 'revisting' of that 1994 paper  published by Demos in 2005 - as: Multiple Identities - Living with the new Politics of Identity . His writings showed how we are in an era when the traditional 'left/right' political classification is less and less meaningful, with people acknowledging quite different identities for themselves as the old often class-based identities fade. We now have a kaleidoscopic array involving nationality or region of origin, religion (with many sub-divisions within), or based on multiple identities such as Scottish and British and European. He says the term 'multi-cultural community' is unhelpful in describing what is actually often a very complex situation. Such phrases may stereotype and mislead into regarding very varied groups as monolithic 'vote banks' for political purposes. What we need - he quotes Trevor Philips - is a need to create a sense of shared identity called 'Britishness'. 

With the measures that followed the 2007/8 financial crisis the financial system has been kept afloat (like a heart attack victim being kept alive) with artificial injections of  ultra-cheap money, with interest rates set near zero and going lower. They are 'lower than Babylonian times' - we are in an Alice in Wonderland situation. The ongoing result is that economic output has been lost and wages are stagnant. On the other hand another effect is to pump up asset prices (property and shares). If you are a homeowner and live in Winchester or London you are considerably wealthier through this cheap money policy, but if you live in Barrow, Blackpool, Middlesborough or Hull you don't see this. Sir Vince said that the resulting envy and resentment found an outlet in a vote to leave the EU.  He also said that globalisation means that such countries as China became competitive and that many people in western countries are suffering lower living standards thereby. Elsewhere, such as in the US, this resentment  of growing inequality has appealed across the political spectrum where even the old right (Republican) wing headed by Donald Trump is gaining support as well as, to be expected, the socialist Bernie Sanders. In the UK many Labour supporters moved in the UKIP direction in the 2015 election crossing old party lines.  

Post Brexit he sees Mark Carney at the Bank of England as competent and following a predicted policy for pumping cash into the system. The £ exchange rate has dropped - which is 'no bad thing'; property prices have fallen - which is 'no bad thing'. It is likely that net bank lending will fall, but he hopes the British Business Bank will help new lending to firms and head off disaster. The next phase may involve a recession or at least an economic slow down. He is encouraged that his successor in the Business Innovation & Skills Dept. Sanjit Javid is prepared to borrow to invest, in such as housing and the railways. He hopes that a re-orientation of the economy is being planned with a long-term industrial strategy involving such as pharmaceuticals, aerospace, car production and training. 

To general laughter he reminded the audience that the Tories campaigned in May 2015 on the slogan 'Cameron or Chaos'. He did not agree with a legal challenge to the Brexit result, we need to get on with the new situation, although some fellow Lib-Dems think differently. He sees the consequences of Brexit to be massive. He is appalled there was no planning for a possible Brexit vote. The bureaucratic changes needed will involve a huge amount of work and take a very long time.    
Audience Q&A's: 

• He expected City of London employment to drop from 750,000 to 550,000. 
• He said that the country needed to be told to expect problems, anything falsely optimistic would bring later resentment. 
• Aligning with his identity analysis and from his experience in the Coalition for 5 years, would he support the suggestion that prospective MP's (should an early election be called) might stand branded Conservative/Coalition; Labour/Coalition; Lib-Dem Coalition so that voters could be encouraged to vote for national unity? He said that he thought the overall opinion was that the Coalition brought better governance. Someone had likened it to decision-making 'in concrete' rather than 'in jelly' otherwise. He said old loyalties are fading, parties are fragile, but how do you change the dynamic?  He thought there might be a  move to the centre with a resurgent Lib-Dem, a Labour breakaway and the Greens. Given such a scenario the suggestion was a possibility. 
• On the continuation of UKIP as a party, he couldn't say. Maybe the UKIP voters will stop voting, continue to, or move (back?) to other parties? 
•  What were his views on lobbying by big business? He thought that if it is done openly it is fine, as ministers must listen to concerned people. What is to be avoided is behind the scenes influence.  
• How could young people be encouraged to vote? He said that David Willetts in his book 'The Pinch' examined the great change that has happened between the generations recently, with life chances severely curtailed, for example in abandoned hopes of house buying for young people in their 20s and 30s and on quite good salaries.  There has been a breakdown in the contract between the generations and young people are abandoning participation in the system due to cynicism.  Sir Vince gave no solution himself.

Sir Vince's 'multi-identity' analysis gives the ideas in the book The Free Lunch - Fairness with Freedom a fresh boost. The idea is that the citizen should be placed at the centre of political thinking to bring extra basic rights to empower them. Policies would cover the financial redirection of resources, the simplification of welfare and taxation, less intrusive bureaucracy, reduced housing costs and steadier economic growth.  Whatever identities each citizen identifies themselves with would make no difference to their new basic citizens' financial rights. Rather than people opting out through alienation it would encourage their participation through inclusion. We are approaching confused and uncharted waters in political life and peaceful yet radical changes are needed to foster unity and co-operation. 

Posted by Charles Bazlinton. Author, The Free Lunch - Fairness with Freedom       

Charles Bazlinton is a director of Local First CIC which is promoting Hampshire Community Bank

QE: easy for the rich. Kaletsky's QE: easier for the poor. Corbynomics? Bank of England independence.

Last week's blog had Natalie Bennett at Making Money Work, asking: Could monetary policy do anything about inequality? Steve Keen said that dealing with private debt would address inequality and it was his suggestion that one-off payments to everyone could tackle this, on the condition that debts be repaid first. Lord Turner didn't think there is a 'magic...costless way' of addressing inequality - the way to do this is progressive taxation.

Philip Aldrick (The Times 19 Sept) QE spared Britain a recession...  is particularly clear that monetary policy increased inequality by creating asset price bubbles such as in gilts, bonds and house prices. Inflation is rocketing in these assets, leading, for example, to fading hopes for first-time homeowners.  Low interest rate funding and high demand from UK and non-UK owners buying to let inflates this bubble. [ Private Eye has a searchable map of such overseas owned properties using Land Registry data. Check your area! Whole streets in London are foreign owned].

Clearly monetary policy as carried out since QE in 2009 has increased inequality in housing. But Anatole Kaletsky in Prospect Magazine: How Corbynomics could work  has a neat solution. Instead of QE's £375bn spent to prop up financial markets ('making the rich richer') he proposes that this could have been spent by being given via a weekly £20 payment, to every 'man, woman and child in the UK' until UK growth returned to pre-crisis levels. He proposed this back in 2012. The Free Lunch Blog mentions it here.

So monetary policy could reduce inequality - since equal payments to all inevitably raises living standards proportionally more for the less well off. As long as conditions are strictly adhered to as to the eventual termination of the payment no harm would be done.

That would be a temporary remedy for a sluggish economy. (NB: temporary QE has lasted 6 years so far). But politicians would be wary of the dangers of launching such a citizen-based policy because it would be difficult to stop politically when the monetary need was over. What would be needed to take over would be a similar payment to all but funded by reform of the welfare/tax balanced budget. Such a Citizen's Dividend / Basic Income would need to be established by the end of the monetary booster to avoid the pressure on politicians to extend the  monetary policy dangerously beyond its period of monetary need. Basic Income UK and Citizen's Income Trust have the details of an unconditional non-withdrawable payment to all, as of right.and it is broadly affordable within current budgets. That is the policy that would establish a new citizen's right, like voting, education and a health service.

Another use of monetary policy to promote sustainable growth is suggested by Prof Richard Werner: that credit creating institutions could provide monetary incentives for education purposes '$100,000 for each child born...such a policy would not be inflationary: among all inputs into the production function, human resources are by far the most important.' (New Paradigm in Macroeconomics p340).
To ensure good education for all must be among the most effective ways of poverty reduction and thereby inequality.

Inequality reduction by monetary means would not be magic - merely an effective policy against poverty and as a means of growing the economy.

But QE is magic - for wealthy people. From early 2009 when QE started the UK FTSE 100 share index to date has gained over 60% & UK house prices have risen 67%.

Strange how central bankers and governments fail to take easy steps to help the poor but so easily open doors for the rich to garner greater riches. The Monetary Policy Committee at the Bank of England has met dozens of times since QE started and resolved every time to keep interest rates at 0.5%. Their learned deliberations have now blown up another asset price bubble. Is the BoE really so partisan that it cannot think beyond top layer wealth creation as the sole answer to the crisis? Is it really there for the good of all - as might expected in a democracy? Presumably our government in meekly acquiescing to a measure that has achieved so little for so long, wholly agrees with it.

Bank of England independence is strongly defended. The question to be put is: How dependent on central bank policies ought the government to be?        

Making Money Work: Lord Turner, Steve Keen, Chris Giles & Richard Spencer on Corbynonmics and money creation.

Lord Adair Turner has learnt a bit on the practicalities of speechmaking since we last reported (see ECOBATE 2014, 11 Nov 2014). In Winchester his PowerPoint slides were lost en route and but he did a brilliant job improvising. At the Positive Money event Making Money Work at Central Hall, Westminster on Monday 7th Sept he safely had 2 paper copies of his slides for each of the 200 or so attendees. His talk developed his ECOBATE 2014 theme and gave much detail as to how he thinks government economic and monetary policy technically could, and politically should, develop. 

He said that he did not agree with the extreme radical Positive Money view for the abolition of fractional reserve banking and its replacement with 100% reserve banking. But the 2008 crisis and slow recovery since cannot be understood without a clear understanding of the nature of debt, money and credit. Pre-crisis and for many decades we were far too relaxed about the private credit creation by banks. Post-crisis we are too terrified of the potential of what he termed 'overt money finance' (OMF) of government deficits -another name for this is 'helicopter money'. 

Lord T said there is no reason whatsoever against helicopter money, it was all a question of how much you do. A small amount will stimulate a little with no excessive inflation. He thought it would however be excessive to fund 10% of the fiscal deficit this way as it would bring hyperinflation and destroy the economy. 

In discussion  - Chair: Fran Boait (Positive Money) ; Prof Steve Keen (Univ of Kingston) & Chris Giles (Financial Times) - the matter of the doubtful effectiveness of Quantitative Easing (QE) so far was discussed in contrast to OMF. Chris Giles thought that whilst he would never rule any new idea out (e.g. Jeremy Corbyn's 'Peoples QE') he was sceptical that it is seen as a sort of magic solution which has no cost. He was cautious of using OMF as a monetary tool.  If it was used simply to put new money in everyone's bank account, good, but to use it to spend on infrastructure was fraught with problems - you might have to halt the construction of the HS2 railway unfinished, due to monetary rules.  Money is not the only driver of the economy, in addition there is housing and planning policy and new macroeconomic tools as to how banks should lend; however in the future QE might be seen to have been OMF.  Here Lord T agreed that QE, as started in 2009, might become post-facto OMF. He illustrated this with his view that with the Bank of Japan owning 60% of GDP in Japanese Government Bonds he thought it highly improbable that these would be repaid or sold off by the BoJ. He thinks it will become helicopter money and be shown to be a permanent monetisation of government debt. ''That is going to happen and I would place a bet on it'.

He thinks that we should consider a 2009 UK scenario where a 4% of GDP fiscal deficit was planned and £350bn 'reversible' QE issued. He put it that it might have been announced that 5% would be planned with the extra 1% being OMF money creation and non-reversible. He said that this would send an important signal and be much clearer than the current scenario of whether QE really is reversible.   

Currently the Bank of England is apparently doing two things: 1.Managing interest rates and QE for inflation targeting. 2. Managing bank lending through loan requirements and bank capital requirements, for economic safety and stability all without managing demand.  What he sees as actually happening is that the BoE is starting to manage the allocation capital as seen in the Funding for Lending Scheme to be directed to SME loans.  Five years ago such government allocation of capital was unthinkable! 

The cause of the crisis had been the mis-allocation of capital through private credit creation by banks.  Too much credit chased existing assets rather than to finance productive investment, which Richard Werner calls 'credit for GDP transactions'.   This caused a debt overhang with the danger of deflation.  Beyond the supply of consumer goods to most households,  housing becomes another way to compete between members of society to gain a more attractive home or stay at a hotel. As locations offer varying benefits this competition encourages more debt. Banks encourage this, being biased towards property lending due to the collateral available. Steve Keen pointed out the reverse case of lending to entrepreneurs where, maybe,  four out of five loans might fail with loss of principal. This shows the difficulties that banks can have in lending to productive ventures. 

Lord Turner questioned how widely we might be able to spread a new understanding of the monetary issues being discussed.  In confessional mode, in his new book 'Between Debt and the Devil' he has a chapter 'The crisis I did not see coming'. He had to embark on an intellectual journey to understand themes ignored in his earlier economics education - a frank admission in mid-career from a very high-flying player. He said the very essence of the insight of macroeconomics is that governments and states are not the sum of households. In the personal household economy, books have to be balanced, but the state economy is different. Steve Keen said whilst he was impressed by the new openness at the Bank of England but in contrast the political class think the government should be running a surplus. 'They vie with each other: 'My surplus is bigger than your surplus' ' which is the equivalent of banks believing they should be receiving more loan repayments than they put out in loans. Governments ought to be running a deficit with money creation financing a large part of that.  Clearly from the view of the panel, economics education should be transformed so that these things are understood in universities, but beyond that how easily can the ordinary voter understand it? As to conventional economics theory, the efficient market theory is clearly wrong as no financial trader would get up in the morning if it was, since they would not be able to make any money! But the public needs to know that economics will never give as clear answers in its field as for instance an engineer can give in designing a bridge.

In Q&A I said I was involved in helping to establish a local community bank - Hampshire Community Bank which would lend locally and give its profits to local good causes. Was this a good foil to the problems being discussed that had arisen through centralised, international banks?  By their strong applause the audience clearly appreciated the idea.
Steve Keen thought it was an excellent idea as local knowledge would inform bank decisions on loans. Centralised banking is essentially 'collateral banking' which is dangerous, but as Richard Werner emphasises local banks are the strength of German banking. 

Chris Giles said local banks are obviously good, but that a weakness might be that local firms gain loans merely by being local and not through normal due diligence and good banking practice. (Note: If I had been able to respond a comment could have been that this danger is just as likely with non-local banks! Just look at what happened leading up to the 2008 crisis. Where was careful banking practice by national /international banks then?)  

Richard Spencer, an economist whom Jeremy Corbyn uses to inform his People's QE, said that 5 weeks ago he hadn't heard of Corbynomics but since then he has been credited with writing it!  Jeremy Corbyn asks what does the economy need?  He thinks we need investment in public infrastructure and this needs money and if needed a deficit, and this if fine because people want to buy bonds. However he thinks the banking system is too powerful and People's QE would mean that the bond route would not always be wholly used and banks not needed for some fraction of the money. Corbyn has said that if the economy is booming People's QE would not be needed as the bond route might be wholly enough.  He (RS) largely agrees with Lord Turner's views apart from central bank independence. He said that for politicians to be told by the central bank the amount of OMF needed is not democracy, it would be rather like being told by bankers how much tax is needed. Politician should listen to able technocrats, such as at the Bank of England. But let's not have bankers in charge, let's have democracy in charge. Strong applause.

From the panel: When politicians had control of interest-rate-setting, public opinion (or party opinion) was often targeted very obviously and the high inflation of the 1970's might be seen as a warning that sole political control was dangerous.  'Commitment devices' (e.g. Committee on Climate Change/ Bank of England) agreed by politicians in order to keep a steady course over time ahead even when it hurts, are useful.  However the ECB has been given far too much control as it defines its own terms for price stability, for instance.      

Natalie Bennett the Green MP asked what the money system would look like if consideration for the environment and for addressing inequality (where everyone has enough) were both addressed. Chris Giles thought a monetary system could not create a better society. Lord Turner thinks that money systems are not an appropriate answer to carbon issues - there are enough devices around already.  Progressive taxation is the device to address inequality, not OMF. Steve Keen thinks that money creation is needed to redirect spending to carbon reduction, no-one will do this for a profit.    

Barb Jacobson for the Basic Income Trust asked about the idea of using money creation for cash payments to everyone?  

The panel agreed with the idea: There should be no problem with ensuring a single payment to each person through NI numbers and tax numbers / It should be directed to paying off personal debt first for those who have it / Alastair Darling tried to do it in 2009 but was told it would take 9 months, so he reduced VAT instead / Australia did the same thing in 2 weeks.

Note: 

Chancellor George Osborne understands the subject of the Making Money Work event, as reported in  this blog   Nov 13 2013:
 ' It is theoretically possible for monetary authorities to finance fiscal deficits through the creation of money. This would allow governments to increase spending or reduce taxation without raising corresponding finance from the private sector.'   See Treasury document quoted para 3.34:  Here 

See the Positive Money official post for the event Making Money Work: HERE

Posted by Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom      

Corbyn's transformative idea: People's Quantatitive Easing

What do Nick Clegg and Jeremy Corbyn have in common? Back in April 2010 on the pre-hustings ITV debate 'the personality of Nick Clegg became visible.....for 90 minutes last week he was seen as a political leader and as normal. The shock rocketed him and his party up the polls leaving Tory, Lib-Dem and Labour within a few points of each other.'

Five years later the Lib-Dems are wiped out and now in the summer of 2015 it is all about Jeremy Corbyn as potential Labour leader. He hasn't generated a huge Labour swing in the polls but has enlivened the political debate in a quite extraordinary way that seems to have surprised even him. But among the other potential leader candidates Corbyn, the complete outsider, has become the star. It took Nick Clegg 90 minutes to effect a change in the 2010 election that brought the 5 year coalition; it took Nigel Farage about 3 years to 2015 to build a great poll rating that ended in UKIP's one seat; just where will Jeremy Corbyn take politics now?     

This poll shows that some of his core policies are favoured by the majority of voters by a wide margin: such as re-nationalisation of the utility and railway monopolies (3:1); minimum wage £10 /hr (3:1); 6o% tax for £150k earners (2:1); employee seats on FTSE100 boards (7:1).  What about people's quantitative easing that Corbyn has espoused as promoted by economist Richard Murphy?  Not an easy subject to poll about as even the Daily Telegraph and Bank of England governor Mark Carney are not altogether clear about what PQE might be as Murphy points out.  

In PQE Mr Corbyn is getting to a solution for the economic difficulties that are facing the country. The conventional stated view is that austerity is the only way.  JC has hit on a way to transform the economic outlook safely, sustainably and fairly.  It is key to most of his economics-related policies. For an early clear advocacy of PQE see Anatole Kaletsky from August 2012 . For nearly two decades Prof Richard Werner has been campaigning about the now so-called 'PQE' since he originally coined the QE phrase in the 1990's and this link has him explaining what he meant by it.

This Free Lunch blog from 2013 has more on PQE and shows that even George Osborne understands a little more of its possibilities than Mark Carney does, it seems - so austerity may not be the only way for Chancellor Osborne.  It wouldn't surprise me if he stole the PQE idea just as he did Labour's minimum wage idea at the last budget. But beware, a hopeful term may be twisted in use by politicians to leave us with current disfunctional economics. See these short videos by  Richard Werner explaining how the money system  and banking works and how it could be transformed.     

Gradually the concept of QE / PQE is taking hold. Lord Adair Turner, Michael Kumhof and Philip Coggan are speaking on it at 'Making Money Work' in London on Monday 7th September 4-6pm. Book on the link, free admission, there are limited places.

posted by Charles Bazlinton. Author The Free Lunch - Fairness with Freedom