Jeremy Corbyn: what’s his economic plan? | Paul Mason

Jeremy Corbyn wants to print money to invest in the UK. He's calling it "People's Quantitative Easing".

Rivals like Yvette Cooper say he's talking nonsense but Paul Mason thinks PQE might not be as crazy as some are making out...

[karlmuud]

I have a very distinct feeling that a large proportion of the voting public may well be moving towards the left.

[shamanahaboolist]

All the top economists are now singing the same tune. QE to the tune of 375 billion straight to the banks did NOT stimulate the economy, just made share and land owners richer.

If you put just 10% of that amount into the real world economy it can be up to 30x+ more effective at stimulating growth and leveraging debt.

[maynon]

QI -Quantitive Investment. ... govt invests in housing & public transport and gets a return on investment..instead of multinational corporations & their shareholders

[swallowdalert]

Diane Abbott will sort it out she paying the police £10 a week bit over paid I think

[simonbarrowuk]

Good stuff from Paul, apart from the gilt fallacy that Tom Bayley refers to below. I also wish people would stop talking about "printing money" and start using the accurate term "creating money" (because realising that money is essentially credit, not commodity, is important to understanding how to make it function more beneficially within the economy).

[sidsmiff]

Thank you Paul. I very much appreciate it when people explain important subjects in plain English that some (myself) find it hard to understand. A little knowledge is dangerous thing ;-)

[SphaHlela]

i didn't hear anything say to why this is a BAD idea. I just heard "its not done in normal times", and politicians don't like it.

[jackmansfield]

...Hold on that was a completely bungled explanation of QE. Did he watch this back?

[dickhamilton]

can anybody imagine anything remotely like this coming out of American network television?

[tbayley]

This is a reasonable explanation which could have been great if it didn't repeat a common fallacy. The fallacy that QE was designed to make the return on gilts so low that people would sell them and invest in the economy. If that was really the case how did the government manage to continue borrowing?! Unprecedented heaps of gilts were bought from the Treasury - more than TWICE the amount sold into QE.

No, the truth is that the trickle down "experiment" was a concocted story - the public front for a well orchestrated sovereign bailout, achieved through artificial demand for gilts. And who can say it was the wrong thing to do? It was done in about equal amounts under both Labour and Tory watches.

[triseebee]

Can anybody suggest the best A2/AS textbooks for Economics/Politics?

[juanmadero]

This "Corbynomics" is called modern monetary theory. It works be taking advantage of the fact that Britain controls it's own currency. Eurozone countries can't do it. It is also Varoufakisnomics and it works really well. If you all are interested look up Modern Monetary Theory.

[OXOjunkie]

That's the worst description of QE I have ever heard. The particular flavour of QE, used by the US Fed, the Bank of England, and now the ECB,   created the greatest transfer of wealth from the poor to the rich in human history. An ingenious swindle.

[drainlid]

Quite simply Quantitative Easing as it has been carried out doesn't work because it is 'trickle across' which is even less likely to work than 'trickle down' - because gravity will cause it to stick in one place.

[johnburns]

When interest rates are zero people move their savings to other forms of making their money grow, property, stocks, etc. This creates some growth as this money is moving around the economy. Obvious. He did not say where money being printed comes into it. Either he missed something or I did.

[grantbeerling]

this, served four terms, died whilst in office....then followed the 50-60's in the US, the system was based upon Keynesian...
So what what went wrong?(and this answers the economists question as to why QE has not become inflationary ) Full Employment, it basically it worked too well, once you have full employment you get wage inflation as the the workers dictate wage deals.
1)The opposite in a Neoliberal economy is the high debt of the working population (ie people who make a product)and a fractured workforce (no unions) which leads to fear of a loss of work, which in turn leads to low wage inflation, due to again fear.
2)So if QE is introduced in this environment the money doesn't trickle down as there is no wage demand due to fear of not being able to pay back loans (why are people in debt? see no 4). And as an extra benefit keeping interest rates low due to the real furnace of growth being hampered by having no disposable income, namely the middle class. So cheap loans if you don't want to touch your hidden stash...we are talking under 1% for the multi-billion loans for buyouts....Really you just can't lose, if you are one of the so few who can do this....The lesson of 1929 'f the shoe boy gives you advice on shares'...get out....
3)Thus it trickles up via stock buybacks, and disappears offshore again not causing inflation as the money is out of the system. Its reintroduced as money needing to be laundered by the only thing we want to be inflationary and is not on the RPI namley Housing,
4)So you can take a hit on the laundered money knowing that in 6 months due to scarcity (that you have created buy buying up said properties) its value will be restored. Add this to paying some money to your favorite Think Tank, Government agency and /or lobbyist you are guaranteed never to worry about money again...

Unless a reforming Socialist Government get in....

So is it any wonder they get so in a panic over Corbyn....they have the money, contacts, press and banks to stop any change to this golden goose laying its fat golden eggs...

[Scholes]

you need to go back to pre bretton woods system, fixed rate of exchanges in the main, and a credit system instead of a monetary system which gives you the most growth, glass steagall to get rid of these derivatives which are in essence worthless, and mass infastructure and high tech spending.

[lukedodson]

the more of something there is the less worth it has. printing money will cause a devaluation in the sterling wont it?

[Archivian]

So description number 1 (Quantitative Easing) is basically trickle down economics (certainly seemed that way). Direct the printed money up ward in the hopes it trickles down.
Which has been shown not to have worked. At least not for the middle class and lower.

[sunmoon]

'Normal' QE doesn't actually increase the amount of money in circulation, it just lowers interest rates. Which is why it cannot stimulate the economy, and which is also why 'fiscal QE' would crash the currency.