Snap General Election called

[Zhivago]

I do hope their economic plans are more ambitious than just raising rates. Helicopter money for example, or allowing people to deposit directly in the central bank, or some form of sovereign money system...

[Stom]

This has taken on a more civil tone again.

I do think Labour are making the right chpice by mainly shutting up right now. They just need to highlight and underline any obvious feck ups better.

On the crowding of private economic activity, I would imagine/hope they would target sectors with very low/non-existant competition...where government intervention has the highest chance to actually improve things.

Natural monopolies.

Well of course...But I would want to take it a little further than that. Just make sure that decisions are robust and fair about who to invest in/compete with.

[Digby]

This has taken on a more civil tone again.

I do think Labour are making the right chpice by mainly shutting up right now. They just need to highlight and underline any obvious feck ups better.

On the crowding of private economic activity, I would imagine/hope they would target sectors with very low/non-existant competition...where government intervention has the highest chance to actually improve things.

Natural monopolies.

I don't happen to think areas such as water, power and trains should ever have been privatised in the first instance, but now they are it's not easy to unwind. I wouldn't want to try and privatise them as we did with Railtrak which is to say on the cheap, I think we need to recognise they're private companies with assets and if we want them back we should pay for them, partly that's about protecting future private investment, partly its about behaving better than Mugabe and simply seizing property in the name of the greater good. That gives a big problem 'cause the kind of money need to take back a good number of companies into national ownership is nearly always going to be the kind of money we can't afford or at least would do better spending elsewhere. Further I don't want to nationalise 1 major company in 6 and then in essence force all the other companies from the market via state control, and I don't want to fund a major buying spree by printing money.

However in advance I don't have ideological problems with bringing some companies back under state ownership, though not ones like BT, British Airways which for me sit much better alongside other private companies, but I would want to know how it's going to be done, how it's going to be respectful of private assets and future investment, and how it's going to be paid for, and if they can't sensibly show all that I'd much rather they didn't get invovled. The areas I would like to see targeted for state control would initially be Air Traffic Control and National Forensic Services, and then if it can be shown how to sensibly pay for it down the line move onto some Rail Franchises, and then water and then power. And certainly I've no interest in hiving off large chunks of the NHS so private firms can dip their fingers into public funds.

But there are lots of steps I'd be taking well ahead of getting anywhere near mass privatisation, for instance it's insane that the National Gird is barred from generating power when at various stages in their network we're basically missing out on free chances to do so as it'd be deemed competition between the National Grid and the energy suppliers and thus it's barred, but in the big picture it makes no sense.

[Zhivago]

This has taken on a more civil tone again.

I do think Labour are making the right chpice by mainly shutting up right now. They just need to highlight and underline any obvious feck ups better.

On the crowding of private economic activity, I would imagine/hope they would target sectors with very low/non-existant competition...where government intervention has the highest chance to actually improve things.

Natural monopolies.

I don't happen to think areas such as water, power and trains should ever have been privatised in the first instance, but now they are it's not easy to unwind. I wouldn't want to try and privatise them as we did with Railtrak which is to say on the cheap, I think we need to recognise they're private companies with assets and if we want them back we should pay for them, partly that's about protecting future private investment, partly its about behaving better than Mugabe and simply seizing property in the name of the greater good. That gives a big problem 'cause the kind of money need to take back a good number of companies into national ownership is nearly always going to be the kind of money we can't afford or at least would do better spending elsewhere. Further I don't want to nationalise 1 major company in 6 and then in essence force all the other companies from the market via state control, and I don't want to fund a major buying spree by printing money.

However in advance I don't have ideological problems with bringing some companies back under state ownership, though not ones like BT, British Airways which for me sit much better alongside other private companies, but I would want to know how it's going to be done, how it's going to be respectful of private assets and future investment, and how it's going to be paid for, and if they can't sensibly show all that I'd much rather they didn't get invovled. The areas I would like to see targeted for state control would initially be Air Traffic Control and National Forensic Services, and then if it can be shown how to sensibly pay for it down the line move onto some Rail Franchises, and then water and then power. And certainly I've no interest in hiving off large chunks of the NHS so private firms can dip their fingers into public funds.

But there are lots of steps I'd be taking well ahead of getting anywhere near mass privatisation, for instance it's insane that the National Gird is barred from generating power when at various stages in their network we're basically missing out on free chances to do so as it'd be deemed competition between the National Grid and the energy suppliers and thus it's barred, but in the big picture it makes no sense.

For me there are two broad cases where nationalisation makes sense.

The first is natural monopolies. For example the francise system simply regulates the monopoly of a rail company over a piece of track, here you can either find ways to break this natural monopoly or return it to national ownership.

Personally my view is that trying to make this work as a truly competitive market has so many problems, it's much simpler to revert to national ownership. With energy it is less clear, although the high barriers to entry seem to reduce competition, so there is a case here too.

Some privatisations have worked, such as the airlines. Here there is clearly a competitive market.

The second case is public interest. For example the profit motive is contrary to the public interest in the case of healthcare, so the NHS should clearly stay in public ownership. Public interest argument can also apply to other services that everyone needs too to some extent.

[Digby]

Natural monopolies.

I don't happen to think areas such as water, power and trains should ever have been privatised in the first instance, but now they are it's not easy to unwind. I wouldn't want to try and privatise them as we did with Railtrak which is to say on the cheap, I think we need to recognise they're private companies with assets and if we want them back we should pay for them, partly that's about protecting future private investment, partly its about behaving better than Mugabe and simply seizing property in the name of the greater good. That gives a big problem 'cause the kind of money need to take back a good number of companies into national ownership is nearly always going to be the kind of money we can't afford or at least would do better spending elsewhere. Further I don't want to nationalise 1 major company in 6 and then in essence force all the other companies from the market via state control, and I don't want to fund a major buying spree by printing money.

However in advance I don't have ideological problems with bringing some companies back under state ownership, though not ones like BT, British Airways which for me sit much better alongside other private companies, but I would want to know how it's going to be done, how it's going to be respectful of private assets and future investment, and how it's going to be paid for, and if they can't sensibly show all that I'd much rather they didn't get invovled. The areas I would like to see targeted for state control would initially be Air Traffic Control and National Forensic Services, and then if it can be shown how to sensibly pay for it down the line move onto some Rail Franchises, and then water and then power. And certainly I've no interest in hiving off large chunks of the NHS so private firms can dip their fingers into public funds.

But there are lots of steps I'd be taking well ahead of getting anywhere near mass privatisation, for instance it's insane that the National Gird is barred from generating power when at various stages in their network we're basically missing out on free chances to do so as it'd be deemed competition between the National Grid and the energy suppliers and thus it's barred, but in the big picture it makes no sense.

For me there are two broad cases where nationalisation makes sense.

The first is natural monopolies. For example the francise system simply regulates the monopoly of a rail company over a piece of track, here you can either find ways to break this natural monopoly or return it to national ownership.

Personally my view is that trying to make this work as a truly competitive market has so many problems, it's much simpler to revert to national ownership. With energy it is less clear, although the high barriers to entry seem to reduce competition, so there is a case here too.

Some privatisations have worked, such as the airlines. Here there is clearly a competitive market.

The second case is public interest. For example the profit motive is contrary to the public interest in the case of healthcare, so the NHS should clearly stay in public ownership. Public interest argument can also apply to other services that everyone needs too to some extent.

The question remains of how would one pay to privatise such as the rail franchises

[Zhivago]

I don't happen to think areas such as water, power and trains should ever have been privatised in the first instance, but now they are it's not easy to unwind. I wouldn't want to try and privatise them as we did with Railtrak which is to say on the cheap, I think we need to recognise they're private companies with assets and if we want them back we should pay for them, partly that's about protecting future private investment, partly its about behaving better than Mugabe and simply seizing property in the name of the greater good. That gives a big problem 'cause the kind of money need to take back a good number of companies into national ownership is nearly always going to be the kind of money we can't afford or at least would do better spending elsewhere. Further I don't want to nationalise 1 major company in 6 and then in essence force all the other companies from the market via state control, and I don't want to fund a major buying spree by printing money.

However in advance I don't have ideological problems with bringing some companies back under state ownership, though not ones like BT, British Airways which for me sit much better alongside other private companies, but I would want to know how it's going to be done, how it's going to be respectful of private assets and future investment, and how it's going to be paid for, and if they can't sensibly show all that I'd much rather they didn't get invovled. The areas I would like to see targeted for state control would initially be Air Traffic Control and National Forensic Services, and then if it can be shown how to sensibly pay for it down the line move onto some Rail Franchises, and then water and then power. And certainly I've no interest in hiving off large chunks of the NHS so private firms can dip their fingers into public funds.

But there are lots of steps I'd be taking well ahead of getting anywhere near mass privatisation, for instance it's insane that the National Gird is barred from generating power when at various stages in their network we're basically missing out on free chances to do so as it'd be deemed competition between the National Grid and the energy suppliers and thus it's barred, but in the big picture it makes no sense.

For me there are two broad cases where nationalisation makes sense.

The first is natural monopolies. For example the francise system simply regulates the monopoly of a rail company over a piece of track, here you can either find ways to break this natural monopoly or return it to national ownership.

Personally my view is that trying to make this work as a truly competitive market has so many problems, it's much simpler to revert to national ownership. With energy it is less clear, although the high barriers to entry seem to reduce competition, so there is a case here too.

Some privatisations have worked, such as the airlines. Here there is clearly a competitive market.

The second case is public interest. For example the profit motive is contrary to the public interest in the case of healthcare, so the NHS should clearly stay in public ownership. Public interest argument can also apply to other services that everyone needs too to some extent.

The question remains of how would one pay to privatise such as the rail franchises

BoE could fund it. Just wait for the franchise to run out, then simply create the money like QE was created. Just for the initial investment, i.e the rolling stock. After the initial investment fund running and maintenance from ticket sales.

[Digby]

BoE could fund it. Just wait for the franchise to run out, then simply create the money like QE was created. Just for the initial investment, i.e the rolling stock. After the initial investment fund running and maintenance from ticket sales.

Printing money is as above specifically one of the areas I'd want to see them avoid. Also you want to fund running and maintenance from 'just' ticket sales? And is that 'just' running and maintenance of the rolling stock or of the track too?

[Zhivago]

BoE could fund it. Just wait for the franchise to run out, then simply create the money like QE was created. Just for the initial investment, i.e the rolling stock. After the initial investment fund running and maintenance from ticket sales.

Printing money is as above specifically one of the areas I'd want to see them avoid. Also you want to fund running and maintenance from 'just' ticket sales? And is that 'just' running and maintenance of the rolling stock or of the track too?

Were you also against QE?

[Digby]

BoE could fund it. Just wait for the franchise to run out, then simply create the money like QE was created. Just for the initial investment, i.e the rolling stock. After the initial investment fund running and maintenance from ticket sales.

Printing money is as above specifically one of the areas I'd want to see them avoid. Also you want to fund running and maintenance from 'just' ticket sales? And is that 'just' running and maintenance of the rolling stock or of the track too?

Were you also against QE?

Yes and no. I don't exactly like the idea, but I understand it given the mess we were in.

But just because we did a stupid thing before out of desperation doesn't mean we should plan for the future by aiming for rank stupidity.

[Zhivago]

Printing money is as above specifically one of the areas I'd want to see them avoid. Also you want to fund running and maintenance from 'just' ticket sales? And is that 'just' running and maintenance of the rolling stock or of the track too?

Were you also against QE?

Yes and no. I don't exactly like the idea, but I understand it given the mess we were in.

But just because we did a stupid thing before out of desperation doesn't mean we should plan for the future by aiming for rank stupidity.

Banks create money as credit into the economy all the time. Have you seen the growth of M4 over the last 20 years?

[Digby]

Were you also against QE?

Yes and no. I don't exactly like the idea, but I understand it given the mess we were in.

But just because we did a stupid thing before out of desperation doesn't mean we should plan for the future by aiming for rank stupidity.

Banks create money as credit into the economy all the time. Have you seen the growth of M4 over the last 20 years?

I'm not sure what you mean when you say banks create money, is this purely about central banks or crossing over into retail and investment banking? If the latter we're more into gearing than creating. Any which way if anyone wants to pay for a major nationalistion project by printing money then it seems to me beyond stupid, but we've just seen Brexit, we've just seen Trump elected, so maybe stupid is the future.

Just to be clear again I'm not saying certain industries wouldn't perhaps better suited to being run as public services, but there needs to be a coherent narrative around how that would happen, and there's no point trying to do it in a way that'd be aborted/unwound in the next 5 year cycle of government.

[Zhivago]

Yes and no. I don't exactly like the idea, but I understand it given the mess we were in.

But just because we did a stupid thing before out of desperation doesn't mean we should plan for the future by aiming for rank stupidity.

Banks create money as credit into the economy all the time. Have you seen the growth of M4 over the last 20 years?

I'm not sure what you mean when you say banks create money, is this purely about central banks or crossing over into retail and investment banking? If the latter we're more into gearing than creating. Any which way if anyone wants to pay for a major nationalistion project by printing money then it seems to me beyond stupid, but we've just seen Brexit, we've just seen Trump elected, so maybe stupid is the future.

Just to be clear again I'm not saying certain industries wouldn't perhaps better suited to being run as public services, but there needs to be a coherent narrative around how that would happen, and there's no point trying to do it in a way that'd be aborted/unwound in the next 5 year cycle of government.

Money supply is endogenous, not exogenous. Mainstream economics is only just waking up to this reality.

[Digby]

Banks create money as credit into the economy all the time. Have you seen the growth of M4 over the last 20 years?

I'm not sure what you mean when you say banks create money, is this purely about central banks or crossing over into retail and investment banking? If the latter we're more into gearing than creating. Any which way if anyone wants to pay for a major nationalistion project by printing money then it seems to me beyond stupid, but we've just seen Brexit, we've just seen Trump elected, so maybe stupid is the future.

Just to be clear again I'm not saying certain industries wouldn't perhaps better suited to being run as public services, but there needs to be a coherent narrative around how that would happen, and there's no point trying to do it in a way that'd be aborted/unwound in the next 5 year cycle of government.

Money supply is endogenous, not exogenous. Mainstream economics is only just waking up to this reality.

What do yo think that means as regards financing policy with a magic money tree?

[Zhivago]

I'm not sure what you mean when you say banks create money, is this purely about central banks or crossing over into retail and investment banking? If the latter we're more into gearing than creating. Any which way if anyone wants to pay for a major nationalistion project by printing money then it seems to me beyond stupid, but we've just seen Brexit, we've just seen Trump elected, so maybe stupid is the future.

Just to be clear again I'm not saying certain industries wouldn't perhaps better suited to being run as public services, but there needs to be a coherent narrative around how that would happen, and there's no point trying to do it in a way that'd be aborted/unwound in the next 5 year cycle of government.

Money supply is endogenous, not exogenous. Mainstream economics is only just waking up to this reality.

What do yo think that means as regards financing policy with a magic money tree?

It contradicts the quantity theory of money, which is where this fear of "printing money" comes from. It also means that banks (acting as private monetary institutions) already do create money ex nihilo, so why shouldn't public monetary institutions?

[Digby]

Money supply is endogenous, not exogenous. Mainstream economics is only just waking up to this reality.

What do yo think that means as regards financing policy with a magic money tree?

It contradicts the quantity theory of money, which is where this fear of "printing money" comes from. It also means that banks (acting as private monetary institutions) already do create money ex nihilo, so why shouldn't public monetary institutions?

I don't think banks do create money at a retail/investment bank level. I think they leverage deposits which can create issues with money supply which often times see central banks respond to ensure there's no crunch. Though this is largely a discussion around terminology, and gets away from the fact that whatever one wants to call it that at some level what some people call printing money is inflationary, and it's not a way to pay for things. If government wants to pay for services, assets, investment or whatever then it can generate taxation to cover or it can borrow, you're down the looking glass if you think you can just print money to support wider government policy

[Sandydragon]

Generating money (in whatever format) out of nowhere risks inflation. Those countries that follow a ‘print money’ policy tend to have high levels of inflation.

[Digby]

Generating money (in whatever format) out of nowhere risks inflation. Those countries that follow a ‘print money’ policy tend to have high levels of inflation.

There do seem to be tolerances. I'm surprised that QE has lasted as long as it has with so little inflationary pressure as a for instance, but what works in a crunch as a temporary solution is still for me a dangerous experiment to carry forward as QE for the 'people'

[Zhivago]

What do yo think that means as regards financing policy with a magic money tree?

It contradicts the quantity theory of money, which is where this fear of "printing money" comes from. It also means that banks (acting as private monetary institutions) already do create money ex nihilo, so why shouldn't public monetary institutions?

I don't think banks do create money at a retail/investment bank level. I think they leverage deposits which can create issues with money supply which often times see central banks respond to ensure there's no crunch. Though this is largely a discussion around terminology, and gets away from the fact that whatever one wants to call it that at some level what some people call printing money is inflationary, and it's not a way to pay for things. If government wants to pay for services, assets, investment or whatever then it can generate taxation to cover or it can borrow, you're down the looking glass if you think you can just print money to support wider government policy

You just don't get it do you. The ILF model of banking is invalid. It is not reality.

[Zhivago]

Generating money (in whatever format) out of nowhere risks inflation. Those countries that follow a ‘print money’ policy tend to have high levels of inflation.

Firstly the correlation is weak.
Secondly even if the correlation existed, correlation does not equal causation.

You should keep your oar out of topics you know nothing about.

[Digby]

It contradicts the quantity theory of money, which is where this fear of "printing money" comes from. It also means that banks (acting as private monetary institutions) already do create money ex nihilo, so why shouldn't public monetary institutions?

I don't think banks do create money at a retail/investment bank level. I think they leverage deposits which can create issues with money supply which often times see central banks respond to ensure there's no crunch. Though this is largely a discussion around terminology, and gets away from the fact that whatever one wants to call it that at some level what some people call printing money is inflationary, and it's not a way to pay for things. If government wants to pay for services, assets, investment or whatever then it can generate taxation to cover or it can borrow, you're down the looking glass if you think you can just print money to support wider government policy

You just don't get it do you. The ILF model of banking is invalid. It is not reality.

M4, endogenous and exogenous, ILF... not sure why you're looking to use such terms but whatever. And it might be that I don't get it, this is very possibly true, but dress it up as you want belief in a magic money tree is no way to plan to finance policy.

If there must be more QE then rather then looking to finance investments or nationalisation I'd be willing to listen to plans to use QE to remove the absurd PFI legacy we've been saddled with, courtesy of a Labour government, but that's off the top of my head as far as I'd go, and that only to listen to plans as I wouldn't in advance endorse without reservation

[Digby]

Generating money (in whatever format) out of nowhere risks inflation. Those countries that follow a ‘print money’ policy tend to have high levels of inflation.

Firstly the correlation is weak.
Secondly even if the correlation existed, correlation does not equal causation.

You should keep your oar out of topics you know nothing about.

I don't know if you're on a strange attempt to provoke responses or simply barking mad when reading commentary like this. It's depressing too as for all I might not vote Labour anyway there is clearly a space in politics for some sensible left wing thinking, and yet we're being offered the risible Corbyn

[Zhivago]

I don't think banks do create money at a retail/investment bank level. I think they leverage deposits which can create issues with money supply which often times see central banks respond to ensure there's no crunch. Though this is largely a discussion around terminology, and gets away from the fact that whatever one wants to call it that at some level what some people call printing money is inflationary, and it's not a way to pay for things. If government wants to pay for services, assets, investment or whatever then it can generate taxation to cover or it can borrow, you're down the looking glass if you think you can just print money to support wider government policy

You just don't get it do you. The ILF model of banking is invalid. It is not reality.

M4, endogenous and exogenous, ILF... not sure why you're looking to use such terms but whatever. And it might be that I don't get it, this is very possibly true, but dress it up as you want belief in a magic money tree is no way to plan to finance policy.

If there must be more QE then rather then looking to finance investments or nationalisation I'd be willing to listen to plans to use QE to remove the absurd PFI legacy we've been saddled with, courtesy of a Labour government, but that's off the top of my head as far as I'd go, and that only to listen to plans as I wouldn't in advance endorse without reservation

You discredit yourself with this whole money tree nonsense. I don't know how you can criticise the executive for being incompetent but use their childish rhetoric at the same time...

[Digby]

You just don't get it do you. The ILF model of banking is invalid. It is not reality.

M4, endogenous and exogenous, ILF... not sure why you're looking to use such terms but whatever. And it might be that I don't get it, this is very possibly true, but dress it up as you want belief in a magic money tree is no way to plan to finance policy.

If there must be more QE then rather then looking to finance investments or nationalisation I'd be willing to listen to plans to use QE to remove the absurd PFI legacy we've been saddled with, courtesy of a Labour government, but that's off the top of my head as far as I'd go, and that only to listen to plans as I wouldn't in advance endorse without reservation

You discredit yourself with this whole money tree nonsense. I don't know how you can criticise the executive for being incompetent but use their childish rhetoric at the same time...

I'm happy using terms like magic money tree. Certainly it's far more childish to imagine you don't need to pay for things and can simply have magical access to money without cost(s)

[Zhivago]

M4 is a precise category of the broad money supply.

Money being endogenous means that its quantity is determined by factors within the economy as opposed to external authority like the central bank. Essentially that demand for money drives its creation.

ILF (intermediates of loanable funds) model of banking is the theory that banks intermediate loanable funds (e.g. Savings) between non-bank lenders and borrowers.

[Zhivago]

M4, endogenous and exogenous, ILF... not sure why you're looking to use such terms but whatever. And it might be that I don't get it, this is very possibly true, but dress it up as you want belief in a magic money tree is no way to plan to finance policy.

If there must be more QE then rather then looking to finance investments or nationalisation I'd be willing to listen to plans to use QE to remove the absurd PFI legacy we've been saddled with, courtesy of a Labour government, but that's off the top of my head as far as I'd go, and that only to listen to plans as I wouldn't in advance endorse without reservation

You discredit yourself with this whole money tree nonsense. I don't know how you can criticise the executive for being incompetent but use their childish rhetoric at the same time...

I'm happy using terms like magic money tree. Certainly it's far more childish to imagine you don't need to pay for things and can simply have magical access to money without cost(s)

The alternative is redistribution of money. You know that capitalism sticks money up to the top. That leads to lack of demand at the bottom.