"Democracy is the problem Capitalism is trying to solve."

Thanks for your link DAR. I am no expert on fiscal economics so exploring to improve my understanding. The relationship between the Government, the bond markets and the third player, Banks of England is nuanced and complicated. I found another video that really helped my understanding on Youtube ( can't do link so google 'Zack Polanski and The Bank Chief Trade blows on BBC", natura.media/support. It referred to what ZP to LK and Haldane's Panel response...

You might be interested in this, apparently broadcast on Ch 4 yesterday.

I haven’t seen much of it, but I think the interviewees are given a fair chance to explain their position. Polanski very eloquent, as usual.

I was startled by the Labour MP, who looked to be about 16 years old. Very eloquent but as she started by telling us that the wealthy are more highly taxed now than at any time since WW2, which is utterly untrue, I don’t hold out much hope for the quality of her economic analysis

m.youtube.com/watch?v=1onr7pAEFRE

Have had a chance to see a short clip plus analysis of LK and it was just as I expected. I don't necessarily agree with the Greens but I do want to hear what their spokesperson has to say rather than what LK tries to put into their mouths.

www.youtube.com/watch?v=dQk08_LtD7Q

LemonJam

Grantanow- my view, though I welcome other views, is that democracy needs a sitting government that is functional, efficient and effective and necessarily includes respect for human rights, supports freedom of expression, an independent judiciary and delivers strong public services. All comes at a cost so all society needs to accept and pay their share through fair taxes. If not capitalism, with wealth and power held by the minority will dominate and continue at the expense of democracy. We see that being played out in the US currently.

Agreed but ideal. Our present politicians are not up to the job and that includes all the parties. The present danger is Reform which might well be an efficient and effective government but so was Mussolini's. Still, their dismal performance running Kent Council may give voters pause.

One local town has elected 3 ultra left Green district councilors they are causing big arguments with the Liberal majority, quite comical with Tories siding with the liberals.

Should have added - par for the course on Kuenssberg and one of the reasons I no longer watch this or the Sky equivalent unless someone flags something interesting.

Thank you to those who pointed me in the direction of the programme. It's beginning to sound as if it was more of an ideological attack than a factual one.

LemonJam

I also watched ZP on LK this am. He is a clear, good speaker who engages I agree. On the panel was Sharon Graham (TUC leader) , Jeremy Hunt, ex C chancellor, and Andy Haldane, ex Bank of England Chief Economist. ZP was given short shrift by the panel.

JH said what ZP was saying was "economically totally illiterate", the job of the chancellor is to raise taxes to fund public services like the NHS. Andy Haldane said that what ZP was saying we can borrow what we want in a different way etc "It's La La Land economics.... I'm the man at the Bank of England who presided over a £trillion of money printing. If that was the route to success and growth we would long since have solved this problem. This is not the time for funny money solutions. We need to invest and that's the only route of getting back to growth".

I just sincerely hope that the Greens don’t do well in the next GE as Polanski is as off the wall as they come.

LemonJam

MaizieD- I don't rate JH either. However Haldaneas a man who presided over printing £trillion money comments interesting...

I;ve been having a chat with my mate Chatgtp (who can pull out data much faster than I can).

Haldane's assertion that QE didn't lead to growth is, I think, rather blinkered because very little, if any, of the money which went to the bond sellers was invested in anything much that would be productive of growth.

The purchase money went to financial institutions which would be the very last organisations interested in long the long term investment needed to start businesses, or to grow existing businesses. They 'invested' it mostly in instruments which were most likely to offer a faster return on their investment. Notably housing and equities.

There were fewer private individuals in receipt of bond purchase money, but they tended to be the wealthy who, again, mostly prefer short term gain over long term investment in drivers of growth.

The same again with the covid QE. While it paid peoples wages and made loans to some businesses (some of which were fraudulently obtained) it did very little that would promote long term growth.

I don't know why Haldane would expect anything different. He clearly lives in a different world from most of us. The one where it is believed that wealth 'trickles down'. Give the rich loads of money and it'll grow the economy 😡😡😡😡

As, indeed, many economists seem to ...

P.S It wasn't £1 trillion, it was £895 billion. Though, of course, £1billion is chicken feed in the context of the national budget

MaizieD- I don't rate JH either. However Haldaneas a man who presided over printing £trillion money comments interesting...

DAR- programme = Luara Kuenssberg - 9am on Sunday mornings- available on I player....

JH said what ZP was saying was "economically totally illiterate", the job of the chancellor is to raise taxes to fund public services like the NHS. Andy Haldane said that what ZP was saying we can borrow what we want in a different way etc "It's La La Land economics.... I'm the man at the Bank of England who presided over a £trillion of money printing. If that was the route to success and growth we would long since have solved this problem. This is not the time for funny money solutions. We need to invest and that's the only route of getting back to growth".

JH is something of a capitalist himself. Remember him 'forgetting' to declare he owned 7 luxury flats? Nor is he an economist. I wouldn't expect him to approve an alternative view of economic policy which wouldn't benefit him.
He wasn't a good Chancellor, either...

DaisyAnneReturns

Thanks for that Lemonjam. Do you remember what the programme was?

Laura Kuenssberg 9am BBC1 Sunday

Thanks for that Lemonjam. Do you remember what the programme was?

I also watched ZP on LK this am. He is a clear, good speaker who engages I agree. On the panel was Sharon Graham (TUC leader) , Jeremy Hunt, ex C chancellor, and Andy Haldane, ex Bank of England Chief Economist. ZP was given short shrift by the panel.

JH said what ZP was saying was "economically totally illiterate", the job of the chancellor is to raise taxes to fund public services like the NHS. Andy Haldane said that what ZP was saying we can borrow what we want in a different way etc "It's La La Land economics.... I'm the man at the Bank of England who presided over a £trillion of money printing. If that was the route to success and growth we would long since have solved this problem. This is not the time for funny money solutions. We need to invest and that's the only route of getting back to growth".

MaizieD

P.S it would have been better if he'd said that part of the UK's debt is owed to itself. that's the QE money which was created by bond purchasing. In effect, the government ordered the BoE (the bank the government owns) to create money to purchase bonds. The government now solemnly orders the BoE to pay on its behalf the interest due on the bonds. In effect, paying itself.

It's crackers!

QE is recorded as borrowing for international comparison.
About half of the QE is actually owed to the commercial banks in the form of the security deposits they all have to make. The BoE does pay interest on those deposits, currently 5% - £50 billion

There has been speculation that Reeves will change that, we will see next week

LemonJam

David49-"Neo liberal capitalism is a fact of life, no one country can change that, if we are to participate in the global trade market we cannot opt out it would be suicide because sterling would plummet".

I disagree. A country CAN modify liberal capitalism and still trade globally. Nearly all modern economies are mixed economies, incorporating elements of both market systems ( capitalism) and government intervention ( socialism/regulation) and all participate in global trade to some degree.

International trade is governed by the World Trade Organisation (WTO) rules and members include countries with a wide range of economic models, from the heavily market-oriented to those with significant state involvement....

States do modify the system to suit themselves, most have the same problem as the UK the government spends more on public services then the revenue it gets so end up borrowing. The exceptions are productive economies like Norway that have small populations and exploit massive natural resources, it also happens to have very high taxation.

P.S it would have been better if he'd said that part of the UK's debt is owed to itself. that's the QE money which was created by bond purchasing. In effect, the government ordered the BoE (the bank the government owns) to create money to purchase bonds. The government now solemnly orders the BoE to pay on its behalf the interest due on the bonds. In effect, paying itself.

It's crackers!

He is a good speaker GrannyGravy13. Certainly clearer and less weird than some. I feel that at least that gives us a better opportunity to decide whether we agree or not!

GrannyGravy13

I caught some of Zack Polanski’s (Green Party UK) interview with Laura Kuenssberg this morning.

He was insistent that a country’s economy is nothing like a household economy and also went on to say that the U.K.’s debt is owed to itself (my simplification)

I have never considered the Green Party as a recipient of my vote, but he did come across clearly and precise. I still need a lot more convincing though 🤷‍♀️

Zack isn't hidebound by the egregious 'household economy' view of the national economy which is promulgated by politicians, commentators and, I'm sorry to say, many economists who should (and often do) know better. He's prepared to look at empirical fact rather than fiction.

There's an interview with him in today's Observer, which I haven't yet read. It appears he's in favour of leaving NATO, which I kind of blinked at and thought , hmmm... But I'll read the whole piece.

I caught some of Zack Polanski’s (Green Party UK) interview with Laura Kuenssberg this morning.

He was insistent that a country’s economy is nothing like a household economy and also went on to say that the U.K.’s debt is owed to itself (my simplification)

I have never considered the Green Party as a recipient of my vote, but he did come across clearly and precise. I still need a lot more convincing though 🤷‍♀️

A country CAN modify liberal capitalism and still trade globally. Nearly all modern economies are mixed economies, incorporating elements of both market systems ( capitalism) and government intervention (socialism/regulation) and all participate in global trade to some degree.

Of course you are right LemonJam. We have evidence in countries all around us trying to maintain social democracy.

Capitalism has existed since time immemorial, as has the fight for democracy. Centralisation of power may appear to be a default, because wealth generates more wealth (investment returns, economies of scale) and because political influence (patronage, coercion, bureaucracy) creates mechanisms for even greater power. This means it is easier to move from "democratic" capitalism to little or no democracy.

Democracy only works when there is trust in elections, agreement on basic rules, and acceptance of losing sometimes. This requires education, a free press, and cultural learning. It take generations to build and is easy to undermine as we have seen only to clearly in recent times. Elites holding power need none of that; they need only force or loyalty as we are seeing, coming from the right, world-wide at the moment. Democracy isn't easy which may be why so many seem to be prepared to vote for its abolition.

Sorry, I didn't finish a sentence and missed it in preview. It should of course read

and proposes that the wealthy believe that the Burkean view of the 'natural order' is the correct one and work accordingly to achieve it

LemonJam

David49: "PS maybe you missed it Adam Smith died a long tome ago".

Rustow- who coined the term Neo liberalism in 1938, and key architects of the ideology, e.g. the American economist, Milton Friedman, also both died a long time ago. Margaret Thatcher was inspired by Friedman and she is dead also. Do you feel the ideology should die with them?

It would have been better for us all if their ideology had died with them

I have been pointed at an interesting blog, The Hartmann Files, which deals with this question of 'the wealthy' (rather than 'capitalism') trying to 'solve' democracy.

It considers the opposing ideas of Burke and Paine (two more long dead thinkers ) and proposes that the wealthy believe that the Burkean view of the 'natural order'

I quote:

Burke and his contemporaries in the late 1700s believed that if working-class people made too much money, they’d have enough spare time to use democratic processes to challenge the social order and collapse the British kingdom.

^Too much democracy, Burke believed, was a dangerous thing: deadly to nations and a violation of evolution and nature itself^.

Whereas Paine, of course, believed that all men were created equal and that it was the hierarchy of wealth that violated nature. His view informed the US Declaration of .Independence of course and the US constitution. The 'hierarchy of wealth' have been subverting that ever since..

It's a very interesting read. It details what the blogger perceives as the suppression of the middle and working classes by Reagan and his successors with the help of the neoliberal economic policy he imposed on the previously Keynesian inclined US.

hartmannreport.com/p/is-the-reason-some-wealthy-people

David49: "PS maybe you missed it Adam Smith died a long tome ago".

Rustow- who coined the term Neo liberalism in 1938, and key architects of the ideology, e.g. the American economist, Milton Friedman, also both died a long time ago. Margaret Thatcher was inspired by Friedman and she is dead also. Do you feel the ideology should die with them?