Sunday, February 08, 2009

Marr, Osborne, Darling, Quantitative Easing

Andrew Marr had that George Osborne in the back of his taxi today.

Osborne, it seems, would not have cut VAT (I thought they were supposed to be the tax cutting party?), would possibly re-organise the Bank of England (BoE), give it a remit to regulate the cycles of the market, increasing the Capital Adequacy in good times, regulating the amount of debt in the system, with the Governor on a single fixed term, and he might cap payments to banksters.

Osborne would not rule out Quantitative Easing (QE - always makes me think of a laxative). This is a bit of a neologism, it gives "no result" on this glossary, nor on this one, but the old Wikipedia comes up with the goods. Right wingers tend to be contemptuous of the W'pedia, but if the alternatives do not exist, then what are they moaning about?.

Every time journalists mention "Quantitative Easing" they add "Printing Money" as an explainer. This is usually followed by a picture of sheets of notes flying off a printing press. (not on radio of course, but in time they will think to put on 3 seconds of printing press noise: "Quantitative Easing" clankety-clankety-clank)

This is a nasty bit of systematic misinformation by the media, calculated to strengthen the association of QE with hyperinflation in the public mind, thereby reducing confidence in the currency. Great. Thanks.

The fact is that the BoE is always printing and minting money. That's its job. That's where cash comes from, just like babies come out of mummy's tummy.

If /when we start QE it will not be through physically printing money, but by creating it, as the banks do every day, by typing figures into someone's account. Ordinarily the banks do this: they create 97% of the new money in the economy, and the BoE gets to create the other 3%, as physical money. Now the banksters have got a fit of the vapours, and have ceased to create new money, so either we go into deflation, or the Government issues the necessary money.

QE is almost certainly going to happen.
The only question is, where is Darling going to direct his new QE money?

Will he just throw it into the bottomless, foetid maw of the diseased banking system?
Will he give it to motor manufacturers, or the next patch of Labour-voting industry that starts to tremble?
Will he give it to the military, by getting his neighbour in No 10 to start a war in Iran or somewhere?

Or will he invest it into the physical and energetic basis of the Real Economy, the clean energy sector?

Energy, along with agriculture, water, sewerage, and housing is the foundation of any and every economy. The priority in 2009 is that energy needs to be conserved and decarbonised, not only because of Global Warming, but also because of Peak Oil. The Green New Deal is the plan to create jobs and prosperity through investment into energy conservation and renewables. The Green New Deal Plus is the way to extend the GND so that it benefits more people, sadly blocked by the Green Party Handbrake Tendency, but that is no reason not to press it on Government.

Anyway, back to the Andrew Marr programme.

George Osborne was ushered out, we got to meet a luvvie, and finally, the moment we had all been waiting for - Alistair Darling was wheeled out to be Marred.

I didn't count, but gained the impression that he got interrupted more than Osborne. Darling equivocated over whether to cap banksters' bonuses, "the whole culture needs to change" (? from apple pie to blaeberry pie perhaps?), half of our mortgage lending was from foreign banks, something about SME's, Japan had QE for 10 years.

It is mentioned en passant that three Eurozone countries are close to bankruptcy, (we were not told which three, for fear that the breath of a word might be enough to knock them over). A quick Google yields nothing definitive, but, Italy, Greece and Spain crop up a bit, which is four, and then there is Ireland, so we are spoiled for choice really.

Andrew rubs Alistair's face in Sarko's remarks about VAT. Alistair retorts that Sarko has been caught stimulating the French Car industry; details were not forthcoming, leaving open the image of his rubbing their bonnets with a soft cloth.

Alistair finished by uttering sympathetic noises about savers. Thanks, Darling.

Overall, the picture is of Mr Tweedledum Darling and Mr Tweedledee Osborne putting saucepans on their heads. It is very clear that the problem is that Labour did not undo Mrs Thatcher's financial deregulation, in fact they loosened it further. It is very clear that the Tories would have done exactly the same thing as Labour, had they been in power. It is very clear that Chancellors of the Exchequer are mere temporary and disposable speakers for the RealGovernment, which is the Civil Service, who are servants of Custom, Habit, Media, Big Business, and Europe.

No matter who you vote for, the government always gets in.
So vote Green. We never get in.

(This is a joke btw, in case any green party managerialisationismists think it should be pulled. Greens do in fact get in, we have about 130 LA councillors and 2 MEPs, even in this electorally benighted country, let alone all the MSPs, TDs and Continental representatives and ministers, where they have a grown-up electoral system).

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