Funding the Future

Politics is the art of the possible, and not about the creation of ideal solutions, about which few are likely to agree in any case. It’s important that this is understood, because far too many political debates argue over the pursuit of goals that are unachievable. 

With a Cabinet made up of supposedly highly qualified graduates, all of whom would claim to have a social conscience, you would expect Labour to be able to think critically about the solutions required to the problems created by fourteen years of Tory rule. Right now, however, it seems that there is not one critical thinker amongst the lot of them. No wonder they’re already in such a mess.

The single transferable party describes the system of government that we now have in the UK, where whoever is in power, the policies appear to always be the same. When all that is on offer is austerity, and all that changes is who delivers it, do we really have a democracy any more, or is there just a single transferable party in power?

All of life, including political life, depends on our ability to tell stories about who we are, what we are, what we think and what we hope for. In that case you would have thought Labour would have defined its story about what its latest iteration is by now, but it hasn’t. As far as I can see, it has no story to tell about what it is, what it believes and what it is for. No wonder it is in a mess.

As a matter of fact, the Bank of England can always create money out of thin air. But can commercial banks really do so? The answer is yes, subject to a massive caveat – which is that they can only do so under licence from the Bank of England, which means that the buck for all money creation ultimately stops with the government.

Some people argue that  modern monetary theory is irrelevant, or that it changes nothing. They’re wrong. MMT fundamentally reframes the power relationships within our economy, moving power away from banking and the City and towards democratic government control, whilst prioritising people and full employment instead. No wonder so many people don’t like it: MMT challenges all the privileges they enjoy at cost to the rest of us.

The overwhelming impression Labour has given during its first few weeks in office is that it has no idea about why it wanted to be in government, or what it will do with power now that it has it. After fourteen years in opposition that appears quite extraordinary, except that it reinforces the idea that the whole Starmer project to date has simply been about defeating Corbyn. But in that case, it’s fair to ask, where is Labour going?

Every time I post a video about money people appear claiming only gold is money and we must go back on the gold standard. Those saying so are economic dinosaurs who do not understand who the modern economy works and would rather we go back to the era that delivered the Great Depression, precisely because of the obsession with gold. They really do need to be ignored.

QE was, and always will be a sham to disguise the fact that a central bank is lending money to the government that owns it. In this video I explain the ins and outs, and costs, of this ridiculous denial of the truth.

Steve Baker – until recently a Tory MP – has claimed that in twenty years’ time – when we will be celebrating the centenary of the welfare state – we will no longer be able to afford it. Is he right, or talking a load of nonsense, as usual?