politicalbetting.com » Blog Archive » In defence of John McDonnell. Don Brind denounces the “intervi
politicalbetting.com » Blog Archive » In defence of John McDonnell. Don Brind denounces the “interview as humiliation”
“If only we Germans had a word for it”.
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Er, no. Taxes simply won't cover the operating costs and the capital expenditure costs of large scale infrastructure investment.
Does McDonnell actually believe this stuff? (Which is worrying) Or is he knowingly lying to people (which is worse).
But I agree with the comments on the Paxman-style of journalism which looks to generate heat not light.
FPPT for Cyclefree: yes, I absolutely dislike anyone in politics who hates any other democratic politicians (one can make historical exceptions for the undemocratic sort - Hitler and so on). You extrapolate one social media exchange to the movement, though, and I think that's a mistake - Momentum is generally mild-mannered and tries not to embarrass the party. I'm fine with their seeking to support new candidates who pledge support for their views - their endorsement can be helpful but often doesn't deliver nomination.
I don't think any opinion groups do anything else - would Labour First consider supporting someone with far-left views? The problem is when they try to unseat existing MPs and councillors, as happened on one council yesterday, and on the whole they don't, though some of their supporters do. That's disruptive and I don't agree with it, with rare exceptions (Danczuk!).
For balance, also FPPT on the decline of constructive conservative ideas. I read the Sunday Times and Sunday Telegraph on the plane to Kenya this week, and they're both depressingly in the grumpy old men camp. The conservative difficulty is that they don't see a way to address the issue that the undoubted efficiency of free markets is leaving a large swathe of the population on permanently depressed income. As one Tory MP observed, it's not realistic to expect people to support capitalism if they have no realistic chance of getting capital. Some - I'd include May - want to make an effort in this direction, but have no coherent intellectual project. Others don't actually care, and resort to empty abuse when the model is challenged from the populist left.
We currently spend more than £1,000,000,000 a week paying interest on our debts, after years decades of government spending more than they receive in taxes. The way out of that hole is going to be slow and painful, like it or not.
We used to call this "capitalism". Until dipshit Tories declared investment communism and decided the only acceptable kind of capitalism was selling assets off for one-off fees and a single profit. That's how we end up with shoddy infrastructure and business joining suit, not Investing in capacity or skills.
He may have mangled his words, but funny to see a Labour Shadow Chancellor standing up for old fashioned capitalism - investment for growth - being attacked by a Tory party who hate investment and pursuing a hard Brexit smash the economy and screw free trade policy
Every ideology has a worldview that would regard at least some other critiques as not just wrong but uninformative. The challenge from an interviewer's perspective is not to determine which approach is right but whether a good tranche of the general public would expect those questions to be put to the politician.
I find it rather worrying that the response to an inability to deal with rival critiques is to shoot the messenger. We need more, not less, of this style of interviewing. If Corbynism or Brexit are such brilliant ideas, their advocates should be able to explain so lucidly to those outside the congregation. Blustering about the media asking inconvenient questions, as the supporters of both frequently do, is a strong indication that both are the strategies of charlatans.
He's saying that:
(A) prices can be cut (dropping revenues) to be "fairer" to consumers
(B) business will operate as efficiently as before (sceptical given producer capture risk, but let's give him that one)
(C) profits from operations will fully cover interest payments to forced holders of debt (instead of equity)
(D) there will be sufficient surplus to fund all investment
(E) the Treasury won't grab any of that surplus
(F) taxes on new jobs created (don't forget taxes on existing jobs already factored in) - which won't impact profitability remember - will fully cover any additional capital the government needs to put in
(G) there will be no impact on interest rates or government borrowing ability or private sector investment
If you believe all that I have a very nice bridge you might like...
We could build a full-spec motorway in the far north-west of the Scottish highlands.
It might employ a few extra construction workers whilst it was being built, but it would become a burdensome white woolly mammoth as soon as it was complete.
What I agree with is that the Paxo style interview cheapens and coarsens the public debate, deters rather than assists in enlightening the audience and makes it sound like there are simplistic choices to make if only our politicians were not so stupid and venal.
Andrew Neil is our best interviewer at the moment but where he was at his best was during the interviews that he did at the election when he gave people a chance to speak and explain their ideas. This budget and its aftermath was not his finest hour.
We seem to have followed the US down a path where the economic, social and political checks and balances that kept capitalism working for the majority of people are being lost, leaving us with an 'elite' who are effectively economic rent-takers, akin to the feudal lords who grew rich coming round every year to collect rent from their desperate tenant farmers.
Forget Africa, Chinese now moving in to E Europe it seems
http://www.faz.net/aktuell/wirtschaft/mehr-wirtschaft/viktor-orban-und-li-keqiang-verhandeln-ueber-milliarden-investitionen-in-osteuropa-15313319.html
The scepticism many evince is because Brown classified much current spending as investment
Additionally many of the most productive areas of government investment - transport infrastructure for example - should be looked at under CBA not ROI.
https://www.welt.de/politik/deutschland/article171022400/Ich-moechte-wissen-ob-das-mit-Wissen-von-Merkel-passiert-ist.html
Oh, and because the Highlanders were all so lazy (allegedly!) it was mostly built by immigrant labour from Ireland...
It's really weird that the economics profession seem to have so little voice in this debate.
https://www.project-syndicate.org/commentary/new-fiscal-reality-favors-public-investment-by-jean-pisani-ferry-2016-11?referrer=/rddANxxiI1&barrier=accessreg
https://mainlymacro.blogspot.com/2015/11/public-investment-has-george-started.html
http://www.igmchicago.org/surveys/infrastructure-revisited
We cannot cut our way to prosperity - that's been tested to death. At some point we need to spend some money and accept the workings of capitalism. Borrow for day to day spending and yes it's debt interest t
dragging us down. Borrow for long term investment and offset the cost against the benefit from economic growth and tax revenues from having more people in work.
Nor can we just say ' we don't need' power generation or sewerage or motorways or fibre broadband or hospitals or all the other things the market has no interest in investing in. We need power generation but declare we can't afford it. But the French can afford to do it for us because we guarantee a 100% premium on power generated. They can see long term, why can't we? Why not borrow the money as they are, not charge the massive premium to consumers which will take money out of the economy, and do the thing cheaper?
At a time of high employment, the effect is pretty limited, and is inflationary,
If HMG is spending the money on that then they're not spending the money on something else and, quite aside from crowding out the private sector, will tend to depress overall productivity in the economy at a macro level as resources are misallocated.
He has actually so far as anyone can make out his opaque statements on the subjects confused GNP growth and government tax revenues. That isn't terribly reassuring in a would-be Chancellor.
It's even less reassuring to reflect he is the ablest member of the shadow cabinet and that many of the others are even less competent.
The trick is to make them spend their money in local businesses and not in foreign holidays etc.
Well, yes.
But that's not what McDonnell was saying. He was saying that any investment will magically pay for itself
the problem is that Briwn left such amess on the structural budget and PFI that it has taken years to get back to semblance of normality.
But yes, good projects should get investment and it's a good time to borrow if you can do so without impacting government borrowing rates.
What I object to is that people take this notion and apply it simplistically to all government spending and call it Keynesian. It is an insult to the great man. Whether spending more is the right thing to do depends on where you are in a macroeconomic sense, what the impediments to growth in the economy are and how quickly that benefit might come.
An economy that is already heavily indebted like ours and which cannot pay for current level of spending from the tax take (hence the structural deficit) is not necessarily made stronger by more borrowing. It may increase the rate of interest that the government has to pay on its debt reducing the amount of money for spending, it may discourage other investment as people take a view about the likely rate of future taxation to pay for that borrowing and it may well have adverse effects on the currency reducing the amount of effective spending power in the economy rather than increasing it.
McDonnell and his spending plans are almost childish in their simplistic disregard for consequences of his proposed actions. We cannot buy our way out of our current low growth without doing greater damage to an already unbalanced and indebted economy.
SPD and Greens using it to weaken Merkel, she's the shakiest she has been in a long time
I don't think the locals are too friendly though, as the road's surrounded by lots of fences and razor wire, and the farmers travel alongside it on quadbikes.
Such as waste of money ...
(*) So I have been told.
Explaining why they are stupid takes up too much time.
For instance - in the debate on re-nationalisation of railways/utilities, the question the journalists should be asking Labour is - why do you think these will be better run under public ownership?
Not: how much will this cost? which is a question which shows you do not understand the issues.
"As any economist knows if this government buys an asset by borrowing at zero real interest rates it really does not matter how much you have to borrow. Ask Labour politicians why they think the industry would be more efficiently run under public ownership, not how much will it cost."
https://mainlymacro.blogspot.com/2017/05/but-do-numbers-add-up.html
I don't fully understand why this concentration of capital, wealth and power is happening, but we see the evidence all around us. I did read an interesting theory a few years back that it was the existence of communism, as a rival world view competing for the support both of non-aligned nations and of voters in western democracies, that acted as a brake upon the excesses of capitalism, creating incentives for those at the top to ensure that its benefits were sufficiently widely distributed to maintain majority global and domestic support. Once this rival world view disappeared, these brakes came off. This seemed to me to be persuasive insofar as both the outcome and the timing match what we have seen, but correlation alone doesn't turn hypothesis into explanation.
There is little point in government funding cases that have a positive direct ROI as investors should be willing to do that.
On the budget deficit: that is current spending and it's very simple: either we cut spending or we raise taxes. There are few alternatives. Capital spending is something different. Unfortunately Brown screwed the pooch on both of those
One other related trend is for a party or government to not put up a person for interview, to try to kill a story by removing any fuel. This seemed to get a lot worse under New Labour, but all parties do this now. Less aggressive interviews may reverse this trend.
The problem is that modern debate focusses more on cheap point scoring than illumination, but in the internet age it is very hard to suppress information. Campbell and Mandleson couldn't control and spin the media like they did 20 years ago.
But right now is a once in a generation opportunity to borrow to invest. And we are squandering it. And perhaps not coincidentally we have abysmal productivity growth.
In the past the Tory and Labour parties would disagree on policy but agree on basic principles like the dignity of human life. Now that you appear to have binned that and economic competence with it, I struggle with holding back the sarcastic abuse.
Anyway, on investment. Every other major economy in the world does so. We don't. Either they are all correct or uniquely we are...
http://www.lefigaro.fr/international/2017/11/27/01003-20171127ARTFIG00211-macron-a-la-conquete-des-africains.php
It may not be investment that floats your boat, or that you agree with, but the government is investing heavily.
But the left can be a little more honest about this. Wanting investment in motorways is fair enough - but then you don't support Swampy-like figures who want to stop projects on spurious grounds. And the Labour leadership''s support for HS2 is rather lacklustre.
One feature of this system is that the block vote had the opportunity to also select the second candidate. Now I don't know if they had been told who to vote for in the second ballot, but I suspect that was the case.
Anyway, congrats to the two successful candidates. They know how democracy works in the Labour Party.
Get rid of the 'alleged' in the third paragraph.
The weaselly brackets in the fourth can go - other papers covered the story, so that's not noteworthy. Also change 'claimed' to 'stated'.
May want to remove 'perfectly sound'. He made 'a case' is factually correct.
Paragraph seven - "it came across as" - "it was", fewer words and more accurate.
We can all do better than this.
Tony Blair claimed in his book that the gentle style was much tougher to prepare for. The aggressive you can just fall back on pre-prepared lines.
Also to be fair - it feels like there is just much less time for interviews/discussion.
Not only that, most franchises are wholly or part,y run by foreign state governments. So we don't need to prove that a nationalised railway run as concessions by nationalised railways works, just get on a Northern train. Cross country. Scotrail...
Not that you'd know that from some of our frontbenchers who attack "privatisation" like we sold it off and struggle with the "what would it cost" question to which the answer is of course nothing.
Besides, will borrowing inevitably be at zero real interest rates? Forming a very grand spending policy based on transient market conditions doesn't make the question invalid. It's a very good example of someone finding an alternative analysis uninformative, seeking to delegitimise it and crying foul when his case is not accepted unquestioningly.
Also
https://twitter.com/sunpolitics/status/935400377280811008
Given the state of internal Labour politics I can see why the most powerful slate winning everything may be attractive.
Would Brexit or the Iraq War have happened if Westminster had any concept of probability?
It doesn't help them to make the economy smaller by not borrowing to invest.
More generally, too many journalists are poor in their questioning style, not forensic enough and far too fond of voicing their opinions rather than asking clear questions.
Transport improvements may be different.
Labour has no talent on its frontbench at the present time, because Corbyn's poisonous and inefficient methods of running the party have turned off all the people who could do a decent job (it is worth remembering however that Miliband had Tristram Hunt on his frontbench, so the problem is not exactly new).
What is different is that because these frontbenchers are basically nasty pieces of work, when shown up as ill-informed or inept they get vicious and abusive. That's a disturbing development for which I suggest we can thank Momentum.
And yet on the other side we have Boris Johnson. How the hell did we end up here?
Have a good morning.
We invest half cocked. Then pay the penalty for years to come. Only in Britain would they invest in new commuter trains for London, cut the budget to remove seat back tables, then have the huge cost of a variance to the huge cost co tract buildi g the trains to have them retrofitted. All because cost comes first and stuff the actual suitability of the product. And with the greatest respect to the A14(M) project that pushes the problem to the next bottleneck and doesn't solve the basic problem that we need more roads or at least the endlessly parked schemes to actually be built.
You rightly point to Labour and swampy - true. This is beyond party politics, it's the British disease since the 70s that we are shit at transport infrastructure and now barely look beyond the next election when making decisions.
It would be deeply ironic if Marx's critique did, by merely creating a possible alternative, help capitalism, at least temporarily, to right itself, whilst doing nothing for those condemned to live under its alternative world view.
I suspect if this was in your field you would not be so sanguine about a journalist mixing up common law and european law or some other technical distinction that 80% of people don't understand or care about but is actually quite important.
https://twitter.com/thecourieruk/status/935158561419571201
https://twitter.com/wewillnot22/status/935164966168137735
An interesting article, Mr. Brind. I agree with the general sentiment and disagree with the particular example.
Too much of the media is trying to get scalps and gaffes, and that's seriously detrimental to politics. The Shadow Chancellor not knowing either the size of the deficit or whether the cost of servicing the debt is rising/falling is a failure on his part, not the interviewer's.
As for employing people to get money back, that only makes sense if a fraction outweighs a whole because (all other costs aside) only a percentage of a worker's wages come back in taxation. If workers made money simply by virtue of working we could hire four million more doctors, enjoy the best healthcare in the world, and see tax revenues soar at the same time.
I remember when Richard Benyon went on TV to talk about Common Fisheries Policy and related issues. And then got quizzed on which fish was which.
Obviously he got lots wrong. He's not actually a fisherman.
Does it matter that he got that wrong? Is it relevant to his job?
But what he said on the policy was reported as an afterthought - even though it was basically exactly what Hugh Fernley Whittingstall was asking for.
However, I would note a difference between McDonnell not knowing the figure (however weak that was), and Michael Howard being asked a yes/no question to which he clearly knew the answer, was clearly in scope for the interview, and which he was clearly hoping would go away by evasion. Although it was excruciating to watch, that was well-deserved and ending up getting an answer, IIRC.
In general though, well informed, incisive questioning in the public interest needn’t be hectoring or get in the way of answers.
The next generation has enough costs in terms of housing, student debt, no pensions, and funding social care for my generation. Paying for our overspending is a burden too far. Budgets should balance over a cycle of a couple of years.
Debt is a chain around the legs of the next generation that forever limits their lives.
I'd also add - when a politician is bragging/claiming they are an ardent football/bollywood/arctic monkeys fan - it's not unreasonable to then follow up with a question like:
Which team do you support? or what is your favourite bollywood film? What is your favourite song by them?
Looking more broadly, in my experience the people that engage in political parties are quite strange and unrepresentative. The parameters for success in a political party deviate significantly from success outside or in government.
But most people listening will have heard "costs are fully covered". Which is not true.
http://www.independent.co.uk/news/business/news/philip-hammond-should-learn-from-labours-fiscal-rule-says-ifs-a7437241.html