politicalbetting.com » Blog Archive » In defence of John McDonnell. Don Brind denounces the “intervi

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

I agree with Don, and not just when it's Labour interviewees. I read his book on politicians, which expressed puzzlement that anyone would want to go into politics for anything except careerist reasons (and then wondered why they didn't pick an easier career). His gotcha interview style is characteristic of a school of media journalism that does huge harm to British politics.

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.

Charles said:

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

Doesn't it depend on the investment?

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

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

RochdalePioneers said:

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

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

Suspect borrowing wouldn't be cheap if he was in charge.

If a politician can't hold up under unfriendly fire, no matter how unfair the questions, that's the politician's problem.

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.

Recidivist said:

Charles said:

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

Doesn't it depend on the investment?

By definition not - taxes will only be a percentage of what you spend on salaries

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...

Well this is almost a first for me, a Don Brind thread header that I actually agree with. Not the bit about McDonnell and his "investment" of course. That might have been possible if we had run substantial surpluses through the bubble in the early years of this century and had no structural deficit but with Brown in charge of buying elections that was never going to happen.

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.

NickPalmer said:

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.

Capitalism is supposed, in theory, to be about low barriers to entry, perfect competition, and survival of the most efficient enterprises. In some areas of the economy, such as much of tech and online, you could argue that this still applies - although even here a few firms like Amazon are hoovering up an ever larger share of business. But in most of the 'old' economy capitalism has been replaced with a form of oligarchy, with a few large firms sheltered from genuine competition and corporate governance manipulated to deliver massive salaries to a handful of people at the top, with no effective constraint, whilst the terms for the rest of the workforce deteriorate towards minimum wage and loss of security. This isn't a sustainable state of affairs in a democracy, and it is even less edifying to see similar setups migrate into the public sector (cf. Bath University).

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.

RochdalePioneers said:

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

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

No. *productive* investment does that

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.

TMerkel now getting caught up in a poisonous insecticide scandal

https://www.welt.de/politik/deutschland/article171022400/Ich-moechte-wissen-ob-das-mit-Wissen-von-Merkel-passiert-ist.html

Casino_Royale said:

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.

We actually did something like that once, and the result was as you said.

Oh, and because the Highlanders were all so lazy (allegedly!) it was mostly built by immigrant labour from Ireland...

Charles said:

RochdalePioneers said:

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

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

No. *productive* investment does that

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.

You evade the point about our long term lack of investment in national infrastructure. If it's CBA on that fine, but it's ROI on business investment and we see less of that now as well.

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?

ydoethur said:

Casino_Royale said:

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.

We actually did something like that once, and the result was as you said.

Oh, and because the Highlanders were all so lazy (allegedly!) it was mostly built by immigrant labour from Ireland...

There's also the opportunity cost.

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.

RochdalePioneers said:

Charles said:

RochdalePioneers said:

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

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

No. *productive* investment does that

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.

You evade the point about our long term lack of investment in national infrastructure. If it's CBA on that fine, but it's ROI on business investment and we see less of that now as well.

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?

yup

rkrkrk said:

Charles said:

Recidivist said:

Charles said:

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

Doesn't it depend on the investment?

By definition not - taxes will only be a percentage of what you spend on salaries

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...

At current interest rates, with the government having starved the country of public investment for almost a decade, basically any sensible infrastructure project will be a positive for the country and will benefit generations to come.

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

Precis: "any sensible investment will be sensible"

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.

SouthamObserver said:

IanB2 said:

NickPalmer said:

FPPT for Cyclefree: yes, I absolutely dislike anyone in politics who hates any other democratic politicians (one cannomination.

I don't think any opinionrare 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.

Capitalism is supposed, in theory, to be about low barriers to entry, perfect competition, and survival of the most efficient enterprises. In some areas of the economy, such as much of tech and online, you could argue that this still applies - although even here a few firms like Amazon are hoovering up an ever larger share of business. But in most of the 'old' economy capitalism has been replaced with a form of oligarchy, with a few large firms sheltered from genuine competition and corporate governance manipulated to deliver massive salaries to a handful of people at the top, with no effective constraint, whilst the terms for the rest of the workforce deteriorate towards minimum wage and loss of security. This isn't a sustainable state of affairs in a democracy, and it is even less edifying to see similar setups migrate into the public sector (cf. Bath University).

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 came round every year to collect rent from their desperate tenant farmers.

Yep - once a majority no longer feel they have a stake in a society that society is not sustainable. Redistribution of wealth through taxation, welfare and investment in public services is just as much in the interests of those at the top as those in the middle and at the bottom. Companies and individuals hiding money offshore to prevent some of it being spent on improving the life chances of the less fortunate are sowing the seeds of their own destruction.

spot on

RochdalePioneers said:

Charles said:

RochdalePioneers said:

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

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

No. *productive* investment does that

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.

You evade the point about our long term lack of investment in national infrastructure. If it's CBA on that fine, but it's ROI on business investment and we see less of that now as well.

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?

The British government is just like British business - short-term.

Charles said:

RochdalePioneers said:

No. *productive* investment does that

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.

Agreed. ROI presupposes that the investment has a return. What is the return on a new hospital or school or a new road? Unless the latter is a toll the question is meaningless. But if the benefit to society exceeds the cost of the work then the investment can be worthwhile. If the new road encourages commercial investment in an area for example the road can indirectly generate the tax to pay for it.

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.

IanB2 said:

DavidL said:

Well this is almost a first for me, a Don Brind thread header that I actually agree with. Not the bit about McDonnell and his "investment" of course. That might have been possible if we had run substantial surpluses through the bubble in the early years of this century and had no structural deficit but with Brown in charge of buying elections that was never going to happen.

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.

Brind is better when he is observing rather than predicting. With his prediction articles there is always an agenda touting his particular strand of politics and his analysis is rarely objective, and often downright dishonest.

In fairness that might well be applied to most of us. Critique is always easier than solutions.

AlastairMeeks said:

If a politician can't hold up under unfriendly fire, no matter how unfair the questions, that's the politician's problem.

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.

Sometimes journalists just ask stupid questions though.
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

RochdalePioneers said:

Charles said:

RochdalePioneers said:

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

We used to call this "capitalism"eclared 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

No. *productive* investment does that

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.

You evade the point about our long term lack of investment in national infrastructure. If it's CBA on that fine, but it's ROI on business investment and we see less of that now as well.

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?

No, not evading it. There is a case for more investment. Government is best used for big projects with an uncertain timeframe or payback or risks that can't be quantified (e.g. Hinckley Point IR HS2). This is why CBA matters.

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

Charles said:

Precis: "any sensible investment will be sensible"

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.

I mean he's obviously wrong if you include stupid ideas like building a bridge out into the middle of the North Sea and stopping. That's just not going to be a productive investment whatever the interest rate.

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.

Casino_Royale said:

RochdalePioneers said:

The principle of investment is sound. Government borrows cheap money. Government invests in infrastructure which delivers a solid long term ROI. Government also benefits from short term effect of people being given a job, spending disposable income, that giving other people a job.

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

Your posts would be more readable and convincing if you cut out the abuse.

A lot of peoples lives would be more enjoyable if the Tories cut out their abuse upon them. If the policies of for example taking mobility cars off the disabled and imprisoning them at home or taking all social security payments off people dying of terminal illnesses that the DWP have cured actually saved us money then you could at least argue the cruelty had an eco kmic purpose. But on appeal the large majority of decisions are overturned, at huge cost to the taxpayer. Its economically stupid as well as cruel. And when presented with evidence - reams of it - and economic data, Tories ignore the cruelty and economic idiocy and waffle on about debt.

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...

foxinsoxuk said:

On topic, I wouldn't want to see a return to the fawning style of interview that once was the norm, but over aggressive interviews are not very illuminating. Badgering is often a substitute for adequate preparation by the interviewer, something Neil is generally good at. A more gentle style and leaving the interviewee enough space to skewer themselves is often more effective.

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.

Certainly Neil is a lot better than Paxman, in that Paxo rarely resisted the cheap line of attack whereas Neil has clearly researched and thought through the issues before he goes into bat, so that we feel he has got the nub of the matter in his mind before the interview begins. Like the politicians he is interviewing, Neil is occasionally reluctant to abandon a killer line of attack that he had come up with beforehand, even when it fails to work out in practice - a fault I see more often from his understudy JoCo who has clearly worked hard to emulate his style without always having the same level of insight.

Fans of voting systems may be interested to hear how we selected our candidates for next year's council elections last night. A shortlist of 4, 2 candidates to choose. We used AV to select the first candidate, then we held a second AV ballot of the three remaining on the shortlist to choose the second candidate. Two AV ballots back-to-back - bliss!

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.

foxinsoxuk said:

On topic, I wouldn't want to see a return to the fawning style of interview that once was the norm, but over aggressive interviews are not very illuminating. Badgering is often a substitute for adequate preparation by the interviewer, something Neil is generally good at. A more gentle style and leaving the interviewee enough space to skewer themselves is often more effective.

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.

Yes I think this hits the nail on the head.
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.

rkrkrk said:

AlastairMeeks said:

If a politician can't hold up under unfriendly fire, no matter how unfair the questions, that's the politician's problem.

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.

Sometimes journalists just ask stupid questions though.
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

A good 80% of the population and rising would think the cost an important question. So it's a good one to ask. The fact that you believe it to be misplaced does not make it bad.

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.

SandyRentool said:

Fans of voting systems may be interested to hear how we selected our candidates for next year's council elections last night. A shortlist of 4, 2 candidates to choose. We used AV to select the first candidate, then we held a second AV ballot of the three remaining on the shortlist to choose the second candidate. Two AV ballots back-to-back - bliss!

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.

Interesting. As you say, just as with the system we use for council elections, allowing each voter as many votes as there are places to elect has the feature that the majority stance (left v right, men v women, take your pick) will win all the places, without any representation for the minority. That's the key difference between AV and STV, the former designed to ensure the successful candidate represents the majorty and the latter designed to give minority views some representation.

Given the state of internal Labour politics I can see why the most powerful slate winning everything may be attractive.

RochdalePioneers said:

rkrkrk said:

AlastairMeeks said:

If a politician can't hold up under unfriendly fire, no matter how unfair the questions, that's the politician's problem.

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.

Sometimes journalists just ask stupid questions though.
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

To be fair to journalists too many of the Labour team are also stupid. You mentioned the railways. Passenger rail operations in the UK are nationalised. The owner is the government who let's their operation on a fixed term concession, and when the term ends ownership and operation automatically reverts to the owner unless a new concession is granted.

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.

Right okay yes - for railways you can restate as why they will be better run under British public ownership.

IanB2 said:

SouthamObserver said:

IanB2 said:

NickPalmer said:

.

Capitalism is supposed, in theory, to be about low barriers to entry, perfect competition, and survival of the most efficient enterprises. In some areas of the economy, such as much of tech and online, you could argue that this still applies - although even here a few firms like Amazon are hoovering up an ever larger share of business. (snip)

We seem to have followed the US down a path where the economic, social and political checks and

Yep - once a majority no longer feel they have a stake in a society that society is not sustainable. Redistribution of wealth through taxation, welfare and investment in public services is just as much in the interests of those at the top as those in the middle and at the bottom. Companies and individuals hiding money offshore to prevent some of it being spent on improving the life chances of the less fortunate are sowing the seeds of their own destruction.

Somehow the trend of capitalism to share its benefits relatively widely - what Reagan used naively to call 'trickle-down economics' - stopped working around about the very time he was in office. And it's the same in housing - a hundred years ago, property was concentrated in the hands of a minority and the rest rented - over the next seventy years ordinary people acquired sufficient capital to own their own homes, my renting granparents moved to the suburbs and became owners, and neither my parents nor my generation rented beyond our 20s. Yet now we see property progressively concentrated in the hands of an emerging landlord class, increasingly beyond the reach of ordinary young workers, and levels of home ownership in much of the country falling fast.

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.

On many ways it's the professionalisation of politics: our ministers can't upset vested interests. Big business likes regulation as its creates competitive advantage. Politicians like regulation because it means they are doing something

foxinsoxuk said:

Charles said:

foxinsoxuk said:

tlg86 said:

Charles said:

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

When income tax is 100% then I guess what McDonnell says is true.

Some goes on income tax, some on other goods and services, which in turn gets taxed or spent by others on taxes or other peoples. Only that amount that is saved or spent on imports leaves the economy. The rest circulates. There is also a geographic and social redistributive effect.

At a time of high employment, the effect is pretty limited, and is inflationary,

If he had talked about the money multiplier he would have had more of s point. But he wasn't

I am very against borrowing and deficit spending, I would much rather see a budget balanced via taxes or cuts elsewhere over a very short cycle. Borrowing is just taxing our children.

But our children (I don't actually have any) are getting the benefit too of investment.
It doesn't help them to make the economy smaller by not borrowing to invest.

Someone who makes a virtue of their claim that their manifesto is “fully costed” but cannot answer a straightforward question about how much borrowing will cost, over what period and what the return will be is not being humiliated by cynical journalism but by his own failure to prepare and, frankly, his contempt for voters who are entitled to know his answers, what that means for them and whether a would-be Chancellor is prepared to put in the hard work needed.

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.

rkrkrk said:

foxinsoxuk said:

Charles said:

foxinsoxuk said:

tlg86 said:

Charles said:

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

When income tax is 100% then I guess what McDonnell says is true.

Some goes on income tax, some on other goods and services, which in turn gets taxed or spent by others on taxes or other peoples. Only that amount that is saved or spent on imports leaves the economy. The rest circulates. There is also a geographic and social redistributive effect.

At a time of high employment, the effect is pretty limited, and is inflationary,

If he had talked about the money multiplier he would have had more of s point. But he wasn't

I am very against borrowing and deficit spending, I would much rather see a budget balanced via taxes or cuts elsewhere over a very short cycle. Borrowing is just taxing our children.

But our children (I don't actually have any) are getting the benefit too of investment.
It doesn't help them to make the economy smaller by not borrowing to invest.

Depends on what it's invested in. Most modern buildings e.g. schools won't last for forty years before needing replacement (and of course the PFI model has grossly inflated costs there, although I know that's not what you're proposing) so the benefit to future generations is limited but if the money is borrowed the cost remains with them.

Transport improvements may be different.

Cyclefree said:

Someone who makes a virtue of their claim that their manifesto is “fully costed” but cannot answer a straightforward question about how much borrowing will cost, over what period and what the return will be is not being humiliated by cynical journalism but by his own failure to prepare and, frankly, his contempt for voters who are entitled to know his answers, what that means for them and whether a would-be Chancellor is prepared to put in the hard work needed.

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.

This whole row reminds me of Thornberry claiming last year that the interviewer was being sexist because he asked her two questions she didn't know the answer to.

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.

JosiasJessop said:

The government is investing: in the case of the railways - ~£30 billion in CP5 (2014 to 2019), ~£48 billion in CP6 (2020 to 2024). On roads, local to me, the multi-billion A14 bypass is being constructed. More wind and solar farms are opening each month. And I daresay people can point at local investments around them.

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.

The basic problem with this is that the investment you quite is a reduction vs previous and creates half baked fudge that will cost significantly more money in the medium to long term than it saves. It's exactly like when BR electrified the East Coast on a treasury constrained budget - the wider spacing of centenary supports leads to dewiring iincidents and delays to this day. And the investment you refer to includes cancelling wiring the Windermere branch leaving it isolated and cancelling Midland electrification and cancelling Transpennine electrification. Which means a lack of capacity growth which constrains economic growth costing money. And means absurd fudge like Grayling's "digital railway" non-alternative for Transpennine which has the industry either laughing or face planting at how little grasp he has of reality. Even on Great western we have the absurdity of the new trains having to drop pantograph and coast under the wires for a few miles because budget cuts meant the replacement bridge was scrapped and the wires don't have sufficient clearance for high speed use.

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.

Charles said:

IanB2 said:

SouthamObserver said:

IanB2 said:

NickPalmer said:

.

Capitalism is supposed, in theory, to be about low barriers to entry, perfect competition, and survival of the most efficient enterprises. In some areas of the economy, such as much of tech and online, you could argue that this still applies - although even here a few firms like Amazon are hoovering up an ever larger share of business. (snip)

We seem to have followed the US down a path where the economic, social and political checks and

Yep - once a majority no longer feel they have a stake in a society that society is not sustainable. Redistribution of wealth through taxation, welfare and investment in public services is just as much in the interests of those at the top as those in the middle and at the bottom. Companies and individuals hiding money offshore to prevent some of it being spent on improving the life chances of the less fortunate are sowing the seeds of their own destruction.

Somehow the trend of granparents moved to the suburbs and became owners, and neither my parents nor my generation rented beyond our 20s. Yet now we see property progressively concentrated in the hands of an emerging landlord class, increasingly beyond the reach of ordinary young workers, and levels of home ownership in much of the country falling fast.

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.

On many ways it's the professionalisation of politics: our ministers can't upset vested interests. Big business likes regulation as its creates competitive advantage. Politicians like regulation because it means they are doing something

And regulation is also popular with voters - see laws on animal cruelty, exploitation of child labour, job protection, minimum wage, statutory holidays etc.

AlastairMeeks said:

rkrkrk said:

AlastairMeeks said:

If a politician can't hold up under unfriendly fire, no matter how unfair the questions, that's the politician's problem.

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.

Sometimes journalists just ask stupid questions though.
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

A good 80% of the population and rising would think the cost an important question. So it's a good one to ask. The fact that you believe it to be misplaced does not make it bad.

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.

They should be trying to inform people I think.
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.

Talking of investment in infrastructure projects...

https://twitter.com/thecourieruk/status/935158561419571201

https://twitter.com/wewillnot22/status/935164966168137735

Good morning, everyone.

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.

Metatron said:

Saw a comment this week by Racing Post`s boffin Kevin Pullein that `politicians have no sense of probability` and realised how true that generally is and yet I can never recall any MSM tv/radio presenter pointing it out .
Would Brexit or the Iraq War have happened if Westminster had any concept of probability?

50:50

SandyRentool said:

AnExileinD4 said:

SandyRentool said:

Fans of voting systems may be interested to hear how we selected our candidates for next year's council elections last night. A shortlist of 4, 2 candidates to choose. We used AV to select the first candidate, then we held a second AV ballot of the three remaining on the shortlist to choose the second candidate. Two AV ballots back-to-back - bliss!

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.

Today’s Times gives further insight on the latter. I believe that Nick Palmer above described it as “mild-mannered”. I’m not sure I’d like to see vicious in those circumstances. To tie this to Brind’s article, perhaps journalist approaches would be different if politicians weren’t inherently dishonest.

I wouldn't be so bothered if it was a voting block based on political ideology. I'm not saying any more.

My experience of discussing such things with those within Labour is that they are perfectly happy with the concept of 'winner takes all' as it applies to voting systems and political power, until you ask the question, what if people voted according to personal critieria like gender or ethnicity, whereupon suddenly the idea that the majority can walk away with all the representation becomes rightly unattractive.

Mr. Jonathan, part of the reason for Commons' weakness is that people are averse to having their lives put under a microscope. If we looked more closely at policies and stopped fixating on personalities, we'd be better governed.

It showed that(from what I read) that McDonnell doesn't have a grasp of economic reality, and that his idea do lend to the theory that the magic money tree is being invoked.

Harris_Tweed said:

I have no time for the sneering at politicians by some interviewers - the apparent attitude that they must be lying as their lips are moving. Paxman and Humphreys are the ones at the top of that pile.

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.

That seems fair to me.

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?

Morris_Dancer said:

Good morning, everyone.

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.

'Keynesian holes' is nevertheless a legitimate economic concept. And military spending during war - which is worse than paying for 'simply working' since the 'work, is destroying rather than creating economic value - has rescued many economy from depression, at least temporarily.

Morris_Dancer said:

Mr. Jonathan, part of the reason for Commons' weakness is that people are averse to having their lives put under a microscope. If we looked more closely at policies and stopped fixating on personalities, we'd be better governed.

That's part of it. But politicians are culpable, they like to focus on personality. I cite Boris.

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.

AnExileinD4 said:

SandyRentool said:

Fans of voting systems may be interested to hear how we selected our candidates for next year's council elections last night. A shortlist of 4, 2 candidates to choose. We used AV to select the first candidate, then we held a second AV ballot of the three remaining on the shortlist to choose the second candidate. Two AV ballots back-to-back - bliss!

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.

Today’s Times gives further insight on the latter. I believe that Nick Palmer above described it as “mild-mannered”. I’m not sure I’d like to see vicious in those circumstances. To tie this to Brind’s article, perhaps journalist approaches would be different if politicians weren’t inherently dishonest.

Link? Or more details so I can google?

IanB2 said:

Charles said:

foxinsoxuk said:

tlg86 said:

Charles said:

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

When income tax is 100% then I guess what McDonnell says is true.

Some goes on income tax, some on other goods and services, which in turn gets taxed or spent by others on taxes or other peoples. Only that amount that is saved or spent on imports leaves the economy. The rest circulates. There is also a geographic and social redistributive effect.

At a time of high employment, the effect is pretty limited, and is inflationary,

If he had talked about the money multiplier he would have had more of s point. But he wasn't

Playing devil's advocate, I imagine that he is thinking that the return on the capital investment (taxes derived from the additional employment plus its wider benefit that can't be captured directly - for which there is an economic term that I can't remember right now) needs to cover the cost of borrowing, and any non-recoverable running costs, not the entire amount borrowed.

May be.

But most people listening will have heard "costs are fully covered". Which is not true.

foxinsoxuk said:

rkrkrk said:

foxinsoxuk said:

Charles said:

foxinsoxuk said:

tlg86 said:

Charles said:

McDonnell i... “Every infrastructure project you put out there immediately starts employing people, they start paying their taxes and as a result of that you cover your costs.

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.

When income tax is 100% then I guess what McDonnell says is true.

Some goes on income tax, some on other goods and services, which in turn gets taxed or spent by others on taxes or other peoples. Only that amount that is saved or spent on imports leaves the economy. The rest circulates. There is also a geographic and social redistributive effect.

At a time of high employment, the effect is pretty limited, and is inflationary,

If he had talked about the money multiplier he would have had more of s point. But he wasn't

I am very against borrowing and deficit spending, I would much rather see a budget balanced via taxes or cuts elsewhere over a very short cycle. Borrowing is just taxing our children.

But our children (I don't actually have any) are getting the benefit too of investment.
It doesn't help them to make the economy smaller by not borrowing to invest.

I am suggesting higher taxes, and cuts to projects like Trident and HS2, that are of little or no benefit to the next generation. I would rather see HS2 money spent on urban tram systems that are used by the many, rather than HS2 systems for the few.

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.

Labour's fiscal rule is actually very good at giving adequate space for investment whilst reducing the debt burden.

http://www.independent.co.uk/news/business/news/philip-hammond-should-learn-from-labours-fiscal-rule-says-ifs-a7437241.html