Monday, 17 August 2015

Some lessons for the Labour leadership candidates

I'm getting worried that our leaders aren't doing their duty in reading learning and thoroughly digesting my blog. I've just made the point that we should look at using Quantitative easing to pay for a few large infrastructure projects carefully structured so they provide a return as a far better means of boosting the economy than expensive PFI fiddles. Then along comes Yvette Cooper trying to prove her orthodoxy and respectability by denouncing PFI out of hand

Let's just repeat the point. QE is a useful way of stimulating the economy when you cant reduce interest rates any further l.e. now. It's a useful way of getting the exchange rate down when markets are pushing it up too far i.e. Now. It doesn't produce inflation when demand is too low and resources underused i.e.,nowJapan ands the EU bank are now using it with beneficial consequences and the Conservatives got away with 375 billion pounds worth of QE though they made the mistakes of shoving it into their friends the banks rather than using it  to boost growth.

So the Labour Party must think about how to use it rather than just dismissing it out of hand. Q.E.D.Don't the establishment candidates need to prove their innovativeness rather than their conformist orthodoxy?


Student loans were introduced (by us)as a way of reducing government spending b y shoving the cost of university education onto students. They are unfair because tertiary education like primary and secondary education should be free. They are economically damaging because they cripple the young generation with debt. They are unfair because they benefit the rich who can afford to pay for the education of their kids and indeed have already done so in public school fees and penalise the poor.  They are inefficient because much of the capital paid out will never be paid back by people who go abroad, foreigners who get them and those who don't earn enough later on. They should be scrapped and students/ be supported as they were by means tested grants while the universities are properly funded by the state as they should be. Wouldn't cost much more than this messy loans system.

Brian Easton, a top New Zealand economist has reduced the system to its real absurdity by comparing student loans to the raising of cows for milking. The costs of breeding rearing and supporting the cow until it begins to lactate can be written off against tax The students can't. Farmers can borrow on their cows to help the farm where parents can't on the kids because of our awkward anti slavery legislation. . So if the government aligns  the financial arrangements for cows and students then, Bingo. A cow producing many years of profitable milk yield.

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