Sir! Keir! Starmer!

IF Stephanie Kelton’s ideas hold water then I’d argue it only applies to the US which has the luxury of controlling the world’s global reserve currency.

Ultimately the world has ONE currency issuer and it is not the UK government. Even if a country prints it’s own currency, it is still always going to be a currency user.

Totally nails the MMT fallacy. Ultimately, we have to buy stuff in US dollars. If the markets see (which they do – instantly) the UK creating more £s, the ability to purchase in USD is downgraded.

‘Why I started petition for fresh general election’

https://www.bbc.co.uk/news/articles/cr4ly6p2wxvo

Tory voter Michael Westwood’s online document has in a matter of days secured more than 2.5 million signatures backing his plea.

 

Mr Westwood, who runs the Wagon and Horses pub in Oldbury in the West Midlands, said he launched it because he believed the Labour government – elected on 4 July – had “gone back on the promises” the party made.

Surely admitting that he didn’t even support the promises that Labour allegedly made completely undermines his claim to be dissatisfied? Shouldn’t he be celebrating the fact that Labour are not carrying out promises which he never supported in the first place?

Claiming to be a dissatisfied Labour voter would make far more sense, instead of publicly confirming what everyone suspected in the first place.

And this also slightly surprised me a  :

He added of the petition: “To have my opinion and my thoughts put out there and to find out actually, quite a lot of people agree, I think it’s fantastic. It just shows that you’re not on your own.”

You would have thought that in hindsight he might feel a tad embarrassed with how he expressed his ‘opinion and thoughts’,  I don’t think that I have ever seen a more badly worded worded epetition, it looks as if it was written by an eight year old child. I actually feel embarrassed on his behalf.

Everything else is Tory lies driven by Starmer and Reeves’s lack of understanding of the wider economy.

Or they do understand how this works but also understand that they’d get annihilated by the media (and the Opposition).

It’s beyond the ability of Joe Public to see beyond tax & spend and the likes of Mrs T’s household budget.

I’d suggest you wait and see, Starmer has a history of playing the long game – ask Johnson.

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Whenever I’ve seen this comment online I’ve asked what these “promises” are, that Labour went back on – currently no one has actually been able to list them, or wanted to.  All I get is along the lines of “do your research” crap.

So can anyone here list them?

Mr Westwood is a classic example of what I was getting at on the previous page.

Whatever the ‘politically correct’ term for it is.

I’d suggest you wait and see, Starmer has a history of playing the long game – ask Johnson.

This is what I’m hoping. The feeding frenzy and expectations that Labour will put right the last 14 years in 6 months is ridiculous and demonstrative of the “everything now” culture. Given the shitshow that was the Tory fiasco from Cameron onwards, I’m happy to let the current administration crack on.

As for the petition mentioned earlier. Please. Some people really do have very little going on in their lives.

Surely the issue with SKS is that he’s doing exactly what he said he would, thereby undermining all of those (including many on this thread) who were previously proclaiming that it was all bluff and things would be different once he was elected.

The MPs panel on Five Live is comedy gold. It’s an insight into  the mindset of the type of person who signed the petition for a general election.

Some tinfoil-helmeted worzel is presently spouting absolutely crackpot conspiracy theories and complaining about the treatment of the ‘white’ working class.

They hardly needed to ask who he voted for but they did. Lifelong Tory voter who went for Reform this time

Totally nails the MMT fallacy. Ultimately, we have to buy stuff in US dollars.

No one is talking about printing pounds to pay for oil or US goods. That will be done via the time-honoured mechanisms of international trade. What they are talking about though is creating money (as the govt currently does) to spend here in the UK on things that UK businesses and public sector organisations provide. That doesn’t need to be bought in dollars, because the entities providing these goods and services don’t want to be paid in dollars because they need to pay tax in pounds. The only way this wouldn’t be true is if you could go down the supermarket right now and buy your shopping in dollars. I think you’ll find you can’t.

Right… what’s in front of me… right now…

Coffee.

Orange Juice.

Laptop.

Software on said laptop paid by subscription.

…I think you can see where I’m going with this…

No one is talking about printing pounds to pay for oil or US goods

Unfortunately, in a global market, how your currency performs against the dollar affects the price of pretty much everything.  Even if you aren’t buying oil or goods directly from the US, literally anything you import is going to be from a country that holds significant reserves of dollars.

Like it or not, the UK is a currency user not a currency issuer in the global scheme of things.

By the way, I don’t think MMT is a fallacy.  I just think Stephanie Kelton takes a very US centric view and doesn’t really consider properly countries that aren’t the issuer of the global reserve currency.

…I think you can see where I’m going with this…

You’re mistaking international trade with how the govt spends money. It spends money in pounds, not dollars. Yes we need to buy things in dollars, and other countries also need to buy lots of stuff off us in pounds. That will result in a trade surplus or deficit. Traditionally we have a deficit these days but that is miniscule in relation to the entire UK economy. A quick google says our overrall 2023 trade deficit was 15bn against GDP of 2.274tn. The end result is that fluctuations in currency values tend to cancel each other out and do not affect the amount of money the govt can spend. If we bought *all* our goods and services from abroad then you would have a point, but we don’t, the balance of trade is pretty much even.

Surely the issue with SKS is that he’s doing exactly what he said he would

Not quite. Five days before the general election :

Starmer’s promise to voters: ‘I will relight the fire of optimism’ in Britain

https://www.theguardian.com/politics/article/2024/jun/29/starmers-promise-to-voters-i-will-relight-the-fire-of-optimism-in-britain

Since winning the general election it has all been doom, gloom, black holes, and tough decisions.

Voters are clearly not feeling this promised “fire of optimism” which presumably explains why support for Labour is now at approximately the same level as support for the Tories was under Liz Truss’s premiership.

So that is one promise to voters which has obviously been broken.

fenderextender
Mr Westwood is a classic example of what I was getting at on the previous page.

Whatever the ‘politically correct’ term for it is.

Tory voter.

Both accurate and insult at the same time.

You’re mistaking international trade with how the govt spends money

OK, how does a government spend money?

I would guess it’s much the same as anything else that spends money.  It either buys things or it pays money to people (ignoring the various accounting tricks to move money around cleverly, money eventually has to be exchanged for goods or services for it to actually be money).

If it buys things then the global supply chain means the exchange rate is going to be an issue.  No goods are completely insulated from international trade.

If it pays money to people then that money is going to end up getting spent on stuff that has interacted with the dollar, again, thanks to the global supply chain.  It’s pretty much unavoidable.

Unless you happen to be the US government.  Then much of what you do with your currency is insulated thanks to the massive amounts of USD treasury bonds held by foreign countries and the various goods that can only be traded for in dollars.

Mr Westwood, who runs the Wagon and Horses pub in Oldbury in the West Midlands,

Curiously, although he’s been the leaseholder for seven years, apparently, there’s another bloke named as the leaseholder from a story earlier this year in the Daily Heil. He runs a drink supply business, which I guess doesn’t sound quite as good as ‘struggling pub landlord’.

OK, how does a government spend money?

Rone has explained it many times. I doubt we want to go over it again. The key point is that we don’t *only* buy things in dollars (and other currencies), we also sell *a lot* of things in pounds, and these pretty much cancel each other out. It applies to all fiat currencies whether you’re the dollar or not. Yes the US govt is in a better place because many countries use their currency instead of their own, but that doesn’t apply to us. We use the pound in this country and nothing else, and the UK govt as the sole issuer of the pound can use that power to spend more money or not irregardless of what is going on with the dollar.

If it buys things then the global supply chain means the exchange rate is going to be an issue.

Yes but the exchange rate only affects trade, not wider govt spending. The only thing the govt needs to consider when deciding whether to spend more or not is whether the exchange rate affects inflation and whether we have the resources in the economy to meet demand. Some times it does, some times it doesn’t, it depends on a whole load of other factors so it’s far too simplistic to say MMT ‘doesn’t work’ (silly phrase because that’s how it actually does work) because of exchange rates.

We use the pound in this country and nothing else, and the UK govt as the sole issuer of the pound can use that power to spend more money or not irregardless of what is going on with the dollar.

I’m pretty sure that’s what Sri Lanka said.

https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/uktrade/july2024#:~:text=The%20trade%20in%20goods%20deficit,billion%20to%20%C2%A338.9%20billion.

I’m not sure the trade deficit is as negligible as you think it is.  And if the UK government started printing even more money then I can only see it going in one direction.

Seriously, the left’s sudden enthusiasm for MMT is worrying.  It’s like we’ve given up on the idea of enforcing a fair distribution in society and instead have decided that there is actually an infinite money supply so we don’t have to worry about getting our money back from the oligarchs and billionaires anymore.

I think we do.  I think printing more money is just going to lead to more money going into the pockets of the already obscenely wealthy and even worse levels of poverty for those who don’t have any assets.

 it depends on a whole load of other factors so it’s far too simplistic to say MMT ‘doesn’t work’ (silly phrase because that’s how it actually does work) because of exchange rates.

It’s also silly to say it ‘does work’.

It’s an interesting theory/observation but the idea that we can simply pay for things and it’ll sort itself out is overly-simplistic, particularly when applied to countries that aren’t the US.

Like I said, just ask Sri Lanka.

Getting away from the fascinating debate about MMT…

Starmer must be absolutely ecstatic that he’s facing Kemi Badanoch every week at PMQ’s. She is absolutely hopeless! She was actually demanding he should resign on the strength of a petition signed by some six-tied pony-****ers and a load of bots. That was pretty much all she had.

This really is the Tory party’s Corbyn moment.

What they are talking about though is creating money (as the govt currently does) to spend here in the UK on things that UK businesses and public sector organisations provide. That doesn’t need to be bought in dollars, because the entities providing these goods and services don’t want to be paid in dollars because they need to pay tax in pounds.

That’s great. So long as we (and everyone else in the world) can distinguish between those special internal pounds sterling and the other type of pounds sterling that is only used internationally.

She is absolutely hopeless!

Yup, definitely. Which must make it particularly embarrassing for Starmer that since Badenoch became leader the Tories appear to have closed the gap with Labour.

In fact if there was a general election this week Badenoch would probably become prime minister.

> chuckle <

Polling at this point in the electoral cycle is completely and utterly meaningless. In fact you could argue after recent events that all polling is completely and utterly pointless.

i’m sure Starmer isn’t unduly concerned about a gammonbot petition that everyone will have forgotten about by next week. He knows that the leader of HM opposition is as clueless as the present one and that the shadow cabinet contains absolute dimwits like Helen Whately.

His main opposition, in reality, appears to be Jeremy Clarkson 

It’s like we’ve given up on the idea of enforcing a fair distribution in society and instead have decided that there is actually an infinite money supply so we don’t have to worry about getting our money back from the oligarchs and billionaires anymore.

Nope, redistribution is central to MMT. It’s the main objective of fiscal policy, along with tackling economic externalities (pollution etc) and being able to target strategic industrial sectors and social groups. I don’t know of a single MMT advocate who thinks we shouldn’t tax the rich more whilst spending more. The two go hand in hand, becaue otherwise you’ll get runaway inflation. The only difference is that the purpose of tax is to restrict inflation and achieve social and economic change, rather than having to raise money to spend on stuff.

I’m pretty sure that’s what Sri Lanka said.

Yes and Zimbabwe, weimar germany blah blah. These are not valid comparisons. Britain is a 2 trillion per year economy with one of the worlds most stable and respected fiat currencies, alongside significant political and military geo-political power. Comparing the UK to Sri Lanka is laughable.

It’s also silly to say it ‘does work’.

Well it’s working right now as that’s how our money system works. If it didn’t work the economy would have already collapsed. What doesn’t work is the way it is obfuscated by pretending that we are ‘borrowing’ money from investors (where do they get their money from?) and basing policy on the myth that the govt operates like a household or business.

I don’t know of a single MMT advocate who thinks we shouldn’t tax the rich more whilst spending more.

Well, that’s what’s happening.

basing policy on the myth that the govt operates like a household or business

Policy isn’t based on that myth, but language people understand is used to explain policy. Tax and spend interact, even though what is spent isn’t restricted or funded by the amount that is taxed. These interactions are complex. Politicians need to speak to people without the time or inclination to look into those complexities.

Taxes need to rise. More importantly, they need to be shifted further towards wealth holders and larger companies. When people start with the “tax doesn’t matter”, “people won’t stand for a larger tax burden” when taxes are raised on land owners, building owners, share owners, non-doms or whoever, it only echoes and validates the populists that sell simple solutions based on low taxation and a diminished public realm (with a side portion of burning more fossil fuels to “maintain living standards”).

Yes and Zimbabwe, weimar germany blah blah. These are not valid comparisons

To date, Sri Lanka is the only country to have implemented anything resembling an MMT policy. @BruceWee is not just using it as an example of a country that’s had a runaway currency problem. The outcome was that instead of the expected MMT theory expectation of the policy having little to no effect on inflation, it was in fact a huge driver of inflation (for obvious reasons really)

and the UK govt as the sole issuer of the pound can use that power to spend more money

But Sterling isn’t just a currency it’s a traded commodity in every money market all around the world, 24 hours a day. What happens when you have more of a thing than the market can accommodate?

the Tories appear to have closed the gap with Labour.

The Tories are one of the strongest performing political parties the world has ever seen, that they’ve regrouped from a defeat (even as large as the one they suffered in the Summer) should come as a surprise to no one. Remember that Labour were ahead of the Tories from Sept 2022 to the election, and it made not one bit of difference in all that time how the Tories governed.

https://stephaniekelton.substack.com/p/no-mmt-didnt-wreck-sri-lanka

Polling at this point in the electoral cycle is completely and utterly meaningless.

Yup, I could not agree more. I am remarking that despite very clearly being absolutely hopeless (and having to contend with Reform UK) Badenoch has nevertheless managed to close the gap with Labour in the short time since becoming Tory leader.

What does that say about Starmer?

Frankly not a lot. Obviously if Badenoch was a political heavyweight or some sort an intellectual giant it would be a very different story, but as you quite rightly point out she is not.

https://stephaniekelton.substack.com/p/no-mmt-didnt-wreck-sri-lanka

Yes, no true Scotsman, and all that…

According to Kelton, the reason Greece got itself into such a tiz was because it was in the Eurozone.  If it had been a currency issuer it wouldn’t have had the same level of problems.

Printing their way out of their financial difficulties wouldn’t have solved the actual issue behind the issues with the Greek economy.  And if they had tried then I’m sure Kelton would have been very quick to explain why they weren’t doing MMT ‘properly’.

I always ask the same question when it comes to MMT.  If the Eurozone is such a hinderance to countries’ prosperity and stability, why isn’t Kelton recommending each State in the US becomes it’s own currency issuer rather than a currency user?

What does that say about Starmer?

That he’s bright enough to take full advantage of the situation  he finds himself in – with a huge majority and a useless opposition – to take unpopular but important decisions early, knowing that you’ve got another 4 and a half years left on your mandate?

In fact you could argue after recent events that all polling is completely and utterly pointless.

If you struggle with the concept of confidence intervals and the problems of FPTP making small differences massive then sure.

Its worth noting that the big winner in the polymarket prediction market made heavy use of polling albeit in imaginative ways which the media companies who generally just look at the first line after the caveats dont.

to take unpopular but important decisions early, knowing that you’ve got another 4 and a half years left on your mandate?

Ah it is all part of a cunning “jam tomorrow” strategy.

I reckon that faith based politics is underrated. After all when you think about it it does make sense……as long as you keep the faith.

So making Labour unpopular is all part of a carefully thought out plan. Starmer is clearly more cunning than a fox who is professor of cunning at Oxford, to paraphrase Blackadder.

Ah it is all part of a cunning “jam tomorrow” strategy.

It’s not being particularly cunning, is it? It’s just what every new government does. Remember when Liz Truss tried it despite having no mandate and forgetting the fact that nobody except her thought that she represented a ‘new’ government?

In Starmers case they’re bringing in policies now that will bear fruit in under 4 years. Not rocket science really, is it?

Well despite it not being rocket science voters don’t seem to realise that they simply need to wait four and a half years for the sunny uplands.

If it was that easy to understand they would realise, just like apparently you do,  that shit news today……..doom, gloom, black holes,  difficult decisions, blah, blah, simply means great news and loads of jam tomorrow.

Before the general election we were told to wait until after the election to see what a Labour government would do, now we are being told to wait another four and half years. It’s all a bit confusing!

I don’t suppose that the message in 2029 will be wait until 2034 before you judge, because all the shit and gloom of the previous years proves that everything is going to plan?

Remember when Liz Truss tried it despite having no mandate and forgetting the fact that nobody except her thought that she represented a ‘new’ government?

I thought the problem with Liz Truss was that all her policies were shit?

I had no idea that it was anything to do with her not having a mandate.

voters don’t seem to realise that they simply need to wait four and a half years for the sunny uplands

Well, if they think everything can be fixed in six months then they’re easily led. Who’s trying to use such an appealing lie to lead them… and why… well…

It’s all a bit confusing!

No, it really isn’t. There is lots happening, every day. Some of it being resisted and moaned about by the people you would expect to be moaning. Plenty more is going under the radar because it’s just getting on with what is expected, and what was promised.

Well, if they think everything can be fixed in six months then they’re easily led.

Is that what you really think……. that lack of support for Labour is down to voters thinking that everything can be “fixed” in six months?

You don’t think it has anything to do with not liking the direction that the government has taken? Honestly?

Since Liz Truss’s disastrous premiership has been raised as a comparison to Starmer’s do you think Truss’s problem was that everyone wanted her to fix everything in 49 days?

I know it’s fashionable to dismiss voters as stupid but they are not as stupid as you make them out to be.

A post while I’m on the crapper. 😉

The poor old UK….

After 14 years of ill health the UK was finally diagnosed with a table but serious cancer, Toriincompentinoma.

The consultant told the UK that the road ahead would be harsh, no point in sugar coating it but there would eventually be light at the end of the tunnel. In the meantime ignore those offering quick fixes or blaming the illness on a mild case of Ceneristitus, a mild condition treated with antibiotics and a cream.

The consultant is certain of his diagnosis, chemo treatment is begun.

The chemo treatment is harsh, some days the treatment might seem as bad as the disease but it’s very early days.

A guy on X tells the UK to ignore the diagnosis, Torincompentnoma isn’t the problem! In fact, if reformed, purified into a less diluted form it is the cure!

For a bit the UK ponders on the post 14 years of relentless pain, ever changing diagnosis and revolving door of lead consultants and thinks **** that shit, the chemo is bad but that was relentless. I’ll give the chemo time and see how it goes.

————————-

Right. Time to wipe my arse.