By Ann Pettifor – Posted March 16th on Labour List
Together with the Prime Minister of Greece, Mr. George Papandreou, I am going to give evidence to the EU’s Special Committee on the Financial Crisis in Brussels this Thursday, March 18th.
So today’s leaked report from the EU, arguing that Labour’s plans for cuts to public spending are not “ambitious enough”, has got me really het up.
Labour, it appears, is just not ambitious enough about its goals for cutting investment and exacerbating unemployment. It does not have punitive enough targets for cutting benefits to the poor and services for the mentally ill and frail.
In the “imbecile idiom” (to quote Keynes) of today’s financial fashion, the EU, it seems, would prefer for unemployment to rise, for people to live in hovels, and for government “to shut out the sun and the stars” – so that we conform to an arbitrary number set in Frankfurt by a group of bankers, under a pact unwisely signed by an earlier British government.
Continue reading the article…
21 February, 2010
Once again apologies for a longish absence. This is down in part, to smashing (literally) building works, to a little grandchild-minding, and to other writing commitments. But have been itching to comment on a) Greece and the EU b) Iceland (it seems the UK is easing up on the pressure); c) the progress of the global recession; and d) China-US relations…..so posts on a, b, c and d are on their way….promise.
In the meantime this is the text of a letter I signed and helped draft, published in today’s Observer, and yesterday (20 Feb 2010) in the Times. It is a response to the letter written to the Sunday Times last week by 20 conservative economists, including Ken Rogoff of Harvard, Lord Megnad Desai, previously a Labour peer, and Bridget Rosewell, who was Mayor Ken Livingstone’s economic adviser.
Our letter has a number of distinguished economists as signatories, as well as my pals in the Green New Deal group – all of whom I am proud to be associated with. See below.
We urge the UK government not to heed the siren song of the 20 economists who, having failed to predict the crisis, now seek to advise on its resolution. The world economy is in the deepest recession since the Great Depression. In the UK, output has collapsed by £70bn on an annual basis. Under such conditions, common sense tells us that the government must compensate for the collapse in private investment and address the high level of unemployment.
The only way to restore the public finances to health is to restore the economy to health.
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17th January, 2009.
This was posted on the Compass site on the 16th January.
I am shortlisted for the North West Durham Parliamentary Selection. A less likely candidate you would be hard pressed to find. I am not a local big wig and did not grow up in the constituency. I don’t have the backing of big hitters – either in the party, or in the unions. Nor am I a youthful 25-year-old, ambitious for power. No, I am far more ambitious than that.
I want the people (especially the young people) of North West Durham to have a sound and stable future. I want Britain to learn from the catastrophic debacle of the financial crisis, and ensure it never happens again. The hopes, aspirations, health, jobs, businesses and climate of Britain must not be sacrificed to pay for economic failure engineered by a small elite in the City of London.
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15th January, 2009.
Patient readers this blog is triggered by Jeff Randall’s column in the Daily Telegraph today.
In it he inadvertently discloses the identity of the puppet-masters dictating the Tory political agenda around public spending cuts.
In a somewhat histrionic column in which he describes the public deficit as a ‘disaster’ ( he should mind his language: Haiti’s earthquake is a disaster) Randall quotes a piece of ‘research’ by the French bank, Société Générale. The paper is titled “Popular Delusions” and its authors explain some simple facts about government spending cuts to Telegraph readers:
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5th January, 2010
There has been much sturm and drang generated by the Guardian and others on the threat posed to government finances by the flawed and often irrational rating agencies, and by the supposedly despotic, vengeful and greedy bond markets.
Methinks they protest too much.
We at the Green New Deal group have long argued that there is no reason why governments should rely for their financing on the capricious private bond markets. Instead, we write in ‘The Cuts Won’t Work’ - finance ministers should oblige the banks in which taxpayers have a substantial stake to lend to the Treasury at very low rates of interest.
That’s how World War II was largely financed in Britain – and no one was the worse for it. The loans were given a title: Treasury Deposit Receipts. These TDRs – bless them – financed a war that saved Britain from the threat Nazism posed to its very existence. Today they could be used to finance the public investment needed to substitute for the collapse in private investment – and to stave off the threat posed by climate change.
Analysts on the Financial Times Lex column (FT 1st January, 2010) have obviously read our latest report, and describe our proposal as “an intriguing alternative” . Governments they write “may lean on the commercial banks in which they hold large stakes to take up the strain instead. Forcing them to purchase government bonds would help replace the market heft of central banks.”
Quite so. You read it first in the Green New Deal.
12th December 2009
At the end of last month I delivered the prestigious EBOR lecture at York. My address was entitled:
“Credit, usury and political power: chasing the moneylenders from the temple that is our democracy”
Click on the link below to read a PDF version of the full lecture:
EBOR Lecture November 25th (PDF)
9th December, 2009
It has been an extraordinary day this day, and something to witness: this frenzy of pre-election fisticuffs.
Extraordinary because Conservatives, like mindless bullies, are fighting a phoney war against the victims of this crisis.
The fact is the Tories are spineless scaredy cats, too timid to take on the perpetrators, who have successfully bribed them with various inducements, including the playground’s shiniest marbles.
As a result they have turned away from the perpetrators, and are picking on nurses, policemen, teachers, civil servants, Alzheimer-carers, school cooks, hospital cleaners and psychiatrists – to categorise but a few.
All these victims of the financial crisis now stand accused – by the Tories and their friends - of pillaging Treasury coffers of £250 billion – the rise in government debt since this crisis started in 2007.
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7th December, 2009
This is the press release from the new economics foundation:
“Two days ahead of the pre-budget report, and as the UN climate change talks open in Copenhagen – the second report from the authors of the original Green New Deal argues that the British Chancellor is likely to miss a historic opportunity to tackle public debt, create thousands of new green jobs and kick-start the transformation to a low-carbon economy.
The cuts won’t work, the Green New Deal Group’s second report shows how, contrary to the policy of all the major political parties, cutting public spending now will tip the nation into a deeper recession by increasing unemployment, reducing the tax received and limiting government funding available to kick-start the Green New Deal.
Instead a bold new programme of ‘green quantitative easing,’ rather than simply propping up failing banks, could help reduce the public debt and kick-start the transformation of the UK’s energy supply while creating thousands of new green-collar jobs.
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6th December, 2009.
Most economists (who should know better) confuse the government’s budget deficit with total government debt.
The distinction really is important.
Mixing them up is a little like confusing stocks and flows. Or confusing your outstanding mortgage – say £200,000 – with your monthly debt repayments. They are quite different things, and if you were to lose your job, the flows (paid with your salary) come to a halt, and then it’s the stock – the £200,000 – that really matters.
Furthermore it is quite possible to increase your mortgage – and lower your monthly payments. Many did this in the boom years of mortgage re-financing. Or even to decrease your mortgage and increase your monthly payments.
So, just as the movements in regular mortgage payments tell us little about the outstanding stock of debt, so government deficits tell us little about the stock of debt invested and the stock of debt outstanding.
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6th December, 2009
The Observer asked a small group of people to comment in advance of next Wednesday’s Pre-Budget Report. This from yours truly:
“Public debt will rise higher if government slashes spending, and recovery will elude us. Unemployment has high costs, but productive government spending, unlike private spending, pays for itself by creating jobs that generate tax revenues and cut welfare benefits.
Will the bond markets revolt and raise interest rates? No, because the markets apply common sense, as they did when Britain exited the exchange rate mechanism. Despite a rise in government debt from 40% to about 70% of GDP, and the extension of the Bank of England’s balance sheet by £200bn, bond markets have been positive – only too grateful for a safe haven in turbulent times. Confidence in sterling will only return when the economy recovers, and only then. Without public investment compensating for the collapse in private investment, there is little hope of recovery or confidence.”