I remember driving down Bond Street which runs at the back of Blackpool Pleasure Beach and that road has a junction with Station Road which leads towards South Pier. It was a sunny day at the height of the season and for reasons I’ll never know I drove straight through it. All I remember was the view in my rear mirror and some rather irate pedestrians with suddenly dirty underwear. I pulled up, did a fair imitation of a goldfish as a way of apology and looked at the cars around me. They were all full of kids, of course they were this Blackpool. It was pure luck I hadn’t t-boned a car full of children or run anyone over, I was in shock. Looking back now I wonder if I made too much of it, after all no harm was done, but that’s just what the brain does to protect you. It was exactly that close and that negligent of me.
Rewind back to 2007 and the beginning of the Great Financial Crash, I was fascinated from the off. From 2006 a crisis had been brewing and it was around this time I discovered a wonderfully written blog by David Malone called Golem XIV. I have no idea how he wrote such deeply researched and informative blogs but he captured the spirit of the times well. So in answer to Her Majesty the Queen who famously inquired “why did no-one see this coming?” they did, as did various heterodox economists such as Steve Keen. My mind span with all the acronyms such as ABS and MBS and the term sub prime emerged. I think for every minute I spent reading some articles I spent 5 on Google trying to figure out what the hell anyone was talking about. In 2008 it finally happened starting with Bear Stearns and ending with Lehman Brothers.
Once again with hindsight was it really that close, was the entire banking system really about to crash? One American banker was in no doubt, when the Lehman story broke he moved his family out into the country and felt in fear of his life. Trust in the banking system disappeared and liquidity froze. The cash machines really were about to stop working and mass civil unrest just around the corner. Speaking in 2012 he said now he wonders if things had really got so bad and… Maybe drove straight through a busy junction but nothing happened? He was incredulous, the central banks, led by the Fed, bailed the whole system out, suddenly QE was on everyone’s lips, untold trillions of dollars was pumped into the system and bad debts ruthlessly expunged. Crucially individuals were never held to account, the bankers got clean away with the heist of the century.
It is too soon to write a history of the GFC because it’s still going on, the UK still spends around 5% of GDP on implicit and explicit bank subsidies, the trillions of Yen spent in Japan on QE give you a nosebleed and the banking system in the EU has never been purged. 10 years after the GFC nobody knows how much bad debt is hidden and there is no sovereign to bail them out because of the flawed design of the Euro. Instead they are attempting bail ins that puts shareholders and bond holders at first risk and so it should be purr true Capitalists. No it shouldn’t. Only a sovereign nation can bail out it’s banking system and those responsible for the mess held accountable. A bail in, which can include depositors, is simply throwing good money after bad and a gross misallocation of capital.
As I’m already guilty of trying to cram too much into one article let’s get to where we are now in the UK. Neo-Liberal economics died in September 2008 with the collapse of Lehman Brothers. The trickle down lies of Friedman and Hayek have been exposed, austerity, misused to make the poorest pay for the crisis has been abandoned and the Tories left naked of purpose. The Tories modern incarnation of look after the richest and they will look after us has merely shown them up as the chancers and spivs they are, the wealth torrented upwards only. I have long discounted the Tories as fit to represent the people and until they have their genuine post Thatcher reform they never will be. They have been found out. You are not a Tory.
So you’re a Corbyn fan Boi are you? No. I’m not Andrew Lillico hysterically screaming “Marxist” at a centre left mainstream Corbyn programme but small “s” socialism is hardly anything new. This blog will simply be the blog I wish existed when I was looking for new ideas and aimed at the layman. It is for the many who look with despair at the political parties and say “there’s no-one who represents me”. So below I will set out a brief description of people who think differently, the new ideas.
Modern Monetary Theory. (MMT) Neo-Liberalism is dead and this is the new economics to replace it. It is a simple set of accounting rules that describes a post Gold Standard economics of how a modern economy really works.
Universal Basic Income. (UBI) Does exactly what it says on the tin, every citizen is given a monthly income to cover all living expenses. This would simplify the benefits system and act as a check on poverty.
The Job Guarantee. This seeks to eliminate all involuntary unemployment and underemployment. It will provide work whenever and wherever a person needs it.
Positive Money. This organisation promotes money creation for public purpose and bank reform. Banks must act as the intermediaries they claim they are and no longer create money.#
Heterodox Economics. This will introduce you to those economists who think differently and where you can find out more about those that think differently.
I have tried to cram around 20 odd posts into one here but I hope it gives a flavour of what’s to come and keeps you reading. As ever thanks for reading and I’d be very grateful to anyone sharing this blog with friends. I’m also on Twitter for those interested and a Facebook page to come.