Why progressive taxation is better than 'People's Quantitative Easing'

Jeremy Corbyn and John McDonnell and their economic guru Richard Murphy have spoken frequently of their plan to use quantitative easing (increasing the supply of money in the economy) to help fund projects such as housing construction, green energy production, digital infrastructure etc, as a way of creating jobs, getting the economy moving and solving some of the social and environmental problems that we currently face.
While I agree that these are laudible aims, I am not sure that quantitative easing (QE) is the best way for a future Labour government to go about raising revenue.  My reason for this is as follows:
Any increase in the supply of money inevitably decreases the value of money that people already hold, and this affects everyone in equal proportion, eg. a 2% increase in the supply of money means that, all things being equal, the value of all previously existing money decreases by exactly 2%.  In other words, QE operates as if it were a flat tax on everyone, including the low paid and those on benefits.  And since those with low incomes spend a higher proportion of their earnings on essential goods, they are more detrimentally affected by a decrease in the value of their money than those who have more of the stuff. QE, therefore, like VAT, is effectively a form of regressive taxation.
There is an argument, which may well be correct, that as long as there is excess capacity in the economy then increasing the money supply to fund investment should not cause inflation - the increase in available goods and services should counteract it (because the more products that are vying to be bought by those that have money, the greater the demand for money, thus increasing the value of money relative to those products).  However, even if this is the case, it means that, to the extent that the increase in goods and services were to be funded by some other method  - one which did not impact on the low paid - those at the lower end of the economic scale would benefit from an increase in purchasing power, which QE denies them.
For these reasons, I think that a better way to fund necessary and beneficial infrastructure projects would be to use some form of progressive taxation - rather than QE which, as explained above, is effectively a flat tax - so that the real cost of investment is distributed in a way that does not impact disproportionately on the low paid.

The Fiscal Charter: Damned if you support, damned if you oppose

I think John McDonnell and the Labour leadership were right to oppose George Osborne's Fiscal Charter yesterday. It is not the job of the current government to try to impose it's will on future governments. It is for future electorates to decide what kind of government they wish to install in 2020 and beyond, and to decide what type of economic policies to oppose or support.
The Fiscal Charter is clearly nothing more than a publicity stunt designed to either undermine Labour's credibility as an anti-austerity party (had they supported it) or to make them appear economically irresponsible in the eyes of the general public in the event that - as was the case - they opposed it.
Perhaps the best approach would have been a mass abstention on the part of the parliamentary Labour party. This would have avoided disunity in the party ranks while treating the Fiscal Charter with the contempt it deserves.

Why Jeremy Corbyn is so popular with the 'grass roots'

In my opinion, the current popularity of Jeremy Corbyn is not, on the whole, to do with any real increase in the level of support for left wing or traditional socialist ideology. In some ways, the old distinction between left and right wing politics is becoming outdated (or, perhaps, transcended), at least among large sections of the public. For many people, the more relevant distinction today is that between the ‘elite’ (both in political and economic terms) and the ‘masses’ of ‘ordinary’ people (the so-called 99% of the Occupy movement rhetoric). This explains why some people who voted UKIP at the general election now warm to Jeremy Corbyn (I know this because I have heard a number of them discussing their newfound interest in Labour on radio phone-in shows. They are not ‘saboteurs’ trying to wreck the Labour Party but people who are cynical about slickly professional mainstream politicians and drawn towards anyone who comes across as someone they might bump into in the local pub).
This phenomenon (the viewing of politics specifically in terms of the ‘little guy’ versus the elite) is, of course, partly a response to the growing momentum behind globalisation, with the increase in influence of the European Union and the growth of multinational corporations. But in some ways it is also a very old movement. The allies in World War 2 overthrew fascism and the ‘West’ then resisted communism because support for liberal democracy with its championing of the rights of the individual is embedded deeply in our collective psyche and, I would argue, this helps to make our culture predisposed to favour the dispersal (as opposed to the concentration) of power.
The distinction is deeply rooted in many aspects of our culture. From Tolkien to Harry Potter, the underlying theme is that of the small, the weak, the ordinary and the everyday (and therefore the good) versus the big, powerful enemy with its huge plans and ambitions for global domination.
Put simply, Corbyn is doing so well because his obvious sincerity and commitment to represent those who vote for him mean that he is trusted, to defend their corner, by those who feel alienated and powerless in this increasingly elite-controlled and globalised world.

Labour Leadership Limerick

When a Labour MP named Corbyn
Whose views were a trifle left wing
Joined the leadership race, many laughed in his face
Now it seems he may actually win!

Labour should have the confidence to be itself!

Yesterday, at the behest of their acting leader, Harriet Harman, the majority of Labour MPs chose not to oppose the government's Welfare Reform Bill aimed at reducing welfare spending through such measures as lowering the cap on Housing Benefit and completely doing away with Child Tax Credits for any but the first two children of a household. Harman's objective in not opposing this bill was to reassure the public that Labour is the party of the workers and not the party of welfare claimants.
In my opinion, the Labour Party is so busy trying to please all those people who didn't vote for it in the general election that it is forgetting it's real job - that of Her Majesty's loyal opposition.
Swing voters are, by definition, capable of having their minds changed by the policies, arguments and record of the parties between whom they have been asked to choose. In my view, rather than trying to belatedly conform to the wishes expressed by such voters at the last election, Labour needs to come up with positions and policies that reflect its traditional values of egalitarianism and social solidarity and offer a clear and credible alternative to the anti-public sector/benefit claimant/immigrant stance of the current government and then set about the business of persuading the potential swing-voters of 2020 that such policies are worth endorsing at the ballot box.
As for the committed Labour voters, such an approach would surely be welcomed by many of them, too - especially considering the amount of grass roots support their seems to be for the most left wing of the current leadership candidates.

Spitfire over Hertfordshire!

This morning I was in my garden when i saw a Spitfire circle overhead then roar off into the distance, dipping its wings in a Battle of Britain style salute! I thought I must be imagining things but a quick internet search revealed that there was indeed a Spitfire flypast today as part of the (somewhat belated) V.E. Day anniversary celebrations of nearby RAF Halton.
Click here to see my extremely clumsy attempt to film this unexpected visitation from the majestic and legendary defender of the skies!

Why Labour lost

The accepted narrative about why Labour did so badly in the General Election seems to be that they failed to appeal to the aspirations of the 'squeezed middle' or to inspire confidence in their ability to manage the economy. I am not convinced by this. I have no solid evidence so my own 'analysis' is purely anecdotal and based largely on conversations (both participated in and overheard) with friends and work colleagues.
I believe that in the last week or so before the vote, scare tactics employed by the Conservative Party and the media around the possibility of a coalition between Labour and the SNP began to have the effect of convincing 'undecideds' that a vote for Labour would be a bad idea (I certainly heard people express the view that the SNP 'only care about Scotland' and that they would somehow use any power they might have in government to benefit Scotland at the expense of the rest of the UK) and, realising that it was working, the purveyors of this narrative concentrated very hard on getting their message out as powerfully as possible, particularly via the tabloid press.
I believe Ed Miliband's response to this development was mistaken and actually exacerbated the effect of the scare. What he did was to make increasingly shrill declarations of his determination never to do any deals with the SNP, which I believe had three (inter-related) negative effects. Firstly it confirmed in people's minds that the SNP were to be feared, secondly it was very difficult to believe since the prevailing view was that Labour would not win enough seats to be in a position to govern alone and thirdly, if he was telling the truth then what was the point in voting for a Labour party that wasn't prepared to do what was apparently going to be necessary in order to form a viable government and keep the Tories out of power?
In my opinion, Miliband should have embraced the idea of an anti-Tory coalition involving Labour as the dominant partner with support from the SNP and others and made the case for the SNP as having a valuable contribution to make to the politics of the UK as a whole. This could have taken the sting out of the Tory and right-wing media scare tactics.
When asked by Jeremy Paxman, earlier in the campaign, whether he was tough enough to stand up to the likes of Vladimir Putin, Ed Miliband's response was a strident "Hell, yes!" Surely, then, he should have been able to convince middle England's swing voters that he was strong enough to be in coalition without being dominated or manipulated by Nicola Sturgeon or any other potential coalition partner.