Fortsätt till huvudinnehåll

Faith in Gordon Brown

Faith in Gordon Brown, on the other hand, has slumped, according to the figures. Why the man wanted to become Prime Minister after ten years living next door as Chancellor of the Exchequer is a mystery. Now he has got the coveted fruit it has turned bitter for him.

It is strange that as Chancellor, he did not see the storm clouds brewing and make a dash for the House of Lords. That at least would have been a way of ducking the opprobrium which he has deserved and is now heaped upon him.

For most of his term as Chancellor he was in the lucky phase of the economic cycle and could quite unjustly take the credit. Now he is being made to take the blame. But at this stage of the cycle there is bound to be pain and no Chancellor could do better - the only question is how to manage the pain - a task which they look as if they will do in a way so as to spread it around as much as possible.

The boom and bust were indeed avoidable but the time to have taken action would have been within a couple of years of taking office, no later. The action would have been to reconstruct the tax system so that it fell primarily on the rental value of land. If correctly implemented this would have prevented the land price bubble which was the precursor to the bust.

However, Brown's bright young advisor, Ed Balls, having learnt economics at Oxford, would not have known the theory that underpins this measure. From the perspective of economics as currently taught within academia, there is no rationale for such a reconstruction of the tax system.
Etiketter:

Kommentarer

Skicka en kommentar

Populära inlägg i den här bloggen

Importing people to sustain demand

I got involved in a discussion with a Youtuber called “Philosophy all along”. This was in connection with criticism of Trump’s policy of deporting illegal migrants, which he argued would be bad for the economy as it would reduce demand. This implies that there is a need to import people to sustain demand. There is no obvious reason why a population should not be able to consume everything that the same population produces. If it can not, then something else is going on. It is a basic principle that wages are the least that workers will accept to do a job. Wages are a share of the value added by workers through their wages. The remainder is distributed as economic rent, after government has taken its cut in taxes. Monopoly profit is a temporary surplus that after a delay gets absorbed into economic rent. Land values in Silicon Valley are an example of this; it's like a gold rush. The miners get little out of it. Rent and tax syphon purchasing power away from those who produce the g...
Skicka en kommentar
Läs mer

The Zombie Train that refuses to die

The Guardian has published a couple more articles against HS2, one by specialist rail commentator Christian Wolmar, and another today by journalist Simon Jenkins. The main arguments in favour will doubtless be wheeled out by the commentators: the need for capacity and the disruption caused by upgrading existing routes. HST itself will severely disrupt services to Euston during the construction period. Capacity can be increased at a fraction of the cost by a variety of measures, provided that it is accepted that the additional traffic will run at existing speeds. It is not generally known that the Midland main line is, or was, four track all the way from London to Trent Junction, between Nottingham and Derby. This is because the additional tracks are separate, having been added for coal trains which trundled down to Brent sidings, on the edge of London, from a collection point at Toton in Nottinghamshire, where the Midland Railway build a huge marshalling yard. Beyond Derby, the main l...
Skicka en kommentar
Läs mer

How much more will the British tolerate?

The British are phlegmatic, tolerant and slow to rouse. Thus there was no great reaction after the terrorist attack in July 2005. The murder of Lee Rigby created a sense of outrage, but nothing more, since it appeared to be an isolated incident. Two serious incidents within a fortnight are another matter. Since the first major terrorist incident in 2001, authority has tried to persuade the public that Islam is a religion of peace, that these were isolated events, or the actions of deranged "lone wolves", having nothing to do with Islam, or to reassure that the chances of being killed in a terrorist attack were infinitesimally small. These assurances are are beginning to wear thin. They no longer convince. If government does not act effectively, people will take the law into their own hands. What, however, would effective action look like? What sort of effective action would not amount to rough justice for a lot of innocent people? Given the difficulties of keeping large n...
Skicka en kommentar
Läs mer