Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "Garys Economics"
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@ruaraidhmorrison5879 Because the British economy looks more risky than other countries, because of its poor performance. Indeed, at one time other than Greece, Italy was seen to be more risky than the UK, but now that's no longer the case. That why the interest rate for the UK is higher than Italy. And it's not Labour's fault. 2008 with 14 years of austerity, vampirised the British economy. Brexit cut another vein open, and the pandemic QE just threw money at the problem without thinking how to recover it was the just the final straw. And who in the end ended up with that money? The asset wealthy, who the bottom 50% spent that money with. And they don't spend it. They buy assets with it, and get even more wealthy. In a sense, we've given away too much, and the asset wealthy have the upper hand. There is no money unless they either do more austerity or tax the wealthy more, as they promised not to tax workers more.
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Absolutely correct. The best economists I have discovered are poor kids who had the talent, and the luck to make it, but didn't forget where they came from. Gary Stevenson, Michael Hudson, and Mark Blyth have all focused on wealth inequality, because they realised that people like them were no longer coming through the system. And they all have a strong sense of economic history being a series of struggles between the asset wealthy and the state for control of the economy, and the people suffering the collateral damage of that struggle. And as technology advanced, it became harder for the state to control the asset wealthy over time. It's been a constant tug of war since antiquity. And the asset wealthy feel they have won the battle. That's why they are undermining democracy. This was only extended to the masses by the state, as a tool to counterbalance the power of the asset wealthy. But, the asset wealthy have broken the power of the state, persuading the masses that they should look to the asset wealthy for protection. That's like cattle looking to the cattle farmer, the abattoir owner, and the supermarket for protection. That protection is only ever contingent on how the asset wealthy can benefit from it. We saw that through Covid, and looking back through British economic history, the same indifference together with indoctrination runs through. And the social darwinism. We're at a tipping point, because of the harm done by capitalism to the planet we depend on for survival. And unless we start taking a wider view, a more collective view, we're in danger of leaving nothing for our descendants - no money, no property, no future. It's that simple.
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It's a good start, but we the people have to change too. Voltaire said "People will cease to commit atrocities only when they cease to believe absurdities." And over nearly the last 5 decades we have committed several atrocities on ourselves and others, because our priorities - individually and collectively - are misplaced. All priorities bring problems, but if you end up resenting dealing with those problems your priorities bought with them, that's a sign you've got the wrong priorities. And resentment driving our politics now. And that resentment leads us to cling to blame, which changes nothing, instead of being accountable. Not only should our politicians be accountable to us, but we need to be accountable for how we contributed to our issues. We're more divided and isolated from each other and the world around us because we haven't been honest with ourselves. Yes the plutocrats and their bought politicians deceived us, but we wanted to be deceived. We wanted not to think about the consequences of policies executed by politicians we voted for that were not only counter-productive, but corrosive, harmful, and pointlessly cruel. People stood by as different groups wet made scapegoat of the week, not realising that was a beast that would eventually consume them. The poor, the sick, and the disabled, and the elderly were thrown under the bus. Then the working class, and now the middle class are now going under, all because plutocrats want more assets, and their banks and corporations they own want more profits. And they resent anyone who stands in their way of those goals. Time to be honest with ourselves, or nothing can get better. Time to accept that the plutocrats see everyone but themselves as a means to an end. And if we keep on pretending that isn't true, things will only get worse. If we want to keep the pros of capitalism, we have to take responsibility for its cons, and it's conmen that come with it. They depend on Society being organised and well-run enough to clean up after the messes they leave as they make their wealth. Well, There's a price for that and that is taxation, entailing redistribution of wealth when capitalism and its markets fail to adequately distribute assets, services, and commodities that are needed by everyone. We need to stop running our economies as if they were branches of Red Lobster, where the plutocrats consume numerous portions of fare, and leave little for the needs of those making it possible for them to eat as much as they can.
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With respect, Royal Mail was sold to British Oligarchs first at a huge discount by the Coalition Government when Vince Cable was business secretary. Those British oligarchs made a huge profit, but then loaded up the business with debt, as well as liquidating the properties that Royal Mail owned. They renamed the business and they spent some money on IP, but essentially they couldn't meet the Universal Service Obligation and make a profit. So make no mistake. It was British oligarchs who set that up. And the Czech billionaire is picking up what's left. He's getting the leftovers.
So forget about the nationality of the asset wealthy people whom British politicians court and listen to. Just remember British politicians need to prioritise the long term welfare and needs of the British asset-limited and assetless voters. Why? You have people working full time needing to use food banks. It wasn't Foreign politicians who did that to British workers, it was probably politicians you or people you know voted for. And if you do vote for Tories, or Reform, who are Tories, or Red Tories, if you don't think outside your box, you, you children, and their children will be served up to the needs of the asset wealthy. Peace. Out.
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They didn't run away when the Debt-To-GDP ratio was 270%,and the top rate of tax was 90%. It took until the 1960's,with the expansion of the tax haven network, before we had that. Tax is needed to maintain the infrastructure upon which business relies, and the theft and grift we have been allowing is not helping. So, no more free lunches. No more socialism for the asset wealthy and unfettered capitalism for everyone else. It's about paying their fair share. Yes, they can bugger off to Singapore, or Abu Dhabi, but why go to those places? It's not just the tax, because they are taxed on their consumption, and the state owns everything, and ensures every citizen has a roof over their heads, and has decent Healthcare. It's not free either. But this what you don't get. You are being reductionist and short-sighted. You don't look under the hood of those places. They can only exist if those who live their permanently are content. That the bit about Singapore on Thames BS ignored. Why? Because it was the fantasy of wannabe rich kids who've never even run a tuck shop in their lives, thinking they could run a country like Jeeves and Wooster, who then were seduced by the wads of cash of foreigners who don't care about this country. The people are this country too. They have needs and they were being failed. (And if you saw how the poor native Singaporeans live, you wouldn't be so impressed. They don't even have places to hang their washing except out of the windows of the tower blocks they live in.) Britain could be like London if it's elites had more imagination, and actually care about anyone else but their kith and kin. The one thing a former empire should never do is bring back the norms of the colonies to the home country. And the Chumocracy are so out of touch with the real world, they tried to do that, and took a bullet. Just a thought.
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Pushback is to be expected from those interested in keeping people ignoring the inevitable effects of not distributing wealth fairly enough to keep those mostly producing it just surviving, nevermind thriving.
What people don't really understand is that this is nothing new.
I was reading a piece by Gore Vidal from July 1961 about the willingness of the "Conservatives" in the USA to embrace the ideas of Ayn Rand, who argued that altruism and justice were immoral, and that the Cult of "I" should replace Christianity, and other religions, and values.
Then I watched Philiosphy Tube's latest video that described how the powerful encourage those they need to keep compliant and cooperative in keeping their gravy train running, to see those harmed by their hoarding and exploitation as not worthy of being cared about. The people, lives, and livelihoods ruined and being cut short by wealth inequality are to be ignored. Or not grieved over.
In that, Boris' Johnson's attitudes towards the deaths in Covid were not an aberration. His response to the real damage done by Brexit to business and people's, was not the ramblings of a functional alcoholic - the only personal characteristic he shared with Churchill - but his real belief.
They want us to stop feeling that injustice is wrong.
That wealth inequality to that extent means that the damaged caused is swept under the carpet, devalued, or seen as not worthy of being grieved at it is destroying the capacity of people and their families to survive, is not inevitable, natural, or virtuous, but a deliberate and calculated harvesting and hoarding of asset wealth to benefit the few. It is the world of "Soylent Green". (Google it.) Where those worthy of consideration as determined by the needs of the powerful are treated are seen as worthy of our consideration, and are granted privilege, whilst those who aren't, are marginalised, seen as inconvenient problems, and their suffering is ignored.
This is nothing new. Class and Caste define who gets looked after. And who ends up rioting. And who is blamed and scapegoated.
The current form comes from the failure of Neoliberal economics to maintain the postwar economic settlement in the West, and to ignore the social, cultural, economic, and political dislocations and insecurities caused by it, occurring everywhere, and all at once in this present time. People everywhere, except the winners in this rigged game, are pissed at the outcome, and rightfully so. But the wealthy winners, are largely are using their profits to prevent the pitchforks coming for them. They know their fantasy has crashed to earth, to the extent it has created more instability and more frictions. To the extent the fallout is capable of damaging the earth. But, like any addict, they're not ready to give up. So they will not admit their failure, but instead, will double down. Hence, there's more political polarisation, because when people are busy hating each other, they don't notice their pockets being picked.
It doesn't have to be that way. Capitalism can work in ways that focus on efficient and effective distribution of asset wealth and resources, instead of beggar thy neighbour. It can work in ways that are safer, cleaner, and that can keep the planet in habitable for humans. But we have to do capitalism differently.
Capitalism has to prioritise the basic needs of people and communities before profit. Simply, profit returns to being the means rather than the ends.
Capitalism has to pay its way. Simply, the costs of doing business have to be borne by those doing business. Socialism for the rich, and unmitigated capitalism for everyone else is no longer acceptable or desirable. The rich should clean up their own messes, such as pollution, and societal and cultural impacts of their activities.
If Capitalism did only those two things, wealth inequality would eventually disappear. Wealth would not disappear. On the contrary, it might even grow in size, with more people being able to access the means of building it. It just would be hoarded by a minority.
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After being told for decades, There Was No Alternative to giving away our assets, we might just begin to realise There Was Always An Alternative. There was an alternative in 1945, when people after World War II said "We had Enough of lower living standards, poor health, poverty, and lack of opportunity" through the ballot box. And less than a hundred years later, we're facing the same problems, for the very same reasons. We've been told the same lies for nearly 50 years, that our were told in the 20th century. It's taken nearly 50 years of lies and neglect to working peoplepush people to say, yet again, "We want to take back control. We want to do things differently." it isn't going to be easy, because as happened in the interwar years, there were asset wealthy people trying to warp and misdirect our desire for change. Do not give up. They are already planning to use their asset wealth to extract more and to further strengthen their control over your country. If you really want to take back control, you have to tax the passive income of the asset wealth of multimillionaires and billionaires, and redistribute it . Then, and only, then will you have any meaningful sense of control over your own country. It took our ancestors time, blood, sweat, and tears to get what we had in the 20th century. But we did get it. Time to really put the effort into getting that back from those who want to own our assets, and pay us far less than that privilege is worth. And when we get it, we need to keep it this time. And we have to work together to do that, and stop the economic clock going backwards.
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Anyone who thinks you're a communist knows less about communism than they think they do. Moreover, they haven't paid attention to what you have said over and over about yourself being a capitalist. In short, you believe that capitalism is necessary, but not sufficient of itself to ensure fair, efficient, and adequate distribution of the resources needed for survival by all. Why? Because capitalism by itself seeks to harness individual human desires, without acknowledging the necessity of disciplining and regulating them to protect the welfare of all humanity. It is not about destroying capitalism, it's about controlling it's downsides that derive from human shortcomings like greed, short-sightedness, and other follies. Taxation is a necessary tool for doing that, as economic history shows us. Taxation became necessary to protect capitalism itself. And there's there is every justification to use it to protect societies from capitalism when it's overgrowth results in harming them. The justification is obvious, but it is how we use taxation that is the conflict. And governments, like markets, are comprised by people who are not perfect or efficient out of the gate. Everything is an ongoing experiment that risks failure. And capitalism is failing the societies it is meant to serve by ineffectively distributing the resources needed for its survival. Fair, targeted, and effective taxation is the only tool to fix that. The status quo isn't working.
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Why do you think MMT and taxation is somehow incompatible? Remember MMT is not a prescriptive or ideological framework. It describes the reality of what governments can do. It is not an ideological position that is prescriptive. In other words, those arguing to use it are not arguing that you can do it, that you should. Indeed governments have used the MMT framework to do QE, and have been doing so since the GFC, and did more to finance their strategies during the pandemic. So call it MMT or QE, it's the same thing. But I think the observation by a famous British statistician that, "All models, are wrong, but some are useful." By this he meant that models and frameworks are maps of reality that cannot capture both what is known and what is unknown, and by being a abstraction of reality, they highlight some factors why ignoring or playing down others. The model of MMT/QE in your mind is incomplete, because you think taxation has nothing to do with MMT. And it's arguable that if MMT/QE together with temporary increased taxation - which is a tool to take money out of the money supply - QE would not have fuelled the inflation that it created. Why? MMT/QE was a permanent transfer of money far in excess to the financial sector and corporations, rather than to households. Taxing the gains from that injection of money would prevented inflation. But Taxation, for ideological capital, is rarely acknowledged as a tool to fight inflation. Just a thought.
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I suggest your information doesn't reflect the reality of the teaching profession in the US. So many teachers there are leaving the profession, for pretty much the same reasons as British ones. And wages vary by state, so $80,000 in California might just be chicken feed, especially when there are reports of people earning $100,000 pa and living paycheck to paycheck in the US. Should big doesn't it. But when breakfast in a diner in LA costs you $20, you can eat there every day. That's why takeaway food firms, and other discretionary spending products are reporting losses because US consumers are tightening their belts. Hell, even Louis Vuitton (LMVH) is reporting lower profits as their sales are significantly down. And teachers do work outside the classroom and at home, and often end up doing 60 hour weeks. That's why both US and UK teaching professions are haemorraghing talent. It's not just giving the lessons. It's the lesson plans, the marking, writing reports, pastoral care, as well as dealing with children who might have special needs or personal problems, such as poverty, hunger, or behavioural problems, nevermind the parents. Classes are too big, and under-and malinvestment over decades in education is reaping the whirlwind. To be honest, in the Anglo-sphere, our brand of economics is selling families short. And teachers get the brunt of that. You can tell? Why? In the UK, the dropout rate for teacher training alone was about 75%. So 3 out of every 4 graduates drop out before they get their PGCE. And of the those that get through the training, almost all are leaving the profession within 5 years. That's the reality of teaching. It's a vocation, more than a job, because it is personally and professionally demanding, as well as being poorly paid for doing what you're are expected to do. They're underfunded and so are the other staff, and so are the schools. That's why we're selling families short. And no wonder some kids fall off the rails. We need to wake up to what we're sleepwalking our society into.
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That is not THE problem. It's a symptom of how myopic and unfair the tax system is. It's not the cause. And, once the people who really run this country realise that has to change, and put their mind to it, then that will have to change. And it's not only the asset wealthy who have to change. The asset limited who rely on a wage, and the assetess, have to wake up the reality of their gradual demise, and stop supporting politicians who do not serve their interests. And let's be honest, the indoctrination is going to be as hard as giving up the worst addictive drug. Fear and Greed are more powerful. And until we stop believing things that can't be true, we will keep falling victim to them. Why? Because we don't understand what's really happening, and the asset wealthy class, especially the ones at the very top, are investing in ways to make you not believe reality. Why do you think Musk, Trump, Bezos, etc spend billions buying access to your attention? Why do you think the best selling newspapers in the UK are kept in business although they are in the red, losing millions every year? Why do think Google have screwed over small businesses SEO strategy to insert their least useful AI on your android phones? Or Apple are now getting their users to work for nothing to train their own AI? No such thing as a free lunch. That's why Twitter wasn't banned here in the UK, when they arguably endangered the lives of innocent people and wrecked communities in the UK by spreading disinformation?
We live in a world that's addicted to wealth, and it's slowing killing us, and will continue to do so, until we wake up to the reality that we cannot win a game that is designed to make a very small percentage win. 1% win. 99% lose. And don't think they will stop willingly. They won't until it costs them more to continue than to stop. Capitalism was invented to harness human fear and greed in a controlled manner, but the addiction is stronger than the controls. Until we wake up to that, we are walking into a disaster that will only protect those who own all the assets.
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Are you familiar with the ONS? Then look up the Labour Share of GDP since 1980. Immigration is not your problem. Nobody from abroad told you to have too few children to support your economic model. You listened to your meal mouthed elites, your betters, who took every cookie jar your ancestors put away since 1945, and shared them with their kith and kin, and rewarded their donors with it. And you voted for that. And now you spout the same mealy mouthed scapegoating of those who robbed you? You are too easily manipulated. You are not in charge of your economy. Your mealy mouthed tubthimpers are, and how they shaped that economy wasn't for the benefit of anyone earning a wage. It was for the ones who own most of this country's assets. All they want you and the migrants to do is get them the money to buy more assets for themselves. And to keep you distracted, they give you migrants to blame for the worries you and your biases allow to take root. They gave you single mothers, the sick and the poor as well to throw under the bus.
What you don't realise that it will be your turn next. They have their plans for you to keep on making them richer, and you and your descendants might just end up under the bus as well. Freeports were only to be the beginning. Open working prisons, with no workers rights, legally outside the law. Let's hope Starmer doesn't have to let those schemes go through, because the only way he's going to avoid it, is by doing as Gary asks.
It's funny that, but you read Gary's book? He was a working class kid in a mixed race area. His neighbours was Asian, and you know a funny thing. He was friends with the eldest boy, and his mum befriended him, and encouraged him to settle down in school, and to work hard, as she was doing with her son. And he listened. His mum and dad upstanding people, god-fearing too. But they didn't get through to him. Not his teachers, not his other mates. That Asian woman did.. She understood him, and saw him not as just kid. She swa his potential. That's the Britain I like. Not the fearful, anxious, petty, mean-spirited Britain, where you can fulfil your potential and put something back, even if it's a kind word. She could have seen him as a rival to her son, and not taken an interest in him. She wasn't vowed by her poverty. She wasn't vowed by fear, or false pride, or envy. She was truly strong enough to be kind. That's what's been buried for so long in this country. And I hope we rediscover that spirit again.
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Home is where the heart, is but their hearts are not with you. Their heart sare elsewhere. And I think you might not realise that they do think about you, I, or us in the same way we think about them. And we're encouraged to do so, because it maintains the status quo. So we cannot rely on them to do what needs to be done by their own volition. The people must stand up together and demand real change. and that can begin by remembering Tony Benn's words - protecting our interests is an eternal duty of self care of those who are not rich. And the only way to do it, is to stop asking anything of those who can't or won't help us do that. And to be heard we must act in solidarity again. We've forgotten that lesson of what it was like before 1945, and it took less than 100 years to do so. Now it's time to start rebuilding that machinery again, based on local people working together and creating ways to help ourselves and our communities flourish. That means making our wants and needs clear to those seeking our votes, and be compassionately sceptical while doing it. No big honchos parachuting into our communities and disappearing to Westminster. We want people who know us, care about us, and who will work with us to represent us, and we should pursue democratic goals like English devolution, strengthening of local government, and citizen participation in policy making. Proportional representation, and reform of cfebtrak government. Britain needs to stop morphing into a company town, and be a country, a home again for all its people.
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Meritocracy is a myth, an offshoot of the Protestant Work Ethic, which is even more misleading. Any society that rations the pathways to opportunity, doesn't believe in merit deep down. And the person who coined the term in his book in 1958, a British author whose name escapes me, admitted he was being satirical. So Louis CK's observation that the powerful are a very small club, and most of us will never be in it is quite true. For a really good book, recommended by the YT channel The Market Exit, get a copy of "The Inner Level" by Richard Wilkinson. Chapter 6 specifically deals with Meritocracy. For me this book really spoke to me about it, and explained far better than I could how "merit" is an cul de sac that leads to leaving barriers in place. Inequality of opportunity is a more fruitful place to start, because it points to the fact that still too many never get to put their foot near the ladder, nevermind putting their foot on the bottom rung, because it keeps getting kicked away by those who are already on top. And doing so is a very common human trait, that has life changing consequences that the in the aggregate, actually weakens our society and economic potential. The Inner Level is a sequel to the more academically rigorous book, The Spirit Level, which discusses a huge study done by Wilkerson on inequality. Check out The Market Exit's video on Inequality too.
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Not really. You assume that the BOE is allowing the securities they bought to mature, right? Nope. They're selling them off at a discount to bond dealers, which just reduces the BOE's balance sheet, and nothing more. And the biggest purchasers of Bonds are? The Asset Wealthy who got the stimulus money in the first place, and not ordinary people. So the asset wealthy are getting a final bung from their buddies at the BoE. That is why asset prices have not collapsed by any significant amount, and inflation is sticky, even as energy prices are deflating due to the global depression. That is why the Yield Curve is still inverted, and why GDP is the most deceptive economic indicator devised by economists. Remember £800 billion was pumped into the UK economy, and the BOE is ripping the UK taxpayers off by selling back the bonds into the money supply at a discount. And that's the false impression people if QT, but their wallets know the truth, as their purchasing power disappears faster than the toothpaste in an open tube stood on by an elephant. It's the Cantillon Effect caused by being sustained by the BOE own actions. Hence the K-shaped recovery, where the incomes of the asset wealthy continue to go to the moon, and the ALICEs - Asset-Limited, Income Constrained, and Employed continue to have their purchasing power eroded.
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Sorry, but you're wrong. Who got all the millions of QE before during and after during Covid? It wasn't migrants. It was corporations and plutocrats, your employers. And they didn't put up your wages. But the prices of houses went up as people with cash from their investments bought houses and competing with each other pushed the prices up and up and up, and priced you out of the market. Why can't you get well paying jobs is that companies make more money by speculating on the stock market by manipulating their stock prices, rather than investing. Why do you thing the stock market is going up and up while your wages aren't? They don't need more people except in the jobs you are unlikely to do. And Technology as well. Just look at the job market. And the economy? What's the biggest sector in the UK economy? Financial Services, which is so profitable that they can invest in algorithmic investment programmes, and other computing that removes jobs. They only need people to program those. They don't need backroom clerks, they don't need counter clerks, they don't need branches. They don't need big HQs in Canary Wharf, because the computer can do it all. They don't need as many workers any more to make their money. And it's the same in almost all service industries. Clerical workers are a dying breed and the starting wage is beginning to be minimum wage. Most of the work is computerised, and 1 person can do the work 9f 3 people. Where are those jobs? Falling off a cliff, or being paid lower. Migrants didn't pay that. And the joke is a loof the profits being made don't stay here, because a lot of foreign investment send those profits back home. Blue collar manufacturing jobs are another dying breed. Not only is manufacturing a tiny part of the economy - only 15%, and those jobs are disappearing. And guess what? Brexit accelerated that decline because instead of pitching at the high margin low hanging fruit in Europe, we're trying to compete with economies that are able to undercut us in labour costs. That, and their countries have plenty of cheaper workers because they had more children. And they got those because we wanted cheaper goods. Migrants think their going to come here and get rich. Nope. They're suffering as much, and sometimes, even worse than you. as you. They have 2 or 3 jobs. Even the Uber drivers are using 2 and 3 apps at the same time to get fares. The UK economy for workers is shrinking. Not for investors and the asset wealthy. Migrants aren't to blame. And if and when you get rid of them, watch how worse things will get. Technology is coming for your job, and employers very rarely train people anymore. Only certain sectors still offer apprenticeships, and you can't live on that money independently, because legally they can pay apprentices below minimum wage. Even today, a training firm is offering apprenticeships for classroom assistants, who normally get paid minimum wage any way. And the pressures are so bad in schools not only are they having difficulty attracting and retaining classroom assistants they're having the same trouble with teachers in the state sector. They're leaving to work at Aldi. So, honestly, it's a lie that migrants are coming here for your jobs. The only sectors expected to grow in the UK is computing and social care. The first is academic, and the second is providing personal care to elderly people. Not working class jobs. And not white collar jobs either. So, it's bad for miggrants. It's bad for you in the same way. For the Sam e reason. So by all means blame migrants, and when they're gone, who are you going to blame then? The poor, the sick, and the elderly? And when they're gone, who then?. Gary's 100% right.
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That's what Gary described as State Capture, and like gunk in the drains blocking the flow of water, it's a perennial problem because extendive asset wealth gives you power and influence. But it doesn't have to be that way. If we don't put the effort to ensure our politicians serve the interests of every citizen, then that's on us. Our ancestors came back after World War II, and used the ballot box to draw a line in the sand. And unfortunately, we can't say "one and done". It's only taken 50 years or so to erode that legacy, of the electorate really taking back control. We didn't realise that that legacy had to be defended. A legacy that fought ignorance and despair, cannot defend itself against a system that relies on leveraging some of the worst traits in human nature. We must protect ourselves against those traits getting out of control in those we reward for exploiting them. Democracy is the only means the people have to tame it, because to govern the country requires our approval to have legitimacy. The cynical say if voting meant anything, they wouldn't let us do it. But I say, if voting meant nothing, why do the plutocrats spend so much time, effort, and money on trying to influence who and what we vote for? Why did certain people try to make it more difficult for certain citizens to vote. For once, Rees-Mogg wasn't lying when he admitted that Voter ID was gerrymandeting. That's why our voting system needs to upgraded and made more effective democratically. We have to move to a system where every vote counts. It's only one defence against those who would manipulate us, but it's an essential one for our democracy to act more effectively. We have to have systems of governing that ensure that our best interests of our communities and country are served. We have to stop being dependent on being lucky. Our democracy needs strengthening, and so do our communities. Neoliberalism isnt just an economic experiment gone badly wrong. It was a social and political one gone awry too. The ideology wanted us to believe that there was no such thing as Society, until those pushing that nonsense wanted it to replace the state's collective support that had been deliberatively withdrawn to provide bug tax cuts to cipirations and their owners, who had 8nturn suppressed wage growth fir decades. They encouraged us to believe that John Donne was wrong when he asserted that No An is an Island, written when the powerful wealthy elite wreaked havoc on their people to entrenched their power. Donne wrote that passage as a survivor of political and economic upheaval in England in the late 16th century that was dressed up as a religious and political struggle, but was the wealthy throwing the little people under the bus yet again, to secure their power. Like a gardener having to keep on weeding the garden, the citizens if this nation have to keep fighting time and time again, against those who would put themselves above the interests of the country and their people. And as austerity and the pandemic showed us, the tendency for the asset wealthy and entitled to throw poor people under the bus never goes away. So we must be able to weed them out. And we must work at it to protect the harvest of our sweat, of our hard work being stolen and hoarded while we suffer. That's the part 9f our history not exactly taught and it should be, because the work can never stop, can it? It's not the 16th century. it's not the 20th century. It's the 21st century. And the work has to continue for the next generation not to slip into poverty again.
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You must be pretty bored today. You've obviously never had an original thought of your own. Or 1) you would have worked out that Gary was and still is a capitalist. 2) Capitalism is like Ice Cream - it just doesn't come in vanilla flavour. Other countries are less wealthy than the US, but the quality of life for those who work hard, save, and pay their taxes is much better than the US. They have better outcomes like longer life expectancy, less homelessness, less suicide, and less mental health issues than the US, and they're capitalist too. Perhaps it's beyond your Ken, but in many ways you are aren't doing so hot. As Scott Galloway said, America's place to make your money, but Europe is a place to live and spend it. You need to get out more, and see the world as it really is, and learn what it's really like. You'll learn that the American way isn't the only way to do capitalism. There is no perfect way to do capitalism except one - ensure people have what they need, more than what they want. If they want more they can go for it, but not at everyonelses expense. And not at the Planet's expense either. It's the only home we have.
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Not really right now, because your loan is literally a drop in the ocean in the current global debt based economy. Gary is simplifying a massive, mostly hidden financial mechanism, which is the creation of credit by banks and non-bank financial institutions. The scale is such that it is bigger than any national economy, and it's not controlled by any government. It's controlled by the banks and non-bank financial institutions, and therefore controlled by those who own these, who in turn use their wealth to directly and indirectly influence national governments, and to buy assets everywhere. Assets are true wealth, and debt is the major asset class in every economy. Why?
Debt is the major mechanism of creating money. Approximately, over 90% of all money created is credit from loans made by banks and non-bank financial institutions. This money creation goes on in every financial centre 24 hours a day, 365 days a week. And a lot of it is done in offshore financial centres that are not regulated by governments. The bit of the financial system that is regulated by government is the tip of the iceberg. Your loan comes from that tip, but the money created to provide you with your loan originated much further down below, and is very difficult to trace where it came. Your loan is the end of a chain of loans as Financial institutions borrow and lend to each other. Big systemically important investment banks/NBFIs to commercial ones to retail ones, etc. And billions are moved around, all out of sight of the public. They also lend to governments and multinational corporations too. That where most of our money comes into existence. And most of the largest owners use offshore banks and shell corporations and blind trusts in tax havens to hide their ownership. Yes, you can track shareholdings in the visible tip of the iceberg. Those are the financial institutions that interface with the public, but not the rest. As tax havens exist to hide ownership of assets held in them. (And a major driver of Brexit was the threat posed by the EU's Anti-tax evasion Directive to Britain's major share of the global tax haven business. (Watch Britain’s Second Empire here on YouTube for a still relevant explanation.)
What Gary is proposing is to tax the visible bit of wealth. That is big enough already to make that affordable for the wealthy to pay that. It won't touch the rest, but at least living standards can be maintained for those who rely on a job for a living.
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Divide and Rule is the oldest political trick in the book. At home and abroad, it's been a tool of powerful minorities to maintain control over the people. Turning them against each other, means people dissipate their strength and their attention in fighting each other. And either blindly believe they will win, (they can't - they're not asset rich and never will be) , or fail to notice how the asset rich minority are hoovering up the asset wealth, while they and the people they're fighting have to do with less and less over time. Pastor Niemöller's poem describes the end result. Why? Because when one 'enemy' isn't enough to distract, they will find another one. That's the reason behind the Culture Wars, and the Hostile Environment around immigration. And it's all convenient lies to distract voters from the real reason why you will get poorer, have to make do with less, and your descendants will be even worse off.
Don't let them distract you. Follow the money. If you don't, eventually the Hostile Environment will be the norm for you, whilst the asset wealthy will just keep on hoarding their wealth.
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Nope. To reverse the Cantillion Effect caused by QE, one cannot let just the purchasing power of the money pumped into the economy and accumulated overwhelmingly by the asset wealthy be eroded by inflation. But that is exactly what the BOE and the Treasury, and other central banks are doing. In particular, the BOE are only reducing what is held on their balance sheet. In effect, that's an accounting exercise, leaving the £800 million of assets in the pockets of the Asset Wealthy, which they are spending on buying more assets, and crowding out the ALICEs of those markets - the (A)sset-(L)imited, the (I)ncome-(C)onstrained, and the (E)mployed. What's worse, the BoE is not allowing the Bonds they purchased from the Dealer Banks to keep them afloat during Covid to mature. They are selling them back to the dealers at a discount. So the post-Covid K-shaped income recovery is being entrenched, with the incomes of the ALICEs being depleted as their purchasing power is also being eroded, whilst the passive incomes of the Asset wealthy continue to appreciate in quantity and value. The only way to reverse this increasing spread between the two groups is tax the asset wealthy. This will reduce the money supply in real terms, and not just in nominal accounting-exercise terms. And those who got most of the stimulus will bear the cost. Not the ALICEs who got very little.
In fact, all QE has proven is that the 1) financial capitalism of today is replicating the mistakes of the past in entrenching rentierism and unproductive investment. 2) people hear what they want to hear, and don't always know what they are being told isn't true, and 3) not disincentivising rentierism is a political choice that will impoverish ordinary people, and destroy real economic growth by reducing the resilence of the economy as a whole, whilst politically and economically disenfranchising the ALICE majority. Too much rentierism creates economic instability and prohibits wealth creation amongst those who need it the most.
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Read the New Yorker magazine article "What has 14 years of Conservative Rule done to Britain? It's 10,000 words of truth bombs, including a section on local authority funding from Central Government, which has fallen by 45 percent since the Conservatives came into power, even though the national debt rose from 56%, to over 100%, and now is at 97% of GDP. Councils are going bankrupt in the United Kingdom, as their local populations get poorer. So, even to fund what little there is left to their functions, they have had to put in above inflation increases in council tax and business rates, even while their populations get poorer and/or leave to find better work. So reversing clean air policies won't cut it, cutting business rates, won't cut it, and all your other solutions are now untenable. And the process began that bought back the slums to Britain started 40 years ago. We have to become serious about the problem, because it might already be too late.
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PS Gary, might be worthwhile reaching out to Richard J Murphy for a chat, as he wrote the Joy of Tax and as you want to bring Distribution to the centre of economic thinking, it might be useful to have a chat with him, as he's just finished a big report on reforming the Tax System as you can see on his blog called "Funding The Future". He's also a daily uploader of short but focussed content on politics, economics, and accounting. I call him "Bomber" Murphy, because like you, he keeps on dropping truth bombs are very well targetted. And we need to find the joy in tax, because it's a tool that we need to understand far better and fear less. and talk about how if used correctly, tax can help counter and prevent economic externalities like misallocation, and promote fairness and wealth equality. Arguing against tax is like arguing against having taps, once you understand how they work.
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Gary, I think this was a great video. You explained the problem, really, really well. I hope Starmer and Reeves realise that they have to be more assertive about it. The exposure that the UK has to Interest Rate Risk is real, because the economy is structured in a way that makes it more unlikely for growth to occur. And Brexit has closed off much of the opportunities to grow the economy in productive ways. And squeezing even further the bottom 50% by austerity, will be vampirising all future potential for growth, which depends on consumer spending. An economy, where the state tries to borrow back the excess money created during the pandemic it gave out is a futile exercise. It's not gonna happen. This pressure is a reality check for the Labour economists, who deluding themselves. They have to tax the asset , as the bottom of the income and wealth distribution are running on fumes already. Why? Well, in modern revolutionary history, revolutions only happen when the middle classes are hit. And if an opinion piece in the FT is correct in its conclusion that the bottom of tge income-wealth distribution in the UK is getting closer to the middle, then things are going to get messy. Historically, the economic impact of pandemics don't dissipate quickly, and the push to get back to "normal" whilst understandable, is also the missed opportunity to sort out the economy. As you say, nobody's asking the right questions, about the billions of pounds created that needs to be taken out the money by government. The people who are hurt most by austerity are those who need government spending the most, but didn't end up with that excess cash. The people they spent it with did. And they're the asset wealthy.
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