About shadow chancellors

While this looks like a technical spat over issues of macroeconomic monetary policy, with Chris Leslie, Labour's stand in Shadow Chancellor arguing classical monetarist i.e. Thatcherite economics, its also about who benefits in terms of policy and for three people career advancement.

  1. Leslie said: “Printing money and ending Bank of England independence would push up inflation, lending rates, squeeze out money for schools and hospitals and mean spending more on debt servicing. Higher inflation and a higher cost of living would hit those on the lowest incomes, the poorest people who couldn’t afford those goods and services. The very people we should be standing up for would pay the price – the poor and vulnerable.”
  2. Notice - no model of cause... the huge discovery over the last seven years is that printing money doesn't cause inflation and with interest rates at an all time historic low, now is the time to borrow long term to invest in the future. Leslie is as on most of his economics very wrong on this.
  3. He got another bite of the cherry in the New Statesman, where he focuses on QE, and it's consequent interest payments (there aren't any) and the independence of the Bank of the Bank of England which for some reason he holds up as a great reform.
  4. The independence of the Bank and the foundation of the Office of Budget Responsibility are both anti-democratic reforms, reducing the power of the elected Chancellor and the House of Commons. The ideology behind these reforms is that these decisions are too important to be taken by politicians, and I'd like to remind Leslie of Mervyn King, the then Governor of the Bank's behaviour in both 2008 and 2010.
  5. Chris Dillow performs a technical analysis of the proposition, critically pointing out that with the current levels of unemployment and underemployment, it's highly unlikely that anything would be inflationary.
  6. Richard Murphy, a Corbyn advisor and author of taxresearch.org.uk opposes Leslie in the most robust terms, in this press version of his radio interview,
  7. The article states that when challenged on Leslie’s point about high inflation, Murphy said: “Any system of people’s QE would be turned off if we got to a situation of high wages and full employment, but we are so far from that at the moment that we have to tackle the low-wage economy and the lack of productivity in the UK by creating new investment, which is the foundation for new prosperity.”
  8. I have heard Chris Leslie speak, and these issues are at the crux of the debate, but it still surprises me to find Labour people using the economics of the '80s to understand today's problems; this isn't the first time he's spoken this way. QE clearly doesn't cause inflation, because we have one and not the other. He's another of Harriet Harman's partisan decisions taken as interim leader, the job's beyond him, and he'll be gone if they reintroduce elections to the shadow cabinet.
  9. Finally if the choice of Shadow Chancellor is between Murphy, Leslie and Rachel Reeves, it's just another reason for voting for Jeremy Corbyn.
  10. Mind you, Murphy is not an MP and so cannot serve as Shadow Chancellor, Chief Commissioner of HMRC anyone?