Funding the Future

As a matter of fact, the Bank of England can always create money out of thin air. But can commercial banks really do so? The answer is yes, subject to a massive caveat – which is that they can only do so under licence from the Bank of England, which means that the buck for all money creation ultimately stops with the government.

Some people argue that  modern monetary theory is irrelevant, or that it changes nothing. They’re wrong. MMT fundamentally reframes the power relationships within our economy, moving power away from banking and the City and towards democratic government control, whilst prioritising people and full employment instead. No wonder so many people don’t like it: MMT challenges all the privileges they enjoy at cost to the rest of us.

The overwhelming impression Labour has given during its first few weeks in office is that it has no idea about why it wanted to be in government, or what it will do with power now that it has it. After fourteen years in opposition that appears quite extraordinary, except that it reinforces the idea that the whole Starmer project to date has simply been about defeating Corbyn. But in that case, it’s fair to ask, where is Labour going?

Every time I post a video about money people appear claiming only gold is money and we must go back on the gold standard. Those saying so are economic dinosaurs who do not understand who the modern economy works and would rather we go back to the era that delivered the Great Depression, precisely because of the obsession with gold. They really do need to be ignored.

QE was, and always will be a sham to disguise the fact that a central bank is lending money to the government that owns it. In this video I explain the ins and outs, and costs, of this ridiculous denial of the truth.

Steve Baker – until recently a Tory MP – has claimed that in twenty years’ time – when we will be celebrating the centenary of the welfare state – we will no longer be able to afford it. Is he right, or talking a load of nonsense, as usual?

When Tylor Swift endorsed Kamala Harris for US President everyone took note. But, do such endorsements matter and should more people put their heads above the parapet and declare what they think in public? My answer is a resounding ‘yes’.

Instead of picking on children on poverty and pensioners needing support with fuel bills to pay the price for the Tory economic aftermath Labour should be picking on tax cheats to fill its coffers, as the National Audit Office agrees, and as I show in the Taxing Wealth Report 2024, would not be hard.

Of all the groups in society anyone expected Labour to pick on when it came into office Labour were the least likely excepting, perhaps, children in poverty. Now it turns out they are the two groups Labour thinks should pay the price for the mess that Labour claims it has I inherited from the Tories. Political incompetence on this scale is hard to make up.

The Bank of England, and most especially its Monetary Policy Committee, have imposed misery on the UK over the past couple of years for absolutely no reason. If ever there was a reason for the Bank to be independent of the government, it has long gone. If the best interests of the people of the UK are to be served the Bank is long overdue for reform.