Oh Jeremy Corbyn (1 Viewer)

mrtrench

Well-Known Member
Clint, I think it depends on one's views re scrutiny. When I watch the BBC it always feels like Labour is given an easy ride and the government lambasted.

However, I have now listened to McDonnell and have some points on what he says. I'll be completely open and disclose that I know a lot about financial markets but am self-taught on economics.

1) Issue government bonds to buy back privatised utilities. The first point is that the definition of government debt is issuing bonds. That is the only way that the government borrows (apart from minor initiatives such as NSI premium bonds). I don't understand how he can make out it is anything else but increasing debt. He says that interest rates are low and hence this is affordable. However we mustn't confuse the current base rate with the rate that government bonds pay for, say, 25 years maturity. 25 year gilts yield 1.9%. It's still low but much higher than base.

The real issue here is that once the gilts are issued to shareholders in utilities they can immediately be sold back into the gilt market, increasing supply. That will drive gilt yields higher (indeed I think they would go higher immediately that Labour were elected as the market would be spooked). That, in turn, will increase the cost of further government debt just to service the deficit and the regular renewal of existing debt (as gilts mature, the BoE issues more to pay the principal back). Debt would immediately become more expensive - and that would increase the deficit.

An important point that wasn't challenged is that 'parliament would decide the price to pay'. Why not the market, because by definition that is the true value. If he forces shareholders to sell below market value that would be subject to legal challenge and would immediately reduce trust in the government. That would send markets into turmoil.

Next, he says that he can pay the interest on the government bonds using the income from profitable companies. I agree that this would work initially. However, when these companies were in public hands they didn't make a profit - they were privatised partially to remove the burden from the public purse. How long until this happens again and we now have more debt and a need to support failing utility companies?

2) PFI buy-back. He claims he will make a profit due to savings. This is nonsense. To buy back the contracts he will have to pay the value on the contracts up front. The projected income to the private companies will be discounted to present value and that will be the buy out price. This is the fair way of doing business. If he forces a discount through that will again spook markets and damage the economy. In any case - more borrowing through government bonds and hence higher gilt interest payments...

3) £250b borrowing to invest. He claims funded by a return from the investment. When he says invest he doesn't mean putting the money in a savings account. He means building hospitals; building roads etc. All lovely things I'm sure, but by no means certain to yield any income. The income he anticipates is increased tax income through growth. But what if all this increased debt cripples the country? Very dodgy.

This is why I am so anxious. He's talking about things I understand from my professional life and it's all tosh and very dangerous.
 

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Captain Dart

Well-Known Member

Captain Dart

Well-Known Member
Andrew Marr has ruined John McDonnell this morning. Really just proves how Labour hasn’t costed it- it’s all ifs and buts, and ‘we think but don’t know’. It’s so worrying.
The ideas are good, but he has no answer as to how much they will cost, or how much they will return.
Did he repeat we are not going to borrow we are going to issue bonds shit again?
 

Captain Dart

Well-Known Member
This is why I am so anxious. He's talking about things I understand from my professional life and it's all tosh and very dangerous.

Will former socialist rebel John McDonnell be able to compromise?

It is quite an achievement to have been sacked by Ken Livingstone for being too left-wing, but that fate befell John McDonnell when the pair were leading resistance to Margaret Thatcher’s government at the Greater London Council.

The pair fell out spectacularly when Mr McDonnell, who was Red Ken’s deputy, refused to abandon the GLC’s low fares policy even when it was ruled illegal.

The episode was an early sign that the new shadow Chancellor finds it difficult to compromise over the left-wing views that have driven his career in politics.

For his first 18 years in parliament, that meant an often lonely struggle to keep the light of full-blooded socialism burning with just a handful of comrades including Dennis Skinner, Diane Abbott, Michael Meacher – and Jeremy Corbyn.
 

mrtrench

Well-Known Member
Perhaps you’d care to address Mr Trench’s concerns?

The key here Grendel, is by how much debt costs would increase and how much growth would increase to make it worth it. I believe it would be a disaster but I don't know. To counter my own argument: Labour will borrow a lot of money initially and gilt yields will increase. The country will face a big increase in debt servicing costs. However the investments they make will cause the UK to rocket out of slow growth and tax income will rise. Soon, GDP grows so much that the debt becomes manageable again.

I don't believe this but I cannot prove it isn't so.
 

mrtrench

Well-Known Member
Did he repeat we are not going to borrow we are going to issue bonds shit again?

Effectively yes. And Marr didn't call him out on it enough. As I wrote above, the definition of government debt is effectively issuing bonds.
 

clint van damme

Well-Known Member
I don’t really get the argument opposition shouldn’t be scrutinised. So if the BNP were ahead in the polls Marr shouldn’t be interrogating their immigration stance?

it's not that they shouldn't be scrutinised, it'd the level of scrutiny Corbyn gets. It's disproportionate to what he can actually influence as leader of the opposition.
Especially at a time when we are going through a massive political change such as Brexit.
 

clint van damme

Well-Known Member
Is that the only argument you have- they aren’t in government so they don’t have to prepare, or back up their points- they can’t call themselves a government in waiting but not actually have any clue of how to fund what they promise.
As I have just said- once I see the budget I will focus on it, but that’s not until next week is it?

again, the level of scrutiny Corbyn and Labour are getting is disproportionate to their standing.
You don't have to look far for very serious issues and concerns at the eminent which seem to get brushed under the carpet by the media.
The fact that the Foreign secretary didn't understand the conditions of the Good Friday agreement and then admitted so should be getting more coverage than it has.
 

skybluegod

Well-Known Member
again, the level of scrutiny Corbyn and Labour are getting is disproportionate to their standing.
You don't have to look far for very serious issues and concerns at the eminent which seem to get brushed under the carpet by the media.
The fact that the Foreign secretary didn't understand the conditions of the Good Friday agreement and then admitted so should be getting more coverage than it has.

Again why? They keep claiming to be a government in waiting yet their claims seem to have no basis.
I don’t think they are brushed under the carpet by the media, i just think Labour try and explode everything bigger than it is.
Let’s be honest Boris shouldn’t have a job, st least not in that role, but you say that doesn’t get enough coverage, there is, Boris is crucified in the media every other day almost
 

clint van damme

Well-Known Member
He really isn't, not in most of the media.
There's a reason he stays pally with Dacres and Gallagher.

boris.jpg
 

Sick Boy

Well-Known Member
Again why? They keep claiming to be a government in waiting yet their claims seem to have no basis.
I don’t think they are brushed under the carpet by the media, i just think Labour try and explode everything bigger than it is.
Let’s be honest Boris shouldn’t have a job, st least not in that role, but you say that doesn’t get enough coverage, there is, Boris is crucified in the media every other day almost

Johnson crucified?! Hahahahahha
 

mrtrench

Well-Known Member
again, the level of scrutiny Corbyn and Labour are getting is disproportionate to their standing.
You don't have to look far for very serious issues and concerns at the eminent which seem to get brushed under the carpet by the media.
The fact that the Foreign secretary didn't understand the conditions of the Good Friday agreement and then admitted so should be getting more coverage than it has.


A matter of opinion, as I wrote before. However, I would say that they deserve more scrutiny, not less - as not one of them appears to understand finance and what they do could be the ruination of the country. Nobody here, I don't believe' is claiming that the current government is doing a great job - but crikey, that would pale into insignificance compared to the damage they could do. Surely something that could be so devastating should be exposed constantly?
 

clint van damme

Well-Known Member
A matter of opinion, as I wrote before. However, I would say that they deserve more scrutiny, not less - as not one of them appears to understand finance and what they do could be the ruination of the country. Nobody here, I don't believe' is claiming that the current government is doing a great job - but crikey, that would pale into insignificance compared to the damage they could do. Surely something that could be so devastating should be exposed constantly?

Again, you're surmising what would happen under Labour, we can see what's happening under the tories. There's a lot of worrying signs.
 

Grendel

Well-Known Member
Again, you're surmising what would happen under Labour, we can see what's happening under the tories. There's a lot of worrying signs.

Summising based on evidence of their intent.

The desire to renationalise shows their intent - to pursue a political dogma which flies in the face of rational thought. Borrowing vast amounts to pursue an ideally archaic view of state ownership in times of severe economic debt is foolhardy.

Any economist would tell you that.
 

clint van damme

Well-Known Member
That is because my perception is that if the current government is scoring 3/10 then Corbyn would score -100. In my mind, at least, the two are incomparable.

in from work and checked out the Hammond interview on Marr. Dropped a couple of fairly big blunders himself with regard to unemployment and the number of new homes built last year. I'm sure he'll be excused!
 

clint van damme

Well-Known Member
Summising based on evidence of their intent.

The desire to renationalise shows their intent - to pursue a political dogma which flies in the face of rational thought. Borrowing vast amounts to pursue an ideally archaic view of state ownership in times of severe economic debt is foolhardy.

Any economist would tell you that.

we've been over the nationalisation argument before.
Plenty of economists support it. We pay dividends to foreign nationalised industry who have invested in our utilities.
Billions go abroad in dividends.
 

Grendel

Well-Known Member
we've been over the nationalisation argument before.
Plenty of economists support it. We pay dividends to foreign nationalised industry who have invested in our utilities.
Billions go abroad in dividends.

The cost of nationalisation is huge. The borrowing absurd and the notion it’s profits will offset borrowing nonsensocial.

Nationalised industries end up as union controlled monstrosities that burden the tax payer not benefit them. The notion the state can pay and fund these industries is a flight of fancy.
 

M&B Stand

Well-Known Member
Summising based on evidence of their intent.

The desire to renationalise shows their intent - to pursue a political dogma which flies in the face of rational thought. Borrowing vast amounts to pursue an ideally archaic view of state ownership in times of severe economic debt is foolhardy.

Any economist would tell you that.

Comparing Socialism in theory with Capitalism in practice is how they like it.


Disclaimer:
*i would actually support a proper plan to re-nationalise the railways.
 

skybluegod

Well-Known Member
in from work and checked out the Hammond interview on Marr. Dropped a couple of fairly big blunders himself with regard to unemployment and the number of new homes built last year. I'm sure he'll be excused!

What did he say about homes I missed that?
I think he said unemployment was non-existent, which is just hyperbole. He knows it’s not actually 0. But yes a blunder none the less acting out of touch with those that are unemployed
 

skybluetony176

Well-Known Member
The key here Grendel, is by how much debt costs would increase and how much growth would increase to make it worth it. I believe it would be a disaster but I don't know. To counter my own argument: Labour will borrow a lot of money initially and gilt yields will increase. The country will face a big increase in debt servicing costs. However the investments they make will cause the UK to rocket out of slow growth and tax income will rise. Soon, GDP grows so much that the debt becomes manageable again.

I don't believe this but I cannot prove it isn't so.

Also depends what you’re borrowing to do. Things like borrowing to fund a major social house building program for instance is just common sense. The government would be borrowing to invest in a tangible asset that aside from paying for itself in rent income the asset is also only going to increase in value. Just add some conditions regarding right to buy and how long the properties are held onto before they become available for right to buy.

Borrowing to nationalise the railways for instance not so keen. Other countries in Europe manage to have a functioning privatised rail network. Seems to me the problem is governance. Although I wouldn’t be against something like they have in France where the rail network is part Government owned and part privately owned. It also leaves the French national railway to invest in other projects including our railways so potentially the French government is putting in more and taking out more of the British railways than our own government is.
 

mrtrench

Well-Known Member
What did he say about homes I missed that?
I think he said unemployment was non-existent, which is just hyperbole. He knows it’s not actually 0. But yes a blunder none the less acting out of touch with those that are unemployed

I haven't seen it, but he was almost certainly referring to the economic definition of full employment. At any point in time, economic theory is that there will be some people between jobs and hence literal zero unemployment is not achievable.

Full employment - Wikipedia
 
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dancers lance

Well-Known Member
Does White realise they are in check?

And about to lose a Queen.

And the board is set up the wrong way round?

Never mind, grab the pawn and take the photo. No one will ever notice.

“Adequate compensation for a sacrifice is having a sound combination leading to a winning position; adequate compensation for a blunder is
having your opponent snatch defeat from the jaws of victory”
 

clint van damme

Well-Known Member
Yeah I thought that too but Clint won’t accept that, so just let him have this one ;)

he said there are no unemployed people, (there are officially 1.4 million), then in a later interview he referred to unemployed people.
It's not about definition or letting me have one, it's what he said.
Agree it's just semantics, but so are so many of the points picked up on on here.
 
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clint van damme

Well-Known Member
Comparing Socialism in theory with Capitalism in practice is how they like it.


Disclaimer:
*i would actually support a proper plan to re-nationalise the railways.

I'm not for or against either nationalisation or privatisation but what I do believe is that the better a countries infrastructure, (and I include utilities and health service in that as well as transport), then the more successful the country will be.)
 

Captain Dart

Well-Known Member
he said there are no unemployed people, (there are officially 1.4 million), then in a later interview he referred to unemployed people.
It's not about definition or letting me have one, it's what he said.
Agree it's just semantics, but so are so many of the points picked up on on here.

He f**ked up his statement, he was trying to argue there is no additional unemployment due to technological advances, that's why his previous sentence was all about (the no longer required role of) short hand typists.

He didn't mess up as bad as Diane Abbott's explanation of how much it costs to employ 20,000 additional policemen.

Diane Abbott gives 'most embarrassing political interview' before she blames the media for her car-crash performance
 

clint van damme

Well-Known Member
He f**ked up his statement, he was trying to argue there is no additional unemployment due to technological advances, that's why his previous sentence was all about (the no longer required role of) short hand typists.

He didn't mess up as bad as Diane Abbott's explanation of how much it costs to employ 20,000 additional policemen.

Diane Abbott gives 'most embarrassing political interview' before she blames the media for her car-crash performance

If you want to indulge in whataboutery how about his gaffe over HS2 when he was out by 20 billion?

You probably didn't hear about it but Hammond got his sums wrong by £20bn

Difference is one has their hands on the purse strings and the other never will.
 

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