What would a left government do in next week's Budget? 1/ A massive pro-cyclical stimulus to put rocket boosters under those parts of the economy we want to recover fastest in H2 - ie start rebalancing away from low-value/low wage growth in the next phase...
2/ .... stimulus means a public spending hike, both on investment and day-to-day spend; that should be Labour's differentiator; there's no need for short-term tax rises *except* for rebalancing investment and behaviour...
3/ ... stimulus also means defect scrapping central bank independence. I don't care what you do de jury but independence is already a myth. Monetary sovereignty's gonna be a powerful tool against collapsonomics in the 2020s...
4/ So a left Chancellor would say: we're borrowing, we're spending, we're relying on significant central bank support to dig ourselves out of this hole in a sustainable way over 18 months...
5/ The central aim of left social democracy in the 2020s - alongside decarbonisation - is to boost the wage share and decrease the profit share of GDP. No politician will ever say that, but that's what ending neoliberalism means...
6/ So I would, yes, signal a long term rise in the rate of corporation tax. Labour's right to oppose any CT raises in 2021 - but windfall taxes on profiteers during the pandemic are perfectly justified, especially on Big Tech....
7/ Self-employment got hit hard, as people were excluded from furlough; a left government would, by signalling the equalisation of CT and the basic rate of income tax, incentivise employment and consolidation among SMEs
8/ But the really radical measures would not involve taxation. They would be: mass housebuilding programme, eviction ban, rent cap; huge hike in capital gains tax and anti-avoidance, windfall tax on property speculators - designed to signal the end of the asset boom...
9/ The reason the Labour centre and left end up in a pointless argument about cutting or not cutting CT this year is that there is no clear vision of the economy we're trying to build...
10/ Covid shows the neoliberal model - precarious low paid work, economy running on central bank life support, asset prices booming, young ppl locked out of property, savings and secure jobs - does not work...
11/ We need a massive green investment programme, investing in skills and culture not just trams and home insulation. You borrow, you create money and you sink the debt into 50-year vehicles... the people of the 2060s can worry about them if we've saved the planet...
12/ A high wage, green, high cultural consumption economy means profits have to be earned through innovation/ productivity, not handed on a plate through property ownership, data monopolies and BITC...
13/ As followers know, I think MMT is theoretical BS and incompatible with the labour theory of value... which means inflation/devaluation is a risk as all G7 states adopt stimulus... but the practical conclusions today are reasonable... they are:
14/ Borrow, spend (on training, culture, wages, welfare, UBS etc not just physical "investments") create money, decarbonise and circularise, boost the wage share, reduce the profit share, attack speculative finance. In 240 characters, that's 21c socialism...
15/ Unless you go into a political battle with a vision, you end up talking about the other side's vision: that's what is wrong with Labour right now ... if you want to see it done right, @PabloIglesias , @AOC and @tsipras_eu (yes!) remain the gold standard. ENDS
... for some reason Twitter does not like de facto and de jure ...
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