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Corbyn Frightens UK Labour and Tories

Jeremy Corbyn is a name that may not be familiar to most Australians. He is the leading candidate for the leadership of the British Labour Party following the resignation of Ed Milliband after the disastrous results of the national elections earlier this year.

In the finest traditions of old Labour, Jeremy Corbyn is creating a significant stir among party heavyweights. He has signalled nationalising the railways, retaining public ownership of the National Health Service, introducing rental controls and even the abolition of Britain’s Trident Nuclear weapons.

The reason that the Labour Party heavyweights both in and out of parliament are so concerned about Corbyn is that his policies are resonating very favourably with the Labour Party rank and file and the broader population generally.

Notwithstanding the results of the recent national election, the British people are clearly looking for something better than either major party has thus far offered. Corbyn’s manifesto offers just that.

But the main reason those Labour heavyweights aligned with the Tony Blair free-market Labour model are fearful of Corbyn, is his proposed PQE (Peoples Quantitative Easing) economic policy.

boe His plan is for England’s central bank (the Bank of England), to set up a National Investment Bank to invest in new infrastructure needed to support the hi-tech and innovative industries of the future, including a new mandate to upgrade the economy by investing in new large scale housing, energy, transport and digital projects.

What is contentious about this plan is that it would be financed without incurring debt. The spending would be new money that would generate employment by directly financing infrastructure projects that create jobs and add value to the national wealth.

The difference between this approach and the QE program the Cameron government undertook with limited success was that Corbyn’s money would go directly to the market rather than to commercial banks.

In other words, Quantitative Easing (money creation) for the people instead of banks.

You may recall part of Kevin Rudd’s stimulus program in 2008 was to credit the bank accounts of taxpayers with two rounds of $900. He did this because he knew the people would spend it, thus providing a temporary boost to the economy to offset a potentially disastrous downturn.

While he did that, the U.S. Eurozone and the UK governments chose to put QE money (created money) into the banks thinking that they would lend that money to investors and developers of hard core projects that would generate employment and restore western economies.

Unfortunately, the banks viewed their windfall differently and much of that money went into non-productive enterprises such as asset appreciation, investing in the stock market, bonuses for financial services and a host of other wealth creating opportunities for the super-rich.

As a consequence, the stock market surged, the wealthy got wealthier but little was achieved in restoring employment levels back to pre GFC days. There were some positive signs in those three economic powerhouses with QE, but they were nothing compared with what could have been achieved had the Rudd styled stimulus been played out instead.

Corbyn’s detractors have spoken out with the usual retorts about inflation, hyperinflation, blah, blah, blah, not the least of whom is our own Greg Sheridan from Newscorp’s The Australian.

sheridan He writes, “Corbyn’s positions are at once antique, bizarre, ideological, extreme left-wing and absurd.” One wonders why Sheridan is so critical of Corbyn when by his own words he sees Cameron as the principal beneficiary.

The biggest fear that has generated so much right wing criticism seems to be the realisation that if Corbyn were to become Labour leader and win the next election, the soft, comfortable world of corporate chiefs, and the fortunes of the rich and powerful would be threatened.

So too, the dominance of those groups over the common man and woman in the street, who have worked so tirelessly to keep the wealthy in control for the past three decades.

Prue Plumridge from the UK’s ‘Think Left’ writes, “We have reached such a time in history now. The destructive neoliberal status quo of the last few decades is being shaken to its core and there is an opportunity at last for a conversation about where we go from here and how we can bring about change. It won’t be easy but Jeremy Corbyn has started the ball rolling by offering a radical vision which not only restores the core values of the Labour party and responds to a changing world but also opens up an opportunity for dialogue on such issues as climate change, finite resources and sustainable living. It is a positive start.”

One can only imagine the media reception Bill Shorten and the Australian Labor Party would receive were they to bite the bullet and present a similar anti-austerity policy framework to the Australian people.

But they won’t of course. Today’s Labor party has, ever since the Hawke-Keating years, become no more than a mirror image of the neo-liberal Coalition with a slight bias toward the average worker and no stomach for real economic reform.

strings But if presented in the right way, in language that nullifies the frantic, desperate cries of the neo-liberal elite, Shorten and Labor could well present a Corbyn styled manifesto that would both resonate with an electorate that is clearly fed up with the status quo and at the same time, reset the economic argument.




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  1. Loz

    I have read about this visionary man and desperately hope (against all odds) that he wins the leadership of the Labour party and eventually the leadership of the country. As for Australia, maybe, just maybe the Labour Party adopt similar policies if Corbyn gets elected.

  2. M-R

    It will be fascinating to watch the vicious death-throes of the right, and of the right of the left, as Corbyn surges onwards, John.
    It seems that apart from anything else about him, they loathe the fact that he doesn’t give a rat’s about how he looks !
    O for a muse of fire … or for a Jeremy Corbyn …

  3. stephentardrew

    Gosh John it is a mantra we have been running with for years meanwhile Shorten and the Labor right keep the party on the short and narrow path of economic rationalism and economic liberalism, whatever that means, when it simply looks like a soft sell version of neo-con rubbish.

    Shorten is not going to cut the mustard by a long shot and we know it. Plibersek is no option either. Labor seems bereft of any true progressive leader willing to challenge the status quo.

    Maybe, just maybe, Bernie Sanders and Jeremy Corbyn will excite someone in Labor to make a stand against this endless corruption and economic mismanagement.

    All we can do is keep on bashing on hoping someone is listening.

  4. donwreford

    If Corbyn’s policy takes place and he gets in two possibilities exist one. the polls will be fixed by MI5, or he will have a accident, the status quo are a criminal organization and they do not mess around with idealism, this is not normal as a policy, the implication is as one could define as revolutionary and as such the system of government has been elitist for centuries, this is in modern terms equivalent to the French revolution of the one of the sacking of the Bastille, as such Israel would not like this and Corbyn could be done in by Mossad.

  5. jeff1944

    Ditto the above (donwreford) The super rich won’t allow this to happen

  6. brickbob

    I have one good piece of advice for Corbyn, watch your back and hire some good security.

  7. Kyran

    Corbyn’s manifesto isn’t frightening them, it’s terrifying them. Most of his policies have at least 53% support from all of the samples I have seen. The Sheridan/Blair hysterical opposition (bearing in mind they have the same employer) is very shrill.
    Fancy nationalizing public transport so the public could own it. From what I have read, 75% of the constituents, including Tories, want that.
    The Arab Spring will never be tolerated in murdochria, which requires terror to sell. Just like tiny.
    Thank you Mr Kelly. Take care

  8. Rocky

    Please entice him to move here. If we have to have an Englishman for Prime Minister we may as well have one with a brain and some good ideas!!

  9. diannaart

    Well said, Rocky.

    We could even entice Corbyn with the same incentive that brought Abbott over – the ten pound Pom deal – fair and balanced.

  10. Keitha Granville

    Yes please, let’s have him. At least he has some ideas that are DIFFERENT from the LNP. Our Labor party seems to have totally lost its way.

  11. Rocky

    Would that attract GST? He might have to be an 11 pound Pom. Speaking as one myself, I would happily chuck in the extra!!

  12. mars08

    From Prue Plumridge, as quoted above: “…Jeremy Corbyn has started the ball rolling by offering a radical vision…”

    How tragic that, in today’s world, Corbyn’s suggestions are seen as “radical”. We’ve been going down the wrong path for DECADES and can barely contemplate turning back.

  13. Bilal

    The hysteria of the Blair Tories and the other Tories is not because they know he will fail to become PM but because they are aware that he has struck a chord with the people and could well become leader of the party and the nation. Pigs scared the trough may diminish in size and variety.

  14. John Kelly

    Corbyn’s great contribution to the economic debate has been to force MMT principles into the mainstream media thus exposing the weakness of the Neo-liberal position. Interestingly, prior to the election there were 200,000+ Labour Party members. In the lead up to the election of the new leader that membership has increased to 600,000+ all of whom have a vote. Most of the increase is thought to be pro Corbyn. Branch stacking? Who knows.

  15. Rocky

    Check out the bile spewing out from the UK Daily Mail. They are seriously bothered.

  16. Lizzie

    Finally, someone with the guts to promote change. If only we had this sort of progressive thinking in Australia. I wonder what Rupert is making of all this – this sort of thinking just can’t be allowed to catch on.

  17. Pingback: Corbyn Frightens UK Labour and Tories – Yes there are other ways. | olddogthoughts

  18. John Armour

    “Corbyn’s great contribution to the economic debate has been to force MMT principles into the mainstream media thus exposing the weakness of the Neo-liberal position.”

    I wish that were so! Things might be different after tomorrow however when Bill Mitchell gets to have a conversation with Corbyn’s economic advisors.

    Whilst I welcome Corbyn’s “out of Left field” gate-crashing the moribund political fray, his manifesto is devoid of MMT insights, rehearsing all the usual neo-liberal mumbo-jumbo about deficits:

    “If Osborne’s forecasts are right there won’t be a deficit by 2020, but if – like last time – he is proved wrong and he only again manages to halve the deficit then I make this pledge:

    Labour will close the current budget deficit through building a strong growing economy that works for all. We will not do it by increasing poverty.”

    The best that could be said of Corbyn, at the moment, is that he’s a “deficit dove“.

    The mechanics of QE are not widely understood: the banks did not get a windfall, and the increase in their reserves had no impact on their capacity to lend.

    But it seems to be widely accepted that QE somehow involved “printing money”, rather than borrowing. Even though that too is nonsense, if it’s widely believed then perhaps “what’s good for the goose…” applies.

    There’s also a nice irony in that it borrows the Right’s livery and drapes it over policy that is decidedly out of the Left.

    The mechanics of Corbyn’s PQE bears no kinship with QE. It’s a straight fiscal operation with some ‘pea-and-thimble’ tricks involving the central bank to disguise the fact. But that’s the reality of politics I guess and I hope he pulls it off.

  19. Sanjay Mittal

    The latest news on PQE is that Richard Murphy now says that PQE money is not intended to be concentrated on infrastructure. He’s all over the place, far as I can see. If you’re interested, search for the phrase “The work proposed has always been broadly based” and look at the preceding discussion in the comments here:

    Increasing the money supply does not create inflation

  20. Rob Holmes

    I dont think anybody should ever concern themselves about Sheridan’s thinking. No need to read any of his columns as they are predictable – down to the last word we know what he is going to write on any subject touch on politics.

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