McDonnell should not forget People’s Quantitative Easing

March 9, 2016

John McDonnell proposed People’s Quantitative Easing shortly after Jeremy Corbyn was made leader of the Labour Party. It might have been wiser at the time to promise nothing controversial because the party establishment were in a state of shock at Corbyn’s win and were hostile to radical economic policies.

McDonnell has since gone quiet on the idea. However, the concept appears to be gaining traction as Adair Turner and Martin Wolf have each recently advocated “helicopter drops” for monetary policy, as an aide to the sluggish world economy. The helicopter drop is an idea of Milton Friedman whereby the central bank would print off cash and give it directly to the general population.

McDonnell’s idea is to use money created through Quantitative Easing to invest in infrastructure rather than buying government bonds. The latter has had the effect of boosting the stock market without boosting capital investment by the listed companies. In fact, the low interest environment has often resulted in companies borrowing money to buy back their own shares rather than investing in expansion. In America, Apple has issued bonds to pay dividends to share holders, in order to avoid bringing home their foreign earnings. As long as it stays abroad they don’t have to pay tax. This wasn’t the intention of the policy. Read the rest of this entry »


Kitchen Table Extremism

December 19, 2015

Imagine yourself as a Muslim child growing up in the east end of London. Your immigrant parents are hard working and your home is warm. Everything in your life is normal and safe except for one strange thing. Each day your dad tells you that the western world is conspiring against Islam. That America and Britain are attempting to destroy your religion, your community, your identity. He then tells you that Islam is a peaceful religion.

Your childhood is happy. You do well at school. By the time you reach your teens, you are expected to go to university and achieve far more than your parents ever could. Again, each day, your dad tells you that the west wants to destroy Islam. It’s hurtful to know that the white people around you pretend to be friendly but in fact are duplicitous.

At the age of 15 you discover ISIS videos on the internet. They also tell you that the west wants to destroy Islam, but they tell you that your father is wrong. Islam knows how to fight back. You are inspired. You steal your brothers passport and credit card and you go to Syria with the intention of joining them. When your parents discover this, they are furious that the police did nothing to stop it. They blame the local mosque for radicalising their child. Read the rest of this entry »