Sorry for not having blogged the past couple of days, but I’ve been having internet issues. Virgin Cable’s online service check thingy insists there’s no broadband issues in my area, but I’m constantly getting DNS lookup errors. Fingers crossed it’s sorted now.
Onieweys, it’s not like there’s a whole lot going on in the world of Scottish politics. Well, nothing except the usual duplicity, double dealing, and downright deception of the British nationalist parties in Scotland. There’s the Labour party, which during its recent party conference voted to support a second vote on the EU, but when the matter came before the Scottish parliament, Labour abstained. Labour in Scotland can’t possibly vote the same way as the SNP, and that particular policy of Labour in Scotland takes precedence over anything that Labour says at a UK level. It’s reassuring to see Labour standing up for Scotland’s interests. That’s reassuring in the same way that it’s reassuring to walk home from the bus stop in the middle of the night after you’ve just seen a slasher movie at the pictures and there’s some weird guy wearing a Freddy Kruger mask behind you following your every step.
But not even Labour can match the sheer and utter hypocrisy of the Conservatives. The hypocrisy high jump is the only political sport where the Tories set a high bar. Despite their constant and repeated assertions to the contrary, despite campaigning in fishing communities in the North East claiming that their Tory Brexit would defend and protect the Scottish fishing industry, for a second time the Conservatives are preparing to sell out the interests of Scotland’s fishing communities.
The defence of Scottish interests comes a long way down the Conservatives’ list of priorities, far below their interest in promoting the history of the trade union movement in securing employment rights. Expecting a Conservative government in Westminster to prioritise Scottish interests and concerns is a bit like expecting Elizabeth Báthory, who bathed in the blood of hundreds of slaughtered Transylvanian peasant women in the belief it would preserve her youthful good looks and vitality, https://en.wikipedia.org/wiki/Elizabeth_B%C3%A1thory to launch a range of cruelty free cosmetic products.
None of this should come as any surprise. The only surprising thing is that there are still people in this country who are prepared to believe Conservative assurances. But then this country also has newspapers which print articles hailing Ross Thomson as a rising star of the Scottish Conservatives, which is a bit like hailing the hard hitting political nous of George and Zippy from Rainbow. Sadly Ross doesn’t come with a zip on his gob. However to be fair, Ross does represent a party which also contains Annie Wells, and compared to her luminosity even a tin of matt black paint the bottom of an unlit coal mine is going to shine.
The fishing communities of the Scottish North East are one of the few parts of Scotland where there is potentially majority support for Brexit. It’s a part of the country which accepted Scottish Conservative assurances that the party would prioritise Scotland’s interests and wouldn’t bleed the country to death so that Michael Gove could bathe in it in order to preserve his political vitality. That support is based on the belief that Brexit will take Scotland’s fishing waters out of the control of the European Common Fishing Policy and restrict or prohibit access to Scottish fishing waters for EU fishing boats.
This support is despite the fact that it was the Conservatives who created the situation which so many in the Scottish fishing industry are so desperate to escape. Ted Heath sold out the Scottish fishing industry in the 1970s when he allowed unfettered access to Scotland’s fishing waters to European fishing boats in return for access to the then EEC. He did so because his government believed that the move would benefit the larger fishing boats then used in English fishing ports, and was prepared to accept the loss of up to half the jobs then existing in the Scottish industry. https://www.scotsman.com/news/politics/heath-knew-policy-would-kill-fish-fleet-1-634422
This support is despite the fact that the rest of Scotland has been warning that the Conservatives sold out the Scottish fishing industry before, and they will not hesitate to do it again if they believe they can secure some advantage elsewhere. Putting your faith in the Conservatives to defend you means you’re acting like those teenagers in the Freddy Kruger movie who are staying in a cabin in the woods and decide to go out to investigate when they hear a horrible noise outside in the middle of the night. You’ve seen plenty of these movies by now, you ought to know what’s going to happen. It’s exactly the same with the Scottish Conservatives. We’ve seen this movie before, and it always ends in a horror story for Scotland.
Reports this week, which have not been denied by Theresa May’s government, claim that yet again the Conservatives are getting ready to sell out the Scottish fishing industry. The Telegraph newspaper has reported that Theresa is preparing to allow EU fishing fleets access to UK waters in order to secure the Brexit deal that might just save her political neck. The UK has already conceded that EU fishing boats will have access to the waters around Scotland – the richest fishing waters in Europe – during the transition period which lasts until 2020. This new proposal aimed at securing a Brexit deal will allow them access in perpetuity.
This will leave the Scottish fishing industry in an even worse situation than the one that they currently dislike so vehemently. As a member of the EU, the UK was able to participate in discussions about the terms and conditions of the EU Common Fishing Policy and had a vote. That was already a poor set of circumstances for Scotland, which doesn’t have direct representation but has to rely on UK ministers who know little about Scotland and who care even less. After Brexit the Scottish fishing industry won’t even have that much. The UK will have no role in determining the terms and conditions of the EU Common Fishing Policy.
The rest of Scotland is trying to resist the temptation to scream “We told you so.” But that’s what happens when you put your trust in the Tories. They assure you that they will rescue you from a bad situation, and then they make it even worse because they won’t hesitate to sell you out for their own advantages elsewhere. They did that to the Scottish fishing industry in the 1970s, and over 40 years later they’re doing it again. The Tories sold out Scotland on the way into Europe, and they’re preparing to sell out Scotland on the way out of it.
If you want to be defended by politicians, you need to ensure that those politicians are directly accountable to you. It really is that simple. The only way that the Scottish fishing industry can be defended is by the government of an independent Scotland.
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Wee Ginger Dug 
And STILL the NE fishing communities will flock to vote Tory. They truly leave me speechless. They’re worse than turkeys voting for Christmas.
Sorry if this is a wee bit OT, but here is Johnson Minor’s explanation of his resignation. Make of it what you will :
View at Medium.com
Indeed,Sam.
The smarter Johnson brother at least admits that his Government has done nothing in 28 months.
I love this paragraph written with no sense of irony given the fact that Scotland and Northern Ireland voted Remain, yet because of the UK ‘democratic deficit’, will be shunted out of the EU because we are ‘vassal states within their corrupt wee UK:-
“While we wait to negotiate trading terms, the rules of the game will be set solely by the EU. Britain will lose its seat at the table and its ability to amend or vote down rules it opposes. Instead of Britain “taking back control”, we will cede control to other European countries. This democratic deficit inherent in the Prime Minister’s proposal is a travesty of Brexit. When we were told Brexit meant taking back powers for Parliament, no one told my constituents this meant the French parliament and the German parliament, not our own. In these circumstances, we must ask what we are achieving. William Hague once described the goal of Conservative policy as being “in Europe, but not run by Europe”. The government’s proposals will see us out of Europe, yet run by Europe, bound by rules which we will have lost a hand in shaping.”
The English parliament is trading off our fishing Rights yet again as Paul points out.
Our Scottish Farmers will be driven out of business as cheap US chlorinated steroid meat and poultry flood the markets.
Our Scottish health service will be sold off to the US Health Companies.
And we can forget Freedom of Movement, not just in Europe, but the rest of the World.
When England ‘take back control’, they mean undo devolution.
On the 30th March 19 the gloves will be off.
Prepare for the worst.
If, that is, we don’t do something to prevent it very soon now.
Do I suffer from paranoia, or have they started Christmas even earlier this year?
The second wee in November and the shops and TV adverts are all ‘Tis the Season To Be Jollying already.
Tinsel wrapped bread and circuses to keep the Great Unwashed amused?
If we are on the brink of May’s announcement, surely we shall hear the Indyref 2 starting pistol soon thereafter?
Crying cockles and mussels alive,alive O.
Well, Jack, just look what’s come up on another Scots blog :
Marco, I substitute ‘demand’ for ‘wish’ in the final paragraphs..
I ‘demand ‘that Scotland returns to be a self governing independent country.
I am asking no one’s permission any more.
We are taking back control.
Now where have we heard that before?
No more pussy footing about.
If you are not part of the0 solution, fuck off to Mother England.
That’s how fizzing mad I am.
They will take away my European citizenship over my dead body.
Indyref 2? ‘Bring it on’, Wendy.
The day of the fat cats and robber barons ‘ruling’ Scotland are over.
Great work by GB.
Totally agree, Jack.
Agree ‘wish’ is better and enhances the fact that we don’t need permission ,that said in my view means you can eliminate what sounds to me like Brexiteer talk ie; Taking back control? fuck off back to your own country? I feel your passion but our movement as you know is better than that Jack.
Need to change Acts of Union to Treaty of Union, please.
[…] via Sold out going in, sold out going out […]
Bertie Armstrong seems to have gone a bit quiet lately. What does he have to say on this matter?
There’s one of the many England supremacists lapdogs that defiantly needs 7 bells knocked out of him he won’t come out for quite a while I’m betting some of those salt brained fools are looking to lynch him right now well those fishermen would vote tory bunch of dumb UK robots.
Scottish Fishermen, everyone told you so.
Believing the Tory’s is pure ignorance, and if the fishers are expecting any sympathy from the rest of us, well tough shit.
I have no sympathy for our fishing industry. All they think about is greed.
In the 70’s they moved from the seine net to trawl net. This meant they could fish over the reefs that were where fish bred their young. This led to reduced stocks. The EU brought in quotas to rebuild stocks. Then in the mid 90’s the Tories allowed them to fish within the 3 mile limit. This further damaged breeding grounds.
The Fishermen shat in their own nest. The EU tried to protect stocks before they ran out.
The issue of foreign boats in our water’s was a Tory deal. The fishermen need to be cautious as our fish processing industry does lots of work for EU fleets. A restriction here will damage this industry which employs more people than the boats do.
Put your trust in the Tories reap the rewards.
Anyone in Scotland who trusts the unionist parties to represent them is simply badly informed.
Like salmond told labour at the start of indyref1 never trust the torys as they will chew you up and spit you out just as they’ve done to the liberal Democrats oh how right he was yet labour still side with the conservatives as Jeremy Corbyn is not going to bother stopping Brexit as he sees it’s inevitable and we should just let it happen in his view.
No, you can’t trust a Tory’s word. Their history is littered with casual betrayal. Political, societal and even within their own party. They are creatures of convenience. Their entire ideology is based on self promotion and advancement. Today’s lasting agreement is tomorrow’s serving suggestion.
International treaties, devolution settlements, peace agreements? They last only so long as they are of use to Conservative interests. They don’t do consensus. They don’t understand unity. Their concept of democracy is how they can best use it against itself and to their benefit.
Does anyone really think that if May could govern without the DUP, they wouldn’t throw them under a bus? Does anyone truly think that the Tories aren’t considering a workaround of that situation right now? What does the DUP think will happen the very next time a Conservative government can command a majority without their bought and paid for input?
Just sayin’ like, but Conservatives are a patient bunch when they want to be and someday (maybe sooner than they think or want), the DUP’s usefulness will come to an end.
Similarly, Labour. When you sow hatred and lies. When you undermine trust between people, their communities and institutions. When you manipulate your own people and put them in harms way for personal gain. Don’t be stunned to find that when you require unity on a national and international scale there is none to be found.
You want to see how that looks, just stick your head out of a window today. Take a good look around. The Brexit shambles. Austerity legislation and ideology. Rise in hate crime. The rising distrust of the media and the political class. Today’s UK?
The buck stops with the governments who created this biblical omnishambles. It stops with their practice of politics. It stops with their actions toward their own populations.
That’s why everytime a conservative opens there mouth and runs us down it makes me want to murder them there arrogant attitude hate filled tones and condescending words all while acting the big and hard bully fills me with some much anger I feel my own blood boil I hate torys with a vengeance.
But, Robert, top Tories are taught in school how to use those “below” them. So we can’t expect better. It’s the poor souls who are brainwashed into doing their bidding we must pity as they lack the confidence to think for themselves.
The upshot of rUK’s Brexit is that Scotland is for sale, and SALE it will be. Renewables, the dreaded oil, gas ( it smells of noxious gas in Edinburgh some days because the Britnats are burning off the excess in Fife, it’s probably the gas they have shipped in) whisky, fish, land, water, seas, agriculture, you name it, the Tories and their best pals the red Tories, ie Labour, have Scotland as their main bargaining chip with the EU and others around the globe.
Great eh.
Criminals at Westminster, criminal Britnats at Holyrood, who’d of thought.
Something a bit fishy going on with technology…I too have had internet/landline issue over the while too…Anyone else?
One factor that has been missed in discussing the Scottish deep sea fishing industry is that the “Quota Kings” will make money no matter what sort of deal brexit gives the industry. For that reason they continue to support the tories, safe in that knowledge. They don’t give a damn about their employees and the smaller fishermen and certainly not a hoot for inshore fishers.
It is time that we stopped treading so softly with this industry.
Incidentally I missed Friday morning’s 90 seconds of Bad SNP News Where You Are on BBC Pacific Quay Stockade Breakfast.
I had something more pressing to do. I had a long lie instead.
We are about to be swept away in a tsunami of propaganda from the Fifth Column Fourth Estate.
This time we are ready.
DNS issues? I wonder if half of Scotland hammering Netflix via the Internet is having an effect? A while ago I was on the phone to an ISP on behalf of client and suggested the problems being experienced were being caused by DNS problems only to get silence as a response followed by the other end putting the phone down. We changed ISP.
The EU issued a notice to stakeholders with reference to fisheries and aquaculture almost as soon as article 50 was signed. The first version stated, quite plainly, that during the transition / withdrawal period nothing would change in terms of management of fisheries – except the UK would not have any (political) input – presumably fisheries scientists would still be supplying data used to calculate the suggested Total Allowable Catches – politicians then (cough) take this into account when agreeing quotas.
An updated version is here:
https://ec.europa.eu/info/publications/fisheries-and-aquaculture_en
It refers to what happens after the UK leaves to EU and becomes a 3rd country. Taking into account that Scotland exports a lot of fish (with or without shells and carapaces) and sometimes lands fish in foreign ports, then this should have rung alarm bells as soon as it was published in April 2018, because:
Fishery products may only be imported to the EU when accompanied by a catch certificate (Article 12(2) of Regulation (EC) No 1005/2008). The catch certificate to be validated by the United Kingdom must certify that the catches concerned have been made in accordance with applicable laws, regulations and international conservation and management measures. The catch certificate must have been validated by the United Kingdom competent authority and, when required, accompanied by other documents envisaged by the certification scheme in the event of an indirect import after transhipment, transit or processing of the products in another third country (Articles 14 and 19 of Regulation (EC) No 1005/2008).
It’s not as if it’s hidden away in a filing cabinet in a water filled basement in some distant galaxy totally unindexed by Google or Bing.
So, the fishing industry is going to get stuffed by Westminster and the ones who are going to get stuffed most are the wee guys, the ones in wee boats landing langoustine worth nearly £80 million at a wee jetty on the west coast, because they will no longer be able to get the prawns to a continental restaurant overnight. Still, scampie suppers should come down in price.
A very good point, it’s an absolute certainty that the small fishing communities in the small boats will be hit hardest by Brexit. Not because thre will be any change to their catch, there can’t be as they fish almost exclusively within the 12 mile limit.
They have nothing to gain from Brexit and everything to lose because mose of their catch is exported to the EU. Places like Crail or Anstruther in particular. A few years back I was doing a job up in Wick and had the Sunday off, I went and visited the harbour in Lybster a few miles South.
I was surprised it was busy! The reason was because there was a huge refrigerated lorry there and this was sales day. The small boats put out their creels and check them 7 days a week, this is a grandson and grandfather type operation that they have been doing for decades if not forever.
When they catch something, usually crabs or lobster they are brought back to the harbour each day and kept in creels hanging off the harbour wall to keep the alive until Sunday sale day comes.
I watched them pull in their catch, put them in baskets and one of the lorrymen weighed them and paid the fishermen in cash. End of the day everybody happy and the lorry set off on it’s journey to SPAIN.
Well what happens next when a Sunday that lorry doesn’t turn up? Does Bertie Armstrong know, more realistically does he even care? I doubt it and neither do the Scots Tories he promotes.
Pretty much. Unless folk in the UK are willing to eat seafood 24/7, the UK’s fishing industry are about to hit harder times than they thought possible.
I’m kinda curious why the EU would value *Westminster* trading Scottish fishing waters for English benefits.
At least before we have another independence referendum.
Surely they are asking Westminster “And what will we get instead after Scotland goes independent?”
Or maybe they’re too busy laughing to say “non” now?
The British went into Ghana in the 1800s to grow coffee. There was no monetary system in Africa at the time. There was no unemployment when you went out and visited the population. Everybody was helping each other out with jobs to do. It was a very social place. The men would hunt and fish and build the houses, and the women would take care of the children and do the food. The grandmother would help out taking care of the children. The people were doing things and there was more to do than there was time to do it. How did the British get them to work in the coffee plantation?
They came up with this brilliant idea. They told everybody there was going to be a tax on their hut. It was called a hut tax. Everyone had to pay, what, 10 crowns a month. Or they would get their house burned down by the British. What happened? Everybody said all right, what do we have to do to get the money to pay the tax? ‘Ah, if you come to the coffee plantation we’ll pay you one Crown a day to work’. Sure enough, people starting coming over to work, to earn the money, so they didn’t get their house burned down. The tax, the monetary system, created the unemployment.
Then the British hired the people so they could get the money to pay the tax so they didn’t have their house burned down. They would spend the money first and pay people, and then collect the tax, right. And they spent more than they collected because some people saved Crowns for paying taxes later.
Would the British let them earn enough to pay the tax, or would they say, ‘No, we’re not going to do that and go burn your house down’? Of course not. They let them come to work and earn all they wanted to pay the tax, and to save, so their houses did not get burned down. If too many people came to work, they would reduce the tax and so forth.
In short the British turned Ghana into a currency slave. So you can see where I am going with this.
Scotland is a currency slave. So there is only so much we can do with our fishing industry. Free ourselves and we can do so much more. It’s what I like to call the Kevin Hague syndrome.
So how could an independent Scotland help both the fishing industry and the communities that depend on it ?
Think of it as our pile of goods and services. Everything we can produce when everybody’s working. That’s how you get the most real wealth. Plus whatever we import adds to our pile of goods and services. Whatever we export subtracts from our pile that we have accumualted.
Now I did not say that exports don’t help the exporters. Yeah, it helps people who export. But it is a subtraction of real wealth from the entire economy. The exports are our cost of imports.We export to get the currency we need to buy the imports that we can’t make ourselves.
Back in the old days we called that ‘real terms of trade’. So to optimise our prosperity, we make everything we can with everybody working, and then we add to that with imports, what people export to us. Then whatever we must export, we try and get as many imports as we can.
If you can export one tonne of langoustines and get 5 tonnes of bananas, that’s good. If you can export one one tonne of langoustines and get 6 tonnes of bananas that’s better. Our fishing policy should be to protect our fishing for our domestic sector. We shouldn’t really be exporting fish the way fish stocks are across the world. We should be encouraging more Scots to eat langoustines for example. However, if we do have to export real terms of trade, that’s the important thing.
Then the Scottish government could introduce a job Guarentee throughout Scotland.
https://web.archive.org/web/20180123235254/https://medium.com/modern-money-matters/thoughts-about-the-job-guarantee-a-reply-55c4a9b68608
This makes sure there would be no unemployment in fishing communities who are paid a living wage with holiday pay and a pension. Which also means more people across Scotland can afford the catch from the fishing industry increasing the size of the doemstic market. These communities are then no longer a poitical football that can be Kicked about by a bunch of ideologues.
You implement a Job Guarantee across Scotland which injects additional spending into the economy where it is needed at precisely the right amount — all completely automatically.
The Job Guarantee is an advanced auto-stabiliser which implements ‘Spatial Keynesianism’. ‘Spatial Keynesianism’ is just a fancy way of saying that spending happens in the locations that need it. More in some areas and less in others depending upon the level of other activity at the time.
So as the economy moves out of recession and into growth what do we need to do to stop overheating?
“Precisely the right amount” means that it is withdrawn progressively and spatially as private economic activity increases. People hired away from the Job Guarantee start being paid with private funds, not public funds, so you get a swap of spending power, rather than an increase.
Over the cycle people come on and off the Job Guarantee which grows and shrinks government spending automatically. All without any politicians or central bank ‘experts’ making any discretionary changes.
The Job Guarantee job is just a job like any other. It generates GDP with labour that nobody else currently wants to use. The private sector no longer has to go into areas it doesn’t really belong, or want to go, in a misguided attempt to try and “create jobs”. It can be left to do its thing of eliminating jobs with innovation and automation via capital investment. That drives up productivity and leads to an increased standard of living for all.
In fact, the private sector can be encouraged down the route. Controlling labour supply makes labour expensive which shifts the capital/labour ratio towards using more capital. You can ensure competition is intense because you’re no longer terrified about firms going bust or moving abroad; the Job Guarantee ensures there are always jobs in a locality that people can take. You don’t need the jobs of the private sector; they are a nice to have. This is the correct approach to take, because the private sector actually creates jobs as a side effect of its main task of destroying them with capital investment (hence capitalism, not jobism).
Government can set policy to eliminate price adjusting firms — via a combination of regulatory action (a strengthened Competition Authority with power to break up cartels rapidly) and competitive action. The Post Keynesian view of a firm shows that quantity-adjusting, time shifting competitors will outcompete price adjusters at any given quality level. Nobody gives up market share willingly in a truly competitive market.
Intense competition, and regulatory authorities aiming their 12-bore at price adjusters who break cover, along with tough government purchasing tactics, force businesses to compete or fail. Failure moves workers from the private sector to the Job Guarantee, activates the auto-stabilisation mechanisms and avoids cascade contagion. Only the misallocated resources are purged.
With the Job Guarantee in place you can let firms go bust and can hold firms to a much higher competitive standard than if you are relying on private firms to ‘provide jobs’. Job security is provided by a liquid local job market backed by the Job Guarantee, not by propping up individual firms with state subsidies. Businesses can be treated as cattle, not pets. If we are to have capitalism, we should have it — raw in the teeth and brutal — but merely restrict its effects to the capitalists. Those that survive this Ninja Challenge will then have truly earned their spoils. Businesses that can’t compete go bankrupt.
The Job Guarantee helps prevents an unsustainable boom by creating an environment where bad firms can fail early and fail often.
Movement between the private sector and Job Guarantee automatically stablises the fluctations in business activity.
Banks
Alongside the Job Guarantee the Scottish government would reign in the banks. A progresive government would regulate the asset side of banks and prevent the banks creating another Minsky Moment.
The job of a bank is to promote the capital development of the economy. That is its public purpose; the job it is licensed to do. All other activities that conflicts with that purpose must be prevented.
For banking to be effective it must be boring — bowler hat boring. The job of a bank is to provide capital development loans to the economy based solely upon credit analysis. All other activities deflecting from that purpose are Ultra Vires.
That means:
Banks can only lend directly to borrowers for capital development purposes (i.e. business credit lines and household loans), and the banks keep those loans on their books until cleared.
Banks must operate on a single balance sheet. No hiving things off into ‘off balance sheet’ subsidiaries to try and hide them.
Banks cannot accept collateral. Collateral is a fixed charge over an asset as an insurance policy and aligns the incentives of banks with those possessing assets, not ideas. It stops banks being capital developers and turns them into pawn shops. That is the wrong alignment of incentives. We want loan officers with skin in the game. Their success should depend upon the success of the borrower. Banks should line up in insolvency with the other unsecured creditors (and importantly behind the remaining preferential creditors — employees).
Depositors are protected 100% at all amounts. A depositor in a commercial bank is holding nothing more than an outsourced central bank account. They are not investors in the bank and should never be treated as such.
Regulation is provided by the bank resolution agency, which is a public body funded entirely by government. There is no charge or levy to the banks for the operation.
The job of the bank resolution agency is to ensure the banks are properly capitalised given their loan book and declare them solvent. If they are not, they take the bank over and resolve it with any excess losses absorbed by government. This aligns the incentives of the regulator. If they get the solvency calculation wrong and the capital buffers exhaust, the regulator stands the cost.
The Central Bank provides unlimited, unsecured lending to regulated banks at zero interest rates. Collateral serves no purpose since the bank has been declared solvent (and therefore there is no reason for it to be illiquid), and collateralised Central Bank lending just shifts the losses to depositors who are protected 100% anyway.
Once you get rid of interbank collateral and funding requirements, you get rid of one of the final excuses for keeping Government Bonds. National Savings annuities for pensions (allowing retiring individuals to receive a secure lifetime income) would get rid of the final one. Transferable instruments that confer government welfare on the owners do not serve the public purpose. Government welfare receipt is a social decision, not a market driven one.
As the asset side is heavily regulated, you want the liability side to be as cheap as possible. Unlimited central bank access ensures liquidity for depositors and allows lending-only banks to arise. It gets rid of the Interbank overnight market and replaces it with central bank overnight accounts. It puts the Central Bank ‘in the bank’ as a major investor — with open access to the commercial bank’s loan book via the work of the solvency regulator.
All levies, liquidity ratios, reserve requirements and the like are eliminated. The cost of maintaining the collateral system is eliminated. The result is loans at a low price with the quantity restricted solely by credit quality. As an economy heats up, credit quality declines and loans become restricted — systemically preventing the Ponzi stages of finance that lead to a Minsky Moment.
Proscribed banks, forced to rely on credit analysis for profit, help prevent a boom by issuing less credit as project quality declines.
You get a natural and steady withdrawal of funding that is far more surgically targeted and responsive to local conditions, than the carpet bombing approach of interest rate adjustment.
This leaves the payment system, which should be as costless as cash and clear just as instantly to eliminate transaction frictions. Whether that should be publicly provided, or remain outsourced to the banks is an open question. Depositors are a cost to the bank and would effectively be a tax, but leaving them with the banks would give them an incentive to get the cost of clearing provision down. It may boil down to a political question that depends upon your view of the effectiveness of public and private provision. I’d lean towards an Open clearing system created by the state (or even states) and available to all on an open licence. We want one good clearing system like we have one good Linux.
Banks are currently too complicated, too large, too impersonal, too intertwined and systemically dangerous. They need to be simpler, smaller, more local and relationship oriented in scope. All of which are easy to achieve once you adopt the Mosler Mechanics for banking.
Once again, because there is a Job Guarantee and a government that will use fiscal policy, we don’t need the banks to provide endless credit, any more than we need private firms to provide endless jobs. Banks and firms can be maintained at their appropriate natural size and location as determined by the technological level of the economy and where people actually live with their friends and family.
Government
Currency as a simple public monopoly, and that monopoly rules apply to its use.
An independent Scotland with it’s own sovereign currency. Can command any resources available for sale in its currency and can use its sovereign power, to force those resources to be freed up so it can purchase them for the public good.
This is in sharp contrast to the neo-liberal viewpoint which is that government is just another organisation in the system that has to compete for resources by price. Business and banks always get first choice of resources and government has to make do with the scraps. They believe the bankers and businesses should be in charge and that the population are just factors of production to be shifted around, like ingots of steel, as business requires.
The Scottish government can if it desires to do so determine that business and banks are servants of the people. Government can take first choice of resources for the public purpose, then allow business and banks to work with what is left, before hoovering up any left over resources with a Job Guarantee.
The public wrap of the private system provides a containment vessel around the nuclear power of capitalism. We can draw its power without the boom. We can fuel it with public investment and improve the power output.
The focus of government action shifts from money to the actual things we need to buy for the public purpose. Smart people talk about government buying, not spending.
From this, government sets the policy for spending and taxation at a level that allows the Job Guarantee and other auto-stabilisation mechanisms (such as standby investment contracts) to function.
Government keeps the Job Guarantee anchor working by making discretionary policy tight enough to maintain a functional buffer.
Because Job Guarantee jobs are just living wage jobs you don’t need to get people ‘off the Job Guarantee and into work’. They are already in work doing things people see as useful and delivering valuable output. Therefore you can adjust policy more slowly based upon data from the Job Guarantee as to how liquid the buffer is in different parts of the country.
Politicians are almost certainly useless at driving an economy. In fact the only people worse than politicians are central bankers and their lackey economists. Politicians are at least partially grounded in reality because they have to get elected.
Enhanced auto-stabilisation via the Job Guarantee and proscribed banking gets all these people out of the way. Discretionary policy is then decided by politicians in parliament once a year, and the day to day gyrations are handled automatically by the system.
Central bank civil servants can then go back to being anonymous operators, just like the ones operating social security, applying the rules they have been given and keeping out of the limelight. It’s time for the era of rock star Central Bank Governors, waving their expectations fairy wand, to end. There is no factual basis for their actions. If we turned up in a remote jungle and found a tribe managing their affairs in the way we do at present, we’d call them primitive and superstitious. The One Rate to Rule Them All is just as much of a fantasy tale as the One Ring.
Kalecki (1946) made a similar point:
It should be first stated that, although most economists are now agreed that full employment may be achieved by government spending, this was by no means the case even in the recent past. Among the opposers of this doctrine there were (and still are) prominent so-called ‘economic experts’ closely connected with banking and industry. This suggests that there is a political background in the opposition to the full employment doctrine, even though the arguments advanced are economic. That is not to say that people who advance them do not believe in their economics, poor though this is. But obstinate ignorance is usually a manifestation of underlying political motives.
The policies MMT put forward reduces the political power of bankers and the ‘captains of industry’. Reducing the scope of bank lending creates spending space in an economy and reduces the need for general taxation. Limiting lending to useful activities is, in effect, a massive tax on the excesses of banking — all without touching a single tax rate.
The Job Guarantee takes that power away from business and makes them the servant of the people once again. The neo-liberal framing of the debate studiously avoids these views, but an MMT analysis brings them both into sharp relief. In a civilised society it is unethical and immoral to keep a group of humans unemployed just in order to control inflation.
We can help our fishing communities and fishing industry so much more. If we can be brave enough to break the chains of currency slavery.
Since I was a youngster, I have been a keen angler. Back in the Seventies, Dunoon Bank and Warden Bank in the Clyde produced record breaking cod in the winter and spring. You could fish for a couple of hours and see the huge fish you had only dreamed about catching. The Daily Record had a fish of the week article and it had featured the Clyde cod a few times.
One morning I looked out my window and nine trawlers were circling the Acca wreck, like the Indians round the wagon train in the old westerns. They were there most of the week. After that, and a few more visits from the trawlers, the large cod were no more. A fishery which had existed for decades, if not longer, was gone. In a few days it was wiped out.
I lost any sympathy I might have had for fishermen over that episode. I do not care if they are left with no fish because the EU are taking it all. They had their chance to show restraint and manage stocks and they blew it big time through pure greed. Hell mend them.
THIS:-
When they think we’re not listening.
Paul, I agree 100% with what you have written here. I am from the N.E. of Scotland, and from a fishing community, with many family members being involved within the industry. It’s just my opinion, based on my observations as a young lad growing up on the N.E. coast that you could argue with the fishers until your blue (and I do mean BLUE) in the face about how they’ve been treated by the CON’sevative party, but they don’t really care. For them it was always about how much more money they could make by devastating the fishing stocks, and being seen to be more affluent than theIr fishing family neighbours.
So as the saying goes `you reape what you sow`. I for one do not feel sorry for them, and I also hope they can open their eyes to the reality of what an independent Scotland can do for fishing communities around our Nation.
I am afraid in the case of both fishermen and farmers, neither group have many hours in the day in which to avail themselves of source based facts pertaining to their industry by researching on line.
The BritNat cabal, knowing this, have therefore deliberately targeted them, as they do for the elderly and other sectors, for their callous misinformation exercises.
Whether the source of that misinformation is Red BritNat or Blue BritNat is not particularly relevant but it is effective.
They may be morally bereft, but the BritNat cabal knows what it is doing.
Targeting of those groups which are least likely to have the time, facilities or knowledge to go on line, do the research and discover the facts of the matter for themselves is no. 1 priority for BritNats.
We are not dealing here with anything remotely fair-minded, ethical or democratic.
We are dealing with BritNats.
It is therefore not becoming of us, to level blame at the hapless duped, rather we should level blame at the deliberate dupers.