As Bill Mitchell (Australian economics Prof.) has pointed out a dozen times, the political left is too dumb to do anything more than ape the economic illiteracy of the political right.
But if the political left really seriously wants those “radical” and “progressive” policies it claims to want, but doesn’t have the guts or the brain to advocate, they could try the following two.
1. Nationalise the money production process.
There are various problems with letting private banks create money - or “lend money into existence” as the saying goes. One is that private bank money creation is pro-cyclical. That is they lend like there is no tomorrow just when they shouldn’t: in a boom. And they fail to lend just when we want them too, as you can hardly fail to have noticed over the last two or three years.
So why give them the freedom to lend money into existence at all? They only make a mess of it.
2. Stimulating an economy by stuffing the pockets of the rich (QE) is just brilliant, isn’t it? I mean that’s got “socialism” written all over it, I don’t think.
Moreover, we’ve been in a BALANCE SHEET RECESSION for the last few years. And the people with seriously impaired balance sheets are households who have taken on too much debt. So to get the private sector spending, stimulus should be channelled into the pockets of ordinary households, no the pockets of the rich.
I don’t favour of debt jubilees: that is artificial assistance for those in debt, paid for by those who have acted responsibly. But certainly stimulus directed at ordinary households would have more effect than stimulus directed at the rich.
Why does it take someone on the political right like me, to tell the political left what to do?