Tom Clark,writing (Opinion, 4 September) in response to our letter to the FT, and misses our main point in saying that Corbynomics “feels subversive but perhaps not for long”. We were responding to the Observer letter that claimed Corbyn’s policies were not subversive,but mainstream. It is precise that “anti-austerity” does enjoy widespread support from economists, but not his simple, or apparently painless,solution (for most), based solely on taxing the wealthy, and effectively raising corporation tax and incredible estimates of preventable tax avoidance/evasion levels. What has become the mainstream position is for a slower reduction of debt than that of Osborne,involving some combination of spending and tax adjustments that would depend on the growth of the economy and tax revenues. This is sometimes denounced as “austerity-lite”.
Clark’s article says a lot about people’s quantitative easing (PQE), but in fact is largely a case for QE as practised by central banks already. PQE would allow the government to instruct the Bank of England to print money to finance its programmes and would seriously endanger the independence of the central bank. Surely Tom Clark does not want to dismiss one of Labour’s best achievements – establishing central bank independence and entrenching the inflation target – as a mere detail”?
Professor Paul Levine School of economics, or University of Surrey
Professor Tony Yates Department of economics,University of BirminghamContinue reading...
Source: theguardian.com