A return to Keynesian economics?

[IrvineHimself]

I nearly fell off my chair when I read this report in the Guardian and had re-read it several times. The key quote from Lord King, former governor of the Bank of England is this

“I think everyone can see there is a strong case for higher public spending in certain areas as we recover from the lockdown period and in many ways people are very good at identifying areas where public spending should be higher in the longer term,” King said on BBC One’s Sunday With Laura Kuenssberg programme.

To me, given current economic orthodoxy, saying "a strong case for higher public spending" is tantamount to advocating a return to the Keynesian model of the 40's, 50's and 60;s

 

[Deleted member 21371]

We have low unemployment.
High inflation.

"The Keynesian response would be contractionary fiscal policy that shifts aggregate demand to the left"

So rather cuts in government spending designed to decrease aggregate demand and reduce inflationary pressures?

I think we are writing a new chapter in history now.

 

[littlevoice359]

To me, it is pretty simple. Necessary services, like health and education, need to be funded. To do so, government spending should be increased as appropriate. To finance any increased spending, taxes need to be raised. Based on what I've read about Keynesian economics, it is nothing more than a realisation of those simple facts. The opposite notion - that allowing markets free rein in the vain hope that increased consumer spending would somehow result in increased funds being magically made available to the exchequer - is, to my way of thinking, incorrect. Giving markets free rein seems to do nothing but swell the ranks of the super wealthy.

 

[IrvineHimself]

To finance any increased spending, taxes need to be raised. Based on what I've read about Keynesian economics, it is nothing more than a realisation of those simple facts.

Yes, I think that sums up how I feel it pretty succinctly. I was actually getting lost in a long winded dissertation until you posted.

I think we are writing a new chapter in history now.

I couldn't agree more, I have felt that way about the economy since shortly after Brexit. There have been a lot of things going on under the economic hood that are only just starting to become visible to the public consciousness.

 

[Deleted member 21371]

I couldn't agree more, I have felt that way about the economy since shortly after Brexit. There have been a lot of things going on under the economic hood that are only just starting to become visible to the public consciousness.

To paraphrase Kropotkin, I don't think the public cares really.

 

[mikeyB]

To paraphrase Kropotkin, I don't think the public cares really.

All the public cares about is inflation. making everything more expensive: food more expensive, the power companies making huge profits with raising energy costs, and the interest rate on Mortgages making home owners tremble. All this with 12 years of austerity making many people not having had any real raise in their wages for years (apart from pensioners). An this suffering, particularly worsened by the struggling NHS England, crippled by 12 years of Tory government leaving us one of the lowest numbers of hospital beds per population size than most European countries. Boris Johnson promised forty new hospitals. Not one has been built.

We wouldn't be able to staff a new hospital , and this was caused by one of the earliest way of saving money by George Osborne was to stop nurses getting bursaries for their training and education. This didn't happen in Scotland, and though imperfect to a degree, NHS Scotland still works far better than NHS England. Moving from Scotland to England, I have seen the difference in my experience.

Levelling up? There is a wider gap between the rich and the poor in the UK when compared to any other European country, other than Romania and Hungary, and it has widened in the last decade here. That alone will tell you who benefits from a Tory government.

What the public wants is General Election.

 

[Bruce Stephens]

Levelling up?

And (big shock to everyone, I'm sure) education reforms have worked against levelling up too:

https://twitter.com/x/status/1583733646137008128

 

[42istheanswer]

An this suffering, particularly worsened by the struggling NHS England, crippled by 12 years of Tory government leaving us one of the lowest numbers of hospital beds per population size than most European countries. Boris Johnson promised forty new hospitals. Not one has been built.



What the public wants is General Election.

It depends on definitions of "new hospital". I know Mersey Care has built one, I think extended one, and is at different stages of development of building another 2. Although for at least 2 of the 3 "new" hospitals they are/ were being built to replace old ones which were no longer in a fit state and I'm not certain whether there is a long term change to the number of beds. (At least 3 of the 4 are mental health not physical health too).

The Royal Liverpool new hospital is also finally opened, although again that is replacing an old building and I think has fewer beds that the maximum when all wards were open in the old building. And of course that was started long before Boris became PM but numerous setbacks of various people's faults (mostly Carillion and the Tory government) have delayed it from the original opening date of 2017


I definitely agree on wanting a General Election

 

[Deleted member 21371]

It depends on definitions of "new hospital". I know Mersey Care has built one, I think extended one, and is at different stages of development of building another 2. Although for at least 2 of the 3 "new" hospitals they are/ were being built to replace old ones which were no longer in a fit state and I'm not certain whether there is a long term change to the number of beds. (At least 3 of the 4 are mental health not physical health too).

The Royal Liverpool new hospital is also finally opened, although again that is replacing an old building and I think has fewer beds that the maximum when all wards were open in the old building. And of course that was started long before Boris became PM but numerous setbacks of various people's faults (mostly Carillion and the Tory government) have delayed it from the original opening date of 2017


I definitely agree on wanting a General Election

I guess it depends on your viewpoint.
Is a consultant worth so much more than a telephone sanitizer?
Are we Keynesian?
Are we Douglas Adams.
Are we backing a hierarchy system?

 

[42istheanswer]

I guess it depends on your viewpoint.
Is a consultant worth so much more than a telephone sanitizer?
Are we Keynesian?
Are we Douglas Adams.
Are we backing a hierarchy system?

I was not commenting on consultants versus cleaners though I did read an opinion article today pointing out that if a hospital can't retain nurses then they lose senior doctors, but it doesn't work the other way around...

 

[Deleted member 21371]

I was not commenting on consultants versus cleaners though I did read an opinion article today pointing out that if a hospital can't retain nurses then they lose senior doctors, but it doesn't work the other way around...

That's the problem.
Hierarchy.
Somewhere is the vast cosmos, senior doctors seem more important than cleaners.

 

[mikeyB]

The reason senior doctors seem more important is that to become a senior doctor takes years of training and education. A cleaner takes a week or so to learn the job. Both are important to keep a hospital running, but only one country seemed to recognise this - the Soviet Union, where doctors earned much the same as say, senior nurses.

 

[offspin]

Hi , well it's about time that the sTory party accounted for it action over the last few months. A general election, not really sure because what would happened if the other lot gained power.

When I was a boy Keynes ideal ( between the World Wars ) was to give the unemployed money to spend this stimulating the economy. I would personally have a high taxation system to reduce our national debt for a parliament !

I would go one step further in that the current position that the UK is in is to form a government of national unity.

I don't believe that the general population of the UK fully understand what a financial mess we are currently in.

Drastic problems require drastic actions !

 

[Deleted member 21371]

The reason senior doctors seem more important is that to become a senior doctor takes years of training and education. A cleaner takes a week or so to learn the job. Both are important to keep a hospital running, but only one country seemed to recognise this - the Soviet Union, where doctors earned much the same as say, senior nurses.

Ah, so you are saying it's all about intelligence?
Or training?
Even though neither could exist without the other, the fact one job requires more paid training makes it seem more important to some?
Possibly the answer then is to make the trainee pay for the training.
A short training period, and a smaller salary, with the cost of training docked.
A long training period, and a higher salary, then a higher amount docked, so the net sum balances.

 

[mikeyB]

"A long training period, and a higher salary, then a higher amount docked, so the net sum balances."

The training of a senior doctor occurs while he is still working as a junior doctor - it is that experience that provides the training and education. There is no cost to that training, so your argument falls flat.

 

[Spathiphyllum]

Trying to combine the original point of the thread with the debate about 'consultants vs cleaners':

Having worked in a wide range of jobs in the course of my life-- it seems clear to me that low pay and poor conditions for people like hospital cleaners and admin staff is an enormous mistake. The best hospital consultants can't make much difference if patients get ill or die due to infections caused by poor cleaning. Nor can they do their job properly if they don't get the information they need when they need it due to poor admin support. The best judges in the world can't do their job properly if they don't get the information they need when they need it due to poor admin support. And so on and on.

And of course if you don't pay cleaners, admin staff, etc a decent wage and give them decent conditions, you won't be able to recruit or retain enough good people in those fundamentally important jobs. The result is inefficiencies that not only harm people but cost money-- outweighing the initial apparent benefits of slashing wages and conditions.

And also-- if you don't pay cleaners, admin staff, etc a decent wage, they can't buy much in the way of goods and services from other people.

Keynes famously said that, in the case of an individual household, it might be true to say 'you can't spend more than you earn', but, in the case of a nation as a whole, you can't earn more than you spend. Your spending is other people's earnings; if you spend less, other people earn less. And, with regard to both benefits and public-sector wages: money that the state puts in the hands of unemployed Jane or administrative assistant Joe passes on into the hands of businesses big and small-- shops, cafes, plumbers, etc etc.

Currently, our public services-- including and in particular our NHS and our courts-- are at the point of collapse due to years of underfunding; meanwhile, many businesses are on the verge of collapse because so many of us are so worried about spending (for good reason, given that real wages have stagnated for so long-- and now huge amounts of money are being siphoned off to energy companies) ... Seems like a very good time to remember Keynes.

 

[42istheanswer]

It's also a very good reason to argue increased benefits before tax cuts for the better off. Increased benefits to the poor are likely to be spent thus recirculating through the economy. The better off are more likely to save the money from tax cuts and take the money out of the circulating economy

 

[Spathiphyllum]

It's also a very good reason to argue increased benefits before tax cuts for the better off. Increased benefits to the poor are likely to be spent thus recirculating through the economy. The better off are more likely to save the money from tax cuts and take the money out of the circulating economy

Absolutely! Another important Keynesian point.

And-- increasing public-sector wages would decrease the burden on benefits. There are actually public-sector workers who are on benefits because they are paid so little, including, ironically, in the DWP.

 

[Deleted member 21371]

"A long training period, and a higher salary, then a higher amount docked, so the net sum balances."

The training of a senior doctor occurs while he is still working as a junior doctor - it is that experience that provides the training and education. There is no cost to that training, so your argument falls flat.

You can't really whinge about the time spent training then, if you say it's just "experience".
Not even intelligence required.
It's just a job, nothing special at all then.

 

[BlueArmy]

What the public wants is General Election.

What you want is a general election you mean. I’m a member of public and I can do without it thanks