The New Yorker‘s photo of Jeremy Corbyn—with the color and exposure adjusted properly so he doesn’t look so sinister. (photo: Rob Stothard/Getty Images)
The landslide victory of left-wing candidate Jeremy Corbyn for Labour Party leader in the United Kingdom has many establishment types bent out of shape. The Blair wing of the party was literally obliterated, with Corbyn drawing more than four times the votes of his nearest competitor. After giving the country the war in Iraq, and the housing bubble whose collapse led to the 2008–2009 recession and financial crisis, the discontent of the Labour Party’s rank and file is understandable.
But naturally the elite types are fighting back. In this vein we get a lengthy piece in the New Yorker (9/13/15) by film critic Anthony Lane warning us of the evils of Jeremy Corbyn. I will leave for others the discussion of Corbyn’s friends and associates. I am mostly interested in Lane’s treatment of Corbyn’s economic agenda. He tells readers:
The national deficit would be erased not through austerity, as practiced by the heinous Conservatives, but through taxes on the rich and by what Corbyn calls “quantitative easing for people.” This means, we are told, that the Bank of England will print more money: an endearing and almost childlike solution, though not one that has met with unqualified success elsewhere.
First off, “quantitative easing for people” is obviously a political slogan. As such, it is not obviously more silly than “putting people first” or “yes we can.” The issue is the substance behind the slogan.
What Corbyn is proposing is directly financing spending by printing money. If that is “childlike,” then folks like Paul Krugman have a similar affinity for childlike solutions to economic problems. Just last week, in reference to Japan’s continuing economic weakness, Krugman (New York Times, 9/11/15) told readers:
What’s remarkable about this record of dubious achievement is that there actually is a surefire way to fight deflation: When you print money, don’t use it to buy assets; use it to buy stuff. That is, run budget deficits paid for with the printing press.
By “stuff,” Krugman means things like childcare, schools, hospitals, cutting-edge internet, research into clean energy and other useful items. If the economy is suffering from a lack of demand, the government can directly create it by spending money. And, since the economy is below its potential, it doesn’t need tax money to finance this spending. It doesn’t even need to borrow; it can simply print the money.
But wouldn’t this cause inflation? Hmmm, we started with a story where the problem was deflation, or at least an inflation rate that is too low. This means that if the government’s spending and printing money leads to more inflation, then it is getting us exactly what we want.
There are plenty of other well-respected economists who would share in Krugman’s childlike thinking. One can question whether Corbyn has the best mechanism for allocating this spending, and whether he has stopgaps in place to make sure that it doesn’t go too far and lead to actual problems with inflation, but his basic position rests on very solid economics.
If Lane were the only person confidently making ungrounded economic assertions, we could dismiss the article as the result of the New Yorker‘s difficulties in getting qualified writers, but unfortunately this sort of thinking dominates elite circles. Just last week, E.J. Dionne, an unusually thoughtful Washington Post columnist, commented on NPR (9/11/15) on the rise of outsiders like Corbyn:
And I think the collapse—the economic collapse in 2008 and the trouble everybody’s having to get their footing again—is at the heart of these problems. In good times, moderate-right parties can defend capitalism, moderate-left parties can spread around money and redistribute it, but when capitalists behave badly, the center-right has trouble defending the economic establishment and the moderate-left faces a harder left. You see it in Syriza, to some degree Bernie Sanders, Jeremy Corbyn, the—who’s a left-wing frontrunner to lead the Labour Party in Britain. They all have strong grounds for attacking the system.
The irony here is that Dionne has the situation exactly reversed. In more normal economic times, when the economy is near its potential, the only way moderate-left parties can finance new programs is either through new taxes or by cutting other spending. The economy is up against its capacity constraints, so there are no free lunches. By contrast, in the current situation, where there are large numbers of idle workers and productive capacity, the government actually can spread money around without worrying about where it will get it. Again, the problem is too little demand, so we don’t have to worry about pulling resources away from anywhere.
The problem faced by the moderate-left parties in this story is not a real economic constraint, but rather their failure to understand economics. They apparently prefer to believe stories their parents told them about the evils of debt rather than trying to understand how the economy actually works. For this incredible level of intellectual laziness, these parties and candidates deserve the contempt they are getting from the electorate.
Economist Dean Baker is co-director of the Center for Economic and Policy Research in Washington, DC. A version of this post originally appeared on CEPR’s blog Beat the Press (9/8/15).
Why is a film critic writing a piece on economics for the New Yorker?! What a joke.
Corbyn isn’t childlike, more like reprehensible. He has an affinity for anti-Semites, 9-11 Truthers, chemtrails, the Alex Jones Radio Show and PressTV. Corbyn held an event at the Parliament that was kicked off with David Thring, a well-known associate of David Duke. He also invited Max Blumenthal to Parliament to describe how scenes in Israel were beginning to resemble Kristallnacht. I am fully against the occupation of Israel, but that’s beyond the pale. You are the company you keep.
http://www.dailymail.co.uk/news/article-3191508/Jeremy-Corbyn-hosts-event-anti-Semitic-conspiracy-theorist-gives-speech.html
His newly appointed Shadow Chancellor is no better. He once said “I’d like to go back to the 1980s and assassinate Margaret Thatcher.” I don’t like Thatcher either, but Jesus. In essence, Corbyn is George Galloway … sober.
There are benefits to having a Queen of England. The monarch can’t oppose a parliamentary majority, but they can refuse to accept the majority’s nomination for prime minister and cabinet. It’s a very important check on certified nut jobs – both right and left.
Sad that FAIR has to compartmentalize these unfortunate truths whenever it involves someone they agree with politically.
You’re citing the Daily Mail as a source for these ridiculous Corbyn smears? It’s yourself whose been listening to too much Alex Jones.
@Ctrenta
Lets get one thing straight here.I know it benefits Zionism to call everything under the sun anti-semitism, but there is plenty of criticism we can lob at Zionist Israel which has nothing to do with anti-semitism and everything to do with War Crimes and Crimes against humanity. Israel is in violation of over 60 U.N.Security Council Resolutions not counting the ones vetoed by the U.S. . My grandparents had a safe house for Jews in the Netherlands during WW2, which I myself survived . Today those same grandparent would stand with the Palestinians and Mr. Corbyn AGAINST what the State of Israel is doing to the Palestinians. They are turning in their graves. Anyone having the audacity to speak against Israeli violence/atrocities is immediately an anti-semite. That canard has already been exposed for what it is. The world is against Zionism (secular Jews) which uses the Jews as a means to justify the evil they do. Zionisms actions are in violation of Judaic tenets but has been very successfully used as a weapon by which to shut people up. Zionism explains that IT represents ALL Jewry, which it doesn’t. Only a small minority of Jews are Zionists but they run Israel. There are many outspoken Jews who resent Zionism and see them as a danger to world Jewry which holds them accountable for all Zionists actions. And then we have Christian Zionists who have ulterior motives. Their interest is not for the Jews but for Israeli Real Estate….It is their aim to convert all Jews to Christianity after which Jesus will return and we’ll have the rapture by which all Christians are taken up to heaven and all Jews who did not convert will burn in hell for ever. Nice folks those.
As for 9/11 No rational person would accept the official BS we are led to believe. As for Max Blumenthal you might want to read “Goliath: Life and Loathing in Greater Israel” Or just read the reviews….
http://www.amazon.com/Goliath-Life-Loathing-Greater-Israel/dp/1568589514
The Nazi occupation which I survived lasted 5 years whereas the ethnic cleansing/genocide of Palestinians and wiping THEM off the map has now lasted 70 years.
To become informed you might, instead of watching Alex Jones, watch RT, Al Jazeera and Press News. Recent polls showed that of all the News channels RT is number ONE, followed by AlJazeera and then Press News. The rest is all propaganda
History teaches us that any regime that keeps itself up through violence lasts one life time. The Netherlands had an 80 year long war with Spain. Communism lasted about 70 years which means that Israel has about 10-15 years and then will fall apart. Young Jews have their own ideas and don;t feel like fighting the wars of their parents. Israel has a very strong Peace movement which i marginalized but exist. Israel is in a big mess.
Here’s another one “The General’s Son” (read the reviews)
http://www.amazon.com/The-Generals-Son-Journey-Palestine/dp/193598215X
Corbin is tapping into a legitimate feeling that is at the root of the modern economic crisis, a feeling that amidst so much aggregate wealth, technology, and knowledge, a majority of the people feel less secure and less capable of controlling their futures. It’s that simple, and the right has no answer; not now, because we have followed its Reagan-Thatcher script since the !980’s and haven’t got the results, despite working more, borrowing more, and generally acceding to the neo-liberal economic model that has prevailed since about 1979.
With all that we know and all that we have, life should be much easier. But, it isn’t. And the people who feel the pain the most are the ones with the least control over their lot, those buffeted about by recessions, downsizing, and the repercussions of stock market meltdowns caused by “their betters”. Building individual merit and honoring the work ethic no longer guarantees anything, as the snail’s pace of Western economic growth barely taps into the vast pool of underemployed labor, thus obliterating the leverage the employee once had to bargain with the boss.
This economic malaise hovers over us like a black cloud that won’t go away. Until it does, the prospects for candidates like Corbin and Sanders will only grow.