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UK GDP down 9.9% year on year - one of the worst Covid impacts in the world. 1/ But it would have been much worse without furlough, unlimited Bank QE and numerous yet-to-be quantified soft loans to businesses. The challenge now is recovery...
2/ Build Back Better is vacuous unless government prepared to go on a) borrowing and b) letting/telling the Bank to expand its balance sheet (I don't believe in the fiction of CB independence, and it's evaporated anyway)...
3/ This country is going to have a state-supported private sector for years to come. Better to recognise that and make the recovery state-led and substantially state owned...
4/ In Postcapitalism I advocated a mixed-economy transition path - beyond carbon & capitalism. The 2018 IPCC report plus Covid now means I think the state will have to play a much bigger ownership role, rather than just framing/investment - it will need to direct...
5/ Sure there'll be a consumer surge; sure the grey pound will mobilise once everyone has a jab (I get mine today because of my 
)... but... who wins the longterm recovery depends on dirigisme on steroids...
)... but... who wins the longterm recovery depends on dirigisme on steroids...
6/ Cummings et al understood this - but all they could do was My Little Crony type investment/sweetheart deals. Labour's timid fiscal orthodoxy - and sticking with 2017 is timid in the context of Covid - will hamper their ability to tell a recovery story...
7/ For clarity, though MMT is BS as a theory, its short term conclusions for a monetary sovereign are correct (with a caveat): borrow, invest, create money but take direction and ownership over strategic parts of private sector and boost wage share (+ shrink the profit share)...
8/... otherwise the recovery will be for asset prices only, not the productive economy. There's a golden opportunity for Labour/SNP/PC/Green to make a joint case for fiscal expansion after the pandemic...
9/ Paradoxically the one UK politician who is COMPLETELY stymied from making the case for a spending-driven recovery is, step forward, @NicolaSturgeon - because the Growth Commission mandates fiscal austerity for a decade in a post-Indy Scotland...
10/ Fiscally, both Labour and the Tories could, if they wished, outflank the SNP given its commitment to short term poverty-independence... but the UK wide issue remains...
11/ The pandemic has tanked growth, tanked the public finances and scarred the real economy. It makes a fiction of CB independence so go with the flow, borrow, spend, print and invest... having ditched Summers, that's what I suspect Biden will also do...
12/ But a social-democratic, investment led, social cohesion oriented model can only be delivered by Labour in alliance with other progressive parties....
13/ Levelling up, building back better etc etc sound nice but unless Sunak goes, the Tories will be back to austerity by 2022, once again slashing police, council, defence budgets - and the political opportunity for a brave, left-led Labour Party is open. ENDS
