”Last Friday I visited Rawlins community college in my constituency and spoke to a very bright group of economics students. We discussed the fact that Governments cannot spend money they do not have. The students understood that; why does my right hon. Friend think the Opposition do not”
- screamed Nicky Morgan, Conservative MP for Loughborough in the House of Commons today asking the Prime Minister a deep and probing question (as you can see) about the financial situation. Another wonderfully planted question that was met with the usual hysterical “yeeaaah” jeers from the Tory back benches, the same joyful jeers they gave when George Osborne announced 500,000 extra jobs losses last year.
I cannot stand planted, pointless, useless, deceptive and simplistic questions on PMQs, they undermine the entire political landscape, they make it weak and simply theatre with half truths and just plain bullshit. It should be treated with the contempt that it treats the public with.
I emailed Morgan to ask her about that. I said:
Hi Nicky,
Today in Parliament you stood up and asked quite clearly a planted question along the lines of “Why does no one understand that Right Winged economics is the only way to run a Country” (clearly ignoring the horrific legacy the IMF imposes whenever it feels the need) and how all the economics students you spoke to at Rawlins agreed.
She opened her reply with:
Thank you for your e-mail which I have read and you have got your many points across. And thank you for insulting my intelligence – I am quite able to prepare my own questions. Do you assume I am not able to do so because I am a woman or a Conservative or both?
There is so much wrong with that opening, I struggle to know where to begin. It is not me who is insulting her intelligence. Firstly, she is insulting the intelligence of the entire electorate who have to put up with the pantomime that she perpetuates with such childish questions, every week. And if I were her, I would rather people believed the question was planted because the question: “The students understood that; why does my right hon. Friend think the Opposition do not” is not suitable for the very short time the PM gets to answer questions during what is supposed to be an adult debate over a subject that is going to cause people misery for years to come, to ask such pointless questions. It is insulting to all of us. It isn’t a fucking game. To the people who will struggle to put food on their families tables, standing out in the dole queue week after week, who can’t afford Christmas next year, disabled people who will lose their support and have no idea how they will cope now; it isn’t a fucking game. It is people’s lives. Real lives. Nicky Morgan is treating peoples lives like a game. She should be ashamed.
To suggest it was “insulting her intelligence” that I didn’t believe she devised the simple question herself is also illogical. I think she is far more intelligent than that, and was given that question. If she truly believes it took an intelligent mind to practically say “Does the Prime Minister agree that he’s a God?“, and believe that is a suitable question to ask, then she is definitely an idiot and her intelligence should certainly be called into question at the next election.
Secondly, suggesting sexism? Really? Is that even worth commenting on? How did such a pathetic person get elected? When you have to invoke sexism or racism or anything of that calibre in a debate that has absolutely none of the characteristics of a sexist or racist argument, you are drastically clutching at straws. If I’d have said “Thank you for your time, oh by the way I have some ironing that needs doing“, I could understand.
What a woefully simplistic idiot she (and Tories in general) really is. This is a woman who came to our University and told us all that businessmen make the best MPs, so it is unsurprising that her view is so intensely, well, wrong.
Firstly, I hope Nicky Morgan practices what she preaches, and doesn’t have a mortgage, an overdraft, or any other outstanding debt. Because to spend money she doesn’t have, would be a little bit hypocritical of her.
Secondly, One wonders what Nicky Morgan thinks was likely to happen when her Party deregulated the banking industry in the 1980s, and when William Hague in 2001 told reporters he would promote people to his Shadow Cabinet on the basis of their commitment to banking deregulation. Did she think that would encourage responsible banking? If she did, she is massively naive, if she didn’t then she is just massively hypocritical.
Firstly, it is essential to note that the value of money doesn’t exist. It is an illusion. It is not backed by gold or silver or anything. It is just an idea; the collective idea of a population. Other than it being an idea, it is just paper and metal. You could use anything as money that is not backed by gold or silver. If we all believed each hair on our heads was worth the same as a pound coin, then we’d use the hair on our heads. There is no reason why not. We invented this concept of money, assigning mystical value backed by nothing important, and now that money controls our lives. Money is simply a medium of exchange now, like any other. Fish was used as money on the East coast of Colonial America once. The idea of money is good, because it is flexible in size and it is always in demand. The idea of money is bad, because for it be portable, its value must be high for a small amount. For that, you need a source that is in scarce supply with a high price (gold). Paper money attached to nothing, is worthless. In fact, gold has all the qualities one would require for a medium of exchange. It is durable, it is scarce, it is portable, it is divisible, far more so than any other commodity.
Banks in the UK can back the money with worthless IOUs. This is known as fractional-reserve banking. What it means is a bank only has to hold a relatively small amount of money in its reserves, the rest it can lend out.
So for example:
Person A deposits £1000.
The bank keeps 10% as reserves.
So the bank keeps £100.
The bank lends out £900.
The bank can lend that £900 as an IOU promissory note to more than one borrower (for the purpose of this example, we’ll say it can lend to three different borrowers).
Over time, each of those borrowers pays back the £900.
So the bank gets the £900 back, and an extra £1800, in new money.
The bank can then take that £2700 it now has, and keep 10%, and lend the rest out.
So the bank has made a fortune, yet only actually has £900 in reserves.
Banks issue many IOUs based on the single deposit.
So if we all marched to Lloyds TSB and demanded our money from our accounts at the same time, the bank would not have it.
In essence, the bank is lending money it doesn’t have, on a grand scale.
The free market advocate of the 19th Century, Condy Raguet noted that credit expansion in the Financial sector will always result in depression. He advocated strong regulations on the banking sector, which he had deemed to be a bit of a beast in need of taming.
Morgan, in her email, said:
I’m afraid I totally disagree with your remarks. In particular you refer to the deregulation of the financial sector and easy credit – which happened during the 13 years Blair and Brown were in power.
- No it didn’t. It was perpetuated under Blair and Brown, but it definitely didn’t begin under Blair and Brown. Another vast manipulation of the truth; something Conservatives are becoming quite the professionals at. The 1986 Building Societies act and the Financial Services Act for example, were definitely key de-regulatory acts, brought into being, under Thatcher. The influx of credit card users and the housing market boom that followed, in the early 1990s through to 2007 (and looks set to continue) was both Tory and Labour’s fault. The entire economy, since at least the 1980s has been based on debt and debt alone. Debt, by definition, is money we do not have.
Nicky Morgan should be fighting tirelessly to stop the fraudulent nature of the banking industry, opposing the deregulation that her own party introduced, and insisting that tuition fees be abolished (debt, money we don’t have), mortgages be abolished (debt, money we don’t have) and in fact every other form of debt, if she truly cares about not spending money we don’t have.
Economics is a tough one. I don’t think there’s a single answer to the problems that have arisen.
I’m not sure you’ve any right to express surprise when you received an unfriendly reply to your own unfriendly email.
I suspect that a more congenial, yet just as probing, email may have received a more congenial response.
While eliminating debt at an individual or family level can often be beneficial this is only true of certain types of debt. Very few people resent the enabling debt of a mortgage which allows them to leverage relatively small amounts in the purchase of a home.
That same group would probably agree that barely meeting the interest on a maxed out credit card is an experience they’re not keen on repeating.
The key to debt seems to be developing a keen understanding of where and when it is appropriate and how best to regulate lenders to maximise returns on investment while protecting borrowers from the less useful forms of debt.
Spending money you don’t have is an important tool at all levels. It’s not an inherent evil. Everyone needs to have a shrewd understanding of when debt is a good thing or at the very least access to someone who has such an understanding and can offer impartial advice.
Since you’re so keen on saving money I’m not sure it’s inappropriate for me to remind you that being polite is free. You may be surprised at the value you can reap from it too!
You appear to have misunderstood me.
I accept your view on debt management. In fact, I would go further and say that spending money a government doesn’t has, is essential, during economic crises. Neoliberalism is crises prone, and that is when Government should step in. When aggregate demand is back to acceptable levels (though not pre-recession levels, because a multi-billion dollar housing boom was pretty much baseless and fake), then it makes sense to cut. Hell, as my ideal, I’m a Marxist.
It makes no sense to me, to cut jobs and livelihoods in the public sector, when the private sector is in no position to take up the flack, due to low demand.
Household debt, is not at all like National debt. Comparing national debt to a maxed out credit card is flawed for a few reasons, not least because if a person is working and can’t make their credit card repayments, they cannot simply work harder to be able to achieve it. The analogy assumes employment of the individual. The country is experiencing high rates of unemployment, shooting up. It is the equivalent of having a maxed out credit card, and yet being told to work fewer hours to pay it off.
In regard to my email to the MP, I have two issues with your point:
1) She was very manipulative, and out-right lied in Parliament, live on TV, to score political points. She is playing a game with peoples lives. I have absolutely no respect for anyone of that making.
And secondly, I wasn’t surprised at her reply, I expected a reply like that. I was surprised that she suggested my criticism of her manipulative nature, was a reflection on here as a woman. That’s massively irrational of her.
[...] isn’t the first. I blogged not long ago, on the subject of Loughborough Tory MP Nicky Morgan asking misleading and futile [...]
[...] isn’t the first. I blogged not long ago, on the subject of Loughborough Tory MP Nicky Morgan asking misleading and futile [...]