Easing the economy, rooting out the banksters and Miliband’s shades of Ted Heath

Peter Wilby puts the social case for quantitative easing, wonders if Ed is the next Ted, the future

As another crisis threatens to plunge us into a second and probably deeper recession, the talk is of more QE, or "quantitative easing". A Bank of England pamphlet says that this "does not involve printing more banknotes". This is a somewhat disingenuous assurance, since QE - which involves the bank "buying" government and corporate bonds with electronically created "money" - amounts to the same thing, except that, being electronic, the "money" mostly goes to rich City folk who circulate it around their computers without it ever reaching shops and businesses where it might create jobs.

The feckless poor, who will spend what they get, are just about the only people who still use banknotes. So printing notes is exactly what the Bank should do. It should then, as John Maynard Keynes suggested (chapter ten of The General Theory, if you want to check), stuff them into bottles and bury them in disused coal mines in areas of high unemployment such as South Yorkshire, Durham and South Wales. The Treasury could invite private firms to tender for the land, requiring them to employ jobless local people to do the digging.

Keynes agreed that it would be better to pay the same people to build houses, but this is ­apparently beyond the organisational powers of this government and, as he said, digging up notes is better than nothing. As the economist Stewart Lansley argues in his book The Cost of Inequality, published on 6 October, we have a consumer society in which large numbers can no longer afford to consume. Rising inequality, far from being incidental to the credit crunch, was a direct cause - in order to continue consuming, the poor had to take out debts they couldn't afford. The answer now is to give them money they don't need to repay. Unfortunately, nobody wants to do the poor any favours.

Up Heath and down hill

It may seem a curious comparison - and probably wishful thinking, too - but Ed Miliband is beginning to remind me of Edward Heath. Like Heath, his odd way of speaking, stiff manner and distinctly geeky persona attract mockery from journalists and dislike from voters. But Heath plodded valiantly onwards and, to everyone's surprise, won the 1970 election.

Heath was criticised for being, as an unmarried man, out of touch with ordinary families and also for lacking the patrician manners of Tory predecessors such as Harold Macmillan. Miliband is criticised on parallel grounds. In the Daily Mail, Dominic Sandbrook writes that he was "born and bred in the permissive salons of Primrose Hill [north London], Oxford and Harvard", and lacks "the common touch" of previous Labour leaders such as Neil Kinnock, Harold Wilson and James Callaghan, the last of whom we should apparently admire for being "embarrassed by nudity" and "baffled by homosexuality". Funny, but I don't recall the Mail's admiration of those Labour leaders while they were leading the party.

Still, it must be helpful for Ed to know that he can attract the paper's support by echoing Callaghan, who said he didn't understand why anybody wanted to be gay when there were "so many attractive girls".

State v fat cats

After Miliband's conference speech, many com­mentators asked how he proposes to distinguish between predators ("bad" businesses) and producers ("good" businesses). But everybody knows the difference: the predators are private equity funds that take over businesses such as MG Rover, the care home provider Southern Cross and Manchester United so that they cease to be public limited companies with shares traded on the stock exchange under strict rules. What they have in common is lack of transparency. They do not, for example, have to abide by rules of corporate governance, announce financial results or publish senior executives' remuneration. Private equity does capitalism's dirty work, saddling companies with high debt (which can be set against tax) and selling off assets to enrich speculators. Drawing up regulations that require more openness and prohibit the likes of Southern Cross from receiving taxpayers' money for public services would be tricky, but surely not beyond the wit of policymakers and civil servants.

Just like the old times

The past, as L P Hartley observed, is a foreign country and, if we were able to travel there - a possibility, we are told, now scientists have apparently found particles that move faster than light - we would treat it just as we treat other foreign countries, cluttering it with high-rise hotels and cheap souvenir shops. If we didn't find things exactly as we expected - King Alfred burning cakes, for example - the tour operators would soon put them right.

I am reminded of a Michael Moorcock novel in which a man travels to 1st-century Palestine, finds that the only person called Jesus is a drooling idiot, and inadvertently gets himself acclaimed, and then crucified, as the Messiah. Most discussion of time travel quotes the "grandfather paradox", whereby our intervention drastically changes history and even wipes out our own existence. The reality, I suspect, is that we would compel the past to conform to the history we already have, only more so.

Have patience, Posh

Victoria Beckham, it is reported, ruled out a move by her husband, David, to my home town football club, Leicester City (now managed by the ex-England boss Sven-Göran Eriksson), because Leicester is too boring. The cheek! She should know that Leicester is where King Lear lived, Simon de Montfort held his model parliament, Cardinal Wolsey died and Engelbert Humperdinck spent much of his childhood. If she hangs around long enough, something else of interest should happen quite soon.

Peter Wilby was editor of the New Statesman from 1998-2005

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 03 October 2011 issue of the New Statesman, Which Tories is it ok to love?