Monday, 7 September 2015

Deluded peoples’ quantitative easing.

The world’s leading authority on peoples’ QE, or should I say “Deluded Peoples’ QE” (DPQE), has now descended to near incoherence. I’m referring of course to Richard Murphy. 

In the comments after this blog post of his, he claims that DPQE, far from ever having been aimed almost exclusively at infrastructure, always aimed to direct money at a wide variety of types of spending. (If you’re interested, search for the phrase “The work proposed has always been broadly based”.)

Well that’s news to me and numerous others. If you do quick bit of Googling you’ll find numerous articles by leading economists under the impression that the deluded people advocating DPQE have always advertised it as being aimed primarily or exclusively at infrastructure. 

DPQE can fund a million homes for migrants?

The other bit of amazing news from the high priest of DPQE is that DPQE can fund a million homes for the flood of immigrants / refugees currently entering Europe.

 What – build a million homes just like that?

There’s just one teensy problem there which is that the UK is ALREADY SHORT of construction skills at the CURRENT rate of house building which is in the low hundred thousands a year. (150,000 in 2014 according to this source.)

Of course additional bricklayers, site supervisors etc can be trained, but that takes years (about ten years if you want a decent building site supervisor with several years’ experience). And of course relevant skills can be imported. But we already have freedom of movement in Europe, as Murphy presumably knows – or perhaps he doesn’t. And the UK’s shortage of construction skills exists DESPITE that freedom of movement. So you won’t get a huge additional number of skilled people from that quarter.

I’m all for increasing the number of houses we build. There’s no big problem in doing that. But it’s plain impossible to quadruple the rate of construction in two or three years.  

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