Duncan’s Economic Blog

The Crash

Posted in Uncategorized by duncanseconomicblog on April 1, 2009

Jonathan Rutherford & Jon Cruddas have published an e-book on the left’s response to the ‘crash’.

I’ve only been through the introduction so far, but I’m liking what I’m seeing.

Reform of the financial sector cannot be separated from the need to
boost manufacturing and develop a new industrial strategy. The
privileging of finance capital has led to an over-dependence on the
speculative activities of the City, leaving the economy dangerously
exposed to the vagaries of global capital. Because of this, we have
depended on the imbalance between the huge trade surpluses of
emergent economies and the deficits of the rich countries. Living
standards have been maintained by cheap credit and by Chinese
workers on subsistence level wages producing more and cheaper
goods. This is unsustainable and we have to rethink our economic
priorities.

Britain needs coordinated strategic banks for industry, small
business, housing, energy and knowledge. A national investment
bank can provide public equity to lever in investment from pension
and insurance funds to develop key sectors, and to build the digital, transport and other infrastructures of a new economy.
Britain also needs a radical new housing agenda that can be a
foundation for economic recovery. With 1.77m households on the
local authority housing waiting list, government needs to directly
fund social housing developments through a Housing Bank. If
necessary one or more of the building companies should be taken
into public ownership, in order to kick-start the construction
industry, bring down unemployment and achieve national housebuilding targets. 240,000 homes are needed each year. Local authorities and other public agencies must be able to borrow to
finance the necessary levels of affordable housing.

Worth a look.

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