Time to Stir it up

My friend Barbara Panvel posts weekly at The Stirrer: 'campaigns that count in Birmingham, the black country and beyond'. Her latest post is addressed to Helicopter Ben - Ben Bernanke of the Federal Reserve who is now following up on Milton Friedman's suggestion that dropping money from helicopters might be a way to deal with deflation.

Nothing could better illustrate the desperation of policy-makers than such an arbitrary and aimless dumping of money into the economy. The language of strategic injections has been abandoned. There never was any attempt to direct the money towards those who might need it.

As Barbara points out, why not simply create money for public projects, along the lines of the proposal from Robertson and Huber? This would allow governments to invest in all the services their citizens need without the need to pay back the debts.

There have been a whole string of Early Day Motions calling for money creation in this form. Such a monetary reform could also pay for the shift towards a low-carbon economy that we so urgently need. It appears to be implicit in the Green New Deal proposal, which is perhaps why that has not gained the attention it deserves.

As Barbara identifies, a key mover in favour of this radical revision of the money creation system has been Austin Mitchell MP. For this he was given the Thomas Atwood Award earlier this year. The reason this proposal is not taken up is purely political, and the political consensus rests of public ignorance. The financial crisis has lit the fuse under this debate.