We have something of a problem here


There are those about who would change the world. OK, we might not agree about how they would do so but that's all part of the joy of arguing about it of course. But it is really incumbent upon people who would change this oblate spheroid to understand how it does currently operate before floating plans to change it. And that understanding seems to be rather lacking. Here's one example:

In a speech that may be the most critical of the week to the credibility of the Corbyn project, McDonnell will insist he understands the need to bring the current account deficit under control.

Now, who doesn't understand this, McDonnell or Patrick Wintour who wrote the article, is unknown to us. But the current account deficit isn't something that particularly needs to be dealt with and it's also not something under anything but the vaguest influence of government and politics. What is meant is the budget deficit not the current account one. It it would be useful if people telling us how to make the nation a better place understood the difference.

But, sadly, it gets worse:

McDonnell has promised he will review the role of the Treasury so that it focuses on fiscal policy and revenue collection. He will promise a drive to end corporate tax evasion and, like the party leader, will point to specific firms deemed to be involved in tax evasion.

There is no corporate tax evasion. Evasion is, recall, the illegal kind: and there's no one at all, not even the Dread Murphy, who thinks that there's anything other than the most trivial amount of illegal tax dodging activity in Britain's corporations. There's an awful lot of allegations of tax avoidance, structuring things so that tax is not legally due. There's even more allegations of taxes that aren't even theoretically due not being paid on the grounds that those making the allegations think that the tax system should be changed to make them practically due.

But as far as there is tax evasion it's simply not in the corporate world. It's you and I paying the window cleaner in cash that is the evasion. And again it would help if those who want to change the world understood this difference.

The country being run by people who don't understand these sorts of differences is unlikely to work out well.

McDonnell has now given his conference speech:

Our balance of payments deficit, which is the gap between what we earn from the rest of the world and what we pay to the rest of the world, is at the highest levels it’s been since modern records began.

You can't have a balance of payments deficit. It's a balance, it balances by definition. You can have a trade deficit, which means most likely a capital surplus, and vice versa, but you can't have a balance deficit.

No, not going to work out well.