This was a week to cause sleepless nights. The refugee crisis got worse. Infighting and border closures across Europe made it look as if the short-lived age of free movement within the European Union has come to an end. We all thought far too much about possible movements in US interest rates. And Jeremy Corbyn was elected leader of the Labour party. It’s all been rather exhausting.
Sadly, we suspect it’s going to get more so. The migration crisis is nearer its beginning than its end. That’s because, regardless of the media obsession with Syria, it isn’t really about Syria. And it isn’t about war either. Instead, says James Fergusson, it is all about water scarcity. That means it isn’t just displaced people from Iraq, Syria, Afghanistan and Yemen who want to come to our wet north. It’s all of sub-Saharan Africa too. And there isn’t anything we can do about that. This crisis will run and run, getting more politically fraught along the way. And it might well break the EU.
The eurozone’s long-term survival lies in it having the political will to turn a monetary union into a fiscal union. But if it can’t even keep its internal borders open for a month in a crisis, what chance does it have of completely merging the finances of its member states? Almost none. And if it can’t do that, what chance does it have of making it through the next financial crisis? We’d say none at all.
On the plus side, this may not be an issue for the UK. It’s highly unlikely we’ll ever again see a good case made for us to join the eurozone, and Corbyn’s election might have taken us a step closer to leaving the EU (he sees it, as he sees everything else, as some kind of banker-led capitalist conspiracy and his supporters may vote his way).
John Stepek looks at this and the other financial/economic consequences of Corbyn in this week’s issue. They mostly fall into the ‘awake at night’ category. But, as is our way, we’ve also tried to look on the bright side this week – to think about things we might agree with Corbyn on, and come to appreciate his lobbying on. One is tax relief. The idea that the various tax reliefs on offer to corporates in the UK add up to the £90bn-odd Corbyn’s advisers claim is nonsense. But there are still far too many ways to opt out of paying tax here (tax relief on interest being the worst) and we don’t mind some light being shone on that.
Then there are wealth taxes. We are interested in land value taxation, and we gather Corbyn is too. We also think wealth is undertaxed, as does he. The problem, of course, is that he wants new taxes on top of old (we would prefer to slash income taxes in favour of wealth/land taxes).
But still, if he starts some of these conversations it may be no bad thing. I suspect we won’t agree with much else (most of Corbyn’s ideas add up to economic and social suicide). But I’d be interested to hear from you. I suspect not many of you voted for him as leader. But has he any policy ideas you approve of? Let us know in the comments below.