There's at least one aspect of Corbynomics which many mainstream economists accept - the case for a National Investment Bank. Even critics such as John Van Reenen and the Economist see no objection to it. Indeed, Corbyn is simply adopting an idea proposed by, among others, the LSE Growth Commission (pdf) and Robert Skidelsky.

However, I fear that this is yet another example of something that is good economics but bad politics.

To see my point, remember that the Corbyn's NIB will invest not just in infrastructure but also in "the hi-tech and innovative industries of the future."

This is good economics, because it's likely that the market under-supplies investment in innovation. As William Nordhaus famously pointed out, the social returns to innovation far exceed the private returns to producers. Innovation thus has a positive externality. This means private firms will under-invest in it and so there is a case for state intervention. As Mariana Mazzucato has shown, state investments in technology can have positive spillovers to the private sector.

A big reason why the private returns to innovation are low is that it is a very risky business. Many apparently attractive projects will turn out to be expensive dead-ends but it is pretty much impossible to spot these in advance. William Goldman's famous saying of the movie business - "nobody knows anything" - applies generally. Two big facts tell us this. One is that the performance of venture capital trusts has been massively variable, with some losing fortunes. The other is that the Aim index - home to some innovative firms as well as a lot of dross - has consistently under-performed for years, which suggests that a lot of apparently promising innovations have failed.

I suspect that one reason for low corporate investment now is that firms have wised up to the fact that innovation doesn't pay.

There is, therefore a sound economic case for a NIB.

However, the same things that stop the private sector innovating mean that a NIB is bad politics.

If the NIB does its job properly it will back a lot of failures. This isn't because the state is bad at backing winners but because pretty much everyone is. Even the best private equity investors back a lot of duds: Marc Andreesen has estimated that 15 of 200 tech startups a year generate around 95% of the total returns. That leaves a lot that lose money.

And here's my problem. Our biased press will focus upon the latter. "Corbyn's bank costs taxpayers" millions would be a regular story. This could be exacerbated by the fact that the planning fallacy will ensure that even "safer" infrastructure projects will often run over time and budget. Even if the NIB is profitable on average - which perhaps it shouldn't be, given that it should be investing in projects with a high social return rather than private return - the media will present it as a failure.

Cynics might see in this a case for "people's quantitative easing". Picture the scene. Corbyn is being interviewed by some right-wing twat:

RWT: [Lists failed investments]. Your bank has cost the tax-payer millions.
Corbyn: It's not the tax-payers' money. We created the money out of thin air!

This exchange, though, merely reinforces my point - that good economics is bad politics. The NIB is therefore like immigration policy and tax policy and fiscal policy...

For this reason, I welcome Corbyn's refusal to kowtow to the media. It is only by refusing to play their silly games that we have any hope of a rational economic policy.