Three economists, four opinions...

Nowadays so much of politics is really economics that the private citizen has to acquire the skills of the economist or retire from the political argument. A case in point is the argument over whether the UK needs a first tranche of cuts, amounting to £6bn, early or later. During the election campaign, Labour and the Lib Dems said we would be prudent to wait: cutting too soon risked damaging the recovery. The Tories wanted "an age of austerity", cut now and cut deep.

Now the ConDem Coalition has adopted the Conservative position and decided that we need the cuts  and we cannot wait until the emergency budget. So much so that the announcement of the cuts was made at a press conference at the Treasury rather than in the House of Commons.

The question for the  rest of us is, who is right? If we cut Government spending deep and soon, will that actually help or hinder the economic recovery?

The OECD has released a report with attached graphs which may help the layman make up his mind.

My interpretation for what it's worth: government spending and exports are the only current engines of growth in the UK (and many other countries). Other engines of growth, such as consumption and investment show no signs of recovery. In the circumstances, cutting that flow of finance surely risks a fragile recovery.

The cuts may be "only" £6billion, but there seems no logical reason to take even that amount away from the planned public service provision with such unwarrented urgency. (And that doesn't include the multiplier argument, i.e. that increased unemployment costs a "double whammy" as more is paid out in benefits while less is gathered in taxes.)

Anyway, read the report, look at the position of UK finances, and make up your own mind.

Vince's Newsnight Cringe.....

Priceless Paxman interview with Vince Cable...

On Newsnight last night, Paxman asked Vince Cable a few gentle questions about when he changed his mind about the £6bn cuts announced by his partners yesterday, and about how friendly he is with George Osborne.

Cable, looking like a man who would rather be tied down naked in a pit full of stinging ants, replied with a complete lack of conviction that he was convinced by a first glance at the books and by the eloquence of the Governor of the Bank of England, and of course he and George had a perfectly good relationship....

Given that he is a Keyneseian and is deeply worried that early cuts are a real risk to the recovery, that he fears that we have cut too early and will cause a double dip recession, and that he regards George Osborne as practically economically illiterate, it's no wonder that poor old Vince looked grumpy and ill-at-ease.

Before the election he opposed early cuts because of the potential economic consequences for unemployment, growth, economic capacity, the availability of credit and its potential to damage us in the eyes of international money markets. For a politician who made his reputation on being right, being honest and being outspoken, swallowing his words is  a real dent to Cable's self-esteem. Being asked to publicly defend the cuts by a sneering Paxman must feel like torture.

It is obvious that Cable still believes what he said pre-election, that he fears the risk that is being run with the economy, that he has been blocked by Osborne in his bid to regulate the banks and that he instinctivley flinches with obvious Tory relish at the cuts.

Expect more dissafection from Cable.

Tory Fault Lines

Progress Online has a good post on the Conservative approach to the NHS, and how it reveals fault lines in the Conservatives basic philosophy. Basically, the drive to sell-off, to marketise and privatise is in conflict with the drive to "conserve" elements of society which has always been at the root of collective and individual conservatism.

I have always believed this to be the case, especially since Margaret Thatcher adopted a harsh "free market" and individualist economic and social model as her Government's basis of policy making. It seemed to me that selling off the family silver and trashing the "old ways", as the Thatcher model demanded, was in serious conflict with the urge to conserve tradition and institutions which was the basis of real "conservatism" (large C and small c) as I had previously understood it.

Income up, Poverty Down, in 1stYear of Recession. Thanks to Labour...

George Osborne said today that the ConDem Coalition will keep Labour's target to halve child poverty by 2010-11. Thanks in the main to the policies of the outgoing labour Government, progress continues to be made in the fight against poverty.  Figures released by the Department of Work and Pensions reveal that, even during the recession, wages continued to rise and poverty continued to fall.

These outcomes are welcome, if suprising, but they did not happen by accident. One abiding feature of Labour since 1997 has been the focus on ensuring that the impact of events on the poorer in society were understood and combatted where possible. The target to eliminate child poverty by 2020 was a real commitment and the aim of policy and energy over many years.

The last time the Tories were in power poverty doubled and child poverty tripled. If they are really serious about adopting and achieving Labour's targets they will have to engineer a change in their basic philosophy of selfishnesss and letting markets rip, and they will have to change their policy stance on benefits, targetting and the place and legitimacy of trades unions in the worklplace.

The reductions in poverty over that last ten years were a lasting achievement of the Blair/Brown era, and they were caused by real policy initiatives and real focus on the problems of reducing poverty. The Tories will have to undergo a sea-change if they are to achieve anything like the Labour successes in this area. I hope they do, for the sake of the low paid, pensioners and children living in poverty and for the good of society as a whole.

Nick's Great Reform "act"

I listened to Nick Clegg's "biggest shake up since the Great Reform Act of 1832" speech on the radio today.

I was astonished to hear him reveal ...

..... all of the intrusive and unnecessary laws that inhibit your freedom.......Our democracy has suffered at the hands of encroaching centralisation and secrecy for decades...citizens' rights: eroded by the quiet proliferation of laws that increase surveillance, quash dissent, limit freedom...executive authority: consistently increased by successive administrations to the point that we now have a neutered parliament and government that enjoys almost untrammelled control .....

...that we had been living in an oppressed and enslaved sub-soviet enclave until May 6th.

Little did we know...freedom and liberty curtailed and cramped to such an extent that criminals could be photographed and identified on CCTV and apprehended by merely leaving their DNA at the scene of the crime....

....an affront to Liberal Democrats everywhere..... no wonder the people revolted.....

How Nick and Dave bravely overcame the politburo and the commissars to sneak into samizdat (but posh, obviously) fee paying education and then earned an illicit living through the underground economy. To chose to work in such defiantly decadent and deliberately effete anti-soviet occupations such as PR and Parliamentary Lobbying must have taken every fibre of courage they could muster. It'll be a grand tale for their memoirs in the blissful freedom of the post soviet era.

Thank you Nick for that insight....

Or did you just go a wee bit mad...?

As I said, I heard the speech on radio, but revisiting the text confirms first impressions: it's full of generalisations, inanities with a leavening of unintentional humour.

e.g

Generalisation:

This government is going to break up concentrations of power and hand power back to people, because that is quite simply how we can build a society that is fair.

Easy to say, but how? identifying a "problem" is easy....George Osborne was so enraged by the number of quangos that his first act was to set up a quango to tell him what to do next....
Inanity:

Landmark legislation, from politicians who refused to sit back and do nothing while huge swathes of the population remained helpless against vested interests. Who stood up for the freedom of the many, not the privilege of the few.

Is this meaningless drivel, or is droit de signeur ended at last....

Humour:

..... citizens' rights: eroded by the quiet proliferation of laws that increase surveillance, quash dissent, limit freedom.

That'll be the Tory dream of repealing the Human Rights Act, will it Nick?

The whole thing is hyperbolic, bathetic, arrogant and vainglorious.

Actually, quite an accurate character study of Mr Clegg himself....

Boris Breaks Cover....Redwood Agrees...Davis Dives In. Coalition Blues.

The first cracks in the Tory support for the ConDem Coalition have appeared and, surprise surprise, they come from the direction of Boris Johnson, John Redwood and David Davis.

Two of the attacks are about finance and taxation.

Johnson, the Tory Mayor of London, professional buffoon and Cameron's most obvious rival for the affections of their party, is enraged by the coalitions plans, not yet clearly defined, to somehow curtail the activities of banks and the City of London in the wake of the banking crisis and the resultant recession. Boris isn't just politely dismissive, he thinks it's "nuts"...

I think it is completely nuts for people to want, as a matter of public policy, to attack the financial sector.

John Redwood, convinced neo-con, comical mimer to Welsh anthems and serial  unreconcilable, has revealed that he has organised a group of Tory MPs and Peers to oppose the ConDem Coalition's Capital Gains Tax plans.

Redwood says that ...

...Conservatives and Lib-Dems had deeply differing views on tax. Deep in Lib-Dem DNA is the Robin Hood principle — tax the rich and give to the poor.... It is superficially popular, and gives believers a feeling of moral superiority. Deep in Conservative DNA is the belief that society and the economy work better if you allow people to be successful and to pay their own bills....

Davis takes a diferent angle, voicing his concern over the proposed 55% threshold for the dissolution of Parliament. In Davis's opinion ..

...we could have a government in parliament which could command 45 per cent, or 45 per cent plus one, of parliamentary votes, but no more, and therefore couldn’t deliver a budget, couldn’t deliver its manifesto, couldn’t deliver its normal legislation and yet couldn’t be thrown out either......a government in parliament which could command 45 per cent, or 45 per cent plus one, of parliamentary votes, but no more, and therefore couldn’t deliver a budget, couldn’t deliver its manifesto, couldn’t deliver its normal legislation and yet couldn’t be thrown out either.

It has been clear that many Conservative grass-roots activists are not happy at the Cameron/Clegg beterothal. So far they have been content to grumble in private and wait and see. But the emergence of such pointed criticism from the upper echelons of the party, so soon after the election and in the persons of such eminent and instantly recognisable Tory heavyweights might push the unease into the open.

It certainly cannot be helpful to Cameron/Clegg and their Conservative Coalition. It must rate as the shortest honeymoon period for any government in modern times.

Why the Tories Have Lost Scotland.

Iain Dale's diary has a post by a "Scottish Conservative" which bemoans the fact that the Tories are unable to make any progress north of the border.

It has this opening sentence...

You know that bit of land that if you forget to turn off the M6 onto the M55 for Blackpool, eventually becomes visible through the rain. The land where some parts of it largest town have worse statistics than Zimbabwe. Where snouts in the trough "socialist" crooks run councils with expertise that the Cosa Nostra is jealous of. That place where the Labour Party has its lair, where evil thugs train as the Tartan Taliban to destroy any prosperity in England. Where Macqueda spin against anyone (including their own side) who does not fit the mould. Even those nominally appearing to be English have names like Campbell and McBride.

If this is typical of Scottish Conservatives and their opinions of their country and countrymen, it's no wonder they cannot persuade their fellow Scots to go along with them.

Ignorant, bitter, deluded, in denial. And the contributor apparently cannot see it....nor does Iain Dale nor many of the contributors on his blog.

Labour is facing a lot of soul-searching in the wake of its defeat in the General Election, a necessary cleansing will undoubtedly follow.

The Tories have been wiped out in Scotland in four successive elections: it's time they woke up and had their own heartfelt review of the reasons for this failure. Starting with the attitude expressed and finding ways of rooting it out of their party would be a good route to understanding why they fail so consistently in Scotland.