In his G2 "review" of the Liberal Democrat conference (23/09/11) Alexis Petridis writes:
"The moment when a lone voice shouts:'Rubbish!' as Danny Alexander suggests Gordon Brown spent too much turns out to be a dizzying pinnacle of insurrectionary excitement that the conference will never scale again."
I am happy to acknowledge that the lone voice was mine and sad that no other Liberal Democrat was prepared to express dissent to a blatant distortion of the truth. The prime cause of the current expenditure deficit is not Labour profligacy but the collapse of revenues resulting from the financial crisis which in its turn was caused by the financial deregulation which is part of the monetarist creed with which almost everybody went along. True, Vince Cable uttered a few words of caution in 2006, but as far as I can remember that was more to do with private rather than public debt, and I don't recall any sustained Liberal Democrat campaign to urge people to cut up their credit cards and live within their means.
At the 2010 election we promised more honest politics. Latching on to a dishonest myth, however popular and convenient, will not restore the public's confidence in politicians and the democratic process. I understand that today's headline in the Daily Mail calls upon the Labour Party to apologise for the economic mess in which it claims they left the country. If Liberals and the Daily Mail are singing from the same hymn sheet we have cause for worry.
Petridis is wrong, however, to think that there was only one expression of dissent. Alexander's claim that an immediate coalition and savage cuts were necessary to avoid the fate of Greece brought from me a cry of "Nonsense!", and his insistence that the government will not alter course (as the economy stagnates and unemployment rises) a cry of "Shame!" Again, alas, a lone voice. Where were the other Liberal Democrats who are proud to be inheritors of the traditions of Keynes and Beveridge?
For my own suggestions of how the course should be changed please see My Plan B post (09/08/2011)
Whilst on the subject of the Labour record, it is worth remembering that, with all his faults (and especially PFI) Gordon Brown is credited with taking the lead in organising prompt and effective international action which possibly averted an even worse financial crisis in 2008. There is no evidence of similar action by any member of the present cabinet. Again, my own suggestion is that the G8 finance ministers should get together and slap a Tobin-type tax on all financial transactions with effect from this-afternoon. Maybe I do George Osborne and Danny Alexander a disservice and they are working on this at this at this very moment, but I'm not holding my breath.
Monday, 26 September 2011
Subscribe to: Post Comments (Atom)
Well done, sir! To answer your question about where all the Keynesians were, I can only speak for myself. I wasn't in the hall at the time, deciding instead to express my dissent by hoping that Mr Alexander would be talking to an almost empty conference hall.ReplyDelete
I do think Gordon Brown spent too much but not in the sense that Mr Alexander means. Keynesian macroeconomic stabilisation policy means that you run budget deficits during a recession but it also means that you run surpluses during a boom. Gordon Brown spent too much during the boom years perhaps because he believed his own propoganda that he had abolished boom and bust.
Politically it is always difficult to run surpluses during the good times; some people attack you for taking too much of their money in tax, others attack you for not spending it in their favoured way. Keynesians down the decades have been too shy to make the case for running surpluses despite there being a very intuitive analogy to ancient times when governments would store grain during good harvests to release during famines.
We are also led to believe that we must follow the present course in order to placate the financial markets. Yet the very day after conference ended, the markets fell sharply because of low growth forecasts which are a direct result of our inappropriately savage deflationary policies.
Nonetheless, your form of protest was a courageous one considering the present obsession with security and the probability of being held under terrorism legislation as happened at another party's conference in the recent past!
Thanks for your comment, Anonymous. I'm sorry we didn't meet at Birmingham: it would have been good to have a chat.ReplyDelete
To be fair Gordon Brown did run a budget surplus in the first few years of Labour rule, and the national debt was reduced. True Labour did throw money about in the last few years, but so have most British governments in the run up to elections. (I believe the only exception is when Roy Jenkins was Chancellor, and the election was lost.) Even so when Labour left office the national debt to GDP ratio was still around the 60% level, which is deemed acceptable. There was no crisis.
The tragedy is that British politicians, instead of using Keynesian policy to steady the level of economic activity, have abused it to win elections. Let's hope that when we have a Liberal Democrat dominated government we shall be more honest (as promised) and disciplined.
Nice one Peter. It's good to see you're continuing to push some liberalism in the Lib Dems.ReplyDelete