Monday, 16 September 2013
Has the Liberal Democrat leadership got a death wish?
We Liberal Democrats have been praised in the media for being the only one of the three main parties which permits real debate at our conference.Well yes, but I suspect some of the the votes on these debates are based as much on sheeplike support for the leadership, with many a glance over the shoulder at a press eager to proclaim the leader's humiliation, as on the strengthen of the arguments.
I wasn't at this morning's debate on the economy so can't assess the strengths of the arguments, but I strongly suspect many of the votes in favour of the motion were in support of the leader rather than the policy. Indeed it is, I understand, unprecedented, for the leader to lay his reputation on the line by personally summing up the debate. Oh that he had followed Vince Cable's clear advice that there was no reason why the (very mild) Social Liberal Forum amendment could not be accepted. Instead Nick Clegg chose confrontation and poor Vince, along with the a majority of the conference, was bullied into voting to support Osbornomics.
I apologise for being repetitive, because the truth of the economic situation, supported by a galaxy of distinguished economists, has been hammered away at in this blog since its inception, but, here it is again:
1. The economic crisis was caused by the irresponsible activities of the financial sector, made possible by the deregulation introduced by the Tories. Labour happened to be in charge when the crash came but to say they caused it is a triumph of "perception management." True Labour did too little to rein in the financial sector, but the Tories were actually calling for more deregulation and, apart from a few shots from Cable about debt (I think he was referring to the private rather than public sector debt), nothing much was being said by Liberal Democrats. No one that I'm aware of had the courage to speak up for killing the goose which appeared to be laying endless golden eggs
2. The UK's public debt was not and is not at unprecedented and dangerous levels. For the first several years the Labour government ran a current surplus and paid off much of the national debt still left behind after 18 years of Tory rule. When the crash came the debt:GDP ratio was modest, and even when Labour left office was nowhere near dangerous levels. We never were in a position comparable with that of Greece. It is hard to avoid the conclusion that the Tories seized on the misplaced perception that we were in order to implement their ideology of rolling back the state. It is distressing that our people in government went along with this, and after this morning's vote it can be claimed that the party does to.
3. The economy was in recovery when Labour left office. Osborne's policies (particularly the raising of VAT) reversed this progress and have caused three unnecessary years of stagnation. We must hope for the sake of the 20% of our people who have suffered most that the trend continues, but it does seem to have foundations based on sand: the seeds of another housing bubble, yet more personal debt, and very unevenly distributed (ie mostly in London and the South East.)
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There are many myths about economics and the supposed virtues of austerity. One, oft-repeated by Mr Clegg after his supposed mirror shaving (but secret) turnaround during the election was his fear we would turn into Greece and end up bankrupt.ReplyDelete
But that is so much the currency of fear - firstly as you say, our debt ratio was much lower. However, secondly, it is nigh impossible for a sovereign currency state to go bankrupt simply because, unlike Greece, it can print money if needs be. It is not always the solution that is ideal, but it does mean that even states like Mugabe's Zimbabwe and Weimar Germany never actually went bankrupt even at times of hyperinflation. The Thatcherite analogy with a shopping basket is nonsensical on a national level: but Clegg and even Labour repeatedly validate this, perhaps betraying either their own economic illiteracy or their neoliberal leanings (or both!).
Thanks Viridis Lumen: I couldn't agree more. The Greece analogy has never had any validity, and there's a strong whiff of Mrs Thatcher's "economics of the grocer's" shop about the neocons. They make easy "perception management" which goes down well with the red tops (and above all the Daily Mail) but they have held back the recovery and the weakest in our society are the ones who suffer.Delete