Tuesday 17 December 2013

500 up

This is the 500th post on Keynesian Liberal. The first post was on   8th April, 2010, about three weeks before the general election.  That's just around  1350 days ago so the publication rate is just over one every three days: not bad considering the large number of holidays I take. I  shall, perhaps hubristicly,  reprint  that first post at the end of   this, as I think it is as true now as it was then.  Similarly I can't think of any other post which events would cause me to retract.

I've read somewhere that a huge proportion of blogs, I think it was a third, have only one reader, the writer.  Well, although my readership lies between  minuscule and invisible  compared to the millions (or is it billions?) for such as Justin Bieber, things aren't quite so dire.  Most posts attract between 50 and 100 "hits."  Of course I have no idea how many actually read the post  once they have "hit" it, but I suspect most do, since a new post quickly attracts 30 to 40 readers, and when there's a dearth of posts, as during the past week when I've been busy writing Christmas cards, there's also a dearth of hits.

The most "hit" post, with 835, has the title  An airy-fairy measure ( 28/11/10).  It's actually about the inadequacy of David Cameron's proposals for measuring our happiness, but I suspect the "hitters" think it's about something else.  Second, with 460 hits is about the BBC World Service, which I should reasonably expect to raise a lot of interest as a surprising number of "hitters" are from abroad. (details below).  Third with 392 hits is about  a Keynesian strategy for recovery.  This may be one of the posts which  attracted the attention of Liberal Democrat voice.

There have been almost as many hits from the US (15 274) as from the UK (18 330).  I'd really be most interested to know why, and should be grateful if some of the US readers would just  write a few comments to say what it is that motivates them;  curiosity about British politics, interest in Keynesian economics, Liberalism (a euphemism for communism in the US, I believe) or just an accident.  I'm pleased to see fellow Europeans in the readership (Germany, 3036 and France 2 455) but they are outnumbered by the Russians (3 036).  I'd love to know what they are looking for: maybe just practice in reading English.

Now here's a reprise of that first post:

The Economic "Crisis"

All three major political parties seem to accept that there is a crisis in the public finances, and that this must be tackled by "savage cuts." The truth is that, there is no crisis. The debt to GDP ratio is a modest 61%. Throughout the 1990s the "Qualifying Rate" for joining the Euro was no more than 60%, so, even after bailing out the banks we are still close to what is thought to be reasonable. By contrast Greece (120%), Japan (107%) Italy (102%), the US (69%) and Spain (66%) are deeper in debt and France and Germany (57%) are slightly less indebted than we. (figures from a graphic in the Guardian, 14/12/09)
It is true that the level of current borrowing is high (about 12% of GDP compared with a preferred maximum of 3%,) but those who are not quite so deeply in debt can afford to borrow more. The idea that this level of borrowing will endanger our AAA rating is dismissed as "scaremongering" by no less an authority that David Blanchflower, the member of the Monetary Policy Committee that got it right.
So why all this talk about "savage cuts" which will harm the weaker members of society. it is particularly galling that the "savage cuts" phrase is associated with the Liberal Democrats, heirs of the party of both Keynes and Beveridge. What Nick Clegg and Vince Cable should be advocating is continued public spending to "pump prime" us out of the recession. There is plenty of scope with the investment necessary to bring about a green energy revolution, bringing our transport network up to date and, if we can't think of anything better, burying the pylon lines..
Instead all parties seem to have fallen for the Tory con that the public finances in a parlous state: a ploy which enables them to indulge almost unopposed in their mania for cutting back the public services which are important for most of us and essential for the weaker members of society.
And if politicians are so worried about the state of the public finances, why isn't there much more talk about higher taxes from those who can afford to pay?

Yes indeed; the scaremongering about the loss of our AAA rating turned out to be groundless, in spite of the dire warnings of that danger if we failed to elect a parliament with a clear majority.  And, indeed, the almighty markets remained unperturbed by the balanced parliament we did elect, and the demand for UK government securities remained stable, in spite of the fact that it took a whole weekend - yes a whole weekend! - (cf Germany's three months, which came to an end earlier this week) to cobble together a coalition.

And then of course, the AAA rating was actually lost after almost three years' experience of George Osborn's economic policy which had been designed with the precise purpose of retaining it.  But the Tory perception management machine  will undoubtedly succeed in ensuing that we forget about that.

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