Wednesday, 19 November 2014

Cameron gets the boot in first.

I've never studied the dark art of propaganda but I suspect one of the standard tenets it to get your story in first, and then stick to it. Thus while, after their defeat in 2010, the Labour Party occupied itself in electing a new leader, the Tories managed to convince the public  that the Britain's economic problems were the result of Gordon Brown's mismanagement rather than a global crash caused by the the their own  policies of financial deregulation. Beyond a circle of informed economists this distortion  is now generally accepted.

Now that George Osborne's "expansionary contraction" policy is seen to have failed on all counts (the government current deficit is not only not eliminated but close to £100bn and once again rising, and he has  lost his talismanic AAA rating). Cameron hastens to lay the blame, not on the ineptitude of his chancellor and policy of austerity, but on global events: recession in Japan, stagnation in the Eurozone, the Ebola epidemic and lack of progress in the Doha round of international trade negotiations (which has actually been failing to make progress for some 13 years.)

Presumably Cameron will hope that by getting in first with his claim that, by contrast with 2007/8, our present difficulties are all the fault of foreigners, he will pre-empt any counter-claims that the problem lies with the failures of his own government.  Perhaps he needn't bother, because it is hard to see in the present state of our politics who is in a position to make the counter-claims.  Labour's shadow chancellor, Ed Balls, is as committed to deficit cutting as Osborne, and, indeed, desperate to bolster his own credentials for toughness.

In his Guardian article Cameron is proud to point out the the UK economy is now growing at 3% per year whereas the Eurozone is flat-lining.  He goes on to flaunt the fact that the coalition government is: ". . .also making the biggest investment  in roads since the 1970s and the biggest in rail since Victorian times, connecting 4 000 premises to superfast broadband every week, and starting an energy revolution  with  the first new nuclear plant  in a generation, the world's first green investment bank and the largest production of offshore wind on the planet."

In other words, Keynesian pump-priming investment, much of it (including, alas, the new nuclear plant) at the instigation of Liberal Democrat ministers.

The truth is that Osborne long ago abandoned his Plan A, and the UK economy, after an unnecessary and damaging delay, is now growing once again as a result of  belated and over-modest Keynesian stimulation.  By contrast the Eurozone has adhered more  strictly to the mistaken policy of austerity and is therefore stagnating.

Cameron studied PPE (the E stands for economics) at Oxford.  One wonders what they teach them: or maybe he wasn't  paying attention..

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