A truthful songsheet for Liberal Democrats to sing from

 Least week I received an Email from Danny Alexander, Liberal Democrat number two in the Treasury. 

 "Dear Peter," he begins,  though I have never met him personally,  and goes on to congratulate himself on the "good news" that unemployment has fallen "because we've stuck to our sound economic plan" in spite of the difficulties of "clearing up Labour's mess." 

So far he hasn't responded to my reply that he should be ashamed of himself,  because his message contains two misrepresentations, or lies, if you want to be blunt.

First, the economic "mess" was and is not Labour's. As has been spelled out ad nausium  in this blog and many more authoritative sources,  although Labour happened to be in charge in the UK when the economic crash happened,  it was caused not by their government but by the irresponsible behaviour of the international financial sector made possible by the policies of deregulation introduced by and so beloved of the Tories and their international allies (the Reagan-Thatcher axis).  Perhaps Labour at the time could  have done more to rein in the bankers, but had they done so they would have been ridiculed by the right, who were actually calling for more deregulation.

It also needs to be spelled out that when the coalition came into office the economy was actually recovering.  Osborne's "sound economic plan" hit the recovery on the head and caused three years of unnecessary recession.

We now need to move on to the second misrepresentation: that the coalition has stuck to Osborne's economic plan of "expansionary fiscal contraction."  Oxford economist Simon Wren-Lewis has done a detailed examination of the figures which shows that, whereas in 2011 government expenditure as percentage of national income fell by 0.1% (the plan), in 2012 it actually increased to 2.6%  Wren-Lewis therefore  concludes:

 So there you have it. Plan A was temporarily abandoned. Austerity stalled. Was that important in boosting the recovery that followed in 2013? We cannot know for sure, but that is not the key issue here. The important point was that Plan A was clearly put on hold. Claims that the government stuck to Plan A are false. The reason Plan A was abandoned, of course, was that it was delaying the recovery, and the government needed a recovery before the next election.

Liberal Democrats can reasonably claim some credit for this, as a result of  the expansionary projects initiated by Vince Cable in his capacity as Business Secretary.  Of course they were minor and nothing like the full blooded Keynesian pump priming needed, but as much as could be achieved given that the Tories have 305 MPs and we have only 57.

This is the song we should be singing, not, as the party that promised more honesty in politics, conniving at Tory misrepresentations.

Liberal Democrats sound timid trumpet on Europe.

In response to Harold Wilson's comment that he was willing to  "join Europe if the price was right," Jo  Grimond commented that  this was rather like reserving judgement on the reformation until you knew what the monasteries would fetch.

Unfortunately the  current Liberal Democrat attitude to the coming European election seems unlikely  to rise above this "what's in it for us" level. Our slogan, according to the Christmas greetings I've just received from Yorkshire's two Liberal Democrat MEPs, is to be "In Europe: In Work" and we don't seem to be going to say much beyond hammering away at the fact that "over 3 million jobs in the UK are directly linked to the European single Market."  Well, that's probably true and it is important, but if we don't project a more exciting vision of the purpose and future of the European Union who on earth will?

Fortunately there is an alternative, indeed a" more excellent way," if only our leaders have the courage to grasp it.  The Alliance  of Liberals and Democrats for Europe (ALDE), the group to which we belong in the European Parliament, is preparing a manifesto with a much more exciting vision  The following summary is taken from an article by David Grace in Issue 362 of Liberator.

Broadly, Grace explains, ALDE stands for environmental  sustainability, free trade, completing the European Single Market, further integration and democratisation, individual freedom  and human rights, gender equality and human rights.

In Grace's view, the manifesto should contain:

1. The promotion of a fiscal union and a well regulated banking union.This will enable  the creation of tools for common policies to boost competitiveness, stimulate research and education, build tarns-European networks and provide the resources and capably for a Keynesian expansion programme.
2. Funding via a genuine European tax rather than a charge on member states.  Grace suggests  the proceeds of a carbon tax. My own preference would be for a Tobin or Financial Transactions Tax. Maybe we could have both.
3. The power to issue Euro-bonds (ie for the EU to borrow.)
4. A leading role in global action against climate change, with tougher targets for the reduction of greenhouse gasses.
5. Increased co-operation in procurement of equipment  for and training of armed forces.
6. Strengthening the EUs democratic credibility by making the President of the Commission the nominee of the group with the most votes in the EU election, and giving the Parliament the right to take legislative initiatives.

We should use our election literature and Focus leaflets to present these issues in an attractive manner.  If we merely murmur about employment and mutter  about migration then our trumpet will give an uncertain sound and no one will realise what the real  battle is about, never mind fight it.

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.

Truth and Reconciliation

Non-religionist tend to say condescendingly that,  although the teachings of Jesus et al are fine ideals, in the hard real world they're not very practical.  Nelson Mandela's  life is a demonstration of how wrong they are.

Like many as the centenary of its beginning approaches  I'm at  immersed in reading and thinking, and to  a  small extent writing* about that great failure of politics, the First World War, and its aftermath, or  continuation, the Second World War.  How different the history of the last hundred years might have been if the victors of 1918 had set up a Truth and Reconciliation  Commission rather than concocted a treaty that would  "squeeze the German nation  until the pips squeak."

It is worth noting that neither of the two greatest political figures of the 20th Century, Gandhi and Mandela, was European or white: so much for the right wing white supremacists. Beside them our own great figures, Asquith, Lloyd George, Churchill, Attlee,  Bevin, Bevan, become pygmies by comparison.

Margaret Thatcher, still the icon of the right, vigorously opposed sanctions against South Africa and regarded Mandela as a terrorist.  And, while many of us were, at the request of the ANC, boycotting South African produce (in  my case tinned  pilchards in the early teaching years, plus  wine as affluence increased) the young David Cameron took a freebie to South Africa, sponsored by a lobby group campaigning to have sanctions lifted.


So Mandela's life reminds us that, when Jesus taught us to "Love your enemies, bless them that curse you, bless and curse not," and Mohammed, pbuh, Guru Nanak et at all said something very similar, he and they were and are on to something very practical.  A tough call but one with the better outcomes.

*I've been helping a former colleague and a former pupil to write accounts of the lives of those Old Boys of  our school who were killed in the First World War.  My role has been modest: mainly précising accounts of their lives and deaths as reported at the time in  the local paper.

Migration and alienation.

Here's a selection of quotes from pages 66 and 67 of Jeremy Paaxman's anecdotal account of  "Great Britain's Great War".

The 1911 census showed there were 53 324 Germans living in Britain. . . At the outbreak of the war perhaps half the bakers in London  were German. . . There were some 3 000 German waiters, nearly 4 000 German domestic servants  and 2 000 German hairdressers..  when the fighting broke out these people were terrified . . .

Suddenly there were German spies everywhere.  The MP for West Essex . . .demanded to know what was to be done about the foreigners who had been snooping abut Epping for the last two years, drawing sketches and taking photographs.  The MP for Frome had wanted to pounce  on the '66 000 trained German soldiers in England. . .'

. . .even Haldane (the Secretary of State for War)  was suspect, for he spoke German, had attended a German university , and was an intellectual . . . The newspapers held forth on his unsuitability for high office, based on what The Times called his 'predilection for Germany'. . .

Over the next four years 30 000 aliens (were) interned . . . At weekends, Londoners could drive out  to Frith Hill Detention Centre near Camberley  to look at the blond barbarians caged behind barbed wire fences . . .Tatler's motoring correspondent said that a visit was 'the very last world nowadays.'

Well, at least they had the excuse of a war.

There can be no excuse of the hysteria surrounding the presence of existing (and mostly young, very hard working, making few demands on the health or welfare services) immigrants from the eastern EU, and the prospect of more after 1st January - unless it is the vacuum of positive comments about the value of immigration from the established parties, which has allowed free reign to the scaremongering press. 

Former Liberal Democrat MEP Sir Graham Watson has been a notable exception.  Other Liberal Democrats with the ear of the media should take a leaf out of his book

Boristics

Boris Johnson  has given us an example of how to distort the truth with statistics which should enter the text books.  In his speech this week  to the right wing Centre for Policy Studies Johnson  doesn't actually lie: he presents absolute truth, but in such a way as to give a hugely twisted impression.

Johnson points out that 16% of "our species", as he calls us, have an IQ of less than 85 whereas only  2% have an IQ of more that 130.  Absolutely correct.

For those unfamiliar with the background, many natural phenomena display a Gaussian, or Normal, distribution, which , in graphical terms, produces a bell-shaped curve with the vast majority in the middle and few at each of the extremes.  This can be validated by actually measuring observable features such as, for example, human height.

Most educational psychologists presume that human intelligence is similarly distributed, but, since intelligence is hard to measure (and perhaps even harder to define) this is impossible to prove. However, intelligence test are constructed so as to produce a Gaussian distribution, with both a  median and modal  score of 100, and questions in IQ tests are deliberately chosen to produce this.  Questions which generate results which do not fit  this "normal" distribution are rejected.

Johnson's distortion is to appear to balance the 16% with an IQ below 85 against the 2% with IQs above 130, thus giving the impression that the "gifted"  2% have to carry the "subnormal " 16%.  But note that the 2% are 30 points above the norm  whilst the burdensome 16%, with IQs below 85, are only 15 points below the norm.

In actual fact, there will be precisely 2% of the population with IQs below 70 who will exactly balance the 2% with IQs above 130, and 16% with IQs above 115 to balance those below 85.

What ever the figures, who owes what to whom by no means follows.  IQ may affect propensity to pass exams, but it doesn't measure hard work, ambition, care, consideration, empathy, sense of adventure, willingness to take risks, or how good a partner, parent (or teacher or nurse) you're likely to be.  In the hackneyed phrase, "It takes all sorts to make the world," and in a modern democracy we all merit equal respect and consideration as citizens.

Questions for Cable

Today Vince Cable, our very own Liberal Democrat economics guru and Secretary of State for Business, is to appear before a parliamentary committee to account for his handling of the privatisation of our Royal Mail. Here are some of the things he needs to explain.

1. First and most obvious, why were the shares of this publicly owned asset, first nationalised by Oliver Cromwell I believe, flogged off to private owners at a 30% discount? They were priced at £3.30 and promptly rose to £5.50 when placed on the market,  thus robbing the public treasury of £2.2bn.  Dr Cable initially dismissed the price difference as "froth" but six weeks later it's still there, and rumour has it that the value of the Royal Mail's property has not been properly taken into account, so there's uncounted  potential for asset stripping.
2. The floatation was supervised by the investment bank Lazards. Are they and the other banks involved going to be sued for the bad advice they've given, or asked to return some of the £12.7million they've been paid, or to be struck from the list of firms eligible to advise governments in future?
3. Why were the  sovereign wealth funds of Kuwait, Singapore and Abu Dhabi offered shares when British retail buyers and pension funds could have taken the lot, which would at least have kept the bonanza in the family?
4. Why was one of the merchant banks advising on the price also allocated a proportion of the shares?  Surely that defines "conflict of interest" just as much as being a Liberal Democrat and supporter of Bradford City defines optimism (as my friend John Cole would put it.)

But what we Liberal Democrats really want to know is why was a Liberal Democrat minister involved in flogging off a profit making public asset at all?  Privatisation for the sake of it has no part in our philosophy.  This privatisation  is widely unpopular with he public, there is no evidence that the private sector will run the business more effectively than the public sector, the sop of 10% of the shares offered to employees is derisory and most will soon be cashed in for short-term gain>

And there is every expectation that, now our postal delivery service it is in the hands of short-term profit-maximisers,  the prices will rise even further, the extent and quality of the service will be reduced and pay and working conditions will deteriorate.

Post Script (added 29th November, 2013)

Well, from reports in the papers the committee seems to have taken a very Panglossian view .  The bankers all feel they did a good job and Dr Cable said, ". . .this has been a very professional well managed and successful operation."

I wonder, if he were to sell his house, the estate agent valued it at £330 000, so he sold it for that, and the buyer sold it the following week to someone else for £550 000, he would think the estate agent had done a good job for him?