An article in yesterday's Guardian could be the beginning of Vince Cable's rehabilitation. For me the key paragraph is:
"We are actually a poorer country , mainly because of the banking crash, the recession that followed it and partly due to the squeeze we are under due to the changing balance of the world economy. Britain is no longer one of the world's price setters."
Thankfully no more moaning mantra about "the mess left by Labour" (although both Nick Clegg and Liberal Democrat News are still churning this out.)
This change of emphasis, from petty point scoring about the recent past to an awareness of the present realities, is to be welcomed. It is not the case that, even with the application of sensible Keynesian policies, the right "touch of the tiller" will restore prosperity as it was. Through the changing balance of the World's economies we are on the verge of economic changes as fundamental as the agrarian and industrial revolutions were in their own time.
Essentially we need to redefine prosperity. A look at Tim Jackson's "Prosperity without Growth" (Earthscan 2009) would be a good start, followed by an examination of what makes a happier society, via, of course, Wilkinson and Pickett's "The Spirit Level" (Penguin 2010)
I've read somewhere recently that the UK economy has now shrunk back to the level it was in 2007. Why is that a cause for "shock horror"? I had a very comfortable standard of living in 2007 (and in 1997 and 1987 come to that)and so did the overwhelming majority of others in the UK. The per capita income in the UK is around £22 000. That's per man, woman and child, including the babies, or £88 000 for a family of four if it were evenly shared out. Of course it is not shared out absolutely evenly, and few would want it to be, but more generosity from the haves would mean that the have nots could live a life of dignity, and there's still be plenty left over for us to contribute 0.7% of GNP to Third World development.
Our political debate has not even begun to examine these issues: Vince's realism is a small step in the right direction.
Sunday, 22 May 2011
Saturday, 14 May 2011
Economic policy based on “unadulterated rubbish.”
In an article in last Sunday’s “Observer” (08/05/11)Will Hutton notes that estimates of the amount the UK needs to spend cumulatively in the next 15 years if we are to meet our climate change targets are in the range of £450bn, but only £70bn is planned.
He comments:
“…the coalition members’ chatter about not leaving huge public debts to our children, or Britain ‘maxing out on its credit card’ is unadulterated rubbish. While this can be expected of parts (but not all) of the Conservative party, better could be expected from the party that is heir to Keynes. I would expect my children to congratulate us on borrowing at today’s interest rates to invest in the infrastructure that will make the country more prosperous and global warming less likely, and accelerate a recovery that is so stuttering, especially as public debt levels in Britain have been higher for 200 of the last 250 years.”
His article concludes: “Orange book liberals have provided cover for a first order economic mistake.”
Unfortunately those of us who take this view, deficit realists, have been drowned out by the Tory spin doctors who have successfully labelled us “deficit deniers.” The truth is that not only are present generations, and especially the young unemployed, suffering from the abandonment of Keynesian policies, but future generations will also suffer as they inherit an economy which is “not fit for purpose.”
He comments:
“…the coalition members’ chatter about not leaving huge public debts to our children, or Britain ‘maxing out on its credit card’ is unadulterated rubbish. While this can be expected of parts (but not all) of the Conservative party, better could be expected from the party that is heir to Keynes. I would expect my children to congratulate us on borrowing at today’s interest rates to invest in the infrastructure that will make the country more prosperous and global warming less likely, and accelerate a recovery that is so stuttering, especially as public debt levels in Britain have been higher for 200 of the last 250 years.”
His article concludes: “Orange book liberals have provided cover for a first order economic mistake.”
Unfortunately those of us who take this view, deficit realists, have been drowned out by the Tory spin doctors who have successfully labelled us “deficit deniers.” The truth is that not only are present generations, and especially the young unemployed, suffering from the abandonment of Keynesian policies, but future generations will also suffer as they inherit an economy which is “not fit for purpose.”
Thursday, 12 May 2011
Lies, damned lies and current politics.
In Nick Clegg’s “message to the party” on the first anniversary of the coalition he claims:
“…it is important to be clear that the current government is a coalition of necessity. The driving force behind the formation of the coalition was the need to act together in the national interest to sort out Labour's toxic economic legacy.”
This is a gross distortion of the truth, and unworthy of a party which stands for and has promised more honest politics.
As has been pointed out, in this blog, and elsewhere by economists and commentators including David Blanchflower, Martin Wolf, Joseph Stiglitz, and Paul Krugman and William Keegan, Britain’s debts are not historically high, (in fact the Debt/GDP ratio is quite modest by comparison with many similar economies,) Labour’s expenditure was reasonably prudent up to 2008, the year of the crisis, and the current deficit is a result of falling revenues arising from the recession rather than profligate expenditure. Above all, we are not Greece, Portugal or Ireland and are not and never have been in danger from “the markets,” who are, after all, largely institutions within our own economy, including many pension funds, lending to our own government.
The recent “No” campaign in the referendum has shown that political victories can be won by distorting and misrepresenting the facts, but I do not believe that we should be stooping to the same level. There are perfectly honourable and decent reasons for forming the coalition. No party had won an over-all majority, it was right that the Liberal Democrats should negotiate first with the largest minority, the parliamentary arithmetic meant that a partnership with the second largest minority was not viable, and significant concessions with respect to Liberal Democrat priorities were made (viz: a referendum on AV, a fixed term parliament, reform of the Upper House, a pupil premium, moving the lowest paid out income tax, retention of the Human rights Act and protection of civil liberties) for a coalition with the Tories to advance progress to a fairer and more liberal society.
This is the story we should be telling: firstly because it is honest, secondly b because many, including most Liberal Democrat activists, would like to see us reach out to Labour to form eventually a left of centre coalition, and telling lies about Labour’s record does nothing to further that aim, and most of all because only honesty will increase respect for and confidence in the democratic political process. If this sounds like idealistic “pie in the sky” then so be it.
Rather than distort the reasons for forming the coalition we need to learn from the mistakes we have made. First, any future coalition agreements should be negotiated over a period of at least 10 days rather than a weekend. Had this happened then the inadequacy of the agreement that Liberal Democrats could abstain from rather than vote against any rise in tuition fees would have been spotted. Secondly party managers should allow open debate at the conference to approve or otherwise a coalition agreement rather than railroad one through. Thirdly it should be understood that the coalition partners should not be required to give unreserved open and public support to all the coalition government’s policies: at the very least frigid disapproval via body language should be not only be permitted but encouraged on both sides for decisions that go against the grain.
In the first year the Liberal Democrat “mistakes” curve has been steep, and I suspect the learning curve will be shallow. But a start has been made and I hope that by the end of the second year our Liberal Democrat in government, and our party, will have learned to make a better shot of separating in the public mind the Liberal Democrat wheat from the Tory chaff.
“…it is important to be clear that the current government is a coalition of necessity. The driving force behind the formation of the coalition was the need to act together in the national interest to sort out Labour's toxic economic legacy.”
This is a gross distortion of the truth, and unworthy of a party which stands for and has promised more honest politics.
As has been pointed out, in this blog, and elsewhere by economists and commentators including David Blanchflower, Martin Wolf, Joseph Stiglitz, and Paul Krugman and William Keegan, Britain’s debts are not historically high, (in fact the Debt/GDP ratio is quite modest by comparison with many similar economies,) Labour’s expenditure was reasonably prudent up to 2008, the year of the crisis, and the current deficit is a result of falling revenues arising from the recession rather than profligate expenditure. Above all, we are not Greece, Portugal or Ireland and are not and never have been in danger from “the markets,” who are, after all, largely institutions within our own economy, including many pension funds, lending to our own government.
The recent “No” campaign in the referendum has shown that political victories can be won by distorting and misrepresenting the facts, but I do not believe that we should be stooping to the same level. There are perfectly honourable and decent reasons for forming the coalition. No party had won an over-all majority, it was right that the Liberal Democrats should negotiate first with the largest minority, the parliamentary arithmetic meant that a partnership with the second largest minority was not viable, and significant concessions with respect to Liberal Democrat priorities were made (viz: a referendum on AV, a fixed term parliament, reform of the Upper House, a pupil premium, moving the lowest paid out income tax, retention of the Human rights Act and protection of civil liberties) for a coalition with the Tories to advance progress to a fairer and more liberal society.
This is the story we should be telling: firstly because it is honest, secondly b because many, including most Liberal Democrat activists, would like to see us reach out to Labour to form eventually a left of centre coalition, and telling lies about Labour’s record does nothing to further that aim, and most of all because only honesty will increase respect for and confidence in the democratic political process. If this sounds like idealistic “pie in the sky” then so be it.
Rather than distort the reasons for forming the coalition we need to learn from the mistakes we have made. First, any future coalition agreements should be negotiated over a period of at least 10 days rather than a weekend. Had this happened then the inadequacy of the agreement that Liberal Democrats could abstain from rather than vote against any rise in tuition fees would have been spotted. Secondly party managers should allow open debate at the conference to approve or otherwise a coalition agreement rather than railroad one through. Thirdly it should be understood that the coalition partners should not be required to give unreserved open and public support to all the coalition government’s policies: at the very least frigid disapproval via body language should be not only be permitted but encouraged on both sides for decisions that go against the grain.
In the first year the Liberal Democrat “mistakes” curve has been steep, and I suspect the learning curve will be shallow. But a start has been made and I hope that by the end of the second year our Liberal Democrat in government, and our party, will have learned to make a better shot of separating in the public mind the Liberal Democrat wheat from the Tory chaff.
Saturday, 7 May 2011
What's in a name?
The British upper crust, who continue to dominate British politics, love sporting allusions. Hence party business managers in parliament are called "whips" (though in my view hounding dumb animals hardy qualifies as a sport.)
It struck me yesterday as I watched the counts in several of our local elections that the only time the selection of a people's representative actually has any resemblance to a horse race is the final stage of each count, when they put the bundles of counted ballot papers for each candidate in rows on a long table, and you can see which one is ahead. That's as far as it goes: there is no "post."
So if instead of FPTP we had called the present system the Largest Minority System and AV the Majority System we might have had a more positive image.
For what it's worth the "Yes" vote in Kirklees was 1% above the national average and the "No" vote 1% below, so I regard my neighbours as marginally more enlightened that the rest of the country.
At local level we retained the council seat in which I was working, but in two others our candidates came below the Greens, who are at least honourable. The BNP, who until recently had developed a dangerous momentum in our area, seem to have disappeared as a significant force.
It struck me yesterday as I watched the counts in several of our local elections that the only time the selection of a people's representative actually has any resemblance to a horse race is the final stage of each count, when they put the bundles of counted ballot papers for each candidate in rows on a long table, and you can see which one is ahead. That's as far as it goes: there is no "post."
So if instead of FPTP we had called the present system the Largest Minority System and AV the Majority System we might have had a more positive image.
For what it's worth the "Yes" vote in Kirklees was 1% above the national average and the "No" vote 1% below, so I regard my neighbours as marginally more enlightened that the rest of the country.
At local level we retained the council seat in which I was working, but in two others our candidates came below the Greens, who are at least honourable. The BNP, who until recently had developed a dangerous momentum in our area, seem to have disappeared as a significant force.
Friday, 6 May 2011
The AV campaigns: a national disgrace.
I am writing this before the result of the referendum is known so that, whatever the nation has decided, I shall not be accused of sour grapes.
Even if by some miracle the "Yes" campaign wins, I believe that from three points of view: the arguments of the protagonists, the conduct of the campaign, and its reporting, the campaign has been a disgrace, more worthy of a banana republic with a semi-literate population rather than one of the world’s most mature democracies .
The arguments put out on both sides have been pathetic. The distortions of the truth from the “No” campaign – particularly the absurd claims about the cost and the need for voting machines, that AV is “obscure” and “unfair” and that some people under it get more than one vote – are well known and easily refuted
The “Yes” campaign has limited itself to claiming that AV will make all MPs work hard, when most of them do anyway, and that it will end “MPs’ jobs for life” which it won’t in many if not most cases.
The real advantages and disadvantages of the two systems have simply not been debated.Instead the argument has degenerated into a exchanges of abuse and cries of “foul”, particularly form the “Yes” campaign, which apparently took the deliberate decision not to attempt to refute the “No” campaign’s assertions, but to stick to its misguided mantra of making MPs work harder and getting rid of jobs for life. The three pieces of literature I had from them, two of which I delivered and one which came by post, all simply repeated this nonsense..
Thirdly, rather than concentrating on the issues the media has lost no opportunity in exaggerating the divisions within the Coalition and, to some extent, within the Labour party. Even the Guardian headlined a fierce attack by Nick Clegg on David Cameron when an examination of the actual speech showed that Cameron had hardly been mentioned. As always for the media, personalities and vacuous speculation about the future have won out over policies.
Although I have believed in and campaigned for electoral reform for almost 60 years, I hope we shall never have another referendum on it. The “No” campaign claimed that AV is “Not British.” What isn’t British is the referendum itself, which in the past we have rightly scorned as a device to bolster the authority of despotic politicians in less enlightened lands. The campaigns of the past few weeks have amply demonstrated the weaknesses of the referendum process, namely that the issues are over-simplified and that both the debate and the vote tend to be about something other than the question asked(in this case Nick Clegg) .
We are a representative democracy and elect our MPs and councillors to use their judgement to make decisions on our behalf. If MPs are not to be trusted to decide how they themselves should be chosen, which is probably the case, then the job should be given to a Citizens’ Convention of, say, 500 electors chosen at random, as are juries, to whom the various alternatives can be explained fairly, in detail and at length, and who can then make an informed decision.
Even if by some miracle the "Yes" campaign wins, I believe that from three points of view: the arguments of the protagonists, the conduct of the campaign, and its reporting, the campaign has been a disgrace, more worthy of a banana republic with a semi-literate population rather than one of the world’s most mature democracies .
The arguments put out on both sides have been pathetic. The distortions of the truth from the “No” campaign – particularly the absurd claims about the cost and the need for voting machines, that AV is “obscure” and “unfair” and that some people under it get more than one vote – are well known and easily refuted
The “Yes” campaign has limited itself to claiming that AV will make all MPs work hard, when most of them do anyway, and that it will end “MPs’ jobs for life” which it won’t in many if not most cases.
The real advantages and disadvantages of the two systems have simply not been debated.Instead the argument has degenerated into a exchanges of abuse and cries of “foul”, particularly form the “Yes” campaign, which apparently took the deliberate decision not to attempt to refute the “No” campaign’s assertions, but to stick to its misguided mantra of making MPs work harder and getting rid of jobs for life. The three pieces of literature I had from them, two of which I delivered and one which came by post, all simply repeated this nonsense..
Thirdly, rather than concentrating on the issues the media has lost no opportunity in exaggerating the divisions within the Coalition and, to some extent, within the Labour party. Even the Guardian headlined a fierce attack by Nick Clegg on David Cameron when an examination of the actual speech showed that Cameron had hardly been mentioned. As always for the media, personalities and vacuous speculation about the future have won out over policies.
Although I have believed in and campaigned for electoral reform for almost 60 years, I hope we shall never have another referendum on it. The “No” campaign claimed that AV is “Not British.” What isn’t British is the referendum itself, which in the past we have rightly scorned as a device to bolster the authority of despotic politicians in less enlightened lands. The campaigns of the past few weeks have amply demonstrated the weaknesses of the referendum process, namely that the issues are over-simplified and that both the debate and the vote tend to be about something other than the question asked(in this case Nick Clegg) .
We are a representative democracy and elect our MPs and councillors to use their judgement to make decisions on our behalf. If MPs are not to be trusted to decide how they themselves should be chosen, which is probably the case, then the job should be given to a Citizens’ Convention of, say, 500 electors chosen at random, as are juries, to whom the various alternatives can be explained fairly, in detail and at length, and who can then make an informed decision.
Tuesday, 3 May 2011
Osama Bin Laden
In 1969 two Americans were landed on the moon and there are still people, the head of science at the last school at which I taught is one of them, who believe it was all faked. How long will it be before the capture and death of Bin Laden attracts similar conspiracy theories? By "burying" the body at sea on the pretext of avoiding the creation of a shrine the Americans have destroyed their best evidence. They may soon find this last error to be worse than the first.
Monday, 2 May 2011
Teachers' pensions
I have little sympathy for the headteachers' union that has decided on a strike ballot strike in protest against changes to their pension arrangements, and nor, I suspect, will the public in general.
Some reflections on pensions have already been given in my post on 14th March
http://www.blogger.com/img/blank.gif
In this case I presume that any changes will affect pensions to be to be earned as from the implementation of new rules rather than entitlements already accrued. If that is the case then I think it is perfectly sensible to switch from a final salary scheme to a pension related to earnings over a working life, and to adjust contributions and retirement age to pay for this. If the figures given in the Guardian (30th April) are accurate, viz:
"The pension reforms would mean the average headteacher would lose £100 000 to £200 000 in retirement and would pay 50% more in contributions , which could cost them £1 000 more each month."
then the reaction of most people, and especially those on the minimum wage, will be "You're so lucky" rather than sympathy.
To repeat the sentiments of my earlier post, the purpose of a pension is to avoid penury when one's earning life is over, not to sustain the life of Riley or to buy advantages for one's children and grandchildren.
The government should stick to its guns and headteachers and other highly paid public servants should get a sense of proportion.
Some reflections on pensions have already been given in my post on 14th March
http://www.blogger.com/img/blank.gif
In this case I presume that any changes will affect pensions to be to be earned as from the implementation of new rules rather than entitlements already accrued. If that is the case then I think it is perfectly sensible to switch from a final salary scheme to a pension related to earnings over a working life, and to adjust contributions and retirement age to pay for this. If the figures given in the Guardian (30th April) are accurate, viz:
"The pension reforms would mean the average headteacher would lose £100 000 to £200 000 in retirement and would pay 50% more in contributions , which could cost them £1 000 more each month."
then the reaction of most people, and especially those on the minimum wage, will be "You're so lucky" rather than sympathy.
To repeat the sentiments of my earlier post, the purpose of a pension is to avoid penury when one's earning life is over, not to sustain the life of Riley or to buy advantages for one's children and grandchildren.
The government should stick to its guns and headteachers and other highly paid public servants should get a sense of proportion.
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