I had this on the Demos blog in May.
JM Keynes’ General Theory was published seven years after the New York stock market crash of 1929. Thomas Piketty’s Capital in the Twenty-First Century was published six years after the financial crisis of 2008.
I had this on Labour Uncut in January.
We are a nation seeking to rebuild from the economic calamity of the past half decade. You might think this task merits a chancellor focused upon it. But George Osborne doesn’t look to Keynes, Friedman or other economists. He prefers his own ‘baseline theory’ of politics.
I had this on the Progress website last week.
At the 1922 general election the Labour party more than doubled its representation, rising from 57 to 142 seats. This election was fought soon after the ‘Geddes Axe’ was wielded, which slashed public expenditure in an effort to restore the pre-first world war parity in government incomes and spending.
I had this reaction to Budget 2013 on Labour Uncut.
Daniel Finkelstein is a leading commentator and one of David Cameron’s most articulate defenders. No other columnist has the economic gravitas of Martin Wolf. Pieces from Finkelstein and Wolf in the week before the Budget exposed the tensions at the heart of the government’s economic and political strategies.
I had this on Labour Uncut a few weeks ago. I think events since have justified my argument.
Public debt, said to be the consequence of Labour largesse, is the problem for the governing parties, and aggressive cutting the medicine. Labour contends that this remedy is too tough to close the deficit. As we recover from a global shock of 1929 proportions, slower cuts are required for strong enough growth to generate the tax revenues needed to achieve deficit closure. Lack of growth, as well as the deficit, is the problem targeted by Labour.
I wrote for Labour Uncut today on the challenge for the new shadow chancellor.
The Labour leadership election will, finally, end on 25 September. But the identity of the shadow chancellor will be unknown until 7 October, when the results of the shadow cabinet election are announced. 13 days after this the new leader and shadow chancellor will lead our response to the comprehensive spending review. “It is”, as a leadership contender has said, “an incredibly tight timetable for the new leader and their shadow chancellor to map out a policy that might yet determine how we are viewed for the rest of the parliament.”
“The best books … are those that tell you what you know already”, wrote George Orwell in 1984. While, pace the likes of Henry Porter, our country isn’t Orwellian, there is a lot of truth in this line. And so it was when I read Martin Wolf on Iceland last week. He powerfully and intelligently argues for that which I have always instinctively felt about events there.
The British and Dutch governments are seeking agreement with the Icelandic government for the repayment of debts, which now amount to 50% of Icelandic GDP, owed to British and Dutch savers in now collapsed Icelandic banks. If we attempt to see things from the Icelandic perspective, this observation from Wolf is particularly striking: “In the UK context, this would be equivalent to a demand for £700bn. It is not hard to imagine how far Mr Brown would get with a suggestion that the UK should accept such a debt to refund depositors in foreign branches of bankrupt UK banks.”
Recently Hector Sants, head of the Financial Services Authority (FSA), said:
“The question of the size of individual payments is not one for financial regulators. That is one for politicians and society as a whole. If politicians wish to take a view on that, then they should say so, but they should not be asking the regulator to carry out a pay policy”.
The point of Roger Casale, which I highlighted in my last post, seems all the stronger in light of an observation made by Martin Wolf today.
“The relationship between the US and China will become more central, with India waiting in the wings. The relative economic weight and power of the Asian giants seems sure to rise. Europe, meanwhile, is not having a good crisis. Its economy and financial system have proved far more vulnerable than many expected. Yet how far a set of refurbished and rebalanced institutions for international co-operation will reflect the new realities is, as yet, unknown”.
Barack Obama may have granted his first UK interview to the FT. But, may be, he should read the FT a little more carefully. In particular, if he had of been following Martin Wolf’s column more closely, then he may not have stalled when responding to the question that Nick Robinson put to him yesterday.
“Unfortunately, no consensus exists on the underlying causes of this crisis or on the best ways to escape from it”, as Wolf notes. Robinson suggested to Obama that one’s views on the underlying causes of the crisis go a long way to determine one’s views on the best way to escape it. France and Germany are supposed to blame the crisis on “Anglo-Saxon capitalism” and so see its solution in a new global architecture of regulation. The UK and the USA are the citadels of “Anglo-Saxon capitalism” and are taken to be more attracted to fiscal stimulation. Thus, Robinson asked Obama to comment on the dividing line that he constructed between France/Germany and the UK/USA.
Richard Reeves is typically thought provoking in the current Prospect. He quotes an interesting line from a recent Liam Byrne speech. Labour’s “mantra should be really simple. We want a country of powerful people”. Given his excellent biography of John Stuart Mill, I wondered whether Reeves also found this line evocative of a famous line from Mill: “with small men no great thing can really be accomplished”.
“On the one side” of the Labour Party, argues Reeves, “stand those for whom the economic crisis demonstrates the need for a more muscular state; on the other, a diverse group”, including Byrne, “who want to use the state to give more power to individuals”. Similarly, Jesse Norman has previously divided Labour into Trimmers, Romantics and Deniers. Remarks from Matthew Taylor and David Miliband are said to define the Trimmers. “Instead of a Government-centric model of change in which we assume our rulers should be given the blame for what goes wrong and the responsibility for making it right”, claims Taylor, “we need a citizen-centric model in which we reinstate ourselves as the authors of our own collective destinies”. In other words: we want powerful people.
President-elect Obama probably now receives more advice than anyone else in the world. The advice below from the Economist strikes me as being likely to be amongst the most important of the advice he receives, however.
“At the end of the 19th century, Britain was the world’s superpower. By the end of the 20th it was America. The transition was preceded by two world wars. Some time in this century, the balance of power will change again. Mr Obama has inherited a world of pressing troubles. But as he tackles them he will have to keep an eye on the longer game: how to prepare for the day when America may no longer be sole superpower and only the first or maybe the second of many big powers. To manage that transition peacefully and still promote the spread of free markets and liberal democracy: that will be the mark of a truly great president for the 21st century”.