We must be honest so that we can be distinctive on the deficit

Prior to the CSR last week I wrote for Labour Uncut on how Labour might approach it.

Social and economic debates on tax and spend run through the messages George Osborne will project tomorrow: his actions are fair (the social debate), best for the economy (the economic debate), and necessary, which intersects both debates. Clarity, and Labour’s cause, is aided by disentangling these strands.



The Economist agrees with me on Osborne’s Plan B

On 11 September 2010 I made this comment on Labour Uncut:

“George Osborne won’t say this but the only “plan B” that he seems to have is to look to the Bank of England for more monetary easing, which will have to come in the form of quantitative easing (QE) given how low interest rates are. We live in very uncertain times and it is hard to say where any of this is going. But further quantitative easing on the scale which may become necessary due to Osborne’s early and deep cuts would make it more likely that the “ketchup in a bottle” theory of inflation becomes a reality: all the money that has been printed suddenly catches up with us in the form of inflation. If we were to have double dipped, this would leave us with negative growth and inflation. That’s right, stagflation. Osborne might think his macroeconomics takes us back to Thatcher’s 1980s but stagflation is, of course, the curse of the 1970s.”



Get a grip, Obama

“I was not commenting and I will not comment on the wisdom of making the decision to put a mosque there. I was commenting very specifically on the right people have that dates back to our founding.”




Climate change and extremism

There is a fascinating article in the Economist on the large-scale pattern of atmospheric circulation which links the heatwave in Russia and the floods in Pakistan. There is also a great article in the Sunday Times by Jemima Khan on the floods and Pakistan’s future. There are some obvious dots to be joined up between these articles.

The Economist writes:



American Trilogy III: The movement is everything

Anthony Painter has recently written about movement politics for Progress. He recounts how “equal voting rights and civil rights”, the fruits of the civil rights movement, “changed America. But it was the movement that followed it and, in part, was a reaction to it, that was America’s most successful ‘movement for change.’ That was the audacious and many headed conservative movement. If the civil rights movement was driven by a sense of moral injustice, the conservative movement was motivated by a sense of moral outrage.”

Painter doesn’t, however, draw the more contemporary parallel: the movement that powered Barack Obama into the White House was driven by a sense of moral injustice, while the Tea Party movement, the most visceral counter reaction to this victory, is motivated by a sense of moral outrage. They are outraged with the ‘socialism’ of Obama-care, outraged with the free market perversion that is the bank bailouts, outraged with the extension of the big government leviathan that has been the fiscal stimulus, outraged by illegal immigration, outraged with plans to build a Mosque near Ground Zero and outraged by the indifference of Washington DC to all of this. They want their country back.



Sorting the economics from the ideology

I had the piece below published on Labour Uncut on 16 June 2010:

The Daily Telegraph isn’t normally essential reading for Labourites. But yesterday it should have been, especially for Harriet Harman. Fraser Nelson set the backdrop to the politics of the deficit and the “emergency” Budget, to which she, as acting leader, will respond. This week’s report from the new Office of Budget Responsibility (OBR) dramatically changes this political context. Nelson has been quick to realise this and, while our instincts differ markedly from his, we need to be equally fleet-footed.



Yes, we still can (but leadership and disciplined support are needed)

The striking thing about the most powerful person in the world, as he approaches one year in office, is how, err, lacking in power he appears.

Disappointed and, according to Mark Lynas, insulted by the Chinese in Copenhagen.  A Health Care Bill that isn’t yet on the statute; is much delayed on his original timetable; and, by his own admission, is only “nine-tenths of a loaf” – some would say that half a loaf is nearer the mark and it comes with lashings of pork barrel whatever way you look at it. An Afghan strategy that even he doesn’t seem wholly convinced by and the backdrop to which Andrew Sullivan commented upon by saying:



China and contested modernity

I think I am noticing something of a theme in the Economist of late. On 28 May they noted:

“How times change. When George Bush’s treasury secretaries first visited China, Wall Street was booming, America’s economy was growing and the president’s emissaries routinely lectured their Chinese hosts on the need for freer financial markets and a more flexible yuan. But as Tim Geithner, the current treasury secretary, prepares to make his maiden trip to Beijing on May 31st, Wall Street is synonymous with greed and failure, America’s economy is on its knees and it is the Chinese who have been doing the lecturing. With America’s budget deficit soaring and the Fed’s printing presses running at full speed, China is complaining loudly of the risks that inflation and depreciation pose to its huge stash of dollars, and arguing for an alternative to the greenback as the world’s reserve currency”.



Why did the right nation turn left? And will it turn back?

“After twenty per cent of conservatives voted for Obama”, wrote Oliver Burkeman in the Guardian yesterday, “the Republican party was left in tatters”. But it really isn’t so long ago – not quite five years – since John Micklethwait and Adrian Wooldridge in The Right Nation, a book described as having a “Tocquevillian quality of informed impartiality”, chronicled the structural reasons in American society and politics for the conservative ascendency.

These reasons, argued these writers for The Economist in 2004, explained “why the Republican Party has won six of the past nine presidential elections and controls both houses of Congress, why every serious Democratic candidate for president supports mandatory sentencing and welfare reform, why the cultural capitals of Hollywood and Manhattan remain the exception and why the much disdained “flyover” land that lies between them is the rule”. The cultural capitals are Democratic citadels and this is the America which European visitors are most familiar with. The explanation for the conservative ascendency exists in the “disdained “flyover” land”, however.



We should all be worried about David Cameron, not just the Foreign Office

The Foreign Office is worried about David Cameron, apparently. It is “most concerned about the effects Cameron’s anti-EU European policy will have on the UK’s chances of effecting outcomes”, the Guardian claims. Labour Councillor Bob Piper has also spotted this claim reported on the Sky News website.

We should all share the concerns of the Foreign Office. It is only in and through the EU that the UK can best serve our national interests and values. Bizarrely, Tory MEP Roger Helmer describes it as “indefensible, humiliating and wrong” that David Cameron has not yet fulfilled a promise to form a new grouping in the European Parliament with other parties that have been described as “openly and unashamedly racist and homophobic”. This promise suggests an inability to understand modern British values, let alone take them forward within the EU.



No amount of sex videos will turn it into a death tax

I often find the Economist to be a beacon of sanity in an increasingly mad world. “When governments raise money”, they note in a fashion that demonstrates a grasp of Adam Smith’s principles of taxation, “they should first get rid of deductions and reverse unmeritocratic measures (such as George Bush’s repeal of America’s death tax) rather than jacking up income-tax to punitive levels”. Smith’s fourth principle stated that, “taxes should not discourage enterprise”.

Punitive income-tax discourages enterprise, while inheritance tax – that’s what it is, not death by a thousand cuts or some such, as even the Economist, disappointingly, suggest by use of the inappropriate “death tax” term – is a tax on unearned wealth. It, therefore, discourages enterprise and encourages Paris Hilton-like and other trust-funded behaviour. Nigella Lawson understands this – and she’s married to Charles Saatchi! So, why does the Adam Smith Institute find this so hard to understand?



Zimbabwe in context

Interesting stuff from Mahmood Mamdani in the London Review of Books. I was particularly struck by one observation in particular.

“There is no denying Mugabe’s authoritarianism, or his willingness to tolerate and even encourage the violent behaviour of his supporters. His policies have helped lay waste the country’s economy, though sanctions have played no small part, while his refusal to share power with the country’s growing opposition movement, much of it based in the trade unions, has led to a bitter impasse. This view of Zimbabwe’s crisis can be found everywhere, from the Economist and the Financial Times to the Guardian and the New Statesman, but it gives us little sense of how Mugabe has managed to survive. For he has ruled not only by coercion but by consent, and his land reform measures, however harsh, have won him considerable popularity, not just in Zimbabwe but throughout southern Africa. In any case, the preoccupation with his character does little to illuminate the socio-historical issues involved.


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