...a blog by Richard Flowers

Tuesday, October 26, 2010

Day 3586: Gross Domestic Products


Good news!

Growth in GDP is 0.8%, or TWICE what the economists expected.

This has of course been greeted from the Left with loud cheers of: "well it's lower than it was last quarter" and "it's just momentum from the Labour government" and "the cuts haven't started yet"!

Yes, see how this goes.

Mr David Outlaws says he's proud of the pupil premium… and the left say "if they weren't spending more it would be a cut!"

Mr Vince announces a fair and generous pension for all… and the left say "it's unaffordable" and "too good to be true"!

Honestly, I think that the Coalition could offer you gold bricks and chocolate and the left would still say we were really in league with the NAZIS.

Meanwhile, Ms Polly Toytown has called the government's housing policy a "final solution" and Mr Chris Bryant has referred to it as "ethnic cleansing".

[elephant holds head in fluffy feet; checks Godwin's Law]

IF you want to have a proper debate about HOUSING, you need to understand how just paying loads of housing benefit to landlords, and not building new social housing to replace the ones you were flogging off, helped to fuel that enormous house price bubble that Mr Frown conspicuously did nothing about and allowed to explode the economy.

CLEARLY, the Government believes in a (Conservatory) Market-led approach, where cutting the amount of housing benefit will reduce demand and cause rents to fall.

I am CONCERNED that that is too BRUTAL an approach: I fear that people will be more likely to lose their homes than successfully negotiate a lower rent.

What this needs is alternative proposals: a method to CONTROL rents DOWN that will encourage a dialogue between landlord and tenant and will achieve a FAIR and AFFORDABLE rent.

Instead we get "final solution" and "ethnic cleansing".


Dear "the Left",

Please tell us when you want to come in from playing in the mud and we will have a proper conversation then, thanks.


This is my TWELVE-HUNDREDTH Diary, brought to you by the miracle of a Happy Anniversary for my Daddy Alex and coincidentally also my Daddy Richard!


Edmund said...

Anatole Kaletsky, the source of the "too good to be true" quote, is not The Left. He's a free marketeer who thought the housing bubble would never burst.

Alan Johnson, who credited the 0.8% GDP growth to "momentum" from Labour, is not The Left either; he's the shadow Chancellor and a thorough Blairite. (And really, left, right or centre, what did you expect a Labour spokesman to say?)

Millennium Dome said...

What did I EXPECT a Labour politician to say or what would it have been DECENT of him to say?

It would just be NICE if Labour would stop trying to have their cake and eat it: Great Britain suffered a longer and deeper recession than anywhere in the world, but whoa no, that was a "global crisis" and certainly not Labour's fault, but now we are growing faster than expected and suddenly it's all down to the diligence of the previous government. Give us a break!

It would be NICE to have a little courtesy back in the debate (yes, IRONY from the satirical elephant); it would be nice if left-wing commentators recognised that we DON'T enjoy making cuts to benefits or services. It would be NICE if left-wing commentators stopped referring to Conservatories (in particular, but also Lib Dems) as some kind of demonic sub-humans (because dehumanising people doesn't in any way go with talk of a "final solution").

It is clear that the Left realises that "we don't like these cuts" isn't a proper argument, but the need to dress it up in economic language leads to just endless repetition of "this will cause a double dip recession". That's not an analysis; it's just srace-mongering.

Is this growth down to the Coalition? Honestly? I would say only a little bit, but an important bit. For all that the Left – and it IS the Left in general, please don't insult our intelligence by saying it's JUST the Labour Party and they're Blairites who "don't count" – for all that the Left have been screaming all summer about the Coalition cuts and that imminent double dip recession, the government has actually been pursuing a mostly steady as she goes strategy.

Yes, we cancelled Building Schools for the Future (aka Mr Bully Balls promise to pointlessly rebuild every school in the country with money that Mr Liam "crash and" Byrne admitted DID NOT EXIST) but that was because it was a stupid and wasteful (not to mention egregiously self-aggrandising) project. Was Mr Borogove an idiot in the WAY he announced it? Yes. Was he WRONG? Absolutely not. Essential repair and rebuilding has continued, and the construction industry is an important part of the extra growth. Will Labour OR "the Left" admit this? No, they latch onto every cut or cancelled programme and deny anything that doesn't fit the worldview that this is a government intent on deliberate destruction.

But the important contribution by this Government is that we convinced the markets that our plan for deficit reduction was CREDIBLE. A little bit of extra stability that has, it would appear, helped the economy pull together a little more.

And, reciprocally, the slightly stronger economy gives us hope that we are better able to weather the difficult but essential task of reducing the rate at which we add to the TRILLION POUNDS OF DEBT we already have.

I've just been listening to the "hilarious" Jeremy Hardy on last week's News Quiz explaining why you can't compare the country's finances to a household budget through the example of saying he has a mortgage. (Nicely undermining his own point there.)

But also, if you've got a mortgage and if your income goes down, then you DO have to economise in order to keep up the repayments. And see how dependent on interest rates you are. If you need to refinance, expect the interest to soar and you'll have to cut back even further.

You CAN have a mortgage of multiples of your income so long as the bank is reassured that you have more money coming in than you have going out. Otherwise, just watch how fast they foreclose.

The Coalition has for the moment avoided that risk. Labour and the Left don't even recognise the risk is there!

Edmund said...

And again you're hammering on The Left. Who do you think The Left is?

Millennium Dome said...

And again YOU'RE ignoring all the substantive points and returning with an argument that amounts to: "not me guv'".

It is broadly accepted that "the Left" refers to those people who believe in greater state control of the economy.

Commentators in the Grauniad, commentators in the New Statesperson, Ken Livingstone, bloggers on "Next Left", bloggers on "Left Foot Forward", Jeremy bleedin' Hardy, Hard Labour's Mr Potato Ed, Hard Labour's Mr Bully Balls… they would all subscribe to the theory that the state spending getting-on-for-half of the nation's GDP is FINE and they have all expressed support for the IDEOLOGY that the solution to the economic crisis is MORE government intervention NOT LESS.

They're not all a single cohesive bunch. The Judean People's Liberation Front are splitters. Obviously. Hence: "the Left".

You may be right that a free marketer has used the "too good to be true" quote, but you're dead wrong to say he's the ONLY one. Michael White in the Grauniad and whoever the Labour person that James Lansdale on the BBC was talking to have both used it too. And guess where THEY stand on the economic political spectrum.

We get forced into using such broad, sweeping, frankly cumbersome terms because people on "the Left" tend to use denialist arguments, coincidentally just like the ones you yourself have deployed, in order that they may disassociate themselves from having to take any responsibility for the actions of, in particular, the last Labour Government, while at the same time coincidentally deploying exactly the same economic nostrums as the current Labour front bench.

I HATE some of the things that this coalition has announced, but at least I'm fluffy elephant enough to admit that we are doing them.

Being on "the Left" means never having to say you're sorry.