...a blog by Richard Flowers

Friday, January 28, 2011

Day 3680: I'm Looking at Day 14611

Daddy's Birthday:

Daddy Richard is trying to convince me that he is NOT REALLY OLD, but I'm sure he is WELL over the hill!

Honestly! He is SO doddery that he has tripped over and fallen on the SELF DESTRUCT BUTTON for the SECRET VOLCANO BASE! What a NUMPTY!

(And yes, that really IS the one from James Bond!)

Still, there is HOPE! We have been listening to Ms Betty Driver on the Desert Island of Discs and SHE has been pulling pints on Consternation Street since longer than Daddy has been ALIVE!

Happy Birthday Daddy!

Tuesday, January 25, 2011

Day 3677: The Coalition Response Isn't Good Enough – Negative Growth Needs Positive Action


There's no avoiding the fact that the growth – or rather SHRINKAGE – figures for the last quarter of 2010 are a DISASTER.

Never mind that economies take YEARS not MONTHS to turn around, and that Great Britain was just TOO SICK after Labour's handling of the recession to get up again; never mind that the Coalition's spending review simply CANNOT have had TIME to be the cause of contraction. People, unfairly, will judge by what it LOOKS like.

And it looks like WE did this.

So we NEED to have something BETTER to talk about than the WEATHER.

Look, you KNOW what Hard Labour are going to say: it's an alliterative accusation that rhymes with WALNUT WHIP recession.

Sticking to Master Gideon's line of "it was the weather" and "no change of direction" will make us look SMUG and COMPLACENT and – worst of all – like we're doing this because Labour are right and it's IDEOLOGICAL.

And Labour are so very VERY wrong on this that we absolutely must not give them even the scantest figleaf of cover.

So we have GOT to show that we are FLEXIBLE and LISTENING and willing to take on CHANGES in CIRCUMSTANCE.

This comes hot on the heels of Sir Richard Lambert's well-timed accusation that the Coalition lacks a "vision for growth".

I think that that is UNFAIR. The Coalition DOES have a vision for a Britain that invests in new GREEN technologies to kick start the next phase in our economic cycle, and HAS announced policies intended to encourage growth, particularly Mr Huhney Monster's Green Deal. There's also the Green Investment Bank, a corporation tax cut for businesses, and Project Merlin to try and get the banks lending again.

But all of that rather got SWAMPED in the announcements of the spending round and then the small matter of a couple of tuition fees riots. Bad news makes better headlines.

Labour, of course, were very keen to throw Sir Richard's remarks in the Coalition's collective face.

Yes, first Labour accuse us of being IDEOLOGICAL. And then they accuse us of having NO VISION. And they see no contradiction in that.

Mr Potato Ed himself has recently been saying that economic growth is the thing we're leaving out of the account when bringing down the deficit, and this makes him look very wise and prescient.

If only he would TELL us how he would ACHIEVE economic growth.

In fact, EXACTLY this lack of clarity about Labour's own position added to the usual level of STAGGERING FRUSTRATION achieved while watching the Newsnight Show with Ms Kirsty Waaaaaark, last night.

Posing the question as: "can the private sector get us out of this situation" was screaming for someone to answer: "ONLY the private sector get us out of this situation; Governments don't create wealth, don't create growth – they just SPEND, to a greater or lesser extent, what other people MAKE!"

Don't get me wrong, Governments can do MANY GOOD THINGS by their spending, but CREATING the wealth that they spend is NOT one of them.

(Actually, before anyone else sticks an oar in: Governments pay for EDUCATION, both at school and higher education AND through retraining; the theory is that this leads to growth because the same workforce can now produce higher value goods (e.g. computer technology instead of raw coal or iron). This is the "ENDOGENOUS" theory of growth (meaning growth generated from within) that came after the NEOCLASSICAL theory which said growth can only be achieved by injecting more CAPITAL (i.e. by BORROWING).

Yes, it's true: Mr Frown lectured us on "post-neoclassical endogenous growth theory" and then went and built his growth on a (neoclassical model) borrowing spree instead. So much for knowing the theory.

But that's not important right now.)

Interviewing Conservatory Business Minister Mark "I'm going to spell this very carefully" Prisk and Labour's Shadow Chief Secretary Ms Angela "so I'll get this one wrong" Eggplant, Ms Waaaaaark repeatedly pressed Ms Eggplant to admit that new Shadow Chancer Mr Bully Balls has changed his mind on deficit reduction since the Leadership contest.

Which I'm sure is very FUNNY and all that, but is it the remotest bit RELEVANT?

The question that was BEGGING to be asked – and never was – was: "what is LABOUR'S vision for growth?"

Because if, as is their position, the country NEEDS some vision, then they should jolly well GIVE IT ONE.

Yes, superficially, there's shadenfreude to be gained from exposing their HYPOCRISY if they have to admit they haven't GOT one (blank sheet of paper and all that).

But actually allowing them to make a positive contribution to recovery ought to be more important than that.

I do need to say, though, "not doing the VAT rise" or "not doing the {insert specific named cut here}" do NOT amount to a "vision"; even "cut more slowly" is PROCESS not VISION. It's also stupid and wrong, but never mind that.

My suspicion is that in particular Mr Bully Balls would say that the government should BORROW more in order to INVEST in GROWTH.

It sounds such an OBVIOUS and SENSIBLE idea, particularly when he can point to the "obvious" effect on growth of the Coalition's deficit reduction plans.

This is NOT the answer.

Apart from anything else, all Governments have a notoriously bad record when it comes to investing in winners. But more than that, bunging money into the economy – even if more borrowing didn't make the whole deficit/debt crisis WORSE – just INFLATES it. But that's not the same as genuine GROWTH.

In fact, that's been Labour's problem ALL ALONG. For the last DECADE, they've DISGUISED the REAL levels of growth in the economy by adding cheap credit from abroad, making it look better in the boom, making it look not so bad in the recession. In the short term circumstances of the recession that helped people keep jobs so it's not all bad. But in the long term it just DEFERS the evil day when you have to let the inflation out of the system again like a hideous economic WHOOPEE CUSHION.

A GENUINE vision for growth means supporting people who want to put their efforts and ideas into creating something.

So what do WE need to do?

(For that matter what CAN we do? Remember: there's no money left!)

Well, one thing we can do is TALK.

It's all too easy simply to REJECT what people say when they say we are getting it wrong. But Governments ALWAYS do that.

Surely the ESSENCE of the Coalition's "New Politics" is openness to DISCUSSION.

So, we – and by that I mean Mr Dr Vince and Master Gideon – should start by ACCEPTING that we need a new plan for growth, and TALK to the CBI – and to the Federation of Small Businesses, and indeed to the PUBLIC – to brainstorm some IDEAS for what we are going to do.

Call it the BIG PLAN for the BIG SOCIETY, if you like.

We also need to admit that in some areas there is a CONFLICT between putting the country's finances on a sound footing and supporting growth. Some of the things that we have done to close Labour's deficit – in particular the VAT rise, but I'd say tuition fees as well – mean taking more cash OUT of the economy to cover Government spending, and money OUT of the economy means LESS money to invest in what the theorists call "capital" (like new machines or factories) that enable you to make more wealth.

So the second thing we should do is EXPLAIN a long term strategy to REDUCE the total amount of tax taken OUT by the Government, and why this would stimulate REAL growth in a way that borrow-and-spend doesn't. (And we should probably start by explaining that TO MINISTERS who have to go on telly and talk about this sort of thing).

We need to be planning to reduce how much the Government takes. From a Liberal Democrat point of view, that means reformulating how we abolish tuition fees by making cuts elsewhere instead of raising other taxes to cover it. From a Conservatory point of view it means at least putting a reversal of the VAT rise back on the table to be considered against future income tax cuts.

Yes, it's NICE to give people a tax cut, but tax cuts shouldn't be about just being NICE; they should be about BALANCING what the Government spends with what the economy can SUPPORT.

The SIMPLEST and MOST DIRECT way of investing in the economy is to give people their own money and letting them decide how to invest it.

This ISN'T the "Tea Party"; we're not about getting the Government "off our backs"; we're saying the Government is leaning too heavily AT THE MOMENT, that taking pretty much HALF of everything that is earned is too much, and people need MORE FREEDOM (over how they spend their own money) if they are going to create new businesses and new jobs.

We need to be clear we are not just cutting the deficit as a RESPONSE to the crisis, but that actually it makes LONG TERM SENSE.

Finally, it does us NO GOOD to dismiss these really very bad figures as because of the weather or a result of the continuing weakness of the American and the global recovery or the fault of the Labour Party's long term economic ineptitude.

Just because those things are TRUE doesn't make them sound any less like weasel words. And frankly, Master Gideon could look LESS like a weasel.

We WANTED to run the economy; we should MAN UP and accept responsibility for it.

And if we state with confidence that we can pull through this, then we just might.


Listening to Mr Dr Vince on the The Today Programme this morning, I thought that he sounded rather SUBDUED, even CHAGRINED. At the time I thought it was because he was still feeling roughed up over the Tell-lie-o-graph STING and the whole Murdoch business, which was bound to be discussed and indeed was. But with hindsight, I do wonder if he hadn't had a hint of the coming figures on growth.


Auntie Caron wanted me to have a go at explaining "Interest" and "Inflation", and I think that it is important to include what we mean by "Growth" in that list too.

But that's all a bit of a BIG topic, and I reckoned that it was more important to talk about how we TALK about these results first.

So more on that subject next time!

Monday, January 24, 2011

Day 3646: DOCTOR WHO: A Christmas Carrot

Christmas Day… Ish:

If I had a TARDIS, I should use it to keep sending Daddy Richard back in time until he got my diary posted on the RIGHT DAY!

I enjoyed the Christmas Special enormously, particularly the towering performances from Michael Gambon and Matt Smith. It was, for once, about Christmas, which was novel; it celebrated the Dickens to which it owed its heritage without betraying the series continuity; and it was, in a lot of ways, very Doctor Who: hilarious though I found it, the Cyberking was infinitely less Doctor Who than alien fish that swim in air.

(And with respect to Larry, who protested that they did not look alien, "alien fish" are aliens that look like fish; not fish that look like aliens. They swim in air, for goodness sake; they clearly aren't fish in the terrestrial sense, so just as clearly they're called fish because that's what they look like. Which does rather rely on them looking like fish. Also, this is a stick, and that is the wrong end that you've got there.)

So I'm in a bit of a quandary here, because while the idea of the Doctor setting out to heal the villain rather than hurt him, to – as the Master put it – make him better, seems so ever so very nearly right, that whole central thrust of the story relies on the Doctor trying to change someone into a different person against their will (and very much abusing the laws of time to do so into the bargain).

Tinkering with someone's past like this until you get an outcome you like feels too much like brainwashing, like possession. It's a violation. It is taking away a person's fundamental right to make their own choices, even to make the "wrong" choices: if you can't make the wrong choices then you can't make choices at all, can you. Failure is supposed to be one of the basic freedoms, so what happened to Sardick's freedom here?

Why not just hypnotise Sardick if that's what you want to do? Because that would make it too obvious that this is just what the Master would do. The Doctor's using the same methods here; he's only trying to be nice about it – or at least trying to convince himself that he's being nice about it.

So the ethics here are extremely dodgy.

And perhaps it's significant that this aspect of the plot is adapted wholesale from Steven Moffat's very first published Doctor Who story, "Continuity Errors" in the short-story collection "Decalog 3" which featured the most… ethically-challenging of the Doctor's incarnations: the planet-bombing seventh.

In "Continuity Errors", the Doctor repeatedly rewrites a librarian's history merely to obtain a particular library book. I say "merely"; he clearly wants the book so that he can rewrite a larger history to avert a planet-scale massacre. Note particularly the "bigger motive", changing one person to save many.

We're going to have to reach for the utilitarian book of ethical calculus to say: "well in the plus column we prevented more than four thousand fatalities at a cost of, in the minus column, destroying one person's entire life (though we did replace them with an identical if "nicer" version)."

A utilitarian would call that a win. The Doctor… wouldn't, usually. He's read the Brothers Karamazov.

Compared to that, it's a side issue but I'll ask it anyway: does the Doctor actually succeed in changing Sardick at all?

Look, I'll raise it here, a lot of people have criticised that: "if the Doctor can go back in time and change Sardick's past, why not just go back and change the past so the rocket never got into trouble in the first place", to which the obvious answer is "because the Doctor wants to save everyone on the rocket and Sardick as well, and thinks that doing this will do that". He even says so explicitly, when Sardick thinks that he's trying to be threatening. (Though I reiterate my main objection to the ethics).

The implication of the cloud machine no longer working must be that he does.

But doesn't this lead to a paradox? Seeing that he becomes a bitter old man is what stops him becoming a bitter old man. But if he's not going to become a bitter old man, what is it that he sees that stops him?

And quite how the machine no longer works is another problem. As presented, we assume that the machine knows what Sardick is supposed to be like and, because he's changed, no longer accepts his new persona. But how can it know what he's "supposed" to be like, when what it knows ought to have been altered in the past along with Sardick's personality. Basically, for some reason the machine hadn't updated itself with all the other currents of time because… er… the Doctor was standing too close to it? Or does timey-wimeyness not work on this particular sort of machine?

We are left to infer the only logical possibility: an altered history where Kazran does not join his dad in the plotting and gloating business and so doesn't get his brain pattern added to the control system in the first place. Even that's not perfect because Sardick clearly expects that it will work for him, as if it always had. But we could stretch a point to put that down to confusion between the several versions of history that he now remembers.

Of course the entire premise of the Doctor altering Sardick's nature after he's already met him is riddled with this sort of thing: if Sardick is "nice" when they meet, why would the Doctor go back in time to "fix him" in the first place?

Is, perhaps, the Doctor's personal past immune to paradox? You have to admit that would be highly handy, if not essential, for a time traveller. Essentially, his own history and that of anyone he meets would have to be "frozen", become fixed points in time to use the series' own jargon, with changes to the past somehow only affecting them from the "present" (relative to the Doctor) onwards. That might explain Sardick's ability to remember both histories.

If you look at this in a quantum mechanical kind of way, there are two superposition states of Sardick relating to his possible live: nasty and nice (actually, arguably three states: nasty 'cos he never saw a fish; bitter, 'cos of Abigail, and nice). The Doctor's intervention in the past creates no paradox because what he's doing is altering which superposition state he interacts with in the present day. It's an experimental application of Schrodinger's cat, and Kazran – as the cat – gets to experience being metaphorically alive and dead at the same time.

Of course the many-world interpretation (which actually is the one most people say that we should use if time travel is possible) this would mean the Doctor is just moving from a universe where Sardick is nasty to a parallel universe where he is nice. Which, by extension, means that he's abandoning his Amy and Rory to crash on the spaceship and going to a universe where nice parallel-Kazran will unfreeze parallel-Abigail and save parallel-Amy and parallel-Rory with her singing.

That's not really the spirit of what happens, is it?

So is it possible that the Doctor doesn't change Kazran after all?

It's certainly implied – by not striking the child, or himself as a child – that Sardick is a good person underneath, so long as he is properly motivated. Perhaps nasty old daddy set up the machine so it would only work so long as you were using it selfishly. Kazran mostly has been using it selfishly, so up to now it's always worked, but this selfless act trips the circuit to cut out.

That would make Sardick right when in reply to Amy's claim that "time can be rewritten" he snarls "people can't!" But that suggests a rather grimly deterministic belief in the fundamental goodness or wickedness of people's souls, regardless of what time throws at them.

And to be honest "people can't!" would usually be the sort of thing the Doctor would say, too. His modus operandi, especially notable in the ninth Doctor's era, is see the best in other people and empower them to bring it out, not to perform outright personality surgery. And he's particularly against mind control, and quite right too, often insisting that people struggle against it. Unless she's blonde.

On the other hand, it might also partly excuse the Doctor's increasingly irritating habit of handing out winning lottery tickets (which he's been doing since "School Reunion" – not to mention the big one to Donna – in case you think this little violation of causality is a typically Moffat slice of timey-wimey), if he's not massively distorting the fabric of history every time he does so: it may alter the scale of what these people do but not the moral value of their actions. Or perhaps it's just a stupid running joke.

But on the whole, the spirit of the piece is that the Doctor does change Kazran Sardick and does so by altering his past in a way that ought to be paradoxical but isn't if only on the grounds that we are only ever shown the self-consistent bits.

Still, being a different person is probably what spared us that heart warming Kazran/Kazran hug turning into an explosion under the "Mawdryn Undead"/"Father's Day" rules.

(Yes, we covered this under "The Big Bang" – exploding twelve-year-olds on Christmas Day: Not. Going. To. Happen.

But seriously… how can you remember the Blinovitch Limitation effect for the sonic screwdriver and then forget it straight away? I mean you can make a case that it's sort of more consistent for the screwdriver – which is the same set of atoms – shorting out time than for two iterations of the same person – where all the atoms will almost-certainly have been replaced in the time interval – but that's really not how the rules are laid out.)

Essentially the story works – and it does work, don’t get me wrong, it works extremely well – it works by fairy tale logic and gets by on emotion. Those people who say Moffat can't write character – yes, that includes me – are wrong. This feels right even if the logic is screwy because it is true to the character of the Doctor and to that of Sardick (ironically, given that his character being in flux is the whole darn point).

We can forgive that almost nobody else has a character – at least not more than one dimension of one – given that the piece is basically a virtuoso two-hander between Gambon and Smith, either of whom electrify the screen when they are on it separately, and together…!

Most inexcusably, Amy was hardly in it. Though when she was, she was more roundly characterised than previously, more sympathetic under her spiky exterior, with sympathy for the probably-doomed passengers but also for Kazran. We cheered to see Arthur Darvill's well-earned appearance in the title sequence, but it was earned off the back of series five, not his few minutes of screen time here. He played a very nice straight man to Amy in the opening jokes – do I need to change the bulb / don't treat me like an idiot – but was otherwise not troubled by the script.

Katherine Jenkins as Abigail did as much (or as little, depending on your point of view) as was expected of her in a role that required little more than she be lovely. And sing, which she did beautifully, and Murray Gold rose to the occasion as usual.

She was of course, in a rather literal sense, a woman in a fridge.

But it seems to me that that meme is really about turning women into graphic totems of violence, not just taking away their power but displaying then as a trophy, a literal objectifying. But then who am I to say what a meme means, and if you felt that Abigail in the freezer satisfied the objectifying and display aspects I'm not going to argue the point.

There's something a bit odd about that whole arrangement, anyway.

I mean, for starters, the usual idea of "security" is that you let someone have an asset of yours which they can sell should you fail to keep up your repayments; that way they have "security" that they will get their money back. Elliot Sardick can hardly expect to sell the people in his vault. Or perhaps he can. Which makes the whole business even more sordid. But surely poor nine-days-to-live Abigail still cannot be that good an asset.

(Oh I don’t know, says the cynic – the very scarcity of her days might make some so-and-so pay and pay highly for them. Yes, the whole scenario just gets worse and worse. Although that rather suggests daddy Elliot would have been mighty pissed to discover that Kazran has been making free with some of the finest time he's got laid down. Does nobody ever audit the vault to make sure the assets are keeping up their value?)

But look at it from the other point of view. Abigail's family have "deposited" her in the elder Sardick's icy vault, in return for which he has advanced them a sum of money. Doesn't this seem a bit win-win for them? They get their dying sister cryogenically preserved at Mr Sardick's expense and a cash bonus too. Perhaps he's covertly an eccentric philanthropist after all. Who coincidentally hits kids.

The fact that her ending is bittersweet – she still only has one more day to live – is a good thing, avoiding the sentimentality of many of Russell's and to be fair Moffat's own stories (in his "everybody lives" mood). But without the Doctor, no one would have opened that casket at all. She had no more days at all. Even Kazran having loved and lost her would not have opened the casket again; as evidenced by how old he got, she would never have had her last day. Thanks to the Doctor, she got her days back.

Anyway, more troubling in terms of Moffat's writing was the fact that the role was, pardon the pun, a one note part. He is normally very good at writing equally for women as for men – although occasionally suffering from the problem that when he writes, all women are Linda Day and all men are Steve Moffat. Again, I'd say in a two-hander between Gambon and Smith, it's understandable that other parts aren't as filled out. But this did make me reflect on season five and think that it really wasn't as good in its roles for women as Russell's series had been. I mean when there are really just two strong positive female role models in the series – one whom is a time travelling murderess and the other is written by Chris Chibnall(!) – you know something isn't quite right. Let's hope that's addressed.

Visually, this was stunning. Top notch visual effects, of course, we expect that now. And the set design, interiors and exteriors of Sardicktown, were a joy: it managed to match up the sense of the alien with the sense of the (even more alien) Victorian. I particularly loved the detail of all the porthole windows – indeed from the trailers I'd wondered if, with the fish and all, the setting would be underwater, though in fact it was the perfect mysterious physics of an alien world. And I'm so glad they did a whole story set on an alien planet, if only to prove that they can do that, even at Christmas (and without recourse to a quarry).

The chubby rocket-ship was great fun, inside and out, even if inside it was only a bridge set and the bridge was rather more Starship Heart of Gold than Starship Enterprise (even with Geordi LaForge at the helm!).

Sardick's "castle" was like something out of a fairy tale, with what Alex calls his reverse-Frankenstein bolt of lightning from the roof and he keeps reanimated bodies too, in his lake of frozen victims in the cellar; and the central chamber so huge but so cold and empty, just like its master.

And the fish were marvellous. Perfectly realised, and, as I said, exactly what Doctor Who ought to be about. More ideas like that please, Mr Moff.

From moment to moment there was always something to enjoy: the Doctor's fireplace entrance; Sardick's casual and sardonic proof of the isomorphic controls (when he was flicking those switches was when he most reminded me of an evil Dumbledore, funnily enough); the beautiful moment where the Doctor appears in the home movie and carries on his conversation with the older Sardick in real time; his expression when the shark eats his screwdriver; the sequence of hats and scarves as he and young Sardick spring Abigail from her fridge each Christmas Eve; Marilyn Monroe… Endlessly inventive, playful and clever, it is perfectly crafted to carry you along while at the same time tangling your emotions around the life of this young/old man each doomed to become the other, thanks to the Doctor.

I'm still not sure about the central ethics: I can't be sure I believe that the Doctor should do what he did nor that he should do it in the way that he did.

But "A Christmas Carol" made me laugh and made me cry. Perhaps more importantly, it made me laugh at the bits which were funny and it made me cry at the bits which were sad.

And the shark made me jump, and not the series. Which was good.

Dr Woo's Christmas Carol is now available on shiny disc and shiny blue disc.

Thursday, January 20, 2011

Day 3672: No More Tears – So Farewell Then, Mr Johnson & Johnson


Mr Alan Johnson & Johnson, Mr Potato Ed's appointment to the role of blocking Mr Bully Balls career Shadow Chancer has resigned.

I've been meaning to write a piece about Mr Johnson & Johnson for a little while now.

Let's not dwell overmuch on his showing himself up by not knowing the Employer's National Insurance rate .

(Although it's worth reading Mr Mark Reckons on why this is important.)

But instead we should go back to Mr Evan Davis' forensic interview on the The Today Programme for teasing an actual statement of policy out of him.

That COULD have given us something worth talking about.

In the interview, Mr Johnson & Johnson:
  • accepts that the size of the problem is about what the coalition says it is

  • agrees that Labour would raise more in taxes than the Coalition's VAT rise

  • admits that the tax of choice would be National Insurance.
Now if we could have avoided treating that as just another in a string of embarrassing GAFFES from a man woefully under-briefed for a senior job then it might have been the starting point for a CONVERSATION.

It is possible to have a GENUINE DEBATE about the relative merits of different approaches to taxation, and the balance between the relative impacts of VAT and NI is certainly not cut and dried.

The Conservatories have a well-founded dislike of raising National Insurance, not least because it conceals a DOUBLE tax rate rise, and because the employer's element increases the cost of employing people in a way that is not transparent. It impacts indirectly on workers, particularly the lower paid, because it effectively gives them a pay rise and then taxes 100% of it. And because it makes employment more expensive it reduces the number of new employees that companies take on, hence the Conservatories reactionary name for it "the jobs tax". Also, it's inflationary, as prices are forced up to cover the (hidden) extra cost of wages.

But equally, Labour's (and Liberal Democrat's) objections to VAT are sound and justified. The impact on lower earners – if not necessarily on the LOWEST earners – is disproportionately higher, making it at least as far as most people can tell a regressive tax. Habit and European law (which requires long term convergence of EU VAT rates) mean that unlike taxes on income it has a ratchet effect that only ever increases – Labour's VAT cut was only allowed because it was temporary – and anyway cuts in VAT are often absorbed as super-profits by vendors rather than passed on to customers as we saw when Labour tried it. And of course by putting up prices directly, VAT is very inflationary. There's a knock-on effect on jobs from a VAT rise too. The argument goes that even if spending remains the same less goes to companies in profits so they will employ fewer people, though I think Labour rather overstate this.

Being more open about tax and the different possible effects and outcomes would be highly beneficial. A more informed debate leads to a greater likelihood of a good policy being agreed in the end.

And being able to discuss economic policy in a way that was not reduced to: "you're cutting because you are EVIL" / "you're overspending because you are FAT and STUPID!" would be a blessed relief!

Sadly, the opportunity quickly came to nothing.

I'm sorry to say that Mr Johnson & Johnson was a nasty piece of work when he was Health Secretary and a nasty piece of work when he was Home Secretary and the shock of being ejected into opposition had not improved him. His basic lack of competence in the Treasury brief failed to mask his underlying reliance on distortion, attack and smug oppositionism.

That would NOT have stopped me wanting to TALK to him, though, to see if we couldn't reach a better policy outcome through debate and compromise.

I doubt any such opportunity will arise with his successor.

Day 3670: "An extremely simplistic and partisan economics lesson"


Well, judging by the comments on Sunday's diary, SOMEONE got out of bed on the wrong side that (2am in the) morning!

Dear Mr "economist"

You've created a blank blogger profile and a blank blog so we can't tell anything about you. Let's assume that you are NOT the magazine of the same name.

Partisan? I'm responding to a comment from the Labour Leader: agree with him or disagree with him, it's difficult NOT to be partisan.

And simplistic? You don't say where I've oversimplified; you just assert that I'm wrong.

Perhaps you are referring to your own reply?

An unbiased reader will notice that I pointed out the ways in which Mr Ed was right; that I gave credit to Hard Labour for paying down debt in their first term; and I pointed out that the Coalition's own growth plans are far from a dead cert. Surely less partisan than someone saying: "the Conservatives and the Liberal Democrats I think are pedalling a very dangerous myth".

("pedalling," says Daddy Alex, "whoops! I should have caught that. That's spelling's an economic bicycle; you want selling, which is PEDDLING."

"Ah," says elephant, "but that's a copy & paste from Mr Marrmite's website, so it's a subeditor at the BBC who is to blame for once, and not me!")

I could go through all the things you say with a point-by-point rebuttal. In fact I have.

But it's very BORING, probably POINTLESS and I do get increasingly tired of shooting down ZOMBIE ARGUMENTS about Lib Dem manifestos (they're fully costed) and tuition fees (rubbish, as I've said before in just the way a partisan blogger wouldn't, but better than what Labour would have delivered).

So I'm going to BEGIN with just two points that I've chosen because they are particularly EGREGIOUS ones that illustrate where Labour's answers are fundamentally WRONG, MISGUIDED or MISLEADING.

And after that we'll do the full fisking.

Here we go:


We have a "structural" part to the deficit because economists are guessing that around 5% of our trend growth has been destroyed by the financial crash. If we were to have an economic boom with above trend growth we could close the deficit without doing a thing.


Loss of revenue due to the financial downturn is the CYCLICAL part of the deficit (i.e. the bit that comes and goes); the STRUCTURAL deficit is the excess of spending over receipts if you discount extra money in in boom years or extra money out in lean years.

The fact that spending exceeded income IN A BOOM shows that our STRUCTURAL deficit is VAST, far larger than the 2% of GDP we had to borrow. The full extent of Labour's overspending was being DISGUISED by the extra revenues from boom-time profits.

(I am, by the way, doing you the service of assuming that you mean: "We have a "structural" part to the deficit because our trend growth has been destroyed by the financial crash by, economists are guessing, around 5%" rather than what you have written which is that "economists guessing" is the cause of the ""structural" part to the deficit".

Sorry to be picky about grammar, but I want to be accurate about what I'm replying to.)

It is, frankly, TERRIFYING that you can even think the idea that another boom would "close the deficit without doing anything". This is the sticking your fingers in your ears and singing lalala approach to sound finance.

There is NO school of economics – not classical, not Keynesian, not monetarist, not laissez-faire, not voodoo Reganomics – that subscribes to the theory that you can run a deficit forever. The suggestion by Ed Balls – yes, I realise he is not Labour's Shadow Chancellor; he's still a very senior figure – during the leadership election that nothing needed to be done about the deficit was beyond appalling and verging on criminal: theft from our children. And you say that the Coalition has burdened the next generation with tuition fees!


And you're forgetting there are two sides to a balance sheet
I'll say it again, there are two sides to a balance sheet.

Jargon. People use it to put a barrier between themselves and the reader, to shortcut the argument by implying they know more or better. It's a fallacy, called the "Argument from Authority". Unfortunately for you, I DO know what a balance sheet is and how it works.

So there are two possibilities here: either you DON'T know what you are talking about and are parroting lines that you have heard elsewhere or you DO know what you are talking about and know that it is NONSENSE.

To answer the point: yes, a balance sheet has two sides: assets and liabilities. But it is NOT TRUE that every transaction is "increase in creditors = increase in assets".

In fact MOST transactions are "increase in creditors = increase in EXPENSES": salaries, repairs, energy and fuel costs, wasting assets (or their depreciation) all of these are essentially money "used up", not money invested. And, I'm obliged to remind you, illegal wars in the Middle East are also money "used up".

Repairs to the swimming pool, or doctors' salaries, or winter fuel payments are good things, but they are NOT assets on the asset side of the balance sheet. With the best will in the world, you cannot use the repairs to your swimming pool to repay the National Debt and it is either stupid or deceitful to imply otherwise, as you did.

It's particularly telling that you ask: "And where would have found 2% of GDP to invest in that infrastructure?" as though the only possible alternatives are "run a deficit" or "spend nothing on infrastructure". Spend less on infrastructure. Spend less on something else and spend the same – or more! – on infrastructure. Raise more tax. There are many other alternatives.

It's a cliché, but to govern is to choose. Repair swimming pools; increase NHS consultants' salaries; expand the security services; employ more bureaucrats to administer targets in schools and hospitals and police forces; set up an NHS database; a DNA database; a database of children; an I.D.iot card database; wage a war in Iraq. Labour chose to do ALL of these things, some good, some bad, some very bad indeed.

A further irony, of course, is that much of Labour's spending on physical assets, what you call "investments" – hospital buildings, new schools, the tube upgrades and so on – were under PPP or PFI schemes which are notoriously "off-balance sheet financing" (sometimes called "Enron accounting"); that is, the asset is actually bought by a private company and leased to the Government so that the borrowing incurred is not included in the Net Government Debt, but the taxpayer is stiffed with the obligation to keep paying, often more than (some say many times more than) the cost of building the asset would have been even if the Labour Government had borrowed commercially to do so.

Matching future use against expenditure to pay for that use is not, in and of itself, a bad thing. But Labour's contracts were on the whole bad and have lumbered us with excessive payments even if the asset ceases to be of use.

The word "investment" when referring to Labour spending, used because although not strictly accurate – some spending really is just spending – it sounds better, is typical of the language of SPIN.

It's of a piece with referring to your opponents' opinion as "myth"; I note that you use the term yourself to refer to Captain Clegg's line and to backhandedly imply that my opinion is just another myth.

This belittling of the opposing view – like calling my diary "simplistic" and "childish" – serves you badly.

Now, my LEGAL advisors are divided between "don't feed the troll" and "if you say you can answer point for point you need to prove it". So the following is at your own risk:

"the REAL complaint is that Hard Labour were borrowing YEAR IN, YEAR OUT throughout the BOOM years while the economy was growing and NEVER PAYING ANY BACK."

You'd better email Clegg and tell him that…

And what makes you think that I haven't?

…because that isn't the myth he is peddling.

I note the backhanded way that you imply that what I'm saying is merely a DIFFERENT myth.

The size of the national debt relative to GDP is not an issue

It really, really is.

Part of the point of my little history lesson was to point out that there is a crude correlation between the times when the National Debt rises about 40% of GDP and the times when the economy goes to hell in a handcart. When we paid the debt down it preceded a period of growth.

Almost all western countries are facing increased national debts because of deficits resulting from the financial crash.

And most of them are in serious difficulty because of it. I don't need to cite Greece, Ireland, Portugal and Spain, because the most obvious example is AMERICA, where people are beginning to consider quietly but seriously the possibility that they might actually run out of credit.

Under Labour's deficit reduction plan net debt would have stabilized around 70% of GDP. As it will under the coalition's plan if their predictions are right.

"Stabilized" is a really worrying term. It makes it sound like you think it's going to STAY there. AS though balancing on a pinnacle of debt is in any way a "stable" position to maintain.

Under the Coalition plan, the public sector debt should PEAK (not STABILISE) at 69.7% of GDP then fall to 68.8% (and continue to fall to 67.2% in 2015/16).

The reason the plan only lasts five years is because it is a plan for a five-year Parliament.

At the end of that time, we hope that we will bring the DEFICIT down to zero. At the end of that time we will only START to be in a position to bring the DEBT down.

Beyond that point, in the next Parliament, I would want us to run SURPLUSES to PAY DOWN THE DEBT. But I'm not the Chancer of the Exchequer, so I can't say that's the plan. And more importantly, the British Public will get to have their say over whether we do that or not. I hope we can convince them of the need to do so, and I fear the sort of BLETHER that Labour puts out saying none of this is necessary.

Labour's plan, I have to remind you again, would STILL be ADDING debt to the debt mountain at the end of those five years. That's NOT stable either, unless you are privy to some unreleased plans of the Shadow Chancer's that you might care to share with us.

"But then from 2001 they spent more than they raised in taxes. Yes, I know I'm repeating myself but it's the MOST VITAL point. They spent more than they raised in taxes."

Labour were perfectly open about doing this and your party supported it.

Well… to a certain extent.

At the end of the previous Conservatory Government, both Liberal Democrats and Labour were in agreement that the public services had been underfunded for many years and needed large spending increases, particularly in the areas of salaries for nurses and teachers and of repairs to buildings.

For the 1997 to 2001 Parliament, Labour stuck to the spending plans that the Conservatories had prepared when Chancellor Fatty Clarke needed to draw up a plan to show that the country really could repay the borrowing HE was running up (the at-the-time-frightening jump to 42.5% of GDP, oh the naiveté of those heady days). Even the Conservatories didn't expect to stick to them.

Labour stuck to those plans rigidly for – beg pardon – IDEOLOGICAL reasons (they wanted to prove they were not a tax-and-spend party), while the Liberal Democrats were actually advocating pulling out of the Conservatory spending plans EARLIER.

Post 2001, we argued the case for SPECIFIC spending increases matched by SPECIFIC tax rises.

(For example, our 2001 manifesto repeated the 1p on Income Tax for education; or, from 2005, the 50p top rate to cut council tax and abolish tuition fees. You'll notice that Labour actually nicked both tax raising ideas but not the spending commitments that went with.)

But that does not mean we agreed with ALL of Labour's spending increases. There were a number of BIG TICKET items which we were very much against: more prisons, more targeting and testing, more databases. And a couple of REALLY BIG TICKET items which we opposed very loudly: the "War on Terror" and subsequent invasion of Iraq.

So it's very much NOT true to say we supported Labour's spending increases. We would have spent more in some areas, but not the SAME and not necessarily so MUCH more overall.

Would a lib dem government since 97 have run surpluses and paid down the national debt?"

We would certainly have done as Labour did and run a small deficit in 1997/98 and a surplus in 1998/99.

Pulling out of the Conservatory spending plans would have meant running SMALLER surpluses in 1999/2000 and 2000/2001 than Labour and so paying down less debt than Labour.

But – we argued at the time – pulling out earlier would also result in a smaller correction for reinvestment. A less steep increase in spending would, I should have hoped, result in us not shooting well over the top, and restrained ourselves from borrowing during the boom.

Of course it is EASY to say with HINDSIGHT that we would not have made Labour's mistakes, but this does have the benefit of at least matching what our economic spokespeople were actually saying.

Well, your manifestos contained greater spending commitments in 97, 01 and 05 without the necessary tax increases to cover.

I'm afraid that's just NOT TRUE.

Each of those manifestos (and the 2010 one as well) included full costings as an appendix, explaining how each increase in spending was paid for by a raise in tax or a cut in spending elsewhere. Something the Labour Party conspicuously did not do. (The Conservative Party neither, for that matter.)

I repeat the most obvious example being the 1p on income tax to pay for education in the 1997 Manifesto and again in 2001. Labour campaigned against that. And then put 1p on National Insurance anyway.

And you're forgetting there are two sides to a balance sheet

As I say above: I'm really not.

Labour only spent that borrowed money on capital projects

The figures simply do not substantiate that.

Labour's budgets were running a deficit on the CURRENT spending and then spending the capital spending ON TOP.

And then lumbered us with EVEN MORE off-balance sheet debt by devising an insanely expensive PFI system that we will be paying off virtually forever!

Even if there was NO capital "investment" AT ALL, you would STILL have been pushing up borrowing.

Don't take my word for it: go and check the public finance figures – the current spending surplus is NEGATIVE for EVERY YEAR from 2002/03 onwards.

But even if it were the case that current spending was within the tax receipts but current plus capital spending pushed it over the top you cannot hypothecate the borrowing ONLY to the capital budget.

You could just as equally say that all the CAPITAL spend was entirely covered by tax receipts and it was the CURRENT spending that you had to borrow to cover.

Cash Out = Current Spend + Capital Spend
Cash In = Tax revenue + borrowing

But that does NOT mean Current Spend = Tax Revenue nor Capital Spend = Borrowing

That's like saying 5 + 4 = 9 and 6 + 3 = 9 so 5 = 6 and 4 = 3.

Labour's CURRENT account spending was too high so they could not afford their capital spending. But they went ahead and spent it ANYWAY.

And what did they spend it on? Ah yes…

It paid for the infrastructure that had been neglected by the tories for 18 years.

And indeed by Labour for a further four years.

Those capital projects are an investment that will provide economic and social benefits for decades…

Economic benefits are measurable. So measure them: what are the RETURNS that we can expect from Labour's spending?

I'm not denying that there ARE benefits from some of Labour's spending. We've already established that the Liberal Democrats SUPPORTED more spending in 1997, and later. Housing, power stations, transport links, roads even: they can lead to economic growth that provides opportunities and lifts people out of poverty.

I'm not going to deny social benefits either. Better health and education lead to a happier and more cohesive society where individuals and families can prosper. Entertainment – theatre, sport, films, the BBC – these help draw the nation together, challenge us with new ideas, encourage us to better ourselves. They're all good things.

But, as Captain Clegg is fond of saying: you can do a lot of good with six hundred billion pounds. So why did you need to spend seven hundred and fifty billion?

The burden is on you to demonstrate that every overspent penny was spent well and will do good.

I'm also, incidentally, interested in your boast of "lasting for decades". Apparently eighteen years of Conservatory Government is enough to annihilate any economic or social infrastructure. That's not even TWO decades. So are you overstating how BAD a Conservatory Government is or overstating how good Labour's achievements are? It's one or the other.

… and it is not burdening the next generation to ask them to contribute to infrastructure that they will use

There IS a case to be made for that, but you'll need to do the work to prove it, not just airily summon a justification out of the air. Do the useful lives of the assets match the repayment period of the loans? Would there be an equivalent commercially available alternative and if so would it genuinely be more expensive and if not how do you estimate the real terms value of the service? Is the infrastructure actually what people want?

But let's be honest, Labour DIDN'T just build "useful things" did they.

There are several examples of VASTLY expensive capital projects that provide little or no benefit to the taxpayer now or in the future. There are hospital buildings being paid for under PFI which are empty because they are not fit for purpose but we cannot get out of the contracts – best practice suggests smaller, more local hospital services, but Labour built large buildings because, er, they're impressive?. There are a couple of AIRCRAFT CARRIERS that we are going to have to build. And no matter what Ed Balls may say, there was no need beyond his personal vanity for Building Schools for the Future to rebuild EVERY SCHOOL IN THE COUNTRY.

Even Labour's CAPITAL budgets were WELL overspent and they DID "burden the next generation" with a load of infrastructure that is often WORSE THAN USELESS.

Hell, your party just burdened the next generation with ~£50,000 of personal debt at commercial interest rates!!!

Firstly, at most £9000 x 3 = £27,000 not £50,000; learn some maths.

In fact, the cap is set at £6000, and in itself that is an additional £3000 only on top of what Labour were ALREADY CHARGING; what about accommodation and food – again, Labour were ALREADY CHARGING that, and in fact we've introduced BETTER maintenance grants so we've REDUCED what Labour were charging for living.

So the ADDITIONAL COST should be considered as £3000 x 3 = £9000 or at most £6000 x 3 = £18,000.

If the burden of student debt is £50,000, then LABOUR ARE RESPONSIBLE FOR £32,000 OF IT.

Secondly, the Labour Party, who INTRODUCED tuition fees, breaking a manifesto pledge not to, commissioned the Browne Report with a view to an UNLIMITED cap. We capped fees at £6000, with a maximum of £9000. Are tuition fees good? No. Are they better under this scheme than they would have been under Labour (or frankly the Conservatories)? Hell yes.

Your party – you defend the Labour leader, you're a Labour supporter – your Party burdened the next generation with MORE personal debt than mine did. And your Party would have burdened the next generation EVEN MORE on top.

Finally, as you asked me something similar earlier, have you checked with your leader what his position is, 'cos he favours a graduate tax or "infinite tuition fees" (you never pay them off) and it'd be nice to know if they're going to be the same amount as the loan repayment (in which case, what's the difference and why's he claiming there is one) or if they're going to be lower (in which case where's he going to get the rest of the money from – because surely he wouldn't give LESS to universities; that would be "cultural vandalism").

Are you arguing that before Labour spent any money it should have paid the debt down to nothing?

Clearly not. I am saying you should not have been paying out more than you got in during a boom: clearly that is unsustainable.

If so, were you arguing it at the time?

Obviously not, since that's not what I'm arguing. However, if you mean "were you arguing against overspending at the time", you can find speeches from Vince Cable going back to 2003 warning against increasing debt. So not only were you overspending, but people DID notice – so much for Mr Potato Ed's denials.

And where would have found 2% of GDP to invest in that infrastructure?

We would not have invaded Iraq. That's a billion pounds a month to spend on swimming pools right there.

But I don't accept the premise that you can only invest in infrastructure by running a deficit. To govern is to choose – but you chose to have your cake and eat it.

"But then the Labour Government's OTHER policy – of being intensely relaxed about people getting filthy rich – led to the casino banking disaster and all bets were off."

Light touch regulation was/is a disaster. What extra financial regulations has coalitions implemented so far to stop another banking crisis?

How very ON-MESSAGE of you: this week we're admitting to letting the banks get out of control, aren't we.

Since you ask: the Coalition has brought all the regulation together under the Bank of England to avoid the lapses caused by things falling into the gaps between the FSA, the Treasury and the Bank. We've giving the Bank additional regulatory powers on top and are increasing the disclosure requirement.

We've implemented the Bank Levy – something Labour said was impossible – which will raise more than nine billion over the course of the Parliament. We did not reintroduce Labour's one-off bonus tax because it raised less than Labour said it would and because the banks had put measures in place to avoid it. Even Mr Alistair Dalek the former Labour Chancer said that the bonus tax would only work for one year.

And Mr Dr Vince is currently leading the negotiations with the banks to regulate bonuses AND increase much-needed lending to business (so-called "Project Merlin").

I know you like to THINK that we're in the pockets of the bankers and letting them get away with it, but that was the last lot, I'm afraid: that was Labour.

"But how does "economic growth" work? Well, if GDP is more next year than it was this year, then you can borrow the same amount in cash terms and it will be a smaller PERCENTAGE of the GDP.

In other words, you've not really FIXED the problem; you've just used INFLATION to make it look smaller"

Nope, you're way off mark here. Economic growth means increases in tax receipts for the government…

Which, of course, I actually say. Thank you for agreeing with me.

However, the Labour leader specified "tax receipts" and "economic growth" as two DIFFERENT ways to close the deficit. Your "explanation" merely reiterates what I say when I show this is nonsense.

…which closes the cyclic part of the deficit.

You see, you get this RIGHT here; and then contradict yourself two lines later.

Osborne is banking on increased economic growth to help close the deficit.

Yes, of course he is. So are you.

Although your Mr Ed says: "economic growth - and that's the thing they're leaving out of the account here".

Maybe you need to e-mail him and set him straight about that too.

We have a "structural" part to the deficit because economists are guessing that around 5% of our trend growth has been destroyed by the financial crash. If we were to have an economic boom with above trend growth we could close the deficit without doing a thing.

I've said it above but EEEEEEK!

And again, first you say economic growth closes the cyclical deficit; now you say the economic crash caused the structural deficit. For the record, it's the former that is correct.

I'll say it again, there are two sides to a balance sheet.

And I'll say it again: SPENDING does not go to the ASSET side of the balance sheet

So, bad luck trying to blind the reader with jargon – I'm afraid I know what I'm talking about and you clearly don't.

Ed isn't arguing to never reduce the deficit or pay down the national debt

Your double negative does not make a positive.

Mr Potato Ed's stated position is only to HALVE the deficit. That means continuing to increase the debt. Anything else I'm afraid, is along the lines of his conveniently-discovered-many-years-after-the-fact opposition to the Iraq war – he's not TOLD anyone about it.

He is arguing for a slower pace which would lessen the deflationary impact on the economy…

Again that's not a slower pace to repaying the debts run up by the Government he was a part of. That's a slower pace to STILL ADDING TO THE DEBT.

And by the by, the economy is currently suffering from INFLATION, not helped by Labour allowing the pound to devalue; deflationary pressures will actually contribute to containing that.

lessen the social impact (which is going to be huge particularly for those reliant on social services like my sister)

And like my Daddy Alex and like Daddy Richard's mum and dad. They all support the Coalition's efforts to control the national debt because they'd rather get the pain over now than have to carry if forever. You see, I can use the "appeal to sympathy" fallacy right back at you.

But Labour's record on "social impact" – the worst social mobility since the VICTORIAN ERA – is hardly something to trumpet.

Most of the Labour Government's efforts – tax credits mainly – were aimed at the people just slightly below the poverty line, so they could fiddle the statistics while abandoning people in real need to despair.

Labour papered over the cracks in society with candy coloured paper and left it to fester.

The Liberal Democrats insisted on the pupil premium as a first step to genuinely helping people achieve social mobility; and we implemented a tax cut for basic rate taxpayers (fully supported by the Conservatories) to reward working; and we're backing Mr Drunken-Swerve's benefit reforms in order to help people overcome poverty, not gloss over poverty with handouts and credits.

and raise taxes through progressive taxation rather than regressive taxation (i.e. VAT).

Well, by "progressive taxation" you mean "though the backdoor tax of national insurance" (with the hidden increase of the employer's NI on top of the income tax-a-like employees' rise).

Here it's YOU being simplistic. The IFS have said that a VAT rise is surprisingly NOT regressive. I'm not sure that I agree, but that needs to be taken into account. And the impact of NI rise on jobs versus the effect of the VAT rise on jobs is disputed.

My stated preference – which is NOT Coalition policy – remains to raise INCOME TAX. Because it is honest and obvious as well as progressive, and it is easier to REVERSE later.

At the General Election, the Liberal Democrats' manifesto – unlike Labour's – proposed several progressive tax changes, including: a Mansion Tax on multi-million-pound homes; taking the poorest out of tax altogether (when Labour regressively doubled their tax rate); and increasing Capital Gains Tax for the richest (which Labour regressively cut so they could comfortably get filthy rich).

However, as minority partners in the Coalition, we have had to accept that the Conservatives prefer to raise VAT. In return, they have made several major concessions to us, not least on Capital Gains Tax and Inheritance Tax (which they abandoned as a compromise for us dropping our directly opposite Mansion Tax proposal).

The balance of taxes is one area where I disagree with Labour AND Coalition. So do a LOT of Liberal Democrats. But that's only to be expected. We didn't win the election – so we didn't get to do everything we wanted to do. A COALITION is bound to do only SOME of what we would have done if there was a Liberal Democrat majority.

And while we're at it, what is so PROGRESSIVE about giving more, and more, and more money to the bankers? Labour BLAMES the banks for the economic collapse… so why do they want to keep REWARDING them with more and more and yet more interest?

Labour's plan would involve harsh cuts but not as harsh as the coalitions at the cost of incurring a bit extra in debt interest payments.

Labour's plan would NOT solve the problem. Half a deficit is STILL a deficit.

That means the total DEBT would only continue to grow. You will never pay it off.

Until you and your Party get this into your heads you will never deserve to recover your reputation for economic competence.

And that's where I think I came in!

The IMF estimates Britain could increase debt to GDP to 150%.

And do they say that as a positive or as a worst case scenario?

I will repeat: historically, for Great Britain a level of debt of 30% to 40% has been seen as sustainable. You haven't disproved that, or even disputed it.

But that is not what Ed is arguing for…

Well thank goodness for that! Labour Leader not calling for Britain to reach Third World levels of debt, shock non-story!

The press is FULL of things that Mr Ed is NOT calling for: he's not calling for tuition fees (even though Labour did at the election), he's not calling for VAT to go up (even though before the election Mr Alistair Dalek was secretly planning to).

If it's not too much to ask, could we have some clarity on what he WILL call for?

…and at no stage under the Labour government or the past 8 months was the UK in danger of a sovereign debt crisis.

It was, you know.

I mean, assuming you've actually talked to people in the City, people in the know, then you would know that they were INCREDIBLY nervous and the main worry was that Britain rather than Ireland would be next after Greece. The speed of the Coalition agreement and then the emergency budget were the main things that allayed those fears (helped, I will add, by stronger than expected growth for which Labour deserve some credit).

But you REALLY cannot claim credit for the eight months after the Coalition took over, can you.

But, hey, you carry on with the misinformation…

I will leave that to you.

and childish name calling.

Oh you don't like the NAME CALLING!

(Pity that goes against the evidence of your own writing.)

But EVERYONE gets called silly names here: I'm a stuffed elephant; the Prime Monster is a balloon; the leader of the Liberal Democrats is a pirate. It's hardly the most SOPHISTICATED satire in the World.

I call the Labour Leader "Mr Potato Ed" because he's a synthetic vegetable with a random collection of replaceable plastic expressions pinned to the outside, as demonstrated most recently by his new "mistakes were made" furrowed brow and "wooing the Lib Dems" lips.

But if you don't like name-calling then you shouldn't resort to the even-more-childish line:

Oh and helping the tories finish off what they started in 1979.

That hasn't been original since "Not the Nine O'Clock News" did it in, ooh, 1980?

And after three long comments that were very short on facts it makes you look a bit, well, partisan. And simplistic.

So, honour defended, maybe next time I can write about how it would be nice to have a SENSIBLE conversation with Hard Labour.

I can wish!

Tuesday, January 18, 2011

Day 3668: Economic Credibility Means Knowing the Difference Between DEFICIT and DEBT - A Brief History


"On this central question of why do we have or why did we end up with a deficit of more than 10% of our national income, the Conservatives and the Liberal Democrats I think are pedalling a very dangerous myth because they want to tell people that it was somehow all because of a decade of overspending under Labour. It wasn't. It was because of a financial crash; a financial crash that happened all round the world."

Ignore the bit about "peddling a very dangerous myth" and this statement is SUBSTANTIVELY TRUE. But also MASSIVELY MISLEADING. Let me explain:

The quote comes, of course, from Mr Potato Ed, Leader of the Labour Party and (though he'd rather we all forget it) former economic advisor at the Treasury under Mr Frown, answering Mr Andy Marrmite about Hard Labour's mistakes on the economy.

He's trying to create a very NARROW definition of Great Britain's economic problems, one which he can then palm off on the handy scapegoat of the not-so-very-much-beloved bankers, and thus absolve Hard Labour of responsibility for what happened while they were in Government.

So let's take this to bits:

The DEFICIT isn't the same as the National DEBT.

The DEFICIT is the amount by which the Government's spending in one year EXCEEDS its income for that year.

The DEFICIT is how much DEBT we ADD to the mountain of DEBT that we have already.

A deficit of more than 10% of what the country earns is, of course, appalling. Imagine adding 10% of what you earn to your credit card bill, and shudder.

You certainly can't do that on an ongoing basis. But in an EMERGENCY and so long as you pay it back again, you probably can. At least that's the theory of the famous economist Mr John Milton Keynes: if the economy contracts, the government can borrow to tide things over; when the economy grows, then the government can pay the borrowing back.

Now it is TRUE that the only year under Labour where the DEFICIT exceeded 10% of GDP was 2009/10 (although it is budgeted to do so again this year, 2010/11).

When the banking sector collapsed, the TAX coming in from their vast boom in profits also collapsed. At the same time, the Labour Government chose to cut VAT in the hope that this would stop a big fall in consumer spending, and that further reduced the tax money coming in. PLUS they increased spending (like good little Keynesians) at the same time.

This meant that the difference between spending and income suddenly jumped wider because of the credit crunch.

So it's also TRUE that the big deficit was because of the banking crisis.

But – and this is where the MISLEADING bit comes in – NO ONE IS DENYING THAT.

The REAL complaint of the Liberal Democrat / Conservatory Coalition is NOT that Hard Labour borrowed too much in one year of the emergency; the REAL complaint is that Hard Labour were borrowing YEAR IN, YEAR OUT throughout the BOOM years while the economy was growing and NEVER PAYING ANY BACK. And that ain't no myth!

In every year since 2001, the Labour Government spent MORE than it raised in taxes and used borrowing to cover the difference. That difference was of the order of thirty to forty billion pounds each year. Compared to the TOTAL earnings of the British economy, that was QUITE SMALL: only about 2 to 3% of the GDP. But it was MORE borrowing on top of borrowing, year in year out.

Between March 2001 and March 2007 the TOTAL amount owed by the Government increased from just over three hundred billion pounds to just under five hundred billion pounds. That's about 60% MORE debt.

Now, left-wing economists – by which I mean "Labour apologists who talk about the economy", in case you think I mean "people who know what they are talking about" – will tell you that it's FINE to run a deficit; we've run a deficit in thirty out of the last forty years, they will say; so long as the economy grows, then the level of debt remains manageable.

There's only one problem with this approach: it's TOTAL BOTTOM WASH.

Surely "we've been running up the credit card for most of the last four decades" is an argument that it is MORE URGENT to start cutting the debt not LESS!

In the last forty years, Great Britain has struggled though economic hardship every time the debt has gone out of control and, with enormous pain, we've managed to wrestle our total debt back down again TWICE: once in the late 'Eighties and again around the year 2000.

Historically, well let's say for the last half century, a level of debt in the British economy of 30-40% has been seen as SUSTAINABLE. It was much higher after World War Part Two, and that was why RATIONING got WORSE after the war was won than while it was going on. It was much higher in the Nineteen Seventies when, you may have heard, the economy was a total BASKET CASE, with rampant inflation and the IMF intervening.

After the recession of the early 'Eighties, the Conservatories managed to cut the total debts by about 10% from a hundred and sixty-seven to about a hundred and fifty billion pounds. Meanwhile, the economy grew sharply, meaning that the level of debt fell as a percentage of GDP, even if we weren't repaying that much.

But then Black Monday and the Poll Tax riots all happened, and Mr Norma Lamont lost all control of the economy, meaning he and then Mr Fatty Clarke more than doubled the national debt to three hundred and fifty billion pounds by the end of Mr Major Minor's Government. As a share of GDP that took us from a low of 26% to a peak of 42.5%.

Then Hard Labour reduced the debt again by about 10% from three hundred and fifty to three hundred and eleven billion pounds over the course of their first term. Remember, for that Parliament, Lord Blairimort and Mr Frown stuck to the CONSERVATORIES' spending plans while Mr Frown raised lots of extra money by (a) RAIDING the PENSIONS of their Advance Corporation Tax credits (b) levying a WINDFALL TAX on the privatised utilities and (c) auctioning off the 3G telecoms licences at hugely inflated prices.

But then from 2001 they spent more than they raised in taxes. Yes, I know I'm repeating myself but it's the MOST VITAL point. They spent more than they raised in taxes.

This meant that the ratio of debts to the size of the economy gently increased from 29.7% to 36.5%. Hard Labour were able to CLAIM that the debt was remaining ROUGHLY THE SAME.
And – and this is important – they were able to say that this remained LOWER than the figure they inherited from the Conservatories, which had been 42.5% of the economy in March 1997.

But remember, they were left in a BAD position regarding DEBT. Getting BACK to that position isn't a GOOD thing; it's a measure of FAILURE.

And at the time, the whole economy was growing too, inflated by Mr Frown's BOOM off the back of cheap Chinese loans and the sub-prime housing bubble.

Remember Prof Keynes' rules: when the economy is growing, you PAY BACK the debt.

THAT is the issue that Mr Ed needs to explain: why were they NOT paying back the debt in the boom years?

Times were good and the Labour government STILL needed to borrow to cover its spending: if that's not a DEFINITION of OVERSPENDING, then I do not know what is.

In fact, the Labour Government was getting EXTRA money because the BOOM was inflating its income. So there's the NORMAL sustainable amount of tax from the NORMAL sustainable economy; then there's the EXTRA cash on top of that from the boom, and then there's the spending HIGHER STILL.

But then the Labour Government's OTHER policy – of being intensely relaxed about people getting filthy rich – led to the casino banking disaster and all bets were off.

The total GROSS debt jumped to A TRILLION POUNDS. Net Government debt, which is the total we owe, less the value of assets that the Government own – e.g. shares in banks – increased to seven hundred and seventy-two billion pounds or from less than 40% of GDP to more than 60% of GDP (and may rise almost to 70% of GDP).

To tackle this DEBT we need to STOP ADDING to the mountain and start paying some back.

What would Mr Ed do?

"there's three ways you can cut the deficit: tax revenues, spending cuts and economic growth"

This again is misleading.

First, he talks about cutting the DEFICIT not the DEBT. To cut DEBT we need to ELIMINATE the deficit; we need to run SURPLUSES, probably for many years. Hard Labour's plan is only to HALVE the deficit, or – in plainer language – to KEEP ADDING to the DEBT.

Then there's the sleight-of-fluffy-foot over "economic growth".

The government controls taxes and spending directly. If spending is more than taxes, then you can see clearly that they could raise more tax or cut their spending and it will close the gap.

But how does "economic growth" work? Well, if GDP is more next year than it was this year, then you can borrow the same amount in cash terms and it will be a smaller PERCENTAGE of the GDP.

In other words, you've not really FIXED the problem; you've just used INFLATION to make it look smaller.

Of course inflation CAN help you with your debts: inflation makes wages go up and the costs of goods go up, so you can expect to get more money in from the existing taxes.

Some people might call that "raising more tax revenues", of course.

Then, as long as spending DOESN'T INCREASE by as much as the tax income, the deficit will get smaller.

This is EXACTLY what the Coalition are doing. Remember, the Liberal Democrat / Conservatory government is going to spend MORE this year than Labour did last year. Just not-as-much-more as Labour would have done.

Some people might call "increasing spending by less than the growth in the economy" "real terms cuts" or just CUTS (in particular people like Mr Potato Ed).

So Mr Ed's three ways of cutting the deficit are "tax revenues, spending cuts and economic growth" where "economic growth" basically means "raising more tax revenues" or "real terms cuts". Which is just the first two again, isn't it.

And how does a Government MAKE "economic growth" anyway?

You could INCREASE SPENDING to invest in growth – but that means INCREASING the deficit.

Or you could CUT TAXES to stimulate growth – but that means INCREASING the deficit.

Or you could do nothing and HOPE for growth – which at least DOESN'T increase the deficit.

The Coalition strategy is to spend LESS but BETTER, to try to invest for growth without increasing the deficit; and to change taxes around in the hope of finding a combination that will stimulate growth better (or at least less worse) than the current arrangement (hence increase VAT but cut corporate tax and freeze employer's NI; increase tax on capital gains but cut income tax for basic rate payers). It may not work. But at least it's a PLAN.

Mr Ed opposes cuts and says that the VAT rise was wrong (and presumably the NI rise would have been right). It appears that he is opting for option three: do nothing and hope.

Essentially, he's offering us a third alternative that DOESN'T EXIST; he's trying to tell us that there's a PAIN-FREE third way that the Coalition have overlooked (or ignored for "ideological" reasons), but it's just not true.

Mr Ed refuses to accept that spending more than you earn when we were earning the most we ever have was a mistake. It seems, though he won't be drawn on any actual policy, that he would go back to the same old attitude of never pay any debt back.

But if you don't ever pay it back, then you create a RATCHET effect, where you keep adding to the debt in the good years and every crisis you jump to a new and higher level of debt: 60%... 80%... 100%... where does it stop?

Or, more to the point, where does the economy go Greek and IMPLODE?

Numbers quoted are from HM Treasury.

Friday, January 14, 2011

Day 3661: The Wrong Kind of Story


Let's face it: human beans are pretty badly put together in the BRAIN department. It's in your interests to cooperate, but you just don't.

Instead, inside your little heads, you're all the heroes of your own story, as I said yesterday. You don't SEE other people except as BIT PLAYERS in your own PERSONAL DRAMA.

The whole of American culture – and now, by extension, the whole of OUR culture – encourages this idea: "one man (it usually IS a "man") CAN make a difference". And the corollary: the government/big business/the bureaucracy/the Matrix/absolutely everyone else is venal, incompetent, corrupt. And probably out to get you.

In how many films is this the plot? In how many TV series is this the premise? From John Wayne to "Knight Rider", from Superman to "24", even "Doctor Who" (the "rebel" from a world of "self-absorbed bureaucrats who run the universe" – which may be why it is as beloved to right-wingers as to Liberals) all say this.

(Of course it's an almost perfect fit for TV or Movies where the economies of the form – dramatic as much as monetary – require a preference for a small central cast of characters and almost certainly a single key protagonist. Who, by a total coincidence, is usually white and male and almost-without-exception heterosexual and cis-gendered.)

The maverick entrepreneur is lauded as heroic when the faceless bankers are condemned (hence the "lucky chancer barrow-boy" persona presented by Lord Sugar-Plum Fairy); the iconoclastic artist is praised as a radical while the populist is condemned as bourgeois (unless you are on "Britain's Got Strictly the X-Factor on Ice" where the plucky populist is the "underdog" against the elitist "industry" – does NO ONE see the irony in this?!); the brave protester, standing up against the vested interests of the establishment is lauded as the lone voice of "common sense" (and so the Prince of Wales, the World's most establishment Don Quixote, wearily tilts at the windmills of "Big Pharma" – defending the multi-billion pound "alternative medicine" industry – and "Big Agriculture" – defending the multi-billion pound "organic farming" industry (in which he has an interest) – and "Big, er, Architecture" – defending, well, his NIMBY chums – in an effort to use the story to make himself popular).

And it doesn't stop there, of course: it's the basis of revolutionary communism and the Führerprinzip too.

Even the World's biggest RELIGION is based on this idea. Heroic outsider who makes a BIG change; corrupt and incompetent government (bribery with thirty pieces of silver; washing their hands of decisions)… is any of this ringing any bells? Christianity historically does VERY well among the poor, the deprived, the underprivileged, the ill-educated and why? Not because those people are more credulous or more gullible (…well, maybe not JUST that…), but because it has a really good STORY.

The REASON that Superman ends up as Mr Jesus so often is because Superman AND Jesus are both YOU. In your own story you are the unique individual that changes and creates the world around you.

It's no wonder that Mr George Lucas ended up turning his own mythology INSIDE-OUT: a Force that relies on you building connections with other people, working together even(!), is the EXACT OPPOSITE of the story of the "chosen one", the one special flower who will do… whatever (in this case "bring balance to the force" but basically "win").

And in a very real way this is how the Captain went from Cleggmania to being burned in effigy: the story of the coalition simply does not fit this overriding world view.

"Star Wars" has to END with the moment that the rebels WIN; you can't go on and have them form a GOVERNMENT (and no, I'm NOT getting into "expanded universe" novels). How's the story supposed to work if the rebels next worry is about the fact that the Emperor has spent all the money on Death Stars so they have to choose between raising taxes or cutting benefits?

Likewise Dr Woo has to LEAVE the moment that the monsters are DEFEATED. Russell Davies' first series of "Doctor Who" (the one with Mr Dr Eccythump) toyed with considering the consequences of this, even went so far as to hint it was a moral derogation that ultimately allowed in the fascists. Or Daleks as Dr Woo calls them. Incidentally, it's easy and obvious to say that the Daleks represent Fascism or the Cybermen represent Communism, but actually both (and indeed our real world fear of "Fascists" and "Commies") also draw on our ALIENATION from a world that at times seems full of identical blank-faced hostile and oppressive OTHERS. Still, a literal deus ex machina saved Dr Woo from having to face the consequences of his sticking to the "and now we leave" script, and he's shown no sign of wanting to take responsibility since (compared with Mister the Master who actually bothered to run the planet for a year! With admittedly MIXED results.)

And also likewise – and forgive me – Mr Jesus' victory definitely has to come in HEAVENLAND in the AFTERLIFE. Actually solving problems here in the real world would involve, well, actually solving problems here in the real world.

Because that's the problem with the story: Real Life does not HAVE winning lines. You don't ever get to "happily ever after". Or "heaven on Earth". Or the communist revolution. "Utopia" MEANS "nowhere". It's why the ENDS never justify the MEANS – because there AREN'T ANY ENDS.

So Captain Clegg gets to be the dashing rebel, the outsider, the underdog and everyone LOVES him and against all the odds – just as the story says he should – he wins, overthrows the government and takes his place in the throne room (or Downing Street garden). He even wins the heart of the Ice Princess. Er.

After that, ANYTHING (short of hopping into the TARDIS) is a betrayal of the story. So actually GOVERNING the country was the WORST thing he could have done!

Which brings us back to the right-wing commentators and their use of the language of HATE.

Somehow the right… actually it's not "the right", that's wholly imprecise; it's the AUTHORITARIAN Parties in Americaland (who, like an icky ichneumon wasp, are consuming the economically DRY Replutocratic Party from within)… anyway THEM, somehow they get away with this.

Perhaps they're particularly good at wiring themselves into the story, subverting the story, so that their supporters get to feel like the "lone hero" up against (if the Authoritarians are out of government) the government or (if the Authoritarians are IN government) the foreign foe/enemy within: commie or terrorist or whoever. Effete European will do at a pinch, particularly in Hollywood.

They SAY they are about INDIVIDUALISM, but it's the sort of individualism that leaves you ALONE and AFRAID. Individuals who wish to be separate should have that choice, of course they should; but authoritarians DEPEND on making you feel separate, and tell you you have NO CHOICE but to be that way. It is the individualism of divide and conquer.

That's why it is so important for me that I remind you of this: Liberalism IS about empowering the individual. But it's not JUST about individuals. It's about the CONNECTIONS that you make as an individual. So it's about FAMILIES. And about COMMUNITIES. And about NATIONS. And about WORLDS.

It is the CONNECTION between us that means we have a duty to be KIND to one another. Disagree, surely, but don't despise.

Thursday, January 13, 2011

Day 3660: A Culture of Violence


We're all the heroes of our own story; that's how it goes isn't it? Very few people, I should think, in spite of the very bad things that they do, think of themselves as "the baddies".

Hearing about the HORRIBLE shootings in Tucson, Arizona, it was very, very easy to get all scared and angry and say that the right-wing media and commentators and politicians whipping up a culture of HATE are to BLAME.

But I've thought long and hard about this and come to the conclusion that actually… the right-wing media and commentators and politicians ARE to blame!

Ms Sarah Palin, the moose-murdering QUITTER who walked out on governing Americaland's least-populous State, has labelled such blame a "BLOOD LIBEL".

This is pretty much EXACTLY the sort of thing that she is to blame for: using lurid and violent language to portray her political rivals as literally "evil", and yes obviously painting herself as a "persecuted victim" by referring to the scandalous accusation by the more rabid form of Christian people (ironically, people LIKE Ms Palin) that Jewish people murdered children.

This is actually pretty SICK when the situation for which she is denying ANY responsibility involves the murder of a CHILD.

Lady GoreGore argues cogently and wisely that we don't know and CANNOT know what was going through the head (um, bad metaphor) of the assassin.

We DO know that someone tried to murder a Democrat politician and DID murder a number of people who just happened to be standing near to her. We ALSO know that with the rise of Ms Palin and her Tea Party, and the radio and now Faux News "shock jocks" there has been a rise in angry and hateful language. We cannot know that the former was caused by the latter.

But we CAN know that the language of hate is WRONG in and of itself.

Quite simply, Americaland is the richest safest country anywhere on Earth, anywhere in history. They have money, resources, enormous amounts of space, an almost invincible defensive position with no hostile neighbours, and (short of that super-volcano under Yellowstone going off) virtually no threat from nature that they cannot overcome with care and preparation.

And yet, Americans have been wound up into a frenzy of terror and nervous exhaustion by years and years of being told to BE AFRAID. Be afraid of disease, be afraid of foreigners, be afraid of strangers, be afraid of the government, be afraid of each other. And why? To serve the political agenda of one particularly authoritarian and (ironically) centralising faction.

Barry O got elected on HOPE, but HOPE didn't LAST. FEAR, on the other fluffy foot, fear is not just for Christmas…

But to quote superannuated Fozzi-bear-alike, Yoda: Fear leads to anger; anger leads to hate; hate leads to suffering. And I'll come back to "Star Wars" in a bit.

The "War on Drugs", the "War on Terror", the "Culture Wars": the language of violence, and of violence as EXCITEMENT, has been used over and over to justify ever-more rightward policies.

And the language of differences over policy has been escalated first into tribal hostility and then into outright McCarthyite renunciations and THEN up into Nuremburg-level rallies tossing accusations of TREASON, denouceing denouncing political opponents – or even just useful victims: "the gays" "the atheists" "the left" yes or "the right" – as THE ENEMY, up to and including the suggestion that the President is not "really" an American. Or, in extremity, not even a HUMAN. (WARNING: may contain NUTS!)

(Like it MATTERS! For fluff's sake: the man got a popular mandate based on his POLICIES, supposedly, not his DNA. Though of course the fact that a lot of this is code for "not pink enough" should go without saying.)

Ms Palin may NOT have called for the assassination of Representative Gabrielle Giffords, but she certainly DID call for Wikileaks founder Mr Julian Assange to be "hunted down like the leaders of al Qaeda".

(And presumably by "hunted down like the leaders of al Qaeda" she DIDN'T mean "allowed to get away while we conduct an illegal invasion of entirely the wrong country".)

Setting to one side whatever may have happened in Sweden, Mr Assange's only "crime" against Americaland is to have caused ACUTE EMBARRASSMENT to some of their formerly-faceless bureaucrats.

When we've got to the level of threatening DEATH to people who EMBARRASS us we are WAAAAAAAY beyond NUTS. This isn't free speech; this is criminal incitement. And for the record, your right to free speech ENDS right at the point where you start threatening someone else's right to LIFE.

It's one of the things that APPALS me about the post-New Labour trajectory of Britain's most authoritarian, right-wing party: the Labour Party. Their use of "betrayal" and "treason" in their language; the use of intimidation, and violent intimidation on the streets by supporters and "fellow travellers" (can we say that?); the playing of the RACE card… the step from a socialist to a national socialist party ought to be UTTERLY RIDICULOUS… "unite against fascism" ought to be an ironic oxymoron, but somehow I don't think anyone gets it… and yet… and yet… there are people in or around Labour FLIRTING with this behaviour and too many people OVERLOOKING them flirting with this behaviour.

Not that there aren't GOOD people in the Labour Party who would be and are equally appalled by this sort of thing. Let us hope they reassert control over their Party.

So I DO put the blame on Ms Palin and her spokespeople and supporters.

I say to them: you are WRONG.

You are wrong in WHAT you say; and you are wrong in the WAY that you say it.

The language that you use is deliberately chosen to DIVIDE and INFLAME, to ALIENATE and to ANGER. And fundamentally you make the World a LESS HAPPY place by doing it. A less cooperative place, a less friendly place, a less – even – Christian place.

And that is just wrong.

Saturday, January 01, 2011

Day 3653: The SKY's the Limit

New Year's Day:

Today is my BIRTHDAY and…

HOLY FLUFF! Daddy Richard's on the telly box!

Run VT!

Well, at least he didn't accidentally go to war with any media barons or make up coalition policy on the spot!

Happy Birthday Me!