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johnharris66

Listed below are comments made by johnharris66 between Tuesday, 8th December 2009 and Saturday, 12th December 2009.

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Pre-Budget report disagreement between Treasury and No 10 10:22am on 12 Dec 2009 #174 bryhers

I'll pass on your misrepresentation of Conservative economic policy this morning as I've responded to it to our mutual dissatisfaction too many times before.

You wrote:
"The conservative temperament is risk averse,tends to anxiety and fails to innovate, so eventually public expectations run ahead of their capacity to change.The radical temperament tends to risk taking,innovation and decline as projects fail."

I note that you, correctly, don't use capital letters so it is of course not necessarily the case that this corresponds to political parties.

In terms of psychological temperament Brown seems the classic conservative whereas Blair seems the radical. But if your division is a question of just psycholology it is not particularly interesting, and I doubt that was your intention.

We could, I suppose, say that Thatcher and Thatcherism showed both tendencies at the same time, radical in economic policy but conservative in social policy. Michael Foot was a radical in both ways so we might say that the 1983 election was a battle between two visions of radicalism.

Since then we might say that British politics has been a battle between different forms of conservatism. The exception was perhaps Blair's policy of liberal interventionism, which seems a radical departure in UK foreign policy.

The political positioning of the current Conservative leadership is particularly risk-averse, and I think the result of three heavy general election defeats. It's why they followed Labour's economic policies (for too long in my opinion), and why they still haven't been particularly radical in their deficit reduction policy (here we disagree what Conservative economic policy is, and so it's back to my opening remark).

A question for you. Do you wish to define Keynesian economics, in the 21st century, as conservative or radical?

P.S. your lion/fox division reminded me also of Berlin's excellent essay 'The Hedgehog and the Fox', which you probably know. By analogy with Tolstoy, New Labour is a fox trying to be a hedgehog.
Pre-Budget report disagreement between Treasury and No 10 12:36pm on 11 Dec 2009 #25 pdavies65 wrote:
"The cohorts of apathetic and disenchanted Labour supporters now have a reason to get out and vote."

I can understand that Labour's recent reversion to "class war" has invigorated the Labour leadership, MPs, and no doubt activists.

Of course New Labour was successful when it built an electoral coalition from a wider section of the community, wheareas now it does seem Labour is operating a 'core vote' strategy. The danger for Labour is that it may not appeal to voters in key marginals.

Of course you mentioned attitudes to spending cuts rather than class war. I don't know what the attitude of Labour activists will be, but I hardly think they are going to enjoy campaigning on a platform of real reductions in future public sector wages, and I've noted the negative Trade Union response to this.

The last few weeks have seen a modest improvement in Labour support so for now perhaps their strategy is working. We'll see what the reaction to the PBR will be (continuation of this trend, or reversal).
Pre-Budget report plans imply cuts 11:44pm on 10 Dec 2009 #83 Brhyers

Actually I agree with much of what you say (and see my reply to pdavies65 above). I am not a crass anti-Keynesian (or at least I hope I am not).

Since I am not an economist I will quote Mervyn King again:
"There must be elimination in large part of the structural deficit over, say, the lifetime of a parliament which is the period for which a government is elected. Anything beyond that is a statement of intent or hope rather than a plan to which someone can be held accountable."

King also said, in the same Select Committee, that UK financial services tax revenues were unsustainable. Retrospective wisdom possibly, but Labour have not owned up to hindsight wisdom about this or many other issues.

There is of course a difficult issue with the timing of the exit from fiscal stimulus, as everyone acknowledges, and you quite rightly say.

If we accept that the amount of discretionary fiscal stimulus has been constrained by a seriously weakening UK budget deficit then we might also say that the exit from the stimulus may have to be sooner than otherwise might have been the case.

Osborne never (to my knowledge) advocated reducing spending in a recession. What he did was to take Labour's GDP growth projections at face-value (going back to the ill-fated PBR of one year ago) to argue that if these growth figures were true then the Government could afford to reduce the deficit earlier.

There was a dispute between the parties over the discretionary fiscal stimulus. My argument is that this was not a large proportion of the deficit and the dispute has been overdone, for poliical reasons, by both parties. Whether it was effective, or implemented in the best way, will no doubt be a subject of academic study in the years to come.
Pre-Budget report plans imply cuts 10:56pm on 10 Dec 2009 #78 pdavies65

I think I more or less agree with your response (and yes, it was a puppy, not a toy). If Labour had repaid debt in the boom years, and operated a more effective counter-cyclical fiscal and monetary policy, the UK's scope for Keynesian measures would have been greater.

Clearly the deficit has exploded under the pressure of reduced tax revenues. For political reasons I think the importance of the (modest)discretionary fiscal stimulus, for good or ill, is much exaggerated by both Labour and Conservatives. My figures may be wrong, but both parties seem to have accepted a deficit of some 160-165 billion for this financial year. The argument seems to be about the other 10-15 billions. Significant, but not a chasm.
Pre-Budget report plans imply cuts 9:56pm on 10 Dec 2009 "Yet another Labour apologist"

Bryhers wrote (previous thread, but relevant to this):

"Like all good scientific ideas [Keynesian economists] are counter intuitive,for instance that a government should go into debt in periods of depression, and pay itself back when good times return.Crass statements like "They didn`t fix the roof when the sun was shining." Show a dangerous misunderstanding of modern economics."

Please don't be bullied by all this semi-intellectual banter. Bryhers never justifies or explains why Labour never mentioned Keynes until recently, and why Labour increased borrowing in the "boom" years. When are we supposed to "pay back when the good times return" when this is exactly what Labour did not do during the last boom (inflated asset prices etc).

Labour's 12 year record shows an ignorance of Keynesian economics.

For Labour Keynes is a like a child's toy, just for Christmas.
Efficiently tackling inefficiency 10:29am on 08 Dec 2009 #153 andy555 wrote:
"It was inevitable that it would all go wrong, both with Brown and with Madoff."

Mervyn King said something similar, in more diplomatic language, in evidence to the Treasury select committee recently. The record is on Hansard.
Efficiently tackling inefficiency 10:26am on 08 Dec 2009 #151 pdavies66

I agree it's difficult to measure the public mood. Before 2007 the economy was Gordon Brown and Labour's trump card whereas now I understand the Conservatives are slightly ahead on economic competence.

Of course saying that Labour are solely to blame for the crisis is an absurd proposition.

However, blame can be allocated to both the Labour Government and the Banks, and this in my opinion should sound more convincing to voters.

We have at least two interlinked crises. One is or was the banking system, the regulation of which failed in the UK and US. The other is the fiscal crisis in several Western economies. No UK politican is addressing the latter issue at all adequately, but some are addressing the issues more honestly than others. I don't want to be personal where it is not necessary, but Brown seems to deny there is a fiscal problem whereas Darling and the Treasury seem more realistic. But perhaps they are both playing the roles allocated to them.
Efficiently tackling inefficiency 09:37am on 08 Dec 2009 #139 Bryhers

Bernanke was attempting to persuade Senate members not to emulate Brown's failed banking regulatory model.

Seems eminently sensible advice to me.
Efficiently tackling inefficiency 09:28am on 08 Dec 2009 "Labour's economic policy not credible"

Evidence to the Treasury Select Committee, November 24, 2009

When asked,
"Given what you said in your opening statement about the need for a credible plan to consolidate the public finances, what are the ingredients of that credibility?"

Mervyn King, Governor of the Bank of England replied:
"There must be elimination in large part of the structural deficit over, say, the lifetime of a parliament which is the period for which a government is elected. Anything beyond that is a statement of intent or hope rather than a plan to which someone can be held accountable."

Labour's plan, halving the deficit over 4 years will make little or no impact on the UK structural deficit by the end of the next Parliament (the UK will still be borrowing nearly 100 billion a year). Clearly the Bank of England has no confidence in Labour's economic policies.
Efficiently tackling inefficiency 00:09am on 08 Dec 2009 "Brown to blame for the crisis" (flag for Brown apologists)

It is interesting to note that the Chairman of the US Federal Reserve, Ben Bernanke has recently criticised Brown's system of banking regulation (Senate confirmation hearing, 3 December 2009).

This is covered in more detail by Stephanie Flanders on the BBC website.

Bernanke told the US Senate:
"[O]ver the past few years the government of Britain removed from the Bank of England most of its supervisory authorities. When the crisis hit - for example when the Northern Rock bank came under stress - the Bank of England was completely in the dark and unable to deal effectively with what turned out to be a destructive run and a major problem for the British economy."

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