Not new Labour


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We continue to oppose the government's cuts but we can't promise to reverse any of them. That, in summary, is Labour's supposedly "new" position this weekend.

However, it does not represent, as many seemed to think, any change in the party's economic policy. It is a change merely of political message.

The Two Eds still believe that the government is cutting too far and too fast. They still believe that the chancellor's strategy is not just unfair but will lead to a bigger not a smaller deficit. They still oppose cuts like those to benefits, defeated in the Lords last week, and those which will be challenged in the weeks to come - as the Labour leader made clear this morning.

So, what justifies the talk of a big policy shift? The Eds believe, as I wrote earlier in the week, that Labour's economic credibility will be restored by what they say about the future not the past. Therefore, they have chosen to highlight promises that they won't make.

Yesterday's announcement that Labour will back and not oppose continuing public sector pay restraint was chosen precisely because it would cause a fuss. It was a carefully selected symbol of realism meant to prove that the party is not in denial about the deficit.

Ed Miliband and Ed Balls have been urged by some in their party to apologise for the past as a way of being taken seriously now. They will not do that. They have decided, instead, to sound tough about the future in order to be listened to more in the present.

It should worry the party that after two big speeches by the two Eds many seemed to have misunderstood what they were trying to say.

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  • rate this

    Comment number 240.


    Why are discussions of inequality a dogma when the declining marginal propensity to consume is one of the two planks of Keynes` General Theory, as is his proposal that putting money in the pockets of those with a high MPC,ie poor and middle incomes has a multiplier effect.

    This has implications for the political sociology of crisis management was used by Brown and advocated by DSK.

  • rate this

    Comment number 239.

    JH there is lots govt can do to encourage risk capital investment in productive industry without big govt – e.g. limit tax relief on debt repayment, introduce proper asset impairment rules for inflated (fantasy) assets, introduce selected sector tax relief on equity investment and capital gains. Provide SME seed equity. That’s before we even start on finance sector regulation.

  • rate this

    Comment number 238.

    Bryers you speak economics then ? LSE ? If you’ver read Keen you will know he targets Friedmann for special critiscism (monetary theory failed Thatcher and Bernake/Kings QE). If you are a post keynsian you are ok with a bit of proper maths, if you can do much more dynamics, develop a grown up theory of value and dump some of the political (inequality) dogma then we will start to agree.

  • rate this

    Comment number 237.

    JH 235

    The habit of not investing here started early.Between 1870 and 1914 we invested 4 billion in new markets starving industry of capital as our competitors industriaized.

    Late industrialization has advantages in new plant and methods as Europe and the USA have discovered

    An industrial policy protects what we have,nourishes innovation,stimulates growth beyond economic stablization

  • rate this

    Comment number 236.

    FBL 230

    It wasn`t debt deflation that rescued the world economy from the great depression but the war economy when debt increased astronomically.Nor was this debt a brake on growth post-war using Keynesian techniques of demand management.

    Marx,Keynes and the IMF young turks see depression as a consumption crisis.Keen is a late monetarist playing marbles in Friedmann`s backyard.


Comments 5 of 240



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