Goodbye and good riddance

Andrew Sentance's comments on interest rates are without any basis. Thank goodness he is leaving the

There were two big stories today relating to external members of the MPC. The first was by Andrew Sentance who, in an interview with the Flintshire Leader, argued that, "If you have interest rates too low for too long, the problem we have is it becomes more difficult to raise interest rates more sharply in the future." There is no basis for such claims. Why would it be harder to raise rates in the future because you had lower rates in the past?

Sentance's presence on the committee has apparently made it much harder for others to get their views across. He has been a damaging influence on the MPC. He failed to see the recession in the first place and has repeatedly suggested that it was all over when it wasn't. He seems to have little concern for unemployment and is hung up with some economic theory of the past that nobody takes seriously any longer, according to which all that matters is inflation. The main economic problem is not inflation and what happens in manufacturing isn't a good guideline to what happens in the rest of the economy. Even his boss, Mervyn King, thinks that, with the fiscal contraction going on, raising rates now would be a "futile gesture" that would have to be quickly reversed. Thank goodness that Sentance has only two more meetings left.

The second story was by my good friend Adam Posen, who has been voting for more QE because of his fears that inflation will be below the target in 2012. He is a Japan expert and knows about these things and needs to be taken seriously. Just because he is in a minority of one, it doesn't mean he isn't right; in all likelihood he is. In a Guardian story, he reports having had sleepless nights over his decision to break with the consensus. "I would take it deeply and personally, which is why I have laid awake at night thinking about it." My own experience at the MPC suggests that it is really hard to plough a different furrow from the tyranny of the consensus.

He has even gone as far as to say that he would not seek a second term if it turns out that he isn't right. I don't think there is much chance of that.

"If I have made the wrong call, not only will I switch my vote, I would not pursue a second term. They should have somebody who gets it right and not me. I am accountable for my performance. I'm holding my nerve because it is the right thing to do."

Posen was also sceptical about the suggestion that the government's deficit reduction plan could help growth by boosting confidence in financial markets, leading to a fall in long-term interest rates and higher investment. That hasn't happened, as consumer confidence has collapsed, UK growth has slowed and unemployment and inflation have risen. Adam is a man worth listening to. I suspect that, in a year or so, we will find his comments to be prophetic.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Northern Ireland election results: a shift beneath the status quo

The power of the largest parties has been maintained, while newer parties running on nicher subjects with no connection to Northern Ireland’s traditional religious divide are rapidly rising.

After a long day of counting and tinkering with the region’s complex PR vote transfer sytem, Northern Irish election results are slowly starting to trickle in. Overall, the status quo of the largest parties has been maintained with Sinn Fein and the Democratic Unionist Party returning as the largest nationalist and unionist party respectively. However, beyond the immediate scope of the biggest parties, interesting changes are taking place. The two smaller nationalist and unionist parties appear to be losing support, while newer parties running on nicher subjects with no connection to Northern Ireland’s traditional religious divide are rapidly rising.

The most significant win of the night so far has been Gerry Carroll from People Before Profit who topped polls in the Republican heartland of West Belfast. Traditionally a Sinn Fein safe constituency and a former seat of party leader Gerry Adams, Carroll has won hearts at a local level after years of community work and anti-austerity activism. A second People Before Profit candidate Eamon McCann also holds a strong chance of winning a seat in Foyle. The hard-left party’s passionate defence of public services and anti-austerity politics have held sway with working class families in the Republican constituencies which both feature high unemployment levels and which are increasingly finding Republicanism’s focus on the constitutional question limiting in strained economic times.

The Green party is another smaller party which is slowly edging further into the mainstream. As one of the only pro-choice parties at Stormont which advocates for abortion to be legalised on a level with Great Britain’s 1967 Abortion Act, the party has found itself thrust into the spotlight in recent months following the prosecution of a number of women on abortion related offences.

The mixed-religion, cross-community Alliance party has experienced mixed results. Although it looks set to increase its result overall, one of the best known faces of the party, party leader David Ford, faces the real possibility of losing his seat in South Antrim following a poor performance as Justice Minister. Naomi Long, who sensationally beat First Minister Peter Robinson to take his East Belfast seat at the 2011 Westminster election before losing it again to a pan-unionist candidate, has been elected as Stormont MLA for the same constituency. Following her competent performance as MP and efforts to reach out to both Protestant and Catholic voters, she has been seen by many as a rising star in the party and could now represent a more appealing leader to Ford.

As these smaller parties slowly gain a foothold in Northern Ireland’s long-established and stagnant political landscape, it appears to be the smaller two nationalist and unionist parties which are losing out to them. The moderate nationalist party the SDLP risks losing previously safe seats such as well-known former minister Alex Attwood’s West Belfast seat. The party’s traditional, conservative values such as upholding the abortion ban and failing to embrace the campaign for same-sex marriage has alienated younger voters who instead may be drawn to Alliance, the Greens or People Before Profit. Local commentators have speculate that the party may fail to get enough support to qualify for a minister at the executive table.

The UUP are in a similar position on the unionist side of the spectrum. While popular with older voters, they lack the charismatic force of the DUP and progressive policies of the newer parties. Over the course of the last parliament, the party has aired the possibility of forming an official opposition rather than propping up the mandatory power-sharing coalition set out by the peace process. A few months ago, legislation will finally past to allow such an opposition to form. The UUP would not commit to saying whether they are planning on being the first party to take up that position. However, lacklustre election results may increase the appeal. As the SDLP suffers similar circumstances, they might well also see themselves attracted to the role and form a Stormont’s first official opposition together as a way of regaining relevance and esteem in a system where smaller parties are increasingly jostling for space.