What do our leaders say about the economic "catastrophe"? Nothing

Britain's economic problems are getting worse. It's time the government took notice.

I have read my old friend Bill Keegan's column at the Observer for so many years. He started writing for them in 1977, first as economics editor and latterly as their senior economics commentator. He was previously at the FT and even had a short spell at the Bank of England, poor thing! Every Sunday, I turn to his column for his take on the current economics scene. This week was a real shocker. Bill, as he admitted this week, is not prone to hyperbole -- unlike some I could mention, perhaps including yours truly -- but, this week, he used the word "catastrophe" about the economy. He claimed he didn't relish using that warning but had to: "things are getting serious" because of the collective view of policymakers around the world that "simultaneous deflation is the answer to all problems". It's time to sit up and take notice when Bill starts to panic. I agree with him.

It seemed a good time to check out what our great leaders had to say about the coming "catastrophe" -- zippo, it turns out. First, on 14 September, there was Deputy Dawg Nick Clegg's fatuous speech on the economy at the LSE on the day that unemployment jumped by 80,000. Presumably, a number of LSE students, who, from my experience, are extremely astute, will not have failed to notice that of that increase 77,000 were of youngsters aged between 18 and 24.

Cleggy started off pretty well with this claim, which cheered me up, thinking that something of substance was coming:

The reality we face is stark; there is now little margin for error. But that does not mean we are helpless. It does not mean we intend to sit on our hands while the global economy falters. Our critics say that all this government is capable of is cuts. That, beyond lowering a few business taxes, reducing a bit of red tape, there is little else we are willing or able to do. That is absolutely wrong. We can do more, we are doing more, we will do more.

Great, at last some action.

Sadly, my hopes were quickly dashed, when shortly thereafter he claimed there will be "no deviation on deficit reduction". He made it clear that this government had every intention of sitting on its hands while the economy falters.

Then, on 16 September 2011, Slasher Osborne made a speech to the Daily Telegraph Festival of Business conference. He also showed that he had thrown in the towel, arguing that there was nothing he could do, as everyone else was to blame for Bill's catastrophe. There were a couple of choice quotes though:

Our plan was designed for both good times and tough times. Flexible enough to let the automatic stabilisers work. Strong enough to command the confidence of world markets. If we abandoned it now, there would be a collapse in that confidence and a surge in interest rates. Look at our neighbours. In Greece, market interest rates are almost 23 per cent. In Italy, 5 per cent. Our market interest rates this week were the lowest they have ever been in our history. Below 2 per cent.

The automatic stabilisers are simply increased spending that occurs in a downturn when unemployment rises. To argue that his policy was "flexible enough" to let them work is absurd. They kick in when economic policies fail. This week, the latest data release from the ONS on the labour market showed that the number of public-sector jobs fell 111,000 on the quarter, while private-sector jobs were up 41,000 on the quarter.

Let me repeat for the umpteenth time: Greece and Italy are stuck in monetary union and cannot depreciate their currency or do more quantitative easing. There has already been a collapse in confidence, from the moment this government took office, and bond yields are as low as they are because the markets believe the growth prospects of the UK economy have been so decimated by the wilfully inept austerity package that interest rates will have to remain at 1 per cent or lower for many years. Note also that when the US debt was downgraded by S&P, bond yields fell, and are much lower than in the UK. Osborne is for the birds.

The quote that made me LOL was this one: "Government helping business to help business. That is our agenda. It's an agenda for jobs. For business. For growth." The reality is, it's an agenda for no growth and no jobs.

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

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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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