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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Quiz: Can you identify fake news?

The furore around "fake" news shows no sign of abating. Can you spot what's real and what's not?

Hillary Clinton has spoken out today to warn about the fake news epidemic sweeping the world. Clinton went as far as to say that "lives are at risk" from fake news, the day after Pope Francis compared reading fake news to eating poop. (Side note: with real news like that, who needs the fake stuff?)

The sweeping distrust in fake news has caused some confusion, however, as many are unsure about how to actually tell the reals and the fakes apart. Short from seeing whether the logo will scratch off and asking the man from the market where he got it from, how can you really identify fake news? Take our test to see whether you have all the answers.

 

 

In all seriousness, many claim that identifying fake news is a simple matter of checking the source and disbelieving anything "too good to be true". Unfortunately, however, fake news outlets post real stories too, and real news outlets often slip up and publish the fakes. Use fact-checking websites like Snopes to really get to the bottom of a story, and always do a quick Google before you share anything. 

Amelia Tait is a technology and digital culture writer at the New Statesman.