Six reasons why Cameron is wrong on the economy
It is increasingly clear that the PM is out of his depth and out of touch. This is "nothing for nothing economics".
By David Blanchflower Published 22 November 2011 12:05
In a speech on the economy yesterday that was 2,235 words long, an out-of-touch David Cameron only mentioned jobs and unemployment once each. He didn't mention the young at all in a week when youth unemployment hit the million mark. It is becoming increasingly apparent that Cameron is a) totally out of his depth when it comes to the economy; b) has no clue what to do to fix the problem; c) has little sympathy for those who are less fortunate than he is. He just doesn't care. Cameron has failed to recognise that his government's economic policies are in complete disarray, and all he can do is resort to spin and obfuscation. Austerity in the UK has failed.
The part of the speech that really struck me was this:
[T]here are some who seriously try to argue that additional spending and borrowing will actually lead to less debt in the end ... despite the fact that no evidence supports this assertion. These arguments are just a way of avoiding difficult decisions ... the kind of something for nothing economics that got us into this mess ... which is why no indebted European country is taking that path. Nor are there any major European opposition parties in high deficit countries arguing for additional borrowing - except here in Britain.
It is about time we put this joker straight.
1) Actually, additional spending would stimulate growth and that would increase tax revenues, as it did in the US under the Clinton boom. In case you haven't noticed, Dave, your pal Osborne slashed spending and raised taxes, which increased borrowing. That is why you are in such a mess. What if the government borrowed £100bn that was funded by the MPC through QE, and used the money to say, build ten nuclear power stations. That would lower the cost of fuel, employ people and help masses of small and large firms. It would raise productivity and in the long-run lower our debts, wouldn't it? If not, why not, Prime Minister?
2) There is an enormous amount of evidence to suggest that fiscal and monetary stimulus can increase growth. There is actually no evidence from anywhere in the world to support the ideology you have been following of an expansionary fiscal contraction, especially when it is not possible to lower interest rates. Such a view is "oxymoronic", as Larry Summers has said.
3) These arguments are not a way of avoiding making difficult decisions. They are what has to happen, because your government made the wrong decisions by imposing austerity before the recovery was fully established. You can't blame the eurozone, as it was clear when you formed your government that there were major downside risks to UK recovery from the European periphery and European banks. You just chose to look the other way and go forward with your mistaken policies, wilfully disregarding the potential dangers for the British people.
4) "Something for nothing economics" is a nice phrase but is totally meaningless. If I recall, Dave, you matched Labour's spending plans, supported deregulation and opposed rescuing the banks. It looked like you may have to do the latter if things continue the way they are. Lloyds and RBS are in trouble again. What you did was slash and burn hoping for growth, but you killed off the tender shoots of recovery. The policies you have undertaken without a growth plan is "nothing for nothing economics".
5) "No indebted European country is taking this path." Well, actually, most other European countries grew faster than the UK did over the last twelve months. GDP growth was as follows. Belgium 1.8 per cent; Germany 2.6 per cent; France 1.6 per cent; Netherlands 1.1 per cent; Austria 2.8 per cent; Finland 2.8 per cent; and the UK 0.5 per cent. The eurozone is headed into recession because they are stuck in monetary union. Portugal this week went to the IMF and asked for more stimulus as austerity has failed there too. Austerity doesn't work when banks aren't lending and your major export market is heading into depression. The German central bank, the Bundesbank, today cut its 2012 growth forecast to between 0.5 per cent and 1 per cent, from a June prediction of 1.8 percent. It said a "pronounced" period of economic weakness can't be ruled out if the crisis worsens.
6) "Nor are there any major European opposition parties in high deficit countries arguing for additional borrowing - except here in Britain". Denmark has lower bond yields than the UK and lower unemployment, and its new government is introducing more fiscal stimulus. These other countries would do this if they could, but they are stuck in a fiscal and monetary straightjacket. That is why there is talk of the eurozone breaking up.
Dave, you are in a big mess on the economy. What are you going to do if the crisis worsens, as it looks like it might? Panic, I guess.
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122 comments
Are my pads sore? Sorry Inbrew I don't understand, why am I using pads to type?
Was that an attempt at humour, which failed miserable again?
You are an ill wind Inbrew, please remember that.
@Matt
I see the Nationwide says prices up again today. Perhaps the lagging Land Reg figures will reflect this in future. Prices are still very high don't you think?
I see you haven't answered the questions again, no surprises there. I think this is because the answers back up everything I say.
£12bn wasted on the scrapped NHS computer system.. That's only one of the previous economically discredited Labour governments.. Cock-ups... But we all knew Mr David Blanchflower is just an appalling New Labour apologist.. Mr Blanchflower you can not keep spending what you no longer have and you also can't keep borrowing your way out of debt..
@matt
Foxy, ever thought of going into the humour industry with own TV show (boom boom).
Avoid cards (always seem to being holding a busted flush).
Are you hoping now Bozo555, is that the plan, surfacing every time some orgnanisation issues a housing report that vindicates you?
The " Lagging " Land Registry figures? are you telling me the November figures will show an increase or the December?
When you talk about Lagging, what timeframe are you talking about Bozo555?
Could you be more specific Bozo55, the "future " is not really specific is it. It is an almighty get out clause, which really isn't cricket.
Only six reasons why Cameron is wrong on the economy, here's a few reasons more why Labour is bad for the county...
£22,500 of debt for every child born in Britain
100 and odd tax rises from a government that promised no tax rises at all
The longest national tax code in the world
100,000 million pounds drained from Britain private pension funds
Gun crime up by 57%
Violent crime up 70%
The highest proportion of children living in workless households anywhere in Europe
The number of pensioners living in poverty up by 100,000
The lowest level of social mobility in the developed world
Endless foreign wars
One in six young people neither earning nor learning
5 million people out-of work or on one kind of benifit or another work
Missing the target of halving child poverty
Ending up with child poverty rising in each of the last three years instead
Cancer survival rates among the worst in Europe despite the billions spent
Hospital-acquired infections killing nearly three times as many people as are killed on the roads
Falling from 4th to 13th in the world competitiveness league
Falling from 8th to 24th in the world education rankings in maths
Falling from 7th to 17th in the rankings in literacy
The police spending more time on paperwork than on the beat
Fatal stabbings at an all-time high
Prisoners released without serving their sentences
Foreign prisoners released and never deported
7 million people without an NHS dentist
Small business taxes going up
Business taxes raised from among the lowest to among the highest in Europe
Tax rises for working people set for after the election
The 10p tax rate abolished
And the ludicrous promise to have ended boom and bust
Our gold reserves sold for a quarter of their worth
Our armed forces overstretched and under-supplied
Profitable post offices closed against their will
One of the highest rates of family breakdown in Europe
The ‘Golden Rule’ on borrowing abandoned when it didn’t fit
Police inspectors in 10,Downing Street
Dossiers that were dodgy
Mandelson resigning the first time
Mandelson resigning the second time
Mandelson coming back for a third time
Bad news buried
Personal details lost
An election bottled
A referendum denied
So how many reasons to you need not to forget New Labour's past cock-ups.
Sorry forgot.. the highest level of teenage pregnancy in the western world. Didn't LABOUR do well!!!
@Matt
I don't need a get out clause, the fact that house prices are still high is all the vindication I need, don't you think prices are still high?
I've explained to you at length what has happened to house prices pre and post credit crunch everyone can see.
I don't run from your questions. The Land Reg figures lag by around 3 months from what I've read. That you pick on these insignificant points instead of answering my questions is very telling.
Luddite, not sobered up just yet?
The Conalition Government
Not the Tories but the Toffees
This is a government that puts you in the sticky stuff.
Systematically robbing Peasant Peter to pay Peer of the Realm Paul…
They have also been robbing part-time Mabel to pay out of work Mary just for balance.
This shower is hitting women harder.
They are the joke.
Maybe we could draft the WI in @ least they make jam. Or at least they used too. Maybe they just import it.
Anything must be better than this Aristocratic Bankers Coalition.
Who voted for change, small change (but no extra coppers)
What did Big Mac say don’t sell the silver..
Paper Money, Paper Banks.
Titter ye not.
Please yourselves this lot will...
Growth you must be joking...
Camerwrong
Luddite has a point, we are looking at the failings of 13 years of Labour that eventually crumbled combined with the crisis, the result is what we have today.
The next person (probably Matthew Fox) to reply to Luddite will probbaly post an even longer list of Tory failures but i have to say we must look at more recent times, the last government.
Talk to a young person on the street and ask... 'do you remember Maggie?' and they would probably think she is the queen, however they will all know who Brown and Blair are and what they experienced in that time.
David Blanchflower is just trying to point out with hatred that 'Cameron is crap' and I'd ask him.. 'tell me about the two Ed's and what they can put on the table'. the answer will be just as bleak because Labour have no ideas, no policy, no growth plan and no recovery plan... all Labour can do is oppose every single type of reform, we are doomed so whether you love or hate Cameron... its simply too late to ponder, sit tight and let hope that after the dip the roller coaster can make it to the top.
Come on Stu, be fair, I shot you down in flames, when you wrote there was a " Massive Rise in Unemployment, during the Boom Years "
At least you had the decency to retract the falsehood, is it coming back to you Stu?
Luddite, you didn't write Networking, you wrote net-work.
Yes Luddite your that pathetic.
The Luddite
Where are your references.
Ha ha ha haaaa!!! no!! i've just opened my second bottle.. sorry Matthew how's dolly.. or i forgot how was your Lancashire hop-pot..
Bozo555, that was a very prickly answer. You have read somewhere that the Land Registry figures are 3 months behind.
Where did you see this information?
I wish you would think Bozo555, and research, it shouldn't be too much effort really, if you really wanted to.
Don't forget, we are discussing, are your words, not mine.
Arthur Williamson.. My own eyes and seeing the disgusting state your pathetic government felt was adequate government.
lol, I'd let you have that one but i'm a fair man... I only merely 'tried' to predict you would give an even longer answer.. looks like you can't be bothered to list Tory failures and there can only be a few reasons...
1) too late in the evening to bother
2) Fewer tory failures than Labour
3) you agree with me that no one gives a toss about the endless bashing of thatcher tory years as it was a few decades ago compared to the last 13 years of Labour.
It's appears i've got a doppelganger.. I wish i had a rich dad, but i'm not a pampered left-wing wankers son.. Hello 1% 'Stu' giving you a good bumming again so to speak.. keep-it up 'Stu' so to speak.. matthew fox: Why as your Gordon Brown gone to the United States to apologize for his mishandling of the banking crisis here in the UK?
Chris garman: What the monkeys does David Blanchflower know about good government.. He still believes you can keep spending what you no longer have and keep borrowing your way out of debt...
Here's Labours Achievements.. The Break down of British society
suppressing British culture and traditions
enforcing the PC culture not a good thing by any means but vile Labour thought so..
favouring the Muslim community for what ever reason probably because they are great at committing electoral fraud asking christian schools not to teach its principles and teachings so not to offend intolerant islam..
Brought the country to its knees financially even before the recession and the banking crisis came along historically we always have a lot of debt after labour'
Labour also send HM armed forces to join American in their illegal and nonsensical war. but do so after slashing forces funding by at least 75% since they came into power and refuse to adequately equip them.
cunningly raising many within their party to be part of the house of Lords not to mention virtually quashing the house's authority to govern what they do in the commons. The list could go but am pist.. on perhaps as long as they've been in power for **** sake! As opposed to Thatcher's term in office the country was overall economically and socially strong, with a great political-international status when Britain had friends abroad a firm military, not to mention that people still had some respect and knew how to behave. The country now is in and disarray because of uesless labour and now labour are searching around in the dark trying desperately not to look half as bad as they really were.
COME on 1% tell me you love me..
Good article. Cameron is looking incresingly out of his depth.It is frightening to think what he might be planning had he a tory majority and no need for the liberals. The question is, who can do better? Certainly not Ed Milliband. I quite like him but he is no prime minister. Time for Yvette Cooper to put him out of his misery, but not before the tories have passed into law the one good idea they have had, the benefit cap. If she does oust him i can see the tories getting a thrashing at the next election and hopefully the lib dems will be wiped out except for saint Vince.
As I keep saying, Dodgy Dave is an upper class right-wing twit peddling snake oil about the British economy. He is a default Prime Minister; a right wing thug who is a leading character in this Thatcherite nightmare that we a currently living through. Left wing thinking and action is the only way we are going to sort out this mess caused by rampant, retrograde right-wing economics and politics and consign the last thirty years of right-wing orthodoxy to the dustbin of history We have to do it NOW!
Luddite
brown sold half the british reserves of gold at 250 dollars an ounce, currently trading 1700... more than 6 times cheaper- but hey, what's 10 billion between friends...
er, it;s the debelopment cost of an airbus A380 airliner, the biggest passenger jet in the world in which the Uk plays a major role building it. ah well
also, u forgot the £600 million brown wasted on consultants for, (now this is funny,sort of, definitely if you're a consultant) on CONSULTANTS that streamlined procurement at the ministry of defense- yeah, u know the one where there's no money left o put aircraft on the carriers. Those consultants are all doing high fives in the bar.
ooops- nearly forgot. balls as education secretary introduced a new a level that would raise standards for british kids. It has been dropped by every major exam board. Yup. the Big man big exam was dropped because, erm, 15k kids took it over 3 years, yes, 5 thosand kids a year. Now how much do u think balls spent on that exam- do u think 20 million quid re-writing a syllabus- i mean it's going to be fairly similiar , maybe Balls invented some new maths- he certainly has some interesting ideas when it comes to budgets. Anyway, 50 million quid to re write an exam paper- remeber, these guys were fiscally prudent... 100 million nah..200 million. NO WAY JOSE!! do you think they stopped to wonder whether they were getting value for money?? nope. 250 million. Now come, on a quarter of a billion pounds on 16-18 year olds- u know, stuff like geography, history, physics, u know what i mean... and the answer is... they spent... 300 million--slam DUNK SON- 300 large ones ... yes siree. bastard cameron hasn't got a clue- he's trying to kick start a housing problem with 400 million, he simply dosen't get the way to do things. Ah well folks, look at the bright side- in the week we learnt that brown and balls spent 900 million quid with nothing to show for it, at least the mad stories are coming to light and it's less than a billion quid.
cameron is truly an amateur when u look at these guys numbers. he is way out of his depth when u look at the record of the previous lot- so boring isn't it coming back to them.
300 bars on an exam paper though, can anyone imagine how they managed that?? I mean it's a bit weird right, surreal almost- how could consultants take that much dough in cheques signed by balls- how did they manage that?? what was driving balls to sign those cheques??
solutions for the rich as usual....
Dear Blanch,
Respecting your honesty and economic learning highly I have taken the trouble to try and find the most appropiate role or you to deliver optimal Macro commentary.
In my humble opinion I bel u need to model yourself on Prof Varou of Athens Uni (http://www.youtube.com/watch?v=6AB620tMkYU) who is not politically affiliated (as you ACTUALLY are also bar a short stint at MPC) and provide clearer independent commentary on the very serious economic climate that is around the corner.
I rate him and hope that this may be helpful to you in providing more productive comment. WHo knows may make u a super-star in the process.
Regards,
JO
How did we let this elitist, PR smoothie spinman became PM? He is good at making speeches and looking important - beyond that the man is worst than useless. I think he and his party will inflict a lot of damage by the time they have finished. Let us not forget aided abetted by Clegg and the Libdems
Your avoiding your own words Bozo555, I am being charitable, don't forget house prices crashed by nigh on 16% in 2008.
Do you remember that fact?
Everyone is talking about the BRICS (Brazil, Russia, India, China and South Africa) as being the new countries of economic development.
I must say, having just come back from South Africa, I am impressed. Lots of raw materials, crime 50% of what it was, cheap land and buildings as spaces is not issue in such a large country, excellent road and airport infrastructure, very fast internet (in Johannesburg and Cape Town I found), a fantastic stock exchange, an elite currency which is performing well etc, a robust constitution, lovely weather, iconic sites, massive tourism potential, massive solar and nuclear energy investment about to happen etc etc. Port infrastructure needs upgrading as does rail!
I am sure that the other BRICS are similar with regards many of these!
matthew fox: Ha ha haaaa!!! You are a real genuine dip-stick... thank-god the Labour party is full of useful idiots such as yourself.
1%.. Take your 300.000 divide it by 13.. Then add 3 million immigrants. See how many affordable homes you have... 'Have you turned blue yet'... ha ha ha ha.... I would love to stay and play, but l've got to get to work unlike some.. don't you get bored watching day-time TV...
@Matt
It will take you seconds to find out for yourself if you do a web search.
I notice you've avoided the questions again, no surprises there.
oh Daniel, would u mind explaining why the germans had a failed bond auction yesterday mate? They have growth, i just don't understand. Could u have a chat with hassan, he's a bit of a ratings guru don't you know....
let me know when u have a mo old chap
Off topic slightly but interesting - I heard the crime in South Africa is down since 1994 too - how else did they host the world cup with the lowest crime? I have a house in Clifton, Cape Town and I really see the country going places - there are a few ultra-left and ultra rights in the country, but they are drowned out by many people talking sense, with the exception of the unions there.
There are at least 3 "Grahams" posting comments on here...A right winger, a left-winger and whatever you are (capitalist)?! I am guessing you are not all the same as you seem to have opposing views!!
Haha and a Graeme! Right I am off to bed.
@Luddite
You can dream up as long a list o Labour failures as your slanted view chooses.However as someone who has a memory longer than that of a gnat.I remember what Britain was like after 18 years of Tory assett stripping,demanufacturing wasting NS Oil on there atlantic bridge neocon wet dreams
Of people dying in NHS
A&E corridors because lack of investment hoping to run the NHS down for privatisation as they did with,railways,water,gas/electric and telecoms.
State schools with leaking roofs with a single book to four children.
I am no Labour fan however compared with this elite scum in power now and there mentors in the 80,s and 90,s I would take them anyday !
As for the financial state of the country Labour had a GDP record in there 13 years campared to the best of the Tories in there 18 and still managed to turn the NHS,Schools and further education around and into something to be proud off.The thing they did not do was stop the spiv city,stop tax evasion and shut down offshore banking ! but then I think we can honestly say there was and is no way the scum in power now would contemplate that either !!
Ps The interviewer is a crackpot but the Proff's MACRO Comment is key
http://www.youtube.com/watch?v=VkDMy-6x69g&feature=related
Fraziel1: You really do believe in fairy stories. The only redeeming aspect about Yvette Cooper is she ones worked for John Smith. The problem for our Yvette... is that economically discredited lump she married. You know the one? the one who should be in America along-side Brown apologizing for their shared humongous economic mistakes.
Your full of surprises Bozo555, they make me smile on the inside old chap.
Don't worry, I will do all the spade work, it is always left to me.
I notice your own words have a habit of blowing themselves up in your face.
Keep sinking old chap.
This is "nothing for nothing economics". Well the political-left should knows all about that...
trevor marwood: You sound old enough to remember the 1970s.. Industrial anarchy. Unions leaders hell-bent on destroying British Industry many under the influence of their soviet pay-matters.
"Of people dying in NHS": So no one died under Labour in the NHS.. ha ha ha..... You are deluded
"Schools and further education around and into something to be proud off" Mmmmm....Billions spend and we fell from 8th to 24th in the world education rankings, in maths from 8th to 24th.... 7th to 17th in the rankings in literacy. We may have gleaming new schools, but whats walking out of them isn't that impressive.. Did you know Travor, under Labour and because of the NUT, it was impossible to sack a bad teacher.
Are you forgetting something about the economic situation in the 1980s. Thatcher was cleaning-up a previous Labour party cock-up.. some would say deliberate economic vandalism, just as they did in the dying years when still in government.. Just watching SKY news.. all the talks about the appalling treatment our elderly receive at the hand of our caring profession.. A profession that's more interested in their own pay and conditions than the well being of their patients...
pig
22 November 2011 at 22:45
solutions for the rich as usual..
PIGGY!! So what did Labour do for the poor besides trapping them in poverty and importing cheap foreign Labour to do their jobs.... I would love to stay and play... but i have a job to do... What the matter 1% still sulking.. can't afford your cheap Cider....
Being a Pretender Bozo555, sorry you have mixed me up with Chrissie Hynde.
I wish you really understood the terms " Propping Up " and " Lagging "
If 0.5% are a support to the housing market, why did house prices decline in 2010 and into 2011?
Come on Stu, fair men don't lie do they?
Please remember that if you can.
Indu Pendent: 1% is a typical Labourite totally humourless, but what is hilarious, is he actually believes... wait for it... Gordon Brown was a brilliant chancellor 'convulsive laughter' (boom boom)
Luddite, I will always love you because nobody else can find it in their heart to love you.
I suppose you can classify Pity as love, if your that desperate.
Denmark's LFS unemployment figure is 7.8%, hardly impressive even in comparison to the UK figure.
@Matt
I've already done the research. No answers again I see. You just keep pretending that 0.5% interest rates aren't a support to the housing market.
@Graeme Hancocks
"(cameron)He is good at making speeches and looking important - beyond that the man is worst than useless"
I think you forget that Blair was also an exceptional PR man, excellent speaker, and has a good rapport with the public something Cameron is trying to immitate! one more thing your beloved Blair did... took us to war, undoubtably spending a whole load of money with repercussions we are still experiencing today. So you dispise Cameron... better look back alittle at your idol.
@matthew fox
Fair men don't lie? lol... depends if you're a politician, I for one am not...
@trevor Marwood
Luddite has a point, I remember watching the news report elderly people being left in the coridoors and several died under Labour, rise in MRSA. Under education the global stats Luddite listed is proof enough. Even countries like China are fairing much better in that area.
You may not hate Labour and you despise this elitist coalition but remember Labour were in power for 13 years. They had more than enough time to reform public services but squandered it all. The coalition has been in power for 18months with little money to spend... it's not about being elitist... it's about opportunity and resources. Got no money you got f'all... simple.
I take it Luddite has stopped taking his medication, and now mixing his drinks with toilet duck.
Luddite gives a wonderful insight into how much hatred boils within him.
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