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 noth

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.

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

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Jeremy Corbyn speech on terrorism and foreign policy: full text

The Labour leader laid out his vision for British foreign policy. 

Our whole nation has been united in shock and grief this week as a night out at a concert ended in horrific terror and the brutal slaughter of innocent people enjoying themselves. When I stood on Albert Square at the vigil in Manchester, there was a mood of unwavering defiance. The very act of thousands of people coming together sent a powerful message of solidarity and love. It was a profound human impulse to stand together, caring and strong. It was inspiring.

In the past few days, we have all perhaps thought a bit more about our country, our communities and our people. The people we have lost to atrocious violence or who have suffered grievous injury, so many of them heart-breakingly young .

 The people who we ask to protect us and care for us in the emergency services, who yet again did our country proud: the police; firefighters and paramedics; the nurses and doctors; people who never let us down and deserve all the support we can give them. And the people who did their best to help on that dreadful Monday night – the homeless men who rushed towards the carnage to comfort the dying, the taxi drivers who took the stranded home for free, the local people who offered comfort, and even their homes, to the teenagers who couldn’t find their parents.

They are the people of Manchester. But we know that attacks, such as the one at the Manchester Arena, could have happened anywhere and that the people in any city, town or village in Britain would have responded in the same way.

It is these people who are the strength and the heart of our society. They are the country we love and the country we seek to serve. That is the solidarity that defines our United Kingdom. That is the country I meet on the streets every day; the human warmth, the basic decency and kindness.

It is our compassion that defines the Britain I love. And it is compassion that the bereaved families need most of all at this time. To them I say: the whole country reaches out its arms to you and will be here for you not just this week, but in the weeks and years to come. Terrorists and their atrocious acts of cruelty and depravity will never divide us and will never prevail.

They didn’t in Westminster two months ago. They didn’t when Jo Cox was murdered a year ago. They didn’t in London on 7/7. The awe-inspiring response of the people of Manchester, and their inspirational acts of heroism and kindness, are a living demonstration that they will fail again.

But these vicious and contemptible acts do cause profound pain and suffering, and, among a tiny minority, they are used as an opportunity to try to turn communities against each other.

So let us all be clear, the man who unleashed carnage on Manchester, targeting the young and many young girls in particular, is no more representative of Muslims, than the murderer of Jo Cox spoke for anyone else. Young people and especially young women must and will be free to enjoy themselves in our society.

I have spent my political life working for peace and human rights and to bring an end to conflict and devastating wars. That will almost always mean talking to people you profoundly disagree with. That’s what conflict resolution is all about. But do not doubt my determination to take whatever action is necessary to keep our country safe and to protect our people on our streets, in our towns and cities, at our borders.

There is no question about the seriousness of what we face. Over recent years, the threat of terrorism has continued to grow. You deserve to know what a Labour Government will do to keep you and your family safe. Our approach will involve change at home and change abroad.

At home, we will reverse the cuts to our emergency services and police. Once again in Manchester, they have proved to be the best of us. Austerity has to stop at the A&E ward and at the police station door. We cannot be protected and cared for on the cheap. There will be more police on the streets under a Labour Government. And if the security services need more resources to keep track of those who wish to murder and maim, then they should get them.  

We will also change what we do abroad. Many experts, including professionals in our intelligence and security services have pointed to the connections between wars our government has supported or fought in other countries, such as Libya, and terrorism here at home.

That assessment in no way reduces the guilt of those who attack our children. Those terrorists will forever be reviled and implacably held to account for their actions.

But an informed understanding of the causes of terrorism is an essential part of an effective response that will protect the security of our people, that fights rather than fuels terrorism.

Protecting this country requires us to be both strong against terrorism and strong against the causes of terrorism. The blame is with the terrorists, but if we are to protect our people we must be honest about what threatens our security.

Those causes certainly cannot be reduced to foreign policy decisions alone. Over the past fifteen years or so, a sub-culture of often suicidal violence has developed amongst a tiny minority of, mainly young, men, falsely drawing authority from Islamic beliefs and often nurtured in a prison system in urgent need of resources and reform. And no rationale based on the actions of any government can remotely excuse, or even adequately explain, outrages like this week’s massacre. But we must be brave enough to admit the war on terror is simply not working. We need a smarter way to reduce the threat from countries that nurture terrorists and generate terrorism.

That’s why I set out Labour’s approach to foreign policy earlier this month. It is focused on strengthening our national security in an increasingly dangerous world.

We must support our Armed Services, Foreign Office and International Development professionals, engaging with the world in a way that reduces conflict and builds peace and security.

Seeing the army on our own streets today is a stark reminder that the current approach has failed. So, I would like to take a moment to speak to our soldiers on the streets of Britain. You are doing your duty as you have done so many times before.

I want to assure you that, under my leadership, you will only be deployed abroad when there is a clear need and only when there is a plan and you have the resources to do your job to secure an outcome that delivers lasting peace.

That is my commitment to our armed services. This is my commitment to our country. I want the solidarity, humanity and compassion that we have seen on the streets of Manchester this week to be the values that guide our government. There can be no love of country if there is neglect or disregard for its people. No government can prevent every terrorist attack.  If an individual is determined enough and callous enough, sometimes they will get through.

But the responsibility of government is to minimise that chance, to ensure the police have the resources they need, that our foreign policy reduces rather than increases the threat to this country, and that at home we never surrender the freedoms we have won, and that terrorists are so determined to take away. Too often government has got it wrong on all three counts and insecurity is growing as a result. Whoever you decide should lead the next government must do better.

Today, we must stand united. United in our communities, united in our values and united in our determination to not let triumph those who would seek to divide us. So for the rest of this election campaign, we must be out there demonstrating what they would take away: our freedom; our democracy; our support for one another. Democracy will prevail. We must defend our democratic process, win our arguments by discussion and debate, and stand united against those who would seek to take our rights away, or who would divide us.

 Last week, I said that the Labour Party was about bringing our country together. Today I do not want to make a narrow party political point. Because all of us now need to stand together. Stand together in memory of those who have lost their lives. Stand together in solidarity with the city of Manchester. And – stand together for democracy.

Because when we talk about British values, including tolerance and mutual support, democracy is at the very heart of them. And our General Election campaigns are the centrepieces of our democracy – the moment all our people get to exercise their sovereign authority over their representatives.

Rallies, debates, campaigning in the marketplaces, knocking on doors, listening to people on the streets, at their workplaces and in their homes – all the arts of peaceful persuasion and discussion – are the stuff of our campaigns.

They all remind us that our government is not chosen at an autocrats’ whim or by religious decree and never cowed by a terrorist’s bomb.

Indeed, carrying on as normal is an act of defiance – democratic defiance – of those who do reject our commitment to democratic freedoms.

But we cannot carry on as though nothing happened in Manchester this week.

So, let the quality of our debate, over the next fortnight, be worthy of the country we are proud to defend. Let’s have our arguments without impugning anyone’s patriotism and without diluting the unity with which we stand against terror.

Together, we will be stronger. Together we can build a Britain worthy of those who died and those who have inspired us all in Manchester this week. Thank you.

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