Obama should give Cameron an economics lesson

Only one of the two leaders is stimulating the global recovery.

No meeting between Barack Obama and David Cameron is now complete without a joint article lauding the "special" (or, in this case, the "essential") relationship and recalling the two countries' past triumphs. The Washington Post is the venue for today's op-ed and the first sentence hasn't even elapsed before the obligatory reference to Churchill.

Rather than the sections on Afghanistan, Iran and Syria (where there is consensus between the two men), the most intriguing passage is on the economy (where there is not). Obama and Cameron write:

As leading world economies, we are coordinating closely with our G-8 and G-20 partners to put people back to work, sustain the global recovery, stand with our European friends as they resolve their debt crisis and curb the reckless financial practices that have cost our taxpayers dearly. We're committed to expanding the trade and investment that support millions of jobs in our two countries.

That's sufficiently bland to avoid any controversy. But it disguises the fact that while one country (the US) is stimulating "the global recovery", another (the UK) is acting as a drag anchor on it. George Osborne was once fond of boasting that the UK had grown faster than the US, "despite fiscal stimulus in the former and fiscal consolidation in the latter, showing that the problem is not too much fiscal responsibility."

But that's not a claim he can make now. The final figures for 2011 showed that the US grew by 1.7 per cent, while the UK grew by just 0.8 per cent (see graph) - one of the worst growth rates in the EU. On employment, the picture is a similar one. While Obama is putting people back to work, Cameron is putting them on the dole. US unemployment is now at its lowest level since the recession, while UK unemployment is at its highest level since 1996.

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What explains the contrasting data? Well, while Obama chose to stimulate growth, Cameron chose to strangle it. Obama introduced an extended payroll tax cut, Cameron raised VAT to a record high of 20 per cent. As the ippr's Eric Beinhocker notes in today's Times (£), the US President's tax cut injected $92 billion a year of stimulus into the US economy, with the result that consumer spending increased by 2.2 per cent last year while it shrank by 0.8 per cent in Britain.

When Obama visited Britain last year he refused, to the despair of the Tories, to endorse Cameron's deficit reduction plan. Noting that the pair come from "different political traditions", he added that the "sequencing and pace" of fiscal contraction would be different in each country.

If and when the subject of the economy arises during Cameron's visit, it will be worth watching the two leaders' language. Having been vindicted by the data, Obama has every reason to offer some free economics tuition.

George Eaton is political editor of the New Statesman.

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This is no time for a coup against a successful Labour leader

Don't blame Jeremy Corbyn for the Labour Party's crisis.

"The people who are sovereign in our party are the members," said John McDonnell this morning. As the coup against Jeremy Corbyn gains pace, the Shadow Chancellor has been talking a lot of sense. "It is time for people to come together to work in the interest of the country," he told Peston on Sunday, while emphasising that people will quickly lose trust in politics altogether if this internal squabbling continues. 

The Tory party is in complete disarray. Just days ago, the first Tory leader in 23 years to win a majority for his party was forced to resign from Government after just over a year in charge. We have some form of caretaker Government. Those who led the Brexit campaign now have no idea what to do. 

It is disappointing that a handful of Labour parliamentarians have decided to join in with the disintegration of British politics.

The Labour Party had the opportunity to keep its head while all about it lost theirs. It could have positioned itself as a credible alternative to a broken Government and a Tory party in chaos. Instead we have been left with a pathetic attempt to overturn the democratic will of the membership. 

But this has been coming for some time. In my opinion it has very little to do with the ramifications of the referendum result. Jeremy Corbyn was asked to do two things throughout the campaign: first, get Labour voters to side with Remain, and second, get young people to do the same.

Nearly seven in ten Labour supporters backed Remain. Young voters supported Remain by a 4:1 margin. This is about much more than an allegedly half-hearted referendum performance.

The Parliamentary Labour Party has failed to come to terms with Jeremy Corbyn’s emphatic victory. In September of last year he was elected with 59.5 per cent of the vote, some 170,000 ahead of his closest rival. It is a fact worth repeating. If another Labour leadership election were to be called I would expect Jeremy Corbyn to win by a similar margin.

In the recent local elections Jeremy managed to increase Labour’s share of the national vote on the 2015 general election. They said he would lose every by-election. He has won them emphatically. Time and time again Jeremy has exceeded expectation while also having to deal with an embittered wing within his own party.

This is no time for a leadership coup. I am dumbfounded by the attempt to remove Jeremy. The only thing that will come out of this attempted coup is another leadership election that Jeremy will win. Those opposed to him will then find themselves back at square one. Such moves only hurt Labour’s electoral chances. Labour could be offering an ambitious plan to the country concerning our current relationship with Europe, if opponents of Jeremy Corbyn hadn't decided to drop a nuke on the party.

This is a crisis Jeremy should take no responsibility for. The "bitterites" will try and they will fail. Corbyn may face a crisis of confidence. But it's the handful of rebel Labour MPs that have forced the party into a crisis of existence.

Liam Young is a commentator for the IndependentNew Statesman, Mirror and others.