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27 January 2011

Make no mistake, Tory economic policy is in trouble

Plan A failed and Mervyn King can't deliver on plan B.

By David Blanchflower

The GDP data release for the fourth quarter of 2011 has got the government and its supporters rattled. At PMQs yesterday, George Osborne looked dishevelled and seemed out if it; shocked, presumably, from the shellacking he has been getting from the media — and Ed Balls — for his reckless and failing austerity policies. His response that this was all down to the weather is absurd.

You can always tell that people are in trouble when they turn to name calling, trying to divert attention from the evidence and shoot the messenger. Benedict Brogan, in his Daily Telegraph blog, called me a “Brown groupie”, whatever that means, apparently because I interviewed Gordon Brown on CNBC’s Squawk Box on Tuesday.

I share Paul Krugman’s view that Brown’s swift intervention to save the banks and co-ordinated rescue packages through the G20 probably did save us from another depression. David Cameron and Osborne were clueless on what to do.

Brogan admitted he hadn’t actually seen the programme or read the transcript. Tough to be criticised because all I did was to interview an ex-prime minister.

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And I quote:

We haven’t seen the full text of his remarks yet, save this line: “If we only have deficit reduction, that’s the politics of the 1930s,” which doesn’t add much to the debate but speaks to the line Labour has pursued for some time, namely that the Tories are intent on taking us into a depression. That’s a charge that can still be laughed off, even if today’s figures mean there’s the barest hint of a croak at the end of our dismissive chuckle.

May I suggest, Mr Brogan, that the figures amount to more than a “hint of a croak”. Your lot’s economic policy is in big trouble.

Interesting that Brogan has no background or training in economics — he studied history and international relations. Balls must be getting to them. The government’s problem is that none of them has any idea what to do as the economy tanks. It only has a failed plan A and Mervyn King can’t deliver on plan B.