Saturday, November 29, 2008

My Debt to Labour


Anonymous said...

For a dispassionate assessment of the range of policy options for dealing with the recession, try this from The Economist:

Of course, another option is just to let the recession take its course but then as Kenneth Clarke - the Conservative Chancellor 1993-7 - said, "this recession is not going to do anyone any good." And then:

"Cameron’s ability to oppose Vat cuts will be hindered by the fact that Kenneth Clarke, the former Tory chancellor, said in an interview yesterday that such a move would 'stimulate spending and consumer demand'. "

The cut in VAT as proposed by Darling in the Pre-Budget Report is estimated to cost the exchequer £12.5 bn, which is more than 60% of the total cost of all the measures proposed.

I'm not often inclined to agree with Mandelson but I think he's right in his interview with the Guardian on Saturday in which he said it was impossible to predict how deep or painful the recession would be.

That's fair comment: economists' models are calibrated on past trends and this recession is being caused and sustained by events and institutions which are uniquely different to previous recessions.

Anonymous said...

"The OECD has endorsed the need for government spending in affected countries to boost growth, because it says that interest rate cuts are no longer effective.

"'Against a background of deep economic downturn, additional macroeconomic stimulus is needed,' it says."

Want a laugh in these depressing times?

Try to imagine a conversation in the future about economic policy options between George Osborne, as Chancellor of the Exchequer in a Cameroon government, and Tim Geitner, the US Treasury Secretary in an Obama administration or - better still - a conversation with Prof Larry Summers, the Director of the National Economic Council.

ROFL! [thumps floor in paroxysms of mirth]

I had to go and lie down to recover after that thought.

For the news about the economic team in Obama's administration:

Anonymous said...

From the Reuters news agency this morning:

"LONDON (Reuters) - Previously sceptical Labour Party backers are returning their support to Prime Minister Gordon Brown, an opinion poll showed on Tuesday, boosting Labour to almost level with its Conservative rival.

"A ComRes opinion poll for the Independent newspaper put Labour support at 36 percent, up five points on last month and catching up with David Cameron's Conservative Party, which lost 2 percent from last month's poll to score 37 percent support.

"The gap between the two main parties is the narrowest in any poll since January when an Ipsos MORI poll put Labour one point ahead, the Independent said."

If he has any sense, David Cameron will drop George Osborne, the shadow Chancellor, overboard soon.