Tuesday, December 27, 2011

Labour made some strategic wins in 2011

In the political sections of the press it's wall-to-wall articles and editorials about how Ed Miliband needs to be toppled from the Labour leadership. Newsnight even headlined a "Should Ed go" feature on the night before the Feltham and Heston by-election. Luckily the voters ignored them and returned a Labour MP with a bigger majority and a healthy share of the vote.

Why all the wall-to-wall shrillness from the press? It's simple; none of them backed Ed Miliband for the Labour leadership, and they are terrified of the prospect of a potential Prime Minister who owes them nothing. What happened to the NOTW only serves to reinforce this terror. Ed Miliband was free to go on the attack precisely because he owed them nothing - and it's something his brother would not have been able to pull off.

Most newspapers are not profitable (with the notable exception of the Daily Mail). Instead they are vanity projects for their owners - the Barclays and Desmonds and Murdochs of this world take losses on various print titles but believe this is an "investment" because they get to influence the government of the day, which in turn has a beneficial effect on their other non-press business interests. If they lose influence, then what's the point of pouring all this money down a black hole?

So their agenda is always to try to ensure that all the main parties owe them something.

When the Tories in the heady excitement of their very first one-member-one-vote election in three centuries chose IDS, Fleet Street was horrified. He was not their man and they despatched him in the usual way - they made up a false smear against his wife, got some useful idiots in the Conservatives to get worked up about it, and forced him out. His replacement Michael Howard did no better than IDS in the 2005 election, so the Conservatives gained nothing from dethroning an elected leader - but Fleet Street was delighted - Howard owed them allegiance, and that was all that counted.

Labour should remember that when the press starts shrieking about EdM. The press cares even less about us than it does about the Tories.

Time is on our side, the power of the press is waning. The lack of influence of the Newsnight broadcast just before the Feltham and Heston by-election is one indicator. The 2010 general election is another indicator: the entire right-wing press backed Cameron, and the Guardian and Independent backed the LibDems - and yet the Tories failed to win the general election, and the LibDems couldn't even match Charlie Kennedy's tipsy 2005 performance and lost seats.

The press are screaming into the wind with ever greater force - but the voters are not listening to them. Indeed the only part of the electorate that is paying attention are the elderly, and that's mainly because they have time on their hands and try to fill it watching the news channels and reading newspapers. And for the moment that's where the Tory support comes from.

The Labour party should take the demise of the NOTW as a massive strategic victory this year. A big part of the 4 million NOTW readers have not shifted to the other papers - they simply stopped reading a Sunday paper and have gone shopping or to a footie match instead. That's several million people not getting their minds poisoned on Sundays then.

Going into 2012, capitalism is our friend in this instance. Businesses are being very careful about their budgets and scatter gun advertising in the print media yields a much lower return on investment than targeted advertising on the search engines for terms like "pyjamas" or "watches" or whatever it is you are selling. So the advertising revenue streams of the newspapers will be under even more intense pressure, and at some point their owners will need to decide whether it is really worth keeping them going. With any luck we should see another paper bite the dust (no need to mourn the loss, journalists are on the record about what a paradise life on benefits is and how they long to appreciate it's charms).

When happens when the shrill make-stuff-up mafia print press shrivels? Well broadcast press is regulated, and the newspapers who ply an honest trade and don't make their stories up have a small readership, so politics then shifts to the ground war, old-fashioned door knocking, leafleting and talking to people face to face. And Labour is good at the ground war. The Tories like to talk a lot about work but they don't actually like doing it. Their local associations are amongst the laziest in the western world. Going into 2012 this should help us - we will continue to win where it matters in local and by-elections - at the ballot box.

Sunday, December 11, 2011

The Americans have moved on already - for them, the challenge to their vision is Berlin

The British papers are understandably obsessed with Cameron's EU veto, with the right-wing press thrilled, the LibDem press (BBC, Guardian and Indie) appalled and the financial press (FT and Economist) deeply concerned. (Labour's sole media representative, the Mirror, has ignored the EU crisis entirely and focused on X-Factor and Tories-in-a-Nazi-themed-stag-party-scandal!).

The Americans however have moved smartly on. For them it's all about Germany v the USA - Germany and US in Tactical fight, says the NYTimes.

According to the American version of events, Obama has prevented global financial meltdown by putting in a huge stimulus and empowering the Fed to print money and fire fight wherever it sees necessity, and they feel Merkel is putting the whole thing in jeopardy by trying to impose austerity on the EU.

They even accuse the Germans of wanting financial instability because it plays into their hands:

The Germans, for their part, seem almost to welcome the collapse of market confidence: without the rising pressure from markets, Silvio Berlusconi would not have resigned as prime minister of Italy. And without the incentive of fear, most European partners would have been more reluctant to give Brussels oversight authority over national budgets — and the right to impose sanctions for violators.

“The Germans had a strategic insight or advantage to let the crisis get to the threshold within the European Union necessary for France to be willing to hand over the kind of sovereignty the country has always resisted,” said Jacob Funk Kirkegaard of the Peter G. Peterson Institute for International Economics in Washington. “You could say that the crisis has either been the wake-up call or the tool that Germany has used to beat them into submission.”


Obama sent his Treasury secretary Tim Geithner to Brussels ahead of the summit - and it's known he tried to contact Cameron too, but Cameron missed the call (or dodged it?)

The Reagan and Bush I administrations used close ties with the Tories to influence European policy, and the Clinton and Bush II administrations used close ties with Labour to do the same, (and Hillary Clinton as Secretary of State in Obama's administration had a very close relationship with David Miliband in Brown's administration).

But the Americans have no relationship at all with either Cameron's Tories or Clegg's LibDems. Further, by removing himself from the EU theatre, Cameron has removed himself as a useful friend to the Americans.

What now?

Well notice how the Americans are worrying about French sovereignty. Obama's relationship with Sarkozy is good, fuelled by his romantic appreciation of France as America's original ally (and pretty much one of two important countries the Americans have never been to war with, the other being India). In addition, to him Cameron is the equivalent of George III and he isn't going to shed many tears over losing him as an ally at the European table.

For the Americans the French are now their proxy in their 60-year strategic goal of keeping the Germans down and the Russians out. Expect maximum help from the Americans to the French in their attempts to ensure that Germany doesn't walk all over them and the rest of Europe.

FWIW, I think Obama is right and Merkel is wrong - wall-to-wall austerity is pretty much nuts - if everyone's consumption contracts, who will buy your products?

Britain needs to hope that the Americans via the French prevent the Germans from sending the entire EU into depression. We are no longer in control of our fate now that Dave-no-mates has found himself locked out of all the top tables in Europe and across the Atlantic. We are in the bizarre position of hoping the French (of all people) manage to prevent made-in-Germany eurogeddon.

Tuesday, November 01, 2011

End game for Greece: Papandreou calls a referendum

There is shock across the eurozone because George Papandreou has decided to call a referendum over the bailout that was cobbled together a few days ago.

Papandreou is the socialist prime minister elected in Oct 2009 to sort out the mess created by the previous uber corrupt Conservative government who not only cooked the books but spent money they didn't have employing Goldman Sachs, who promptly made even more money arranging new bum loans.

Papandreou has been struggling manfully with the legacy of his idiotic opponents and an angry public who has been asked to pay for the sins of the elite.

He also has to deal with a stroppy German public who have already been through a similar restructuring of their own - The foolish conservative Helmut Kohl had unified Germany with a 1 Deutchmark = 1 Ostmark policy, which led to rapid loss of productivity in the eastern states, plus massive stress on the western states who had to bail them out, and which was only sorted out painfully by the socialist Gerhard Schroeder who led Germany from 1998 to 2005, along with Peer Steinbr├╝ck who was the socialist finance minister in the grand coalition from 2005 to 2009. As it happened, joining the euro in 1999 helped them - though the euro was a fairly strong currency it wasn't as strong as the old Deutchmark, especially in the early years, so the Germans got a boost from de-valuation - the very thing they are denying the Greeks. And despite the devaluation boost they got from the euro, they still had a rough old time - from 2000 to 2009 Germany under-performed the UK, US and French economies.

According to the Greek press, the Greek conservative opposition is furious about the referendum, labelling it "irresponsible".

So what is Papandreou up to? In my opinion, he is looking for a way to exit the euro, and to then emulate what Nestor Kirchner managed to do in Argentina.

For those who don't know Argentina's history, the conservative Carlos Menem had pegged the Argentinian peso to the dollar, to acclaim from Wall Street and other banker types. But it ended in tears as the Federal Reserve raised interest rates to cool inflation in the US, which raised the dollar which in turn raised the peso which was pegged to it. Argentina was unable to service it's dollar-denominated debt and had to default - does this story sound familiar? It should because it's the story of the ostmark being pegged to the deutchmark and the drachma being pegged to the euro.

While the Germans gracefully got out of their problems by devaluing under the cover of joining the euro, Argentina had the mother of all defaults, and in raced the IMF to impose draconian spending limits all in the aid of propping up the banksters who had a) urged Argentina to peg their currency to the dollar and then b)lent them money in dollars knowing all the while it would be a disaster.

Kirchner was a socialist and sided with his people against the banksters. He simply told them to take a hike, decided what Argentina could afford to pay without massive unrest, and then defaulted on the rest. Argentina promptly revived and started prospering.

The only option for Greece is to do what Kirchner did - and that needs a referendum and for the voters to say No.

Why the consternation in the rest of Europe? Because a bailout will still have to take place - of the banks, shorn of the "cover" and pretence that they were really bailing out the Greeks. In turn this will accelerate the need to re-regulate the banks and separate retail banking from investment banking - in other words reversing the trend set in course by Margaret Thatcher when she de-regulated in the 1980's, and then exported the idea to the world. (People forget that one of the arguments made by Wall Street when they were pressing for the repeal of Glass-Steagall was that they were ham-strung compared to London where de-regulation meant retail banks could merge with investment banks).

Cue Tory City donors prodding Cameron sharply in the back-side and him responding by de-crying Europe interfering and preventing the banks from bankrupting us all again (he's that silly, he probably believes that the public will side with the banks against the EU, but as usual he is mis-reading the situation).

As for the Greeks - it's awful to default, but it happens to every single nation at some point. Britain defaulted on her debt to the USA in the 1930's. The Americans sort of defaulted in the 1930's by switching from the gold standard to their own paper currency which was worth much less - and they did it again in the 1970's when they switched from Breton Woods to floating currencies. And yet life went on. Germany on the other hand tried to pay her debt in the 1930's and it led to war. De-valuing by joining the euro proved a better way out in the late 1990's.

Whatever. Good on Papandreou for calling his referendum, and I wish him and the Greeks luck.

Tuesday, August 16, 2011

Dave's Broken Government

An apt pair of comments from the Telegraph that I thought deserved a wider audience:

Question:

6 months for stealing £3.50 worth of bottled water.

18 months for being in possession of a stolen television

48 months for calling for riots via Facebook.

How much for hacking into the mobile phones of hundreds of people, including the mobile phone of a murderd child, and then undertaking a conspiricy to cover up this fact by lying, with others, to both the police and parliament?


Answer:

A senior position in the Tory government.

Wednesday, August 10, 2011

The Standards of a Country Are Set at the Top

I just thought I'd remind readers of my 2007 post on the Bullingdon Club - it's pertinent because we have a Bullingdon government - Cameron, Osborne, and Boris Johnson were all members.

Here's some choice bits from this article in the Oxford Student of what this club got up to:

Last December[2005], images of snivelling Bullingdon members were splashed all over the tabloids after all 17 members were arrested for wrecking the cellar of the 15th century pub, the White Hart, in Fyfi eld.

17 bottles of wine were smashed into the walls of the pub after the civility of a gourmet meal descended into a brawl, leaving a trail of debris that was compared by eye-witnesses to a scene from the blitz. The inebriated members started fighting, leaving one with a deep cut to the cheek, and the landlord recalls attempting to pull apart the fi ghting parties, only to have them set on each other once more, exclaiming, “Sorry old chap, just a bit of high spirits".

.........‘At another infamous Bullingdon garden party, the club invited a string band to play and proceeded to destroy all of the instruments, including a Stradivarius.

.........Cameron was member of the club at a time when it was de rigeur to engage in the ‘man of the people’ pursuits of washing down “a cocktail of drugs with an honest, working class box of chips and a five pound bottle of wine”.


Now compare to this blogpost, which was quoted in the Guardian, giving a live account of the 2011 riot.

It sounds stupid to say it, but the atmosphere amongst everyone else seemed like carnival – I actually saw a girl getting chirpsed (chatted up). There were plenty of people (my estimate is maybe as many of 50% of people there) hanging around, fascinated by everything and enjoying watching the 'entertainment'. They didn't seem to be in the wrong place, they wanted to be there and to see what was going on.

I got the feeling that they wouldn't get involved in smashing any shops in, but if there were goods dropped by looters, they wouldn't hesitate to pick them up and I actually witnessed this later on. Lots of these onlookers were females and young kids (10-13) and they came from ALL races. I didn't notice any racial tension, Walworth is a very diverse area and white and blacks were mixing together whether that was in watching or in looting.


Very similar, no?

Tory apologists for the Eton mafia's Bullingdon behaviour kept saying "they were young" and "it was just larks" and accused Labourites of being too dour and "Presbyterian" about it.

But what happens when you put someone at the top of the country who has taken part in this vandalistic behaviour for "larks" and it's dismissed as something that's allowed because they were young? Why, people who are young think it's OK for them to do it too - if the Prime Minister can have larks smashing restaurants in his youth and get away with it, why can't they?

Why are the riots happening now? Why not in 2008 after the financial crash? It's because the tone at the top has changed. We've gone from the dour Gordon Brown advising people to "try their utmost", to the "let's smash property for larks" Boris and "Leave Tuscany to deal with public disorder? You must be joking" Cameron.

Can Cameron really tell the nation with a straight face that this type of behaviour cannot be tolerated, when he was doing exactly the same thing at that age, and got away with it? He didn't even have the decency to turn himself in and serve his time. In his mind he deserved to get away with it scot free. And the rioters think the same way as he does.

They say fish rots from the head. We're going to have a continuous stream of disturbances till the Bullinngdon mafia are kicked out.

Tuesday, August 09, 2011

Shocked by what is happening in London

Back on December 10th, I wrote a post titled Why have the Con-Dems lost control of the street?, where I made this comment:

When the first student protest got violent, the feeling was that the Met had been caught off guard - they simply didn't have enough police on hand to deal with it. But now it's the fourth protest, and they still haven't got a grip. Have they cut their budget so much they can't afford the overtime for extra officers? Are the police deliberately holding back in order to make a protest of their own?


Yes, we have a careless Tory government (what's new?), headed by a prime minister who sends for his personal tennis coach to be flown out to Tuscany while London riots. Yes, there is a lot of tension on the streets as the under-classes feel the pinch of cutbacks in education allowances, high inflation and no prospect of work thanks to Osborne taking an economy growing at a fast 1.1% per quarter at the election and hammering it wilfully into the ground.

It still does not add up to a burning capital city, unless you throw in a third toxic element - and that is the Met. They've handled it astonishingly badly, they failed to call for swift assistance from outside police forces, they've messed up at every turn.

The chattering classes are now nodding and saying "well they won't cut 2000 officers from the Met now, will they?".

Leave aside whether you agree or disagree with the cuts to the police force (I think the cuts are a bad idea).

The serious issue is that the police have won their "protest" with their rather unusual strike, where they've worked to rule and watched from the sidelines rather than taking full control of the situation. And at what a terrible cost. I shudder to think they'll feel emboldened to do it again - holding both communities and governments to hostage, because they've discovered they have the power to let the capital burn by simply doing nothing.

The weak Tory leadership and their clown Clegg deputy haven't helped either.

This would not have happened under either Tone or Gord. Tone's antennae would have been twitching on day 1 and he'd have been putting tremendous pressure on all concerned to get a grip. John Prescott would have done his deputy job and been all over the airwaves telling the rioters off (or as someone on twitter put it "I can't help but wonder that if John Prescott was in charge he would be out on the streets punching the hoodie feckers himself"). And in Gord's era, the chief of the Met would have been woken up at 4 a.m. to ensure he was up in time to do his job properly, and he might have been encouraged with a bit of shouting.

The Met wouldn't have dared to allow things to get this out-of-control under the Labour government.

But no one is in the least bit in awe of Cameron, not the rioters, and not the police. So London burns.

Friday, July 15, 2011

So Honest Ed was Victorious!

Let's recap on the past week and a bit:

* the Tories didn't want a judge-led enquiry - Ed forced them to accede to one
* the Tories didn't want the enquiry to start till after the police investigation was over (a few years down the line) - Ed forced them to agree to one starting now
* the Tories didn't want to refer the BSkyB bid to the Competition Commission - Ed kept up the pressure so that there was no was no option but to get the Competition Commission and Ofcom involved
*Finally, Ed arranged for a Commons vote to call on Murdoch to withdraw his bid altogether, and the Tories reluctantly accepted the Labour Whip, causing Murdoch to withdraw his bid. The demise of NOTW is just a bonus on top.

So now the post-mortem - why was Ed Miliband able to respond so quickly to events, leaving Cameron and Clegg in his dust, and as is clear to all observers, quicker than his brother David would have reacted had he been the leader.

It all goes back to the Labour leadership election. None of the newspapers backed his leadership bid, not even the Mirror. There was shock and fury in the media that the Labour electoral college had defied them and gone with their own instincts.

So Ed was beholden to no-one, apart from the Labour party, and could act freely.

Media endorsement is a double-edged sword - even if you know intellectually they are jumping on your bandwagon, a part of you wonders, did I get here because of their help? And of course the media plays on this feeling. Part of the reason why there have been campaigns in the papers in recent weeks against Ed Miliband's leadership is because they feel bereft as they have no leverage over him.

So that explains his ability to just go for it. The rest was skill.

There's something else: Ed Miliband may be what Napoleon referred to as a Lucky General.

During the Iraq war, he was not only not an MP, he was not a Parliamentary aide either - he was at Harvard teaching economics, and not in the loop at all. So that's the luck bit.

Then came the expenses scandal. He came through as one of the saints, with one of the lowest expenses in Parliament, because he only claimed for rent for a two-up-two-down in his constituency plus a bit of electricity. This at a time when both Cameron and Clegg were claiming three times as much. So that was down to innate honesty plus disinterest in money.

And then came the Murdoch hacking scandal - his initial reaction was down to revulsion (minutes after the story broke he summed it up saying "My wife said to me, this is sick, what is going on?", which echoed what everyone else was thinking at that moment. Then the luck bit again - he was not under obligation to anyone in the press, thanks to how things worked out in the Labour leadership election. So he took his opportunity to stand up to Muddoch and take him down, and skilfully played it out to the finish.

If he continues like this, it's a just a series of moves on the chessboard to Downing Street.

Thursday, July 07, 2011

Honest Ed v the Dirty Digger

One of the most striking things about News at Ten was the comment from Nick Robinson saying that the Murdoch empire have said that "If Ed Miliband thinks he can win, he's about to be proved very wrong".

Clearly News International do not regard this as a battle between them and the political establishment, or them versus the law of the land, but them versus Ed Miliband.

How sweet of them to personalize this battle. Clearly they are the forces of evil (not to mention the forces of criminality). So if, according to them, Ed is their only opponent, then that means he stands alone on the side of the forces of good and the forces of decency. And I guess they would know who their true opponents are.

This is not the first time that Ed Miliband has been on the right side of a huge scandal. In the expenses debacle, he was one of the "saints", with one of the lowest expenses in parliament. They say that the mark of an honest man is that he does the right thing even when no one is looking.

His core character is decent and his instincts sound. I'm glad he got elected Labour leader.

As for News International - well Labour managed to force the emergency debate in the House of Commons against Tory wishes, and managed to force Cameron into conceding Ed Miliband's request for an enquiry. Now it looks like we might have forced U-turn Dave into delaying the BSkyB takeover. Go Ed!

Thursday, April 28, 2011

The Royal Snub to the Labour Party

The huge, and I mean HUGE news is that while William and Kate have invited all the dictators of the world to their wedding (the Crown Prince of Bahrain, King Mswati III of Swaziland, Saudi tyrants and Robert Mugabe's personal ambassador to London), they have deliberately excluded two Labour former PMs (whilst inviting former Tory PMs).

We've had a ton of excuses come out from the palace - that this isn't a state wedding (ah, so the ambassador from Mugabe is William's personal friend, is he? Shades of Edward VIII). And the whole business of "knights of the garter" (how does that apply to Guy Ritchie)?

What is clear is that the Royal Family is breaking with over a century of tradition where the head of state stays neutral, and is deliberately picking a fight with a major political party.

It changes the constitution more than any referendum to change the voting system.

Blair's exclusion is particularly interesting as the only reason we have a monarchy at the moment is because Blair used his political capital to rescue them in 1997. At the time, many of us Labourites shook our heads and wondered at him. Republicanism was riding high, the Labour party was riding high, and Blair was at his zenith. If he'd have withdrawn his support from the House of Windsor, they'd have collapsed.

Looking back, he is probably wondering why he bothered to help them.

One thing is clear - a future Labour PM will view the monarchy as a biased institution that is opposed to our party and our Labour voters i.e. our enemy. When the next royal crisis comes - and it will come - it is unlikely that the next Labour PM will do a Blair. We're more likely to do a Baldwin.

Thursday, March 24, 2011

Looks like Osborne is determined to turn the UK into Ireland

In 2006, George Osborne penned a piece for the Times called Look and learn from across the Irish Sea, which he began with the memorable opening phrase,

A GENERATION ago, the very idea that a British politician would go to Ireland to see how to run an economy would have been laughable.


It's still laughable, but he doesn't seem to get it, and today's budget was a continuation of his stated aim to emulate Ireland - he cut corporation tax rates just two months after he hiked VAT on consumers.

He fondly believes that cutting corporation tax stimulates the economy - but as the Irish experience shows, the only thing that stimulates an economy is consumption - preferably by the consumer or but in emergencies, consumption by the state works too. But what has he done? Taken a hammer to the consumer with his threats to people's jobs, VAT rises and petrol rises (albeit backing down by a tremendous penny on petrol), and cut consumption by the state at the same time.

Anyone who runs a business will tell you that in order to survive, you have to sell stuff - which means other people need to buy stuff from you. It's literally that simple and that difficult. If people stop buying, no amount of corporate tax cutting helps - because if you don't make the sales, you don't make the profits, and corporation tax is merely a theoretical notion.

I've never heard of a business saying they will close down if their corporation tax isn't cut by 5%, but I've heard plenty say they have to close because they can't make sales. Forget all the tortured arguments about encouraging people to start new businesses with the corporation tax cut - success in business is more about how the hell you keep a business going, how you sell stuff. Starting the business is the easy bit.

Osborne's decision to heap taxation on individuals and simultaneously lighten them on businesses, actually hurts the economy because it clobbers those who underpin any economy, anywhere - consumers.

We got a glimpse of what is going on in the latest figures released by Sainsburys. Like for like sales increased by just 1% in the 10 weeks to 19th March, down from 3.6% in the previous three months. It will just take a small further tightening of household budgets to tip them into a fall. Sainsburys (and Tescos) have blamed the VAT rise. Will the cut in corporate tax help them? It depends on whether the impact of VAT, high inflation, high fuel prices and high joblessness reduces sales by more than the 5% corporation tax has been cut by. If it does, profits after tax will be down despite the corp tax cut, and their only option is to cut expenses - jobs - which frightens the consumer even more.

Ireland has proved that if you get the the balance between households and corporations wrong, if you expect households to shoulder all the burden and corporations and shareholders none, you end up in a death spiral. Shareholders don't spend enough to keep an economy going, and that's before you factor in the fact that most shareholders are either off-shore or overseas investors anyway. Trickle down economics doesn't work. But that's what has been served up by the Tories today.

Sunday, January 30, 2011

The public sector unions should enact a personal spending strike rather than an actual strike

Trade unions have been meeting to consider striking in response to the public-spending cuts, and the Tories have been rubbing their hands in the hopes of stirring hatred towards the unions and trying to turn public opinion against them.

I've got a better idea - instead of the unions striking, they should ask their members to go on a personal spending strike. They should honour their employment contracts, turn up for work, supply the services they are supposed to, and instead focus their efforts in an area they have absolute discretion - how to spend (or not spend) their after-tax take-home pay.

This is essentially a boycott of the economy at large - Stop eating out, stop buying anything other than essentials, save, save, save, and pay off debts (which is rational as they could lose their jobs, Gideon said so).

After all Osborne thinks spending is bad. So public sector workers should stop spending their after-tax pay. How on earth can he object to that?

A good six months of a co-ordinated boycott by all public sector workers (and anyone else who feels like joining in) should see a contraction of the economy which will precipitate a crisis and a general election by the end of the year.

If we are going to have spending cuts, lets have competitive spending cuts. Lets see who can cut their spending the most, the state or individuals, and which group has the biggest effect on the economy. Why should just one group suffer while others make hay? Things should be spread around, both prosperity and misery.

My message to the unions is to not go on strike - ask your members to be prudent and prepare for the job losses by stopping all their personal spending instead.

Tuesday, January 25, 2011

Economy contracted in Q4 2010

The only people shocked by today's bad figures are Tories.

I'm sure they will rush out to blame the weather - but even if you strip out cold-weather effects, growth would have been non-existent. This is very serious because the contraction happened in Q4, which is the most important trading period of the year. If we can't grow in Q4, when can we grow?

Ed Balls and others pointed out that if you attack the economy while it is still fragile, you are attacking the private sector, which leads to a drop in growth. Especially as most of the "cuts" the government made so far were cuts to contracts held by the private sector.

It was all compounded by Osborne holding his emergency budget in October, just before the important Christmas trading period, when most businesses make most of their profits. He gleefully frightened voters, telling them that he was going to axe public sector jobs - but didn't say which jobs, so that all 5 million public sector voters shut their wallets tight and stopped spending. Which again impacted the private sector.

Osborne can't seem to grasp that economies run on confidence. People don't spend unless they feel confident about their jobs. It's fear that holds economies back, not fiscal policy. And if you frighten the economy into contracting, you end up with a bigger deficit as tax receipts shrivel - ask Ireland, who were running a budget surplus in 2007 and might have ridden out the financial crisis if they hadn't decided to take an axe to their economy at the same time.

What's just happened is a vote of no confidence in Osborne by consumers.

Friday, January 14, 2011

Oldham East and Saddleworth by-election

So it turned out to be a comfortable victory for Labour, with a majority greater than Phil Woolas got in 1997 at the height of Labour's New Dawn.

The significance of this election was that it was the first since the early 1980's where Labour faced tactical voting against us, and we were nervous, as not only had the LibDems got within 103 votes of us at the 2010 general election but the combined LibDem and Tory vote in that election was enough to overwhelm us.

As it happened, enough LibDem and Tory voters switched to us, and enough Tories stayed Tory, to prevent tactical voting for the LibDems from delivering a win. The Tory candidate looked sad standing on the podium, he had been sacrificed at the Coalition altar, and I felt a bit sorry for him.

If Tories and LibDems are asking "why wasn't tactical voting enough to win this seat", the answer is "because you fielded two candidates", which enabled those genuinely Tory to vote Tory. If they want to crush that kind of thing out they need a a proper "coupon" election of the sort they had in 1918, where no Liberal stood against a Tory and no Tory stood against a Liberal. That requires both parties to merge, which might be too much for Tories to stomach, while at the same time being the end of the LibDems.

As long as the Tories and LibDems field two candidates, the vote should split between them allowing Labour to win, especially if some of their voters switch directly to us because of dissatisfaction with the government.