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.