Tag Archives: economy

Can the Liberal Democrats provide a vision for Britain that the disaffected can support?

A few weeks ago Liberal Democrat Voice published an article by Lord William Wallace entitled Could Trumpland reach Britain in which William Wallace argued that we need to firstly “pay more attention to ‘the bottom third’ of society.” He identified that “what used to be called ‘the white working-class’ has deserted the Democrats in the USA” and spoke of the rise of Marine le Pen in France and UKIP in Britain.

Lots of liberals talk of the rise of inequality over the last 30 or so years. However few if any talk of the major causes of this – firstly the rejection of managing the economy to provide full employment where everyone will have a job. Some people talk of their experience in the 1960’s and 70’s by saying you could hand in your notice on a Friday and within a week you would have a new job and some would say by Monday or Tuesday they would have started their new job.

Secondly the increase in the mobility of labour. In Britain we have seen this most clearly from the 2004 EU enlargement, but in worked in favour of British building workers in the 1980’s who went to West Germany as in “Auf Wiedersehen, Pet

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Cakeonomics and Free Trade

 

Crumbs!

Not heard of Cakeonomics?

Cakeonomics is a simplified, quick and sometimes fun approach to economics and its connections with everyday life. It uses the metaphor of cake in an effort to make Economics more accessible and attractive, so that more of us can ask better questions about it and be sharper at assessing any answers. We need stronger, more confident knowledge to better analyse and help address the problems of our times, which are also likely to be the problems of our children and theirs.

Your piece of cake depends on various factors. Two crucial factors are the size of your slice and the size of the cake from which your slice comes.

Here’s some data and information about the global economic cake:

The richest 1 per cent increased its income by 60 per cent in the last 20 years (1992-2012) with the financial crisis accelerating rather than slowing the process.

Posted in Op-eds | Also tagged and | 10 Comments

Kramer: Cameron and Osborne must stand up to despots and oligarchs

Lib Dem Economics Spokesperson Susan Kramer was not entirely impressed with David Cameron’s pronouncements on corruption. It’s fair to say she won’t be holding her breath. She said:

We welcome the Prime Minister’s announcement that those buying property in the UK or bidding for government contracts will be required to register, but quick action is vital for him to show sincerity, and any such register should be publicly available.

Don’t forget, we have heard similar platitudes before that have amounted to nothing. Back at the G8 conference in 2013 a new drive against tax havens was heralded, and the Panama Papers have exposed just how pathetic that action turned out to be.

When push comes to shove, Cameron and Osborne have shown they will always cater to the whims of corrupt billionaires from across the globe rather than pushing through real change. Unless they are willing to stand up to despots and oligarchs from places like China, Russia and Nigeria, any commitment will prove to be utterly shallow.

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Reducing the Government’s Deficit is not the same as reducing the UK’s Deficit.


Now that the immediate fuss over the recent Budget has died down a little it is perhaps time for some more considered reflection on the nature of any criticism on the failure of the government, and George Osborne in particular, to make anywhere near the progress promised on the question of cutting the budget deficit. Maybe we can get it right for the next time it hits the headlines. The deficit problem is not going to be solved any time soon.

Naturally, the duty of an opposition is to constructively oppose, and so if the government’s deficit does not fall and total debt does rise, when the Government has a clear policy for just the opposite, then the Lib Dems, together with the other left of centre opposition parties, need to point out the failure of that policy. However, we need to be careful. That argument can be easily turned around. So we are in favour of even higher taxes and even more drastic cuts in public spending, are we? And when we say we are not, how does that chime with the public? Will they accept we are really being constructive? Aren’t they just going to think we want it both ways?

Posted in Op-eds | Also tagged and | 8 Comments

Should the UK have a policy on the Pound’s exchange rate?

 

One point of agreement between the more radical of Post Keynesian economic thought and the mainstream is that there should be little or no intervention in the exchange rate and that the pound should be allowed to float freely. However, whilst many Post Keynesian economists would argue this way, they would also not be in favour of being quite so concerned about the budget deficit which is behind the austerity drive favoured by the mainstream.

An exchange rate policy need not be in the form of an old fashioned peg between the pound and the dollar, or even a basket of currencies, at any one particular rate, but it could be that government tries to ensure that imports and exports are always close to being in balance and always is prepared to nudge the exchange rate either way to try to achieve that. At present the imbalance is approximately 4% of GDP which puts the UK as a whole into debt. Either the government or the private sector has to cover that. There’s no point there being a squabble over just who that has to be. But that is where we are now in our economic thinking.

Posted in Op-eds | Also tagged | 10 Comments

Farron’s strategy to tackle Corbyn is all wrong

 

Recently Tim Farron responded to Jeremy Corbyn’s economic strategy by saying “Unfortunately Corbyn’s anti-business policies will ensure that no company has the budget to pay the wages their employees deserve”.

Now this is absolutely true and it’s very much Tim Farron’s approach to Corbyn and Labour at the moment. But it’s also absolutely the wrong approach to take.

The thing is, the public already thinks Labour aren’t economically competent and the Tories keep on ramming home that message. But since the public think that the Tories are economically competent then any attacks we make on Labour’s economic competence will just drive voters to the Tories.

In a nutshell, attacking Labour on the economy does nothing more than to annoy Labour voters who we want to win over while helping to turn undecided voters to the Tories.

Posted in Op-eds | Also tagged and | 71 Comments

George Osborne’s austerity policies put economic growth under threat.

On 6th January George Osborne made a speech emphasising the threats to the UK economy in the coming year. His emphasis on the weakness of the economic situation might have come as a surprise to anyone who had listened to his autumn statement, where he was keen to trumpet how well the economy is doing, but Mr Osborne is a spin master above all else, and he clearly feels that the time has come for a different spin on our economy. The spin yesterday was all about the impact of the global economy on the UK.

The UK and US economies are growing at the moment, but growth in the rest of the world is looking very shaky. A down-turn in the global economy is bound to have an impact at home, and George Osborne’s austerity policies are not helping the UK to weather any potential global economic storm.

The biggest threat to the UK economy at the moment is not inflation, but deflation. Deflation means that any debt held by individuals or companies increases in value rather than decreasing over time. As a result deflation discourages spending and investment by individuals and companies, particularly the type of long term investment our country desperately needs.

Posted in Op-eds | 4 Comments
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