CommentIsLinked@LDV … A Vince double-bill – ‘Osbornomics’ and single mothers

Lib Dem deputy leader Vince Cable’s path has gone beyond mere sainthood – to his financial omniscience we can now add his media omnipresence. In today’s Independent, he delivers a withering attack on what he terms ‘Osbornomics’ in, erm, honour of the Tories’ shadow chancellor.

First, Vince tries to pin down Boy George’s guiding economic philosophy:

The last Conservative government was led by people who had a clear sense of ideological direction and conviction. Mrs Thatcher was clearly influenced, directly or indirectly, by the ideas of Hayek – rolling back “the serfdom of the state”. Sir Geoffrey Howe and rising stars like Nigel Lawson had developed a response to the inflationary 1970s through the monetarist ideas of Milton Friedman and the Chicago School. It is very difficult to see any clear or consistent thread this time round.

However, he acknowledges Mr Osborne has publicly lauded one philosopher, one Adam Smith:

I applaud his choice. Smith was one of the true greats and his intellectual case for markets, competition and free trade has stood the test of time. Gordon Brown, another son of Kirkcaldy, also claims to be a fan.

But Smith did not have a great deal to say about the financial markets and the banking system (unlike John Stuart Mill, whose descriptions of the credit crunch phenomenon in early 19th-century financial crises was uncannily prescient). His “hidden hand” of the market worked to allocate real things, not complex derivatives and securitised debt. Yet Smith would have instantly recognised those modern bankers engaged in a “conspiracy against the public”, maximising profits in a state-protected industry with the help of anti-competitive practices.

More uncomfortably, Smith would have heartily disapproved of Mr Osborne’s one big idea: lifting inheritance tax on wealthy estates. Smith wanted to see entrepreneurship and hard work rewarded and was contemptuous of the idea that “children of the rich” should become rich “without the necessity of any exertion”.

The Tory shadow chancellor is, says Vince, all at sea in the choppy waters of this recession:

I don’t see any trace of rigorous or interesting economic thinking which would merit such attention. I am struck by the fact that the Conservatives’ two main economic policy proposals amount to little more than messing about with quangos. One is to split the FSA and put its supervisory arm under the Bank of England: a badly thought out bit of juggling that will absorb a vast amount of time and energy and tells us nothing about the future direction of financial regulation.

The other is to create a powerful new quango to oversee public spending. There is a role for a stronger National Audit Office type body to assess government fiscal policy independently. But Mr Osborne appears to envisage placing unelected officials firmly in charge of what are essentially political decisions about when and how and where public spending is to be cut or reallocated.

Meanwhile in the Mail, Vince takes a look at Gordon’s ‘gulags for slags’ policy presecription for single mothers, and finds some merit in the proposal – though not for the reasons put forward by the Prime Minister:

It is possible that, for some, teenage pregnancy and motherhood is a lifestyle choice, but this usually involves stress, insecurity and poor prospects. The single mothers who I meet, and who are seeking help, are mostly committed to caring for their children and are very good mothers, but they are struggling. … it is widely believed that underage sex is prevalent and leads to growing numbers of accidental or deliberate pregnancies. In fact, the opposite is the case. In the past decade, teenage pregnancies have fallen by more than 12 per cent. We do, however, still have the highest rate in Europe. …

From my experience, men (or boys) without a sense of responsibility often escape [the Child Support Agency] and the authorities find it difficult to trace or penalise them, while conscientious fathers with two families are often crippled with financial obligations they can’t meet. Most of us support the principle of making fathers pay, but the reality can be very messy.

The biggest problem is not the cynical, calculating single mum who is trying to play the system, but the sad fact that there are children having children. Teenagers who have often had a poor upbringing find themselves with babies to look after with only hazy ideas about what being a parent involves. So a new generation of children grows up with a poor diet, lack of discipline and poor reading skills, which they in turn pass on to the next generation. Breaking this cycle is difficult but essential.

All of which leads Vince to conclude:

… that is where Gordon Brown’s supervised homes come in. Some already exist, supported by charities or local councils. There is a lot of difference between a workhouse for ‘fallen women’ and hostels designed to help children become responsible parents. The latter could be a good idea if Gordon Brown’s attempts to appeal to prejudices about single mothers don’t get in the way.

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