I’ve read the speech by Gordon Brown to the TUC, so you don’t have to. You’ll thank me – it’s no fun reading such an acreage of prose with every other paragraph starting with the word “And”.
Following Lord Mandelson ‘paving the way’ on the subject yesterday, today was meant to be the occasion on which Brown, in charge of our public finances for, oh, about 12 years, let us into a little of his thinking about how the small matter of a 175bn deficit will be mended over the next decade or so. During which he will of course be in power.
You will be aware from ‘A balancing act’ (see link to right) that I/CentreForum have cautiously welcomed the fiscal stimulus that Brown and Darling have allowed in fighting the recession. The bank rescues, too, were a good idea for the British public and taxpayers. Others take this line: as well as Krugman, Delong and the usual cutting-edge Keynesians from across the Atlantic, bright economists on this side like Duncan are mystified by the Tory opposition’s pre-1930 approach to fiscal policy in a liquidity-trap slump. This view is not radical left- it is orthodox economics for a slump caused by aggregate demand falling when the credit-mechanism is broken. It ought to be an easy sell.
But not if the prose is as turgid as this:
And we know that the better path which we have taken and the one our opponents urged could be worth up to 5 trillion dollars invested in the global economy, and it could make th e difference in output of 4% . . . And this is not the moment to abandon the help that has kept over 200,000 businesses afloat, this is the time to continue it, so I can say that businesses who need deferral of tax you will continue to receive it over the coming few months.
You can tell that he is maddened by the inability of the world to give him credit for all the micro-initiatives – on housing, jobs, apprenticeships, all that Brownite stuff – that have made some sort of difference. But LISTING them – interspersed with ‘ands’ throughout – is unlikely to have impressed the stony-faced TUC mob, let alone a broader audience who have now listened to Brown enumerating initiatives for 12 years, and no longer believe that lists of numbers, pounds, jobs, things, really means anything.
The tragedy is that it is with the economy below capacity that these things DO make a difference. Normally the Right wing charge that government actions drive out private behaviour can gain traction – because it may be true. But not during this sort of recession. Tragically for Brown, his style has only become suited to the economy once it has dived into a serious mess.
He explains the Keynesian Multiplier idea relatively well:
And we do this because it’s right to help people but also because it’s right for the economy. Because the more jobs and homes we lose now, the higher unemployment rises, the lower growth is as a result, and the more difficult it will be to secure our recovery, bring our debt down, and keep people in their jobs and homes. Growth is the best antidote to debt
Well, it’s probably more comprehensible to most than algebra (see Paul’s nevertheless useful post).
The stuff on public spending cuts utterly dodged the issue.
But we can only make these improvements within a framework of sustainable finances. And to pay for these improvements and to achieve our budget reduction plan to cut the deficit in half over the next four years, we have to take action . . . we have announced we will raise national insurance from April 2011 by 0.5 percent (in the last Budget) we will raise the top rate of tax to 50p for those on the very highest incomes (ditto) . . . Labour will cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets. (utterly empty)
He just can’t do it – he can’t come out and say what he will really to in terms of cutting, apart from talk in generalities. Compare and contrast with how Vince Cable has actually come out with some cuts. Nothing like enough of course, but it puts the other parties to shame.