Gosh, I’m beginning to sound like a Tory already! help
From Megan McArdle of the Atlantic – a wise and self-doubting piece about, well, Greece and intellectual triumphalism. Could apply this to the whole Credit Crunch analysis:
You cannot graft rich-world policy onto emerging markets … Conservative fiscal and monetary policy… -emerges from the social and political institutions of a country; it cannot be imposed.
As Tyler Cowen says, “The fundamental cause of the financial crisis has been people and institutions thinking they are more wealthy than they are; this spread to Europe as well and now we are seeing the comeuppance.” To which I’d add, the problem is often less the overall level of spending, than the fixed commitments … Because these obligations are very hard to adjust in downturns, their governments are, like individual debtors, more vulnerable to individual income shocks. It also makes the coming pensioner problems harder to deal with.
As Felix Salmon says, banking crises often become sovereign debt crises, and vice versa. There is no neat separation between “the government” and “the free market” in a financial crisis,
The fact that some moron is willing to lend you money is not a good reason to borrow it.
Underwhelming negotiation of the decade:
By afternoon the Labour team appeared to have shifted further towards the Lib Dems – they did come up with an offer on the third runway “in principle” and they seemed to come up with a better offer on increasing money for renewables “in principle”
If the Conservatives had known about Ed Balls’ attitude, would they have played harder?
Jonathan Freedland gets ahead of himself in predicting the outcome of 5 years of coaltion government.
the Lib Dems have already passed the peak of their power. They will never again have the leverage they have enjoyed this last week. Once they have signed on the dotted line, they will be at the mercy of their new Tory masters. They cannot threaten to walk away: if they do, despite the reported agreement on a fixed-term parliament, they risk triggering a general election at which the Lib Dems stand to be crushed. To use an idiom both these public schoolboys will recognise, Clegg has just become Cameron’s fag.
Shocking honesty about Labour councils in the North from Ellie:
Thatcherism destroyed the local economy (based on coal mining and steel), but in some cases the Labour-run local authorities made things deliberately worse. Sheffield City Council is widely thought to have tried to bankrupt itself in order to force a government bail-out. City funds were piled into paintings for the town hall and building Sheffield Arena (where ironically Neil Kinnock delivered his death speech in ‘92). Local rates were increased to such high levels that the poor couldn’t pay and were forced to default. Nationally this was mirrored in the rate-capping rebellion. Now they try to deny it, but party members were quite aware of what was going on. The strategy was to create huge difficulties for the Tory government, while maximizing local rage.
Read Labour history now and you’d forget why Thatcher remained so popular in the mid 1980s.
Some robust good sense from Sunny on Liberal Conspiracy:
This coalition won’t fail easily, and a lot of Labourites should be careful of being optimistic about that. Cameron and Clegg know that if their government fails soon, then a new Labour leader plus severe budget cuts would hurt them electorally. So expect this to be at least a 4-5 year parliament.
and his biggest worry
if the Con-Dem-Nation works well, then it may seriously re-align politics in a way that could put Labour out of power for a generation… If the future of politics is indeed coalition governments, then there is a real danger here that the future is anti-Labour majority than an anti-Tory majority.
Labour writers are often in the flush of unexpectedly strong tactical voting and Council results last week, which helps to set the framework for their ‘we’ll annihilate the Lib Dems’ stuff. Maybe. But 4 years is a long time.