Sorry, I am in a sunny mood.
Martin Wolf is also infected with the sun, because he comes out with a surprisingly generous verdict on The economic legacy of Mr Brown. The general theme is that his mistakes were shared by most of the economic policymaking world, and Wolf makes this telling point:
“In retrospect, the government also trusted too readily in the stability of contemporary finance. Would a Tory government have been much more distrustful? If you believe that, I have a bridge to sell you.”
And on the spending splurge myth (see posts, passim), Wolf gladdens my heart again:
“The jump to a ratio of 48.1 per cent, forecast for this year in the 2010 Budget, is due to the recession. Nominal spending is currently forecast at 3.5 per cent higher in 2010-11 than forecast in the 2008 Budget. But nominal GDP will be 10.3 per cent lower and tax revenues 16.4 per cent lower.”
Yes, spending is too high. Yes, the deficit has leapt up. But no, the high spending and the deficit leap are not the same thing.
A fantastically Euro-intellectual column about the Euro being the right side of history.
The euro remains on the right side of history, Tommaso Padoa-Schioppa
“Over many months, a mighty army has advanced on the citadel of the European currency with the cry: “It will never work””
“Their reasoning was as follows: the euro area is not a political union and can never become one, because Europeans have no appetite for it and nation-states will not relinquish power …the advent of the euro is just an episode – a most significant one – in the building of a post-Westphalian order… In this battle, the citadel emerged as the winner because it finally set aside hesitation, prejudice and division. But in a deeper sense it lost, too. It was mistaken in its belief that the euro and full national sovereignty are compatible. The attackers saw the incompatibility, but were mistaken in their belief that it was the euro, rather than the Westphalian dogma, that would emerge most damaged.”
Beautifully written. Doesn’t make it right, of course.
And a letter repeating my point in yesterday’s post (I really ought to have written to the FT) about German monetary orthodoxy.
“Sir, John Taylor (“Central banks are losing credibility”, May 12) makes a number of interesting points, but several are erroneous …. he criticises the European Central Bank for not buying distressed government debt, arguing that it is not conventional monetary policy. Having the financial system teetering on the edge of collapse with interest rates already close to zero is hardly a conventional position and the ECB should be applauded for what it has done. This is no time for mindless orthodoxy … Or perhaps he is thinking what a triumph has been achieve in Japan since the 1990s”
Finally, a hugely entertaining short piece from Gideon Rachman about the day he interviewed George Osborne for a job at the Economist.
I had just been appointed editor of the paper’s Britain section and we were looking to recruit a new reporter. Osborne had been working as a political adviser to the Conservative Party, which had just gone down to a crashing defeat at the hands of Tony Blair and New Labour. Self-deprecatingly, Osborne explained that his job had been to try to “destroy” Tony Blair – but, as he pointed out, “I obviously didn’t do a very good job of it.” His frank admiration for Blair’s skills as a politician was obvious.
Finally, under Aren’t Americans Extraordinary, this League Of Ordinary Gentlemen piece debates a piece of legislation. Boy, am I glad that we have never reached the point in this country that this even needs debating.