Tuesday, 26 October 2010

I'm not biased but...

On the BBC's radio 5 program this morning was Stephen Haseler, professor of government at the London metropolitan university.

He was asked for his views on the economy and said " All the evidence from around the world is we are about to enter another recession and the much trumpeted recovery is petering out." Asked if he supported the spending reviews cuts he said. .. "No. Not any cuts really. The coalition government..has a fundamental flaw in their argument. They are not going to get the private sector to grow. They say that cuts to the public sector will allow the private sector to grow. this won't happen. The recession is global, we won't be able to export out of it and the banks won't lend to support it. .. Its just not going to happen."

Interesting so far. It is all a bit dependent on private sector growth, and that could be being stifled by Vat rise, PS cuts, lack of confidence etc. He may be right. So what does the good professor propose as a solution?

The only way to grow the economy and get more tax receipts through the treasury is to expand the public sector. Just keep borrowing and keep spending..spending on anything. When you grow the economy your tax receipts increases and therefore your deficit decreases. The coalition plans mean a deficit increase program. It completely ignores all the lessons of previous recessions. The public sector grows you out of trouble."

Then he was asked to put some ideas to labour .. "New Labour are still in this mindset of free market liberalism that has led us into this mess. You must keep printing money until the economy is running well again. that's how it was dealt with in the 1930's."

Hmmm.. two small issues.

1} He has avoided any mention of the world war, inflation, no strong Asian economies or what public spending on uncompetitive industries did to this country.

2} The 1980 recession to deal with inflation cut spending, which, eventually, led to massive growth.. too much and eventual overheating..but ..still worked, after a fashion.

The profs
wiki is that of a full blown left wing academic. GLC, Stood for a Labour seat, Founder SDP member, European Republic supporter and so on.

Why do they insist on having these people on? Stephen Haseler has a long list of published titles, the reviews of which are clear. A very clever man who has a very entrenched view that gets in the way of objectivity. A Social Democratic view of a 100% committed European Unionist. He gave these same views at the
Lib Dem conference, on a platform with blogger Guido Fawkes. Was it just his forthcoming book that got him on the show?

We here could all collectively come up with a theory that fits the opposite narrative.
We could say if the public sector was cut 70% then there would be little government spending and no debt at all... All employment benefit could be insured or limited to 300 days. Schools could be faith or private, and as there are few taxes, everyone would have money to pay. And charities sort out those that can't . Home defence only army, Police on a volunteer basis .. Abandon the EU immediately, and Nato.
Would this nonsense get any airtime? Its not that far removed from the spend until you're out of debt approach advocated by the eminent professor. Yet we aren't likely to get an invite to spout it on the breakfast show any time soon.

I'm not criticising the prof for his beliefs. He is qualified to hold them. He is a regular guest all over the media because he holds those views. And the USA may still yet decide to try them out and then we'll see if he's right.

But the whole thing smelt of 'lets have another no to Tory cuts' story....Squeeze another one in before the anticipated poor GDP figures come out.
Even Nick Robinson mentioned this theme on the 10 o'clock news. 'Labour and parts of the media are driving this 'cuts strategy will lead to a double -dip' message.'

Yes, Nick. Parts of the media indeed...


Anonymous said...

Ah, now is it possible that the good Prof is talking his own book?

After all, his employer is the same London Met university that was caught fiddling its student drop out rates leading to very precarious financial situation just last year. And, what with the suggestion that social sciences will lose its teaching grant, the suspicion is the Prof may well be on the way to job center

Anonymous said...

I'm not criticising the prof for his beliefs. He is qualified to hold them.

Well you bloody well should be if you want respect in this forum.

measured said...

Mud does seem to be stick. Can you remember who were the deficit deniers only three months ago? p
This is possibly because we do not individually identify all these Lefties. In my experience they lack intelligence, so they will be as irritating as possible and will in a tribal ritu wish to retain as many of their friends as possible. Alan Johnson has said Osborne's plans are 'totally RECKLESS'. I'd say the complete opposite, but perhaps this is where the others are taking their lead from. Scaremongers.

measured said...

I posted the comment from my iPhone and the phone rang. I had to return the calll but, as it is difficult to reread the beginning of the comment, you have my apologies that the beginning of my previous comment doesn't read well.

Anonymous said...

"The only way to grow the economy and get more tax receipts through the treasury is to expand the public sector. Just keep borrowing and keep spending..spending on anything. When you grow the economy your tax receipts increases and therefore your deficit decreases"

The guy's a fkin retard.
'Qualifications' mean bugger all these days, academics are 10 a penny.

Besides, just because you have a degree in theology doesn't mean theres a god..

This guy says "keep spending..spending on anything. When you grow...."
as if the act of spending in of its self creates growth, any kind of spending.
Doesn't he realise its possible to waste money?

Its possible to reduce the size of the pie just in the same as its possible to increase it, and if resources are misallocated waste occurs..

To quote John Mills:
"Panics do not destroy capital; they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works".

That is what we have seen in the recent collapse, capital has been wasted loaning it to people who couldn't pay it back.
Now this stupid professor is advocating doing even more of it.
People like that will be the death of this country.

If it were true that when an economy gets into trouble that you can simply borrow and spend your way out of it, why do poor countries exist?
And why were large numbers of leftists a short time ago arguing for debt relief for the third world?
surely if they have done so much borrowing they must have strong economies, right?

Anonymous said...

This is how we should regard Gordon Browns debts.
"In international law, odious debt is a legal theory which holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, such as wars of aggression, should not be enforceable. Such debts are thus considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion."

Electro-Kevin said...
This comment has been removed by the author.
Electro-Kevin said...

Well the professor should be happy then. Because public spending IS being increased.

Those Whitehall jobs that are going ? They'll be the ones that are paid a lump sum and gold plated pension to retire at 50.

The benefit-chav side of my family ? Same as it ever was. Except that their portfolio of council properties increased this week. Darren decides that he's had enough of the screaming baybee and hectoring girlfriend so he's made off - got his own flat ... still no job though.

This is the plan:

- increase public spending whilst cutting public services

- increase taxation

- increase inflation

Impoverishment of those who work by making what money they do get worth less, the aim of which is to diminish national debt.

The upshot ? Communism by default... until the great collapse. Wages become worthless. In fact it becomes a financial liability to have them.

CityUnslicker said...

Ek - Don't despair the tax rises are temporary, they won't last even the full five years of Government.

The benefits people are going to undergo a new plan, but IDS is to wean them off slowly, not with cold turkey.

the plan is to turn things around.

As for the mad professor - well when you want someone to confirm your view you find them - this is what the BBC is doing. it's pathetic but its shows how desperate they are that they have to wheel out the loonies in their defence. What next, serious inteviews with Bob Crow?

roym said...

reds under the bed again?

i must say i listened to R5 yesterday and i didnt hear this interview so it's not as if he was the focus of the whole show.

what about the capital effort al beeb's website did priming the public for the cuts all summer.i recall plenty of labour whinging there.

Bill Quango MP said...

Anon[1]: Yes the prof had a book to plug. But its still his belief. I took his words of i-player. Its not a precis. That's what he said.
I left out the bit where he said "Its not a very popular theory at the moment..I don't know why"
I thought he'd made a big enough fool of himself as it was.

Anon [2] : Criticism of the prof is implicit in the post. He's a dangerous ivory towered loon.
What I meant by not being critical of his views is that that is his job. He is being paid to be a red skies thinker, coming up with an alternative to market forces. Can't knock that.

Measured: You are correct. if you look at the profs books, and then check them out on amazon, you'll see some of his earlier works have not come true. There's one about the rise of the EU superstate taking over from America, by about now. I doubt there is a chapter on Greece, Ireland or Spain, or French strikes etc.
Alan Johnson's response was considered ineffectual by PB.

Anon [3] Can't disagree. But remember the 'spend your way out of debt' theory was very popular in this country and exported to the rest of Europe by Mr Brown, right up until about the time Greek's wheels came off.
And there will be more QE. Maybe delayed by the somewhat flattering GDP figure but still on the cards.

EK- What CU says. if you look at who the Tories are trying to protect, its the 55+ age group.
They voted Tory at around 75%.
The 40 somethings only at 40%

So its protect the core now. Then kick those that don't vote for them anyway later.

Anonymous said...

Very popular in academic and establishment circles maybe.

But most people I know think they are absolutely barking mad if they really believe it. But there is a questionmark over that, or whether they are just trying to justify more statism for the sake of it.


Would it not be fair to call government borrowing simply deferred taxation? and therefore increased borrowing is in the long term increased taxation.

I know in theory that this borrowing to 'invest' is supposed to pay for itself, but who really believes that Gordon Browns borrowings were really costed properly on that basis?

fewqwer said...

London Met is the worst university in the country.

Bill Quango MP said...

Anon [ -2] Would it not be fair to call government borrowing simply deferred taxation?
What an inspired idea. I hope Osborne takes it up. Deferred taxation -its funny 'cause its true.

[pick a name anon; we won't bite. We're up to our eyeballs in anons at moment. A name makes replies so much easier. And round here we believe there are no right answers. Plenty of wrong ones, but no right ones...]

Fewquer. Indebted for that link. i shall use it when the next mad idea is sent forth from the land of the masters. Steven_L had a great 'new insane idea' he discovered on Labourlist' on his blog here.

Sean said...

Maye we should call this the Geoffrey Howe phase off the argument?

Remember all those 364 big brained economists writing to the Times? "no basis in economic theory or supporting evidence" apparently