Wednesday, March 02, 2011

Long Boring Comment

..I made elsewhere

you have utterly misunderstood the position here on at least two levels. Mervyn King has been conspicuously and constantly critical of New Labour.The above mentioned remarks are far from the only ones. This was during the run up to the GE and a comment directed straight at Alistair Darling whose proposed fiscal strategy he rubbished. That quote was retrieved from many considered on Duncan Weldon`s New Labour loyalist Economic Blog and the normally mild mannered geek was duly outraged . With good reason .
King went far beyond his remit in attacking the fiscal strategy of the government , strikingly so.Think of the timing and his authority! Compare it to this vague weak hand wringing to no purpose .
He has remained strongly supportive of coalition Policy and provided low interest rates despite the incipient threat of inflation as they would have hoped
( Darling`s plan, you recall ,was far tighter than the objection to every cut New Labour currently indulge in would imply and opposed by the Brown cabal and most of all by the shadow Chancellor.)
Now it is of course true that the growth of the deficit was caused by the collapse of revenues in a down turn. It is, as a statement of maths true that excessive spending did not cause the Grecian deficits we experience.
Had we lived through a perpetually over heated boom, had there been no end to brisk growth , had benign conditions of low inflation , high employment and apparently victimless asset inflation persisted then all might have been well (personally I doubt it ... but still)
Its like saying if I went out on the open sea in a tiny canoe with no life belt and did not check the weather then I cannot be blamed if I drowned .Had the sea remained serene then all would have been well .It was the choppy conditions that were to blame 100%
In a sense that is true , but, as any fule do know it gets choppy only a complete ijjit sets sail equipped thusly .
King has ,on numerous occasions made it crystal clear he felt New Labour were like the canoeist.
That position is quite consistent with his remarks above which if you think carefully about them mean very little . It is a painless way of appearing not to be the friend of the City or the Conservative Party (by whose patronage he is accused of benefiting ). His interest rates are accused of risking calamitous inflation into the Economy which will hurt low income groups and it is in that context that this gesture should be made . he sees no choice clearly and what he does is how we know what he thinks .
Incidentally I do not agree that events are "Caused by the Banks" although they certainly made an ill earned killing during the bubble . It was caused by a speculative property bubble which governments on both sides of the Atlantic allowed to let rip. Leaving aside legitimate difference about the role of the players it is agreed by all that this is part of the same picture
Do you not then , find it rather disgusting that many of the dippy baby boomers sit on mountains of unearned property cash (which the young pay for ) and have pensions the young will not get are quick to deride the greed of everyone else.
The banks were not the only winners from the screw-tommorow decade

No comments:

Blog Archive