Posts Tagged ‘Economics’

Not did they just run against each other for the Tory leadership in 2005 and disagree on Europe, VAT cuts and their approach to the economic crisis, Cameron’s new found pal, Kenneth ‘big beast’ Clarke, was also responsible for the firing of the current Tory leader in 1993 from his post as special advisor to the Chancellor.

Oh well, desperate times call for desperate measures I guess…

If your own shadow Chancellor cannot take on the government in the middle of a daunting economic crisis I guess bringing into your team the leading critic of your economic policy strategy who fifteen years ago thought you weren’t up to the job just so your party can get a sit on the grown-ups table is sensible enough.

Did anyone really think that Osborne could ever survive a direct confrontation with Brown and Mandelson or even Vince Cable? Afraid not, that’s what Clarke is there for, even if he disagrees with most of what his leader’s actually saying. Such is life…


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My friend Liliane has received today this email from Labour HQ,

Dear Liliane

I’m sure you’ve already seen reports about our employment summit on the news today and I wanted to contact you directly about the unprecedented challenges that this summit is helping to address.

Let’s be clear – we are facing the first crisis of the global age. Countries across the world are taking action to stimulate their economies and provide help to those who need it.

Today’s employment summit gathers employers, trade unions, and the firms and universities who provide the skills that will bring Britain out of the recession quicker and stronger.

Because we are Labour, we will always approach tough economic times not by just monitoring the economic statistics, but by understanding that each statistic represents families, communities and businesses struggling for help.

We can invest millions in people’s future now or pay billions in a future where people are stuck on benefits – real action no w is vital to ensure that those who are out of work now do not become the long term unemployed of the future.

We understand that, by providing real help now, we can emerge from this downturn quicker and stronger. This is why we are: investing £500m to get people back into work; boosting the economy by providing an average of £275 for each family per year through cuts in VAT and £145 in tax cuts for basic rate taxpayers; and helping to create 100,000 additional jobs through our capital investment programme in schools, hospitals, environmental work, infrastructure, and transport.

But while we are rising to challenge of the times, the Conservatives are blinded by the same old ideological blinkers.

We are absolutely determined that we will not repeat the mistakes of previous recessions when, time after time, the Conservatives’ ‘do nothing’ approach allowed rises in unemployment to become permanent and whole generations were written off.

Britain toda y faces a clear choice.

A country in which a Labour government provides real help for families and businesses affected by the downturn – or a ‘do nothing’ Conservative party set on repeating the mistakes of previous recessions by leaving people to fend for themselves.

Best Wishes


More and more I think this crisis is helping both Labour and Brown regain its social democratic identity, which can only be a good thing. After the last years of Blair when the ideological anchoring was lost, the party tried to reinvent itself on a permanent basis, losing its raison d’etre, and the ideological battle lines were blurred, Brown is finally being unashamedly Labour and that is getting party activists excited once more about getting the message out to the electorate.

A clear message and strong beliefs on its ideology is what Labour need as the electoral season draws closer

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I just watched Paxman interviewing Tony McNulty and Alan Duncan on the economic crisis and it’s curious how the tables have turned in British politics since 1997. In 1987 and 1992 Labour lost two general election mainly on the electorate not trusting them with the economy. Tax and spending was the Tories’ electoral forte for years while Labour struck the right note on social issues…depending on what issue the electorate care most about one or the other would shore up in the polls…not anymore. Listening to McNulty and Duncan one could see the Tories complaining about the economy without providing any soutions, very a la old Labour, while McNulty playing the safe pair of hands Minister. On social issues the Tories are now almost the perceived ‘caring party’, when social issues like crime or 42 days detention were the centre of media attention Cameron shore up in the polls, once the economy went down he started sounding too naïve to handle the storm while Brown look decisive with a very Thatcherite ‘take no prisoners’ attitude.

The Tories can certainly lose the next election if they keep looking so weak on the economy. I have a feeling Osborne is under serious threat now if the Tories don’t find a narrative on the economy soon and the PBR goes down well in the polls for Labour a new year reshuffle could see him off and Ken Clarke in.

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Osborne is feeling the heat

George Osborne must be cursing the day he chose Corfu as his holiday destination last summer. Everything was great for the shadow chancellor before that, but then he got himself entangled in a very silly but also very damaging political situation.

The Osborne-Deripaska affair became the first nail in the coffin. Boy George thought he could play hardball with heavyweight Peter Mandelson and came off hurting the new Tory brand. I wrote about this a month or so ago here.

That amateurish mistake is now spreading to his actual shadow cabinet portfolio, the economy. Firstly, his idea of tax credits to employers, announced by Cameron this week, has proven a total failure, both in terms of its economic rationale- it doesn’t achieve its aim and costs a lot more than the Tories say it does, read about it here– and the little impact it has had on back-footing Brown on the economy.

A Tory peer, Lord Kams, and an unnamed Tory MP have already called for Osborne’s replacement. The tax-cutting wing of the party is already uneasy about his lack of vision and pundits are starting to read the runes about possible hints in Cameron’s behaviour that might signal an early exit for his economic wonderboy. In the meantime Osborne is doing no good to the UK economy with his alarmism while Brown and Darling are meeting world leaders in Washington trying to sort out the world economy.

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With ideas like this one understands why they are reluctant to put more policy substance out there…it would just be embarrassing.

The argument against brilliantly put by Hopi and Chris here and here.


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Iceland: from boom to bust

The blog La moqueta verde has a very interesting post on the boom and bust of the Icelandic financial market.
The graph shows the sharp rise and sudden fall of the Icelandic OMX15 index, it’s just brutal.

From happiest nation in the world according to the UN just a year ago to a country shattered accepting a 2 billion dollar loan from the IMF to save whatever is left of its economy and contemplating the very serious threat of a brain drain that would leave little hope for a country with population 320,000 (that’s smaller than my hometown of Murcia).

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Osborne’s big big mistake

For many inside the Westminster bubble the fact that there has been no resignation or institutional investigation in the Osborne/Deripaska affair meant the end of the story. Many think Osborne has been shaken and the Tories will actually be better off now that he has learnt a valuable lesson, never to get too cocky.

But those same people are very wrong indeed, Osborne is responsible for damaging the most valuable asset of Cameron’s Tory party, its branding. Actually it wasn’t Osborne who has done it, it’s Peter Mandelson, but Osborne brought it upon himself anyways. As John Hoynes tell Josh Lyman in the first season of the West Wing: ‘welcome to the NFL kid’. Osborne thought he could play dirty politics with probably one of the most skilled politicians in that field seen in the UK in a long time and he’s shot himself on the foot instead. But back to our main story…

The Tories have had a number of negative stories on dodgy financial dealings since David Cameron became party leader, MEPs’ expenses, the Conway and Spellman affairs… the problem was that none of them stuck at the time because they were dealt by Cameron as bad habits from the past that his new team was committed to eradicate. But then the Osborne story came up.

Cameron’s most trusted advisor, his Shadow Chancellor, the man who would run the British economy if the Tories were to win the next election has gone dirty as well. It is not anymore an old habit, it’s the very core of the new Cameron leadership who’s in trouble. Many will say he hasn’t done anything wrong, but that doesn’t matter in politics, because Osborne is now responsible for allowing future attacks on the Tories financial dealings to stick. There are new stories coming out in the Guardian and the Mail on the Tories and dodgy donations, are they true? doesn’t matter, everyone is at it now and it’s going to hurt Cameron badly because financial honesty and transparency is key right now to win the trust of voters at a time of an economic recession.

Osborne has contaminated the Tory brand badly. You can see the Tories running around trying to switch the blame over to Mandelson (here and here), but it’s too late, the damage to the “whiter than white” Cameronites is done. And the funny thing about this is that Osborne brought it upon himself by disclosing a private conversation between him and Mandelson, which is not just bad social manners but very very amateurish politically speaking.

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