DEM not gonna CON dis NATION: Rolling UK politics in the short-lived Cleggeron era

Still really fucking angry about the way all three parties dodged the issue throughout the campaign.

HM is on the money, even if we agree that the national finances need repairing - unsure exactly how much of a given this is - the collusion of all 3 main parties in offering the same solutions is depressing bullshit.

Can someone explain to me what happens to the economy if, as seems likely,

- Wages stay flat
- House prices stay flat
- Unemployment stays flat or gets worse
- Bank lending stays sluggish
- The government raises taxes
- The government institutes massive cuts in every department

?? Where is the light at the end of this tunnel?

I'm pretty sure that the economic orthodoxy is now some deep ideological poison disguised as historical inevitability, but hey, maybe that's cos I'm a Trot.

- and the white man get paid offa alla that

too much fraser nelson on tv lately

What's with that accent too? What is that exactly? 'Orrible bastard.

unsure exactly how much of a given this is

me too. would appreciate being told why the following is wrong: deficit jumped from ~£30bn p.a. pre-crisis to ~£150bn last year. but £130bn of that was the bank bailout which is a one-off cost, you'd hope, and some of which will be recouped in the big bank sell-off.

so why can't we make relatively modest cuts, wait for tax receipts to return to former levels (and eventually exceed them) and pay down the debt slowly without dumping a load of public sector workers on the dole? genuine question for people who understand finance.

general and prolonged strikes tbh

so why can't we make relatively modest cuts, wait for tax receipts to return to former levels (and eventually exceed them) and pay down the debt slowly without dumping a load of public sector workers on the dole? genuine question for people who understand finance.

all govts running pretty huge current deficits because their spending levels grew so much during boom times, is my basic understanding. 'modest cuts' won't cover it.

Re Frazzle Nelson: I know a couple of privately-educated Edinburgh types with a roughly similar accent so I think it's that.

but £130bn of that was the bank bailout which is a one-off cost, you'd hope, and some of which will be recouped in the big bank sell-off.

i *think* that this is wrong: i think the increase is owing to the slump in tax receipts owing to the recession owing to the banking collapse

but i mean yeah the fundamental question is why the rich get bailed out!

and yeah, again, taking people out of work will surely stiff the economy? right?

but basically we have this big-ass debt, and lenders, being out-of-control bastards, will yank up interest rates unless we offer them great sacrifices (i.e. privatizations etc). which sucks, and is why we need an opposition party able to provide a different economic model.

xpost to self: Though I see he went to Dollar Academy and the only other dude I know who went there doesn't speak like that. Hmm.

but i mean yeah the fundamental question is why the rich get bailed out!

because the market will eat us all if not fed with public cash instead. haven't you been listening?

nelson's accent is something else

something alien

Interesting interview with Galbraith Jr

Since the 1790s, how often has the federal government not run a deficit? Six short periods, all leading to recession. Why? Because the government needs to run a deficit, it's the only way to inject financial resources into the economy. If you're not running a deficit, it's draining the pockets of the private sector. I was at a meeting in Cambridge last month where the managing director of the IMF said he was against deficits but in favor of saving, but they're exactly the same thing! A government deficit means more money in private pockets.

The way people suggest they can cut spending without cutting activity is completely fallacious. This is appalling in Europe right now. The Greeks are being asked to cut 10 percent from spending in a few years. And the assumption is that this won't affect GDP. But of course it will! It will cut at least 10 percent! And so they won't have the tax collections to fund the new lower level of spending. Spain was forced to make the same announcement yesterday. So the Eurozone is going down the tubes.

On the other hand, look at Japan. They've had enormous deficits ever since the crash in 1988. What's been the interest rate on government bonds ever since? It's zero! They've had no problem funding themselves. The best asset to own in Japan is cash, because the price level is falling. It gets you 4 percent return. The idea that funding difficulties are driven by deficits is an argument backed by a very powerful metaphor, but not much in the way of fact, theory or current experience.

(xpost to Joe) I asked something like this a while back and the verdict seemed to be that if and when interest rates rise we will have to quite a lot of interest on the large national debt and this will contribute to making the annual deficit even bigger, so maybe the idea is to make a dent in the debt before the interest becomes too much of a problem.
(this post is kind of redundant now as so many other people have answered the question)

but £130bn of that was the bank bailout which is a one-off cost, you'd hope, and some of which will be recouped in the big bank sell-off.

i *think* that this is wrong: i think the increase is owing to the slump in tax receipts owing to the recession owing to the banking collapse

that seems to be what everyone says, but the bank bailout did cost that much, and it's not going to happen again, so most of your deficit disappears doesn't it? still got the debt, but you can pay it off more slowly.

take the point about interest rates.

like galbraith's attitude there.

wd have to defer to galbraith jr, but i'd assume that a deficit can't be expanded indefinitely. the vig would come to take a large chunk out of day-to-day expenditure eventually, no? i dunno, the british state has been running on a deficit since forever iirc, but within the present world system it presumably has to have some limits.

from galbraith again

What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn't be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

arguing against myself & g jr, one other possibility is that the markets are convinced that govts will cut spending and deficits and have priced that in, but if the political environment changed so would the markets. think there was some big bonanza on uk bonds after the libcon deal, which would make sense.

the markets are convinced that govts will cut spending and deficits and have priced that in

yeah. well, this is the thing. over a five-year span all three parties aimed to get to the same place, deficit-wise. they aim to half it in that time iirc. the markets claimed not to be that arsed who got in as a result. but if labour had not promised to cut the deficit, i can imagine interest rates going up? it's not like lenders need that much of an excuse is it?

There was an article in the Guardian by someone just before the election arguing that no cuts were needed but I'm buggered if I can find it now. (very helpful I know).

It was something along the lines of this one (but no this one).
big.http://www.guardian.co.uk/commentisfree/2009/dec/07/deficit-debt-hysteria-spend-recession

Seems pretty redundant now.

that reads to me like extremely wishful thinking

Several Labour candidates have explicitly said that we need to get ready for a lower level of private spending in general and be more like Sweden, where the state shoulders more of the spending burden in the economy. i.e. the "stimulus" should be permanent. How you finance that is an interesting question of course.

55% now up front centre on the BBC website.

Front page of the Metro too - "Coalition is on the ropes on day one"

Fuck this giant banner on the new BBC site btw

sweet

They've got to lend to somebody, though (xp to hm) - there's so much money around and has been for the last fifteen years that anyone who doesn't look like a basket case has been able to borrow cheaply, brief liquidity crises apart.

Japan is a bad example of a success story too because their ease of borrowing is a bit artificial - largely down to demographics meaning oceans of pension money have to be lent domestically to keep it as riskless as possible.

The BBC is apparently persisting in its wilful misinterpretation of the policy, along with various Labour MPs and constitutional 'experts' who should (and do) know better.

The policy moves power of dissolution from the executive to the legislature. If anything it makes dissolution too easy, so the percentage should be higher - 66% for instance.

David Howarth's Bill didn't have any such provision, so in order to undo the fixed term Parliament would have to pass another Act - a much higher threshold for dissolution, and a genuinely fixed term Parliament.

You will not be surprised to learn this was not even being mentioned on Sky News earlier this morning

The BBC is apparently persisting in its wilful misinterpretation of the policy

Privatise the lefty bastards

The BBC is apparently persisting in its wilful misinterpretation of the policy, along with various Labour MPs and constitutional 'experts' who should (and do) know better.

The policy moves power of dissolution from the executive to the legislature. If anything it makes dissolution too easy, so the percentage should be higher - 66% for instance.

David Howarth's Bill didn't have any such provision, so in order to undo the fixed term Parliament would have to pass another Act - a much higher threshold for dissolution, and a genuinely fixed term Parliament.

― ilmigliorfabbro, Friday, May 14, 2010 1:06 PM (1 minute ago) Bookmark

you are wilfully obscuring the fact that it raises the bar for dissolution by bypassing the old way -- the vote of no confidence.

it also makes no sense in our system to bring down the government but *not* call a new election.

+ ne ways we do not need a five year fixed-term parliament.

ne ways we do not need a five year fixed-term parliament.

We don't but they do

I don't think it is a misinterpretation, currently 50%+1 can vote no confidence after which the PM can try and form a new government or dissolve parliament, in effect parliament can force the PM to go to the queen for a dissolution.

Under the 55% rule, parliament can dissolve itself, but only if it gets a 55% vote, a 50%+1 vote of no confidence basically allows the PM to cling on to power until the fixed term is up or until the PM or enough rebel MP decide enough is enough and put the government out of its misery.

It makes a minority party in coalition stronger than previous elected majorities.

Whether this is being misinterpreted or not is not the issue - where is the case for fixed term parliaments and increased dissolution thresholds? Do we really want parliaments to continue after NC votes with alternative coalitions bringing in the much maligned "unelected" Prime Ministers that the Lib Dems and the Tories have criticised so much in the past 3 years?

A vote of no confidence was not the bar for dissolution in any case. Dissolution is, and always has been, the decision solely of the Prime Minister (and, nominally, the Queen).

I agree five years is too long, but fixed term parliaments are far more sensible than elections being called on the whim of the executive. They were in the Lib Dem manifesto AND the Labour manifesto, and Cameron signalled last year that he was in favour as well.

Dissolution is, and always has been, the decision solely of the Prime Minister (and, nominally, the Queen).

you can't accept the unwritten rule that the pm exercises the queen's preroragtive without accepting the unwritten rule that the pm has to call an election after losing a confidence vote. it's all part of the same deal.

I agree five years is too long, but fixed term parliaments are far more sensible than elections being called on the whim of the executive

^^ this. four years seems about right to me.

Maybe this is why we should have a written constitution.

But in any case, there was not an election in 1924 after Baldwin resigned after he lost a confidence vote.

Ah yes, I remember it well

In constitutional terms it might as well have happened yesterday.

that it's tory-driven does show their confidence in being able to sideline the libdems in due course, they won't be able to try for a majority but the libdems are further hamstrung

I don't know that 55% is actually Tory-driven. Do you? Adonis' commentary (which I quote above) says the LDs wanted Labour to sign up to it as a precondition for coalition. Because it helps the LDs as much as their coalition partners. Maybe more. In the new system, the Government isn't allowed to call elections whenever it wishes - it must get 55% of the Commons to agree with it. At only 47% this would be an uphill battle for the Conservatives if the LDs were opposed. 51% would be much more reachable.

Of course there is the obverse consequence, that this protects Tories from mass LD defection. Which is presumably why both sides agreed to it.

Yeah a coalition is much less attractive to the LibDems if the Tories see a jump in the polls, call a snap election, and get back in with a majority.

If we're going to get historical about this then bear in mind that the last parliament to dissolve itself was the Long Parliament, and that led to a spaniel loving, pseudo-catholic, europhile running the country.

Blair, right?

Exactly. The fact is that it is a bizarre system that allows the executive simply to call an election whenever they feel like it. Hence fixed term parliaments. That is the real argument here, and no amount of disingenuous media churn about confidence votes can change that fact.

As opposed to Nick Clegg, a spaniard loving, pseudo-catholic, europhile

Maybe this is why we should have a written constitution.

yes, these notorious make everything unambiguous and, as you wish, "sensible"

But in any case, there was not an election in 1924 after Baldwin resigned after he lost a confidence vote.

― ilmigliorfabbro, Friday, May 14, 2010 1:21 PM (16 minutes ago) Bookmark

no-one has said that a no confidence vote *necessarily and at all times forever more* leads to dissolution. just that they generally do, and that there is no solid case for changing the status quo on the question.

i could just about live with a four-year fixed term parliament if that's what a majority *really wanted*, though i don't see the point (please do name some dodgily timed elections -- perhaps if blair had waited till may 2002 the world would be a better place). but the 55% rule is str8 bullshit.

The fact is that it is a bizarre system that allows the executive simply to call an election whenever they feel like it.

sorry, but what is "bizarre" about it? what is your standard?

it is a bizarre system that allows the executive simply to call an election whenever they feel like it. Hence fixed term parliaments.

OK, I can accept this argument while at the same time feeling that the OTHER consequence of it - that it locks in a Conservative government for five years even if the LDs all vote with Labour in a no-confidence vote - is a massive powergrab and that they simply sprung this rather than spell out why or do any consultation does not bode well AT ALL for what we can expect from this government.

(From my American perspective it is bizarre for the ruling party to be able to call an election whenever it likes. It gives even more power to incumbency which can't be a good thing.)