Monday, 15 December 2008

We Can't Afford Keynes

The economic arguments for keynesian intervention are impeccable in certain circumstances. Those include not being monstrously in debt. Public and private debt.

Italy would be most unwise to go for a keynesian solution and has Mr Tremonti to make sure the idea would not even cross their ancient, malevolent, calculating minds. Italy did 'New', even 'New Dawn' once in the last 2000 years and it will be another couple of milleniums before they go for it again.

Unfortunately the United Kingdom lacks experience and world weariness. New Labour are doing keynesian reflation, with public debt even worse than Italy, and household debt that is being admired from Alpha Centauri.


CityUnslicker said...

well, they are few alternatives - which is not a bad answer. Doing a pure germany is not an option - we are not exporting our over-capacity.

The only sensible thing to do is cut taxes and government waste in line with one another.

Labour just want votes; I think everyone can see it now. The only question is whether they will buy enough to keep them in perpetual power. I think that is in the balance.

Anonymous said...

I'm not sure that we actually lack experience, Hats.

But perhaps you are too young to remember Mr. Callaghan, or indeed Mr. Barber.

I have that sickening "here we go again" feeling. I really thought we would never have to go through this again, but it seems people - or nations - never learn.

My father has an occupational pension from working several years as a manager at a good strong middle-sized company (a well known market leader of its time, in its field).

The pension now pays his weekly paper bill, and not much more.

That is what inflation can do to you, and we are about to experience it all over again.

Thank you Mr. Brown.

hatfield girl said...

The New Labour line that the Conservatives are a do nothing party appeals to me greatly. Doing nothing (except pick up the social pieces) would be the best thing to do. Then the state can be back in its box doing what states should be doing, and the people in whatever forms they choose to take, and with whatever institutions an corporations they choose to accept, can get on with their pursuit of happiness.

The reduction of the size and role of the state and tax cuts are invariably part of that pursuit.

hatfield girl said...

Here I slip again
About to take that tip again
Got my grip again...

Only we haven't any grip at all, 11.03. Though I agree we don't lack experience of what is happening.

We can read almost anything on line but there is something about the morning paper, or the Economist in hand - worth two in the bush. I remember my surprise during the Long March that in truly middle class houses there were so many newspapers and weekly and monthly journals on the table, not down at the local Library. There should be much more crossness about the destruction of the English middle classes and their enlightened life style.