There is of course collective responibility where the Cabinet is concerned. Cable's line is "things'd be a lot worse if it wasn't for me" Bear in mind that Cable is a former member of the Labour Party and as such is probably still at heart a social democrat. I wouldn't be surprised to see him do a "Hesletine" but he'll probably pick the moment he can have most effect.

Yes - Alastair Darling cut VAT to 15% for a year in 2009 but when the Tories came in they were quick to say that the cut in VAT 'made no difference' hence they hiked it up even higher than it had originally been. But of course when it comes to higher taxes for top earners, they are full of warnings about how this will devastate the economy because all the rich will go to Switzerland etc.

The Office for Budget Responsibility analysis released at the time of the election said that they estimated 48% as the optimum upper tax rate, which begs the question if Osborne was cutting from 50% why not choose 48% rather than going to a sub optimal rate of 45%...

I expect over the next few years we will see a similar story - the top 1% rich increase their wealth disproportionately whilst the other 99% become relatively poorer, as there is never any real evidence of 'trickle down' effects, but the argument then will be that the reason it isn't trickling down is because top tax rates are too high, and wages at the lower end are also too high, and you need to cut taxes for the top earners and allow wages at the bottom end to adjust downwards and THEN you will see some trickle down effects....

I'd expect to see quite the opposite over the medium term. Low wages for the majority stifles demand and over time causes the rich to lose out.

So the rich will be campaigning for a 'living wage'. I look forwards to it because their strong lobbying power might see it be delivered.

And you can add to that another excuse for the economy not picking up that employ laws are too restrictive and what we really need is "reform" making the labour market more flexible which is euphemism for making everyone fearful for their job and for wages to be driven down further as a result.

I used to associate the word "reform" with good things. Reform of bad practice, stopping child labour and so on. These days whenever anyone says a phrase like "Reform of the labour market" you just know they really mean the erosion of hard won and [unecessary[/u rights that [iwill[/i lead to abuses.

Osbourne



Tim Nice-But-Dim


i do wish this hadn't been pointed out to me.

I think this is important, as it doesn’t get sucked into pseudo-Keynesian multiplier mythology; if you invest it has to be in something that genuinely creates growth, but that’s the incredibly hard part in Western economies. It may be a populist meme that fat cat banks aren’t lending their bailout dosh to poor hard pressed businesses, but the real problem is businesses aren’t going to the banks with robust investment opportunities, instead you’ve got some firms sitting on reserves because they cannot see the investment opportunities they really would like to go after, you’ve got some firms choosing to pay down debt rather than borrow more because of economic uncertainty and then there are the ones who keep the myth alive, the failing businesses and highly speculative “opportunities” who would have struggled to raise finance before the financial crisis.

The reality is just so much harder the fit in with the populist narrative where it’s the banks who are at fault, firstly because it’s harder for people to conceptualise a structural lack of robust opportunities than have the idea of a general unwillingness to lend (no matter how misleading it is in practice), and secondly because it makes better viewspaper copy to talk about anecdotal businesses going down the tube because the bank wouldn’t plug the losses than it does to talk about how banks plugging losses on unviable businesses won’t lead to economic growth.

It’s the absence of genuine opportunities for economic growth that is the real problem in the UK economy and in many other Western economies, it is not an unwillingness to hike debt and indulge in half-baked New Deal style money pits which don’t deliver growth, but simply hang on the myth that you can load up with debt to do productive stuff and get a positive multiplier going. Conspiracy theories about this politician or that political party or this pantomime villain are just clumsy bits of misdirection, and building this or that political pet project, or appeasing this or that client group with a subsidy won’t bring growth.

Some of your post made sense ... but "pseudo-Keynesian multiplier mythology" tells me there's not much chance of your view overlapping with mine.

Except he's not very "nice" is he.

Now, "Tim, complete c**t, and thick as pig$h!t" , possibly more accurate.

I think Osborne has more than a look of a well-fed Stan Laurel about him

These two combine to.....