Thursday, November 20, 2008

Kaletsky v Tories

The Cameroons should take heart from Anatole Kaletsky’s condemnation of their approach to economics. Kaletsky’s heyday is long past as Mister-E-Man notes on Nick Robinson’s blog -
The same Anatole Kaletsky who in January of this year, in his Times articleGoodbye to all that: the worst is over for the global credit crunch, predicted that…

…conditions are not nearly as bad as the headlines and market pundits suggest. In Britain, there seems to be almost no chance of economic and financial disasters comparable to those suffered from 1990 to 1992. …I believe that the global credit crisis, far from taking a turn for the worse, is now almost over…. There will be no US recession. …Stock markets around the world will rise in 2008.

Shock horror – Cameron must be devastated not to have this prophetic economic genius on-board…

Anatole Kaletsky is long and very wrong.

Liquidity Issues – Wine Prices Going Down?

During the tech boom in the late nineties Guido was buying wine faster than he could drink it (for once). When the tech collapse halved Guido’s net worth he drank all the wine rather than see it, errm, depreciate. Seemed sensible at the time. This time Guido thinks he should just get short the Wine index (which is exchange traded) and drink the profits.

Unfunded Government Spending Up £1.4 billion in October

Public sector net debt (on the Treasury’s definition) rose to £640.9 billion, or 42.9% of GDP. This does not include other liabilities such as off-balance sheet public sector pension liabilities.

Unfunded government spending is getting worse as the economy nose-dives. it would have been much worse if wasn’t for the receipts from oil companies.

With oil back down to $50 a barrel that won’t be the case in the future…

Unfunded Spending and the End to Prosperity

Danny Finkelstein is fighting a proxy battle for his friend George Osborne, that is why advocates of tax cuts like of Fraser Nelson, Tim Montgomerie, Iain Dale, Dominic Lawson, Nick Clegg and Guido are so willing to battle with him on the blogs and rehearse the arguments.

What is so depressing about Danny’s arguments is that they are primarily about politics rather than economics. They are not even about politics with a capital “P”, but the low politics of electoral calculation.

He has even taken on Arthur Laffer. Danny doesn’t believe there is anything to gain from promising voters tax and spending cuts. Even though strong political leadership could make the case to the voters more credible. It is because of an unwillingness to tackle the issue head-on that the Tories have allowed the vocabulary of the argument to be determined by Brown. How come we never hear much of Gordon’s unfunded spending commitments – the budget deficit? In all of this the actual merits of the case for a low-tax, higher growth economy have been ignored.

Laffer’s new book The End of Prosperity: How Higher Taxes Will Doom the Economy–If We Let It Happen reminds us that there is more to the argument than just psephology. If we want to get out of this recession faster we need to lighten the tax burden on business and consumers…

The Granite Hits the Fan

The FTs Alphaville blog draws our attention to bad news on the wires this morning, as the Dow closes below 8,000 and the FTSE trades below 4,000, we get the news that Granite Master Issue PLC, the trust that is 28% of the UK mortgage securitisation market, is reporting a “non-asset trigger event”. It is telling lenders that Northern Rock‘s collaterallisation, and hence credit worthiness, has declined significantly.Granite is the single biggest funder of the UK mortgage market. If it goes tits up, £38 billion of Northern Rock mortgage assets could be liquidated…

Wednesday, November 19, 2008

Mandelson’s Big Chance

Obviously the big political news today is the withdrawal of John Sergeant from Strictly Come Dancing. He says he feared he would win.

Hmmm. Guido is suspicious, you don’t think he has been got at? It was after all only a few days ago that Mandelson said he wanted to be on the show….

UPDATE : Mandy has, this really is genuine, released a statement “John Sergeant should not bow out… He has become the people’s John Travolta and he should be a fighter, not a quitter… . The Guidoisation of politics continues.

PMQs Live Chat

Having a Few Image Hosting Problems

Normal service will resume after lunch.

Paul Flynn Loses Allowance Over Rude Blog

Paul Flynn’s blog has occasional gems, such as describing Peter Hain as a “shape shifter”. The parliamentary authorities have withdrawn his allowance because it is partisan. Given that if blogs are boring and non-partisan no one reads them, isn’t it a given that they should not be funded by the taxpayers? John Redwood pays for his out of his own pocket. So should the rest of the troughing politicians.

Tuesday, November 18, 2008

Cameron’s Press Conference – Live

Cameron opened up with a preamble mentioning free enterprise, an open economy, sound money, micro-economic supply side reform and the importance of competitive markets. Ticking some of the Thatcherite boxes in his introduction.
He said he was pragmatic not ideological before turning to monetary policy, for an awful second Guido thought he was going to advocate some kind of Nixonian interest rate controls.

Then we got to the meat, the two decade long Japanese fiscal stimulus did not work, Gordon Brown has himself argued that fiscal loosening was wrong, weak currencies flow from weakening economies, the pound is weaker because the government is weak. Dave pointed out that the markets now see British Gilts as twice as risky as German Bunds. Gordon is abandoning every policy he has held to because he has no choice, so he is making a virtue of necessity.

He advocated “less of an increase” rather than cuts in government spending, saying Labour will lie that this is a cut. “Same old Labour, same old spin” with Mandelson and Campbell back to deliver the spin.

It was a reasonable diagnosis and he has set reasonable objectives. Not a lot of excitement, but a reasonable attempt to take control of the news agenda. He has, at last, formalised the Conservative Party’s intention to not keep to Labour’s spending plans in government.

UPDATE : Full speech here.


Seen Elsewhere

5 Things We Learned From Guido’s Party | GQ
Revealed: Guido Fawkes Anniversary Dinner Guestlist | Peter Oborne
More Owen Jones Errors | Michael Ezra
Why Should Men Get Equal Maternity Leave? | Laura Keynes
Dentists Have Last Laugh Over Sneering Keynes | FT
Why’s Clegg Giving Men Paternity Leave? | Conservative Women
Cam Cannot Stem EU Immigration | David Keighley
9 Mansion Tax Questions for Ed Balls | TPA
Politicians are Lying to You About Immigration | Alex Wickham
Give Journalists Public Interest Defence in Law | Guardian
Cameron is Going to Have to Deal With UKIP | Dan Hodges


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Chris Bryant talks to the Times Diary about a famous gay actor:

“I don’t think I’ve had sex with him. He says we had sex in Clapham. I’m fairly certain I’ve never had sex south of the river”



Progressive Inclusion Champion says:

Great to hear Carswell call for inclusive policies and that UKIP must stand for first and second generation immigrants as much as the English.


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