The appointment of Ed Balls as shadow chancellor means that deficit denial becomes the central economic policy of the Labour Party. In essence both the Eds intend to argue that it was the banking crisis and only the banking crisis that caused the deficit. In taking this policy direction they repudiate the more sensible realistic policy followed by the last Labour Chancellor, Alistair Darling.

It also flies in the face of statements made by Tony Blair in his memoirs and as recently as last Friday at Davos. Since Balls isn’t an idiot we have to ask ourselves: why is he trying to deny reality? Does he think the voters can be convinced that overspending wasn’t a problem until the banking crisis? Here he is telling Andy Marr there was no structural deficit under Labour:

Clearly both the Eds think they can blame it on the bankers, popular understanding of the deficit is hazy. The huge one-off costs of bailing out the banks and the constant government-debt-bloating-deficit are confused in the popular consciousness. Even the debt and the deficit are confused in many people’s minds. Whenever Ed Miliband is cornered on spending or taxes he reaches for the banker bogeyman – tax them more and it will sort everything out. None of this adds up to anyone with any financial literacy, which unfortunately is a minority of voters, the majority of voters do blame and detest the bankers.

For this argument to make sense of course requires Ed Balls to deny that there is, or ever was, a structural deficit that had to be tackled. Which is exactly what he did on the Marr show today.

Denying the deficit and blaming the government’s debt crisis on the bankers is an attempt to absolve Brown, Balls and the Labour Party of the blame. It thus allows Balls to claim that, since there is no structural deficit, the cuts are unnecessary and ideological. Which is exactly what he does.

The problem for Balls is that the public senses innately that the government under Brown’s chancellorship and premiership was overspending. If Osborne can keep that national memory alive over the next three years the public will forgive him doing what is necessary. If they forget, or prefer to believe Ed Balls’ claim that cuts are not really necessary, they will blame the government for the coming hardships. The deficit blame game will have to be played until the next election.

George Bush said…

“Are the peoples of the Middle East somehow beyond the reach of liberty? Are millions of men and women and children condemned by history or culture to live in despotism? Are they alone never to know freedom and never even to have a choice in the matter?”

The machinations inside Murdoch’s empire have kept the politico-media chattering classes agog this week. Guido managed to keep News International, the Guardian and Downing Street on their toes with these stories about Cameron spending Christmas with Rebekah Brooks and Rupert Murdoch attending the Times’ morning editorial meeting – the Guardian played follow up here and here.

Favourite story of the week is still Courtney Love joining OUCA, which was followed up by NME, Q Magazine, HuffPo, Holy Moly, Popbitch – the quality press…

Traffic this week was a Times thrashing 393,835 page views from 244,866 visits by 82,497 visitors. The top 7 stories last week in order of popularity were:

• Is Politics Too Posh?
• Exclusive : Courtney Love Elected OUCA Officer for Rock ‘n Roll
• Solidarity
• Shagger Strathclyde Seven-Year Affair With Old Flame
• Bercow’s Loses the Red Hand
• Double Dip Fears Grow
• Campaigning for Mr and Mrs Miliband

You’re either in front of Guido, or you are behind…

If you were wondering why new Shadow Foreign Secretary wee Dougie Alexander was so quiet today, a quick peek at the Socialist International website will show you why. The Labour Party are affiliated with Mubarak’s hopefully outgoing National Democratic Party.

Awkward...

The FT note how Tom Baldwin has saved his boss from near media oblivion, but the re-branding doesn’t stop there. Apparently in preparation for what will no doubt be an in depth interview with Piers Morgan in next month’s GQ, Ed has called in a personal trainer.

It did wonders for Gordon…