Monday, August 20, 2012

The incredible credibility of a failed plan

One of the biggest arguments in economic policy is finally over.

The government says that it mustn’t change course on fiscal policy, because of the danger of losing market confidence and having to pay high rates for its borrowing. Opponents say that these low rates mean that we can afford to borrow more without spooking the markets, and give the stagnant economy a bit of a boost.

In yesterday’s Sunday Telegraph, Liam Halligan quickly, compellingly and accidentally settled this argument:
“Ah, but Britain is a safe haven”, the detractors cry. “Government borrowing costs are low, so we can afford to spend more.”
Where does one start when faced with such nonsense? The UK government can currently borrow cheaply, partly because –when compared with much of the eurozone – we have a reasonably credible fiscal plan. We aren’t sticking to it, of course.
We aren’t sticking to it. This is like saying that the police can trust a witness’s statement because they’ve got a sophisticated new lie detector – although they didn’t use it, of course.

And Halligan’s right that the government’s plan has come unstuck. They’re now facing the prospect of borrowing £200 billion more than planned over five years:

This is not because they’ve got cold feet on the cuts; it’s because the economy is due to grow by less than half the rate they expected:

A plan that’s going hopelessly wrong is not a credible plan. It follows that the reason for the government’s low borrowing rates isn’t faith in its credibility.

No doubt there is a point where the markets would take fright at the amount of government borrowing. But £200 billion extra doesn’t seem to have taken us significantly nearer it. This follows the pattern of late 2008, when an even vaster surge in government borrowing was accompanied by a fall – not a rise – in the rate charged on that borrowing. A major developed economy with control of its own currency, and with relatively low inflation, has to go horrifically wrong before there’s any real risk of a government debt default. We’ve not been anywhere near that point and there’s no sign that we will.

Saturday, August 18, 2012

The best idlers in the world

A gaggle of Tory MPs has declared:
Once they enter the workplace, the British are among the worst idlers in the world. We work among the lowest hours, we retire early and our productivity is poor.
I was so shocked when I read this during my mid-afternoon two-hour internet break on Friday that I had to go and have a lie down. After my union rep explained the situation, my line manager was very understanding.

Now that I’m recovered, I’ve been wondering: if we’re such a useless, lazy bunch, this would show up in the growth figures, wouldn’t it? So, here’s a chart of GDP per capita growth among the G7 countries over the last two decades (OECD data):

Oddly, the idling Brits seem to be up front. And this isn’t a matter of us coasting on an unsustainable debt-fuelled boom. We’d taken the lead before the excessive borrowing of the 2000s set in, and we’ve held the lead following the crash.

So it looks as though we’ve been doing something right, and that Kwasi Kwarteng, Priti Patel, Dominic Raab, Chris Skidmore and Elizabeth Truss are missing something.

Friday, August 10, 2012

If political interviews were like sporting interviews

Downing Street. A breathless, downcast Nick Clegg hobbles out of the door. Our intrepid reporter bags the first interview.

“Nick, second place in the long-distance Lords reform – how do you feel?”

“I just – it’s really emotional, I haven’t had a chance to let it sink in yet.”

“Because I know you had high hopes for this event.”

“Yeah, I’ve been in training so long for it, and to get this far is – well, it’s great, it’s an honour, but in the end I just wasn’t good enough.”

“But this has always been a strong event for the Conservatives.”

“It has, and congratulations to them, they played an absolute blinder. But I really wanted to bring home the gold for Team LD. And I gave it my all, and really that’s all you can do.”

“And despite that nasty fall where you fractured your credibility, this result is a personal best for you, so that’s something you can be proud of.”

“Yeah, I … I’ve never come so close to being able to achieve something before, and I just hope my team-mates and my family back home can find … I’m sorry … it’s all kind of intense, you know?”

“That’s OK, Nick. There’s no denying that silver is a great result, and doubles the LD medal haul after your bronze in the freestyle electoral reform. So where are you going to go from here?”

“Well, after my injury I’ll have to withdraw from the synchronised boundary changing, so my next big hope is 2015. We’ve got a lot of work to do, but we’re going to rethink our tactics so we can bring home the best result we can.”

“Nick, I’d better let you go. Best of luck with the recovery and we’ll all be rooting for you come 2015!”


He staggers away.

Thursday, August 09, 2012

Religious opposition to gay marriage

Jonathan Chaplin, a theologian, writes that the gay marriage debate should become more temperate. He argues that religious opponents of gay marriage shouldn’t be branded as homophobes but also that they shouldn’t gloss over their own failings on matters of sexuality.

For instance, he criticises a letter written by the conservative group Anglican Mainstream:
The letter was within its rights to challenge Cameron's ill-informed misrepresentation of the churches' attitudes towards gay people. But it included the unsustainable claim that people of homosexual orientation "have always been fully welcomed" in the churches. Whatever the official teaching of the churches may have been, their practice has all too frequently fallen lamentably and hurtfully short of the goal of "welcome".
This is true, and on the whole his article is calm and sensible. But he goes on to commit a strikingly equivalent act of glossing-over:
But whatever the shortcomings of individual statements on the question, the churches' opposition to gay marriage is now facing the undiscriminating charge that it is driven by "homophobia". In fact, most of their public statements on the matter are only attempts to re-articulate what has long been the most fundamental and enduring principle of Christian (and Jewish) sexual ethics, which is that human beings have been created in such a way that sexual union is appropriately enjoyed in the context of permanent heterosexual commitment. This principle is as much a restraint on heterosexual behaviour as it is on homosexual behaviour
This is self-evidently not true. Ruling out straight sex except within a permanent relationship is much less of a restraint than ruling out gay sex entirely. This is obvious. So why does he deny it?

We all have our blind spots. You’d hope that intellect would help us to reduce these, but sometimes it just helps them to hide more effectively.

Some religious opponents of gay marriage are clearly ranting homophobes. Others are more sensibly and sensitively weighing their scriptural traditions against modern liberalism. But what they have in common is a conviction that gay relationships are in some way inadequate or illegitimate. And that fact is terribly sad: it shrinks their moral universe and, by extension, that of society as a whole.