Pursued By A Bear Market

A tale of fiscal policy and self-justification

The Royal Palace. The KING holds court with CAMERON, OSBORNE and CLEGG, Lords of the Treasury, and MILIBAND and BALLS, courtiers.

King:

Lords Cameron and Osborne, here you stand

To bring us tidings of financial woes.

You feared that those three Fates of credit would

Condemn us for our royal borrowing

And curse our land so nothing more could grow.

Thus warned, we charged you to avert this doom,

To halt the spending of our ministers

And raise such levies as could bring us gold

So that our monstrous debts would grow no more.

Now speak! We yearn at last for happy news.

Osborne:

My lord, we were entrusted to reduce

The vastness of your annual deficit.

And now it is my honour to declare

We’ve cut a quarter of this giant sum.

King:

That’s but a quarter – this news meets our ears

With disappointment, and familiar ring:

Was this not what you said a year ago?

Osborne:

It was.

King:

And now?

Osborne:

A quarter still, my lord.

King:

So when will all four quarters then be gone?

Osborne:

I swear, my lord, within five years from now.

King:

Was this not what you said a year ago?

Osborne:

It was.

King:

And what you said two years ago?

Osborne:

It was.

King:

And now?

Osborne:

Five years from now, my lord.

King:

These riddles disenchant us. How can time

So dance away as we approach each year

And stay as distant as horizons far?

Cameron:

My lord, I can explain my kinsman’s words.

When you appointed us, we sought to change

The short-term thinking of past ministers

And always turn our eyes to future times,

Determined that they must be better days.

We screwed our courage to the sticking place,

But now we find the sticking place can move

And so our constancy demands we change,

For we are bound to keep our fiscal oath:

‘Five years from now’, my lord. Always five years.

King:

How now, what craven sophistry is this

That conjures strength and virtue from a wreck?

Balls:

Methinks that ‘screw their courage’ gets it right,

For fools stand fast where angels fear to stay.

Cameron:

Damned knave! Your wretched insolence is cheap

And marks you out as low-born scoundrel, sir.

Balls:

Such ready fury boils your noble blood

And gives the lie to your play of command.

For you have marched us all into a swamp

In which our people cannot hope to thrive

Nor even stem His Majesty’s great debts.

And now you cannot dare to lead us out,

So make us all the captives of your fear.

Cameron:

This barking oaf! He tries to slander me

Before the very presence of the King.

I take no lectures from the gentleman

On courage; if he seeks to challenge me

I’ll slit his smug, fat belly with this blade!

Osborne:

Now cuz, hold still, for though he is a rogue,

The temper that he slyly sparks in you

Is crafted to repel you from the King,

Who cherishes good manners over all.

So douse your voice, and breathe until your face

Can lose this violent hue: a red as bold

As those bewitching locks of your true love.

Cameron:

The thought of dear Rebekah cools my bile,

But quickens yet my blood, for how I long

To be with her again, at last, to ride –

Miliband:

Rebekah, lady once of Wapping, stands

Accused of treason. Hold you her so dear?

Cameron:

I know! I know it! And she shall face trial.

I will denounce her crimes, if proved.

(If not, I shall her favour once more seek.)

King:

Pray stop this wanton prattle. We care naught

For squabbles or ill-chosen loves.

Our business here is fiscal. Miliband?

Miliband:

My lord, we seek to build one nation here:

Unsqueeze the middle and let fairness reign

Throughout the realm, as in your own good heart.

My raft of policy initiatives

Is not quite yet constructed to be launched

But, as I argued in my speech last week

To that esteemèd think-tank called –

King:

Enough!

Is there much more of this? Our bones grow old.

Balls:

If I may speak my mind, my lord, you’ll hear

My language is more plain than my wise friend’s.

Your ministers have failed, as you have seen,

When few can prosper and your debt still grows.

King:

They are your rivals, yet we find it sad

That now you smirk; this failure taints us all.

Balls:

I swear, my lord, it is no gleeful smirk

At their humiliating haplessness,

Which surely will entail their public fall

And clear a path for better men to lead.

I smile in nothing more than humble joy

At being granted your majestic ear.

And with this honour, I shall now explain:

Their folly is to try to cut too fast.

Dismissing servants of the Crown to save

A penny here and there may seem to help,

But if too many quickly lose their wage

Then how can merchants hope to sell their wares

And earn the gold with which they pay their tax?

And if proud Osborne asks them to pay more,

However can they hope to trade at all?

King:

You bring to us a thrifty paradox

That seems to beg we borrow more to save.

We would have further counsel on this point,

So let us hear from our Lord Clegg now. Clegg!

Where are you, man? Come forth! Now speak.

Clegg:

Sorry.

King:

Indeed! A sorrier sight we never saw.

And now we see it, we have quite forgot

All reason to have sought to see. Begone!

Cameron:

If further counsel do you seek, my lord,

Then I, unlike that grey-faced mope, can talk

And warn against the madness of these two,

Whose optimistic fancies are a dream

As fever’d as the mad Caligula

And surely as destructive to your realm.

Miliband:

Why, sir, if mad destruction do you seek,

Then walk the streets of any English town

And see the pain that your infernal cuts

Have wrought upon the visages of all.

Cameron:

I surely walk, and I can see each day

That everyone is grateful for my work

To build up our society so big.

But what, I ask, would you do in my place?

If you lack now the stomach and the will

To dam the fearful flood of royal gold,

How long yet must we wait? When will you act?

Miliband:

In time, and in a very real sense,

But I shall not get into that today.

Instead, I say again that you have failed:

Your recklessness has undermined your plan;

More haste has now resulted in less speed.

Osborne:

Your clumsy wits have led you far astray:

We made great haste to guarantee great speed.

And now, when it appears that speed is low,

This grim misfortune only proves us right,

And heralds the necessity of haste.

King:

Now gentlemen, we tire of these words

That tie themselves in cruel, ingenious knots,

To trap the earnest listener in a noose

While failure wears the robes of victory

And solid now dissolves to future mist.

We know from sad acquaintance what we have.

But tell us, clear and true, what else might be?

Balls:

I plead for lower taxes, for a year

So that our merchants may advance their trade

And earn a profit that they then can spend

Elsewhere, so new prosperity can spread.

And when, after a year, they all have thrived,

We can return to levy our demands

Now knowing that they have the strength to pay.

King:

You plead for lower taxes, for a year?

Balls:

For just this year, then we’ll have no more need.

King:

Was this not what you said a year ago?

Curtain.

A bad recession and a terrible recovery

The UK recession of 2008-09 was a bit deeper than the 1980s recession but shallower than the 1930s one – and briefer than either. It was much deeper than the 1970s or 1990s ones: by historical standards, it was pretty bad.

But what about the recovery from recession? I find it hard to get too excited about whether the technical definition of a double-dip or triple-dip recession has been met: the overall picture is two-and-a-half years (so far) of stagnation. And it’s this that is so terrible by historical standards.

For about the first five quarters after the end of the recession – up to autumn 2010 – it looked like a normal recovery. And then it stalled. We haven’t seen anything like this before.

Blind on welfare

You may remember George Osborne explaining his method for identifying his next victims:

Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next door neighbour sleeping off a life on benefits?

But here’s the thing: in “the dark hours of the early morning”, aren’t most of us still asleep? To get to work for 9, I don’t need to wake up until 7.30 (although I have curtains rather than blinds – I’m not sure how much of a difference that makes).

And this symbolises Osborne’s bigger misjudgement. His decision to uprate most working-age benefits by 1% a year for three years – a real-terms cut – was supposed to show the government on the side of the strivers not the skivers, the workers not the shirkers, the hard-grinders not the closed-blinders.

But in fact, most of those hit by the policy are in work, having their low incomes supplemented by tax credits and the like. Whatever kind of drapery they have.