Tory Economic Competence Myth?

Spidernick

An interesting article:

https://kittysjones.wordpress.com/2015/03/30/conservative-negative-campaign-strategy-share-the-lies-and-win-a-prize/

Obviously the writer is biased against the Tories, but the quotes are mainly from independent sources (but correct me if I'm wrong). Some highlights for discussion:

'The Office of National Statistics (ONS) has said that David Cameron has presided over an economy with the weakest productivity record of any government since the second world war, and revealed that output per worker fell again in the final three months of 2014.'

There may be more jobs, but the nature and quality of these (ZHC, people forced into becoming self-employed on low incomes in many cases, etc) is nothing to shout about I would suggest.

Next:

'The Centre for Macroeconomics polled 50 leading economists, asking them whether they agreed that the government’s deficit-reduction strategy had a positive impact on growth and employment. One third disagreed and a further third strongly disagreed.'

I don't know anything about this body. Is it truly independent or left leaning?

Also:

'The Tories seem to think we have forgotten that it was they that lost the Moody’s Investors Service triple A grade, despite pledges to keep it secure. Moody’s credit ratings represent a rank-ordering of creditworthiness, or expected loss.'

I'd almost forgotten about that. I don't think its had a detrimental effect in the grand scheme of things, but again a chink in the armour?

More from the article:

'Over on the Conservative campaign site, the focus is on the economy. Or more precisely, on how Labour “wrecked” or “will wreck” the economy. Yet Osborne was rebuked by the Office for Budget Responsibility (OBR) for making outrageous claims that Labour left the country “close to bankruptcy.” The economy was officially recovered and growing, following the global crash, by the last quarter of 2009, so the Tories and Clegg are lying when they claim they “inherited a mess.” Furthermore, within months of the Coalition taking office, we were back in recession.'

This is one thing that really does surprise me: why Labour doesn't defend themselves more when it comes to their economic record in the last government (I can guess what the simplistic response to this will be, but please elaborate if you can). Miliband had a chance to do so last night, yet lambasted Cameron for being stuck in the past. When Clegg told him to say 'sorry' again he missed the chance to re-balance things, so that most people assume that the country was in a mess in 2010 and that Labour cannot be trusted to run the economy effectively.

Finally:

'Osborne has ironically demonstrated that it is possible to dramatically cut spending and massively increase debt. Austerity doesn’t work as a means of reducing debt, but works exceptionally well as a smokescreen for an ideologically-driven reduction of the state.'

Nobody disputes that the Tories claimed that the deficit would be gone by now and that the debt would no longer be increasing. The fact that it still is increasing (despite Cameron publicly claiming it isn't - Peter Hitchens on Question Time last night claimed Cameron doesn't know the difference between a debt and a deficit!) is surely another mark in the failure column for them in this parliament?

Feel free to refute the points raised in the article (and the above are a few highlights - the Tory campaign methods are also 'interesting' if the claim is valid), but even if only a few of the claims were true (and bear in mind many of the quotes in the article seem to be from independent sources) then to my mind it blows the idea of Tory economic competence out of the water.

Your thoughts please. Thanks.

kabayiri

http://www.dailymail.co.uk/news/article-1232897/Manufacturing-decline-Labour-greater-Margaret-Thatcher.html

Labour's recent record is also depressingly dismal.

*Both* Labour and Conservatives need to do better.

CLAPTON

always worth remembering that many economic forums were in favour of the UK joining the Euro

BobQ

It was interesting to hear Clegg claim that Lib Dems believe in austerity to the degree necessary, whereas the Tories believe in it for the sake of it.

I have thought this since Cameron became PM and the quotes in the article seem to demonstrate that the economy is not all that Osborne claims it to be.

People should have what they vote for but the obsession with rolling back the state should not be an end in itself

chewmylegoff

The article claims that the economy was "officially recovered" in 2009 and attempts to suggest that all borrowing in the period 2010-15 was the fault of the Tories (rather than the coalition) on the basis that Labour had already fixed the economy prior to the 2010 general election.

Clearly the author is a dribbling idiot writing politically motivated spin.

Thrugelmir

Spidernick wrote: »

Your thoughts please. Thanks.

Brown inherited a perfectly good economy and trashed it over a period of 13 years. We are still paying the price today and possibly for another decade or two. Unfortunately rectifying situations such as the one we face requires a little more than words and a sprinkling of fairy dust.

As for economic competence lest not forget that Brown's architect was a certain special adviser to the Treasury called Ed Balls. For a shadow chancellor he's actually been very quiet the past 5 years. Wonder why?

cells

How is productivity calculated?

GDP / hours worked?

BobQ

chewmylegoff wrote: »

The article claims that the economy was "officially recovered" in 2009 and attempts to suggest that all borrowing in the period 2010-15 was the fault of the Tories (rather than the coalition) on the basis that Labour had already fixed the economy prior to the 2010 general election.

Clearly the author is a dribbling idiot writing politically motivated spin.

Yes I agree the article is somewhat biased.

The reality is that a global financial crisis came at the wrong time for Labour and there was still a lot that needed doing by the Coalition. But had GE2010 resulted in a stable Lab/LD coalition we would have had a different form of austerity. But I think we ended up with the very worst solution. Instead of more belt tightening with the aim of growing the economy, we ended up with politically motivated austerity that has just created poverty for some while others have prospered. I just wish Clegg had spoken out about the politically driven austerity at the start.

As the OP said the article is politically biased but some of the quotes come from credible sources such as CFM's survey

Question 1: Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK?

The great majority disagree or disagree strongly with the proposition. Of the 50 economists in the survey, 33 responded: two thirds disagree or strongly disagree that coalition policies have had a positive effect on aggregate economic activity. To be precise, no one strongly agrees, 15% agree, 18% neither agree nor disagree, 33% disagree and 33% strongly disagree. Ignoring those who sat on the fence, 19% agree and 81% disagree with the proposition. This ratio is unaffected by confidence weighting.

Are most of these economists left wingers who are prepared to publically put their name to absurd arguments?

Loughton_Monkey

Spidernick wrote: »

....'The Office of National Statistics (ONS) has said that David Cameron has presided over an economy with the weakest productivity record of any government since the second world war, and revealed that output per worker fell again in the final three months of 2014.'.....

This is old hat. We all know that as a result of EU membership, migrants have come here in their droves to seek work not available in their own country. Most of them were unskilled.

What would you prefer? Those 2 million jobs not to be available so that we give the 'full monty' in benefits, which is what the Conservatives inherited?

Cutting benefits was essential not [primarily] to save money, but to reintroduce a work ethic which was lost over the 13 years of Blair/Brown.

Rome wasn't built in a day.

Spidernick wrote: »

'The Centre for Macroeconomics polled 50 leading economists, asking them whether they agreed that the government’s deficit-reduction strategy had a positive impact on growth and employment. One third disagreed and a further third strongly disagreed.'

I don't know anything about this body. Is it truly independent or left leaning?

To call anything deriving from the LSE as "left leaning" is like calling the Pope 'slightly catholic'. The LSE is a full blooded hive of neo-communism, who probably look on Miliband as a middle class campaigner to bring back Thatcherism.

Spidernick wrote: »

'Over on the Conservative campaign site, the focus is on the economy. Or more precisely, on how Labour “wrecked” or “will wreck” the economy. Yet Osborne was rebuked by the Office for Budget Responsibility (OBR) for making outrageous claims that Labour left the country “close to bankruptcy.”

A mere technicality. Governments cannot go 'bankrupt', but in layman's terms he was right. Irrespective of the GFC, we had 13 years during which Gordon Brown introduced the concept of throwing benefits around like there was no tomorrow, causing an annual defecit as 'normal'. Without the GFC we would still have become 'bankrupt' soomer or later.

Spidernick wrote: »

Osborne has ironically demonstrated that it is possible to dramatically cut spending and massively increase debt. Austeriy doesn't work as a means of reducing debt, but works exceptionally well as a smokescreen for an ideologically-driven reduction in the state.'

If you go back to 'Janet and John's Economics Primer' I think you will find that it is physically impossible to reduce the debt until the annual defecit has been eliminated. Mathematically, until then, it can do no other than rise.

If you are saying, therefore, that Labour would have made enough cuts in the first year to eliminate the deficit totally, then the same would have happened. I believe GDP growth under the Conservatives has outperformed any other Western country post-GFC. To believe that Labour could have done better by maintaining high business taxation is outrageous.

It [austerity] is not an ideologically-driven reduction of the state. It is the ideologically-driven re-targeting of government spending away from a benefits package that makes 'working' a totally uneconomic prospect for anyone with little or no skills.

Cyberman60

BobQ wrote: »

It was interesting to hear Clegg claim that Lib Dems believe in austerity to the degree necessary, whereas the Tories believe in it for the sake of it.

I have thought this since Cameron became PM and the quotes in the article seem to demonstrate that the economy is not all that Osborne claims it to be.

People should have what they vote for but the obsession with rolling back the state should not be an end in itself

It's not cuts for the sake of it and you may not have noticed but key areas such as the NHS are ring-fenced. Labour btw stupidly grew the public sector by 600,000 during 13 years of largesse. The UK was and still is in serious financial trouble and only the Coalition recognised this. Increasing taxes during a recession would have been disastrous as it would have stripped consumer demand at a time when we needed it most.

If interest rates rise we haven't seen nothing yet, as interest on National Debt is 35 Billion with LOW interest rates !! We can not ignore the o/s 90 Billion annual deficit and neither the growing National Debt or we will be paying 100 Billion a year interest before long. That's why Labour are NOT the answer.

Thrugelmir

cells wrote: »

How is productivity calculated?

GDP / hours worked?

What does hours worked have to do with North Sea oil and gas output, the value of farm outputs, or the number of Bentleys sold.

Nothing.