Tory Economic Competence Myth?

BobQ

Loughton_Monkey wrote: »

Exactly. That's what I was alluding to.

Chaired by LSE’s Nobel Prize-winning economics professor, Christopher pi$$arides.

It would be far more credible if chaired by someone who works at a proper university. And preferably by someone who's name doesn not imply being drunk all the time.

Chaired by but covering a range of institutions.

Any views on Andy Mountford's comment above?

Try this one from Prof. Martin Ellison (Oxford)

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?

Answer: Strongly Disagree

Confidence level: Very confident

Comment: The idea that fiscal contractions can be expansionary has largely been discredited. The work by Alesina, Favero and Giavazzi shows that it matters whether austerity comes about through rises in taxes or cuts in expenditure, but the evidence is that spending-based consolidations are at best neutral and that taxation-based consolidations are contractionary. There is scant support for spending-based austerity having a positive effect on output, and clear indications that tax-based austerity does not.

mgdavid

Spidernick wrote: »

.....Your thoughts please. Thanks.

I'm an average sort of Joe, non-university educated but later went to evening college to get a qualification. Mostly worked as a small cog within large corporates.
In the 50 years since I started earning money there has been a remarkable correlation between my prosperity and Conservative Governments. Good enough for me.

Spidernick

Doesn't Keynesian policy urge (in simplistic terms) spending when times are hard and reining spending in when they are good? Under those terms aren't both the last Labour government and the existing coalition to a large extent culpable?

Thrugelmir

Loughton_Monkey wrote: »

Whilst I don't disagree, I would like to think that the relevant Minister, together with [guessing] 4 or 5 ministers of state, would at some point be getting their "Sir Humphry" to supply quite detailed budgets and expenditure broken down to quite a low level....

Unlike the large multi nationals that use SAP to monitor their financial performance. The UK's Governmental departments are somewhat fragmented. Don't even use the same software let alone the same chart of accounts. Which means that consolidation of data is let's say long winded. By the time it's available totally out of date.

Add the fact that many people have built their empires and much of the public sector is run by committee. Change is a long slow drawn out process. Not helped by what remains of a dwindling Union influence.

Fortunately there's an increasing number of bright intelligent people joining the public sector who not so long ago would be working in the upper echelons of the private sector. There's solid change from within.

Like a war. Austerity isn't fought in the trenches but hand to hand. Not by Generals looking at the lines on a map. The critical moments require real leadership on the ground.

chewmylegoff

BobQ wrote: »

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



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

No, but i don't think we need a bunch of economists to tell us that higher government spending results in higher GDP and higher employment. Clearly if the govt borrows an extra £100,000 and uses it to employ you at a salary of £100,000 which you then spend on Starbucks coffees and such like then both employment and GDP will be higher. If the next government comes along and decides that is a waste of money and makes you redundant then GDP and employment go down.

Saying that reducing spending has a negative impact on GDP and employment (when compared to not reducing spending) is not the same as saying that we shouldn't reduce spending. The answer that the economists have given to the question is irrelevant to your argument as they haven't been asked whether they think it is the right economic policy to pursue, they have been asked to answer an irrelevant question. Perhaps elsewhere in the survey they express a view that the govt should not have taken a different economic approach, but I assume the blog would have reference it if so...

CLAPTON

Spidernick wrote: »

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.

would a cabal of economists agree that

up to about 2008/9 the massive borrowing in Greece increased their GDP?

would the same cabal of economist agree that the massive borrowing in Ireland (to finance massive house building) increased their GDP?

would the same cabal of economists say the the people of Greece and Spain are very pleased and grateful for this increase in GDP or wouldn't they care as it's the wrong question?

Generali

BobQ wrote: »

Chaired by but covering a range of institutions.

Any views on Andy Mountford's comment above?

Try this one from Prof. Martin Ellison (Oxford)

That would imply that the UK has undergone austerity (spending falling or taxes rising). It hasn't.

What has happened is the rate of increase in spending has fallen dramatically.

antrobus

Spidernick wrote: »

An interesting article:

Obviously the writer is biased against the Tories, ...

Not really. It is political propoganda masquerading as analysis. The internet is awash with such things.

purch

It always amazes me how much credit/blame politicians get for economic outcomes

Generali

purch wrote: »

It always amazes me how much credit/blame politicians get for economic outcomes

Every politician should have the following phrase tattooed on their foreheads:

"Don't just do something, stand there".