Seriously? The economy in the tank, the Tories on the ropes after Eastleigh and the best thing George Osborne can do right now is goes out of his way to defend the most hated people in society… (after politicians of course)… People talk of politicians living in Ivory Towers, but this level of political disconnect is scary.
Meanwhile Olli Rehn, Vice-President of the European Commission, is pleading that austerity must continue. Whilst there may or may not be a case for austerity in other European countries, the case for austerity in Britain is so laughable only a fool could fall it…
The main three arguments at the moment for keeping up with austerity are:
The ‘debt is too high to pile on more debt’ argument. Anyone who takes a look at a history of Uk debt levels can immediately see how poor that argument is.
Then there’s the ‘inflation will sky rocket’ argument. Although, with round after round of QE not having pushed inflation up and the US seemingly avoiding hyperinflation despite having had an (admittedly small) stimulus programme it seems hard to see us turning into Zimbabewe just for borrowing at record low levels and growing the economy with it… (Meanwhile the pound is losing value as result of the credit downgrade which is only going to be reversed by growing the economy.)
And finally there’s the ‘stimulus will anger the markets’ argument. This one really annoys me. In general, the amount of attention given to the markets by the media gets me in a huff. Whenever any business or political story hits the news, the first place the TV News turns is – not to an expert on the subject – but to a ‘market expert’ who claims that the news story of the day (inflation figures, Italian election, small business lending figures etc) will have a positive or negative effect on the markets… and we’re supposed to care…
Now, I’m not knocking the importance of the markets per se, but the reverence of them as Gods who must be appeased at all costs and who have knowledge of all things is just bizarre and daft. The markets will respond positively to growth, that is beyond doubt. Sitting around and worrying what borrowing may or may not do to these people’s confidence is a waste of time and completely misses the point. Ordinary people suffer every day that austerity is allowed to continue, that should be the news story, not what the markets think of x, y or z.
Appeasement hasn’t been a popular policy since the 1940s for most, but when it comes to the markets its staggering how quickly people will throw all common sense out of the window to follow the whims of a few rich people. Anyhoo… end austerity. Do it soon.