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All too obvious

Well it had to come; I’m a little surprised it took so long.  The Triple A credit rating was like an elderly relative that you grew up with.  Often reckless and occasionally fun, you were surprised that he had learned nothing and continued the wild-hog spending with seemingly no ill-effects.  But as the enfant terrible grew up and aged, you knew the end had to come.  Yesterday, it did.

Predictably enough the Beeboids gave Ed Balls* a primetime opportunity to shout at Osborne. Balls made the fair point that the Tories had indeed made this a bellwether for their economic competence (thereby revealing political miscalculation as well as economic ineptitude).  He didn’t quote the tory manifesto** which perhaps would have made the attack better; always use a man’s own words against him if you can.  Nonetheless it was an open goal, he could hardly miss.

Where he floundered, was when the BBC talking-head asked “What would you do?”  He covered the predictable sound-bite territory of ‘an immediate stimulus’ but wasn’t sure exactly how much this should be, or where the money would come from.  The interviewer let him off of course, but it seems to me that a few points arise, namely;

~ Why is spending £100B more than you raise in tax, not enough stimulus, why would £110B (or whatever) would be the magic number?

~ If overspending got us into this mess, won’t more over-spending just make things worse?

~ Wasn’t this whole nonsense debunked intellectually as far back as Bastiat and certainly by Von Mises?

~ Doesn’t the practical reality of countries from Japan to the PIGS show us that overspending is not the route to prosperity?

~ Doesn’t the US economic contraction in 1920 show us that if you halve government spending in two years (which they did) the economy powers back (which it did)?***

~ If government spending is so good how come Greece isn’t lending us money?

But the worst aspect of all of this slow-motion death was that had Labour won in 2010, we would be in more or less the same position.  Sure the end may have come sooner, but we would be in the same place.  Osborne as Shadow Chancellor would have been condemning Balls although he may have had a slightly tougher interview.  The reality is, all the major parties have only one plan; spend, spend, spend.  And that will lead us to the poor house and national bankruptcy.

I used to wonder, was it just real ignorance and total stupidity that made ‘em like this.  And sure enough some of the back-benchers are indeed pig-ignorant.  But if you’ve been through some serious universities as most of the front benchers have, you must at some point have encountered Austrian economics.  You would have to be criminally incurious not to know who Hayek was.

The real reason I think that none of ‘em espouse it, is that on a fundamental level it shows the irrelevance of politics.  Less government, less spending and fewer politicians is the route to prosperity and freedom.  How many amongst the current crop of sociopathic criminals would admit this?  Politics makes ‘em rich and privileged (far beyond what most would achieve in the real world) while hammering the rest of us.  The problem isn’t left or right, its major party politics as currently practised.  They are the same and voting for a change of personnel periodically will change nothing.

So it’s time to stop voting major party.  They have all had ample opportunity and their failure is manifest.

* In fairness to Balls, I find him so viscerally loathsome that if he said “let’s stop that blind toddler from wandering into traffic I would find reasons to disagree”  He’s worse than John Selwyn Gummer or Hilary Clinton in this regard, even approaching the never before scaled peaks of Leon Brittan for smug creepiness.

** “We will safeguard Britain’s credit rating with a credible plan to eliminate the bulk of the structural deficit over a Parliament.”

***  Check it here, really worth watching.


  1. Mr Ed says:

    It is, I hope, the beginning of the end or the mess created by the State, starting in Victorian times. The end result is inevitable, an end sooner rather than later would enable a decent future. The Conservative’s plan was always to carry on as Labour had, just as they did in 1979.

    We need a ‘White Yezhov’ to purge the Public Sector down to a manageable size, purely by deleting jobs, not lives. A certain chap in Kettering would fit the bill.

  2. peter horne says:

    Indeed. There are now two classes of men. Those who are employed by or dependent on the state-our new aristocracy-and those who must toil to support them-the serfs.
    The serfs must rise up in rebellion.

  3. John Galt says:

    “The serfs must rise up in rebellion.”

    Unfortunately, the serfs have shown very little inclination for rebellion in recent years. Indeed those on lower incomes seem to be subsidized by those higher up the food chain (mainly middle class families which are now struggling because of the cost of living as well as the various burdens of the state).

    If the UK Government were unable to finance the deficit then reductions in state spending would have been forced upon them, but as it is the UK Government is able to keep merrily pissing away more money than it can steal from its tax slaves by chalking everything up on the slate using Quantitative Easing to achieve monetization of debt by proxy through the captured banks.

    Through currency debasement the UK is forcing down the wages of those who are taxed to pay for the largess of the state. This situation is not sustainable, but I do not know which particular aspect will actually bring it down.

    A revolution of the serfs is unlikely.

  4. RAB says:

    Who rates the Ratings agencies?

  5. Paul Marks says:

    RAB – both Moodys and S&P are open to pressure from the American government (which is why they gave “Triple A” to every piece of ……. the very act for which the government is now persecuting them). That leaves Fitch – based in Paris.

    As with so many things regulations make it hard to compete with the established ratings agencies.

    Mr Ed – if I was allowed to, if I was allowed to…….

    SAOT – yes of course.

    It is all mad – the government is spending so much money the rating is gone, so the government should spend even MORE money.

    Keynesianism is the “economics” of the lunatic asylum.

  6. APL says:

    So, the tricky bit is, working out how long I can expect higher rates of interest on my gilt holdings, before the principle becomes worthless. Hmmm!

  7. Umbongo says:

    “I used to wonder, was it just real ignorance and total stupidity that made ‘em like this. And sure enough some of the back-benchers are indeed pig-ignorant. But if you’ve been through some serious universities as most of the front benchers have, you must at some point have encountered Austrian economics. You would have to be criminally incurious not to know who Hayek was.”

    I received my economics degree from LSE in the mid-60s. Sorry to disabuse you of the notion that economists – academic/teaching ones anyway- speak of nothing but von Mises but, in my 3 years in Houghton Street, the Austrian School was not (in my hearing anyway) mentioned (in lecture or tutorial) and Hayek was dismissed – if referred to at all – as a complete loony: both as an economist (portrayed as a “stand-alone” figure not as part of a “school”) and, partularly, as a political commentator/theorist. In practice, we were led through the economic version of the Whig theory of history which began with Adam Smith and ended with Keynes and those of a similar economic disposition. This occurred despite Hayek once having been a distinguished member of the LSE faculty and when both Michael Oakeshott and Karl Popper were still on the staff (not, of course, the economic staff).

    It was only when I went to the University of Chicago that a whole other world of economics was opened to me. The “heresy” taught there by serious academics that Keynes’ ideas and prescriptions were not the final words on economic theory and practice was at once shattering and stimulating. Mind you, IIRC, the Austrians, although mentioned at Chicago, were not held in high regard there either (or, at least, not by my instructors).

    This is not to disagree with your point that ackowledgement that the Austrian School might have something worthwhile to say is irrelevant to the parasites who rule us. However, if an “Austrian” could be quoted in support of the present system of legalised theft, rest assured (whatever his other thoughts) his words to this effect would be constantly on the lips of our rulers (and Stephanie Flanders).

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