Cuts & Runs.

There is a kind of obscene haste at the moment with politicians from all three major parties in what seems to be a new game of boasting about future cuts in public spending. The public sector has become a whipping post a target for plans for pay freezes, pension reductions and unemployment. Let us recall this recession began with the selfish, greedy bonus seekers in the banking sector who appear to be able to continue their bad habits regardless that their jobs were saved by taxpayers money. The fact we are £805 billions in debt is the sole responsibility of the UK banks. The banks must be made to pay back every penny they have gobbled up and no one should be given a penny in bonuses.

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The Recession Is Over! But Not for You–Yet. | Newsweek Business | Newsweek.com

Newsweek article by Daniel Gross suggests that the recession is over!

By Daniel Gross NEWSWEEK: “In Westport, Mass., about 60 miles southwest of Boston, traffic crawls along Route 6 as drivers make their way to the nearby Atlantic beaches like Horseneck or Baker’s. A 10-worker crew pouring and raking asphalt onto the road slows their progress. It’s the kind of small annoyance drivers nationwide face each summer. It’s also one small manifestation of President Barack Obama’s ambitious strategy for jump-starting the economy…”

via The Recession Is Over! But Not for You–Yet. | Newsweek Business | Newsweek.com.

I’ll be nation’s hate figure, says top Tory Philip Hammond: The Guardian

So now we learn more about the sneaky Tory policy of brutal public service cuts.  Phillip Hammond is even now boasting about his proposed actions. This country cannot afford such an extremist Tory government;

“I’ll be nation’s hate figure, says top Tory Philip Hammond. Prepare for rapid post-election budget and deep spending cuts” – Hammond

Patrick Wintour and Nicholas Watt in THE GUARDIAN: “David Cameron may be forced to stage a rapid post-election budget to calm the markets and prevent a drop in Britain’s credit rating in the first days of a Tory government, Philip Hammond, the shadow Treasury chief secretary, warns in a Guardian interview today.

Anticipating an era of deep short-term cuts in public spending, Hammond urges voters to give the Conservatives a big majority so a new government can act boldly to cut the public debt, warning that the public finances are in such a state “the worst outcome for Britain would be an unclear political result at the election”…”

via I’ll be nation’s hate figure, says top Tory Philip Hammond | Politics | The Guardian.

End public pay excess, say Tories

So the Tories now are keen supporters of envy. The politics of envy is a core value to modern Conservatism. It’s rather a puzzle though as we all know, without doubt that public sector workers are made up of people on low pay Would Bullingdon boy, George Osborne want to give up his well paid jobs in order to become a care assistant or road sweeper? Public sector pay by and large has been held down over the years. Alistair Darling’s call for a public sector pay freeze, his leap into popularism and Tory feeling’s of envy and jealousy should not be supported by Labour politicians. George Osborne should not deceive the general public; there has been no “age of excess” in public sector pay, some Tory friends in the City have made fortunes in this recession and continue to do so. I am all in favour of focussing pay increases for low paid public sector workers but perhaps senior well paid executives who probably vote Tory anyway could face a freeze.

BBC NEWS: “A Tory government would end the “age of excess” in public sector pay, shadow chancellor George Osborne has said.

He told the BBC pay should reflect economic conditions and the Conservatives would change the “culture of Whitehall” to save money.

Meanwhile, a pressure group's report suggests more than 1,000 council bosses earn six-figure salaries.

The government said this justified its plans to make councils publish the pay packages of 2,500 top earners.

A report by the Taxpayers' Alliance suggests those earning £100,000 or more rose by 27% in a year – with at least 16 people being paid more than Prime Minister Gordon Brown…”more

via BBC NEWS | Politics | End public pay excess, say Tories.

UK’s economy ‘the best in Europe’

Professor Paul Krugman: Image by Getty Images via Daylife

The news from Professor Paul Krugman (who won the 2008 Nobel prize for economics), may bring some comfort for Gordon Brown after a pretty grim few weeks of bad news.

BBC NEWS” “The UK is in the best shape out of all the economies in Europe, according to a leading economist.

Professor Paul Krugman, who won the 2008 Nobel prize for economics, said that the UK’s economic policies had been “pretty good” and called them “intelligent”.

The government also deserved more credit for its policies, he said in an interview with Will Hutton in The Observer newspaper.

His comments come at the end of a week when the pound has risen to its highest level this year.” More

via BBC NEWS | Business | UK’s economy ‘the best in Europe’.

Zakaria: A Capitalist Manifesto.

I imagine many people, post credit crunch, would be unwilling to accept the idea that Capitalism is good and that greed is good: we have seen where unregulated capitalism can lead us. But given that models of socialism, social democracy and varieties of communism have in the past clearly failed we are now on the horns of a dilemma as economic systems thought to be perfect become imperfect. One simply cannot leave economic fate to invisible hands nor allow greed to grow as it has done and continues to do in the banking sector. It seems Fareed Zakaria, with a degree in political science ventures into the world of economics. He is international editor for Newsweek and a CNN regular presenter. I suppose this book will need to join a growing pile that I will read in the months ahead:

Image via Wikipedia

Fareed Zakaria, NEWSWEEK: “A specter is haunting the world—the return of capitalism. Over the past six months, politicians, businessmen and pundits have been convinced that we are in the midst of a crisis of capitalism that will require a massive transformation and years of pain to fix. Nothing will ever be the same again. “Another ideological god has failed,” the dean of financial commentators, Martin Wolf, wrote in the Financial Times. Companies will “fundamentally reset” the way they work, said the CEO of General Electric, Jeffrey Immelt. “Capitalism will be different,” said Treasury Secretary Timothy Geithner.

via Zakaria: A Capitalist Manifesto | Newsweek Business | Newsweek.com.

Van maker LDV collapses into administration: Business: guardian.co.uk

I hope it is not too late for the government to act to save the jobs of 850 workers at LDV and the thousands of related jobs at stake. A Labour government has bent over backwards to assist the banks with billions and something should be done to save the jobs and communities of workers associated with LDV. Failure will only mean more votesfor Labour will disappear as the government looks the other way.

Elena Moya & Graema Weardon in THE GUARDIAN: “The Birmingham-based van maker LDV fell into administration today after teetering on the brink for months when a prospective bidder failed to raise enough money. As many as 3,000 jobs at dealers and suppliers have been put at risk by the failure of the firm, which has already made most of its staff redundant.

PricewaterhouseCoopers has been appointed administrator of LDV Group and a parts supplier, Birmingham Pressings. The two firms employ about 850 people at their offices and plant in Drews Lane, Birmingham. About 40 staff will be kept to maintain the site, PwC said. Most redundancies came after the plant shut in December as the firm ran out of cash…”more

via Van maker LDV collapses into administration | Business | guardian.co.uk .

Gordon Brown: BBC Radio 4 Today Programme.

Image via Wikipedia

Gordon Brown was interviewed on BBC Radio 4 Today programme, this morning. Again we get the same old excuses in regard to MPs’ expenses and a willingness to defend what could be considered to be wrong doing or making irresponsible claims.

In regard to reform, 12 years into a Labour government and suddenly he reports he wants reform, yet all we get is promises so far nothing, nothing has been set up, the cynical amongst us would regard that as just blah, blah, blah.

Audio recording link below:

“Gordon Brown has insisted that he will carry on as prime minister despite predictions Labour will fare badly in this week’s local and European vote. Mr Brown rejected calls to quit, saying he was the man to tackle the recession and the expenses scandal.He told BBC Radio 4’s Today he wanted to ’stay on to do the job’ before calling a general election.
‘With the record I have had, I’m the best person to clean up the political system,’ he added.”

Danny Blanchflower Ends 3 Year Stint from the Monetary Policy Committee.

Image by wallyg via Flickr

Danny Blanchflower was one of the few members of the Bank of England Monetary Policy Committee (MPC) who wisely would call for interest cuts at a time when the MPC favoured increasing interest rates at a time when the economy was already showing signs of failure:

BBC RADIO 4 TODAY PROGRAMME: “British academic Danny Blanchflower has reached the end of his 3 year stint sitting on the panel setting interest rates at the Monetary Policy Committee. He discusses the possible impact of quantitative easing and interest rates cuts on the UK economy.”

Indebted Britain: Robert Peston

Agencies that publish economic data and economic analysis for the purpose of making a report can sometimes lead to very confusing results. Only yesterday the International Monetary Fund (IMF) reported that the UK government had done the right thing in initiating economic stimulus though it did have reservations about the growing public debt. Standard & Poor’s (S&P) the international credit reference agency, have now decided that due to this growing public debt it needed to issue a negative status thus reducing the AAA credit rating.

Peston writes in his blog:

“…Also, S&P has not said that the UK will definitely lose its triple-A rating, its rare and precious badge that we are good for our IOU’s in all seasons.

Putting British sovereign debt on negative outlook is not as bad as being assessed for possible downgrade, which almost always leads to a downgrade.

Apparently, a negative outlook is followed by downgrade in about a third of cases.

And some would say that S&P is stating the bloomin’ obvious, that public sector debt is patently rising too fast – and that we can’t assess the long term health of the economy, or the ability of the government to meet its financial obligations, till we know the taxation and debt plans of the next government.

S&P is thus in slightly different language repeating what the IMF said yesterday, that the UK needs a bolder plan to stem the rise in the national debt.”

And so we are left with as much vagueness as before, S&P is telling us no more than we already know. We are at a crucial stage,  there will come a time when the economy will recover, there will come a time when we will not need to borrow and the public debt will begin to diminish.  One thing is obvious, although a Cameron led Tory government might look attractive to many voters, Cameron’s economic strategy would not aid recovery, his policies would lead to greater unemployment and despair.