Observation of reality is always useful
Yea, even in economics that reference to the actual universe has its merits. Which brings us to the latest idea from Danny Blanchflower and Richard Murphy. Calling themselves the Mile End Economists they are to:
We are not. We believe that what is being done by Rachel Reeves since she became Chancellor in July is deeply dangerous for the people of this country.
It looks as if she is heading to deliver Austerity 2.0, the first version having been delivered 2010. That will be her prescription when she goes to the dispatch box in October to deliver her first budget. And we think she's making a fundamental mistake.
There is this little difficulty. A difficultette perhaps. As one wag has put it about current politics:
It’s bleakly entertaining watching people who’ve spent the last 15 years complaining about austerity now in government and having to face up to the fact that there actually wasn’t any.
Or as one of us put it elsewhere:
Yet the current meaning that has real value among the electorate is that the Tories, the b*stards, just stopped spending government money. Those are the ‘cuts’ they are expecting a new government to simply reverse and let the milk and honey flow again.
Yet the Conservative Party didn’t, in fact, spend the last 14 years reducing government spending: quite the opposite. Large parts of the Labour electorate have however convinced themselves – egged on by a large part of the press – that government spending has fallen and that it will be easy to reverse. But they have been taken in. There is no switch on spending waiting to be flipped.
Or as we’ve said here:
It’s also possible to wonder about something else. If government spending has risen by 6% of GDP - which is a lot, even a lorra lots - then what is this story about austerity? Seriously, what austerity?
The Mile End Economists are to campaign against an austerity that never happened. Ho Hum. Still we suppose it beats their usual shouting at clouds.
Don’t forget, it’s actually a Labour Party advertisement currently claiming that the Tories overspent. What austerity?
Tim Worstall