Sunday, 23 May 2010

Has Vince Cable been sidelined? Will there be a double dip recession?

There is no doubt that Vince Cable has a very important job to do. He needs to propose how to split up the banks, make sure they are not too big to fail, that they are properly regulated and the retail and casino functions are split up. People's savings should not be put at risk by irresponsible banking behaviour of the kind we have seen recently. Ideally he should resist Tory urgings that the banks should be privatised straight away. Yes they should be privatised eventually when economic conditions are favourable, but not on the behest of his ideological counterparts in the Tory party. It is said that he is frustrated that he does not have the power to do what he wants and that George Osborne wields some power in all this. This is alarming if true. However even if it is true, Vince should fight his corner and go public if the Tories are being obstructive. He will surely have public opinion on his side. He may have more power than it appears on paper.
But why would the Tories do such a thing anyway? Well the Tories are the party of hedge fund managers and the money markets. Not only that, city institutions will lobby hard and they have the financial clout to do so. Making these changes will be very hard, and the Tories are not our natural allies in wanting to do this.
So there is a battle to be fought on the banking front, but we should not overlook the broader economic picture. This is a government that will make cuts right away. That in itself is a problem, as Vince Cable argued only a couple of weeks ago not to do this; "Slashing spending now could push the economy back into recession and inflict further structural damage on the UK that will make it harder to sustain our credit rating. He (George Osborne) ... fails to appreciate what the markets are looking for is a credible plan to reduce the deficit, not a willingness to slash regardless of economic conditions. In the current climate it is essential that decisions about the speed and timing of tackling the deficit are based on the state of the economy, not political dogma". See Vince Cable will be busy with his own priorities and will not get much of say in all this now.
I have asked about this on-line and got various responses. Some Lib Dems never believed what Vince Cable said at the time and thought he was just playing politics. These are often the same people who thought a the same a couple of years ago when Vince Cable was criticising the government over the high levels of debt. Look how wrong there were!
Others argue that £6billion is not very much, although I doubt it will seem that way once implemented. Some have pointed out that it depends on where the cuts are being made, and this is a more important point. Clearly cutting on national Id cards will not result in big job losses (albeit no comfort for those who do lose their jobs). Maybe it is possible to make cuts without detracting from the economic stimulus? Up to a point this is true, but can we cover all £6billion this way? Probably not. The official party response is that somewhat miraculously we do now have the growth we need to make this cuts less painful. If true this is an astonishing turn of events, coinciding very conveniently with the date of the general election. The latest growth figures do look better, but surely it is too early to say now that the time is now right? particularly given the prospects of contagion from the parlous state of the Greek economy?
The problem once again is Tory ideology. They will advocate we should cut regardless of economic conditions, as Vince Cable warned. Dangerous times.

Saturday, 15 May 2010

"Cleggmania" succeeded first of all in galvanising the electorate. But by the time they got to the polling booth their attention had switched to defeating the party they were afraid of most. Under our voting system, that meant they reverted back to "Labservative".
In addition the leadership debates brought up the issue of immigration. Whenever Cameron spoke on this, his vote went up.
And so on election day the Tories got the most votes.
A progressive coalition looked mathematically possible. But Labour tribalist MPs made that impossible.
This left 2 options; go it alone, or align with the Tories.
Go it alone was not really an option. Only the Tory party can afford to fight another election this year.
But aligning with the Tories has risks too. For many on the left, including many Lib Dems, there is the symbolism. The MPs we least want to see running the country; Osborne, Hague and Fox now have their hands on the levers of power. It becomes much harder for the Lib Dems to win votes in Labour areas from now on.
Then there is the question of what the government will now do. 2 weeks ago, the Liberal Democrats claimed that they would not support radical cuts in public spending right away, as this would induce a double dip recession. Now they are doing just that. How can this be in the national interest? There may be a good answer to this question, but I have not come across it yet.
On the other hand there is a lot that is positive about this proposed coalition. Good to see Chris Huhne tackling the issue of global warming for example. Good to see the pupil premium being implemented (although it remains to be seen if the investment will be there to make it work). Good to see civil liberties being supported. The question is whether the benefits on policy outweigh the risks from a possible recession?
The electorate gave the Lib Dems a poor hand for their negotiating position in the coalition talks. They have made the best of a bad hand, but there remains a high risk that our unforgiving voting system; whether FPTP or AV, will come down hard on them next time.
Under our voting system, you do not get many choices in politics. Left Liberals should stay in the Lib Dems and make the best of the situation as they can. It is not clear there is any other choice for the time being.

Thursday, 6 May 2010

Change the system, vote Lib Dem

I have not had the time to write about this election. However I did find the time on Facebook to suggest why not to vote Labour;
"A catastrophic war in Iraq, the never ending war in Afghanistan, failure to stand up to Israel when they invaded Gaza, collusion with torture with the Bush regime, "light touch" regulation of the City, believing that market forces were self-correcting with disastrous economic consequences, failure to reform the finance of political parties - which ... See morenow gives the Tories a massive advantage for decades to come, failure to change the electoral system after they said they would, wasted lots of money on national ID cards and their commitment to replace Trident, locking up petty criminals for short term prisons which are in effect academies of crime with a reoffending rate of 90%, a widening gap between the rich and poor, making the UK the worst in Europe, the consequences of which you can read in The Spirit Level, the Decent Homes initiative that has saddled unsuspecting leaseholders on salaries of £15K with bills from £10K to £70K, failure to introduce the traffic lights system of food health after lobbying from ex-Labour ministers, the UK massively behind Denmark in alternative energy sources, support for a new runway at Heathrow despite commitments to global warming targets ..."

In short, Labour dances to the tune of Rupert Murdoch.
Before "New Labour", the politics of the left was in many ways more liberal than it is today. There is still a hinterland on the left that supports the Liberal agenda, and although many of them would prefer to vote Labour, this time they are either voting Lib Dem or are voting tactically to keep out the Tories.
It was over 50 years ago when Liberal leader Jo Grimond talked about Liberals "realligning the left". Today we must rescue the left, but only the liberal part of it. Otherwise the onslaught from Murdoch will soon begin.