The debate on Twitter between Simon Wren-Lewis, Jonathan Portes and me on Labour's fiscal rule was resumed last night, and continued long after I'd dropped out to go to bed. I'll comment separately on my engagement later. What I instead want to do is give full credit to someone called Darrell Kavanagh, who said this to Jonathan Portes:
At last we got to the nub of the issue here. First, Portes and Wren-Lewis don't do politics. It shows, I have to say.
Second, they don't think economics and policy are politics. I hate to say it, but nor do any neoliberals. Instead, economics and policy are for them 'the revealed truth', as they clearly are for Portes and Wren-Lewis.
Third, and rather tellingly, the result is a Labour Fiscal Rule that is the same as the LibDems approach and is, apparently, almost indistinguishable from anything Osborne did.
In other words, my suggestion that this is a continuation of the logic of austerity is right. As Darrell Kavanagh put it:
Precisely. To which Portes replied:
So, the drive for a balanced budget had nothing to do with the policy then, Jonathan?
I note you saying 'I can't speak to the politics' in the tweet I quote, above. Too true you won't, I am sure. Because four things are very clear.
First, this is Osbornomics.
Second, its use in the hands of the Bank of England - who it is intended to empower, again - will be to recreate Osbornomics.
And third, your rule strips away the power of the Treasury to stop that.
So, fourth, this rule is intended to re-establish the old economic order of neoliberalism, again.
And for the record, as Portes and Wren-Lewis think it should be used, that is what it would do.
I call that politics.
And I call that the politics that perpetuates all the errors of the pre-crash era (because this is also the Brown / Balls rule in all but name) as well as all the worst of the post-crash era.
And Jonathan Portes and Simon Wren-Lewis 'sigh' (to quote Portes) and think I 'seem to want to misunderstand' (to quote Wren-Lewis) at my comments, in an attempt to belittle them.
But I get what these two are saying. In fact, I got them entirely right. This is Osbornomics, as Portes has confirmed. And that's a million miles from where Labour should be. And I say that because I do speak to the politics. And I understand them. Which is why we differ, completely.
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The mainstream continue to misunderstand and argue for the status quo 2.0!
http://www.youngfabians.org.uk/labour_party_fiscal_credibility_rule_mcdonnell_s_mainstream_mantra
Thanks for that
Not an erudite response, I’m afraid, but I keep seeing Portes’ tweet in which he dismisses Osborne’s austerity programme as ‘policy errors’. This might be a deeply significant and meaningful condemnatory phrase in Economics speak but to this lay person it sounds as though he’s dismissing nearly a decade of dreadful hardship for many as just a little mistake. And it’s making me very angry…
Suggesting the rule is right but the implementation is wrong when he says he and Wren-Lewis do not do politics is not wise
[…] could do a blow by blow account of the exchanges on Twitter between Jonathan Portes, Simon Wren-Lewis and me concerning Labour's Fiscal rule last night. There would, I suspect, be little advantage. Instead I […]
Richard, I have been receiving your blog posts via email for several years now. I got very excited when Corbyn took on your ideas in 2015; becoming called ‘Corbynonics’. What happened between now and then for Labour to now be following a path that is little different from ‘Osbornonics’?
What seems imperative now is that the grassroots of the Labour Party – those members who joined and are so enthusiastic about Labour and its insistence it can change our economy to stop austerity could, in fact, be being mislead.
I cannot say; as I do not understand the economics under question. I tried hard to grasp what MMT is. I could not. Is there any way you could present who are not au fait with economics — other than balancing the books at home or for a business, to understand this?
I would suggest if this could be explained simply enough; AND then presented to members within Labour who could then question Labour’s proposed economic policy.
I’d love to
If I had time
And right now I don’t
Sorry….
I get, you are so busy, Richard. I think it’s phenomenal your output in getting your blog written, plus your work.
…Could there be anyone else do this that you know? And you then vet it before publishing?
It seems to me this needs broader knowledge, and only then can honest debate be held by those who are members of the Labour Party. After all Mr Corbyn speaks of taking members concerns seriously.
I have no idea how this information could be then disseminated to these members. Maybe others who read this might know…?
I posted a video tonight….
Video? Where?
In a separate post