The Observer typifies the LibDem mess: it supported this government and does not know what to do about it.
In their editorial they summarise what the Lib Dems have done today:
Mr Clegg's apparent change of mind was no minor policy tweak to accommodate a coalition partner. It was a decision to throw the Lib Dems behind the biggest economic gamble taken by any government in recent memory — the bet that the private sector will fill the gaps in jobs and services when state provision is pruned back.
As they also say in tat editorial
That is not the choice many Lib Dem voters thought they were endorsing. Mr Clegg is wagering it is the right one none the less, and that by taking it he has won the opportunity to pursue other goals, not least establishing his party as a serious force in government for the 21st century.
As Danny Alexander revealed yesterday the reason for making the choice was fear of Greek style economic meltdown. As he put it:
When we came into office there was a serious danger that what was going on in the eurozone, where increasingly questions were being asked about how to pay off their debt, those sort of questions could have started to be asked of the UK. But we have taken the country out of the danger zone by acting swiftly.
But as Martin Wolf, Paul Krugman and many others have argued, that was just plain daft: there never was any such risk, and there’s no chance there will be.
The truth is the whole Liberal democrat decision was based on a fantasy threat from the bond markets — one Mervyn King (credited with changing Clegg’s mind) still peddles — as he did to the TUC this week when he said:
Market reaction to rising sovereign debt can turn quickly from benign to malign, as we saw in the euro area earlier this year.
But that was the eurozone — and small states like Greece suffering massive tax gaps and no control of their currency. To compare that in any way — and to believe that this in any way compares with the UK is reckless irresponsibility — and an untrue excuse for very different action indeed. In that action — as many trade unionists rightly perceived, and as King did not deny, they and all ordinary working people are the innocent victims.
Why make that choice to make innocent people suffer? As William Keegan put it today:
Frankly, I am seriously worried about what the coalition is — in my opinion unnecessarily — risking with the fabric of British society.
Or as Dave Prentis put it:
The Lib Dems have ditched the poor, the elderly and the vulnerable along with their election promises.
Why do that? As Clegg himself reveals today — for wholly right wing dogmatic reasons. As he’s said today:
Clearly there is a chunk of people who, I totally understand, turned to the Liberal Democrats at the height of Blair's authoritarianism and his fascination with [George] Bush and [Dick] Cheney. They said, 'Aha! These Liberal Democrats, they are the leftwing party I want. They are the leftwing conscience of the Labour party that I want.
That was always going to unwind at some point, particularly when Labour went back into opposition and started sloganeering leftwards. Because the vocation of Liberalism is not to be a leftwing ghetto for people disaffected by the Labour party.
That was no ghetto. That was the party of Ashdown, Kennedy and even Campbell. It’s Clegg who changed that. It was the nastiness of the takeover of the LibDems by Manchester School Orange Bookers — promoting free market solutions to all problems — which changed that, and which went (I admit) less noticed than it should have done — although I argued back with some of them before the election.
Clegg can reject this part of his party — some say 40% or more of his party — but they have only one place to go then — and that’s to Labour. For his own right wingers there’s also only one place to go — to the Tories — where no doubt Clegg will end up.
Clegg has killed three party politics — of that I’m sure.
But he’s done something else. he’s given Labour no reason to be in the middle either — because there’s no demand to be there now. Why appease the right when the only viable position is to oppose it — whether Tory or LibDem? Whoever wins the Labour leadership the case for radical alternatives is unassailable. That, and the destruction of his party is what Clegg will achieve.
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I can’t speak for all Lib Dems, but I joined the party because I’m neither a Tory nor a socialist. I think that, ceteris paribus, liberal and individual-focused policy solutions are preferable to centralised and collectivist. That’s not to say I’m fundamentally opposed to the latter – in some cases C&C is preferable. But I find the former philosophically and ethically preferable when outcomes are likely to be similar. I also saw what a state-centred economic policy did to my country from independence til the early 90’s, and how economic liberalism succeeded in lifting more people out of poverty and increasing their quality of life than decades of (well-intentioned) state intervention.
On a personal level, I also got mighty tired during my student days of student Labourites (both in Ireland and England) assuming that if I disagreed with them it could only be a result of me being selfish, nasty and generally morally inferior to them, not having legitimate philosophical or political differences of opinion. I look forward to seeing if the new leader of the Labour party continues in this vein as Mili-Ed has shown signs of doing.
Oh, come off it, Daragh. Joining the EU and getting huge subsidies is what turned the Irish economy around. Having junked all that nasty socialist protection and with the EU taps turned off, I don’t think things are looking too great there at the moment for a whole lot of people.
@Daragh McDowell
Haven’t you noticed what the free market’s done to your country?
Open your eyes for heaven’s sake
@Richard Murphy
I know what a failure to reign in spending due to the social partnership agreements being extended beyond their usefulness has done. I know what poor regulation of the banks has done. And I know what an overly incestuous relationship between the construction industry and Fianna Fail has done (which has existed for decades.) I know that the ‘Free Market’ allowed hundreds of SMEs to develop, gave us full employment, and that ending ridiculous notions like currency export controls and state monopolies in telecoms, air transport and energy both increased consumer choice and drastically lowered costs to the point that annual holidays in Spain, a luxury reserved for the Uber-Elite prior to 1994, became accessible to virtually everyone and most popular among the working class.
@Carol – in fact it was Ireland’s position as an anglophone country with a highly educated population and ACCESS to EU markets that was the main attractant for FDI, which is what really got the Celtic Tiger going. I’m afraid your analysis is simplistic in the extreme.
I suggest you both read Tom Garvan’s excellent ‘Why was Ireland so Poor for so Long’ to see what liberalism (social, political and economic) can unleash.
@Daragh McDowell
Carol answered your point already
I worked in the Republic and she’s right
You are – as the Irish might say – out with the fairies
Your analysis is what caused the Irish problem, not what solved it
@Richard Murphy
I live in the Republic, and I can assure you she’s not. If simply joining the EU and gaining access to its funds was behind the boom, why did Ireland endure two decades of meager economic growth under successive FF and FG/Lab governments? What about the Tallaght Strategy, the emergence of the Progressive Democrats, deregulation and destruction of the state monopolies? Why did we go from a point where airline tickets to London cost IRE£1,000 (in 1985 punts) to today when it costs as little as E50? In short, why did the economy only start to take off in 1994, precisely when we started to junk the dirigiste policies of the past? Why not in the early 1980s when the initial conditions Carol describes (EU membership and funding) coupled with a Social-Democrat/Socialist FG/Lab government suggests that they would have under your explanation?
You can hurl ad hominems about me being away with the fairies all you like Richard – it doesn’t make your analysis any less simplistic.
You seem to be in serious disagreement with yourself there. Carol suggested that the problems in Ireland were the result of an unrealistic and unsustainable situation created by EU intervention. You, in contrast, claimed the issues were a product of some “free market” you perceive to exist there.
@Paul Lockett
As ever you fail to comprehend the possibility that a person may hve two ideas in their mind at once
Maybe both played a part?
Or is that too difficult for you?
@Daragh McDowell
Fintan O’Toole would not agree with your analysis
Nor do I
@Richard Murphy
Fintan O’Toole isn’t God – his analysis is not perfect, and not entirely dispassionate. I should know – he was a guest at my sister’s wedding. I think his book (Ship of Fools) is good, but as anyone who’s read his columns for the Times regularly will tell you, he lets his political opinions guide his analysis a bit too often, particularly his hatred for the PDs. You and he (and others) might not have liked the party, but there are few economists who would dispute the major role it played in making Ireland a competitive market in which to do business.
@Daragh McDowell
Very politely, I think it is you whose political views are hiding heir objectivity.
So I think we’ll leave it there.