Why there is no economic good news

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We are coming up to elections. I'm not really referring to the EU elections - important as they are in so many ways, but to next year's general election.

It's curious that in the EU elections the economy hardly figures. The debate on UKIP dominates, regrettably, and that relates in large part to questions of the most profound ethics.

When it comes to next year's general election everyone will expect a different story. The Bill Clinton campaign adage that "it's the economy, stupid" will be expected to prevail. Maybe it will. I'd prefer it didn't. I think we should instead be asking questions of profound ethics all over again in May 2015.

I have, I think, good reason for saying that. It's not that the economy is not important. Far from it: I've always thought and suspect I always will that economics and politics are inextricably linked. But then, from fairly on in my time reading and studying economics I was taught (more at school it must be said than was ever the case at university, where silo based thinking was, I regret already commonplace) that to ask deeper questions on the relationship between economics and politics was necessary.

This is a lesson that has almost been forgotten over the thirty eight years since I left school. It does, however, remain of fundamental importance because unless you look at the assumptions that drive the economics that underpins any political belief system (and by and large that is the right way to recognise direction of travel in the association) then little makes sense about the statements of intent on politics that follow.

For thirty or more years now - so during the entire time that the vast majority of those now in political office, or aspiring to it, in the UK were taught this subject - economics has been subject to a hegemonic stranglehold by neoliberalism. Despite espousing the merits of competition this thinking has, in fact, sought to eliminate all opposition to its creed (I choose the word with care). So absurd has the consequence been that I have been told by an Oxford professor that I pursue politics because I question neoliberalism but his own work is wholly objective because it follows the natural laws on which he claims that the neoliberal interpretation of neoclassical economics is founded.

I have covered this ground many times before, and have explained, often, why this claim is wrong. But it has real relevance now, for two reasons. The first is, as Larry Elliott has pointed out, there will, it is confidently expected, be reports of economic 'good news' this week, which will be trumpeted as a sign that recovery is now fully upon us. Secondly, that is wrong.

As all those who have looked at GDP per capita data know, the UK is not enjoying growth in anything but population right now - much of it because of net immigration. That is the cause of our growth. Indeed, in many areas, as I have, for example, shown with the self employed, real earnings growth is negative and likely to remain so.

And second, there is no doubt that what's happening is an old fashioned pre-election boom of the very worst kind. We all know that the last thing we need in the UK is house price inflation, over extended personal credit before inevitable interest rate rises and growth based on credit bubbles and not investment and yet that is exactly what we have. This is 1988 and 2006 all over again. And the bust will follow - to be triggered by interest rate rises unless something unforeseen happens before then (and don't rule out a Euro crisis if the far right get a significant blocking mandate in EU elections as a potential trigger for that earlier event).

So why go back to fundamentals? The answer is simple. We need to look at what change is really needed in our economy. We need to ask what the assumptions that should drive the economics that can delver the freedom from fear I have written about should be. We should be asking what that economics and so what that politics would look like. And we should be asking which parties are willing to rise to that challenge when deciding how to vote - which is an issue on which I do not advise.

That is, incidentally, true of the EU elections as well as next year's general election. And what are the fundamentals? I think the critical assumptions that must underpin the economics as well as the politics - all of which issues are now clearly evidence based - are a belief that inequality is harmful; that providing opportunity for all - including access to capital in all its forms - is vital; that safeguarding of future generations is essential, and that investing with that in mind is key whilst providing work for all who want it is the most obvious way of using our economic resources sustainably as well as socially acceptably.

The economic news we will get this coming week is not based on any of those assumptions, and the political thinking of those who will deliver the news is far removed from that logic which values each and everyone, now and in the future, as of merit in their own right That's why we will get no economic good news this coming week. We'll just get some papering over some more cracks in he facade of a failing economy, a failing politics and a failing way of economic thinking.

The time for change has come.