{"id":44225,"date":"2019-02-05T06:58:56","date_gmt":"2019-02-05T06:58:56","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=44225"},"modified":"2019-02-05T06:58:56","modified_gmt":"2019-02-05T06:58:56","slug":"labours-fiscal-rule-is-osbornomics","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2019\/02\/05\/labours-fiscal-rule-is-osbornomics\/","title":{"rendered":"Labour’s fiscal rule is Osbornomics"},"content":{"rendered":"

The debate on Twitter between Simon Wren-Lewis, Jonathan Portes and me on Labour's fiscal rule<\/a> was resumed last night, and continued long after I'd dropped out to go to bed. I'll comment separately\u00a0on my engagement later. What I instead want to do is give full credit to someone called Darrell\u00a0Kavanagh<\/a>, who said this to Jonathan Portes:\"\"<\/a><\/p>\n

And secured this response<\/a>:<\/p>\n

\"\"<\/a><\/p>\n

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.<\/p>\n

Second, they don't think economics and policy\u00a0are politics. I hate to say it,\u00a0but nor do any neoliberals. Instead, economics and\u00a0policy are for them 'the revealed truth', as they clearly are for Portes and Wren-Lewis.<\/p>\n

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.<\/p>\n

In other words, my suggestion that this is a continuation of the logic of austerity is right. As Darrell Kavanagh put it:<\/p>\n

\"\"<\/a><\/p>\n

Precisely. To which Portes replied:<\/p>\n

\"\"<\/a><\/p>\n

So, the drive for a balanced budget had nothing to do with the policy then, Jonathan?<\/p>\n

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.<\/p>\n

First, this is Osbornomics.<\/p>\n

Second, its use in the hands of the Bank of England - who it is intended to empower, again - will be to recreate\u00a0Osbornomics.<\/p>\n

And third, your rule strips away the power of the Treasury to stop that.<\/p>\n

So, fourth, this rule is intended to re-establish the old economic order of neoliberalism, again.<\/p>\n

And for the record, as Portes and Wren-Lewis think it should be used, that is what it would do.<\/p>\n

I call that politics.<\/p>\n

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.<\/p>\n

And Jonathan\u00a0Portes and Simon Wren-Lewis 'sigh' (to quote Portes) and think I 'seem to want to misunderstand' (to quote\u00a0Wren-Lewis) at my comments, in an attempt to belittle them.<\/p>\n

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.<\/p>\n","protected":false},"excerpt":{"rendered":"

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
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