Ed Balls has a Plan, one which he has had for a long time. Long enough you might think to actually have worked out whether it will actually produce the economic uplift that he claims it will. Unfortunately Ed Balls hasn’t bothered to go as far as checking his figures…or rather his hopeful predictions, and with the help of the BBC and a lot of brass neck, is managing to maintain the impression that he does have the faintest idea of what he is talking about and it is not all a lot of pie in the sky make believe that he hopes will fool the voters long enough for him to get his foot in the door of Number 11 before they rumble him.
Despite a few valiant efforts at unearthing the truth the BBC is running cover for Balls and by doing so is endangering the economic recovery with constant negative reporting and gloomy outlooks undermining both public and business confidence thereby limiting borrowing and investment and future growth.
Before 9/11 the US intelligence services had a constant stream of information that if gathered together, collated and analysed would have probably allowed the intelligence services to predict the attacks and then to prevent them….but with so many different agencies with different agendas the information was not fused to produce a coherent single narrative allowing them to produce a clear indication of what the intelligence all meant. Individual people or groups knew certain facts but when it came to produce an overall intelligence picture those individual intelligence resources got lost or were ignored in favour of what was probably the conventional wisdom about what was happening.
A similar situation exists within the BBC…except that it is left to the Public to make sense of the diffuse pieces of information sent their way by the BBC. The BBC itself fails to join up the dots, either deliberately or through lack of a central controlling policy to guide the thrust of any particular story which has the effect of allowing a culture to develop that is based upon the consensus opinion amongst the dominant staff which means that other staff have to toe the line and adopt the same attitudes or lose out on promotion or the most favourable work….as Chomsky says: ‘Most people are not liars, there are outright liars and brazen propagandists in journalism and in the academic professions but the norm is obedience to the culture, adoption of uncritical attitudes, taking the easy path of self-deception. There is also a selective process in the academic professions and journalism…people who are independent-minded and cannot be trusted to be obedient don’t make it by and large. They are filtered out along the way leaving you with a monoculture of similar thinking, attitudes and world views.’
All this means of course is that however the consensus is reached once it has been decided upon, however ‘unofficially’, there is little or no dissent from it regardless of the facts.
The BBC keeps to the Party line until there is a signal from a higher authority that all has changed…in which case a new consensus is reached and it all begins again….genuine news based upon investigation, reason and truth seeking is shelved in favour of partisan promotion of the chosen ideology or thinking.
For instance Ed Balls’ ‘Plan B’.
If you wanted to find out about the credibility of Ed Balls’ ‘Plan B’ the BBC is not the place to go if you want an intelligent and impartial analysis….for the BBC the economic outlook is always dire and unlikely to improve unless Osborne changes direction….and Britain exists inside a bubble isolated from the effects of world, and especially European, events, and America is swiftly recovering its economic health under the sainted Obama’s divine guidance and massive government spending.
There does seem to be a single narrative in the BBC editorial that pushes Balls’ plan….but every now and again you get a dissenting voice of reason that tells it like it really is about the economy and the solutions to the problems…if you conduct a wide ranging scrutiny of BBC output you will find a steady stream of common sense and economic reality bubbling to the surface from even the most unlikely sources long suppressed by the consensus.
You will even hear the likes of Stephanie Flanders and Robert Peston say something that completely rubbishes Balls’ plan…but ever after they ignore that moment of clarity and revert to the BBC conventional wisdom that Osborne is failing and we need the infamous Plan B.
It is readily evident that Balls’ plan would fail…history, the IMF, the Markets and common sense say it will.
Only the BBC say it will succeed.
Balls is a clever man, he went to Oxford and Harvard….he studied economics, philosophy and politics….not an inspiring mixture to be sure….not a single subject that demands a single answer….complimenting each other only in so much as they all allow you to say something supposedly intelligent without actually committing yourself to anything concrete that could be held against you in the future.
Here are some words of advice that should be in the front of every economics text book:
‘It is the skilled economist who looks for the effects that are hidden, the surprises that are unseen.’
The Seen and the Unseen
“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
“Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. “
– From an essay by Frédéric Bastiat in 1850, “That Which Is Seen and That Which Is Unseen”
Ed Balls amuses himself by playing politics instead of adopting a statesmanlike approach to the massive problems Labour left us and working to solve the problems. he opts for the instant effect, the flash in the pan, that impresses for an instant but is soon gone rather than workig for a long term solution that involves hard work and initial economic pain.
He could agree that Osborne is right…but then he’d have to admit Labour broke the economy and robbed at least one generation of a prosperous future whilst reducing others to a poverty ridden retirement.
Instead he offers us a 5 point plan that not even the Labour Party wants as policy and school boy antics in Parliament that reduces the State Legislature to the level of playground delinquency and foolishness.
And yet the BBC take him seriously.
You have to wonder why….as said his 5 point plan is not Labour policy as even the BBC admits:
‘If you thought you heard Ed Balls promise to cut VAT on home improvements or bring forward investment projects in his conference speech, listen again.
He did nothing of the sort. Those were not Labour policies.’
What else did he reveal in that speech?: “No matter how much we dislike particular Tory spending cuts or tax rises, we cannot make promises now to reverse them.”
So his plan is not Labour policy and in fact he might continue with the Coalition economic policies…just as Brown did after 1997 following the Tory policies that turned the deficit into a surplus…until Brown returned to his roots and the ruinous tax and spend policies that have beggared us all.
And yet the BBC still push his Plan B stimulus.
The BBC’s very own Dominic Laurie has tried for a year and a half to get Balls to produce the figures that will show his plan will work…Balls has consistently refused as here in a Channel 4 interview:
‘Shadow Chancellor Ed Balls has told Channel 4 News Britain needs a “stimulus for growth” saying that he has a “better way” of getting the economy back on track….
“The economy has flatlined…..What I’ve not done is sat down and done a detailed economic forecast – that’s actually for the independent OBR.
“What I’ve said is five things the government could do which could have a material impact on growth, jobs and get our deficit down.”
His five-point growth plan includes:
1. Repeating the bank bonus tax – and using “the money to build 25,000 affordable homes and guarantee a job for 100,000 young people”
2. Bringing forward long-term investment projects, such as schools, roads and transport, to create jobs
3. Reversing January’s “damaging” VAT rise now for a temporary period
4. Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance
5. One-year national insurance tax break “for every small firm which takes on extra workers, using the money left over from the government’s failed national insurance rebate for new businesses”
Say that again Ed….what haven’t you done?
‘What I’ve not done is sat down and done a detailed economic forecast.’
Balls hasn’t actually crunched the numbers for his Plan B? It is astonishing that the shadow chancellor can, for nearly two years, be allowed to get away with incanting his ridiculous 5 points without a real challenge and a demand for his workings….a man who states he has a ‘better way to save the country’…but he’s not actually going to show you how that ‘s going to work is a charlatan….a carpet bagger, a snake oil salesman, and should be shown the door and run out of town.
And yet the BBC take him seriously.
Conservative Home have managed to come up with some figures, and it’s no wonder Balls isn’t too keen to be more candid about them:
Balls’ Plan B would… “Increase the deficit by £87 billion per year by 2015 compared to the Government’s plans; Increase the National Debt by £5,000 for every man, woman and child in Britain; Increase debt interest payments by £16 billion per year – or £500 for every taxpayer; and Only reduce the deficit by a third over four years – not halve it over four years as Ed Balls has promised.”
Flanders resurrected her ‘Stuff’n’Nonsense’ programmes to examine firstly what we should do to encourage growth in the economy. She valiantly persisted throughout fighting for Balls’ Plan B but was pretty well outgunned by all three guests, even those who might have been expected to support her, sorry, Balls’ position.
Even she seems to realise that the game is up stating:
‘The debate was lively, and I think we did get past some of the tired old arguments about “austerity versus growth”. So it was a realistic debate – no magic bullets on offer, I’m afraid.’
What did come out of the programme was that it was private investment not government debt sourced stimulus that helped the economy recover, and that the essential ingredient is ‘confidence’ of both consumers and business.
One final contribution was to state that: Politicians have to be honest…the economy cannot be fixed NOW, you can’t have everything immediately, there are costs as well as benefits to economic policies….short term ones might seem attractive to a politician seeking votes but it is the long term ones that, whilst initially painful, generate the best, longer lasting outcomes eventually.
Her second programme was somewhat dull but came to a conclusion that we are better off without a European Union.
Her third was an ‘Occupy’ special questioning not only the need for growth but for any sort of wealth at all…quality of life versus money apparently….which is at odds with the BBC’s own attitude that growth is essential…and that vast immigration is also essential to provide that growth…essentially importing the ‘Coolies’ of George Orwell to provide the cheap labour which slaves away for the wealthy in the UK…..which is at odds with that other BBC attitude that consumerism and capitalism are evils that should be abolished to make way for Soviet style tractor factories, empty shelves and bread queues.
Robert Peston also lets slip the truth occasionally although we never hear reference to this type of thinking normally as it seems to be suppressed in favour of the Labour narrative:
The Party’s Over.
It has now become widely recognised that perhaps the greatest economic policy failure in the UK, US and eurozone during the 16 boom years before the crash of 2008 was the explosion of borrowing by banks, households, businesses and governments – or, to use the jargon, the unprecedented and massive leveraging up of entire economies.
That is why getting the debt down to prudent levels is the most important economic challenge of our time.
So what’s going on? Why are UK debts still going up?
Well partly it’s to do with a phenomenon I’ve discussed here many times, that debt has been shuffled from the private sector to the public sector.
When banks stopped lending, and private-sector spending and investing collapsed, governments continued to spend, even though tax revenues were falling. So public-sector borrowing exploded.
To be clear, if governments had not continued to spend, our recession might well have become something much worse, a 1930s-style depression.
But it is fair to say that a consequence of banks, households and businesses trying to repay their debts has been a big increase in government borrowing.
The point is that if excessive debt is the disease, what we’ve had since the end of 2008 is analgesic and sticking plaster, rather than cure.
Record low interest rates and the creation of £275bn of new money through the quantitative easing programme have made it possible for us to live with our debts – cheap money has made the debts bearable.
But we haven’t as yet found a way to get the debts down so that we can be confident that our economy’s foundations are solid and sound again.
What it means is that we must brace ourselves for many years of relatively low growth, perhaps 1% versus the 3% of the 16 boom years before the crash, because we no longer have the fuel of borrowing more and more every year.’
And let’s not forget this long forgotten gem from Flanders who knows where the blame really lay for the economic downturn…but has conveniently forgotten since:
Testing the Miracle
Stephanie Flanders, BBC economics reporter
On running the rule over Gordon Brown’s economic record 2005
Finally we have this blasphemy that has managed to slip through the BBC’s Keyne eyed filter:
‘What would John Maynard Keynes, one of the most influential economists of the 20th Century, have made of the current economic situation, ponders philosopher John Gray.
In other respects, Keynes’s early philosophy was dangerously shallow. “We were among the last of the Utopians, or meliorists as they are sometimes called”, he wrote, “who believe in a continuing moral progress by virtue of which the human race already consists of reliable, rational, decent people, influenced by truth and objective standards… We were not aware that civilisation was a thin and precarious crust… only maintained by rules and conventions skilfully put across and guilefully preserved.”
We face a conjunction of three large events – the implosion of the debt-based finance-capitalism that developed over the past twenty years or so, a fracturing of the euro resulting from fatal faults in its design, and the ongoing shift of economic power from the west to the fast-developing countries of the east and south.
Interacting with each other, these crises have created a global crisis that old-fashioned Keynesian policies cannot deal with. Yet it’s still Keynes from whom we have most to learn. Not Keynes the economic engineer, who is invoked by his disciples today. But Keynes the sceptic, who understood that markets are as prone to fits of madness as any other human institution and who tried to envisage a more intelligent variety of capitalism.
Keynes condemnedBritain’s return in 1925 to the gold standard, which famously he described as a barbarous relic. Would he not also condemn the determination of European governments to save the euro?
I suspect Keynes would be just as sceptical about the prospect of returning to growth. With our ageing populations and overhang of debt, there’s little prospect of developed societies keeping up with the rapid expansion that is going on in emerging countries.
Keynes’s most important lesson is to let go of inherited ideas. If we cling to the panaceas of earlier times, we risk losing the civilisation we have inherited. This is the truly Keynesian insight that our leaders – airily floating above the dangerous undercurrents of popular feeling like the water-spiders ofBloomsbury- have yet to grasp.’
