The economy not Europe is my priority, says David Cameron


Via The Telegraph:

David Cameron, the Conservative leader, has pleaded with his MPs and voters to allow him to concentrate on fixing the fragile British economy if he becomes Prime Minister rather than having “a massive Euro bust up” over the Lisbon Treaty.

Many of us with an international perspective on human cooperation have strong, principled objections to a government that cannot be dismissed at the ballot box. However, David Cameron is right: the clear and present threat to the livelihoods of British people is the state of the economy, not the EU. And George Osborne is right: we need an economy based on save and invest.

Consider the analysis provided by my Cobden Centre colleague, Ewen Stewart:

Cobden CentreEquity Strategist Ewen Stewart makes the case that the national debt will within 5 years be over £150,000 per family of 4 with debt repayments of twice the present defence budget, up from £31 billion in 2008/9 to £70 billion in 2013/14. He explains the root causes of our difficulties and indicates a route to recovery.

It’s all over. What a fuss about nothing. The economy will soon be growing again and, look, the FTSE100 is up almost 50% since the March low. Even house prices, according to the Halifax, have risen 6 months in a row. The doom mongers were wrong. Central Banks and Keynesian public spending programmes, together with QE, have worked. Brown indeed has saved the world!

Well that would be one interpretation and a very short sighted one too, for this recovery shows all the hallmarks of a drug addict who claims to be going straight injecting a further mighty dose of the substance that has caused such decay in the first place to prolong the party.

The problem is that the underlying fault lines in the UK economy remain and, thanks to the Government’s response, are even more pronounced.

I thoroughly recommend the entire article: Happy days are here again? Another view from the City » The Cobden Centre.

We simply cannot allow ourselves to slip and let Labour retain power. Everyday British people cannot afford a hung Parliament. We must win strongly and deal with the most urgent and important problem before us: a wrecked economy.

We cannot escape our fate by sticking with Labour’s insensible reactionary fear. We must think.

We cannot keep creating new money: it would eventually destroy the economy completely1:

Continuously injecting additional amounts of money where it creates temporary demand, together with an expectation of continuously rising prices, draws labour and resources into use in areas which will last only as long as the supply of new money. These policies bring about not so much a raise in the level of employment, but a distribution of employment which cannot last and which eventually can only be maintained by ruinous levels of inflation.

We cannot keep borrowing from future generations: it is just plain wrong and the markets would stop us.

We cannot grow a healthy society by simply seizing the wealth of one and giving it to another. Try doing that with your children’s sweets: you will get little more than screaming, sobbing and tearful mumbling. It is a dead end.

Ewen’s article sets out his policy prescriptions. The way out is the grown-up way: working, saving and investing.

So here is the greatest danger this country faces: a Labour government of childish fantasists who know nothing about creating real prosperity and everything about appearing strong before the camera. They are failing us all: it is tragic.

As my friend Chris Neal — a man with a big heart for the poor and CEO of charity GB Job Clubs — has written of Labour, bringing Cromwell up to date:

It is high time for me to put an end to your sitting in this place, which you have dishonoured by your contempt of our democracy, and defiled by your practice of top down government; ye are a factious crew, and enemies to all good government; ye are a pack of mercenary wretches, and would like Esau sell your country to the Brussels federalists for a mess of pottage and a title; and like a Judas betray your Queen and country for a few pieces of money; is there a single virtue now remaining amongst you?

Is there one vice you do not possess? Ye have no more sense of democracy than my horse; you have sold our Gold; which of you have not barter’d your conscience for the whips? Is there a man amongst you that has the least care for the good of the Commonwealth? Ye sordid prostitutes have you not defil’d this sacred place, and turn’d Parliament into a den of impotent lickspittles, by your immoral principles and wicked practices?

Ye are grown intolerably odious to the whole nation; you were deputed here by the people to get grievances redress’d, are yourselves become the greatest grievance. Your country therefore calls upon me to cleanse this Augean stable, by putting a final period to your iniquitous proceedings in this House; and which by God’s help, and the strength he has given me, I am now come to do; I command ye therefore, upon the peril of your lives, to depart immediately out of this place; go, get you out! Make haste!

Ye venal slaves be gone, not to Brussels by Eurostar but to your shires to beg the forgiveness of the people you purport to represent! So! Take away that shining bauble there, and lock up the doors. In the name of God, go!

Further Reading

  1. See The pretence of knowledge which explains how economists come to make astrologers look good. []

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Comments & Responses

One Response so far.

  1. Steve says:

    As an afterthought, some remarks about the Bank of England under Eddie George:

    The Bank became independent on his watch – after Labour came to power in 1997 – allowing it to set interest rates free of government policy. The Governor, who became known as “Steady Eddie” for his deft handling of the Bank, also had to deal with the collapse of Barings in 1995. In 2007 he admitted that he had deliberately stoked the consumer boom and left a difficult legacy to his successor, Mervyn King.

    “We only had two alternative ways of sustaining demand and keeping the economy moving forward – one was public spending and the other was consumption,” Lord George told the Treasury Select Committee when asked about dealing with the slump in the global economy at the beginning of the decade.

    We knew we were having to stimulate consumer spending. We knew we had pushed it up to levels which couldn’t possibly be sustained into the medium and long term. But for the time being, if we had not done that, the UK economy would have gone into recession just as the United States did.

    “My legacy, if you like, has been ‘sort that out’,” he added.