This £1 trillion row leaves voters shortchanged

The squabble over the cost of the Labour Party’s policies, started by the Tories at the weekend, tells us next to nothing about the potential impact of either party’s economic programme. But it does reveal the decrepit state of the parties that were once the two big beasts of British politics.

Spending figures – large or small – do not tell us if either party is planning an economic transformation of the country. In themselves, the numbers even say very little about how profligate or prudent either party is being. When it comes to future economic performance, the impact of public spending has much more to do with what the money is being spent on, and the circumstances in which it is being spent, rather than simply how much.

The row over these figures suggests that both the Tories and Labour have yet to appreciate what this General Election is really about. It also alerts us to how little meaningful distance there is between the two parties’ economic proposals. The huffing and puffing about numbers provides camouflage rather than clarity. … Read the article here

The myth of Corbyn’s radicalism

Given the fears generated by the prospect of a Corbyn-led government, just how radical is it likely to be? Should we really expect Britain’s first anti-capitalist government? Certainly not on the basis of what Corbyn and McDonnell and their cheerleaders have been writing and saying about their future Labour government. Read the full essay here.

When the next crisis comes, don’t blame the central bankers

President Trump’s tweets criticising the Federal Reserve bank, and the European Central Bank, draw attention to how prominent central banking has become over recent years. Central banking’s high profile today marks a significant shift from earlier times. Central banking used to be regarded as a necessary activity that most people knew existed, but few could get that excited about.

Increasingly over the past three decades the central banks have attained a much more prominent role, not only in the US but across the mature industrial countries. This has had nothing to do with changes to the calibre of central bankers, or to the development of new banking techniques. Instead, it was primarily a response to the exhaustion of Western politics that became more evident from the second half of the 1980s.

There are three important features of central banking in modern mature economies. First, the misleading fallacy of central bank ‘independence’. Second, the associated sheltering of politicians from responsibility for the economy. And third, the waning efficacy of central banking.

Read the full article here.

How to help British Steel workers

News broke last week that British Steel had been placed in compulsory liquidation, putting 5,000 jobs at risk. This has sparked debate on what to do about the ailing British steel industry and the people impacted upon. The best, and most honest, way the government can help the employees is to let failing steel plants go under and sponsor all the people affected during the transition into better and more lasting jobs that they should be doing much more to help create.  Read the full article here.

Trade wars cause real wars? It’s not that simple

President Trump’s imposition of steel and aluminium tariffs is counterproductive for the US economy in several ways. It will increase import costs and hit US businesses and consumers. It will cause tariff retaliation from other countries, thus restricting America’s export sales. But, more importantly, it will inhibit economic advancement. Tariffs are anti-growth and hold back economic renewal at home. They shield domestic companies from engaging in the long-term investments needed to grow productivity. And in today’s depressed conditions, they act to reinforce stagnation.

Read the full article here