Lies, Damned Lies, and Economic Statistics

The Chancellors debate was even more disappointing that I had anticipated. Perhaps I should be thankful that we were in the middle of a digital switchover debacle so the wise words of Alistair and friends were lost in an analogue wilderness somewhere between the Wenvoe and Mendip transmitters.

There were several examples of mislabelling that George Orwell would have been proud of. First, the idea of a debate, which surely should involve some element of fundamental disagreement, honestly explored, and with progress towards a resolution? What we saw was rather a performance, each man presenting a show of confidence that his obvious nerves revealed as dishonest. Each offering defensive responses intended to maintain face. The underlying premise of the debate was that capitalism works, an assumption that flies in the face of the financial catastrophe of the past few years, not to mention the environmental crisis that has been accelerating throughout the past several decades. Without this question being put, the whole event was revealed as a charade.

Then there was the fact that it was called 'Ask the Chancellors'. This seems to chime with the widely held, although deeply misguided, notion that believers in the catechism of neoclassical economics have anything useful to tell us about sorting out the economic mess we're in. These are the guys who learned this orthodox faith at university: it is hardly likely that they are going to be the ones to trace the path towards a stable and sustainable future.

Meanwhile the masochist of the year competition continues. Our three would-be chancellors are now wishing to match their prowess against Madame La Guillotine herself: putative Iron Chancellors competing with the Iron Lady. This is an embarrassing public display of posturing that does nothing to address the question of how we protect the vulnerable in our society in a situation where the economic system we have signed up to has allowed the money they have earned and the value they have created to be stolen from them.

All three must have seen the figures that will confront the person who actually walks into 11 Downing Street on May 7th. The graph illustrates how The Economist sees the situation (it illustrates the ratio of debt to GDP for a number of countries). These data were derived from World Bank sources. They seem to bear little resemblance to what the UK is reporting to the EU and offer no justification for the singling out of Greece for a particular beating by the foreign exchange markets. Given that these figures do not include either our private debts or our off-balance-sheet debts, it is a miracle that the pound is still trading at all Tweet

A Load of Old Balls?

Puns like this could be everywhere by the end of the week, if they pundits are right and disastrous results for labour lead to a cabinet reshuffle that goes almost to the top. Gordon Brown's bag-man Ed Balls is a tabloid headline-writers dream - my colleague the Green Bean Counter worked with him at the Treasury many years ago and says they have a large collection or pre-made plays on his name they are no doubt willing to share.

Now Darling himself, whether fairly or unfairly, has been caught up in the gutter politics of allowances he is unlikely to survive. I was slow to catch onto the expenses scandal, considering it a distraction from the real issues and an example of political displacement activity. But it seems to be more of a touchstone for a general resentment with the unequal nature of our society and a token issue for the backlog of fury and disillusionment that the economic and financial crisis are causing.

The journalists and the public have the wrong target, but their anger is valid. The rage against the unfair distribution of resources may be expressed in terms of moats and duck-houses but has been seeded by the fury at the realisation that the elite class in this country have created a framework of laws and regulations that has enabled them to extract the value of the economy that the working people of the country have created.

My accountant friend informs me that 'flipping' your primary residence to avoid Capital Gains Tax is quite within the rules, and that people who are privileged enough to have two houses do it all the time. (I do live on the edge of the Cotswolds, remember.) The public revulsion is not that people have done anything illegal but that the laws that make this acceptable are laws designed by the rich to benefit the rich. The Capital Gains Revenue that should have paid for hospitals and schools was legaly, but immorally, avoided. Tweet