Danny Alexander's Challenge

This is the global lending merry go-round as explained for the general public by two leading Australian economists, wisely employing a variation of the Socratic method.



There is an answer to all this, you know, and it's called 'cuts'. I wonder if young Danny Alexander is up to the challenge. Ha! Fat chance.

Remember John Redwood? We might have had a chance with him.

Hat tip: Tangled Web

Meanwhile, In Other News...

Dow crashes 1000 points in 15 minutes on Greek/EU debt crisis. Wall Street thought it was a computer malfunction. It wasn't.

Um...

Source: CNBC

Winning The Argument

It should not be seen as much of a coincidence that on the day Greek debt is downgraded to junk, a poll comes out that lends weight to the view that the Tories are winning the key argument in this general election campaign, the economic argument.

The only game in town is Europe at the moment, with Portugal and, somewhere further down the road, Spain, next on the list for the dreaded rating drop. Whatever the virtues of wonderful and exciting policies such as Michael Gove's brilliant education plan, which has already caused a Damascene conversion of former Fabian research chairman and now editor of the Jewish Chronicle (Martin Bright take note), Stephen Pollard, the vindication of the Tories in at least promising to focus urgently on Britain's own Brown/Labour-caused debt crisis is surely now unchallengeable. Brown and Labour can go on denying the seriousness of the crisis all they want, but that will not make it go away.

And that's clearly why people increasingly are now seeing that they must therefore make Labour go away on May 6th. The stakes have never been higher - for everyone. One thing's for sure, a hung parliament or, heaven forbid, five more years of Brown - though one could and most likely would lead to the other - and we would be the ones in the unfortunate Greeks' shoes next: 16+% government borrowing interest rates, a shattered credit rating and staring down both barrels of a titanic debt default and a bombed out economy.

But the message is finally getting through: Brown or Clegg mean economic crisis and meltdown. And only the Tories offer any hope of averting both.

Let's Talk About Debt

Who would have thought it? After years of denial Brown finally admits, sort of, responsibility for the banking collapse by deregulating them 'in the nineties', thus proving, incidentally, that the Tory banking regulatory checks and balances worked perfectly. If it ain't broke, Brown fixes it. Now Britain's broke.

Speaking of which, I am hoping tonight that Cameron nails Brown on the scale of the debt crisis this country faces and that his policies caused. The fact that the mainstream media can't seem to grasp this, nor most of the bizarre economic 'expert' commentariat of this country (the Anatole Kaletsky-types), should not frighten the Tory leader. He must make it plain to all that we really can't go on like this. Brown can't blame the banks for making him cave in on deregulation 'in the nineties'. And, as Dan Hannan I think said yesterday, if the banks' advice about deregulation was wrong - and Brown shouldn't have listened to it - why did he decide to listen to the same bankers over the public, trillion-pound bailout? Fool me once and all that. Two wrongs don't make a right.

Debt. Cameron's got to talk about it, not just to demolish Brown, but to be straight with the electorate about the scale of the challenge Brown's scorched earth policies have left for a Conservative government to repair and for future generations to pay off. We are, indeed, all in this together. Everyone. So what is there to be done?

Well, the first thing to do is to face up to reality. The other two parties can't do this because they are wedded to a particular ideology of big state interventionism, so the Conservatives, as always, will have to do it on their own - with a little help from the population. The reality is that public spending is bankrupting the country. I'm not saying that Cameron should be specific about where the axe will fall, but fall it must - hard and often. He's got to level with people, but in a positive way: a little pain now; pleasure later. Reform everything, abolish waste, get more bang for your buck and fix the public finances, starting with Labour's nightmarish overspending, currently putting us at a humiliating 20% bankruptcy risk (five times higher than France, Germany or the USA).

Labour's all about pleasure, pleasure, pleasure -now, now, now - until there's simply no money left to pay for it. That's just infantile.

If the infants are returned, therefore, with "economy killer" Brown at the helm, this country will effectively be bankrupt within a few years.

As it is we already face a period of Labournomic, fake growth (where every £1 of expansion in the economy actually costs the taxpayer £2 in 'stimulus' money. Hey, that's just what the figures say.) As it is we already face a period of stagflation. As it is we already face what could be another lost decade, just like the last time Labour was in charge.

Anyway, those are the sorts of things Cameron needs to talk about, along with all the optimistic stuff, obviously. People want an effective leader, not just a charming one.

Brown is neither. Cameron could be both.

The World Wants Britain To Vote Tory

Read this and weep, Labour wreckers.

The world expects a rational conclusion to the British general election, and that means kicking out this Labour government. Only idiots and socialists would fail to do that simple thing, and let the entire world down as a consequence. But idiots and socialists - they're one in the same thing, aren't they? They refuse to "get it".

"Don't let them [the British idiots and socialists] ruin Britain again," is the clear message from the rest of planet earth.

The only way forward for Britain, and the only way the international community will listen to Britain again (rather than being lectured to by an arrogant, unrepresentative weirdo like Brown), is by meeting their expectations by voting the arrogant fool out. Forever.

We absolutely musn't disappoint the world.

Byrne Wriggling

Liam Byrne, no stranger to the odd pork pie, told a whole tray-full of them a few minutes ago during his interview on Radio 4. In response to the serious damage caused to Darling's tax-on-jobs NICS policy by 23 business leaders, who between them employ over 500,000 people, and who've come out in favour of the Tory proposal to more or less scrap the plans, Byrne wriggled, exaggerated, diverted and lied like only he can. The ever-changing Labour economic narrative has just morphed again, this time into an even bigger cutting machine.

For instance, while Darling was only a few days ago talking about £12Bn of 'efficiency savings' - of cutting Labour's massive overspending in other words - today Byrne talked about £35Bn in cuts. Where the hell did that come from? I'm sure he has an answer (he always does), but that's a monster leap in the cuts bidding war in just a couple of days, and gives some indication as to how hurt Labour's economic policies have been by the letter (the bigger the lie, the bigger the damage - it's always been proportional with Labour). Anyway, that's the first bit of wild exaggeration.

Then he goes on about the Tories 'magicking' up figures out of thin air (yes, Liam Byrne said that, ho ho). They will need to find an extra £9Bn in cuts, on top of Byrne's new £35Bn mega-number (he was on a roll by now). The reality is, of course, a little more modest. The Tories will need to find £11Bn in savings, of which £4.9Bn will be counted as a loss against the extra NI money that would come from Labour's tax hike and rest pumped back into the services they have ring-fenced. Byrne damned out of his own, lying mouth again, then.

Whatever the rights and wrongs of this Byrne wriggling, what it shows is that the Conservatives have won the argument on cuts; Byrne's wild numbers at least show that the debate is heading in the right direction, that the government must stop overspending so that it can cut the monstrous national debt. The other thing he singularly failed to do was attack the letter from the business leaders itself. Never once did he say that the businessmen were wrong about the tax on jobs, or, directly at least, that the Tory policy was wrong, either. He did make some feeble reference to the last NI rise, hilariously saying that jobs actually rose after it (it was well before Brown's bust, when public sector employment was still ballooning, and paid for by, you guessed it, tax rises lol), but the thrust of his trainwreck argument was that the Tories were right, but they're Tories, so they're still wrong.

Very lame, Liam. Even for you.

Massive win for the Tories.

Giant Redwood

Thanks to Iain Dale's heads-up, I've just seen what I think should and could be a politically game changing post by John Redwood on his blog. I say that because it made me realise, to my shame, that I've been as taken in by the Labour revisionist narrative on the economics of the Thatcher years as virtually everyone else has (and I dare "everyone else" to say otherwise). It's potentially game-changing because, for one, rather important thing, it's all evidentially true.

One of the myths perpretrated by Labour and the BBC is that Margaret Thatcher came in and cut public spending. She did not – spending on the main services grew rapidly under her control. She did cut plans in 1981 to help the recovery, but the overall figures for total public spending including capital, current and debt interest were:

1978-9 (last Labour year) £71.2 billion
1980-81 (first full Cons year) £120.2 billion
1981-82 £130 billion
1983-4 £137.5 billion

(These are all cash figures taken from the Red Books of the day – they also represent rises in real terms, though on a much smaller scale than the cash increases)

She tackled the deficit and the need to fuel growth by asset sales in the middle and later years, and by better control providing better value for money. She also got the high rate of inflation down which she inherited, and put through crucial trade union and nationalised industry reforms.

Margaret Thatcher had no need to cut public spending by the £39 billion Labour now say they need to reduce it by,(or by the then equivalent) because she ran things more prudently and did not borrow so much.

I do wish the commentators and interviewers wouold look at the numbers and the published facts, instead of all this misleading spin. They could also point out that say a 10% per cent overall cut over 4 years is a very modest cut by private sector standards, and has been delivered by many private sector companies with no dimunution in quality of service.

There are several simple truths – it is possible to cut public spending by substantial amounts without sacking a single nurse, teacher, doctor, soldier. It is possible to cut some public spending and make things better by doing so. It is possible to greatly increase efficiency throughout the public sector, if only someone started to run it with the taxpayers interests at heart.

It is also an immutable law of public sector reform in the UK that Labour spin doctors and some BBC journalists will wish to keep alive the myth of the massive “cuts” of Margaret Thatcher, and the myth that all cuts are damaging if not politically impossible.

It's so obviously time for a new Conservative government because it's so obviously time to get on with reversing the dire consequences of the devastating new Labour decline. Watching that little weasel Liam Byrne on Question Time just now, the first part of whose incoherent outgas was to whine incongruously that it's time "to front up" to the economic disaster confronting Britain (that his party designed, facilitated and delivered), simply reinforces the fact that, astonishing though it might seem, his own second point was entirely correct, though not quite in the way that he intended (surprise surprise): we are faced with a "clear choice" between Labour and the Conservative Party in the general election. That choice amounts either to more of the same under Brown, or an honest attack on Brown's economic crisis under the Tories.

Not an especially tough choice, then, is it, actually?

Finally, Some Real Perspective On Darling's Larceny Budget

Jeff Randall, as usual, has said precisely what needed to be said (ie: the truth) about the implications of Labour's latest act of political violence against the country we somehow collectively permitted it to ruin once again. Now don't get me wrong. I'm a grown-up (sort of) so I can take a bunch of socialist tax rises and spending lunacy on the chin. I'd expect nothing less from these power-hungry economic illiterates.

What I will not tolerate, at all, however, is the prospect of future generations having to pick up the bill for their rank electioneering and amoral, scorched earth economic blitz. Randall explains how and why this is precisely what will happen if the current voting generation really is stupid enough to allow the Labour fraud to work come the general election.

I'm no longer in the habit of lifting whole pieces from other sites (it breaks one of the ten blogging commandments that I take pretty seriously these days), but there are exceptions. This is most certainly one of them, because it's too important to ignore:

If you want to know what would become of Britain were Labour to win another five years in power, turn to page 189 of the Treasury's Budget book. Before you do so, however, slip into a straitjacket and gulp down an elephant tranquilliser. Prepare to feel like Jack Nicholson in One Flew Over the Cuckoo's Nest as he was administered huge electric shocks.

In Table C3 – Current and Capital Budgets – there's a line showing Public Sector Net Debt, ie how much we, as a country, will owe our creditors (not including personal borrowings). Now, cast your eyes over the column
"2014-15". Pow! I bet that hurt. Have another go: it's not a printing error.

Yes, according to the Treasury's forecasts, the United Kingdom will nearly double its indebtedness from £776 billion (in 2009-10) to £1.4 trillion. Even in Gordon Brown's devalued, debased and degraded system of accounting, that is still a poleaxing sum, equal to about one year's national output.

It gets worse, because this unprecedented and unimaginable debt projection is based on Alistair Darling's optimistic assumption that, from 2010-11, the UK's economic growth will bounce back to 3-3.5 per cent, well above long-term trend. If you are feeling confused, don't worry, you are meant to be.

Listen to the assurances of Mr Brown – that his ministers are acting to "halve the deficit" – and you might be forgiven for thinking that there's a credible plan to reduce our national debt. In fact, the very opposite is true.

Labour's plan, if one can so dignify it, involves a viral proliferation of state borrowing. In effect, the Government has turned the country into a home-owner whose mortgage is too onerous. Interest obligations are increasing faster than our ability to repay. Money goes out of the national account every month, but the capital owed is ballooning.

Consider this: the UK's deficit (annual shortfall) is scheduled to drop over the course of the next five years to £163 billion, £131 billion, £110 billion, £89 billion and £74 billion. But total state debt in the same period will rise to £952 billion, £1,095 billion, £1,218 billion, £1,320 billion and £1,406 billion. At that point, the Treasury's Debt Management Office will be humming like a Guangdong sweatshop.

In his Budget speech, the Chancellor was reserved, cautioning that there is nothing "pre-ordained" about our exit from recession and "there are still uncertainties". But when it comes to inventing numbers to suit his political agenda, the calculations are sexed up with a Panglossian twist.

It makes no sense to warn that Britain's fragile recovery could not possibly withstand the rigours of the Conservatives' tough love, while at the same time attaching to it an assumption of turbo-boosted expansion for next year and the one after. As Ed Balls would not say, this a non-sequitur.

Never mind, let's for argument's sake accept that Mr Darling's wonderland becomes reality and everything in the Treasury's crystal ball turns out to be true. How much will we, Britain's taxpaying classes, have to fork out annually for the pleasure of holding £1.4 trillion of debt? Go on, have a guess.

Well, next year the bill will be £43 billion on £952 billion of debt, an implied interest rate of 4.5 per cent. Apply that to £1.4 trillion and by 2014-5 those who contribute to the Chancellor's coffers will be forking out £63 billion a year in interest. That's 150 per cent of our current defence budget and three times what we will spend next year on industry, agriculture and employment.

Time for another happy pill, because the real outcome will almost certainly be more painful than that. For a start, the OECD rejects Mr Darling's growth prediction, insisting that Britain's economy will expand next year by only 2.2 per cent. Without a drastic slowing of Labour's spending binge, weaker growth will inevitably necessitate even higher levels of state borrowing.

Then there's the cost of servicing that debt mountain. Today's rock-bottom interest rates are unlikely to be on offer come 2014-5. Add these factors together and it is not unreasonable to conclude that Britain's annual interest bill could be approaching £100 billion five years hence.

This is legalised theft, a national disgrace. Under the bogus banner of "fairness", the Government is stealing from our children's tomorrow in order to buy votes today. It's bad enough that the current generation of university students – including those at third-rate former technical colleges – will emerge with an average debt of £23,500 (see last year's survey on push.co.uk), but they will also have to compensate for their forefathers' profligacy.

When he was in opposition, Mr Brown lambasted John Major's government for "the costs of failure", by which he meant the bills for unemployment and debt interest. He was right to do so. Unfortunately, on this Prime Minister's watch, those very same costs are rocketing out of control. His steadfast refusal to contemplate affordable spending has created an island of debt junkies: economic vandalism.

And for what? Clearly much of that extra funding for education – lots of nice teaching assistants – isn't working, otherwise Mr Brown's little helper, Mr Balls, would not be so angered by the success of grammar and private schools. Next year, the Government will spend £89 billion on education (an 80 per cent increase in 10 years) and yet our best universities are being strong-armed into accepting comprehensive-school pupils with sub-standard A-levels, in order to make up for a state system that is failing the poor.

If we are to extricate ourselves from this dung hill of Labour's making, Britain has three choices. We can default, an option not even Mr Darling favours. We can raise taxes, and that is already happening. But to knock a hole in that £1.4 trillion, punitive taxation would need to extend so far down the food chain that even dinner ladies would be heading for Zurich.

That leaves fiscal responsibility. We can stop pretending that the state is a machine for ever-increasing mass entitlement and, instead, align public-sector spending with our ability to pay.

The trouble is, while Mr Brown remains in charge – and the latest poll in the marginal constituencies suggests he may yet survive – this will never happen. He will always use the public purse as a tool for his party's advantage.

Professor Philip Booth of Cass Business School sums up the problem: "Almost every Budget measure [on Wednesday] involved a spending favour for some small group or other, or some tax relief for a group that the Government hopes to sway behind the Labour Party at the election."

Thanks to Channel 4's Dispatches, we learned this week that the daily rate for former Labour ministers "on the make" is £5,000. Perhaps we should pay the entire Cabinet that rate to clear off for good and save ourselves a fortune.

Five more years of Labour? Over my dead body.

So When's The Real Budget?

From what I've read so far, 'trivial tinkering' is about as generous a term I could think of to describe what is, beyond all question, the most inept and irresponsible response to Britain's debt crisis that Labour could have managed, desperate as they are not to confront the consequences of Gordon Brown's economic car crash before the general election. We got the usual cowardly hammering of harmless drinkers and smokers, the usual mindless fuel duty increases (staggered, as if that matters during a devaluation) and the usual (from Labour, especially under Brown, but now under Darling) stealth tax increases, which are being deciphered from the small print by various sifters and sleuth bloggers as we speak.

The giveaways were pathetic too. Raising the stamp duty threshold to encourage first time buyers will have no such effect. It is, when put into perspective, a tiny tax break. Not being able to get a mortgage on decent terms, or a mortgage that any first time buyer with half a brain will know would become an unaffordable millstone with the first interest rate hike are the real problems. So, no help there. As for the attempt to woo the grey vote once more, well, it's nice for my folks to look forward to a winter fuel allowance again. But now that the worst of this winter is just about over, I can't see them being overly impressed with this straightforward bribe. They'll still have to stump up £2000+ a year for gas and electricity, a constant struggle for pensioners - who are hardly excessive users. See? Pathetic. And where were the cuts? Inadequate and slipped in under the radar.

In reality, therefore, this was a white noise budget with no clear purpose and no clear goal. I note with great pleasure that Cameron was especially thorough in his demolition of it, of Labour's latest ruin of Britain and of the man responsible for it all, James Gordon Brown. Five more years of this? You need your head examined if you seriously want that.

But if you really are as determined as I am to see the end of Brown and his ultra-corrupt government, but can't vote for Cameron for whatever petty reason, then just remember: If you do that then you will split the vote and you will get five more years of Brown. And you'll only have yourself to blame. Putting prejudice before country is as sure a way of letting these useless wreckers back in by default as actually voting for them.

I would have thought this burnt-out budget of a burnt-out government would have provided reason enough to wake up, smell the coffee, vote Tory and finally get them out.

Then, fifty days after that happy day, we'll have the real budget. You know, a Conservative budget that will begin the process of reversing the catastrophic damage long years of a Labour government has caused to the United Kingdom. Again.

Budget Bluster

What a load of laughable lightweight rhetoric. "I believe that government can make a difference," whimpers Darling. Yes, mate. But not this one. Not your bust government.

The whole tone of the thing makes me think that he's decided to vote Tory himself, actually (on the sly), because then, in his confused mind, at least he could guarantee the "big changes" he thinks we so desperately need - without Gordon there to wreck them, that is. Well, at least that's two things we can agree on then: the need for big changes and the necessity to vote Conservative to get them.

Peter Hoskin was a little less (a very little less) scathing about this pre-budget manure. He also thinks it's a signal that Darling's nicked another Tory policy and is going to cut business tax. I doubt it will be handled competently even if he does, however, given this nightmare government's record when it comes to the private, productive heart of the British economy. What's more, you can guarantee that it will be paid for not with vital cuts in government debt and overspending, but with tax hikes everywhere. Prepare to become a lot poorer after tomorrow, everyone.

Epic, unravelling fail, 24 hours before it's even happened.

Brown's Death Rattle

No matter what the increasingly irritating (is that possible?) Nick Robinson might think, quoting himself as usual - always a very bad sign - this was yet another trainwreck interview from Gordon "give me a chance to finish the job of destroying the country" Brown this morning. (Just remember, for instance, that when he growls that ridiculous phrase "continue the stimulus" he really means "continue adding to and Britain's, titanic, horrifying debt mountain".)



You cannot believe word one of a man who thinks that by saying he's 'cutting the deficit', he'll fool people into thinking he's actually tackling the terrifying debt explosion that he, personally, created. They are not the same thing, and this appalling man, who caused the recession in Britain to be far worse thanks to years of hopeless economic mismanagement, is doing what he always has done: telling the country - and the world - a pack of absolute lies. If he does somehow hoodwink - or even bribe - the people of this country into letting him sneak back into power, the rest of the world will deliver its verdict in short order. The economic crisis that would follow would make Brown's first, record-breaking recession look like the good old days.

But I'm pretty confident that, thankfully, the British electorate won't be fooled again. Far from the twit-Robinson's idea that this was somehow an 'assured' performance by a man pretending to be some kind of latter day Churchill, this is Brown's political death rattle. It was the last, desperate diatribe of a very desperate man clinging on to office for dear political life. I'll give him this, he doesn't sell it cheaply. The unelected fraud, who, so it goes, 'thrives' in a crisis - and therefore causes one wherever he goes and with whatever he touches - will soon be gone, gone, gone, thank God.

Hard though it might be to take for some, it is time for the Tories to come back, once again to clear up a Labour government's economic catastrophe. It's time for the medicine.

And it's way beyond the time for us to be able to say 'good riddance' to the remorselessly dishonest, politically and nationally corrosive influence that has been and will always be James Gordon Brown, the worst prime minister ever to have been inflicted upon this nation.

Recession v2.0

I still don't believe that the 'first' recession has ended yet, however, even if you allow for a brief period of taxpayer stimulated 'growth', the next collapse into contraction is only moments away. But don't take my word for it. That's according to this Guardian report (yes, Guardian report), citing the talisman trader, Jim Rogers' predictions.

Fears of a double-dip recession and a sterling crisis in the run-up to the election were raised last night amid news of collapsing investment in British industry and a warning from one of the world's leading financiers that the pound could plummet within weeks.

The pound fell sharply on the foreign exchange markets after a day of grim economic news which saw an admission from RBS that it had missed government targets for business lending, a downgrading of the UK growth prospects by the European commission and a warning from the CBI that consumer spending was likely to remain weak ahead of polling day.

Sterling, already down by a cent against the dollar following the release of official figures showing capital expenditure plunging by almost a quarter between late 2008 and late 2009, saw its losses doubled after Jim Rogers, the former business partner of speculator George Soros, said sterling was a potential "basket case".

The rest of the article hardly makes for happier reading, either, at least if you're a Brownite, I suppose. If you're a realist, (like Rogers - and lots of other people), then you'll know that after Brown bet the Bank of England on spending his way to the winning of, finally, a mandate to ruin govern Britain, there is now nowhere else to go for him, his party and for the entire country but down the debt plughole. Labourists, of course, will be reading the article too, and may be (maybe already have been) convinced that from here on in, with Labour somehow narrowing the gap in a few polls (though they'd be very foolish to trust them), things can only get worse.

More reason to believe Guido's mysterious BBC source, then, who said that the election will be called this weekend.

Bring it on (finally).

Randall On Darling

Jeff Randall has done it again. In his latest piece for the Telegraph, he considers his recent, possibly game-changing interview with Alistair Darling, which produced arguably one of the most memorable quotes of the Brown years. You know, the one about the 'forces of hell' being 'unleashed' - by, er, the son of the manse himself. Randall is at his sparkling best in this piece, as this hefty taste will, I hope, demonstrate:

Renewed allegations about Mr Brown’s bullying had surfaced at the weekend, when The Observer published extracts from Andrew Rawnsley’s new book, The End of the Party. The Chancellor knew that he would be facing a few bouncers on the subject, almost certainly on the way that Number 10 had tried to intimidate him in the past, especially after he had predicted in the summer of 2008 that Britain’s downturn would be the worst for 60 years.

Mr Darling was not caught off guard by me. He and his adviser, Catherine Macleod, had had plenty of time to formulate an appropriate response to the issue of Mr Brown’s bad temper. In the event, they went deliberately for the explosive option, a decision that would have been endorsed by the delightful Maggie Darling, the Chancellor’s bubbly but determined other half.

This was revenge at its most delicious: a platter of cryogenically modified resentment. From now until the election, and almost certainly beyond, Mr Brown’s cabal of slime merchants will be branded as the doers of the devil’s work: Forces of Hell, the Inferno’s Enforcers, Satan’s Storm troopers. The son of a preacher man has, it seems, been employing the wrong crowd.

After the interview, Mr Darling and his Treasury team accepted my offer to stay on for a few drinks. Over a glass of chablis and a bowl of Doritos, he chatted confidently about the task of reducing the United Kingdom’s unprecedented deficit. As we discussed the choice between lower spending and higher taxes, Miss Macleod’s BlackBerry was glowing like Chernobyl. The fallout had begun, yet the Chancellor seemed entirely unbothered.

I inferred from Mr Darling’s equanimity that he has accepted his fate. For him, the Downing Street game is nearly over. Even if Labour were to pull off a remarkable election victory, securing another overall majority, the chances of him being invited to remain as Chancellor are slimmer than a collection of Mr Brown’s witticisms. In the unlikely event that the Prime Minister finds himself back in charge, you can be sure that only loyal Yes Persons will be rehired.

Thus, Mr Darling has nothing to lose. He is unsackable before the election but, in political terms, unemployable after it.

This is why I like Randall so much, not just because he is always clear, illuminating and knows his own mind (a mind I more often than not totally agree with), but because he is fair, tough-but-amiable and, above all, lays almost 100% of the blame for grinding the British economy into the ground squarely at the door of the self-aggrandising weirdo wrecker, Gordon Brown. And rightly so.

Anyway, I won't go on - read it for yourself; it's certainly worth it. But be warned, Randall ends the piece on an ominous note about the true state of the public finances and the real scale of the Brown catastrophe that awaits the next government:

When near-bankrupt companies are taken over at the 11th hour by fresh management, it is often the case that their numbers are far worse than we had been led to understand. In desperation, dodgy directors try to hide the full extent of the horror in the vain hope of bluffing their way through. That is what Labour is doing to UK plc - and very soon its bluff will be called.

So don't believe the hype anybody (not that you do, of course). Whoever wins, things can only get tougher.

Incoherent Brown's Latest Smears Fool No-One

So today we have the first counterpunches from the sputtering Brown smear machine, on the back of some dumb remarks about Labour's debt crisis and out-of-control deficit spending by a bunch of tame Keynesians in a brace of suspiciously timed letters to the Financial Times. Well, more power to them but I prefer to listen to the previous day's crop of economists who rightly warned that we need to bring Labour's economic chaos under control now, or risk an even deeper crisis going forward. And as for Lord Mandelson of La La Land's latest slimy nonsense on the BBC a few minutes ago about businesses telling him that cutting the so-called stimulus now would be 'daft', well, Sir Richard Branson's comments two days ago pretty much shoots that drivel down in flames - and he's a pretty good businessman! Oh, and top work over Redcar Corus, Mandy. That was really slick. What a useless piece of vastly overrated spinning nothingness Mandelson really is.

But Brown. My God, this man is a piece of work. Let's just have a quick look at some of the latest, increasingly desperate claptrap coming out of his gawping piehole today. His claim, first of all, that this crisis was caused by the banks, suggests that he's retreated into the kind of cowardly, "bunker" mentality that caused people to realise how unsalvageably flawed he was, and totally unsuited to the office he took by default, in the first place. For the record, it was his policies and his light-touch, hopelessly inadequate system of regulation that allowed the banks to behave with such recklessness in the first place. It was his actual encouragement of the property bubble and the massive personal debt bubble that left people so exposed when the bust came. His behaviour, and blinkered, hateful arrogance in suggesting that he had 'abolished boom and bust', virtually guaranteed that when the bubble burst, Britain would be the most exposed major economy in the world and the British people would be the biggest losers. The point is, his ridiculous claim that this was 'all the banks' fault' is palpably ridiculous - and was proved as such long ago.

But that's just he start of it. Instead of stopping the digging while the hole wasn't too deep, he brings out the JCB. This is the Telegraph's report of his, quite frankly, lunatic remarks:

2010 must be the year of growth. It must not be the year when the economy dips back into recession.

''Instead of admitting the mistakes of private banks and institutions in causing the recession, the well-financed right-wing are not only trying to blame governments for the crisis but trying to use legitimate concerns about deficits to scare people into accepting a bleak and austere picture of the future for the majority, and then to use what's happening as a pretext for public services to be marginalised at precisely the moment they should become smarter and more personalised.

''They are using the talk of action on debt to conceal the hard fact that their real position is that they remain wedded, as they have always been, to an ideology that would always make government the problem and deny people the helping hand that government can be.''

While seeking to ''frighten'' voters about the scale of the debt, Conservatives failed to mention that growth would automatically cut into the UK's deficit and bolster investor confidence, said Mr Brown.

''Instead of helping the recovery in our country, Conservative dislike of government, bordering on hatred of government action, would risk recovery now,'' he said.

Never had I really understood how unhinged this guy actually is until I heard this stuff. Aside from the truly awe-inpiring level of economic illiteracy on display, there's the spiteful reference to the 'hatred' of the 'right'. With the former, someone needs to bellow this at the fraud relentlessly: it's not rocket science, Brown, it's basic economics: rising debt means rising inflation; rising inflation means interest rate hikes; interest rate hikes mean higher credit costs with the inevitable consequences of increased business failures, personal insolvencies, higher unemployment, worse public services and, you guessed it, a recession. Not growth, Brown, a r-e-c-e-s-s-i-o-n. Do you think it'd get through that four inch thick skull of his in the end? No, me neither.

Of course, though, we know the ulterior motive here. Brown does not give hoot-one about the catastrophe his "policies" would cause over the next few years, all he cares about, in his fevered political calculations, is the time when he finally, finally!, has to face the electorate. He thinks he can buy votes and sod the future. We are, quite simply, with Brown, back to square one. It's 2008-9 all over again. The guy is incapable of any other mode of thought or operation.

Only this time, with this horribly divisive speech, he's shown a little more of the true, tribal, irrational, Tory-hating core that we know is what fundamentally defines this appalling man. And this is where we see the incoherence:

...their real position is that they remain wedded, as they have always been, to an ideology that would always make government the problem and deny people the helping hand that government can be

This is a smear, obviously, but the scale of the misrepresentation is only topped by the scope of its implausibility. It hardly warrants scrutiny (it certainly doesn't bear any). However, I'll have a crack - again, just for the record. Clearly, as with most smears, it's what's omitted that's most revealing. For instance, it's not 'government' that the Conservatives have ever seen as 'the problem' (as far as I can discern, Tories aren't anarchists), it's big, inefficient government. Further, though, you notice how he confuses (and I don't believe this is deliberate - I think he actually might not understand the distinction, which, if true, is most revealing) the term 'government' with the term 'state'. Government makes policy and enacts law accordingly. The instruments of government (like the MoD), and taxpayer-funded institutions of public service (like the NHS), of which there are many, are what is generally understood, at least in the real world, to be 'the state'. When the instruments of government, public service institutions and government itself have been permitted to become so bloated, inefficient and unaffordable that they begin to cause, overall, more harm than good, then yes, they must be pruned, reformed and reset so that once more (or, in the case of some state institutions, 'for once') they can fulfil their putative functions. To deny any of this is to defy rational thought. But that's what Brown does, in choosing smear and mere narrow-minded tribalism over common sense and, simply, the truth. Plus ca change? Not really: this is Brown we're talking about.

The only difference this time is the incoherence. We're used to the Tory-hating smears - they go with the Brown territory. But combined - and total - confusion over the economy and the difference between government and state is something fairly new, at least to me. I can understand the economic incoherence. Given the state of the British economy after a decade of Chancellor Brown and three further years of him as First Lord of the Treasury, it's not hard to see where that comes from. But this government/state thing: I feel that he really, genuinely, doesn't see a difference; he thinks they are one and the same. Government is the State; people are merely units of that State whose sole purpose is to service it in order that it can provide for them.

Oh my God! Brown really is a socialist! So that's what's been bugging me all this time...

New Labour might have fooled some of the people some of the time, but Brown is fooling no one. His brand of state socialism, masquerading as some kind of government altruism, is not what Britain needs just now, thanks very much (did it ever?). Bring on the election so we can have done with it.

Make Labour History

Tony, whose Cogito Dexter blog won my sincere admiration many months ago, has asked us all to join him in his campaign to Make Labour History.

He has my full support to that end. If you really do want to secure a prosperous, free, pluralist and debt-free future for your children, in the finest traditions of our great country, Tony should also be able to count on yours.

I promise that I will do as much as I can to bring about that desirable, and, for everyone in Britain, and for the nation itself, that desperately vital outcome in this Year of Change, 2010.

Bottom line: if you want to save yourselves, your economy and your nation from total socialist destruction, then Vote Conservative - and make Labour history. After thirteen years of hurt, it's very much more than Labour deserves, and it's what we and our country so desperately need.

(Tony: sterling work, compadre. Outstanding.)

Understatement of the Year (So Far)

Nick "I know which side my bread is buttered" Robinson, BBC-Labour's tame political pundit, after the start of the UK's so-called economic recovery (0.1% to be adjusted is not exactly Darling's "trampoline" recovery now is it, especially after squillions in printed inflation-fuel has been chucked at it?), has just concluded on his hyper-moderated blog:

...some voters may note that we are still not securely out of the longest and deepest recession since the war and may conclude that the current custodians of the economy can no longer be trusted to finish the job.

You think?

The fact that Brown and his cohort of economic nincompoops and ne're-do-wells, whose now-legendary incompetence is only just about trumped by their compulsive mendacity, have managed to bankrupt the country in search of some sort of theoretical, artificially stimulated recovery that, as these figures show with devastating clarity, has utterly failed to materialise will not have gone unnoticed by the general public.

So, toenails, my old china, for "may conclude," read "decided a long time ago," and for "the current custodians of the economy," read "the Brownite, Labourist liars and wreckers," and for "can no longer be trusted to finish the job," read "are going to be lucky to get away with not being hanged en masse from the nearest tree, never mind an election defeat, for the cataclysmic economic harm they've managed to do to Britain, not to mention the desperate harm they've managed to do throughout British society, during their overlong period in office."

This is no time for understatement, you see!

But it is time for a Tory government. And if you read between Robinson's BBC-approved lines, even he knows that most sane people have known that for quite some time.

Billy Bragg Mashed

I thought the Daily Mash's reporting of Billy Bragg's principled hypocritical tax protest and celebtivist posturing was rather bloody funny.

DEFICIT REDUCTION WAS BASED ON SALES OF 'BETWEEN THE WARS', ADMITS DARLING

19-01-10

CHANCELLOR Alistair Darling has been forced to scrap his deficit reduction plan, admitting it was based entirely on sales of Billy Bragg's Between the Wars EP. Bragg says some RBS executives can now afford to buy a house as big as his Britain's 14th biggest pop-folk shouter is withholding his income tax in protest at Royal Bank of Scotland's continued insistence on being a bank. Bragg said: "The RBS bonuses echo the kind of backstage rider demands I never get to make at the Tolpuddle Martyrs Festival. I just hope I can make a difference before the Murdoch press hires someone to assassinate me." But the Treasury warned it will be forced to make even deeper cuts in public services, including those council-sponsored equality and diversity festivals where Bragg turns up and makes BMW-owning management consultants feel like students again for 20 minutes. Tom Logan, chief economist at Madeley-Finnegan, said: "This is potentially very serious. Five year gilts are currently being sold on the basis of guaranteed revenue streams from William Bloke and the ones he did with Wilco. "We don't want to have to use up the tax revenues from the Kirsty MacColl version of New England. We need that in case we go to war with China." Other left-wing musicians have supported Bragg's stance, with Paul Weller only declaring income from his last three solo albums and all that Style Council rubbish. Weller added: "But not Stanley Road or All Mod Cons. I'm not some fucking mug." A spokesman for the Inland Revenue said: "I've actually got a copy ofTalking With the Taxman About Poetry. Maybe he should do a new album called Talking With the Taxman About Spending 18 Months in Jail for Being a Marxist Twat." Meanwhile Bragg demanded that all banks should be run like the Co-operative with its green investment policy, fair trade mortgage refusals and the ethical way it charges you thirty quid whenever you go 1p over your limit.

You can read Billy Bragg's pile of disingenuous horse manure here, if you really want to. Some of the comments underneath it might make it worthwhile, I suppose. Like this one from 'unionjackjackson':

I similarly am withholding my tax from HRMC until we have a tory government and my money will be spent wisely.

unlike these labour tossers pissing it away.

Or this excellent one from the multi-posting Lefty-basher 'stevehill':

I'll visit you in prison Billy. Maybe.

Starving schools, hospitals, pensioners, benefit claimants etc of funds to make a protest is a particularly infantile form of toy throwing.Most bank staff are on or below the national average wage, their bonuses will be in the order of £1,000 or so, and they depend on this to pay their bills. The bank's assets - which you and I own - are essentially its people. They walk out of the door every night. You seem to accept that you can't veto HSBC or Barclays or Goldman Sachs bonuses. So how do you plan to stop the best people at RBS joining their rivals, causing the bankruptcy of RBS, the loss of 141,000 jobs, and a total write-off of the taxpayers' investment?

No, you're not an anarchist. But you're not being very smart.

Perhaps there is hope for Britain after all - so long as we all club together now to ensure that Bragg and his ilk never have any influence on the running and the future of our country again!

Then we can deal with the bankers properly. They'll keep.

Inflation Spike - The Double Dip Begins

No one likes hindsight very much, but it really should have gone without saying in the first place that when you print 200Bn quid of unreal money just to keep going month to month, are running a record structural deficit and have public debt exposure approaching 1.5 Trillion, then you are running the severe risk of diluting your currency's value to the point where it begins to hurt the entire economy - and hurt a lot. With inflation having spiked by 1.0% in one month, which is the largest jump on record, hitting 2.9% just as the first signs of recovery were (allegedly) being detected, then no amount of spin can disguise the fact that Britain is in big, big trouble.

There is, of course, some suspicion that this is all part of Brown's 'plan' (if that is what it can be called): bankrupt the country now in order to buy some kind of election victory and then inflate away all the debt regardless of the huge amount of damage that that will do to the prosperity of private citizens, especially those who are wealth creators, self-sufficient (prudent), and savers. It will also impact heavily on home ownership, of course - which is why I suppose there has been all the clamour on the left for a return to council housing recently. All this is naturally a socialist's wet dream - and it is precisely the total basket-case calamity that Thatcher had to confront in 1979.

But if it really is that ruinous old bastard Brown's intention to turn back the clock to the 70s, with low or no growth, high debt, high taxes and high inflation (aka: stagflation), then even someone as self-serving and cynical as he is (beyond any shadow of a doubt) is in for a severe shock. First, it won't work because people are on to him: no amount of attempted vote-buying is going to win him the mandate he has never, ever deserved, particularly if his 'plan' is to catapult Britain thirty-five years into the past, back into the economic dark ages (although some might say he has already done exactly that).

Second, it won't work because of the sheer scale of the crisis. It is unprecedented, relatively speaking, not just in the history of Britain, but the history of any major economic power, in terms of the scale of the exposure to a possible economic tempest. QE, as Fraser Nelson (one of the very few MSM journalists who have been warning us about the inflation crisis following swiftly on from the damp squib that was deflation) has said time and again, is uncharted territory. It's a nuclear option; a highly experimental and untested method of dealing with a crisis the nature of which is most likely not completely understood. It is also a one-shot deal. If, as increasingly seems to be the case, Brown and Darling have, in fact, completely failed to plan for rapidly rising prices (or, rather, a rapidly deteriorating purchasing power parity), then whatever stimulated (fake) recovery they were hoping for will be choked off in short order. The danger of a double dip recession, that little old I (for one) starting talking about last May for heaven's sake, is now not so much a danger as a certainty. But while it's a familiar story so far as Labour is concerned, what is unfamiliar this time, as we roll our eyes muttering 'here we go again,' is that we will be entering the second recession with literally less than nothing left in the kitty. What must follow, regardless of Labour's lies, and thanks to their terrible economic mismanagement across the board, is a rapid fall in the overall standard of living. The rest of the world will not prop us up for much longer - and we have no more bullets in the gun.

Third, Brown's plan to inflate away Britain's debt won't work for the simplest reasons of all - the real-world economic ones. Let us say that by some satanic twist of fate Brown won the election, thus enabling him to continue to get away with QE for a bit longer (and that can be measured in weeks now rather than months), what are the eonomic realities that will hunt him down and expose him for the utter fraud and socialist economic illiterate that he is?

The simplest point is about levels of public spending. (I know you know this but writing it down helps me to get it clear in my own noodle!) As inflation continues to rise and money is worth less (expressed as price and wage hikes), people can buy less, economic activity is hampered because businesses are starved of cash and crippled by ever-increasing pay demands, and, of course, rising interest rates (as the BofE tries desperately to control the collapse) and, following on from that, the social security bill increases as a result of rising unemployment, an increase in income support costs (as more and more people fall into the poverty trap) and, as the spiral gathers pace, the subsequent increase in debt further devaluing the currency - leading to more inflation and even higher interest rates. Nothing personal, you see. It's just how the world works - no matter what your politics!

Point is, do not believe any of the propaganda from any of the politicians, but especially the socialists (many of whom quietly wish this calamity upon the nation for their own, peverse political reasons), because the signs are that these economic realities are already here.

There is nowhere for Brown (fortunately) or us (sadly) to hide any more.

A massive, unprecented, 1% inflation spike in one month is just the start of it. Batten down your financial hatches folks. This is going to be one hell of a storm.

UK Debt Downgrade "80% Certain"

Tomorrow's DT will make further horrible reading for Brown and Darling (I dearly hope). According to one of their economics journos, Ed Conway, the head of one of Britain's leading fund managers, Neil Woodford, Darling's and Brown's inability to face up to the unsustainable scale of their spending and consequently gigantic debt levels - at least in peacetime - is now virtually certain to lead to a credit rating downgrade and, far worse, a subsequent debt spiral. Woodford is quoted as saying:

I would argue that there is a high probability... a decent chance that we will be downgraded, and it is a near certainty if we do not, in the wake of the next election, properly deal with the deficit. There are some major challenges here. If we do not take the medicine, there will inevitably be a downgrade. If we do, we have a chance of escaping a downgrade.

After the PIMCO shock, where their experts determined that there was an 80% probability of a downgrade from AAA and acted accordingly by dumping UK gilts, it seems this gathering economic storm is going to make the current arctic weather and subsequent national chaos look like a soft, Barbados beach on a warm day.

And the only party with a plan for getting us out of it with a coherent fiscal policy, designed to allow monetary policy to remain loose by avoiding the downgrade and subsequent, devastating interest rate rises and inflation, thus enabling a strengthening in any recovery, is the Conservative party. Philip Hammond proved that yesterday.

No wonder the Tories want an election right away. They're not bluffing - it's vital that we have a change of government because it really is the 11th hour for Britain's finances and economy.

Action must be taken - now!

By the way, well done Gordon. Well done Darling. Britain really is nearly bankrupt, thanks to you. Marvellous.

Brown's Gilt Trip

Mark Bathgate warns that Brown faces a major headache next month. The cost of Britain's debt is creeping up, especially after PIMCO decided to dump UK gilts, making it more and more expensive to fund, as Bathgate calls it neatly, Brown's "fiscal debauchery". As Bathgate says:

With inflation continuing to "surprise" on the upside, how long can the Bank of England keep justifying printing money? Now we learn that the Bank of England had printed £193.5 billion to finance government spending by the end of last week. So we are only four weeks to the next MPC meeting – but there is only £6.5 billion of new money left for them to pump out before they hit their £200 billion limit. Then we enter the scary territory I outlined in an earlier post. And Brown is still left needing around £15 billion of Gilt sales a month to finance his fiscal debauchery.

The Gilt market was fine while Brown's appointee's to the MPC were willing to keep the printing presses rolling to the tune of £1 billion a day through the summer. But...as inflation has started to rise quickly, the pace of money-printing and Gilt purchases has had to slow.

This has become a race for Brown, between the general election and a visit from the IMF. How long can he keep hosing borrowed money away, with no cogent plan to bring spending under control, or, in fact, no apparent acceptance even of the need to do so? The truth is, he can't face up to reality, but reality is about to bite. However, his head is currently buried deep in the snow. In what appears to be yet another classic Brownian displacement activity, he's taken personal control of the nation's dwindling grit supplies. Well, Gordon, this country and your diabolical premiership are on life support. And it's about to be switched off.

Seems to me this is an argument for a March election, but I reckon Brown is running another kind of race in his fevered imagination. He thinks that if he hangs on long enough, then the recovery will have begun and he will be able to take credit for it.
It won't matter to him that we were first in and last out (by a mile).

What he doesn't seem to realise is that the rest of the world, especially the parts having to fund his economic lunacy and political dishonesty, couldn't care two hoots about his political destiny, or the financial stability of Britain, for that matter. Why should they? But they could well be about to pull the plug, and yet the Bank of England has no choice. With inflation rising, adding to the strain on an economy mired in debt and still, officially, in recession, it will not, as Mark Bathgate suggests, be willing to go beyond the £200Bn funny money level. Next month will therefore be crunch time for Brown. He's gambling with the British economy and people's livelihoods just to save his own political skin.

But even if he thinks he's got away with it, with the start of a limited recovery (after the longest, deepest recession in the world, remember), he will not be forgiven for his behaviour and for the disastrous state he has left Britain in. That's the misjudgment he, and many of his jellyfish Labourist co-conspirators, have consistently failed to comprehend.

Give us the election so that we can explain it to them.

Meanwhile, as Bathgate says:

The market has already started to push up the cost of borrowing for the UK. It's risen by 0.6 percent over recent weeks. Despite having official rates over half a percent lower, UK borrowing costs are now 0.7 percent higher than those of Germany. I suspect the Gilt market will be very vulnerable in coming weeks.

Hang on to your hats, folks, we're all on Brown's gilt trip and it's gonna be one hell of a bumpy ride.