"I'm fed up of hearing that lie repeated by the media and by our coalition government in Westminster. We have a deficit not because the legacy of the Labour Party, we have a deficit because we had a global recession which we acted to stop turning into a depression. We didn't have a deficit until 2008/2009 when the global recession struck. Its a lie and I'm fed up of hearing it."
For the benefit of Owen Smith here are Labour government borrowing figures (i.e. 'deficit') from 2002 until 2008, a period during which, according to Owen Smith, we had no deficit:
2002 - £19bn
2003 - £34bn
2004 - £36bn
2005 - £41bn
2006 - £30bn
2007 - £33bn
So, by my reckoning that makes a total of £193bn of cumulated debt ran up whilst Labour went on an unprecedented spending spree during the so called good years -- and long before the first cracks emerged in the UK economy when the government was forced to nationalise Northern Rock in February 2008. Northern Rock, incidentally, was a bank which failed not because of a global recession but mainly because it had seriously overstretched itself with aggressive mortgage sales based an overinflated house price bubble in this country -- not elsewhere in the world. So much for Owen Smith and "we didn't have a deficit until 2008/2009 when the global recession struck".
What we can conclude is this: after undoubtedly being more than partially responsible for running up the largest government debt since the second world war, Welsh Labour figures like Owen Smith now seem content to withdraw from the field and jeer at those trying to tackle it, whilst at the same time telling the rest of us that they had absolutely nothing to do with making the mess in the first place.
21 comments:
Druid
Its endemic, Lying that is.
Whilst we are on that subject. Are we getting near the large article on the Grants situation you mentioned at 16:44 on 18th October?
Keep up the good work.
"Its endemic, Lying that is."
It is. The reality is that effective government is a myth. In order to appease the people and look as though they might be worth the considerable salt we give them, borrowing and making a big 'bang' with wonderful new projects has been the order of the day for Labour.
But it would be a mistake, as I suspect the Rt. Hon. Druid is doing, to suggest that the smoke and mirrors of borrowing is limited to Labour; it's something that all governments in most countries have been involved with. Wihtout it, we'd all conclude that politicians were an expensive joke.
I found this article covers the issue nicely:
http://news.bbc.co.uk/1/hi/magazine/7733794.stm
I remember being on "Dau o'r Bae", the Radio Cymru politics show, along with Carwyn Jones just as the last recession was starting.
I remember him parroting the same line as Owen Smith - that very little could be done to alleviate the situation because of global factors and that the Labour Party was not to blame etc etc.
I countered by saying that whilst he was technically correct about the Labour Government being able to do little to stimulate the economy, the reason for this was because they had run up a massive deficit through reckless spending, which meant that they had no money left in the pot to cut business taxes, for example,
The response, silence.
Most labour supporters fall into two camps, the ones that are "believers" and those who are "deceivers."
the believers are those who swallowed the bait and believe in the caring sharing equal society.
the deceivers say they are labour but are invariably on their path to riches preaching "do as I say not do as I do" as they travel in Zills, are profligate and sponge off everyone whilst preaching what they believe in order to become wealthy....i think not.
name a senior labour politician with zilch!
Anon 07:52 - Its in the pipeline. Watch this space.
TGC - I am certainly not trying to suggest that government borrowing is limited to Labour. I am merely pointing out that Owen Smith is telling a very deliberate lie, i.e. that (a) Labour did not run a deficit prior to 2008; and (b) any borrowing from 2008 onwards was due to measures to deal with a global recession alone.
As I have shown: (a) Labour did indeed borrow considerable amounts of money from 2002-07 when they effectively grew the size of the state beyond the willingness of the public to pay for it with taxes, and effectively laid the foundations of the 'structural deficit' which we are now being forced to act to reduce. And (b) yes, there was a global recession, but there was also a serious readjustment in the UK economy brought about by the bursting of the UK house price bubble (which anyway had been needlessly prolonged due to Gordon Brown changing the inflation index which the Bank of England tracks to one which didn't include house prices). When Northern Rock fell, it fell not because of a 'global recession' but because it overextended itself with aggressive mortgage sales and under-regulation (120% mortgages, remember them?).
Anon 8:59
And your point is, have you not read Animal Farm. I’m still a believer, I believe that all irrespective of background should be given an equal chance to succeed, that the ‘competition’ should be fair. Sometimes to treat people as equals you need to remove the barriers that disadvantage them.
What no politician will tell you is that in order for the free market to work in addition to winners you need losers, sadly some are losers because they have been told the are no good to society.
I believe in communities, strong communities working together for the benefit of all and not just for the few. Nothing wrong with entrepreneurs though, look around the island and see how many schools and churches where paid for by successful entrepreneurs of the early twentieth century.
Put please because you are rich does not exclude you from caring, and because you say you care does not exclude you from becoming rich. Bill Gates is a fine example, and remember his wealth is all based on a slight of hand and an ruthless approach to business.
Your link seems to be broken.
Anon 12:32 - which link?
Anon 8 59
"name a senior labour politician with zilch"
Peter Hain?
Sorry Anon 8 59. I misunderstood your question.
I thought you meant credibilty, shame and charisma.
Is the Druid going to carry on his endless cheerleading for the Tories?
Will he make the same mistake he made at the GE when the Assembly election comes round?
Will we have an endless diet of pieces saying that the Tory candidate is the best thing since sliced bread?
Anon 14:34 Getting rather tired of this - It's the Druid blog, therefore why not?
Not saying I agree with everything the Druid says, but it’s called; just in case you have forgotten, freedom of speech - and a bit like a parrot I'll repeat if you have different opinions start your own blog.
TGC: Thanks for link to the Beeb article.
I agree that all political shades are as guilty as each other of blaming anyone but themselves.
BTW. If say something critical about the Tories that does not mean I'm in favour of Labour. If I say something critical of Labour then that does mean I'm in favour of the Tories. There tends to be a lot of bi-partisanship on here.
I'm taking the 'South Park ammendment' as I'm equally critical of all politicians and political parties.
Druid, do you not think that the chief executives of Northern Rock might have had more to do with the collapse of the bank than the government?
I don't recall Mr Brown forcing any of the banks to take out high risk debts, although he certainly helped create the conditions for them to do so.
Prometheus
"Druid, do you not think that the chief executives of Northern Rock might have had more to do with the collapse of the bank than the government? "
Certainly I do, they were foolish in the extreme. Still I will blame Brown for (a) introducing a regulatory system that didn't realise a house price bubble was forming despite ample evidence; for (b) fueling that bubble by allowing 120% mortgages and 100% buy-to-let mortgages; (c) changing the measure of inflation tracked by the Bank of England to one which did not include house prices, thus sustaining the bubble by keeping interest rates too low for too long despite rampant house price inflation.
Druid: I agree with your points a, b & c.
I too don't like the fact that the measures of inflation were changed to keep house prices out of the equation.
I still think that increasing inflation is a very real danger and needs to be carefully tracked using measures that account for all basic domestic expenditures.
(Food, clothes, housing costs, transportation costs, utility bills, interest charge rates, etc.)
The measures of inflation should be the basics - food, energy, transport and housing (both rent & mortgage).
Instead it's iPods, Hannah Montana fancy dress outfits, gerbil cage water bottles, Chilean red wine, french goats cheese, DVDs of Friends seasons 1-6 and fridge magnets.
And politicians wonder why they have less credibility than Wayne Rooney.
@Red flag - Quality!
And what's more you are considered officially poor if you and your brood do not have all that is on that second list.
The 'poor' from the early 20th C would have a fit if they saw what the 'poor' of today have to 'suffer'
Back to the days of, first up, best dressed.
Much of the Brown deficit was money that desperately needed to be pledged to repair the damage done by decades of tory neglect. His mistake, along with every other believer in the markets, was to think it could go on forever.
His strength, unlike every other politician at the time, was to see what had to be done to keep the lights on.
The real culprits for the crunch were everyone with a mortgage and a credit card. It remains to be seen whether they are mugs enough to fall for the same con again.
As for the Boys' Brigade now in power, their idea is that by sacking 500,000, they will create 2.5 million jobs.
God said to Abraham, 'Kill Me A Son'.
The real culprits for the crunch were everyone with a mortgage and a credit card.
Bit simplistic.
You need to add and people with unsecured loans taken out on the strentgth of notional equity in their home (there is no equity until you sell it). People who took out 100-125% LTV mortgages, people who took out self-certified mortgages, people who took out interest - only mortgages and people who thought property always only went up, when in fact it doesn't.
The best one is when you point this out to them they always say "well how else was I supposed to be able to afford" - meaning they have developed a totally false belief that they are somehow entitled to buy a house and at the same time failing to realise that perhaps they aren't supposed to be able to afford.
The responsibility for this reckless lending then gets thrown onto the laps of the lenders - who it must be said were equally responsible, with the emphasis on equally.
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