Tuesday, 1 October 2013


Simon-Wren Lewis recently asked on his blog whether the Conservative party will become like the US Republican party, well in two wee respects British politics certainly feels creepingly American.

One concerns the news, in particular how mainstream media reporting in the US is so bad, satirical shows – above all the Daily Show and the Colbert Report – are regarded as more credible sources that the actual news; cue April’s Daily Mash article about how “the government’s welfare cuts are targeted at the fictional character Frank Gallagher” and compare it with the reporting here of the new Work for the Dole scheme.

Another is the flat out disregard for the truth. Over there, this reached its apogee with Bill Clinton’s subsequent destruction of Paul Ryan’s speech during the presidential elections (recent events aren’t so much about truth as they are utter mental-ness). Here, we’ve just had George Osborne’s Conservative party conference speech.

Take him saying this: “You ask someone with a mortgage what happens to their living standards when mortgage rates go up. Just a 1 percent rise means an extra £1000 on the average mortgage bill.” Fair point, it probably does except he’s incorrectly using this to falsely claim his policies have maintained bond market confidence in current economic policy. Except, current interest rates are actually a sign of how fecked the economy is i.e. if the economy really was undergoing a strong and sustainable well interest rates would start rising back to more normal levels.

That was flat out disingenuou whereas the following is a dirty great fib: He said “(u)ntil we’ve fixed the addiction to debt that got this country into this mess in the first place. It’s not over.” Uh huh? The Help to Buy scheme he announced has just been brought forward is about increasing personal borrowing i.e. debt. And it does so by increasing the risk involved because it single handedly reintroduces the 95% mortgages banks are no longer willing to sell.

So Osborne is trying to fix our addiction to debt by ......  aggressively encouraging an increase in higher risk borrowing by individuals. Immersion therapy economics perhaps given his stated aim? No, just rank hypocrisy.

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