Liberal Vision

Ever Closer Union?

The Liberal Democrat leadership had intended to fight the next general election on the basis that they had taken tough decisions and those decisions had paid off. The view was that by 2013 the economy would have turned around and voters who were angry with the party would forgive them by 2015.

After the Chancellor’s Autumn Statement it looks as though this strategy is no longer tenable. Danny Alexander made clear on Newsnight that he believes the party will go into the election arguing for more cuts to public expenditure in order to deal with a structural deficit that will not have been entirely dealt with. This is because in government, the party is committed to the plan set out by the Conservative Chancellor, George Osborne.

It is true that Ed Miliband has said that the Labour party needs to think hard about how it can deliver its social justice agenda while dealing with a difficult economic situation. If the leader of the opposition is making the case for continued cuts, it is not surprising that the Chief Secretary to the Treasury is too.

However, Alexander’s statement has already caused concern for some in the party.

That is not surprising given that Alexander’s comments have profound implications for the party.

If the good times had arrived by 2015, it might have been easier for the Liberal Democrats to distance themselves from their coalition partners. Now they will enter the election standing on a record of austerity with more austerity to come. The party will say that things would have been worse if the country had had a majority Conservative government. Whether the voters will make that distinction is open to question. Both parties will not only sound awfully similar as they fight for every vote they can get they will, apparently, be fighting on the same policy regarding cuts.

By now, the reader will have realised that this post is not about the ever closer union of Europe.

The fate of the Liberal Democrats will depend on the electorate’s verdict. It will be very difficult for the party to enter into coalition with Labour given the current political atmosphere. For those in the party who wold prefer that outcome, they need either Labour or the Conservatives to win outright and for the Lib Dems to have time to regroup and develop a different political agenda that will differentiate the party from its years in power. Then they need another election that produces a hung parliament.

If the 2015 result leads to five more years of a blue and yellow administration the parties will start to be seen as natural allies.

The upside of all this is that the party continues to govern and implement its policies. The downside is that it could lose its identity. The electoral consequences would then be bleak.

Assuming Lib Dem members would rather see the party carry on governing but not lose their identity in an ever closer union with the Conservatives, they need to ensure that the party offers a set of clear liberal policies. If people understand what the party stands for, that it is implementing some of these policies in government and that its vision for the future is consistent with the past, the party will stand a better chance of electoral success.

Crucially, it needs to be positive in government while being separate. It can’t appear as simply complaining about the Tories. It has to work with them in order to ensure its policies are successful.

It is not going to be easy. The public are rightly worried about the economy and what will happen in the next few years. Being in government is a great responsibility. A wrong decision can impact on many people. The party will need to think long and hard about the policies it puts forward.

Niall Fergusson: don’t blame deregulation

Writing in the Nuu-yaaaaarrrk Times today, Niall Fergusson takes on the common “blame deregulation” reaction to the lastest economic crisis – and warns that a new layer of regulation today could stifle our economies for years to come.

The Harvard professor argues:

• Deregulation began in 1980 – how has it only just caused a downturn, and is it also responsible for the subsequent growth period?
• Heavy regulation in the 1970s coincided with two large recessions.
• Certain European countries like Germany have had much stronger regulation – yet now experience even worse financial sector problems than less regulated countries like the UK.
• Bad regulation causes crises, not deregulation.

For more details, in non-bulleted proper prose, click here for the full article.

Wednesday morning double-history video fun

By no means have I tired of this Morvah George business, believe you me, but for some of us a little break from Expenses-gate may be welcome, no?

A minor distraction, perhaps, and so what to distract us? Oh yes! By Jove, we’re still in a global economic recession.

And rather than reading books and stuff, why not try that old hungover teachers’ trick of dimming the lights and pretending that a historical video counts as work?

Quiet please…

Nobel Prize-winning economist: stick to markets

Anyone see this piece in the Wall Street Journal a few days ago?:

“Now Is No Time to Give Up on Markets”

A synopsis, if I may:

It’s an interview with Professor Gary Becker, winner of a Nobel prize, who explains that now more than ever we need markets to cure the world of its ills.

He concludes:

“When the market economy is compared to alternatives, nothing is better at raising productivity, reducing poverty, improving health and integrating the people of the world.”

Do you concur, my interweb buddies? Yes or no, go take a butcher’s.