Polling companies are scoundrels

The YouGov poll for yesterday’s Sunday Times included this ridiculous question:

Do you agree or disagree with the following statements?

The government could save billions of pounds by eliminating unnecessary “non-jobs” in the public sector.

Agree 85

Disagree 6

Don’t know 9

Can you imagine a more loaded phrase than “unnecessary ‘non-jobs’ in the public sector”? I’m amazed that even 6 per cent disagreed. I mean, they might as well have asked people: “Do you agree with the state paying people to do nothing?” It would have elicited the same response.

From The New Stateman. Utter codswallop.

Dave, Nick and George: Crushers of optimism, enemies of business

I spotted this earlier but was at work and couldn’t comment, but its on Liberal Conspiracy via Sunny, and now I’m home.

What have the Lib-Con achieved in their time in office?

Business confidence among UK firms has seen its biggest drop since 1995 due to the government’s rhetoric on spending cuts, a survey suggests.

This leads Brad DeLong, admittedly a man not given to subtlety, to label them Herbert Hoover and Andrew Mellon, the men who helped turn the roaring 20s into the depression 30s.

At the moment monetary policy in this country is tight and is overwhelmingly unlikely to get looser. Our main trading partners are either subduing domestic demand by necessity or through choice.  Our domestic sector is still highly indebted and repairing its balance sheet.

However, at the moment the state can borrow cheaply and boost demand, running deficits for a year longer until the recovery is ingrained will not significantly increase the national debt but it could shave a percent off the unemployment figures.

Moreover, reducing deficits too soon could damage demand to such an extent that we are dipped back into recession, a nightmare scenario unless you’re Hayek or Schumpeter and wish to purge the rottenness from the system. Well you and I am that rottenness, and I think purging us is a dreadful idea.

Running a deficit in a situation where we cannot (will not) use monetary policy to stimulate demand will boost aggregate demand and help stop the economy slipping back into recession.

What would stop us running a deficit longer?

1. Well perhaps we would be unable to afford it, but that isn’t the case, as the markets are offering us very low interest rates on 10 year bonds and our average debt maturity at around 13 years gives us a lot of room to manoeuvre. The interest on our debt is high, but not onerous.

2. Government borrowing may crowd out private borrowing, meaning that inefficient public sector pet projects replace efficient private sector businesses. But we are not in normal times:

Under the kind of conditions we’re now facing, the main determinant of business investment is the state of the economy, as evidenced by the plunge in investment shown in the figure. This, in turn, means that anything that improves the state of the economy, including fiscal stimulus, leads to more investment, and hence raises the economy’s future potential. That is, under current conditions deficit spending doesn’t lead to crowding out — it leads to crowding in. In fact, you could argue that the worst thing we can do for future generations is NOT to run sufficiently large deficits right now.

3. Alternatively you can pontificate on intergenerational justice while shafting aforementioned generation.

The coalition are running the wrong fiscal policy for the situation. They are doing so through choice. Lots of metrics are pointing to this – interest rates, business confidence, the electorate didn’t mandate the cuts to be proposed.

When they write the history of this episode they will ask how we could have let them get away with it, and ask whether it was them or us who were more stupid.


Further to my previous post, here is the Early Day Motion [1] tabled by Caroline Lucas:

That this House notes that the legal advice charity Refugee and Migrant Justice (RMJ) is in danger of closing because it is facing a cash crisis because a large proportion of legal aid work is now paid upon completion, meaning payment can take anything up to two years; further notes that as a result the charity has a £1.8 million backlog of payments; further notes that senior legal and human rights experts, faith leaders including the Archbishop of Canterbury, Citizens Advice, Liberty and Mind all back the campaign to rescue the legal advice charity from the cash crisis that is not of their own making; is aware that RMJ is not asking for new money but simply prompt payment of legal aid by the Legal Services Commission, or failing that, interest-free loans by the Government to cover the gap; and calls for the legal aid payment system to be changed to ensure charities are paid promptly for their work.

[1] Paul Sagar is right about EDM’s in general, but I want to keep this on the radar.