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Thoughts on the Cameron Speech

Written by Giles Wilkes

Thursday, 08 October 2009 20:17

Elsewhere, I have blogged on how dishonest are parts of the Cameron speech, particularly the claims that (a) they called the debt question right (b) the claim that current inequalty was created by Labour not the Conservatives and (c) the convenient failure to remember that it was the Conservatives who broke the link between pensions and earnings.

Otherwise, a bit of a curate's egg: some instincts to decentralise and 'let go' that we Liberals at CentreForum ought to applaud; some cheap shots (the 96p withdrawal rate for taxes relies on finding a particular spike in the benefits-withdrawal nexus and then extrapolating to the whole philosophy of Labour's benefits system); some rather cheesy anecdotes; and in my view just a little too much of the personal family story, which I'm deeply uncomfortable with.

What I think is: many of us still want to know 'have the Conservatives changed?' Because while Cameron says

When I stood on that stage in Blackpool four years ago it wasn't just to head up this party, sit around and wait for the tide to turn.

a lot of us wonder if that is not exactly what has happenned.

For the likes of me, there are a few good hints. Acceptance of the minimum wage, defending Sure Start, caring about the marginal taxes facing the poor (is Cameron aware - thanks to CentreForum research - that under John Major a single mother's marginal tax was over 100%?); thinking about pensions. All that detoxing the brand.

But there is still not enough recognition of how they were wrong, what has changed. It may seem unfair, but even after 12 years people still want to know. For example, I read David Willetts in Total Politics magazine (sorry, no link) admit that in the 1980's they felt that since the unemployment benefit produced as much income as a wage in the 1940s, it was high enough. Absolute, not relative poverty was the watchword. This he now recognises is mad: you can't have a society with the median accelerating away from the poorest segment.

Onto other stuff: the Economist survey of the future of the world economy had a lot of useful-underline bits. My favourite takeaway, however, is the difference between resilience and prescience. I think I would like to christen it The Royal Fallacy*: the idea that economics is about predicting the next crisis. No: but you can make the world more resilient. If you let banks go around being 50x leveraged, you will never be able to predictwhen they collapse will happen, but you know it will be big and bloody.

*the other fallacy that deserves decapitation should be called the Micawber Fallacy: that of treating the macroeconomy like a Victorian household.

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Last Updated ( Friday, 09 October 2009 05:36 )

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