Economic recovery: the method

US public spending as proportion of GNP in the inter-war years.

End-of-war recession to 1920, Harding cut hard and fast, cuts in public spending and taxation, recovery and golden years.

Wall Street Crash 1929, Hoover increases spending, doubles the size of government (oh how laissez-faire - there's one myth debunked), causes Great Depression.

So the "taking money out of the economy" brigade are just plain wrong, especially when we're talking 1% of GDP (out of 48% of GDP government spending).

Cut spending and then taxation hard? And please don't raise in Capital Gains Tax, whatever loopholes there are, it's the worst tax to raise when the Laffer curve comes into play (above 15% has bad effects I've heard).

And it makes sense that less money spent on government bonds is instead used by banks to lend to individuals (since they've been told to have more reserves).

Government spending cut from 48% of GDP to 30%? Sounds good.

Could the Lib Dems split?

Over all these deals? It's already a coalition as it is (a merger of the old Liberal-SDP alliance) - so what if the Orange Bookers, the old Liberals (Laws et al) left and went across to the Conservatives, who share some of their Whiggism if we are to go back that far, while the lefties went across to Labour, who they seem to think are their "natural partners"?

And the UK returns to two-party politics, with no need for electoral reform?

Just a thought.

The best advert against PR...

...has been the last few days of coalition negotiations.

Behind closed doors, politicians decide on which parties join as a coalition (note to unhappy Lib Dems: you support every election having this result), who takes which Cabinet post, which manifesto pledges are dropped, and since Gordon decided to resign within recent minutes, which second consecutive unelected PM you get. Is this how the "more democratic" system will work?

Gordon Brown wants a Lib-Lab pact, despite his party being comprehensively beaten at the polls. Very democratic. Again, similar to what would happen under PR?

I've kept an open mind throughout this, but I think the whole episode has persuaded me that PR might be more representative, but at least with FPTP you know (normally) what you're voting for, who you're getting, and that you can kick a bad government out. And for those who say this election shows that FPTP doesn't create strong governments, people will remember it and will elect a strong government next time. Once in 35 years doesn't mean it doesn't produce them.

Bailing out Greece

So here we go again, talk of bailing out Greece etc. The UK's opposed, except

Euro-zone leaders are attempting to get round objections from countries such as Britain by invoking Article 122 of the Lisbon Treaty, intended to enable a collective response to natural disasters. This does not need unanimous agreement.

So like it or not, make the right decisions, stay out of the Euro, and you still have to pay up. Because that will stop countries making bad decisions in the future. No, it'll mean that we don't learn from our mistakes - that the Eurozone was never one of these "Optimal Currency Zones" that economists have talked about.

But that isn't what annoys me. The bit that says "intended to enable a collective response to natural disasters". Natural disasters. The Greek debt problem is not natural. Even if it's those evil speculators, as the left-wing press seem to be saying, it's not natural - in fact you could say it's even more artificial. It's of their own making - they borrowed too cheaply for too long in the good years, built up a massive budget deficit, are in a lot of debt, and can't afford to borrow because they won't pay it back. That's not natural, that's their fault, and they should pay for it. It's certainly nothing to do with us.

On FPTP

Labour MP Tom Harris gets it right. Read the whole post, but these bits stood out to me.

At least under FPTP, whatever its disadvantages, the party that’s elected has to implement the policies in its manifesto. And if it doesn’t, it can be kicked out. Not so with most forms of PR. Have you been listening to some of the arguments in favour of reform, particularly on the Left? Reform would mean a permanent centre-left coalition in this country, they say. But since when has permanent government by the same two parties been remotely democratic? This argument, to me, is the best reason not to go for reform. I’m a democrat. I believe that if we’re beaten by the Tories, they should form the government. It’s up to the electorate to decide if they want a change of government, not poitical parties.

But what’s wrong with coalition government? Nothing at all. In fact, I’m in favour of coalitions. We’ve had coalition government in this country for decades. Labour is probably a broader coalition than what already exists in some proportional European systems. Any party that can accommodate Frank Field (or me, for that matter) and John McDonnell and Dennis Skinner is a very broad church indeed. The same goes for the Tory party. Because FPTP forces parties to broaden their appeal, to be open to a far wider range of opinion than would be the case under PR. And our democracy is the better for it.

While I'm sympathetic to something like 3-member STV (like Ireland), the British way is wide coalitions of people with generally similar principles. Labour a belief in government solutions, Conservatives a belief in people and society making those solutions, Lib Dems......let's not go there, but they are possibly the widest coalition (where else would you have economic liberals and economic statists together?). A factioned political system is not the British way. I don't want to sound too dogmatic here about "the British way", but we don't do internal haggling - we put it to the voters, let them decide the path.

The coalition negotiations, behind closed doors, are a fantastic argument against PR, since it's exactly what would happen. The same politicians, the same minor parties in the coalition, the same ones you just can't get rid of.

I want a strong Parliament, that holds government to account, that has MPs who are actually accountable to constituents, a specific number holding one specific person to account. While something like 3-member STV might be a more proportional way while somewhat keeping to that, I think there are things we can do now that would make FPTP work better: boundary reviews that seem to be out of date and don't take it to account that we maybe have a 3-party system on our hands; open primaries; recall elections - that sort of thing. Then perhaps we can look at the accountability issue a few years down the line, see how it works, see how maturely people react to open primaries (judging by the moustaches on posters, I'm not optimistic) and so on.

So I'm not sure. Keep an open mind, see how things pan out, and don't do anything knee-jerk or silly (Labour supporting voting reform as they are about to lose an election is one such silly reaction).

Cameron should not form a formal coalition

No, no coalitions. An implicit deal, yes, but not a formal coalition. There are areas of common ground, the sort of legislation we can push through with the votes (or abstentions) of LibDems. Might help push an emergency budget through, since that being blocked could lead to financial meltdown.

Yes, there are disagreements, electoral reform being one of the major ones - why not put it to the House? We have legislators for a reason, they just aren't used properly enough. And in fact the 2010 Conservative manifesto had something of an old Liberal feel about it - might some Lib Dems actually feel comfortable with a good lot of what's in the manifesto?

As for electoral reform, I'll talk about that in a future blogpost. But it's probably worth Cameron going it alone, getting some stuff through, showing he's serious and he's taking the decisions, then calling a second election. But first, he also needs to sell conservatism to a sceptical public, sell the fact that government is not the answer to everything.

(in other news today, a load of youngish (7-11) kids decided to jump on me and make lots of noise because I said I voted Conservative. The poor souls seem to think voting Labour/Lib Dem is better for unemployment, or is somehow 'helping the poor'. They're young, I'll let them off.)

On bank taxes

Tim Worstall in support of a bank deposit insurance tax:

If this is passed on to consumers, well, who cares? The consumers are getting something of value from it: deposit insurance.

That's the main point I think, and the best reason for someone like myself to support it. As long as the revenue is ringfenced as deposit insurance, that is.

Which then brings up questions of whether this can be optional, whether banks opt-in or consumers opt-in (or opt-out), and it all gets rather complex.

Conservative Party PPB

It's good. More of this please.

Campaigning in Newport West

Went out canvassing for the first time this morning, in Malpas. Interesting to see how many conservatives there are out there - and many "anyone but Gordon Brown" voters. Malpas doesn't strike me as a particularly friendly area for us, but it seemed to be - apparently one of the more marginal bits (well, compared to Bettws and Pill, maybe it is).

Another interesting thing is that I didn't personally find a single Lib Dem voter, and of all of us, there weren't many there. So this resurgence is nonsense to me.

It's target seat #117, so needs to be won for a Conservative majority in Parliament. Flynn seems to be treating it as something of his safe seat from what I've seen; let's hope not.

The Conservative manifesto

First of all, apologies for not posting in months - A levels are soon and they tend to take up my life. Since as of yesterday I'm of voting age, I thought I should probably check the two manifestos out.

The Conservative Party manifesto; plain on the cover, but inside of it something else. For too long, "they are all the same" has controlled the mainstream argument (as has "the Tories haven't changed", blah blah). The manifesto today, for me, disproved it. It shows a distinct difference between the Labour approach and the Conservative approach; Labour favour the big government solution, while the Conservatives look for less government, power to people, the responsibility approach, and yes LibDems, the DIY approach!

That is inherently the conservative way. For too long, and for 13 years under New Labour, government has grown larger and larger, inheriting roles that people and society should have taken up, taking more people on to the payroll, be it the bloated public sector, the expansion of tax credits to the middle classes, and whatever else - and taking away these things seems politically unthinkable. We have a new interest group that, ignoring economics and the basics of opportunity cost, has been paid to support this larger state. And it's time that it changed, we got back to a British model, where government does less and people do more.

And for all the "One Nation" talk of this, it suits the libertarian-conservative Welshman in this corner. Though I have my qualms with some of the training "community organisers", protecting NHS spending and whatnot, there are some inherently conservative things in this manifesto. Take free schools (which should settle a few votes), freeing schools up, taking away the targets and looking for diversity and innovation - what's wrong with the postcode lottery if it leads to us finding a better way? I'm not sure how much there's a link between government and society in this manifesto, and I'm hoping they are made quite separate, but for people to do more and to organise themselves without government is certainly something I can support. A model of individuals controlling their own lives and doing things themselves, without government pretending it's a charity, organiser, planner, or anything else? Fantastic.

I was concerned that we'd lost conservative principles, that Cameron wasn't a conservative, and so on. Seeing this manifesto today, however much I'd like to see some of the main policies highlighted in there (but that's just a presentation issue), I know quite clearly who I should vote for. This manifesto should win the election; it sets out a different vision for the future. Whether people see that, overcome their prejudices, the "all the same" nonsense, fringe parties and so on, will probably decide this election.