Winner of the New Statesman SPERI Prize in Political Economy 2016

Tuesday, 12 May 2015

Don’t ask what lost, ask what won


I took a short break after the election, so I managed to avoid most of the immediate post-election analysis. But I could not avoid seeing some Labour people complaining about how Labour’s defeat was because they vacated the centre ground and went for a core vote strategy. This seems very odd. In terms of ‘vacating the centre ground’, I thought it was pretty obvious that occupying it was the main Liberal Democrat strategy, and that didn’t go too well. In terms of a core vote strategy, it seems to me this applied at least as much to the Conservative campaign.

Rather than Labour and Liberal Democrat people asking what they did wrong, they should ask what the Conservatives did right. What they did right had very little to do with actual Conservative policies, beyond fiscal sweeteners mainly directed to their core voters. Instead it was about attacking their opponents in areas where - for whatever reason - their opponents failed to fight back.  

In terms of Labour, the Conservative campaign mainly focused on three themes: how inadequate Ed Miliband would be as Prime Minister, how bad Labour’s macroeconomic policies had been when they were last in government, and how Labour would be ‘held to ransom’ by the SNP. With all three of these, the arguments were not based on clear objective facts, but on political spin.

As Peter Oborne has observed, Miliband’s performance as Labour leader had indicated a number of positive qualities which suggest he could also have been a good Prime Minister. However he is no Cameron or Blair, and the Conservative machine managed to spin this unfamiliarity as a weakness. A minority Labour government backed by the SNP would have been unusual, but would it really have been so much more unstable as this government will be given how split it is on the EU? This question was never asked in the popular debate, which instead managed to galvanise English nationalism against an imagined threat from north of the border. The Labour line that there would be no deals was inherently defensive, as well as being unconvincing.       

The distortion on economic policy was perhaps the greatest of the three pieces of spin. In a post written before the election entitled ‘UK election: it was mediamacro wot won it’ I ended with the following line: “if the coalition government remains in power after this election (or if the Conservatives win outright), then the title of this post will have rather more justification than the Sun’s original headline.” Harvard historians writing macroeconomic nonsense in Financial Times op-eds after the election shows that the mediamacro problem is not about to disappear.  

What the Conservatives achieved was to turn at best half-truths into apparent facts, which then became the talking points of the media’s coverage of the campaign. The Conservatives won because their spin was so much better than their opponents. That is the lesson of the 2015 election, and not anything to do with actual policies.
To many Labour or Liberal Democrats supporters, this argument will be very unpalatable. They hate the idea of political spin, and all it represents. I have a lot of sympathy with that view, but I suspect it may help lose elections. In fact, it is probably much more important for the centre and left to think a great deal about political spin, because they have to overcome the spin machine that is much of the UK press, as well as the specific problems associated with mediamacro. Left leaning think tanks prefer to focus on policies rather than propaganda, a characteristic less evident in their right leaning counterparts, but in terms of winning an election that is a weakness.

A few of the post-mortems on Labour’s defeat that I have read suggested they should have tried to counter the myth of Labour profligacy much earlier than 2015. Having written for some time about this myth, I could hardly disagree. I suspect within the Labour hierarchy the view was to look forward rather than go over the past, but you cannot abandon the writing of history to your opponents. However that was not just one mistake among many successes: instead Labour's political spin appeared to be consistently amateur compared to their opponents. While over the next few months the debate will be about selecting a new leader who can recapture some of the Blair magic, the truth may be that the more important task is to employ a lot more people like Alastair Campbell.

78 comments:

  1. I wholeheartedly agree with your analysis. But we're not likely to hear these sort of points over the noise being made by the blairites. Even though spin was one of their pillars.

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    1. Agreed. If the Labour party does not recognise the fact that they lost in this manner then there is no hope for them IMO.

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  2. You focus a lot on Conservative messages during the campaign, but did they really change the vote much? There was no obvious shift in the polls - the parties were roughly level pegging within the margin of error six months ago, and they ended there. And while the polls don't seem to be worth much this time around, there is no evidence that they understated the Tory lead six months ago more than just before the election. Did the Scottish referendum and subsequent nationalist surge increase the Tory share? Not obviously.

    I don't think the Tory campaign, like most campaigns, had that much effect. As Nigel Lawson observed in his memoirs, in most campaigns most voters make up their minds long before and wait more or less patiently for election day. I think it was the growing economy and the unsuitability of Ed that won it for the Conservatives, but I think voters, whom you appear to think very gullible, decided these things by themselves.

    As to Labour and the rump of the Lib Dems employing more Alastair Campbells, do we really want more dodgy dossiers and dead government scientists strewn around the place? To say nothing of Demian McBride ...

    Whatever, with Scotland gone for the foreseeable future and a Conservative majority of 105 in England, it's a long, long road back for Labour unless the Tories screw up on the economy as in 1992.

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    1. "As to Labour and the rump of the Lib Dems employing more Alastair Campbells..."

      If the leader can't get a message across to potential voters, certain techniques need to be employed. Do any of the current leadership candidates look like they can formulate coherent policies and state them effectively?

      "...unless the Tories screw up on the economy as in 1992."

      If the Tories really push austerity as they have threatened, that will happen.

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  3. Prof. Wren-Lewis,

    isn't this a good time to terminate your blog?

    You have outed yourself as a out-and-out supporter of Labour, and anything you write in future about politics will be understood from that perspective.

    You are also an unconditional and uncritical Hellenophile who believes Greece should be saved by giving (not lending) them enough money to continue their disastrous policies.

    Your macroeconomics as such are not original in its modern-day fairy-tale world. It might be for you that Robert Lucas's golden words were written:

    "The fact that nominal prices and wages tend to rise more rapidly at the peak
    of the business cycle than they do in the trough has been well recognized from the
    time when tile cycle was first perceived as a distinct phenomenon. The inference
    that perinanent inflation will therefore induce a permanent economic high is no
    doubt equally ancient, yet it is only recently that tltis notion has undergone the
    mysterious transformation from obvious fallacy to cornerstone of the theory of
    economic policy."

    At least one can read Krugman for the jokes.


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    1. You know you can just not read this blog if it bothers you so much, right?

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    2. Jason12 May 2015 at 02:31

      Wasn't that clear?

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    3. Did you intend to write "Isn't this a good time for me to terminate my habit of reading this blog?"

      Or maybe your point was that anyone who wanted Labour to win the election should be banned from writing a blog, or something.

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    4. Silly comment. Wren Lewis is not a Labour supporter as much as he does not believe in pro-cyclical policy. That applies to many people on all sides of the spectrum and inside and outside the economics profession. Both Labour and the Conservatives followed this strategy before the election, why - because clearly it wins elections. Other cynical things also work - wait till we see tax cuts from the conservatives just when the business cycle is in an upswing.

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    5. SW-L has enough brain to keep his political sympathies separate from his views on economics. And if he doesn't, then those in the habit of leaving comments here will have enough brain to see what he's doing (especially the fantastically brainy yours truly).

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    6. This is a silly comment (the original, not the responses), there is no particular reason the Tories need turn their back on Keynes, they might even find it helps their policy live up to some of the more one nation rhetoric they've put out since the election.

      I should also add that your choice to invoke Robert Lucas is bizarre, the quote holds the dual qualities of being both boring and irrelevant.

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    7. Original anon. Strange that when I offered similar advice to the Conservative party:

      http://mainlymacro.blogspot.co.uk/2013/12/the-conservatives-and-ghost-of.html

      no one said I had outed myself as a Conservative party supporter.

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    8. i do not see why supporting a monetary or fiscal stimulus should have anything to do with being conservative - i.e. the size of the welfare state, what people need to do in return for welfare. But that does not mean that the Tory party or the Republican party would see it my way.

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    9. Mainly Macro12 May 2015 at 09:05

      What an odd comment - rest assured that no one suspected you of conservative sympathies on the basis of that post. But to compare that post with your broadside of posts in favour of Labour (if only as the minor evil - who could ever pass muster in the eyes of a macroeconomist?) shows a surprising lack of self-awareness.

      Of course you can continue preaching to the converted and get quoted by P. Krugman.

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    10. Not odd at all. I thought the idea was that because I was offering Labour advice, this 'outed' me as a Labour supporter. So it seemed appropriate to cite an example where I can given advice to the Conservative party.

      What criticisms of your kind betray is exactly the kind of tribal loyalty that you accuse me of. It is possible to look at issues and policies on their own merits, which is what I do in these posts, as I explain here:

      http://mainlymacro.blogspot.co.uk/2015/02/on-not-being-politically-partisan.html

      What I am not is a partisan economist. If you have evidence otherwise, then produce it. Simply to point out that on the issues I write about Labour had better policies than the Conservatives is not a reason to discount my arguments, unless you are partisan yourself.

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    11. Simon please don't respond to this kind of nonsense, I mean really...quoting Robert Lucas like he is some kind of demigod 'golden words'. And the random dig at Paul Krugman, such pathetic tribalism. Never feed the troll Sir.

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    12. Anon, your comment shows all that is wrong with political debate in this country. You are implying that the Prof is a Labour supporter and therefore his analysis is not valid due to bias. Please correct me is I am misrepresenting you.

      Both of these assertions are problematic.

      I have no idea what Prof W-L's political leanings are. But even if he was a Labour supporter that would not make him wrong is his analysis. That would potentially be a bias. But only potentially.

      On the other hand if you look at Macroeconomics and you come to the conclusion that a certain type of policy is not only sub-optimal but plainly wrong and then you look at the political parties and discover than one of them is espousing such a policy as the only acceptable one then inevitably you are going to oppose said party. If one of the other parties has policies that may not be optimal but are a lot better then inevitably you will support such a party. Anything else is intellectual dishonesty.

      Not only is Prof S W-L clearly well qualified to form such a view - in this blog he's explained the evidence for this view in a clear and accessible way.

      Let me give you a parallel. I am a doctor. If you like I can explain in detail why vaccines are a very good idea. Nothing comes close to vaccines in terms of the number of lives saved - there are no other medical interventions in their league. If you want to save lives and especially children on a world wide scale; number priority is clean water. Number 2 is giving them vaccines.

      So let us - for the sake of argument - suppose that the PINK party had a platform of stopping all vaccines because we know they cause autism and Guillain-Barré syndrome. Now the WHITE party say that's silly. Vaccines MAY be a problem but they're keep making them available without vocally supporting them.

      Now, I as a doctor (and before that a molecular biologist) can only come to one conclusion about these two positions. Have a guess which party I would vocally support?

      The point is simple. The evidence from macroeconomics overwhelmingly shows Osborne's chancellorship to be a disaster. And yet he is lauded as some kind of miracle worker and thought to be good by the majority of the public. Surely any academic who speaks out against him is fulfilling his duty to society to communicate the truth. One could argue that to not do so is to be guilty of being an 'ivory tower' academic.

      If I have indeed also been feeding the troll, then I apologize.

      AFZ

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    13. "You are also an unconditional and uncritical Hellenophile who believes Greece should be saved by giving (not lending) them enough money to continue their disastrous policies."
      Ah, what disastrous policies would that be, austerity and 25%+ unemployment?
      And if the eurozone requires lending not linked to growth it will fail.

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    14. Random14 May 2015 at 06:51

      What would the unemployment have been if the Eurozone had not helped Greece?
      But I agree with you on this: " if the eurozone requires lending not linked to growth it will fail."

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    15. Random14 May 2015 at 06:51
      and
      Anonymous14 May 2015 at 11:16

      Varoufakis just gave the answer: Leaving the Euro would pushGreece back into the stone age.

      http://www.spiegel.de/wirtschaft/soziales/varoufakis-warnt-griechenland-vor-ausstieg-aus-dem-euro-a-1033788.html

      Delete
  4. I am reminded here of the Ian Duncan-Smith versus the BBC imbroglio from 2012.

    My email received from the BBC 02 May 2012:

    'We brought your further complaint to the attention of the Editor of our Business and Economics unit who explained in response that if he understands you correctly, you are making a general point about what you see as a failure to look at what happens in a so-called “liquidity trap” – where you cut interest rates to zero or close to it and fail to boost demand for money, ie you pump money into the economy and people/businesses won’t spend or borrow it...Stephanie Flanders also did a piece from Japan recently, broadcast on January 18th on the BBC 'News at Ten' and also on the BBC World Service, on what lessons Japan’s so-called lost decade and economic stagnation offered the UK.
    So I would contest the gap in our coverage. In terms of combatting the liquidity trap, we have also reported the Bank of England’s estimate of how quantitative easing had affected economic output or GDP on October 6 2011. The wider point, of course, is that the Bank of England and Fed in the US would not agree we are in such a trap, even if there are some economists who do...The job of our economics team is to make sense of hugely complicated areas such as these for general audiences, and for that reason they would often choose not to deploy such difficult jargonistic terms as liquidity trap – especially in a short bulletins piece - if they felt such a term would not add to audience understanding. That in no way is intended to reduce the depth and the context they seek to bring to such issues and I would want to reassure you that they go to great pains to ensure their analysis is as detailed and accessible as it can be. We always welcome feedback and should you wish to contact or meet Hugh Pym to discuss it further we would have no objection to that."

    Then, by Simon Walters, Mail on Sunday Political Editor, 18 August 2012:

    "Mr Duncan Smith claimed the coverage was part of a pattern. ‘When the news is good, the BBC view is “get the Government out of the picture quickly, don’t allow them to say anything about it”. When the news is bad, [it’s] “let’s all dump on the Government”,’ he went on. He also claimed the BBC ‘sought every little bit of bad news’ on jobs, adding: ‘Last month, there was a marginal rise in youth unemployment so they centred on that.
    ‘This time it came down so they cast doubt on the figures. [Flanders] said it could be industry is so bad they have to take on two people where one person could do the job. ‘She was peeing all over British industry and the private sector. It was terrible. Our private industry is unbelievably robust compared to much of Europe. ‘We were all told, “It’s no good, you can’t lay off these public sector workers, they’ll never find jobs, the private sector will never expand.” ‘When we got elected the public sector was squeezing the hell out of the private sector. Now it has created nearly one million new jobs.’ Mr Duncan Smith has made a formal complaint to BBC head of news Helen Boaden about its coverage of the Government’s crackdown on the workshy and benefits scroungers."

    Incidentally, I never did take up that offer to meet with Hugh Pym.




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  5. Nothing to do with low inflation, steady growth, and declining unemployment, then?
    MrSauce.

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    1. I thought it may be just a bit to do with the screaming Daily Mail headlines (And the Sun, and the Telegraph, and the Times, and the Independant, and the Express..)

      Even then, it was the pensioners wot won it.

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    2. No. But please supply evidence that it was if you are convinced. Thanks.

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    3. Your kidding about the growth right? Conveniently forgetting the double-dip...

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  6. What surprised me about the Labour approach is that the counter to the "profligacy" meme was, to my mind, fairly simple. We had a worldwide financial/economic crisis in 2008, not just a UK one. Was this therefore because all those affected were profligate in the same way as Labour (the US?); it posits a rather powerful external reference point.

    Now many would in reality answer "yes" to this and say that this has been the case ever since we abandoned gold in 1971 but this is a rather sophisticated argument, but this (it happened in many other countries)would have been an effective counterblast to the charge of profligacy that does not need the type of sophisticated analysis employed on this blog.

    Whilst I agree with your analysis and the importance of propaganda vs policy I can't help feeling that this government may well be the victim of the same charge as it foisted on Labour in a few years time. I can't but help feel that we are headed for a second "bust" that will be more serious than the first and this will expose the UK as being perilously weak.

    Furthermore I can't see that Osborne will meet his fiscal targets, even without a bust, and even a shallow recession will cause the automatic stabilisers to blow these out of the water.

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    1. Don't worry about the next crash.
      All you have to do, apparently, is print a load of money and everybody is rich again.
      I don't know why we even go to the bother of having crashes.
      Just let everyone add a zero to any banknote they have in their possession (£5 becomes £50; £10 becomes £100 etc) and everybody is rich and happy.
      MrSauce.

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    2. I don't know Bob, if you say 'Labour never overspent' people look at you like you just landed on from Mars. I think a better strategy would be to say 'yes we may have spent, but it wasn't on plasma tvs and holidays, it was on schools, education and healthcare, and I think you'll forgive me for wanting to invest in our nation' etc etc.

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    3. Indeed - the argument that Labour caused the crisis by spending money on poor people is very easily debunked. But Labour have been mostly uninterested in debunking it, and certainly will be even less interested now. I think they believe any attempt to debunk it would make them look like they want to spend money on poor people, which is the last thing they want. (I mean, the pollsters say voters think spending money on poor people could cause another crisis.)

      There's also the possibility that some of the more right-leaning parts of the Labour Party actually genuinely believe their welfare policies *did* cause the crisis, or at least that they should have spent that money on tax cuts for "wealth creators" rather than spending on public services or benefits.

      Whatever the case, it seems highly likely that Labour will now embrace the Tory agenda on the economy and cuts wholesale now, most likely just in time for it to cause an economic implosion, this time rather more specific to the UK...

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  7. I think you dismiss the policy differences too readily. Of course, you focus on the macro policies (as that is your area) but I'd be surprised if you could find me a sizeable number of mainstream economists who thought that *price controls* were a sensible way to run the economy.

    How about the following observation: the last time Labour won with a prime minister who *wasn't* Tony Blair was 1974. The last time Labour won with an explicitly left wing prospectus was 1945, in rather.. special circumstances.

    England is still a conservative country (if not Scotland or Wales).

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  8. I absolutely agree with you Simon, and although you and many others tried but failed to get the basic macro-message across during the election (despite an impressive attempt) it is important that this next battle is not lost. The 'centre ground' is a politically useful but meaningless rhetorical device which could disguise ulterior ideological motives that have nothing to do with sensible economics - just like that of the pro-austerity camp. Just one thing though:

    "Harvard historians writing macroeconomic nonsense in Financial Times op-eds after the election shows that the mediamacro problem is not about to disappear."

    You have got a lot of flack on this blog from historians who are concerned about the use of models - particularly those with dubious ontological and epistemological foundations. But Ferguson is definitely not one such historian. In fact, like many bad economists, he does exactly what an historian shouldn't do: start of with a theory (or model or ideology or pulls out a gadget which just conveniently describes something) and go out to find evidence for it. Ferguson is renown for sweeping generalisations. He is most definitely not an historian's historian. So please do not think he is representative of the profession. Quite to the contrary.

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    1. AIUI, Ferguson has only ever had a good reputation in a field by people who don't know about that field. He can sound smart to a layman, but that's it. So some historians say, "Oh, he's not very good at history, but I believe his economics" and some economists say, "Well, his economic arguments are shaky, but he's solid on history".

      The truth is that he's just nonsense all the way down.

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    2. "All you have to do, apparently, is print a load of money"
      And spend on idle capacity so it is not wasted. For example, giving all the current unemployed a job. The waste of austerity is huge.

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  9. New reader to this blog and I enjoy the commentary (I think I just deleted my first post, so this will be briefer)...

    As well as the FT piece (can we not just name and link to it?) I wonder about how we can counter the mediamacro that is out there? Although not in mainstream media, I just came across this from a Conservative MEP:

    "On one doorstep, I was confronted by an angry trade union representative from the local hospital. The idea that there was a limit to government expenditure sent her into a purple, choking fury. I tried to explain that no one could live forever on credit. Imagine, I said, that you borrowed a load of money and rented a huge house and a sports car. Now suppose that you stopped borrowing. Your living standard would fall, wouldn’t it? I mean, never mind about paying off the debt: the very fact that you had stopped borrowing would mean you couldn’t keep up payments on the house or the car. There’d be no point in marching against “austerity”: you might as well march against gravity."

    http://www.capx.co/david-cameron-should-give-scotland-full-fiscal-autonomy-immediately/

    And I feel it reinforces every myth going. Discourse analysts would have a field day with it. Another piece by him reinforces the same message, as if Keynes never existed. But my question about this is - have you thought further about how we can counter this? (and also , have you published anyone else on macromedia?) Thanks.

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    1. Anywhere else* (Sorry, I rushed my message after the I deleted the first one...)

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    2. Try searching for past posts using the tag mediamacro. Or read my articles for the London Review of Books or the New Statesman.

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    3. “I wonder about how we can counter the mediamacro that is out there?”

      And countered it must be, not least because of the barbarism which, along with other myths and lies, it is used to justify.

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  10. I have just read the Ferguson article. Unbelievable. For a start the only parties I know of with a broadly Keynesian (anti-cyclical macro-economic stabilisation) platform were the SNP and the Greens - so how can Labour blame Keynes? Ferguson is an example of what is wrong with the US tenure system.

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    1. I tried to read it, got half way thru, and was severely ill, so had to give up.

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    2. I've got to say that the FT has seriously disappointed me recently, on the subject of economic policy he is a charlatan who has been repeatedly proven wrong, yet he's still given column inches. Chris Giles, who I used to hold in high regard reads much more like a partisan hack these days. There are still some excellent commentators and Alphaville is still excellent, but I can't help but be disappointed by some of the more recent editorial decisions.

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    3. Niall Ferguson made a fool of himself when he wrote about inflation in Newsweek a few years ago, where he proclaimed that it was in double digits based on a ridiculous source. He ought to have realised he had no business trying to write about economics.

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    4. Ferguson is a member of the Davos set. He talks in a similar manner to a Goldman Sachs partner or a private equity manager. These people also talk in a convoluted, egocentric and self-important manner and amaze many with their astounding ignorance and stupidity. They overwhelm you with their convolution and extraordinarily incoherent monologue. But if you are a useful mouthpiece for the financial industry, clearly you can go a long way.

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    5. Andreas,
      you cannot complain about underrepresentation of the Keynesian view in the FT. Martin Wolf and Wolfgang Munchau and lots of other international commenters represent this world view.
      NF is an odd choice for a critic that in his maniac style is doing no favor to opponents. John Cochrane would be a much better choice who is making his point much better. But he is associated with the WSJ.

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    6. Given the problems with productivity; i have a problem considering GB a success story.

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  11. The success of the Tory spin was to repeat the same messages ad nauseum, but its real power was in the media repeating these messages unchallenged. I have seen people defending their decision to vote Tory, and frequently quoting one of these points as part of their justification. People may expect some bias within the press, but they tend to have more trust in TV news. Unfortunately they should not have such faith in our broadcasters. The BBC has become too scared to challenge anything put out by the Tory/press spin machine. If Labour (the opposition) can't challenge positive economic data because it makes it look like it doesn't want the UK to be successful, then we are reliant on the media to question any dubious figures. If we can't rely on the media then it undermines our democratic process.

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  12. I'd never heard of Alastair Campbell until I clicked on your link to him. But it turns out he was a government publicity officer 20 years ago. If saying that Labour needs people like him implies that Labour didn't get their message across in the election, that's wrong. They did. And that's why they did badly.

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    1. Ok, do you think most people think the recession/deficit was caused by a global financial crisis, automatic stabilisers and reduced tax receipts, or Labour overspending...? They did not get their message across at all.

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  13. From my point of view, it seemed as if at almost every turn Labour failed to challenge the Tories on their economic rhetoric. The Tories spin often went unchallenged, with Labour often preferring to get across points about the NHS rather than challenge conservative spin.

    The coalition acted as if they had saved the country from disaster, a ridiculous claim but it was never challenged as such. Whatever happens next, Labour needs to seriously up it's game on what it says about the economy and what it let's it's opponents get away with.

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  14. Alistair Campbell is not the answer. That is too cynical. The Tory victory is regrettable, however, we must remember why they won: the economic crisis took place under New Labour. True, it was a global crisis, but we were not able to cope with it. New Labour were a big part of financial deregulation, foreign policy misadventures, and a monetary policy that followed mechanical Taylor types of rules that did not detect developments in the global economy or asset price inflation - factors for sure behind the crisis. They also were incumbent during rises in extreme inequality, massive immigration, and social fragmentation.

    The Scots voted for sensible economic policy. So can the English.

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  15. http://www.ukpolitical.info/Expenditure.htm

    This link does not contain figures for 2015 but party election expenditure will be a factor.

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  16. Was Cameron more active on the hustings than the other leaders. The link below suggests so but it was early in the campaign.
    http://www.bbc.com/news/election-2015-32219476
    I think your link misses old fashioned campaigning: knocking on doors, kissing babies and the like. The personal touch in an election is missing in the post. What did the grannies think of him, etc. Michael Howard was finished by the phrase that there is something of the night about him. I think Milliband just didn't come across too well either. People can complain about that but the point is that appearance is something. He just never looked relaxed and the picture of him eating a bacon butty was just the end. This is why Labour badly need a professional campaign manager and spin meister. They also need to remove the unions from any involvement in the choice of a leader. Clause 4 gone was major progress. They should now move to removing the union vote in leadership elections.

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    1. Cameron hardly met a single member of the real public. All his "events" were staged. Labour were almost as bad, but not quite.

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  17. "The siren voices are at it again. Instead of learning the obvious lesson – that Labour wins only when it is seen to offer what the British people most crave, something fresh and full of hope and ambition – the Blairs and Mandelsons urge that Labour should become even more like the Tories. At a time when even the central banks and the IMF have abandoned their support for retrenchment and austerity, and neo-liberal orthodoxy is seen as a busted flush, Labour is advised to show no interest in a brave new world but to cower in a craven old one."

    http://www.bryangould.com/how-the-election-was-won/

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    1. I think above is food for thought. The new paradigm for Labour should be with the new emerging economics. It is at a fragile early stage, but the signs are there it is emerging. One important aspect of this economics is discarding micro-foundations such as equity-efficiency tradeoffs that are irreconcilable with the General Theory. It builds on Piketty. It is understands that solid growth is equitable growth. It is multidisciplinary and historical in its approach.

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    2. @Anonymous 12 May: tell me more about this "new emerging economics". It sounds a bit like post keynesian economics to me?

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  18. Simon
    To characterise the Tory win as a triumph of various distortions (particularly on mediamacro) may well be correct. But your argument has a tinge of "If you can't beat them, join them" about it. Is it naive to think that Labour should now focus on developing and elucidating better policies that extend outside their core vote, rather than focusing on how to sex up existing ones?

    I'd like to see Labour win in future because its ideas are better. To do this, it needs to be brave and stand up for itself on focusing on sustainable growth over deficit reduction, the benefits of immigration, housing planning reform, civil liberties etc. They didn't lose because the messaging around these policies was poor - they lost because they didn't have the courage to go with them!

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  19. Labour lost because left wing Labour leaders always get rejected. Middle England doesn't want the policies and doesn't trust the politicians. Wilson and Blair were winners. Foot, Kinnock and E Miliband were losers. There's a pattern here.

    Wealth creation matters to people, radio silence, or open hostility to it makes Middle England worried. Wealth distribution is nice, but follows the former.

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    1. Oops. I forgot Gordon Brown. After Kinnock, before E Miliband.

      And I forgot the incredibly offensive "working people" myth that Labour kept banging on about, as if Middle England does no work. It made working people's blood boil, but we are too polite to complain about it, and certainly not to pollsters.

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    2. It doesn't help that whenever a politician suggests anything progressive it is labelled in the right-wing press as some kind of bolshevik plot lol.

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    3. The areas of Britain wither the highest percentages of working people, ie lowest percentage unemployed or on benefits voted mostly heavily against Labour, the party of not-working people.

      And another thing. Why so many shy Lib Dems voted Tory, but remained shy? Because the Progressives are so bloomin' aggressive, constantly labelling a Tory or anyone not on their side heartless, unkind, uncaring, facist, racist, tax-dodging, carbon-guzzling, homophobes. Ever listen to Labour's BBC Radio 4? Or seen an progressive activist on a rant? Lol.

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    4. If you think Wilson was to the right of Brown or Miliband, you're deranged.

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    5. Things were different in those days, lots of people were socialists - and it showed in Britain's relative economic performance until 1979 and the introduction of some supply side discipline. Neither Heath nor Wilson had much ideological baggage. Wilson was more of a Blairite, really, of no fixed abode. Very unlike Brown and Miliband.
      http://www.theguardian.com/politics/1995/may/25/obituaries

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    6. You mean the economic performance that was affected by the Barber boom-and-bust and the oil price shock. Both very socialist. Please read some history.

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    7. Wilson was a Bevanite. That is, from the Left of the Party. He also thought (not without reason) that many on the Right of the Party were out to get him.

      Of the Labour Right, pre-Blair, Callaghan (1979) and Gaitskell (1959) lost decisively.

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    8. Not just the Right of the Party. MI5 thought he was a communist (OK they were a bit mad).

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    9. You might be right. England, Australia and the United States are basically conservative countries and individualism runs deep in their cultures. Northern Europe also like "good housekeeping" when it comes to macro-policy, but are not in thrall to markets. They are egalitarian and are not obsessed with tax cuts.

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    10. Wilson was an enigma, agreed. A real trimmer despite ostensibly coming from the left. And that's what made him a winner.

      Callaghan lost on his record. Blair won three out of three. Hats off to him. I voted for him first time around.

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    11. Actually Blair was losing the third election because he was so unpopular. The campaign was saved by Brown - in the later days the implicit message was "Vote Blair, get Brown". That hasn't stopped some people from re-writing history, though.

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  20. I agree with Simon's analysis and wish to delve deeper into why Labour did such a poor PR job relative to the Conservatives.

    Most of my friends are convinced that Labour wrecked the nation's finances. Why? Mainly because the Conservatives were relentless in making that assertion and it went largely unchallenged by the media, so "it must be true". But Labour also did a poor job in defending themselves.

    Simply saying "it was the Global Financial Crisis" was not enough, even if true. My experience suggests many people thought "they would say that, wouldn't they? The crash made things worse, but spending was already out of hand. On top of that, Gordon Brown sold all our gold at rock-bottom prices."

    A better reply from Labour would have been along the lines of "we overspent but think of it as investment in schools, hospitals, etc." I saw Ed Miliband and other Labour politicians try this tactic towards the end of the campaign.

    However, I am astonished that, over the past five years, I never heard any Labour politician bluntly state some IMF data (apologies if I missed it!):

    - In 2007, just prior to the global crash, the UK had the lowest public debt to GDP ratio among the G7 (43.6%; rest were all above 60%)

    - Moreover, public debt as a share of GDP was lower in 2007 than when Labour entered office in 1997. (46.9% in 1997)

    To doubters, please see data on General Government Gross Debt from the IMF WEO database via www.imf.org.

    Given the deference all the major parties and the BBC pay to the apolitical IMF (akin to the deference shown to the IFS on budget analysis), surely this would have done the job, right? So why did Labour fail to make these simple points?

    S

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    1. You ask why Labour failed to change the narrative? I think that, as much as anything, they just didn't try to do so, instead going for a different tactic of focussing on other areas of policy, something which still leaves me baffled.

      The myth of Labour profligacy was intensified by the Tories insinuating we were in some kind of a massive boom in the lead up to the credit crunch (and therefore debt should have been reduced in this era). Simon has shown that this also wasn't the case, but perhaps this is why the two Eds didn't try to change the narrative because doing so would have led them to note that the economy was only in moderate growth under Labour prior to the recession?

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  21. Not putting up a robust defence against the Tory narrative on the economy was perhaps the most serious mistake. Unfortunately that account stuck in people's minds and if a lie is repeated often enough it appears to be a truth.

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  22. Great analysis.
    Why do so many have difficulty in learning from the opposition?
    Its almost a basic axiom on the literature on warfare.
    Lynton Crosby masterminded the Tory campaign.
    Those who want to understand how its done would enjoy his session on U Tube with a group of would be consultants/politicians.
    Politics is a rough trade but if you don't know how to play the game you will get a thrashing at the polls. For all Labour's good intentions it has behaved in an politically incompetent way pretty well since Blair left the stage.

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  23. As I said on the 22/4 in your blog "This is the Tory press, sir. When the legend becomes fact, print the legend." ( with apologies to the Man Who Shot Liberty Valance script).
    Labour never used your economic arguments or even attempted to counter the Tory narrative. I can understand that when you are the opposition you attack the sitting government, but when that government is still attacking you for events that happened 7 previously and even the famous Liverpool not burying the dead from 1979 it can be difficult. The Tories scared the middle English pensioners with the SNP picking their pockets argument, and it worked very well. Labour released too much of their not very imaginative manifesto months too early and had little new to add to the debate, they seem to have surrendered a long time ago to the "Rentier" Neo-liberal, Friedmanite mantra , private good state bad and BBC the worst of all.
    I await this quarters growth figures with bated breath, I have my fears that they will be bad and that in the run up to the EU referendum they will be the first of many as investment is postponed, till the result is known and manufacturing has some idea of what it's market will area will be.
    I also think the cynical and racist Anti-Scottish card played by the Tories will be the last straw to many north of the border, I hope the SNP take the next few years to start to set Scotland's finances on a stable footing , and move to a German federal type structure with industrial banks and sound finance to support business and move away from "casino" banking , so that when the next referendum comes along we can go without needing oil and even gain your approval this time Simon for our fiscal soundness.

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    Replies
    1. Many other resource scarce economies have done well - Germany, Japan, China, Taiwan, SIngapore, Korea following exactly the policies you suggest. The key is not to follow Anglo Saxon economics and ignore ideology posed as science.

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  24. The idea of Labour changing its policies - appealing to the centre ground - in order to win the next election - doesn't it sicken you? Is Labour a chameleon - changing its appearance to suits its habitat?

    But there is a problem with Labour and that is that it has to deal with the electorate - and the electorate showed that a sufficient number of them don't give a damn for all the fine words complaining about the damage done to the poor and the disabled by Conservative policies.

    Ed Miliband was speaking to a caring population in a parallel universe - not Planet England. Of course, the pesky Scots wouldn't toe the line and behave themselves, but then they're uncivilised...

    No, life is good - or sufficiently good - for most people to just get off the fence on the most convenient side. It will take more pain, much more pain to change that. And as long as there is broadband, and iPhones, and Starbucks - it will take a lot of pain.

    I think the Conservatives will be in power for a generation unless they make a fatal mistake - and I can't think what that might be.

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    1. Well their deliberate mismanagement of the economy - and the considerable damage it does to the welfare of the “don't give a damn about the poor”s - ought to be a fatal mistake.

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  25. It seems to me that Matt Yglesias has the best analysis of the election. Basically, the coalition collapsed-the Conservatives improved themselves by only 1 percent while the Liberal Democrats dropped from 23% in 2010 to 8% this time

    So this wasn't a question of the British embracing Team Austerity. The real puzzle is why Labour was unable to take advantage of the implosion of the Liberal Democrats.

    The answer in part seems to be that even with the failure of Scottish Independence, SNP is a growing force.

    For more see here

    http://diaryofarepublicanhater.blogspot.com/2015/05/on-why-labor-lost-uk-election.html

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  26. "To many Labour or Liberal Democrats supporters, this argument will be very unpalatable. They hate the idea of political spin, and all it represents."

    The Liberal Dems have imploded. Remember they were part of Cameron's coalition that enabled him to govern at all.

    So you can read the implosion of the LDs as rejection of Team Austerity-but the Liberal Democrats were part of team austerity. It's quite impossible for them to run against it now.

    The Conservatives have no new friends but the LDs have basically destroyed themselves as a relevant party by selling their soul for finally getting a scrap of shared power in 2010

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