Winner of the New Statesman SPERI Prize in Political Economy 2016

Thursday 25 February 2016

A letter to Tony Blair

Dear Mr. Blair

We have not met, but I have talked to your former colleague Gordon a few times and I did some academic work on his 5 tests for Euro entry. I saw a report that you were mystified by the popularity of Jeremy Corbyn and Bernie Sanders. I have an article today in The Independent that might help you understand your puzzle.

I know you find it strange that people that appear to you like those your predecessor Neil Kinnock did battle with over the future of the Labour Party in the 1980s are now running the party. It must also seem strange that in the US where socialism once seemed to be regarded as a perversion, large numbers should be supporting a socialist candidate. You suggest some explanations, but you do not mention the power of finance, inequality and the senselessness of austerity. You say that these new leaders will not be electable. But if the alternative is to try and elect leaders from the centre who will do nothing to confront these great issues, and will instead cut spending, accept stagnation and wait for the next financial crisis, is it any wonder that many people would rather take their chance with someone different?

Please do not take this the wrong way. I generally look favourably on the achievements of your government when you were Prime Minister (that war apart). I hope, by reading my piece, or articles others have written, you will understand that the situation today is not the same as the early 1980s. At that time the expansion of the financial sector had only just begun, and the income share of the 1% was only beginning to turn upwards. If you can see this, I would ask that you do one final thing for Labour party members and for those, like me, who try and challenge the damaging policies of the current government.

There are many Labour MPs and left leaning journalists who seem to share your puzzlement, and have decided that they have to fight again the battles of the 1980s by doing everything to undermine their new Labour leadership. For example your friend Peter has recently reaffirmed that Labour is a broad church, but it seems for him it is like a church where those once in charge cannot countenance others being in the priesthood. Rather than celebrating the enthusiasm and interest of the many young people that have recently joined (even if they regard some of their aspirations as naive), and who will be vital in future election campaigns, this overtly anti-Corbyn group seem to regard them as a threat.

You know the electorate above all else hates divided political parties. You might note that the strategy of this group, by creating division at every turn as a means of achieving what they see as their ultimate goal, is not so different from that of some of the left wing militants that you and your predecessors had to deal with. Please tell them to stop. I fear they need someone they respect like you to point out the foolishness of their actions.


Simon Wren-Lewis


  1. I honestly don't understand this attitude...

    We just had an election and Labour lost. As a consequence, the government is shifting even further to the right than before. If running a more centrist campaign and then implementing a centrist program avoids a further shift against the poor, how is that worst than the outcome we got?

    I agree there was excessive focus on austerity. But at the end of the day you need to convince the public. You can argue that a better leader/program would have convinced more people. But I think the median elector logic is very strong. Labour shifted further to the left under Ed Milliband. It lost. This is not an opinion, it's a statement of fact. Are you really arguing that Ed Milliband was as centrist as his brother?

    Obviously the median voter theory is a simplification of reality, but so is most macro-economics.

    In many ways Blair is the main Labour politicians who always defended his record. You yourself argue that defence of the Labour economic strategy is the base for winning elections. Corbyn is not defending the last Labour government. He was attacking it while it was in power. He is breaking your own criteria. He is saying that we don't just need to tinker with a recipe that worked more or less okay, we need full overhaul...

    1. Corbyn has been elected - that is a fact, whether we like it or not. But he has to compromise with the PLP - that is also a fact. So who do you support in this imperfect two party system: the Labour opposition or the Conservative government? Those openly attacking Corbyn are doing the latter by default.

    2. No they are not. You present it as if a Labour *government* were a viable choice. It just isn't. The 2020 election is lost.

      I want a choice between a Labour government and a Conservative government. Choosing between a Labour opposition and a Conservative government is no choice at all.

      The actual immediate choice is about what happens going forward to the Labour party. An entirely different matter.

    3. I would say that those supporting Corbyn are doing the latter by default. For the Tories he is a dream come true.

    4. SH: You have a vote, so why are you avoiding answering my question? And JD, the Labour party election is over. You now have a choice. I have spent all my life arguing with people on the left that elections are about supporting the least bad, and not looking for you're ideal candidate.

    5. Yes, I have a choice. And I choose to do everything in my power to get rid of Corbyn at the earliest opportunity, since this is the best route to a Labour government.

      Unfortunately 'everything in my power' is pretty much limited to posting unread comments on online forums. ;)

    6. yes, I do have a vote. It is now a hard choice, for the first time in my life.

      It comes down to the individual candidate. I am afraid I would not vote Labour if I lived in Norwich South. That would be counterproductive. If I lived in Pontefract I would quite happily.

      Who would I vote for in Norwich South? Certainly not the Tory, but I may not have a candidate I could support.

      I don't have the 'my party right or wrong' attitude that I had aged 18, that you seem to have developed late in life.

    7. SH You really do misunderstand my position. As it is not 'my party' (I have none), how can I have developed this attitude. However right now it is the only potential opposition to what I regard as a crazy macro policy.

    8. Right. So it is your party then.

      What do you think the additional necessary conditions for that not to be true are? You only need one reason (and you have one). It isn't like supporting a football team.

    9. Labour lost the last election because their message was confused and they didn't argue against the fallacy that the previous labour government caused the financial crash.

      It has nothing to do with Milliband's supposed leftward shift - and I would also argue strongly that that shift I'd also a fallacy.

    10. JD writes: "Unfortunately 'everything in my power' is pretty much limited to posting unread comments on online forums. ;" JD Your throw away line implicitly acknowledges that the anti-Corbyns offer only counter-productive petulance. You have no feasible alternative to JC, if he were to stand for re-election as party leader he, or someone similar from the left, would overwhelmingly win again. It achieves nothing, it even muddies the water- if Labour does badly at the polls was it Corbyn of those who presented a divided party to the electorate? Because of anti-Corbyns in Labour JC can credibly claim the latter. The anti-Corbyns in the party are contributing nothing, just sour grapes and impotent petulance that would leave Labour divided long after JC has gone. Simon is, as so often, right as the big-brained objective observer he always strives to be. Please think it through yourself.

    11. > However right now it is the only potential opposition to what I regard as a crazy macro policy.

      The problem is, when we come to vote in the General Election, we are not just voting on macro policy. Ultimately, I find Corbyn's stances on foreign policy and defence so objectionable that I could not bring myself to cast a vote that might put him in number 10 even if I had full confidence in his ability to implement sound economic policy competently, which I do not. And I am saying this as someone who has been a member of the Labour party for his entire adult life.

  2. Good post.

    But it's not just that the anti-Corbynites are damaging the party. It's that they're damaging their own cause. Corbyn will retain the membership's support for much longer if Labour's unpopularity can partly be ascribed to the fact that much of the PLP seems more focused on attacking him than the government. They're giving him an excuse for failure. I say this as someone who believes Corbyn has a near zero chance of winning a GE and would like him to go asap.

  3. Sorry Simon - I bow to your superior knowledge on economics of course, and generally I am with you on your light touch in revealing your political leanings, which I generally agree with. I am also bemused by Blairs lack of understanding, but the sting in the tail of your post, the way you castigate those in Labour who are concerned about its direction at present is not well informed, and takes us into the realm of pure politics The majority of the PLP, and the so-called soft/centre Left has taken to heart the lesson that Jeremy 's election teaches us - have a look at Jon Cruddas' analysis for a start - and is pleased about the expansion of the membership. Their concern remains that the party does not appear in tune with the concerns and priorities of the electorate. What are they to do - sit back and accept this uncritically, in the misguided belief that papering over the cracks to give an appearance of unity that it's obvious to everyone doesn't exist will somehow propel the Party forward? Welcoming the enthusiasm of many new members has to go hand in hand with a rigorous debate, including challenge to the strategies and the direction the party is going in. //////I know you like to confine comments here to discussions of economics, so you probably won't post this. But, via your comments directed Tony Blairs remarks, you have proceeded to jump into purely political matters regarding the attitudes of the present PLP. So I feel on this occasion I am justified in taking issue with you on these political matters, and I hope you will at least read this.///////

    1. There is always debate within political parties, but how that debate takes place matters. I think the majority of MPs and some media supporters are doing what you suggest, but a minority have the attitude I talked about in the post.

  4. You seem to have a peculiarly one-eyed view of the world.
    You can see those in the financial sector supporting the Conservative Party, yet seem to be blind to the Finance companies putting money directly into the pockets of Gordon Brown, Tony Blair, and Alistair Darling.

    1. "In the land of the blind the one-eyed man is king."
      You seem unable to form the thought that the reason Brown, Blair and Darling were supported in that manner was because they were pursuing policies which benefitted the finance lobby.
      It's no longer about Left and Right but about Up and Down.

  5. As Yogi Berra said:

    "There are some people who, if they don't already know, you can't tell 'em."

  6. As Yogi Berra once said:

    "There are some people who, if they don't already know, you can't tell 'em."


  7. This argument appears to be based on the premise that the positive effect of a united party ('the electorate above all else hates divided political parties') might be sufficient to override Corbyn's proven and powerful voter-repellent qualities. In my view this is just wishful thinking, and getting rid of Corbyn, whatever it takes, much the less foolish course of action.

    1. No, that is not what I said. If people believe Corbyn will fail because of the reasons you say, their best strategy is to let that happen, and not give him the excuse that he was having to spend all his time fighting his own party.

    2. Well what is the point of your statement that 'the electorate above all else hates divided political parties' if not to suggest that being nice to Corbyn will improve the electoral prospects of the party?

      Whether being nice to Corbyn is a better way of getting rid of him is a different point. Again, I disagree with you since 1) the reputational damage done to Labour by four more years of Corbyn may well be terminal and 2) the members don't seem to have any problem with electoral failure - indeed they seem to positively welcome it - so they may not get rid of him in 2020 anyway.

    3. So where does that leave you - endless Conservative government.

    4. Yes, endless Conservative government unless the Labour Party finds a way to ditch Corbyn.

    5. On reputational damage, that done to the party by Harman's surrender to Osborne on tax credits was immense. Corbyn restored Labour's credibility on this by reversing that policy and defending the interests of lower paid workers.

  8. I agree, but why not write to Gordon too? Or a Miliband or two? I think they might have more leverage these days.

    1. Miliband D's UK political career is over.

      Miliband E does have a great deal of pull with the membership. Among Labour members he is remarkably popular.

      He seems to be keeping his powder dry.

      I wonder what for?

  9. "that people that appear to you like those your predecessor Neil Kinnock did battle with over the future of the Labour Party in the 1980s"

    Corbyn, McDonnell, Milne, Livingstone and others *were* the people Kinnock fought with in the 1980s. They don't just look like them.

    " do not mention the power of finance, inequality and the senselessness of austerity"

    He did mention inequality. Expressly. See the quotes here

    "You know the electorate above all else hates divided political parties"

    There is no polling evidence whatsoever that this is what is causing Labour's unpopularity. The problems are, as they were before, (a) the leadership and (b) economic credibility. these problems are now worse under Corbyn than they were under Miliband.

    The idea that the current unpopularity is all down to Blairite Quislings is just untrue.

    The quickest way for Labour to return to power is for Corbyn to go. Blair knows this. Asking him to say he supports him is ridiculous. Nobody would believe him.

    Blair is, roughly speaking, staying out of it as he did under Miliband. We all know what he thought about Miliband, and he was right. We all know what he thinks about Corbyn. And he is right.

    1. When David lost to Ed it was obvious what he thought this would mean for Labour's electoral prospects. But did he spend the following year writing articles and appearing on TV saying so? Blair too is behaving as he should in this respect. It is others who I'm complaining about, as you know full well.

  10. Oh, and the Corbyn/McDonnell/Milne project is *not* to win in 2020. They are not idiots.

    The project is to transform the Labour party. Asking the Blairite rump (who are tiny) to put up and shut up is to misunderstand what is going on.

    More evidence?

    Here it is today

    1. What I read was that McDonnell wants to stop the practice of barring socialists from membership of the Labour Party. If anyone already believes that McDonnell wants to transform the Labour Party, even at the cost of losing the next election, I suppose it would confirm that belief. For those of us who don't believe that already, it's not very persuasive.

    2. yeah, Momentum are just a great bunch

    3. You should read your links. It starts with: "Lambeth Momentum's leadership is on a rightward trajectory ...".

    4. "Unfortunately the meeting agreed to campaign unconditionally for Blairite candidates," says insignificant Trot sect which wishes it could control Momentum. If anything that's evidence against your argument.

  11. It seems a good time, while the EU referendum sates the reactionary media, that a Labour Party which overwhelmingly wants to stay in the EU should sort itself out on its economic policy and come to know what a liquidity trap is, what a fiscal multiplier of 1.5 means, and why bond vigilantes are invisible.

    All LibDems and Greens should also be welcomed on the same journey.

  12. The Labour surge exploiting the largest and most spectacular divide in any political party since the 1970s, the Tories over Europe, in full.

    CON: 38% (+1)
    LAB: 30% (-)
    UKIP: 16% (+1)
    GRN: 5% (+1)
    LDEM: 5% (-2)

    (BMG 23 Feb)

  13. Thanks for this post. The lightbulb moment for me was the Oldham West result, and what made it happen. A not particularly left-wing candidate was elected with a huge share of the vote, in a not particularly left-wing seat with a not particularly left-wing local party, thanks in large part to the not particularly left-wing tactic of tramping the streets, knocking on doors, reminding people there's an election and generally getting the vote out. It was a good old-fashioned Labour victory, in other words - and it was only possible because the party had busloads of volunteers at its disposal, many of whom were fired-up, enthusiastic, new recruits. Oldham West CLP aren't Corbynites*, but they were willing to take the hordes of Momentum and put them to work. The volunteers, for their part, would probably much rather have been campaigning for somebody a bit more exciting than Jim McMahon, but they knew how important it was to win that election for Labour, and they were willing to get behind McMahon. At the risk of channelling Neil Kinnock, that's how Labour wins - when the different wings of the party work together. If only more of the PLP would learn that.

    *Michael Meacher did nominate Corbyn, but the vote within the local party went for Andy Burnham.

  14. New Labour was a disaster for Labour supporters. The financial crisis happened under New Labour. Light touch for and pandering towards the City? That was New Labour. OK for the manufacturing sector to disappear because of globalisation? New Labour. Independence for the central bank? New Labour. Inequality happened under New Labour. All sorts of lies about the scale of (economic) immigration and its effects happened under New Labour. Worst of all its failure has put in place a conservative government.

    Under what grounds can you possibly judge it a success? Especially for anyone who supports supports broadly socially oriented policies. Of course traditional Labour people and the young want anything but a return to New Labour.

    1. I count central bank independence as a plus. We had in the UK 10 years of good steady growth, and that had nothing to do with the financial crisis that followed. Labour took decisions on migration that allowed it to happen. Labour did a great deal to tackle poverty. Those, and more, are the grounds. Perhaps you think the Labour governments of the 60s and 70s were better.

    2. The 10 years previous to the crash had EVERYTHING to do with the financial crash occurring.
      The crash was 100% the consequence of the things that happened before it. The idea that things 'went bad' at some point in 2008 is so wrong it makes my head hurt.

    3. Since CBI average UK growth has been lower than in the preceding period. Is it reasonable to claim the good times for CBI and disown the bad?

      Indeed, during the first decade of CBI the UK economy benefitted from several factors that cannot be attributed to CBI, including Brown's fiscal loosening from 2001 which proved to be a timely response to the .com bust, Chinese expansion lowering manufacturing prices, etc., in generally benign conditions.

      CBI as introduced by Brown was part of a package that encouraged financial excess. Indeed, his decision was as much driven by politics as economics: he wanted to make a gesture to the City that would earn him trust from the financial sector in the hope this would give him more policy space. For a time it seemed to work, then the years of 'light regulation' ended in the financial crash.

    4. Neither of you have told me what asking a bunch of people to set interest rates for you has to do with financial regulation.

  15. Simon, I enjoy your economic commentary but your political commentary tends to be rather less well grounded. The idea that the public hates divided parties "above all else" doesn't really hold water, I'm afraid - many divided parties have won elections comfortably even against comparatively united opposition. The Tories have had a huge gaping split down the middle over Europe for multiple decades, Thatcher had her wets and doubters, New Labour was infamously and publicly split between Blairites and Brownites for its entire existence, and Cameron has been loathed by his backbenchers for being too soft and centrist. And yet the electorate was OK with being led by all of them. It's not the fact that some Labour MPs bicker openly with Corbyn that is responsible for the party's current dire position, it's things like equivocating over whether or not the police should kill terrorists in the midst of conducting an attack, pushing for unilateral disarmament, and suggesting that sovereignty over the Falklands should be shared with Argentina. Unfortunately, Corbyn has done enough to make himself irredeemable in the eyes of the electorate all on his own.

    1. The examples you talk about are very different from what is currently going on, but I do not think you want to see that.

    2. I think the only one of those divisions that comes close to the current situation is the Tories' problems with Europe, circa the Major government - and that didn't end well. In any case, whether voters are willing to turn a blind eye to divisions that develop once a party's in power isn't really the key question here. Labour has an election to win. Since 1945, an opposition party has won a majority five times, by my count: in 1945, 1951, 1964, 1979 and 1997. Would Attlee, Wilson or Blair have won those elections if their party had been as divided and undiscipined as it is now?

      In any case, the fact that we're discussing the pros and cons of causing division in the party tells its own story. I'm sure Mandelson, McTernan et all don't actually want a divided party - they want a united party, but under a different leader. Well, is the current leader going to go quietly if tapped on the shoulder by the men in grey suits? Is there any mechanism to replace him with a leader more suited to the PLP? Even if there were, would this go down well with the party membership? Would a new leader (whatever their politics) be accepted as legitimate by Labour's enemies in the Tory party and the media? I can't see any answer but No to any of those questions. But without any achievable objective, we're left with people who seem intent on stoking a faction fight for its own sake - and without any regard to making it more likely that Labour will win the next election.

  16. Great posts these past few days, Professor! Keep on writing them!

  17. Agree wholeheartedly with Mainly Macro, but please bear in mind that Blair is inaccessible to reason; what he Believes transcends logic, and he now regards himself as a World Leader destined to inspire all nations and correct their perceptions of democracy (to which he is on record as preferring strong government.

    Apologists for Tony's 'centrist' approach - that approved by global financiers and speculators - in addition to overlooking its dire effects on the hoodwinked UK citizen, fail to recognise that Blair is now an extremely toxic brand, despite his ceaseless and well-orchestrated self-promotion. It is not one with which the Labour party should be associated in any way.

  18. Reply to SWL: Sorry to keep harping on about it, but I've got to say it again: the centre is on the right.

    For example:

    "if the alternative is to try and elect leaders from the centre who will do nothing to confront these great issues, and will instead cut spending, accept stagnation and wait for the next financial crisis, is it any wonder that many people would rather take their chance with someone different?"

    Someone who doesn't try to confront such issues of austerity is by their very behaviours not of the centre, and is obviously behaving like a right-wing politician regardless of what they claim to be.

    I also keep saying that the centre of politics doesn’t exist, so maybe I should try to explain my position a bit better. There’s a difference between a person’s stated ideology and their behavioural ideology, and the difference is usually caused by a perception of what *other people* think; usually as given by polling and survey data.

    A typical thing for someone like Polly Toynbee to say is that they completely agree with Corbyn’s ideological outlook and the type of policies that he would like to enact, but that the UK electorate wouldn’t vote for him, so therefore she can’t support him either. At that point a bunch of polling data is then given to support the argument, or in some cases this isn’t done as it is taken as a general ‘given’ that Corbyn can’t win; almost like saying “well, I wish he could win, but ‘everyone’ knows that he can’t”. Never mind that pundits like her are fully aware that their predictions (and most of the main polls) are wrong most of the time (since they influence more than they predict) and so should not be used as a basis for argument; she’ll use them anyway and be adamant that she’s being ‘realistic’ all the same.

    It’s this misuse of the opinion of some collective body (that people like me call “the big Other”) that allows ideological compromises to be made, and these compromises stretch to the point where the person’s *actual behaviour* (in terms of the policies that they think could be supported by the electorate) is right-wing, while only their statements of what they *wish* other people would support are left-wing. It’s this attitude that leads to them disavowing their right-wing behaviours and misrepresenting themselves as someone in the middle, or centre-left.

    The current economic crisis has been caused by the general ‘opinion’ of the people being that a genuine left-wing party cannot get elected; either because the polls say so or we just generally all ‘know’ this already. The poll culture has led to a feedback loop in the discussions where this perception has gradually got worse and worse, and this feedback loop is not unrelated to the one that makes the super-rich ever super-richer. The economic situation is bad and is getting worse because people keep compromising their beliefs for the sake of the opinions of polls, and it needs to stop.

    There are two ways to doing politics:

    1. Hold a political outlook and try to convince other people that it’s correct in order to win their votes.

    2. Poll and survey the electorate to find out what they want, and then tell them what they want to hear in order to win their votes.

    There will always be a degree of both being used no matter how ethically minded the candidate might be since we don’t develop our opinions in a vacuum, but we should at least acknowledge that the dominion of the latter is largely to blame for our current power structures and their inability to fight against inequality and austerity.

    So I have two requests to SWL and the readers of this blog:

    a. Please stop using the term ‘centre’ to describe people who either support or don’t challenge the austerity policies of the right, and especially when they use ‘other people’s opinions’ as the sole basis of their arguments.

    b. Please stop using polling or survey data as the basis for your arguments as it’s this kind of thinking that has got us into the mess that we’re currently in, and it will do nothing to get us out of it.

  19. Simon, as always, your writing is a model of clarity.

    There are, indeed, very good reasons why an appreciable part of the electorate might turn away from the 'mainstream' politics.

    Partly this is because in times of poor economic growth, there is inevitable discontent.

    Deeper than this, I would suggest, is a feeling among the electorate that those in power are not addressing the issues that matter.

    Housing is a case in point.

    Those voters who benefit from the house price boom may be happy, but even they can sense that something is not right-that the politicians are far from helpless bystanders.

    This brings us to Corbyn.

    He has tapped into a vein of discontent, which is a good thing (in my view).

    What is deeply disturbing, however, is that his goals appear to be those of entryism and taking control of the Labour party, rather than effecting political change at the government level.

    So, we can look forward to a continuation of the one party rule so far as national politics is concerned.

    At a local level, there will be Labour enclaves, with Corbyn placemen and agendas that are likely to be self-serving at best.

    So there we have it.

    The patient has an appetite for a novel treatment, but only quack medicine is on offer.

    1. I do not understand "his goals appear to be those of entryism and taking control of the Labour party, rather than effecting political change at the government level." Of course he wants his people in positions of power in the party - what leader does not. But the idea that he does not want to win power. What evidence is there for that?

  20. There seems to be a four false or very dubious arguments being made in relation to Simon’s post.

    1) We know Corbyn cant win in 2020. But nobody has a time machine that allows them to see the future with any degree of certainty. All kinds of events could happen over the next four years that could lead to a Labour victory. Most obviously there is an upcoming EU referendum. Should there be a vote for a Brexit, and the oddsmakers give this a not inconsiderable 20-30% probability then the political and economic future becomes highly unpredictable. Even a slim vote to remain could lead to a huge schism in the Tory party with a majority of both MPs, and particularly members, favouring exit. Another possibility is that Corbyn could make way for another candidate who would have less baggage but would essentially carry forward the same policies. This idea that you can some how predict with any certainty future elections reached its silliest point recently when a American professor claimed that there is a 97% chance that Trump would beat Clinton and a 99% chance he would beat Sanders in the upcoming Presidential election As Chris Dillow recently pointed out the future is unknowable

    2) Having Corbyn in charge for an extended period – even if he were removed before 2020- would destroy Labour’s chances in the general election. This argument was made recently by the pollster Ian Warren but there is no evidential base to make this statement.

    3) Being seen as being divided isn’t the problem for Labour, Corbyn is. Corbyn has obvious weaknesses- there is no denying that- but to argue that having significant parts of your party constantly briefing against you isn’t extremely damaging is magical thinking. To defeat the Conservatives, labour will need a convincing economic narrative that will need to be repeated with consistent message discipline.

    4) Corbyn’s Labour is too far away from what the public opinion to be electable. There are many problems with this well worn piece of conventional wisdom. Much of these claims are based on opinion polling which is highly sensitive to how questions are framed. Also public attitudes are not static and shift in relation to events. They can also be changed by political discourse. When Mrs Thatcher was elected many of her views were very much outside the consensus but this was not the case when she departed. However the most important argument against this position is that in many cases the public is badly misinformed on issues as research has demonstrated and the direction of misunderstanding follows a distinct ‘tabloid' direction. Should the Labour Party really introduce stupid and cruel welfare policies because the public massively overestimates how much money is spent on Jobseekers’s allowance? Should they support economically illiterate austerity policies because a majority of the public think they are a good idea? Or should they attempt to challenge the false narratives that dominate much of the media? The research literature here is clear - once you accept your advisory's frame as Labour 2010-2015 clearly did on the economy -you have lost.

    1. Mike. I also think there are two other things going on here to do with framing. One is about defining what are acceptable views and what are not. The right have always done this (the loony left), but people on the left can do it too with forms of political correctness. Certain views or ideas are regarded as so outlandish that they put those that hold them 'beyond the pale'. So Corbyn is condemned for his association with Stop the War, but cosying up to China or Saudi Arabia is considered acceptable. Of course society will quite rightly have norms about what is acceptable and what is not, so if you can succeed in defining what these are in the political sphere it is a powerful weapon.

      The other is to distort what Corbyn says. The episode over shoot to kill is a clear example. The right also did it to Miliband when he talked about responsible capitalism, which became that he was anti-business. Again both sides do it, but given media bias it has a much bigger effect on Labour. Indeed I suspect part of the reason that so many Labour politicians fail to connect with the electorate is that they have almost been trained to avoid saying anything that could be willfully misinterpreted.

    2. He did not just 'associate' with Stop the War. He was the chair from 2011-2015, and a founding member.

      Some views are outlandish. McDonnell and Corbyn's views on the IRA for example, are.

    3. On

      1. Yes of course. Predicting the future requires judgement. We will see whose judgement is right, won't we?

      2. Having elected Corbyn has already done terrible generational damage to the Labour brand. I was sat next to someone who had voted Labour since 1979 last night, but said they would not in 2020 regardless of what happens. When I asked why not, they said that even if they replaced Corbyn with a social democrat, he'd worry that if the leader died ("was killed with polonium" was his suggestion) the members would then elect a Corbyn-style leader to replace him.

      So, even if Labour changed leader before 2020 (I don't think it will - judgement again) the damage is done.

      3. The Tories are divided over Europe. Labour was split at the top between Blair and Brown. The only way we have of testing your claims that Labour's unpopularity is caused by division is to look at the polling data. Which doesn't support that at all.

      4. Again, claims like this are untestable. I don't want Corbyn and McDonnell because what they want and believes is substantively wrong, and has been for 40+ years. The Left Platform they stood on in May 2015 was barmy.

      Don't know what the Left Platform was? Then you don't know who Corbyn and McDonnell are.

    4. Reply to [SpinningHugo 27 February 2016 at 00:58]:

      "1. Yes of course. Predicting the future requires judgement. We will see whose judgement is right, won't we?"

      Was this guy's judgement right:

      "It probably wont matter for the 2015 electoral result, the fundamentals so strongly favour Labour that they can't lose."

  21. Yes I absolutely agree with both those points Simon. Corbyn needs to much more careful about what he says because, as you say, the media and the Conservatives will distort what he says. They did over Bin Laden, they did over shot to kill, they did it over his anodyne comments about wouldn't it be great hypothetically if every country was able to get rid of its army. That's why I didn't like the unspecified comments about 'People QE'. It was obvious it would only be used in an extreme situation but it offered the Telegraph, Times, the rest of the right wing press his opponents in the Labour party to start talking about Zimbabwe and monetizing all public spending. Corbyn has struggled because he had no experience of running this kind of media operation and desperately needs a decent rebuttal machine.

  22. As to ‘what asking a bunch of people to set interest rates has to do with financial regulation’, for the UK at least, giving the MPC the power to set interest rates was part of a package that included moving regulatory powers from the BoE into the FSA and which was intended to persuade the City that it was safe under New Labour. In general I would argue that monetary and financial stability must be considered together and hence setting rates should not be separated from financial regulation. There are several links between the two so I’ll just give a few examples.

    1) Low rates encourage a ‘hunt for yield’ in which financial institutions take on more risk in the hope of gaining more return. This has been evident in the flows of capital to/from emerging markets in response to US interest rate moves. Indeed, one of the justifications for QE was to encourage purchases of higher risk assets (equities rather than gilts) in the hope that this would stimulate the economy.

    2) Interest rates affect bank profitability. This was a justification for the MPC in 2009 to extend interest payments to all reserves not just those deemed to be excess. Worries have been expressed this year that negative rates could have a damaging effect on banks and these have helped to drive down bank shares.

    3) As loans create deposits, the interest rate required to achieve a given target rate of inflation will depend on the ability and willingness of banks to lend, which in turn depends on the regulatory regime, such as capital or reserve ratios. One of the reasons QE had limited impact was that it did no more than offset the contraction in bank lending (broad monetary aggregates are remarkable stable through the QE period despite the sharp rise in narrow aggregates).

    4) Similarly, good macro-prudential regulation should allow interest rates to be kept lower than they otherwise would have to be to manage inflation and the risks of financial over-expansion.

    5) Evidence suggests that in setting rates, central banks worry about asset prices as well as inflation and employment, and not just because of the impact asset price changes might have on these. This is the infamous ‘Greenspan put’ (see a recent ‘Economist’ article on this at

    I hope this suffices to show that rates and regulation cannot be wholly separated. I have further reasons for thinking that the setting of rates is inherently political, not purely technical.


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