Saturday, March 7, 2009

Never Fear - Polly Is Here

Oh to live in Pollyanna. There is no problem to which the solution is not simply more Government...

Yesterday George Osborne, the shadow chancellor, laid out an economic policy that looks to any Keynesian like the perfect recipe for turning recession into deepest depression. It's Margaret Thatcher in 1980 all over again - cutting, sacking and reducing debt just when the state should expand.

No, no, no. The solution to recession is, by definition, to get the economy expanding. Yes, the state is one element, but it is also the non wealth producing sector. Far better to look at ways to stimulate the private sector which can both generate the wealth, and consequently the tax £s, to pay for the 'cost' of government help, rather than seek to bloat the state with the result of crowding out the private sector and stifling the very wealth creation which will have to pay for it all.

Here's his programme: cut corporation tax and stamp duty on shares; abolish tax on savings; "come off Labour's unrealistic spending plans" and "bring national debt under control"; no investment in "public works projects" but instead "confront uncomfortable truths" - which means "government can't just spend money on every worthy cause that comes knocking on the door". Never mind what nice Mr Cameron says about "capitalism with a conscience", it's the numbers in nasty Mr Osborne's calculator that count.

Re shares it is a good idea to cut/scrap stamp duty on transactions, and while George is at it he might wish to reinstate capital gains tax back at 40% with a modified taper relief since it an economically efficient tax (capital being infinitely inelastic in the short run). As for saying government shouldn't just throw money at everything that comes its way, well that sounds rather good to me!

But this is just a wonderful piece of idiocy...

That is why Compass puts PR top of its manifesto. Without it, every spark of new political life is extinguished. You can march or throw green custard or sit down on airfields - but it's wasted effort if your votes have no chance of winning representation. Yes, PR may mean the BNP wins a few seats. Yes, it means coalitions. No, don't point to Italy or Israel's absurd, extreme systems. People deserve a choice closer to their views - a left-of-Labour group, maybe this mythical Red Tory party or a pro-Euro Tory group, an unwasted Lib Dem vote, a Green voice, a David Davis English yeoman vote.

What I find so amusing is that the Israeli electoral system is based on the d'Hondt PR system also used in the European Parliament elections. If Polly doesn't think it a particularly good PR system will she be campaigning for a change there as well?

And as Simon Jenkins points out so eloquently in this article from 2007, to support PR at Westminster fundamentally misunderstand our system of government. Parliamentary democracy is not suited to it. If we decided to make a break, however, and directly elect the executive and then turn to some form of PR for the Commons and/or Lords, then that would be perfectly legitimate.


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