Britannia Radio

I gave this morning a glimpse of what the Brown-Darling pair are 
actually doing with the economy right now ("In the real world there 
are problems galore despite the second coming! ") which is fiddling 
rather than managing,  with previous excesses uncurbed.

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SPECTATOR    5.11.08
The Tory Quest For A Fiscal Holy Grail Is Doomed
IRWIN SELTZER

Brown's golden rules have been exposed as a sham, says Irwin Stelzer, 
but the Tory response has been feeble. Their target should be the 
PM's feathering of Old Labour nests

The good news is that Gordon Brown's golden rules are no more. These 
rules did not stop the then chancellor from launching a spending 
binge. They did not stop him from spilling red ink all over the 
nation's books at a time when the flow of cash into the Treasury was 
at record levels. They did not stop him from raising taxes, 60 times 
by some counts. They did not stop him from redistributing income from 
wealth-creators to wealth-consumers.

What the rules did do was provide the curtain behind which this 
latter-day Wizard of Oz could hide, give him the distraction on which 
magicians rely to prevent audiences from following their sleight-of-
hand. Pay no attention to my tax-and-spend, I am adhering to the 
golden rules I invented.

And in the end, when his 2002 promise that 'at all times - now and in 
the future - we will never compromise our commitment to meet our 
fiscal rules and disciplines' became inconvenient, Brown sent his 
chosen successor into the newly cruel world to announce, 'To apply 
the fiscal rules in a rigid manner today would be perverse.' Indeed, 
Alistair Darling has no intention of applying them in a rigid or any 
other manner. Golden rule, R.I.P. rules that are jettisoned when they 
become inconvenient hardly qualify for that designation. It is as if 
we were all allowed to disregard the speed limit when we are in a 
hurry - not very binding, such rules.

The fiscal rules that were Brown's guarantor against 'boom and bust' 
are not the only casualties of the current credit crisis and 
recession. The independence of the Bank of England has been seriously 
compromised. Now, the Bank was never truly independent, since the 
Chancellor has the power to appoint and, if he is unhappy, to fail to 
reappoint the Governor and the members of the monetary policy 
committee. He also sets the inflation target, currently at 2 per 
cent, a single mandate that has prompted Mervyn King to keep interest 
rates higher than any sensible economist would countenance. Now that 
inflation is clicking along at an annual rate in excess of 5 per 
cent, the Chancellor has signalled the Bank that it need not worry 
just now about meeting its 2 per cent target - better to lower 
interest rates to support the government's efforts to stimulate the 
economy. Gone is the notion that an independent bank's primary job is 
to tighten monetary policy when it feels the government is playing 
fast and loose with fiscal policy. Or at least to apply the judgment 
of its monetary policy gurus, rather than take 'advice' from Number 
11 - more precisely, Number 10.