Cameron's Press Conference - Live

Fiscal Illusion: Ricardian Equivalence and Tax Cons - BOM
Indy for Sale, Zac Goldsmith Was Wooed - Times 
Psychotic Brown Creates His Own Reality - Simon Carr
Bonkers Brown Exterminates All Doubters - Quentin Letts
Gordon Blames All On U.S. of A. - FT Westminster

TUESDAY, NOVEMBER 18, 2008

Cameron's Press Conference - Live

Cameron opened up with a preamble mentioning free enterprise, an open economy, sound money, micro-economic supply side reform and the importance of competitive markets. Ticking some of the Thatcherite boxes in his introduction.

He said he was pragmatic not ideological before turning to monetary policy, for an awful second Guido thought he was going to advocate some kind of Nixonian interest rate controls.

Then we got to the meat, the two decade long Japanese fiscal stimulus did not work, Gordon Brown has himself argued that fiscal loosening was wrong, weak currencies flow from weakening economies, the pound is weaker because the government is weak. Dave pointed out that the markets now see British Gilts as twice as risky as German Bunds. Gordon is abandoning every policy he has held to because he has no choice, so he is making a virtue of necessity.

He advocated "less of an increase" rather than cuts in government spending, saying Labour will lie that this is a cut. "Same old Labour, same old spin" with Mandelson and Campbell back to deliver the spin.

It was a reasonable diagnosis and he has set reasonable objectives. Not a lot of excitement, but a reasonable attempt to take control of the news agenda. He has, at last, formalised the Conservative Party's intention to not keep to Labour's spending plans in government.

UPDATE : Full speech here.

Government Has Already Lost £8 Billion in the Banks

If you thought your pension portfolio was doing badly you should see the government's share portfolio. When it decided to nationalise banks HM Treasury said:

The Government’s investments will be managed on a commercial basis by a new arm’s-length company, ‘UK Financial Investments Limited’ (UKFI), which is wholly owned by the Government. Its overarching objectives will be to protect and create value for the taxpayer as shareholder...

UKFI of course differs from other funds "managed on a commercial basis" in one important respect, it is unable to sell underperforming assets, and underperform they have, destroying value for the taxpayers as shareholders.

Barclays took petro-dollars to recapitalise, so could and should have these banks. Northern Rock should have been put into receivership and whatever was of value sold to other banks. Instead, somewhat pointlessly, taxpayers have been lumbered with an £8 billion loss to date. The government is no better at investing in banks than it was at investing in British Leyland.

Instead of being lost in the stock market, £8 billion could have been used to raise tax thresholds by £1000 per income taxpayer for a year with plenty leftover. Helping those on lower incomes the most.

"A Vampire Feeding On Our Misery"

Is Paul Dacre away from the office? This morning's Mail has two scorching attacks on the Prime Mentalist. Quentin Letts captures the essence of Brown, Peter Mackay unloads both barrels:

Prime Minister Gordon Brown's political stocks continue to rise even though Britain is facing an economic crisis.

Deceit and hypocrisy are as common in politics as in everyday life, but for Labour to suggest Shadow Chancellor George Osborne might undermine the pound by criticising Gordon Brown suggests new depths of political depravity.

There is already a run on the pound, which has lost 25 per cent of its value against the dollar and the euro. Trying to pin it on Osborne seems cowardly as well as disgusting.

Brown wants complete freedom to do as he pleases during the current economic crisis, even though it's likely that it was his let-it-rip fiscal recklessness which to a large extent caused our worst-of-all-nations fix.

He demands silence from his political opponents, calculating that if his schemes go wrong he can avoid responsibility by saying he had cross-party support.

Brown practised the same dirty politics when pressed by David Cameron on the Baby P tragedy. He said Cameron's questions were politically motivated - in other words, they wouldn't have been asked if the case hadn't happened in a Labour borough, Haringey.

He must know this isn't true. He can't possibly be so cut off from what's going on that he didn't know the whole country was talking about the case. But he refused to withdraw his snide remark. His reaction was: 'This is harmful to me.' So it was OK to accuse Cameron of playing party politics.

Nothing is allowed to mar Brown's new lease of life in which - bafflingly - his poll ratings rise while the country goes down the tubes. He feeds on our distress like a vampire, bursting with energy while others wonder how they and their families will survive.

His trip to Washington for President George W. Bush's G20 economic summit was all for show. Bush wants credit for helping clean up the mess he caused. So does Brown, who also needs to win a general election.

But President-elect Barack Obama wisely kept clear of them - and, we must hope, their attempts to write his new policies.

Brown now hopes Obama will agree to a new G20 summit in London in April. A world-famous new political star with whom he can be photographed again. Thereby fulfilling his greatest dream: that he can demonstrate to the world - not just Britain - that he, and he alone, has the answer to its problems.

All who aspire to public office need to have faith in themselves, but Brown is in a class of his own. And he'll literally say anything to advance himself or keep back others. He pulls more stunts than Gerry Cottle's Circus.

As for his colleagues, aren't they a dismal crew? They were threatening to dump him in order to save their seats. Now the polls have improved, they're in the grip of collective dementia.

They can't understand why they're being rewarded for their mistakes but the new prospect of electoral victory drives them mad with excitement.

No one may threaten their fragile dream by questioning the Government's competence. Hence their insane jeering during the Commons questions on Baby P and the pathetic attempts to blame Osborne for the collapsing pound.

Brown is now poised to bribe us with tax cuts and other goodies ('fiscal stimulus', he calls it) before springing a 2009 general election, saying he needs a new mandate to steer us through the troubled waters ahead.

He doesn't care how much he spends - or how much debt he piles up for our children and grandchildren - because its a heads-he-wins, tails-you-lose game.