Forget Super Thursday, the Bank of England can only offer Mildly Useful Thursday

 The Bank of England is expected to announce on Thursday measures to stimulate the UK economy following signs that there will be a significant economic downturn following the vote for Brexit. The Bank may cut interest rates, inject another dose of quantitative easing or conjure up something new to give the economy a monetary boost.

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Ignore the mudslinging – Corbyn would be a sound option for Labour

The contest for the next leader of the Labour Party is in danger of becoming interesting. Jeremy Corbyn is increasingly stealing the show – perhaps because he is the only one saying anything of substance. The other candidates seem to have been rendered incoherent or inchoate by the carefully manufactured “Big Lie” that the Great Recession was caused by a Labour government that spent too much.

It has now got ridiculous: with Andy Burnham, while arguing for “balanced and sustainable public finances”, considering it necessary to reassure us that “Labour spending on education and the health service didn’t cause the global banking crisis”. As if any of the electorate believe that buying books for British school children and drugs for the NHS caused the sub-prime crisis in the US housing market? And, while senior Labour politicians are busily apologising for spending too much in the past, the Oxford economist, Simon Wren-Lewis, has shown that the argument that the last Labour government seriously mismanaged the nation’s finances is a myth.

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Budget 2015: cuts to make Daily Mail readers wince, but not just yet

George Osborne is preparing to deliver the first Tory budget since 1996. He will proclaim the success of the government’s “long-term economic plan” and will use this as a platform to launch a radical reduction of welfare expenditure. But repeatedly extolling the success of your long-term economic plan does not mean that you have one. And an economy that in the first quarter was growing at a sluggish annual rate of 2.2% per head – after a deep and protracted recession – is not an indicator of sustained economic revival.

There are two main components of the government’s economic plan. First, to decrease the budget deficit and eventually move it to surplus – with the fiscal burden being borne by cuts in government spending. Second, to reduce the size of the state in the British economy. This is not an “economic plan”, it is a political agenda based on a doctrine of faith.

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David Cameron’s red light zone is closer to home than he thinks

When discussing the state of the economy, politicians deploy two key tricks. First, get your excuses in early. Second, take all the credit for any good news but blame others for any bad news.

David Cameron has used both devices when he warns that “red warning lights are flashing on the dashboard of the global economy” with the UK’s fragile recovery threatened by external forces, most notably: the euro-zone crisis; a slowdown of growth in the emerging markets; and geopolitical tensions. So, is the prime minister’s intervention good economics or just good politics?

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How to shape economic policy when we move beyond GDP

The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behaviour and religion.

 These are the words of John Maynard Keynes in the first annual report of the Arts Council in 1946. Keynes was writing a lifetime ago, and he was wrong. The “economic problem” of today is firmly in the driving seat of policy with higher economic growth the ultimate goal of many policymakers. But is growth of the economy – producing more goods and services (usually measured as the percentage change of GDP) – a good indicator of well-being or the quality of life? The economist, Simon Kuznets, who developed the concept of GDP in 1934, was sceptical, remarking that: “the welfare of a nation can scarcely be inferred from a measurement of national income.

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Osborne’s four myths mean he hits the poor and helps the rich

George Osborne performed his main role at conference: to produce some good news to deflect attention from defection and deviance. Abolishing death taxes while targeting tax avoiders sounds good and the Tory faithful loved it. And this is good news on the cheap.

The Treasury estimates that the move will cost £150m in a total government budget which is estimated to be £732 billion in 2014-15. It does not cost much because it will only benefit a small number of prosperous pensioners. And the conference also loved the freeze on working-age benefits; which means a cut in real terms for the unemployed and those on low incomes.

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Immigration rhetoric is a threat to Britain’s long-term growth

Immigration has risen to the top of the political agenda in the UK.

And the popular press has been propelling the bandwagon.  ‘We must stop the immigrant invasion’ according to the Daily Express and ‘enough is enough’ according to the Daily Mail.  The Sun columnist, Jane Moore has argued that ‘immigration fears are all about the numbers, not race’.  But the numbers show that the fears are unfounded and that immigration is good for growth.

What is the extent of the ‘invasion’? According to the latest official data (see Chart), net immigration was approximately 212,000 in the 2013.  And why are they invading? To seek asylum according to public perceptions (see: Blinder, Political Studies, 2013).  The reality is of course different. The main reasons for the ‘invasion’ are to study and to work.   And these migrants have a positive effect on the British economy.

Full Bog continues here on The Conversation website.

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