Politicians should be wary of vested interests in the economic debate

Tom Bailey

Image © Alan Chan

On Monday the 2020 Tax Commission final report was published. Other websites have picked over the bizarre elements, the major problems and highlighted certain strengths better than I could. This blog will not discuss all of the report itself but instead use it to raise a broader point. These reports are productions by groups of self-interest and must be treated as such. Think tanks such as the Taxpayer’s Alliance often lack transparency about funding. I can’t find such information on their website and emailing to ask who funds them has not led to a reply (nor did it for George Monbiot). Polly Toynbee wrote a good piece a while back that articulated the problems of that think tank in particular. The TPA supports the self-interest of large business owners and leaders in lower taxes, regardless of the consequent costs for everyone else. What is more annoying is that they are sought whilst many intelligent economists without such evident self interest are ignored. Business leaders and their stooge think tanks seem to be given a preferential place in all economic debates.

This is a cross-party phenomenon that has been going on for far too long. Sure, business support is all well and good, but it should not be the be-all and end-all in economic debates. Tony Blair wrote in his memoirs that he knew Labour had lost the 2010 general election when business came out in support of the Conservatives. He wrote that once you lose chief executives, ‘you lose more than a few votes. You lose your economic credibility. And a sprinkling of academic economists, however distinguished, won’t make up the difference.’ (681) Given Blair’s obsession with courting business support, it seems it was more than just another cheap shot against Gordon Brown. The Conservatives have had a more established deference to business. Appeal to business authority was one tactic used in 2010 by Osborne trying to make the case for deeper austerity than Labour favoured. He said in his Mais Lecture in 2010 that his view was supported by ‘many leading business figures and crucially by international investors’. Both reveal an the misplaced confidence that credibility is primarily derived from business, a theme constantly repeated by journalists. For instance, in January the ever critical Dan Hodges welcomed Labour’s declaration that they could not reverse cuts as a demonstration that ‘Labour “flat-earthers”, who argued for no retreat in the face of the coalition’s austerity measures, or an electorate that views them as a necessary evil, have been routed.’ It has been a common critique of Labour despite the slowdown since the election of the Conservatives in 2010. Personally, I think credibility should be what works rather than by default with what business vested interests support. Business lined up behind Tory levels of austerity arguing that it would support recovery. As we have now gone into a double dip (or if the figures are off, are still flat lining at best), can we be a little more sceptical about their wisdom on all economic matters?

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The real villain of the GOP race

Scott Hill

Image © Greg Elin

In the somewhat irrelevant, mundane and over-long run-up to November’s presidential election much of the media spotlight has been on the talents – or rather, lack of – within the GOP ranks. Frontrunner Mitt Romney is suffering from what I shall refer to as the sinister and weird Mormon problem, up-and-coming Rick Santorum is, by any true believers’ standards, a complete and utter loon, which is also a tag all-too-easily synonymous with the recently humbled Rick Perry, who, following an on-going drought in Texas, declared official “Days for Prayer for Rain”[i] back in April last year.

Yet, before I sink to the similarly low depths of much of the media, I shall refrain from dissecting the Republican nominees too much; they are not the most important, nor indeed, the most interesting segment of this excruciatingly predictable election campaign.

Instead, I would like to propose that we imagine for a moment, if you will, that a Republican was in the White House and a young, enigmatic idealist named Barack Obama was their greatest challenger. Rather than use those phony, over-polished slogans – “Change we can believe in”[ii] – we shall pretend, for the sake of clarity, that his campaign was made up of pledges mirroring the reality of what has transpired since the 20th January, 2009.

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