A lesson from history - you can't spend your way out of recession

Those who fail to understand the mistakes of the past are doomed to repeat them. In the worst financial crisis since the Second World War, there is a clamour in some quarters - particularly from some sections of the Labour Party, which bequeathed us this mess - that 'stimulus' is the way to blast our way out of recession. Spend the money and you stimulate demand. It sounds seductive. But who said this:

"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step."

It was actually James Callaghan, speaking at the Labour Party Conference on 28th September 1976.

3 years later the top rate of income tax reached 98%. Did it work? Did it hell.

Sainsbury's Boss is Right - There's no such thing as 'unhealthy' food

Sainsbury's Chief Executive caused a storm a few days ago by saying that 'there's no such thing as unhealthy food'.


"Well he would say that, wouldn't he?" was the collective response of many, and in particular from MPs concerned at the obesity timebomb that will soon explode, or maybe has already exploded, Mr Creosote-like, across the UK.


But the thing is - he's technically right.

Senior Lib Dems express doubt about the Coalition. Big Deal!

Vince Cable has been caught out expressing doubts about Coalition policy, and saying that if he disagreed too much, he could resign. A few other Lib Dem MPs have similarly been recorded saying they are unsure about some policies, notably those on tuition fees and the cuts. The BBC has been all over the story, and rushing to interview Labour figures about it. Aside from the amazing lapses which led Cable and the others to just shoot their mouths off to total strangers, I suspect no-one outside Westminster quite understands what all the fuss is about. The nation yawns, you might say.

Some students have changed the world for the better. But not these ones.

I've already deconstructed the wider issues around Higher Education in this country here. I said that you can't look at the debate over rising tuition fees in isolation from wider issues in HE. But on to the recent protests themselves.

A few weeks ago my Christmas shopping was diverted by a bit of a 'kerfuffle' around Argyll Street near Oxford Circus. The whole street was blocked off by scores of police vans and no-one was being allowed through. I assumed a celebrity of some sort was visiting the Palladium, but it seemed a bit over-the-top. It was one of the days of the student protests against fee increases, but I didn't see any protestors, or any trouble at all. Oxford Street is full of noisy, slightly mad people anyway, so noisy protests are no big deal for us Londoners.

Germans play the economics game right

German Chancellor Angela Merkel has been  pushing for bondholders to take some of the hit the next time a bank sheepishly puts its hand up and admits it's got no money. Sounds fair enough to me. Why should it be the poor old taxpayer who has to cough up every time a bailout is needed?

Ireland's pain, Euro's shame

Ireland's Celtic Tiger is dead, a stake through its heart.

Even when the ugly truth has been exposed, people still can't admit to what has gone wrong. The Euro wasn't right for Ireland (or, by extension, for the UK). How much more proof does anyone need? The cause of the Irish crisis was, in essence, that Irish banks went on an orgy of irresponsible lending to fuel an unsustainable housing bubble. Sound familiar? Oh yes....

But here's the thing - the Euro. You can't get away from it. Well, Ireland can't anyway. And that's the problem now.

The Pope, AIDS and contraception

Pope Benedict XVI has changed  - or perhaps clarified - the Catholic Church's position on the use of contraception. He had previously reaffirmed the teaching set out since The Second Vatican Council, and reinforced vigorously by hsi predecessor Pope John Paul II, that contraception was 'intrinsically evil'.