What, even post-Lehman? ‘king hell. Before Lehman, there was a good case that “let the bastards go to the wall” might be better than bail-outs; after Lehman, there wasn’t.

“It’s OK to let entire mining communities, industrial towns and entire manufacturing industries go to the wall.”

…because if they do, then everyone else isn’t shafted.

Before provoking the miners’ strike, the government (Tory and Labour before them) spent many years changing our energy and transport infrastructure to allow more use of oil, gas and imported coal for generation and heating. But if the miners had required an enormous bail-out in 1979, they’d certainly have got it – indeed, they regularly got enormous pay deals throughout the 1970s precisely because if they went on strike, the country ground to a halt.

Creating a system where you’re utterly dependent on the miners, or the bankers, isn’t clever. But once you’ve got such a system in place, you fucking well need to bail them out in the short term if you want the lights to stay on…

Firstly, we don’t ALL know that. There is a sizable body of opinion that believes the weak, badly run banks should have been allowed to fail. The government could then have decided what to do about savers deposits, if anything beyond the existing and very long standing guarantees.

It’s OK to let entire mining communities, industrial towns and entire manufacturing industries go to the wall. But it’s not OK to allow savers who invested their money under strict, legally binding agreements in the full knowledge of what would happen should their bank fail, lose out.

It’s OK to see unemployed factory workers queueing for their benefits but a line of old codgers trying to get their savings out will lead to panic and economic collapse. Oh, wait! Too late. We had that anyway.

It’s a strange battle cry for Labour, isn’t it.? “We save the banks for the nation”
So all existing banks can poodle along in the certain knowledge that the idea of market forces (which you might think was close to the hearts of financiers and bankers) simply don’t apply to them. Nice.

Nobody here is questioning the need to inject money into the system (and therefore the need to borrow in order to do that). What some are questioning is the way it’s being done and the real motive behind it. The VAT reduction is a piece of utter nonsense and a waste of money. It was done so that there was no chance the money would go to people in need but would only kick in when money was spent on VAT rated goods. Although, even there, Darling has completely miscalculated the likely effect on spending/consumption.

This government is locked into the idea of boom. It’s still Granita style New Labour – let’s not be in any doubt about that – which is why Toynbee’s assertions are risible. Previously it was boom without the pain. Now they still want the boom but they’ll accept a bit of pain in the meantime. Or rather, WE WILL accept the pain, on their behalf.

I think you’re being way too generous to PT: she tried to pull a similar argument over the abolition of the 10p tax band (i.e. a ‘what’s all the fuss?’ position) until it was very forcibly pointed out that the lowest paid workers would be facing a tax rise to give basic rate taxpayers a tax cut. Toynbee obviously isn’t in favour of mass unemployment, but her wording suggests that most people will be fine as New Labour presides over 1980s style dole queues – which is not an argument she would have made in the 1980s. Maybe she thinks recessions are nicer under New Labour – it must those magic ponies talking in her head again.

Even at 57% of GDP in 2013, public debt will probably still be amongst the lowest in the G7. Japan has currently over 100% debt (and that is before the recession even starts).

All those on the Right crowing abour borrowing have to answer 3 big questions.

1. Would you have let any of the high street banks go bust? We all know there would have been economic catastrophe as panic ensued. So ‘No’ must be the answer to that and bailing out the banks is where the majority of this extra debt is going. The Tories are now more neo-liberal than George W Bush.

2. Why is it wise to CUT public spending as we enter a recession? The answer is, it will only deepen the recession like it did in the 80s. The Tories may not care about the 3m unemployed or the poorest who will suffer (and Polly’s point that you misinterpret, was that politically ignoring this number can still get you re-elected, as the Tories demonstrated in the 80s).

Every nation, every party left or right has recognised that we need to borrow to spend in these extraordinary times… except the Tories. It really shows how callous they are. Yes, we could have had no debt at all and been in a brilliant position – but at 42% – debt is no higher than it was under the Tories throughout their 18 years in power – so do we really believe the Tories would have us in a different position. I don’t believe them, just as I don’t believe they can magic more efficiency gains than Labour, or that the NHS is safe in their hands or that they would redistribute anything like this Labour government has.

3. Finally, where are your inevitable Tory tax rises going to hit? Labour may be weakly hitting the rich, but at least they are not going to cut IHT which only helps the richest.

Now, if he had given any sign of having read this, maybe we would have an ideological divide to discuss.

Some might say serves ‘em right, and I have some sympathy with that point of view, but not all middle income earners went on a credit splurge or benefited from the housing boom yet we will all (including my family) foot the bill for this profligacy, Brown’s mismanagement and the banking sector’s criminal irresponsibility for many years to come.

Darling could have pumped money into the economy AND struck a blow for social justice by targeting the cash injection at those who need it most. But then it would only get spent on food, heating and other essentials which is hardly the stuff of ‘restoring confidence in the high street’ or ‘laying the foundation for secure economic growth in the future’. What we want is more Malaysian plasma TVs.

Brown benefited from an artificially funded consumer boom and he added to his good fortune by raising taxes (usually by stealth), raiding any pots of gold (literally, in one case) he could get his grubby mitts on and fiddling the GB balance sheet, leaving us in the worst position of any developed country to deal with the present financial crisis.

And what does he do? He walks around with a big f**king smile on his face.

http://www.lettersfromatory.com