I keep re-reading this, but it’s definitely by John Redwood (Martian, left). And I see no warning that John’s blog has been hacked by Cuba. And yet here it is.
So, what’s going wrong in the UK economy John?
…the authorities should fight deflation, not inflation.
[spits coffee out onto computer monitor] Not fight inflation!! Who is this guy?
If Keynesians insist on government intervention to increase aggregate demand, laissez-faire economists (formerly the Martian John Redwood) would insist on focusing on preferably zero inflation and zero government intervention as this obscures market signals and bumps up inflationary pressure.
And yet the authorities should not fight inflation, and instead reflate the economy.
Erm… okay. This can take various forms – devaluation; interest rates rise; government capital spending projects etc. Where would New John focus on?
Well, New John says:
In order to fight recession you need to… use what public spending you can afford to maximise the beneficial impact on people’s employment and incomes.
Use public spending!! Interfere with the purity of the market? Well, yes. But how has the socialist government performed?
The UK authorities are giving a very mixed performance judged by these simple standards.
Not enough creative intervention!! But the Tory demand in transparency remains crystal clear, obviously.
If they think any bank needs more capital, they should sort that out in private with the bank concerned. We should know nothing about it until the bank announces to the market how it is raising the money, when the problem is largely solved.
Nothing!! Back to the old gays in the military ‘don’t ask, don’t tell’ tactic? Well, that sounds fair.
I’m sure the left-wing press are going to town on this as we speak.
But so much to take in here. I’m going to have a nice cup of tea and a sit down.
Burke’s Corner is worried about populism of conservatism and draws Nixon as the example of what it looks like when conservatism has a fire sale on values.
As Tricky once said, ‘we’re all Keynesians now’. Eh, John?
[Still don’t know how to fully react to this.]