Good piece in The Spectator by Irwin Stelzer, whose conclusions are always a worthwhile pay off for the pomposity.
Irwin thinks Brown ‘just might decide that it doesn’t get any better than this, and seek to turn applause into votes before the recession really bites’.
Staff at Bobballs think there’s something in this.
At the moment 60,000 homeowners a day are plunging in negative equity. Britons were once happy to use equity like a credit card to fund consumer spending, but we know those times are long gone. However, most homeowners will want to take advantage of a dip in interest rates to start paying capital off on their leaky asset (the home) and try to combat the slide into negative equity. So the capacity to spend is removed, and the incentive is there to pump disposable income into reducing mortgage debt.
Result? More slowing in the economy, less demand and so unemployment increases. This month unemployment surged by the largest amount since 1991 and it could spill over the 2 million mark by the end of the year.
Longer term the US recession looks (from most of the comment we read) L-Shaped – deep and prolonged. This could be the shape of things here.
This is the dilemma. You are Gordon Brown, Nobel-winning economist Paul Krugman has just hailed you as the man who saved the world’s economy (from even worse problems), and the media consensus tends towards the positive. Interest rates are low and lowering, petrol prices are falling and, while inflation is high, it is expected to swing back down again. So hard-working families will feel slightly more comfortable in the short term. Oh, and you had a better, higher profile conference than the Tories, the polls have cut the deficit between the two main parties, and the Parliamentary Labour Party has started to calm down a bit.
You also know a recessionary environment is a bad one for elections (this will have officially arrived by the end of the year) as Bush Snr, Heath and Callaghan learned to their cost. You know this month’s dynamite bail-out plan will substantially enlarge public debt in the months ahead (so you could be the political equivalent of Gary Glitter by next Spring). At next budegt you know you must raise taxes on everyone including those hard-working families you’ve been prattling on about endlessly.
The only upside is the decrease in inflation will drive down prices and wage inflation, so allowing employers in the real economy the opportunity to buy in more staff. But this will take several months – and then several months more to recover to where we are now (if all other things are held equal of course at a time of global crisis… so this ain’t so likely).
Things are not going to get any better than they are now. But if Brown is looking at a snap election, Glenrothes (Nov 6) is in the way. What do you do?
Staff at Bobballs say call the snap election, and let Glenrothes be your Verdun (Tories being the dastardly Hun, obviously). But we’re not the only one’s thinking this way. According to Scotland on Sunday:
Downing Street insiders are adamant that any discussion of an early election is not on the Prime Minister’s mind. One source said: “It hasn’t been talked about at all.”
So that’s clear then. They’re talking about, and it’s at the forefront of the PM’s mind. We say go for it. And if the Yanks can do a general election in November, why the hell can’t we?
Local parties should crank up their policy departments, dust off the 2007 assembly manifestos, and look under the mattress for any spare change. An election is on the way.
Gentlemen, start your sectarian headcount!