My favourite economics commentator, Aditya Chakrabortty, has provided some more innocent entertainment for the discerning.
Writing in G2 this morning, Chakrabortty has had another go at flaying George Osborne's economic policy. To paraphrase, tomorrow's GDP figures will show the UK is still in recession, cuts are wicked, and there is "no real reason this unprecedented schedule of pain, imposed by a coalition with scant ministerial experience, should be taken as inevitable".
I read the article - more than a dozen paragraphs - hoping to see Chakrabortty setting out the alternative to the Chancellor's policy. But there was nothing. Nada. Silence. Osborne has got it wrong. That's all.
To be fair to Chakrabortty, it's possible to infer from his previous outpourings that he sympathises with what might be called the Balls Position, namely that the government will be more successful in getting the deficit down if it spends more money. He has however been slightly coy, unlike Balls, in what this will mean. More borrowing.
To summarise, the argument runs "In order to get out of a mess caused by too much borrowing, we need to borrow more". I always hope that someone will utter this praece out loud so I can hear their voice tail off at the end of the sentence.
Actually Ed Balls is shameless enough to do something pretty close, although as a consummate politician he shows no sign of unease . Again and again we hear him saying, "Government policy is not working because the economy isn't growing and, look, they are borrowing more than they said they would". Now the second part of this sentence is true, but, awkwardly for Labour, its own policy is to borrow more than the Tories. And extra borrowing doesn't seem to be having the desired effect.
This is slightly embarrassing for the Tories too, because they said if we borrowed more the sky would fall in. Bond yields would shoot up and we would rapidly do the Mediterranean shuffle toward the abyss. Of course bond yields might well have been lower if we had borrowed less and reduced the deficit faster, but nevertheless they are quite staggeringly low.
If I were George Osborne I would, faced with this argument, point out that we have pumped well over £300 billion into the economy by way of QE and it has had no discernable effect. Just how much extra do Balls and Chakrabortty want us to borrow? Last year's deficit was about £126 billion, down from about £140 billion at its peak. Should we go back up to £140 billion? Would the extra £14 billion make any difference? £300 billion didn't get things going again after all: what price the lesser sum? And what if the markets thought, "These people aren't serious about getting the deficit down. That makes lending to them riskier. Let's charge them a bit more."
But the point of this blog is not to focus on the flaws in the Balls Position, but rather in Chakrabortty's analysis. Firstly he has asked, "Is the economy growing?", to which the answer is of course "No." QED, he says.
Well not so fast. What if he has asked the wrong question?
In a context in which Europe's banking system is teetering on the edge, in which sovereign states are on the verge of collapse, in which I can get a mortgage at a cheaper interest rate than Spain (please read that clause, astonishing but true, again), a better test of whether Osborne's economic policy is working might be to ask, "Can we actually borrow money on the gilt markets at a rate we can afford?" The answer to that is a ringing yes. And if you want another question, how about this - "Is the deficit coming down?" The answer to that is yes as well. It's coming down in real terms, in nominal terms, and as a percentage of GDP. That looks to me pretty much like success.
But what about the workers? What about the people losing their jobs and houses because of the cuts? What about the people whose lifelines from the state have been cut off? In most cases that will be a tragedy. But we have long passed the point at which fixing the problems with the UK's economy can be made without collateral damage. There is simply no magic button which can be pressed which will take us back to dry land without pain. This is particularly true as long as the Eurozone is paralysed by uncertainty and incompetence.
This is Chakrabortty's second conceptual mistake. Those like him who pretend that there is something dead easy the Government could do to make things right are not just mistaken, they are helping slow the process of dawning realisation that's required on a national scale. We have been living on massive borrowing; it can't go on forever; and what can't go on forever must stop.
The credit crunch has made fools of us all, but the Guardian's Chief Economics Leader writer more than most.
