Home > Economics, Policy > Politics isn’t about policy

Politics isn’t about policy

December 15, 2011 Leave a comment Go to comments

[Update: in a massive “D’oh” moment, even though it’s pretty unclear to me whether the structural deficit provision of the accord applies only to Eurozone countries or all signatories, obviously the BBC article I quoted completely contradicts my position. Overall the reports I’ve found are conflicting (really surprised how hard it is to get this straight), and I formed the argument in this post on the basis of an impression that the budget provisions would apply to all signatories, as this would explain why it would be controversial in the non-Eurozone countries such as Sweden and Denmark. I then somewhat unthinkingly pasted in the BBC version of events because, well, it was the BBC. If you can enlighten me as to the truth, please do.]

I’m not usually one for following the verbal sparring of parliamentary politics, because I value my sanity. I would like to point out that I was not motivated to write this in order to single out a particular side, but rather this is just something I happened to pick up on (and people who know me well will be aware of my near total contempt for almost every political party). Earlier this week, Leader of the Opposition Ed Miliband attacked Cameron for his veto of the proposed revisions to the Lisbon Treaty:

Here’s the truth: last week he [Cameron] made a catastrophic mistake

I would simply like to point out one of the provisions of the agreement

  • a commitment to “balanced budgets” for eurozone countries- defined as a structural deficit no greater than 0.5% of gross domestic product – to be written into national constitutions (emphasis mine)

And compare it to something I found on the Labour Party’s website back from a couple of years ago

  • we have set out clear plans to reduce the majority of the structural deficit over the course of the next Parliament – falling from 9% of GDP this year to 3.1% in 2014/5  (emphasis mine)

And then compare Ed Miliband just four weeks ago in anticipation of the Autumn budget statement , on the coalition government’s relatively aggressive deficit reduction plans

It will be the moment that we learn that the biggest economic gamble in a generation has catastrophically failed (emphasis mine)

I’m not saying Cameron wielded the veto for the right reasons – I simply don’t know the facts (although what I will say is that the big European countries have consistently shown that they will regulate in such a way as to coddle their larger and more leveraged universal banks). Furthermore, every other European leader has a huge political incentive to shift the blame onto someone else if they can. But if Miliband thinks Cameron should have gone along with the accord, then he’s saying that Britain* should enshrine in constitutional law(!) the very kind of deficit reduction requirements that he simultaneously believes to be so catastrophically dangerous.

Seriously, is there no one in this country who can say anything about Europe that isn’t either daft, xenophobic or in complete contradiction to everything else they ostensibly believe in? Because it sure does seem that way most of the time.

Robin Hanson is almost certainly right – politics isn’t about policy. Sigh.


*As I said in the update, I could be quite wrong to think that Britain would have to go along with this part of the agreement. The lukewarm response in the non-Eurozone countries suggests yes, that Cameron didn’t say he vetoed it for this reason suggests no. Either way, the Labour Party’s position ought to be that this is a giant mistake (if they want to be consistent).

Categories: Economics, Policy
  1. Tom Eland
    December 15, 2011 at 2:21 pm

    I think your been a bit harsh on poor old Ed. For one (it seems as if) the restrictions would apply to euro-zone countries not all signitiaries. Assuming this is the case, or the UK could have negotiated for it to be the case, Miliband wasn’t advocating reversing his parties position on UK policy to enter the treaty.

    That still means he’d be going along with a treaty that he thinks will be bad for other countries. But that could be justified quite reasonably on ground of the national interest (and so policy). It would amount to saying (perhaps not out load) “You are doing something which will unreasonably bind your fiscal policy with bad results. However whether or not we sign the treaty will not stop you from doing this or make us do it. Signing it will however leave us better placed to negotiate with you on decisions that will effect us and so we’ll sign.”

    Regardless of his actual motives (which will obviously have at least some political elements) I think there is a plausible policy argument there.

    • December 15, 2011 at 3:30 pm

      Point taken. I have probably been too harsh. But there’s still the basic inconsistency that if deficit reduction is disastrous as he thinks it is, then he can’t consistently think the accord is a good thing.

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