Economics

Maurice Glasman’s New Statesman piece on Ed Miliband is causing a bit of a stir. Lord Glasman, an academic who Miliband proposed for a peerage, writes that the Labour leader ‘has not broken through. He has flickered rather than shone, nudged not led.’ But if you read between the lines of Glasman’s article it is clear that he thinks someone is holding Miliband back and he drops very heavy hints as to who that is. For instance, the second sentence reads as follows: ‘Old faces from the Brown era still dominate the shadow cabinet and they seem stuck in defending Labour’s record in all the wrong ways – we didn’t

Yesterday, George Osborne announced the sale of Northern Rock to Virgin Money. Here, to mark the occasion, is the piece Allister Heath wrote on the bailout of the bank in 2007: Northern Rock: morally hazardous, Allister Heath, 29 September 2007 First we heard about ‘sub-prime mortgages’; then it was ‘collateralised debt obligations’; now it’s the turn of ‘moral hazard’ to appear on the Ten O’Clock News. Jolted out of prosperous complacency by market turmoil, the public has started to care about economics: strange jargon and obscure concepts previously familiar only to investment bankers are going mainstream.    The best way to understand moral hazard is to reflect on how taking

Here’s the latest in our Another Voice series of posts, which give prominence to viewpoints outside the normal Coffee House fold: You can’t help but notice that the UK economy isn’t doing too well. Part of this is down to international developments, sure. But part – as Mervyn King said in “http://www.bankofengland.co.uk/monetarypolicy/pdf/govletter111006.pdf”>his letterto George Osborne last week – is the result of “fiscal consolidation”, aka spending cuts. The IMF’s assessment, published a few days ago, shows both why debt has risen (lower tax revenues) and what is happening now (sharp contraction): And there’s much more contraction to come: So why keep on contracting if it is affecting economic growth? Clearly, the Prime Minister

A number of papers report today that George Osborne is minded to replace the 50p tax with Gordon Brown’s original proposal: a 45p tax. How the ex-PM will be laughing. As he knows, even the 45p tax will lose money — that’s why Labour didn’t raise the top rate until the final four weeks of its 13 years. But the Tories haven’t worked that out yet, and the Treasury is still working on the false assumptions he programmed into it. In short, the amount of money that either tax rate will raise depends on what’s called the “taxable income elasticity,” or TIE — a figure suggesting how responsive various taxpayers

There’s been a lot of fuss about this morning’s GDP numbers, but if David Cameron has his way we’ll soon be fretting about an entirely different set of statistics. The Prime Minister has given the data-crunchers at the Office for National Statistics a new mission: measure the nation’s well-being. The idea is to create new stats to accompany economic figures like the Gross Domestic Product as an additional gauge of how well things are going in the UK. It’s an idea that makes a great deal of sense. After all, the shortcomings of GDP are well-known. As Bobby Kennedy put it back in 1968: “It measures neither our wit nor our

The Harvard economist Martin Feldstein proposes an intriguing solution to Greece’s problems in his latest column: “A temporary leave of absence from the eurozone would allow Greece to achieve a price-level decline relative to other eurozone countries, and would make it easier to adjust the relative price level if Greek wages cannot be limited. The Maastricht treaty explicitly prohibits a eurozone country from leaving the euro, but says nothing about a temporary leave of absence (and therefore doesn’t prohibit one). It is time for Greece, other eurozone members, and the European Commission to start thinking seriously about that option.” Where Feldstein is surely right is that Greece can’t get out

Five years have passed since Alan Greenspan stepped down from the most influential banking job in the world. (Now that’s how to leave at the right time.) Described in books, interviews and profiles too numerous to mention as ‘the most powerful regulator/person on earth’, he served as Chairman of the Federal Reserve for 19 years. For reasons of sheer longevity, perhaps Greenspan deserves to be called the architect of the modern global economy more than any of his elected contemporaries. So it’s not insignificant that, by the accounts of his friends back in 1950s New York, Greenspan was something of a fruit-loop as you will discover tonight if you watch