David Blanchflower, writing in The Independent on Sunday, adopts polemic as the tool of debate in his survey of Coalition economic policy. The thrust of the piece is quickly established with a description of George Osborne as "the most inept" in history. A selective reading then follows: comparing the growth of Darling (achieved through a huge level of government expenditure) with the flatlining economy of contemporary Britain.
What interests me is the incoherence of the piece. Blanchflower identifies stagnant wages, loss of confidence and continued uncertainty as strong headwinds to growth. He slams Tory politicians for confusing deficits and debts (a trick they learned from Labour). Yet none of this is controversial or non-consensual. The attacks on Tories, fellow economists and 'anyone who doesn't agree with Blanchflower' strike the neutral reader as overdone to a turn. One can preach to the converted but are any solutions proffered?
Blanchflower intimates that workers need a raise so that they can spend. But surely any raise will be squirrelled away and used to pay down debt: that unmentionable: deleveraging, which Blanchflower forgot to mention. And is it rational for people receiving pay rises to incur more debt after the biggest credit orgy in history.
There is a policy trap: low interest rates, higher inflation, genteel stagnation. Any rise in interest rates will raise the animal spirits following a period of creative destruction. Yet, without growth, the government is unequal to the task of reducing the deficit.
This dilemma would tax any Chancellor and proves a more difficult context than most have ever faced. I don't know the answer but I do know it isn't pay rises. That was a trite ending to a trite article.