Even though this is currently a very sick country with a government coughing up metaphorical blood it’s nice to see that Her Majesty appears to be in robust health.

Unfortunately the picture of QEII as a ‘glove puppet’ with Peter Mandelson’s hand you-know-where is just too much to stomach.

Yech.

I don’t vote in the last election and probably won’t vote in the next but have to say I’ve become increasingly sickened by Cameron and the Conservatives who plainly haven’t a collective clue about appropriate fiscal policies when the global economy is faced by the prospect of a re-run of the 1930s depression.

At the end of last year and the beginning of this, the Conservatives were explicly denying the need for a fiscal boost to stop a recession – induced by the banking crisis – deepening into an international depression. They have gone quiet about that denial in the face of fiscal boosts by governments in the US, Germany, France, Japan etc and the evidence of where the global economy was heading:
http://krugman.blogs.nytimes.com/2009/11/03/the-story-so-far-in-one-picture/

But there is no evidence that Conservatives have given up on the bicycle and all-unemployment-is-voluntary theories of employment or have understood that fiscal intervention to stabilise economies can be crucial at times. A little surfing will show up the abuse heaped on the members of the BoE’s Monetary Policy Committee. Some folks really believe the Free Markets mythology.

I suppose recessions or depressions and public spending priorities don’t matter much if you are a millionaire:
http://timesbusiness.typepad.com/money_weblog/2009/11/10-wealthiest-tories.html

By now, most folks understand the tradition of the Queen’s speech and perhaps also think the monarch’s influence in partisan politics should be strictly constitutional and therefore limited to the traditional private audience of the PM with the monarch every week. Famously, Queen Victoria used to keep Gladstone standing while she liked the nice Mr Disraeli, who was the grandson of immigrants to Britain.

Still, it is very good to hear the Queen set out that her government will push on to “enshrine in law its commitment to abolish child poverty by 2020”.

Why? It’s a meaningless thing to do. There are no sanctions capable of being levied if the ’statutory target’ is missed, there is no indication of what policies will be used to achieve it, there is no way by which this Act can be enforced against future Governments. It’s no more impressive or effective than enshrining in law that Governments have to be nice. Or that the deficit has to be halved. It’s legislative and constitutional bollocks.

And, of course, its sole purpose is to shout ‘yah-boo’ at the Tories. Thank Christ this is almost certainly the last Queen’s Speech ever under Labour.

“Thank Christ this is almost certainly the last Queen’s Speech ever under Labour.”

So much for a commitment to democracy and political pluralism.

Why do you suppose the electorate rejected the prospect of yet another Conservative government in May 1997?

During the post-war period through to May 1979, the Conservative and Labour parties spent almost equal times in government. One of the most impressive singular achievements of a Conservative cabinet was its willingness to ditch an incumbent prime minister in December 1990. In its own way, New Labour ditched Blair as PM but then he lost 4 million votes between the 1997 and 2005 elections and half the membership of the Labour Party.

Btw at various elections I’ve voted Conservative, Labour, Liberal and Social-Democrat – depending on the circumstances at the time.

Hmmm. A whole series of meaningless and unenforcable guarantess that aren’t worth the paper they’re written on?

That’s Gordon’s big plan to answer the question of why anyone in their right mind would want five more years of this shit?

Must try harder.

“I don’t vote in the last election and probably won’t vote in the next but have to say I’ve become increasingly sickened by Cameron and the Conservatives who plainly haven’t a collective clue about appropriate fiscal policies when the global economy is faced by the prospect of a re-run of the 1930s depression.”

They’re proposing the same sort of fiscal policies that got us out of the Depression in the 1930s. Much better than the artificial stimulus that Roosevelt introduced in America (and even if one accepts that the small cut in government spending in 1937 caused the recovery to lapse, it just goes to show that it was built on sand).

So much for a commitment to democracy and political pluralism.

Nothing more or less than a commitment to basic political reality. The Tories are overwhelmingly likely to win the next election. They are extremely likely to win the one after that. In 2020 HMQ would be 94. I suspect that we will probably have a new monarch by then (although it’s not certain). Ergo, no more Queen’s Speeches until – when? Next two in line are male, William has yet to have children, but we’re looking at potentially another eighty years before there’s even a possibility of another Queen.

I’m not predicting the eternal governance of the Conservative Party.

@7:

I reckon the odds that this is the last ever Labour government are no higher than 7-2.

Richard @6: “They’re proposing the same sort of fiscal policies that got us out of the Depression in the 1930s. Much better than the artificial stimulus that Roosevelt introduced in America (and even if one accepts that the small cut in government spending in 1937 caused the recovery to lapse, it just goes to show that it was built on sand).”

But history doesn’t exactly repeat itself – and I’m amazed that Conservatives are now invoking (botched) historicism as a guide to policy. Karl Popper will be turning in his grave. Arging via historic parallels doesn’t work unless we can restore the complete 1930s context.

One of the most important policy decisions in 1931 was to take the Pound off the Gold Standard in September 1931, at which the Pound depreciated sharply in the foreign exchange markets. Freed from the obligation to maintain the Gold value of the Pound, the (then privately owned) Bank of England was able to slash interest rates and that stimulated an enduring construction boom in the south of England and the midlands – but not in the north or in south Wales where high unemployment persisted. Btw a Conservative government had put the Pound back onto the Gold Standard in 1925 at the pre-war parity contrary to the advice of Keynes at the time. Trading partners like France and Germany kept to the Gold Standard with adverse consequences. The British economy also benefited from tariffs supporting Imperial Preference. Try this on going off Gold:
http://krugman.blogs.nytimes.com/2009/10/09/modified-goldbugism-at-the-wsj/

Roosevelt never understood keynesian economics and believed in balanced budgets regardless. When his administration took steps to balance the US Federal budget in 1937, the American economy turned down and only turned up with public spending on armaments.

Why do Conservatives now suppose the governments of the other major economies have (unsurprisingly) all resorted to increasing their fiscal deficits to boost their national economies out of recession? The German government is now into its third fiscal boost despite the much publicised comments last year by Herr Steinbrueck, the Social Democrat finance minister in the last, grand coalition government, about “crass keynesianism”.

For information, this is the IMF back in March on the state of public finances:
http://www.imf.org/external/np/pp/eng/2009/030609.pdf

“Thank Christ this is almost certainly the last Queen’s Speech ever under Labour.”

“I’m not predicting the eternal governance of the Conservative Party.”

So, what you are doing is wishing the Queen dead.

Niiiice…

@7: “I’m not predicting the eternal governance of the Conservative Party.”

I feel sure there will be much relief about that in many places.

10 – no, merely predicting that the rebirth of the Labour Party will post-date the coronation of our next monarch. We don’t have to say “Queen Elizabeth, may she live forever’ you know. Or do you think that she will, genuinely, reign over us for ever and ever amen?

11 – well, you seemed to interpret my remarks as a repudiation of pluralist democracy. Just trying to clear up on the whole reading comprehension front.

Well, her Mum lived to 101, you know.

“There’s a chance this is the last Queen’s Speech ever under Labour” might have been a more tactful way of putting what you meant to say.

13 – fair enough, though I’d go further than ‘there’s a chance’. ‘Probably’ work for you?

“Btw a Conservative government had put the Pound back onto the Gold Standard in 1925 at the pre-war parity contrary to the advice of Keynes at the time.”

Agree that the pre-war parity was a mistake, plenty of non-Keynesians would agree with that analysis.

“Roosevelt never understood keynesian economics and believed in balanced budgets regardless. When his administration took steps to balance the US Federal budget in 1937, the American economy turned down and only turned up with public spending on armaments.”

The 1937 downturn has also been put down to increase in bank reserve requirements and the introduction of the Wagner Act which increased wages. Furthermore the cut in government spending in 1937 was relatively small. Suffice to say this combination of factors allows Austrians, monetarists and Keynesians to say “X rather than Y or Z caused the downturn”. Despite not being a Keynesian I’m open to the idea that it may have contributed towards the downturn – I would simply offer this as evidence that you shouldn’t base a recovery on government spending as it often ends up propping up businesses which lack any genuine private demand for their products/services. Cut off the government tap and down they go.

Richard @15: “I would simply offer this as evidence that you shouldn’t base a recovery on government spending as it often ends up propping up businesses which lack any genuine private demand for their products/services. Cut off the government tap and down they go.”

What motivated the keynesian revolution was the (explicit) quest for an explanation of how economies could get stuck with persistently high levels of unemployment, often along with continuing price deflation.

Questions about appropriate policy in response to a recession are a secondary issue – about which Keynes’s General Theory (1936) had little consecutive to say.

The orthodox policy prescription before Keynes for widespread unemployment was wage cuts – with, implicitly, get-on-your-bike advice. Monetary policy might be mismanaged but the supposed result of changing the quantity of money in circulation was to just change the level of average prices and nothing more – in the jargon, money was “neutral”. The keynesian analysis challenged both conclusions.

There is nothing inconsistent about applying keynesian analysis to better understand why an economy is malfunctioning – such as the Japanese economy did for a decade after the asset-price bubble there burst in 1992 – and questioning whether specific counter-cyclical demand management policies are effective/desirable or potentially destabilising.

Kalecki and Abba Lerner – early proponents of keynesianism – are surprisingly insightful about potential downside risks of demand management policies. Kalecki, a joint revolutionary with Keynes, predicted in the 1940s, long before Friedman, that trade unions would develop expectations based upon governments applying demand management measures to reduce unemployment. Lerner explictly worried about fiscal boosts being absorbed in pay increases.

Few read this nowadays but JCR Dow, in a previously much cited study: The management of the British economy, 1945–1960 (Cambridge UP for NIESR, 1964), certainly took the position that that budgetary and monetary policy, between 1945 and 1960, was positively destabilising, and that was during the heyday of demand management, much of it bipartisan and dubbed at the time: Butskellism, after the personal get togethers of RAB Butler (Tory chancellor) with Hugh Gaitskell (economist and Labour leader after Attlee retired).

Many attacks on Keynes are entirely misconceived because the critics simply haven’t read the literature and hack away at straw images of their own creation. The advantage that us ancients have is that we were educated in the literature before the concerted attack from Chicago on Keynes and “macroeconomic” analysis.

There are times when additional government spending is crucial to prevent an economy sinking into a deep recession with a deflationary spiral of falling prices because tax cuts are likely to be saved up by consumers until prices are expected to stop falling. The art is in selecting the appropriate projects to spend public money on.

16. Bob b.The art is in selecting the appropriate projects to spend public money on.
Fat chance with Labour. They will just increase the white collar admin head count because we do no have the British work force for large infrastructure projects.

Does this Reuters news bulletin on Wednesday have a worrying resonance?

“Nov 18 (Reuters) – There is no end in sight to X’s ballooning public debt with the country having put off targets for reforming its fiscal conditions, the head of the OECD said on Wednesday.

“‘With the annual budget deficit approaching 10 percent of GDP, public debt is on track to rise even further to over 200 percent by 2011,’ Angel Gurria, secretary general of the Organisation for Economic Cooperation and Development, told a forum in [the capital city of X].

“He voiced concern that X has pushed back its goal of bringing the primary balance deficit — the budget deficit outside debt issuance and services — into the black by 2011.”
http://www.reuters.com/article/marketsNews/idUST21727420091118

Amazingly, country X above is Japan, not Britain.

Compare this academic paper from 2002 on Japan’s competitiveness:

“In the postwar years, the Japanese economy caught up with the United States and Europe at an astonishing speed. Japanese automobiles and electronic products spread worldwide, and in the 1980s, even Made in America, a Massachusetts Institute of Technology (MIT) report on U.S. industrial competitiveness, rated the practices of Japan’s auto and semiconductor industries the best in the world. In the late 1980s, the Japanese economy entered its longest postwar expansionary phase.”
http://park.ecc.u-tokyo.ac.jp/mo/seika/files/JJTI-Analysis1.pdf

“Monetary policy might be mismanaged but the supposed result of changing the quantity of money in circulation was to just change the level of average prices and nothing more – in the jargon, money was “neutral”. The keynesian analysis challenged both conclusions.”

The hardcore free-market Austrians also accept that changes in the money supply were not “neutral”, although there seems to be a divide over whether or not a one-off decrease in the money supply after inflation is an overall good or bad thing. Unfortunately most free-market anlysis nowadays comes from monetarists/Chicago Schoolers/”NeoLiberals” etc.