There is a striking article here by the editor of the ‘Spectator’ – that’s the current one, rather than the former one and current Prime Minister.
Entitled “Sajid Javid: it’s time to tear up the old investment rules”, the piece ascertains, as though in a blinding revelation:
With government able to borrow at 0.8 per cent and inflation higher at 1.5 per cent, then the real-terms interest rate is negative (ie, minus 0.7 per cent). Minus anything means that, in real terms, you’re being paid to borrow
This has of course been the case for the last decade, and the only things stopping investment were George Osborne’s and Phillip Hammond’s policies on austerity. Javid was a banker of course, though as he was employed by Deutsche Bank, a bank that is still not out of its financial difficulties, themselves in large part created by the Collateralised Debt Obligations that Javid sold, you might be forgiven for thinking that his skills as (what the article genteely refers to) a “former financier” are unlikely to suggest someone who has the country’s, rather than his own, best interests at heart.
The Spectator goes on to quote Javid, ” But now I have the privilege of being in charge of the Treasury, we’ve already started making changes to [Treasury] models. To allow for what is, I think, a unique situation in terms of government investment.’
It’s only unique in that it’s been the case for all of the last decade when the Conservatives have been in power – they have slashed and burned and now they are building up again. Just because they can. To blame the Treasury civil service as if they had no political control at their head is remarkably disingenuous.
That the media don’t question this means the media are either stupid or partisan.
And in either case this conclusion from Professor Ronan McCrea on the dangers of viewing a democratic vote as similar to purchasing a service – an idea that Conservatism since Thatcher has generally been all too keen to emphasise, seems particularly appropriate:
Unless the electorate can find ways of informing themselves – and this, it has to be said is not always easy with the usually preoccupied voter, then we will continue to have to put up with this political incompetence.
The only thing that can be said is that in this limited area at least, as Churchill might have put it, they have chosen the right policy only after exhausting all the alternatives.