Thursday, 22 April 2010

Behavioural politics, day 16 of 30

I'm writing this at the end of day 17, which has been much more exciting. But back to day 16 (Wednesday) first.

David Cameron has been hit by an egg, which seems to be a tradition of political campaigns nowadays. No real harm done except that eggs are only thrown at people with a chance of winning (and occasionally at people like Nick Griffin of the BNP, but that's a different motivation). So, paradoxically, the egg is probably good for Cameron - confirming that he's still the front-runner. This brief history of egg-throwing confirms that most politicians who've received an egg, a punch or an unexpected buttonholing have gone on to win the election - the exception being Harold Wilson in 1970.

The story of the day, insofar as there is one other than tomorrow's debate, is the IMF. Not the IMF's bank tax, which could trigger an interesting policy discussion. But whether, under a hung parliament, the IMF would have to bail out the UK's public finances. Ken Clarke, former Tory chancellor, has suggested that this might happen.

Briefly, my reaction as an economist: nonsense. The UK is nowhere near the fiscal position that would require this - and even if we were, the IMF couldn't hope to marshal enough resources to help. The UK's annual budget deficit is about equal to the IMF's total balance sheet of $250 billion or so. But more importantly, the fiscal position is improving - today's figures show a deficit of £163 billion, £3 billion less than was forecast just a month ago. If improvement continues at the same rate, next year's deficit is likely to be closer to £120 billion than the £160 billion officially projected.

But none of that is the point. The point is: can Ken Clarke scare people, and will it work?

Undoubtedly fear is a great tool to use in an election campaign. Usually incumbent governments get to use it, and Labour has played its "secure the recovery" card frequently. But the Tories have spotted that many people still have a discomfort over the idea of hung parliaments, because of vague folk memories from the 1970s (again, the factual basis for this discomfort is weak - but not the point).

There's a meta-fear question too: is it irresponsible for Clarke to raise this issue and will it "spook the markets"? Some predictions do have the power to become self-fulfilling, but I suspect not this one. So Labour's response that "Ken should know better" while true, probably won't make much impact.

Labour's focus today remains on the prospect of a coalition with the Lib Dems - which they regard as an appealing message, even as the Tories appear to think it will put people off. I wonder who'll be proven right?

The Liberal Democrats have had the confidence to firmly reject Labour's advances, which is exactly what they need to do to retain the 'hope and change' mantle. And while they're doing so, the Obama comparisons are starting to roll in. That can only be good for them - as is the simple fact that they've maintained their poll positions on equal terms with the other two parties for this long.

The Conservative-supporting newspapers are already hinting today at a vicious anti-Clegg strategy. But more on that tomorrow.

Ratings: Conservatives 7/10, Liberal Democrats 6/10, Labour 4/10.

1 comment:

Min said...

"But whether, under a hung parliament, the IMF would have to bail out the UK's public finances. Ken Clarke, former Tory chancellor, has suggested that this might happen."

What is the scary scenario? That a hung parliament might not appropriate funds for necessary government spending? Does the U. K., like the U. S., have a debt ceiling?

Thanks. :)