Thursday, November 27, 2008

Darling Dinosaur Dashing to his Doom

Bit depressed over the Pre-Budget report debate. The only ray of light is the money going to energy conservation, but no mention of the necessary massive investment in renewable technology (unlike Obama, who is talking in Green New Deal terms). The Cameron line was a pathetic bleating about the fact that NuLabour considered putting VAT up, although in the end they took it down. Europe has decided against playing with VAT to try to get money circulating in the economy, partly because of all the fiddling with VAT codes that is involved, and the possibility that some vendors will keep prices the same and pocket the increased revenues.

So Brown looks as if his neighbour in Number 11 has pulled the rug out from under Brown's position as World Leader in The Recovery, given his lack of vision with VAT, Green New Deal - and also NIC.

Darling's promised increase in National Insurance contributions is also another Blairean disappointment. Does he not realise that NIC is a tax on jobs, and we need to maximise good work, not tax it?

More clouds on the horizon from the motor industry, who are approaching Downing street with a request for a handout. "Jaguar Land Rover, which employs about 15,000 workers in the West Midlands, has said it wants a £1billion loan to help it cope with "unprecedented trading conditions"."

I wonder if Darling will oblige? He probably will, given his eagerness to stop the Dagenham vote from migrating from NuLab to the BNP. If he does, he will be demonstrating that he knows nothing about economics, in particular that he does not understand the difference between investment and doling out random cash. Investment means putting money into a venture with the expectation of getting more money back in the future as a result. Spending means just giving money away with no prospect of a long-term return. You invest in renewable technology, you spend on motor cars. Motor cars need petrol, Darling, if they are to be of any use, and petrol costs money. How are people with no jobs going to pay for petrol, let alone a new car? Petrol is a finite resource, and is killing our planet. Let market forces take care of the motor industry.

The only valid reason to give money to the motor industry is the EU approach, which is to stimulate energy efficient cars. Darling should help and oblige the industry develop plug in hybrids, which can use waste electricity and boost underpower times on the National Grid. This would save up to 1% of Britain's electricity output.

I doubt that the Government will do that, because they are peopled by intellectual dinosaurs, galloping happily towards the cliff of extinction. Still, we must be brave and think positively. The recession has not yet really started. Once Government realises the enormity of the total mess that we are in, once the dinosaurs realise there is no ground under their feet, then they may be open to the Green New Deal. Give Piglet time, said Eeyore.

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