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Lib Dems – Smarter Than The Market

September 25, 2012

It is likely that the Lib Dems will be in coalition with Labour after the next General Election (May 2015 or sooner), which means makes what Vince Cable (the party’s probable leader in 2015) said in his September 24th conference speech all the more depressing. The centre piece of his plan for the economy is an “Industrial Strategy”, in which the government will pick winners and bet our money on them. Assuming he wasn’t being ironic, it is astounding that in the second decade of the twenty first century the country’s business secretary thinks smart socialism is going to be an improvement on the regular, dumb kind.

Cable said the country had lost the “harder virtues of making things productively…So we’ve got to get behind the successful British firms in vehicles and aerospace, life sciences and creative industries and our world-class scientists at universities”. And like all politicians whose egos run ahead of their talents, he added, “I’ve been working hard in government to make that happen”. Apart from making taxpayer money disappear into the trouser pockets of their clients and patrons, what did any politician achieve in business? He said the plans for “a green investment bank to finance the green investments of the future” were well-advanced. Unless Cable has a crystal ball, how will he know what innovations will be successful? But he’s got a surer guarantee than a crystal ball, he has unlimited taxpayer funds to spend until he’s right. The approximate cost (current estimate) appears to £1 billion leveraged up 10 times to give a fund of £10 billion, guaranteed by government taxpayers (£10 billion over 31.5 million taxpayers is an easy £317 each). This is the cost of the equity, the institution being founded to administer the £10 billion will incur the salaries, perks and pensions of bureaucrats to run it. A group whose cupidity would make a private equity maven blush.

Not only is the government going to invest more profitably than the market, it’s going to dictate who should be on company boards, by mandating female representation. And that perennial favourite, it will scrap red tape for small business – presumably by setting up a department for scrapping red tape. Surely Vince knows that red tape, or EU regulations, are not his to scrap. He is not going to dent the Working Time directive, the Equalities act or any of the other legislation imported into Britain by a foreign power. A power that the Lib Dems love very much.

There will be more government taxpayer guarantees for an “aggressive programme of house building by housing associations and local councils” so they can “build in large numbers now and we need an extra 100,000 per year”. Goodbye green belt and hello slums fit for the twenty first century.

Cable couldn’t talk about tax without threatening the affluent middle class with his mansions tax, a “core Lib Dem policy”. He claimed it was the first step to the proper taxation of wealth and land. He obviously doesn’t know that the land value tax is also known as the single tax, because it is supposed to replace all the others. The land value tax is proof that even a tool of a just society can do damage in the hands of an ignorant  maniac.

The wealth generating capacity of this country is being pulverised between the usurers and the ignorance of politicians who understand nothing of economics, but don’t let that stop their hyperactivity. They believe they are the expert pilots of the economic jumbo who can get us through the present turbulence. They can’t and they are in grave danger of giving us a very hard landing.

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From → Chapter 1

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