False binary choices

This government has chosen the wrong course on the economy.

Well, it's self evident isn't it? I mean they said there'd be 3% growth in 2012 and (according to the preliminary figures) it was flat. They've failed haven't they?

And therefore, Ed Balls and Labour were right. The coalition have cut too far, too fast and we are now seeing the consequences of their economic folly. We should have done what Labour suggested, i.e. delayed the cuts for a year and had slightly fewer of them. Then we'd have been fine.

Well at least that's what you'd think if you listened to Labour.

I'm not saying they're not right. They might be*. What I am saying is that there is literally no way of knowing. We cannot run a counterfactual where they won the 2010 election and enacted their economic plans. We cannot know if faced with another 5 years of Brown (who would doubtless have remained PM had Labour formed the government) if the markets would have panicked and interest rates would have shot up. We can't see how all the consequences of their approach would have played out. It is impossible to know. So therefore what I can say with absolute confidence is that Labour are being highly misleading when they try to present the economic situation in these binary terms. The coalition did one thing. It didn't work. They planned to another (slightly different) thing. Ipso facto that would have worked.

For all we know, neither approach would have worked. Maybe a third or fourth approach would have done the job. Or maybe the economy was so screwed by May 2010 that no economic plan would have helped. It's actually possible when you look at it like this that the current approach is making the best of a bad situation.

But I am sure this sort of nuance will not make it into the debate in the run up to the next election.  What will go on the leaflets and the in the adverts is that the evil ConDems have cut unnecessarily for "ideological" reasons "destroying our economy" in the process and that Labour know for sure that had they had been in power and enacted their plans we would have escaped our economic fate.

The fact that they can't possibly know if this is true won't get a look in.


*For what it's worth I would have put more into infrastructure investment at an earlier point but there is no guarantee that would have helped much either.