Ed Balls speech to the Fabian Society

Ed Balls speech to the Fabian Society; Balls speech SOT - But - and this was his great insight - Keynes also knew that economies could occasionally get stuck in a deflationary rut. Although he called his famous book in 1936 ‘The General Theory’, it actually was not a general theory at all. It was a description of what can happen in the unusual and special circumstances after a big financial crash - for him 1929, for us 2008 - when the ‘animal spirits’ of companies and consumers are so depressed that private spending stagnates. When interest rates are so low that they can’t be cut any further. When governments crudely cutting spending risks making deficits worse. Of course, there will be naïve 'Keynesians' who will think it is always a special case - time to let rip and just 'tax, spend and borrow' in the hope that will deliver full employment - people who think it's the 1930s and if you borrow more you can get unemployment down. And that is what gave Keynesianism a bad name in the 1970s. It is why Labour leader Jim Callaghan was right to tell the Labour Party Conference in 1976 that that you can’t just spend your way to full employment. But, as I argued well over a year ago now in my Bloomberg speech, the reason why the real Keynes is so relevant today is that the world economy has been sliding into that rare and ‘special case’ that Keynes identified in the 1930s and Japan suffered in the 1990s. You either learn the lessons of history or repeat the mistakes of history. With growth stagnating around the world, every country pressing ahead with deep cuts is catastrophic. Which is why Ed Miliband and I have argued for a global plan for growth, with clear medium-term plans to get deficits down, but stimulus now to avoid a global slump too. Rejecting the complacent isolationism of the 1930s and instead following Keynes’ lead by setting out a global solution to global problems - an economic alternative based on growth, job creation and balanced defi...
Ed Balls speech to the Fabian Society; Balls speech SOT - But - and this was his great insight - Keynes also knew that economies could occasionally get stuck in a deflationary rut. Although he called his famous book in 1936 ‘The General Theory’, it actually was not a general theory at all. It was a description of what can happen in the unusual and special circumstances after a big financial crash - for him 1929, for us 2008 - when the ‘animal spirits’ of companies and consumers are so depressed that private spending stagnates. When interest rates are so low that they can’t be cut any further. When governments crudely cutting spending risks making deficits worse. Of course, there will be naïve 'Keynesians' who will think it is always a special case - time to let rip and just 'tax, spend and borrow' in the hope that will deliver full employment - people who think it's the 1930s and if you borrow more you can get unemployment down. And that is what gave Keynesianism a bad name in the 1970s. It is why Labour leader Jim Callaghan was right to tell the Labour Party Conference in 1976 that that you can’t just spend your way to full employment. But, as I argued well over a year ago now in my Bloomberg speech, the reason why the real Keynes is so relevant today is that the world economy has been sliding into that rare and ‘special case’ that Keynes identified in the 1930s and Japan suffered in the 1990s. You either learn the lessons of history or repeat the mistakes of history. With growth stagnating around the world, every country pressing ahead with deep cuts is catastrophic. Which is why Ed Miliband and I have argued for a global plan for growth, with clear medium-term plans to get deficits down, but stimulus now to avoid a global slump too. Rejecting the complacent isolationism of the 1930s and instead following Keynes’ lead by setting out a global solution to global problems - an economic alternative based on growth, job creation and balanced defi...
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Redactioneel nr.:
685851440
Collectie:
ITN
Gemaakt op:
14 januari 2012
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Soort licentie:
Rights ready
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Geen release. Meer informatie
Lengte van clip:
00:02:24:13
Locatie:
United Kingdom
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QuickTime 8-bit Photo-JPEG SD 720x576 25i
Oorspronkelijk opgenomen op:
576 25i
Bron:
ITN
Naam materiaal:
r14011202_17053.mov