Nancy and the Keynesians
Sir: Nancy Dell’Olio is a Keynesian (‘John Maynard Keynes, my hero’, 29 November), but if Keynes were alive today, he would be revising his doctrine. In the 1930s government expenditure was a much smaller proportion of GDP than it is today. So was the tax take. Then, with the private sector devastated by the slump, increasing government expenditure was the strongest lever to change sentiment and reflate the economy. Now, both the private and the public sectors are crippled with debt. Increasing government expenditure threatens the nation’s credit-rating, and tweaking VAT to encourage people to spend is at odds with people’s desperate desire to save. With the tax take today amounting to such a high proportion of gross domestic product, the strongest lever is to take large numbers of private individuals and businesses out of the tax net altogether. Because cash is king, people will use their extra cash to reduce debts and increase bank deposits, thereby reducing the banks’ need for government funding. This means that the government deficit will not increase. Of course government expenditure has a place in the economy, but today Keynes would be making a very ‘un-Keynesian’ suggestion, namely to improve sentiment at a stroke by massively raising the thresholds at which private individuals and businesses start to pay tax, hugely increasing private saving. The sooner the private sector has repaired the holes in its balance sheet, the sooner people will spend and the sooner they will pull the economy out of recession.
Matthew Quirk
Chiddingstone, Kent
Sir: Your new economics correspondent Nancy Dell’Olio might like to consider another economist, Kondratieff, who postulated an 80-year cycle in economic events: 1929 marked the end of a decade noted for bright young things, financial excess, limitless confidence, loose morals, alcohol and cocaine. If that rings any sort of bell, consider the ten years that followed, with poverty, authoritarianism and, ultimately, war. Our present problems will not be solved by ill-conceived gestures, any more than were those of 1929. And Keynes, before he died, was no longer a Keynesian, if he ever was.
Sir John Sparrow
Padbury, Buckinghamshire
Sir: While I don’t doubt Nancy Dell’Olio is a fan of John Maynard Keynes, I cannot shake off the feeling she may have had help composing her case for him. The last leg of her piece reads like someone from the Treasury has willingly obliged and written something for her. A defence of the government’s credit-crunch action is all it is. Will someone dare leak the details of her call for help?
Ross Burns
Via email
All Greek to Moore
Sir: Charles Moore employs a more inaccurate term than he may appreciate when he describes the Greek Cypriot organisation EOKA as ‘separatist’. In fact EOKA fought for enosis, Greek for ‘union’, and wanted to attach Cyprus to Greece. It would be far nearer the mark to call it a ‘unionist’ group, even if rather an extreme one.
The ‘separatists’ were those who, often with British encouragement, sought to detach a part of Cyprus and affiliate it with Turkey. Thanks to the divide-and-rule policy of the colonial authorities, and to the partitionist constitution bequeathed by London at independence, these minority splitters and their patrons in mainland Turkey were able to achieve a de facto dismemberment of the island in 1974, which is the ironic reason for something that Moore deplores — namely the fact that the British military cemetery now lies on the ‘wrong’ side of the line.
Christopher Hitchens
Washington DC
Plane wrong
Sir: This may be pedantic, but given the relevance and personal interest attributed by Charlotte Metcalf to the Spitfire in her article on Bremont watches (Christmas Gifts, 29 November), I am surprised at such a simple mistake: the plane pictured behind Nick and Giles English is no more a Spitfire than a Mercedes-Benz is a Rolls-Royce. Spitfires did not have radial engines, nor did they ever sport two-bladed propellers, only three or four.
Stephen Saunders
Midhurst, West Sussex
Bloody brilliant
Sir: Toby Young (‘Status Anxiety’, 29 November) tells of his daughter’s present to him of a swear box. She has set an important precedent that deserves maximum support. Let there be such boxes in school classrooms and their considerable contents serve to foster educational projects. Police should be armed with them and empowered to extract on-the-spot fines from football spectators who give voice to foul language and any team player who is sent off for abusing the referee. Let the BBC dock the salaries of broadcasters who show Ross-like tendencies, while a box will rapidly fill with contributions from a certain chef. Swear boxes will serve to both diminish our deteriorating vocabulary and to enrich the Treasury and, maybe, my inadequate pension.
Thank you, Sasha.
Eric Dehn
Bristol
Not the embonpoint
Sir: Dear Mary uses the word embonpoint to mean ‘bosom’. It doesn’t; the OED and Harrap’s French-English Dictionary agree that it means ‘plump’ , ‘stout’ or ‘well-covered’.
Tom Jago
London SW6
Letter of the law
Sir: Following Charles Moore’s comments about TV Licensing (The Spectator’s Notes, passim), we would like to make clear that TV Licensing’s operations strictly comply with the law. We are tightly regulated and take our obligation to act within the law as seriously as we do our duty to enforce it.
Joanna Richards
TV Licensing, London WC2
An undignified part
Sir: If Robert Peston is the only route through which the government is prepared to take a leak, which part of the body politic does that make him?
Giles Rowe
London SW12
Comments