That was the key line from Ed Balls’s speech to the Fabian Society today, and it’s one that will no doubt be picked over here and elsewhere in the coming days, weeks, and probably months. It will be spun (by those of all political stripes, each for their own ends) as a policy change from the Balls/Miliband axis. But like Ed Miliband’s speech earlier this week, this was more about emphasis than a change in policy. The implied economics behind “too far too fast” was that Labour accepted cuts and the need to cut the deficit. Anyone within the Labour Party who overlooked that (and the persistent refrain of “tough economic choices”) is as guilty of misrepresenting Labour’s position on the economy as George Osborne.
What was particularly pleasing was Balls’ reference to “naive Keynesians” – those who think that we’re always in exceptional circumstances that demand ever higher levels of spending. In many ways it’s not dissimilar in the arguments it makes to what I said back in May, particularly on the need for “Hard Keynesianism”:
“Keynes didn’t just believe that it was necessary to spend heavily during a recession to stimulate an economy. Such thinking is reckless and lop-sided unless there is a counter-mechanism which can operate when the economy is strong. What Nobel Prize winning economist du jour (and New York Times columnist) Paul Krugman calls “Hard Keynesianism” should be applied by Labour. We should advocate stimulus spending now to get the economy off its knees, but we should be prepared to run a surplus when the economy is in good shape, and invest that money (perhaps in a UK investment bank or stablisation fund) to fund future stimulus spending.”
The alternative is the ostrich-style politics exhibited by Green leader Caroline Lucas (and others) at The Fabian Society conference today. As pollster Deborah Mattinson rightly argued this morning, if we don’t meet the public where they are on the economy then we’ll never get anywhere.
Cuts will be unpleasant, and in all probability I will dislike most of them. But do you know what? We lost an election in 2010. We lost it on the economy, and we’re still getting the blame today. People think of us as the kind of house guest who is careless enough to trash the living room but stands outside caterwauling as others make ham fisted attempts to clean up.
The point of representative politics is to win elections. The public won’t vote for that person. And be honest, would you?