Frank Field MP
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Countering neo Keynesian views

It is very difficult to get space for the counter argument to the meddling of neo Keynesian views about the economy. Last Friday the FT carried two letters with a huge appendage of signatures making what is now thought to be the Keynesian line, on the dangers of cutting back before the recovery gets underway.

I have been trying to argue that this is a false dichotomy. The issue is whether people will go on lending us money now that the Government has halted printing funny money to buy its own debt, and has a clear limit on how much of any gilts issue it can force the banks to buy.

While the FT has carried in the past 12 months one letter of mine it has refused an article and, similarly, decided not to print my reply to Friday's onslaught.

Here is the letter and people can judge for themselves. It is a theme I have been trying to introduce to the public debate since shortly after the pre Budget report in November 2008.

One development since I wrote this letter is that the Governor of the Bank of England, before the Treasury Select Committee today, has given the broadest hint possible that the government will start printing more funny money to buy its own debt. The Governor presumably believes there are not the buyers out there in the absence of a clear cuts programme from either Labour or the Conservatives. Sterling fell as a result of the Governor's statement. How long will it be before there is a full scale sterling crisis and possibly a gilt strike?
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Read the letter the FT wouldn't publish with great interest. I am also worried about the rating agencies, as my posting on the 19th Feb shows, although I can see both sides of the argument. I also had a letter refused once, but that was local. My postings tend to go up. However, now and then, they take days to do so, and there was only one I couldn't ever find and I didn't post it on my own site either. It was sensitive. What didn't the FT like about your letter, I wonder? The cuts subject is being openly discussed
Comment by Anonymous on 15 Jul 2011
It was reassuring to hear Mr Field express these unpalatable truths on Radio 4 this morning. At least someone in the public eye "gets it" and is prepared to be honest with the public. There would be more hope that the worst of repercussions of this continuing crisis could be at least mitigated if the political class could overcome its desire to treat their electorate as children to whom no bad news can ever be given.
Comment by Anonymous on 15 Jul 2011
Frank, I listened to you on the 'Today' programme this morning and gave a cheer. Thank you for speaking out and writing your letters. Don't be disheartened by reaction from the establishment, be it in Westminster or the media. We need more fearless people like you. If we had MPs like you and John Redwood running things we would have more confidence in the future of our country.
Comment by Anonymous on 15 Jul 2011

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