The winner of October’s Deluded Guardian Journalist of the Month was by universal acclaim David Leigh who argued that all internet users should pay a poll tax to subsidise loss making newspapers like, er…The Guardian. I am not waiting another 27 days to call November’s winner. Unless Polly Toynbee comes up with a real corker, the prize has to go to John Palmer who argues that the 6.8% budget increase for the EU is not enough. It needs to be more.. Saints preserve us.
In case you have forgotten Leigh’s classic application for the asylum my take on it is here
Now to this month’s winner. Palmer argues that the proposed EU budget amounts to barely 1% of the total economy. Clearly Government should be spending more of our money and Palmer ( who wants the EU budget quadrupled) thinks that the EU fails to recognise that:
“In the British domestic economic debate there is usually at least some reference to the vital role of the public budget in offsetting the crisis of growth and unemployment and also in spearheading investment in infrastructure and research vital in securing growth and jobs. Not so when it comes to the EU budget – even though it could be a very important means of reversing the deepening recession throughout Europe.”
He goes on:
“The current European Union budget – covering 27 (soon to be 28) member states – amounts to barely 1% of the total EU economy. Whatever the benefits that budget brings – for example to the poorer regions, to scientific research and to vital transport and energy networks – it is ridiculously small. As has been argued by economists across the EU, to make a significant impact on the European Union economies it should be increased by a factor of three or four and directed more specifically to overcoming the mounting obstacles in the way of sustainable growth and jobs.”
Oh please. As I understand it the Palmer thesis is thus:
Every EU member is running a budget deficit. Some now have such debts that they are already bust (Greece, Spain, Ireland). Others are running such vast deficits that within a few years they will also be bust (France, Britain, Belgium, Holland, Italy, etc, etc).
So running vast deficits in domestic economies has not created jobs (unemployment is rising across the continent) so what we must now do is run even bigger national budget deficits to hand money to the EU so it can allocate it back to individual nations to build roads, invest in R&D, blah, blah, blah.
There are two flaws in this thesis.
1. “Rich countries” like Britain, France and Germany will increase their deficits as net EU contributors. But the “benefits” will be felt as the cash is doled out to net taker countries. So from a British perspective this is insanity even if you are a Keynesian.
2. Running deficits is not creating jobs now, has not in the past and never will. Cutting deficits, cutting taxes allows folks to spend more of the money they earn and they tend to allocate it more wisely than Governments do. How many of you would be allocating 2% of your income to buying jets for African dictators as the British state does?
The fact is that the EU budget has grown massively in real terms over the past decade and this has achieved nothing other than employing 33,000 pen pushers in Brussels and making the EU the world’s largest contributor to foreign aid ( see jets for dictators above).
Palmer argues that the EU budget is too small because it is 1% of GDP in the Evil Empire. So what does he think is the right number? Would it not be more sensible to reference the budget to what the Evil Empire actually needs to spend rather than just plucking a number from the air? Of course it would but this is The Guardian.
Palmer continues…if you can bear it. He then equates opposition to more EU spending as “the most basic and ill-informed populism.” This reminds me of those who opposed Britain joining the Euro who were branded racist, xenophobic, and economically ill-informed. It is playing the man not the ball. Facts do not assist Palmer so he reverts to type: anyone who does not love all things EU is simply “ill-informed” and probably has nasty right wing tendencies that go down badly at Islington dinner parties.
So what ill-informed comments did we sceptics raise? Apparently some Labour MPs thought the Common Agricultural Policy wrong as it hands cash to some of the richest landowners in Britain. Naturally Palmer says this is true. What planet is he on? CAP hands some cash to British farmers but the UK is a huge net contributor to the Empire. CAP hands tens of billions to utterly inefficient lifestyle farmers in France, the PIIGS countries and Eastern Europe.
The real scandal of CAP (other than the endemic fraud) is that the EU is handing out tens of billions of Euros to subsidise inefficient farmers producing food that is not really needed and in doing so pushes up the cost of food across the EU. Scrap CAP and import blocks and food prices fall, poor African countries can get less poor by exporting food here and 27 countries most of which are hurtling towards bankruptcy (or are there already) can cut their deficits.
I am afraid that this is not the end of Palmer’s madness. To fund an EU budget of 640 billion Euro he wants to see not only increased national transfers (The UK writing a bigger blank cheque) but also far more EU imposed customs duties and levies starting, needless to say, with a financial transaction tax. In effect more tax on the few successful job creating industries in the EU so that the (super) State can allocate resources to support industries that cannot raise funds in the market. History shows that State picked industries are almost always losers in the end. So jobs will be lost in winning sectors in order to create jobs in losing ones which will be lost when the EU Government eventually runs out of other people’s money.
John Palmer, you win my November deluded Guardian Journalist of the Month award. I cannot see anyone trumping this effort unless David Leigh comes up with another complete brain wave.
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