Thursday, November 27, 2008

Why Anatole drives me crazy

I can't stop reading Anatole Kaletsky, the Times economics columnist. I know it bad for me. Almost everything he writes drives me crazy. He is doing my head in.

During the summer, he proclaimed that the US economy was just fine. Then came the failures of Freddie and Fannie, the Lehman bankruptcy and the near total meltdown of the world's financial markets.

The "US is just fine" line had to go. So Anatole peddled a different explanation; the global financial crisis was all down to one man; Henry Paulson. The US Treasury secretary screwed up; if only Paulson had acted more decisively, saved Freddie and Fannie, the world economy would still be growing. If only the all the problems of world could be reduced to such simple explanations.

Today, Kaletsky stopped playing the blame game and loudly endorsed Darling's borrowing binge:

"The Chancellor is right to cut taxes and to spend and borrow through the recession, undeterred by rising deficit projections and the build-up of public debt."

Like everything that Anatole writes, he provokes more questions than answers. Take the statement above as an example. The UK government needs to float about ₤150 billion of new debt in the next 15 months. Who does Kaletsky think will buy this debt? Does he think that long term interest rates will be unaffected by this massive increase in the supply of financial assets? Had he considered the possibility that yields on government debt might start to climb? Can he see the link between government debt yields and corporate borrowing costs? Would he accept that higher government borrowing might actually kill off the recovery that the Darling spendfest is supposed to deliver?

In Anatole's world, today is the only thing that matters. The UK needs positive economic growth right now, this very instant. The long term consequences of any policy does not matter. Later generations can deal with public debt we contract today. If Anatole could think of a way, he would also push today's banking crisis onto our children too. In fact, Anatole would endorse any policy that ensured that he, and his generation of middle aged debt-serfs, could maintain their ill-deserved way of life.

The real problem with Anatole is that he can't be ignored. He articulates the muddled thinking behind UK economy policy. When required, he champions misplaced optimism. Where necessary, he conspires with Brown in blame displacement for this mess; peddling the line that the UK's economic ills are down to some vague global crisis rather than policy mistakes. He is quick to endorse Darling's mad plans to buy his way out of recession. He will argue for the ridiculous line that the bank of England's policy rate should be negative in real terms, regardless of its catastrophic effect on long term savings.

Perhaps, this is why I keep reading his column.


  1. Journalists are only one rank above paedophiles, with very few exceptions. Get used to it and move on.

  2. The yield on long bonds/gilts can be manipulated.

  3. In Anatole's world, today is the only thing that matters. The UK needs positive economic growth right now, this very instant. The long term consequences of any policy does not matter. Later generations can deal with public debt we contract today.

    We've been doing this for 40 years.

  4. I think you're right about Kalwrongsky.

    I wrote to him a little while back disagreeing with his view that the housing market would go up in perpetuity.

    And lo - it came to pass.

  5. Speaking of people who drive you crazy, I watched Robert Peston last night- he's getting more mannered, isn't he?

  6. Newspapers do not exist for their readers, but their advertisers.

    It is the job of the press to tell you house prices only go up and you always win on the stock market in the end and the economy is always doing fine, so the smart money can make money out of their misguided readers. The newspapers peddle the positions which allow their advertisers to make money out of their readership.

    B. in C.

  7. Don't despair Alice, Anatole is being mocked in the City. He is now a figure fun on bulletin boards. He is doing untold damage to the Times. I'm surprised the Editor hasn't fired him.

  8. I remember him asking the question in his column, "what is going to happen now people can make more money sitting in their house than going out to work" !!!

  9. That's precisely what bothered me about the 'boom', AC.

    The majority saw it as home owners getting wealthier. The minority (such as Alice, Peter Hitchens ... err ... ME) saw it as our children getting poorer.

  10. Funny old Rees Mogg writes far more sense in The Times than the whippersnapper.

  11. you're on fire tonight alice.

    there is no check/balance in the system to prevent the young and unborn being massively exploited for the benefits of the present generations.

    end of


  12. In Australia, we have this dickhead, real name Peter Jonson, who writes under the pen-name of Henry Thornton. He's like our Kaletsky: not only is he an incompetent, intellectually lazy dimwit with no grasp of economics, he also has the same penchant for making broad, sweeping claims in order to to give the impression of being far-sighted, where actually he knows nothing and is shooting in the dark.