Simon Wren-Lewis: macro: Cameron, austerity and what other people did not say:
The Prime Minister said this on BBC Breakfast yesterday… "what is good about what Mark Carney is saying is that he is effectively saying 'look, the Government is doing the right thing by taking difficult decisions to get the deficit down and therefore we can have an aggressive monetary policy until unemployment falls even further'." Now perhaps I have missed something, but I can find no instance where Mark Carney either said or implied that…. All I did see was his strenuous efforts to avoid saying anything about fiscal policy, in line with his previous practice…. You may remember that the Prime Minister has form when it comes to putting words into other people’s mouths. Both he and Osborne were fond of claiming that the OBR in some way supported the government’s austerity programme, and that austerity was not harming growth, until it became too much for the OBR to stomach, and Robert Chote wrote the Prime Minister a rebuke…. That episode clearly has not led the Prime Minister to kick the habit, perhaps because he is sure he can get away with it this time. But it says something about the confidence the government has in its policy, when it has to make up the support for it.