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Politicians heed economists at their peril

February 19, 2010

 It used to be all about celebrity endorsement. The Labour
Party had its “luvvies” such as Simply Red singer Mick Hucknall
or actor Jeremy Irons. The Conservatives had comedian Jim
Davidson.

       But the financial crisis seems to have changed all that.
With the economy topping the news on most days and public
spending becoming the main dividing line for the election,
economists are suddenly in vogue to prove just how right party
policies are.

       The latest war on words on whether spending cuts should
start this year or next kicked off when 20 leading economists
sent a letter to the Sunday Times backing Conservative plans
that fiscal tightening should come sooner.

    The Tories could not hide their glee. Aides to Shadow
Chancellor George Osborne were on the phones Saturday night to
claim their policies had been vindicated.

    Labour was rattled. Around 10 points behind in the polls,
their key message is they know how to handle the economy.
Chancellor of the Exchequer Alistair Darling was sent out on to
the airwaves first thing Monday to defend the government line.

    But economists love to disagree. And while many like to
think their craft is an exact science, economic forecasting can
sometimes have more in common with soothsaying. After all, many
leading economists were singing the virtues of free markets or
warning on the dangers of rampant inflation just before the
crash.

    And so on Thursday night, it was Labour’s turn to gloat.
Spin doctors were sending out comments even before the first
editions hit newsstands. More than 60 economists had written to
the Financial Times warning against premature action on the
deficit.

    Maybe the Conservatives will find even more economists to
back their case. The bigger lesson for politicians perhaps is to
stay away from academic endorsements.

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