This week Labour's two Eds told us they wanted to establish economic credibility. All they asked for in return was our credulity.
In a a pair of speeches, they went backwards, and drove Labour still further from reality.
After Ed Miliband's speech, Labour abandoned any pretence of supporting growth and jobs. How can you support growth and jobs if you oppose the businesses who create them?
Worse still was Balls' performance.
At Conference Balls was heard to say ‘It's not right to describe this as a traditional boom-bust crisis…’ on this at least, Balls is right. This is a vast debt crisis. Yet Balls' past and present are addicted to debt.
We all know about Balls and Miliband's central role in building up the largest deficit in peacetime history. They cannot escape that past.
But what was extraordinary was their refusal to acknowledge this failure, and their insistence they would make the same mistakes again.
They are spectacularly badly placed to deal with this debt crisis.
During the last boom, asset prices rose not because the economy had become more efficient, but because borrowing was cheap, plentiful and cheered on by the Labour Government who claimed to have ended boom and bust. But while asset values and taxes dependent on them fell in banking crisis,the debts live on to this day.
The real barrier to growth is the monstrous debt burden which created the conditions for crisis in the first place.
Stock markets are tumbling around the world not because long overdue fiscal reforms are being implemented, but because the world’s lenders fear governments will fail to act.
In a similarly absurd line of argument Balls continues to claim that the state will somehow deprive itself of revenue by employing fewer workers. This argument relies on the implausible idea that the state saves money by employing more people. It is absurd.
Balls suggests that government spending is the only way to support growth, but as we know, fiscal laxity does not work in a debt crisis. It simply increases the burden while fuelling the kind of market panic currently destabilising the eurozone.
Where is the growth in Greece and Italy?
There is nothing ‘strong’ or ‘disciplined’ about admitting one set of mistakes – failure to properly regulate the City – while flatly refusing to apologise for another: fiscal recklessness. Balls' failure to come to terms with his own legacy ofoverspending, coupled with a new wish-list this week of unfunded borrowing commitments – I totted up £23bn – demonstrates his ongoing addiction to debt. Surely it’s time to kick the habit?
Credibility means proposing a realistic response to the debt crisis.
Yet rather than using the biggest moment of their year to lay out a serious solution to the debt crisis, Miliband and Balls have used their moment to hammer home their pro-debt and anti-growth message.
This is not an appeal for credibility but an appeal to credulity.