He Told You So

One person who has more right than most to claim vindication by history is Bryan Gould (pictured), defeated by John Smith for the Labour leadership in 1992 and who left British politics soon afterwards. I wrote in November that he and Peter Shore, two Labour politicians I knew well in the 1980s and 1990s, had been right about the euro all along.

So I was sorry to miss Gould when he was in London last week, but I communicated with him by email and he said that he had, in fact, just written a comment on his blog entitled “I told you so”.

His praise for Ed Balls is interesting, as the shadow chancellor was also an early and rigorous sceptic about the euro, condemning the plan for a single currency as “Euromonetarism” at the same time that Gould was resigning from the shadow cabinet over Smith’s support for it.

I am still puzzled, by the way, by Balls’s support for political union of the eurozone countries, which contradicts everything we know about his economic view, which is that trying to keep Spain and Italy in a currency union with Germany imposes such severe costs that it will suppress European growth for decades. I can just about see why George Osborne supports it, for reasons of expediency: breaking up the euro might cause short-term pain leading up to the 2015 election before the benefits of floating exchange rates come through. But Balls’s position is curious, suggesting that he is deferring to the more EU-minded views of Ed Miliband and Douglas Alexander.

How awfully collegiate of him.

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• Old Git Tom

  One wonders what Ma Merkel is hooting & hollering about. Germany’s booming exports are soaked up only by the European fringe nations’ deficits. Less deficits, less Deutschewidgetz sold. The EU hootenanny was meaningless w/out a level of economic/wealth parity amongst the national players. The Brussels crats should have brought Greece, etc., up to German consumption-production standards first – a task way beyond fat, greedy, banking sub-Neanderthals.

  And what The Tool doesn’t seem to grasp is the impossibility of controlling debt in a rotted financial system – where debts/loans are merrily leveraged into imaginary assets. It’s all in the mind? OGT

• greggf

  Speculators also lose money. If the markets were so predictable everybody would be a winner!
  The markets simply reflect the aggregated views of millions of investors and practitioners coupled with emotional factors such as greed and fear. Divining all that is hardly easy.

• Toocleverbyhalf

  Ah but the most successful speculators only ever lose other people’s money. The trick is to profit from the upside but not be exposed to the downside. Shrewd unit trust managers also became expert at this “art”.

  Have you ever met a poor bookmaker?!

• greggf

  True enough, but technically speaking Bookmakers and unit trust managers are not speculators. But I agree, managing other people’s money is far safer!