Listening to Lord Mendacity's dismissal of Britain's top businessmen today, you get the authentic Labour view on the way economies work. Despite all the NuLab spin, they have never really accepted the idea that sustainable growth is delivered by private enterprise not by government spending.
As we blogged here, their plan to hike the jobs tax will be a disaster, costing up to 500,000 jobs. And George is absolutely right to make it his top priority for cutting (or at least rescinding the increase).
But Mandy clearly doesn't understand that. Instead, he comes up with the utterly preposterous idea that these top business leaders are whacking Labour policy because they have somehow been deceived by the evil Tories.
Did Mand not read what they wrote? Just for future reference here are the key bits:
"In the last few years, the private sector has improved its productivity by around 20 per cent, while productivity in the public sector has fallen by three per cent. Savings can be made by removing the blizzard of irrelevant objectives, restrictive working practices, arcane procurement rules and Whitehall interference... As taxpayers we would welcome more efficiency in government.
As businessmen we know that stopping the national insurance rise will protect jobs and support the recovery.
Cutting government waste won’t endanger the recovery – but putting up national insurance will."Spot on. In fact, it could easily be Tyler talking.
But it most certainly couldn't be Labour.
As we must all understand, the very biggest of the several big challenges ahead of us is how to get the economy growing sustainably. Under Labour, growth was fueled by a huge debt bubble and a crazy ramping up of public spending. But that has ended in catastophe, and we must now find another way.
Next year, even on the government's over-optimistic numbers, public spending will account for nearly half our GDP (48%). And Labour believes that to be the essential prop supporting future growth.
But there is a very different view, partly but not yet clearly, articulated by Cam and George. It is that continued high public spending and high government borrowing will soon undermine the very growth Labour say they want. It will happen via a number of different channels, but most dramatically via the impact on interest rates.
And most helpfully, Policy Exchange has just published some work on how big these effects might be. In particular, they have looked at the likely impact of our huge fiscal deficit on gilt yields and interest rates.
There is a considerable economic literature on this question, and its conclusions are unambiguous - higher government borrowing pushes up interest rates. Quite a lot. In fact, the literature suggests that the current level of UK borrowing will have the effect of pushing up gilt yields by 2-4% over where they would have been without the deficit.
Andrew Lilico and his Policy Exchange colleagues have also done their own analysis, and here's one of their pictures:
As we can see, countries with the biggest deficits tend to have the highest borrowing costs. And we can also see that our bond yields look low relative to the average relationship.
Why? Well, partly because the Bank of England has artificially supported the gilt market by buying the best part of £200bn of gilts as part of their Quantitative Easing programme - a support that has now gone. And partly because the market still believes there will be a Tory government that will cut the deficit - a support that will go if Labour get back.
The chart also shows just what happens to borrowing costs when market confidence goes - look at where Greece is.
To bang the message home, Policy Exchange works out what their expected increase in borrowing costs would mean for mortgage costs:
"In the UK a rise of 1%-2% in mortgage rates would add some £700-£1400 to the average annual mortgage bill."And that is precisely the kind of effect that would stop our anaemic economic recovery dead in its tracks.
Which is why Labour's policy of continued high public spending is so hare-brained. Far from supporting growth over the next few years it will undermine it. From higher jobs taxes to higher mortgage rates, it is a disaster in the making.