How Long Can the Labour Bounce Last?

Stumbling tells us the government is all over the place: the right hand doesn't quite know what, er, the other right hand is doing. It's probably true: a large ship of state is being turned round after many years of steaming in one direction and the crew have quite forgotten how to perform the manoeuvre. Underneath the headlines about Brown leading the world into a series of counter-cyclical Keynesian reflation measures are a whole host of more practical problems which New Labour is only weakly equipped to address in this new world. Today reported this morning that Lord Mandelson - now doesn't that name have a ring to it, like a title that was somehow always pre-ordained – was considering shelving the family friendly/flexible working extension proposals for small businesses. Meanwhile Brown and others still plough on in their quest to help 'hard-working families'. Something is going to have to give.

Perhaps some of this is inherent in the nature of politics itself: you deal with one problem and another one pops up somewhere else and you suddenly remember you used a different technique to deal with that one some time ago. 'Events dear boy, events'. But it is also due to the fact that New Labour abandoned politics per se, or at least politics as it was previously understood on the Left of the spectrum. They were and remain essentially technocratic managerialists. They ask not 'What is the Good Society and how can we edge towards it?' as old-style social democrats did, but simply," What Works?" A global recession makes it very, very difficult not to extend this into the obvious next question of "Who do you want it to work for?" and that's a political, not a managerial, question.

There is more than one historic model for Keynesianism. FDR tried it with infrastructure projects – but so did Hitler with his rearmament programme. Dave Osler reminds us that Keynesianism alone is not enough: we need policies for full employment. Will Hutton makes the striking observation that the quickest way to get the economy moving is not pulling forward large scale building projects but raising unemployment benefits. & the Green New Deal people want the infrastructure measures to be ones that leave us better off than before in terms of being able to face the challenge of climate change. But every one of these things involves some renegotiation of the relationship between state and economy, not just technocratic reflation.

New Labour will go down in the history books as the masters of spin - and the original spinmeister is back in the cabinet. But that's not going to be enough now. They need some politics now and I'm not sure they can magic it up without hurting their long time friends.