Time for Economics 101, Gordon

I think prime Minister Gordon Brown needs to take and Econ 101 course. I'm still shaking my head over this article on police pay raises.

Pay deal 'in national interest'

The decision to hold back part of the police pay increase this year was taken "in the national interest", Prime Minister Gordon Brown has told MPs.

Mr Brown, who said he would be willing to meet "people" to talk about the pay issue, said "the bigger picture" was the need to keep inflation down.

Huh? Pay increases should be based on the market value of skills and abilities needed to do the job and keep the pay level competitive, not macroeconomic policy goals. When questioned about this, the Prime Minister continued to rewrite the laws of economics.

Mr Brown replied: "Nobody wants to say to the police, you cannot get a higher salary.

"But nobody wants inflation to return to the British economy and have pay awards wiped out simply by rising inflation."

Uh, Mr. Prime Minister, you control inflation by contracting or expanding your money supply via monetary policy, not by playing shell games with your public employee pay raises. Not even John Keynes, the king of "activist government", saw chintzing with pay rates as legitimate fiscal policy. You are simply going to push qualified people out of that profession by artificially holding down pay rates. Also, good luck negotiating with anybody in the future.

So, under the Prime Minister's flawed logic, he should then be giving big pay raises if inflation is low, in the "national interest". Does anybody really believe that would happen?

Me neither.

The police negotiated for these increases via their legitimate arbitration mechanism and deserve to get them. Playing games with their raises is a big mistake.