Ed Balls's grasp of economics will hurt his party

By choosing Ed Balls as shadow chancellor, the Labour party has shot itself in the foot, says Matthew Lynn. He has got just about every major call on the economy wrong. He will ruin the party's credibility and make the re-election of the coalition much easier.

Almost alone among an anodyne generation of British politicians, Ed Balls has the ability to divide opinion. When the Labour Leader Ed Miliband appointed him shadow chancellor last week, many people saw him as too addicted to back-stabbing and briefing to make an effective team player. But most praised his economic expertise, and concluded that his combative approach would make life harder for the Conservative-Liberal Democrat coalition.

In fact, that consensus is upside-down. Balls's aggression, and his ability to make life hard for his rivals, are his strengths. His weakness is his shaky grasp of economics. He's got just about every major call on the economy wrong.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.