Labour can't blame the bankers

Labour's official line in opposition remains that everything was going along fine until the banks overreached themselves (NB there is no mention of the failure of the Labour government to regulate the banking sector). This line is too often taken on trust, especially by the BBC.

Thanks to Guido for reminding us of a useful graph in the Spectator magazine, which illustrates the point I made back in October 2010.

Even Chris Dillow, dubbed a left-wing economist, admits the deficit, though now explains it away as a success in making up for the deficiencies of private capital.