I wrote that Ed Miliband's first appointments showed fear. As Red Ed Two takes charge, this one shows desperation.

by Paul Goodman

"The appointment of Alan Johnson looks like a weak compromise.  Balls has been dispatched as Shadow Home Secretary to bully Theresa May.  Cooper has been sent out of the country altogether - for parts of year at least - to trot the globe as Shadow Foreign Secretary.  It looks as though Miliband wants to break up a rival power base.  Johnson is an agile and able operator well qualified to play class war politics opposite George Osborne.  That's fine for opposing "the cuts".  It's not so convincing if you're trying to persuade voters that you should be Britain's bank manager."

The paragraph above is part of a piece I wrote immediately after Ed Miliband's first Shadow Cabinet appointments.  It was titled: Cameron's first Shadow Cabinet appointments showed confidence. Miliband's show fear.

Johnson proved to be less agile and able than I'd anticipated.  But otherwise the rest of the piece was on the fairway: as Shadow Chancellor, he didn't even begin to persuade voters that he could have cut it at the Treasury.

There's not yet a clear sense of why he's left.  He couldn't have gone into the next election as Labour's future Chancellor, as his recent bungles with figures demonstrated, but the resignation doesn't look to have been forced by Labour's leader to sort the problem now.

At any rate, Miliband has got the Shadow Chancellor he strived so hard to avoid.  The power base that he sought to break up is in place.  It is awkward for the Labour leader at best, humiliating for him at worst - and dangerous in any event.  It's not hard to see Kinnock/Smith-style problems ahead.

Either way, Mr Deficit Denier himself will now lead for Labour on the economy.  In sum, his appointment -

• Breaks with the Miliband/Johnson/Darling/Brown Labour orthodoxy on the deficit.  Balls would reduce it less swiftly.

• Throws Balls's Labour leadership speech forecasting a double-dip recession into the spotlight.  It will be fiercely, constantly tested against events.

• Pits two ruthless and resourceful strategists up against each other: yes, it's Osborne v Balls.

• Weakens Miliband - now hemmed in not only by his new Shadow Chancellor, but by Yvette Cooper's return from the relatively distant world of foreign affairs to the domestic crucible of the Home Office.  Douglas Alexander, a reasonable voice of opposition to IDS, is moved abroad (so to speak).

Oh, and the timing of the news is a lucky break for Sayeeda Warsi.  Up to a point, anyway.