I’ve been worried, as have many of you I’m sure, about the way our leaders here in Europe have been handling the economy. I don’t vote Conservative and never have but, even if I were a supporter of the Conservative party, I would have to admit that Britain is suffering under the worst government of my lifetime. Half-way through this parliament, they are trying to re-launch their reputation in our eyes but, sorry, no matter how many policy tinkering announcements they make this week, the central point has to remain that they are failing to sort the nation’s economy.
It seems a long time now since Gordon Brown’s government and it is now a lazy and oft-repeated mantra that the economic crisis was all his fault. Actually the opposite is true but we have chosen to forget that. Poor Gordon, one day, the history books will reassess his reputation and show that without his tough intelligence when the financial bubble burst back in 2008, we would all be in an even more serious mess than we are now.
Gordon Brown and President Barack Obama saw eye to eye at that time and while, Brown lost out to the feeble Conservative-LibDem coalition in Britain, Obama won a second term and, hardly free from economic difficulties, he is sticking to the Obama-Brown doctrine. Looking from the devastated battlefield that is now Britain, I know which of the two countries is more likely to come out of this economic crisis any time soon.
I am not an economist, but I’m not a fool either and, for some time now, on these pages I have tried to plead the case for Obama-Brown while British chancellor George Osborne recklessly refused to back down from the austerity policy that is only just beginning to reveal its truly damaging potential. What do I know so don’t believe me but read the words of American economist Paul Krugman writing in yesterday’s New York Times. Paul Krugman is one of those brilliant journalists who can make the complexities of economics understandable to the likes of me, I just wish more people would listen to him. Here in Britain, we need to accept that we will never recover unless something is done about George Osborne.
“My spending is your income; your spending is my income. If everyone tries to slash spending at the same time, income will fall – and unemployment will soar…”
“In 2008…governments needed to step in, spending to support their economies while the private sector regained its balance. And to some extent that did happen: revenue dropped sharply in the slump, but spending actually rose as programs like unemployment insurance expanded and temporary economic stimulus went into effect. Budget deficit rose, but this was actually a good thing, probably the most important reason we didn’t have a full replay of the Great Depression. But it all went wrong in 2010. The crisis in Greece was taken, wrongly, as a sign that all governments had better slash spending and deficits right away. Austerity became the order of the day, and supposed experts who should have known better cheered the process on, while the warnings of some (but not enough) economists that austerity would derail recovery were ignored…”
“The really bad news is…(that) European leaders, having created Depression-level suffering in debtor countries without restoring financial confidence, still insist that the answer is more pain. The current British government, which killed a promising recovery by turning to austerity, completely refuses to consider the possibility that it made a mistake…. The truth is that we’ve just experienced a colossal failure of economic policy – and far too many of those responsible for that failure both retain power and refuse to learn from experience.” New York Times, 7th January 2013