Thursday, April 26, 2012

You have a choice

Remember this from 2010? It proved sadly prescient. 

In the last 13 weeks of the Labour government, we added £15 billion to the economy, driving it to recovery. Since then, the recovery has flatlined. 

In the last 637 days of the Tory government, they have struggled to add £5 billion. 

In the seven quarters since Osborne took the helm of the economy, aided by the useful idiot Danny Alexander, the economy has gone backwards in four. The fantasy of an export-led recovery, as seen in Canada in the 1990s has been exposed as the pipe-dream it always was.

However, the problem isn't the technical recession - I can assure you that out there in the real world, it has felt like a recession for a long time. Perhaps even recession isn't the right word - we're just bouncing along the bottom. I'd expect a pickup over the summer, but not by much and ongoing sluggish growth and contraction.

As I noted here, the recovery - such as it is - has taken longer than in any recession on record, including that in the 1930s. A far better qualified economist than me, the Nobel laureate Paul Krugman, makes exactly this point - that this was a choice not enforced upon us by the bond markets or the European Central Bank and adds a warning:
The defense I hear from Cameron apologists is that the austerity mostly hasn’t even hit yet. But that’s really not much of a defense. Remember, the austerity was supposed to work by inspiring confidence; where’s the confidence? Basically, the expansionary aspect should already have kicked in; it’s all contraction from here. 
The private sector has not stepped up to the plate to replace the contracted state - and there are lots more cuts to come. 

The fact is, this is a depression manufactured in Downing Street by an utterly incompetent government. They try to shift the blame onto the Eurozone, ignoring the fact that up to 2010, the Eurozone and UK recoveries were tracking nicely together. After the May election, they diverged as the UK recovery stalled. 

The figures hide the fact that it is ordinary people and families that are suffering in this depression. I'm certainly not celebrating this awful news. 

However, we need to remember that in 2010, people had a choice about which road we would follow. 

They have a choice again on May 3. 

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