There is no pretending that today's news of an unexpected contraction of the economy is in any way good. I'm no economist, but there's I didn't come down in the last shower either, so I don't buy George Osborne's airy reassurances that it was all the fault of the snow. Nor will I take any nonsense from Labour about it being all the fault of the Government when their spending cuts haven't kicked in yet. In fact, if we didn't get our normal Christmas boom, isn't that going to have a knock on effect for the rest of the year?
There's a bit of me that's fearful that this is as good as it's going to get for a while and that there might be a call for the Government to moderate its deficit reduction plans to ensure that we don't end up putting loads of public sector workers out of jobs when there aren't any in the private sector for them to go to, and when there are more unemployed people that the public sector needs to efficiently support.
I get the argument that the deficit needs to come down. I've never been sold on why it needs to be quite as fast. What the Government can't do, though, is stand by and watch the economy sink without taking action to help stimulate it.
Those of us around in the 80s remember how awful it felt when Margaret Thatcher came out with things like "the lady's not for turning". It seemed very callous in the face of mass unemployment and it kind of felt that the Government was throwing us to the wolves.
I expect our ministers to be taking a close look not just at the figures on a sheet, but on the human effect of what they mean and do their best, within the Government, to ensure that people aren't abandoned. I don't know enough about the ins and outs of it all to say exactly how that should happen, but I don't want to see - and I can't imagine - a Government with Liberal Democrats in it being as intransigent as the Tories were in the 1980s.
I don't want to get too Cassandra like because from what I hear these men in pin-striped suits in the city are sensitive types who lose their confidence quite easily (such a sensible foundation for an economy, really) so I don't want to suggest that we're all doomed, but we might be if the Government gets this wrong. No pressure then, Nick, Vince and Danny...........
Update: The Elephant, who actually does understand about the economy, has some good advice for the Government. I am still scared, but maybe there is a way out of it. I took the word creative out of what I thought our ministers should be. Maybe I should put it back in.
1 comment:
You have good reason to be scared!
The high priests of the 'econosphere' have no more idea about how to manage the economy than you or I! They will produce and use rhetorical language such as 'confidence; the sensible family; recovery in the private sector to finance the public sector; None of which do they really understand. Like priests they all disagree with each other and insist that their interpretation is the most sensible! They use what they think they understand as if it is a reality, but don't get down to asking why their ideas continually fail.
We do not have sectors of an economy that create wealth and another that consumes it! We have one integrated economy where each so called sector is interdependent with all of the others.
For a properly working economy that serves society, as opposed to itself alone, we need full employment to provide the money that enables people to spend it on goods and services which maintain those jobs. You cannot have one without the other! The trick is to discover how to create and inject the money to maintain full employment. The system we have cannot do it! But we do not need central planning nor massively overpaid bankers. we do need a relatively straight forward system that we can all understand and manage individually. One which enables each of us to work it for ourselves.
Quite impossible? No! just not possible to get past the entrenched self interest of those who see themselves as the high priests of this system! Getting them to challenge to accepted conventions; have the courage to experiment and even accept probably fundamental change.
Keep your fears!
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