So, Gordon is lauded as the saviour of our economy, his fortune in the popularity polls has staged a dramatic comeback and he must be feeling a little smug that the Conservatives lost their deposit in Glenrothes. Not that the latter was really ever in doubt and, I suspect, he is more pleased that the SNP rennaisance seems to have temporarily stalled.
But the big issue amidst all this economic drama has to be the big picture of what to do. There is no panacea, quick win or low hanging fruit – they are as ephemeral as their titles suggest. In todays immediate must have world the risk is that as a consequence of our impatience for action, we do the wrong thing.
This crash gives us – in fact requires us – to make some deeper long term decisions about our economy and its’ place in the world.
The truth is that in pure terms of productivity we are quite insignificant. We have built success on the back of global financial markets which until recently performed well. Despite all the criticism of the fat cat bankers, remember that without the global liquidity they provided it would have been well night impossible to get a loan for car, never mind a house. The catastrophic failures in Banks are a direct consequnce of a combination of a collapse in asset values more fundamentally driven be a collapse in confidence.
The restructuring in Britain needs to take into account our new position in the world. US domination is not finished, but it will have to learn to get on better with India and China. We need to look to new partners and settle down to a decade – I mean it – of real financial prudence, rather than the wholly dishonest version Gordy was selling us over the last decade.
There is much talk in the press of what the government needs to do to ‘kick start’ the economy. Again we are lead to expect a easy and immediate remedy which is unrealistic. There are a range of things we need to do:
We need to lower business taxes. In the short term this will be hard to do, but it will make us more attractive for investors and this, coupled with the dramatic fall in the value of Sterling, will make us a great place to do business. We should also resist any temptation to tax the very rich any more. They are immensely mobile and will simply go elsewhere when we need their acumen and capital the most.
We need to reduce public spending. Again hard because it will have an effect on the economy, but the reason we must not continue to spend is because we will have to borrow and that, with a weakening currency will be catastrophic.
We need to reduce the cost and bureacracy of government. Far too much money is wasted here. We all know it and government growth spawns legislation. This goverments record of new laws is outrageous and more people than ever seem to be growing tired of the control freak approach.
We need to improve and increase education. That does not mean spending lots more money, but it does mean keeping children at school for longer. They may not like it, but we have to reduce the amount of feral and useless young in this country.
We need to encourage individual accountablity and responsibility and reverse the entitlement culture. Social handouts must be on an as needed basis, not an as of right basis. The culture of ‘entitlement’ has to be changed: it’s cancerous and any and all handouts must be given in exchange for some contribution to society. This is the most dramatic shift in our endemic parasitic dependent culture. If folks have to ‘work’ for their Giro, they might decide to work in a real job and contribute.
We need to be patient and positive. On the plus side, companies who have taken big write downs and cut costs dramatically over the last few months will be better poised to be competitive and return to profitability more quickly. They are more likely to start hiring and growing as they have been forced in the downturn to become more efficient and to get rid of some economic baggage that held them back.
We need a more common sense approach to justice that is more equitable. No more hoody hugging and no more Asbo’s awards. Proper consequences for crime. Could we force the young unemployed into the Forces? Maybe – we’d need to fund it and I don’t expect the Army relishes the challenge of cleaning up so of today’s yoof; but then again maybe not….
So, that’s my tuppence worth. I could be wrong, I could be right. But we need to take positive action and somehow convince the public to be patient. It will require a great and popular leader to implement.
If only we had one.