Boneheaded Britain

The big problem with ideologues is their propensity to do genuinely stupid things that leave others paying the price for years, sometimes decades.

With Harper at the helm, Canada has no cause to be smug, but it's Britain that provides the best example of conservative boneheadedness at the moment as the Cameron government plunges the UK into a double-dip recession.   The Guardian's Will Hutton points out how utterly unnecessary this all was:

Yet [George] Osborne – the kamikaze chancellor – and his coalition partners decided that the prime aim of government policy had to be eliminating the structural public sector deficit in just one parliament. Caution was thrown to the wind. The assumption was that the economy would quickly get back to business as usual; after all, as long as markets were free and flexible, what could go wrong? 

Osborne, a laissez-faire economic dry, would repeat Sir Geoffrey Howe's budget of 1981, opening the way for tax cuts in the runup to the general election. He would keep the Murdoch press onside – and repeat the years of Margaret Thatcher's hegemony.

The result has been as inevitable as it is desperately sad. On Wednesday we learned that Britain has experienced a double-dip recession just two years after the biggest decline in output since the early 1930s. Worse, it will not be until 2014 that output will return to 2008 levels – a six-year recession not equalled since the 1870s. What is happening is a disgrace.

Moreover, it is totally unnecessary. Britain has a very strong public balance sheet. The stock of our national debt, accumulated over decades, is modest compared with other countries and our own past. The rate of interest is the lowest since the 1890s. The debt is exceptionally long term and does not need to be refinanced with any sense of panic. Total debt service costs have been higher for only a few decades over the past 200 years.

Britain was supremely well placed to take a measured approach to budget deficit reduction. ...Only an innocent or a fool would insist on it being done in four years, with four-fifths of the burden assumed by spending cuts. It was clear that a vicious circle could be created in which the severity of the programme would so puncture the growth in demand that the weakened banks would stay weakened – and business confidence would remain flat. Britain would be deadlocked in stagnation.

That is what is happening. The Office for Budget Responsibility's forecast of a return to growth next year, driven by a surge in investment and exports, has looked absurd for months. The idea that business investment will jump 40% by 2015/16, the biggest since 1945, is risible.

A collective madness seems to have descended on our policymakers. Too few understand that what besets capitalism is unknowable risk – the risk of transformative new technologies, the risk of making epic business mistakes, or the risk of there being no demand for the goods and services a business produces. 


But it's not really a collective madness, it's the appearance of a class of ideologues who persistently ignore facts in favour of their gut instincts.  And that, in a nutshell, is the recipe for a ruler of the small stature of Stephen Harper.   He has been indulged and pampered by his rightwing acolytes so long that he has thrown caution to the wind in pursuing his illogic.   That he has descended into megalomania was almost pre-ordained.   That we and our kids will pay dearly for his boneheadedness is virtually assured.