R.F.Wilson writes from the City of London: When it comes to sorting out the mess in the British economy common sense seems to be very unpopular with the current coalition government. Everything it does actually makes things even worse. Chancellor George Osborne, who has produced a laughable autumn budget statement yesterday, doesn’t seem to realise that you can’t pump billions into banks that don’t lend properly and expect public spending cuts to help slash the budget deficit all on their own.
Prime Minister David Cameron and his chums are missing one very simple but crucial point: you can’t get out of a recession by battling the nation’s debt while the economy is not growing. It’s a very simple formula really: when you have a budget deficit and a recession at the same time you don’t cut public expenditure but do everything to kick start growth. Without that nothing would work and all the painful measures would simply hit people with low incomes, and keep hitting them for years and maybe even decades. Not to mention that you can’t allow the banks to continue avoid any responsibility for the crisis and not hit them hard with massive taxes and levies.
Messr Cameron and Osborne seem to be under the impression that just because the International Monetary Fund has approved this bizarre cutting of public spending it means the coalition is on the right track. The IMF is as guilty of sleepwalking into the financial crash that had caused the present mess as any other international financial institution and bank. The IMF has been blamed for causing untold problems in the developing world with its stupid conditions that it ties to its loans. Ask anyone in Africa what is the biggest problem that developing nations have when it comes to financial aid and they will tell you: the IMF. Not forgetting of course the shameful role it played in the eurozone crisis, wasting hundreds of billions on bailing out the banks.
The problem with the coalition that contains left-wingers posing as Tories and an open loony lefties, the Liberal Democrats, is that no one really knows how to handle the economy, having never held a proper job in their life. And as for the so-called government advisors, including Governor of the Bank of England, Mervyn Kings, they are either too deeply involved with the banks that are opposing any proper measures or they are just failed PR men and women with no idea how the real world operates.
The most amazing thing about the current government arrangement is that the unelected coalition has decided to stay in power for the full term, supposedly because the national interests demand that. In reality these people have effectively pulled off a coup and keep their jobs even though they have failed to deliver on the economy and, even more ironically, on cutting down the budget deficit. In an ideal situation the coalition should have stepped down and called general election, to clear the decks and get new people on board, who might at least have some idea of how to start getting the country out of the mess it is in.
And one more thing: at a time when consumer demand is low to allow unprincipled lenders to charge extortionate interest on their loans, including grotesque rates of 4000 per cent and higher as some online lenders are offering, is about as close to criminal as it gets. Mr Cameron and his people always claim that they take ‘tough decisions’ on the economy, but in reality they actually shun all the difficult parts and hit the vulnerable to protect the money men. Usury laws have to be reinstated as soon as possible, if anyone is hoping to revive consumer demand. But again, too many people in power are too closely linked to the dodgy dealers who make a fortune on loan sharking, so expect nothing to happen.
Basically its time for Cameron & Co to go. They have nothing to offer their people when it comes to the economy, nothing but more meaningless pain.