Thursday, 3 May 2012

Trading myths: Addressing misconceptions about trade, jobs, and competitiveness

The obvious flaws in the Tory economic policies made more visible by recommendations from a myth-busting study by MCI.

Weakening the pound and printing money in the wishful hope of improving export competitiveness is not only short-sighted but futile without incentives to stimulate innovation.  The "inflation tax" thus created may have helped the government service the debt burden more easily, the weak pound may have helped some exporters, but this stubborn policy destroyed real purchasing power, put a severe burden on imports, and severely penalized savers (among which pensioners), without achieving the declared goals of stimulating overall growth via exports.

This was the only economic policy since 2010, and that is inexcusable.  The big tangible gains have flown into the pockets of owners and brokers of expensive London property on the Northern shores of the Thames.

Infrastructure and education are long-term bets that must be won by the Government via vigorous, direct and urgent involvement.

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