Friday, 28 September 2012

Heading out of the storm

The apparent improvement in the economy is without doubt a good piece of news, and we should all welcome.  One of the issues I have with Labour in opposition is its "anti government" rather than "pro country" stance.

This recovery is not to my taste because it has so far been driven by splurges in consumer spending at times of declining real standards of living, and while the household leverage is still almost 100% of GDP.  Let's not forget the crisis was driven by a still inflated houses bubble and easy credit.  If productivity does not improve, the danger is "spend-all-you-earn-and-more" habits come back with a vengeance.  The accumulation of consumer debt cannot be the engine behind any sustainable economic resurgence.

This is why I believe the government's lack of vision and inability to formulate strategic goals is dangerous.  The obsession with business profits and wealth preservation is exclusively ideological, therefore cannot produce a good outcome for all Brits.  Cheap credit is not how people will have better lives.  This government believes its sole purpose is to ensure businesses make money and the military power is still being perceived as significant.  A government has a duty to provide quality services to its citizens, and care for the vulnerable ones.  The Swedes seem to agree.

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