When snow is a red herring: the UK economy contracts
I am sure I am not the only person to snort with disgust when the media report today’s figures, from the Office of National Statistics, that show a “shock” contraction of 0.5% in the UK’s economy in the last quarter of 2010?
How can it be a shock when ever since the Coalition cobbled themselves together in May they have been taking money out of the economy, meaning that most of us have less to spend, and that what we need to buy costs more. It’s a simple equation that means we consumers cannot afford to grow the economy out of recession. And because our version of capitalism has been so closely linked to excessive consumerism – I’d say the model is in trouble.
From April more public sector workers will hit the scrapheap; that will take more money out of circulation and so on until down the plughole we will go. Shrinking the state has been one of George Osborne’s long-standing ideologies before he got his mitts on the public purse and his dogged persistence in pursuing that aim, before industry is in a position to expand to fill the gap, is at best short-sighted and at worst downright vandalistic.
The equation is simple about our own spending and so is the model of swift action by the coalition: they want to get the pain out of the way in time for the country’s economy to have taken a turn for the better in time for the next election. George can’t afford to hang about because he wants the glory run. I don’t think it’s coming. The devastating effects of the cuts and inflation are kicking in now and private enterprise is not going to be able to pick up the slack in time for there to be a quick upturn in the economy.
It doesn’t take a genius to work out that the state of the economy has given the coalition carte blanche to viciously shrink the state in short order not just for our own good and to pay off the nation’s debt (economists say we are not even going start touching that for another 5 years), but to fit with certain politicians’ pre-existing ideas about how economies and countries should be run which are then blindly applied. A scientist would look at the experiment so far and observe that it isn’t working in the way they had predicted. Unless Osborne knows that we (yes us, not just some thing called the economy) are going to go through this and is lying.
Instead Osborne just blames the snow for the downturn in the quarter that included Christmas: well you may as well just say leaves on the line George, leaves on the line…