From the April 14, 2009 Daily Telegraph (London)
April 14, 2009
by Irwin Stelzer
Now that the G20 meeting has failed to produce the additional stimulus spending that he and Barack Obama had been hoping for, and that once again Gordon Brown has been caught conjuring non-existent trillions out of thin air, he must shift his election drive back to the domestic economy, hoping that a recovery takes hold soon enough to generate the feel-good factor that might propel Labour to victory.
But the Prime Minister must worry that Keynes was right when, referring to Lloyd George, he observed: "Even the public learns by experience. Will the charm work still, when the stock of statesmen's credibility… is getting exhausted?" Surely, persistent economising with the truth – not to mention the antics of Brown's underlings – has exhausted Labour's credibility.
Yet, the election will not only be about the incumbents' veracity or stewardship of the economy. It will also be about what the Tories have on offer. Not so much specific policies, although those matter. But if we have learnt anything over the years, it is that the governments we elect, in my country and yours, are more often than not called upon to react to events that no one imagined would face them. Franklin Roosevelt was elected to get the country out of a depression and to keep its sons out of foreign wars, and is remembered as a war president. Tony Blair was elected to reform the welfare state and correct some of the excesses of Thatcherism, and is remembered for the Iraq war. In the end, we have to choose governments not only with which we are sympathetic on polling day, but which we judge capable of learning on the job, admitting error and moving on to more effective solutions, confronting problems we cannot foresee when we mark our ballots.
Brown worries voters because of his stubborn refusal to admit he has ever got policies wrong, for his adherence to a supplier-driven welfare state in an era of informed consumers, and for a lack of the human touch so plentifully bestowed on his predecessor. David Cameron and colleagues worry voters because they seem more expert at public relations than at public policy, seem to lack the right stuff which will be needed when some new, difficult problem faces Britain.
Brown can be judged on his performance – love him or loathe him, you know what sort of person he is, what his weaknesses and gifts are, what policies he pursues now that boom and bust is again with us. The Tories present a more difficult case. In part this is because the new boys had to mature under the glare of publicity, and move from Cameron's early emphasis on catchy phrases and photo-ops to serious policies by serious members of a new government. Cameron got the Tories heard before he and his colleagues had a great deal to say. Nice lad, not mean like some Tories, pleasant enough to persuade voters not to switch channels when a Tory appeared on television. That was then, and this is now.
It is a long way from proposing that we hug a hoodie to demanding that young people's behaviour be subject to strict restraints by their parents, teachers and, if necessary, the police. And it is a long way from Cameron's initial (and perhaps politically essential) mushy ecumenicism, which drained conservatism of meaning, to a tough-minded tax policy that distinguishes between the traditional family and the ersatz version favoured by the otherwise estimable welfare minister James Purnell.
Still, it is reasonable to ask whether the Tories have anything useful to say about the nation's current difficulties. And it seems that they do. Whether Cameron is right to argue that a policy of borrow and spend will prove disastrous for a country such as Britain, which is not blessed with the reserve currency that might permit America to spill so much red ink, we won't know for a while. But we might just be witnessing a please-everyone PR man morphing into a brave politician and potential PM.
Throw in the Leader of the Opposition's insistence that new regulations to rein in financial excess should work with the grain of "the free enterprise economy [that] is the foundation of so much we want to achieve", and you have an increasingly well articulated and distinct alternative to the present government. And when George Osborne raises the possibility of using the government's shareholdings in the nation's banks to break them into smaller, more manageable units, we have a seriously radical policy mind at work. If the recent problems of Citigroup demonstrate anything, it is that some financial institutions are too big to be managed by anyone, and certainly by the sorts attracted to managerial positions in the banking industry, "the least realistic of men", according to Keynes. If experience with toxic assets proves anything, it is that the current structure of Britain's (and America's) banks is not consistent with the national interest in sustainable growth.
Still, it is early days. Labour can reasonably claim to have prevented a complete meltdown of the financial system; the economy might be turning up when Brown at long last faces the voters; and the PM is a master at doling out vote-winning benefits to key constituencies, many of them frightened of losing access to the Treasury teat should the Tories take over. Never underestimate the flexibility of a Kirkaldy-bred Keynesian.
Irwin Stelzer is a Senior Fellow and Director of Economic Policy Studies for the Hudson Institute. He is also the U.S. economist and political columnist for The Sunday Times (London) and The Courier Mail (Australia), a columnist for The New York Post, and an honorary fellow of the Centre for Socio-Legal Studies for Wolfson College at Oxford University. He is the founder and former president of National Economic Research Associates and a consultant to several U.S. and United Kingdom industries on a variety of commercial and policy issues. He has a doctorate in economics from Cornell University and has taught at institutions such as Cornell, the University of Connecticut, New York University, and Nuffield College, Oxford.
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