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“Liberal Consensus”

January 16, 2010

Says it all for me..

The blogger is Mark Seddon@BT — well done that man!

From now until May, it will be the job of politicians and journalists to create sufficient interest and excitement to cajole Britain’s increasingly reluctant electorate into the polling booths. They will have their job cut out.

The problem for Britain’s professional political class is twofold; the country, alone amongst its competitors is still in recession and all three major parties are to one extent or another wedded to a liberal economic consensus – the consensus that laid the foundations for the current banking crisis. From Thatcher to Blair and now to Brown and Cameron, the essential policies have remained the same. Loosely these can be described as free market based, de-regulatory, biased towards the finance sector and deliberately neglectful of the manufacturing sector. Labour has been kinder to public services, and as long as the bubble was still capable of expanding, allowed for an element of ‘trickle down’. However welcome some of the micro measures to boost training or build schools and hospitals, the gap between the rich and the poor has continued to grow. Britain is now more unequal than at any time since Queen Victoria was on the throne.

So attempting to create any enthusiasm, and especially by a political class now largely reviled as corrupt, would be a tall order in the best of times. But these are the worst of times, and all of the political leaders are agreed that the axe will have to fall on Government spending – the Government having spent much of our wealth bailing out the bankers. In truth cuts are already taking place, but after May comes the heavy stuff – whoever wins. This much the public already knows. It explains why there is so little enthusiasm for any of the parties or their leaders, and why this coming General Election may be less game changing, and more game playing.

In time it may also become known as the ‘phoney election’, because while all of the parties agree that cuts must be made, they are not really telling us where and how deep. And having artificially inflated the economy by pumping billions of taxpayers’ money into bust banks, the politicians are now set on deflating it as quickly – and before a recovery has even started.

Some have suggested that Britain is only a bigger economic version of Iceland. That may be true. But what I fear is that the direct result of slashing public expenditure will be that Britain will be caught in a stagnating deflationary spiral similar to that which has gripped Japan for nearly a decade.

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