Monday, 25 November 2019

The economy, stupid!

Boris Johnson has been going round the country promising, if his party is elected, a mix of grandiose spending plans and generous tax giveaways which would result in a debt burden which would make even Gordon Brown blush. Corbyn's Labour manifesto has already been revealed as unrealistic based on their stated tax proposals, so equally likely to lead to a 2008-style crash when the money markets tighten again, as they inevitably will. The drafters of the Conservative manifesto released yesterday have avoided the most extravagant promises and claim that it is economically sound, but Guido Fawkes is not convinced.

The Carville dictum, "the economy, stupid", which drove Bill Clinton's  successful presidential campaign, clearly inspires the Tory and Socialist electoral strategists. Clinton profited from a US in recession in the 1990s by offering economic recovery. Indeed, his liberal policies, particularly those on trade, fostered a "very robust economy during his tenure" (wikipedia). However, it is the very dedication to free trade and movement of labour, cornerstones of the Clinton philosophy, which both Corbyn and Johnson would turn their backs on in their desire to leave the EU.

The worm in the Clinton apple was following the path of deregulation begun by his Republican predecessors. As applied to property mortgages, this liberalisation led to the collapse in confidence in financial institutions which in turn triggered loss of faith in banks linked to them - conveniently after Clinton left office, but in time to catch out the Blair-Brown government which had assumed that cheap money and trust in UK institutions would go on for ever.

It is all change from New Labour in the Victoria St HQ but the new people have not learned that all periods of easy money come to an end. The Liberal Democrat manifesto is more realistic.

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