Preparing for the economic marathon
One of the pleasures of spending Christmas on Saddleworth Moor, better even than the wonderful beer, is being able to run in the bleak but beautiful countryside. The other day I admitted to someone that one of the main reasons I run regularly is that it means I can feel less guilty about drinking and eating more than I should. I suspect that the health consequences of over consuming and exercising are no different to consuming less and being more sedentary but the former makes for a more interesting life. I ate the equivalent of several horses yesterday, behaviour I was able to excuse by the 45 minute run up and down hills on Christmas Eve and the propect of its repeat this morning.
As anyone reading this blog all week (and I’m not sure I can even rely on my mum) will know I have been focussing on poltics; voter volatility on Monday, Cameron’s faltering rise on tuesday, Brown’s fragile recovery on Wednesady and the Lib Dems undeserved doldrums yesterday. One question to be asked of all our poltical leaders is have they prepared us for what lies ahead?
The current recession is not yet as bad as that of the early nineties but not only do most experts think it will turn out to be worse, the bigger probelm is how unprepared we now are for the depredations of a downturn. I only come to Saddleworth once or twice a year and nowhere else to do I take on hills as steep and frequent as round here. But becuase I run twenty miles or so every week in london I set out from the cottage reasonably confident that I’ll make it back.
For the family finanances of millions of people 2009 and 2010 are going to be a long uphill struggle. Like embarking on a marathon most of us think we will somehow get to the end but we know there is going to be a lot of pain and self doubt along the way, and inevitably some people won’t make it. After the years of excess and debt we are very badly prepared for the rigours ahead. We could do with some last minute coaching and then strong encouragement along the way. Politicians aren’t the only coaches we need but we do listen to them sometimes, esepcailly if they are saying something brave. But the political class as a whole seems to lack the self confidence, sense of responsibility or vision to give it to us straight; telling us how hard things are going to be and convincing us that good can come out of the struggle ahead. Like other bloggers I was dismayed a few weeks ago when Andrew Lansley was forced to apologise for pointing out that one good consequence of a recession may be that we are less prone to over consumption of food and alcohol.
Society needs a broad and deep debate about how we should tackle the financial downturn marathon. We need words that can ring in out ears when we hit the wall. We need to beleive that we can come out of this fitter, stronger and wiser. But in the absence of the leadership we need, too many people are embarking on 2009 feeling nervous, pessimistic and alone.
Economic crisis and party fortunes – has Cameron got it right?
The Conservatives are still favourites to win the next election. But, as I said yesterday, things are closer and more uncertain than anyone would have predicted a few months ago. There is no question thus far that the economic crisis has been good for Labour and bad for the Tories. This too was unpredictable. There is no simple correlation between the state of the economy and the ruling party’s fortunes; parties can win in bad times, as the Conservatives demonstrated in 1992. But thinking about moments when stories of economic crisis have dominated the news; devaluation in the pound in November 1967, taking an emergency loan from the IMF in September 1976, and leaving the ERM in September 1992, each has damaged the Government’s standing and each been followed by its defeat at the subsequent General Election.
In all three of these examples plenty of other things went wrong for the ruling party between the point of crisis and the election, and there is an important difference between a short term emergency and a longer term downturn, but there is little in recent history to suggest Governments benefit from economic turmoil (a good thing too given the obvious moral hazard of bad times leading to good polls).
Despite being implicated in the creating the conditions for the crisis, Gordon Brown has been pretty successful in portraying himself as being the kind of leader we need right now. But his team have also been helped by the Conservatives’ decision to open up a clear policy divide on the handling of the crisis. In 1992 John Smith established a lead for Labour which persisted largely unchanged up to 1997. Yet Labour had been a supporter of ERM membership and it didn’t offer any serious economic alternative to the short term measures forced on Major and Lamont. Instead Smith focussed on competence, charging the Tories with being dithering and divided, charges that stuck.
In contrast David Cameron has chosen to argue for a different policy approach. Labour has been able to portray the Conservative alternative as ‘do nothing’, which, I understand, is an attack that is working in Labour focus groups.
There appeared to be a clear switch in Cameron’s strategy marked by his ‘moral responsibility’ speech in Glasgow East in July. Having successfully decontaminated the Conservative brand in his first thirty months, from that point on the focus has been on highlighting what is distinctive abour the Tory approach. But in choosing to differentiate on the economy and public spending the Conservatives appear to setting themselves against the international consensus. They may have more work to do to defend their stance in the new year when is seems that President Obama (someone with whom the Tories have generally been keen to identify) will launch exactly the kind of public spending splurge the Conservatives are seen to oppose in the UK.
The Independent reports this morning that voters have shifted their priorities decisively from public spending to tax cuts. In the medium term as the public sector retrenchment and rising tax levels kick in there will be plenty for the Conservatives to get their teeth into. But now as millions prepare for a Xmas dinner that has more of the feel of a last supper, the issue is how to get through the next six months.
In choosing to oppose the Government on the substance of policy, and not just competence, Osborne and Cameron have displayed political courage. If they win the next election it will be easier for them to argue that they have a mandate for diffcult decisions, echoes here of Thatcher and the economics of the corner shop. But first they have to win that election aganst a Labour Party whose strategists seem keen to splash about in the clear blue water of economic policy.
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