I am sorry I used "Now is the Winter of our Discontent..." as a Blog title some 16 months ago. It would appear to have been much more appropriate now in the context of the UK in particular.
The Coalition Government was never going to be easy, given the differences between the two conjoined parties, with the Liberal Democrats having traditionally and philosophically been closer to Labour. But they recognised that Labour at that moment in time were a "busted flush", and they were more likely to do better with the Conservatives.
They must be questioning that decision now, although if they had their time over again I hope they would still have come to the same conclusion.
Britain, under the leadership it was enduring at the time of the last election was moribund. It was inefficient, it was piling up the debt and generally going nowhere fast. It should have been a shoo-in for the Conservatives, but it didn't quite work out the way they expected, for whatever reason. With the resulting "hung" Parliament the LibDems had the swing vote, made their choice presumably by a majority knowing they would have to compromise at times, and are now in Government. And they are not finding it comfortable.
Britain has economic woes. Of that there can be no doubt - and to let them drift on unchecked would be irresponsible. But if it cannot find easier ways to raise money, in a tax environment that is already hurting some and perhaps stifling the growth of new business, then it needs to cut expenditure. The basic position understood by every household, which also knows there are limits as to how this can be done. This is not unique to Britain. It is going on elsewhere in Europe. The Greeks and the Irish have already had to introduce austerity measures - and probably one or two more European countries are going to be facing the same issues sooner rather than later. And it's not nice.
People who thought they had secure jobs and reasonable pensions are going to find themselves suddenly disadvantaged. Students who were preparing to go through University at minimal cost are now going to find it harder going - and they will have to repay their fees at some stage in the future once they have found jobs and are earning more than a certain income.
I sympathise. I have been extremely lucky in life, but then my expectations were not so high to begin with and I just took up whatever job was available; barman, filing clerk, whatever! But I really do worry today. However, if we do nothing and take the easy options because it will be less difficult to manage, then nothing will be achieved, and the debts will pile up until they can no longer be paid back or more money borrowed. And what then?
I am not, by nature, someone given to scaremongering but the spiral will be downwards. Strikes, riots, civil disobedience, fuelling nationalism - economic and racial, and anarchy. Unless prevented, we return to the laws of the jungle. The strongest will rule by force and fear. And is that an encouraging prospect?
The Russians, the Chinese, the Cubans, the North Koreans have all tried it and I would conclude that it has not worked. It creates a lowest common denominator syndrome. And some of those countries have changed their models as a result.
All that said, should the protests be banned? No, they shouldn't. People are angry, and they have a right to be heard. I would only urge that it is two-way traffic! There seems to be a movement towards making freedom of speech a one-way street. "I must be allowed to speak freely, but I don't want to listen to your point of view" sort of thing.
But protests should not resort to senseless violence as has been witnessed in Britain recently. Where students, plenty of them rather long in the tooth it seems, have resorted to vandalism pure and simple. Acts that in some highly publicised cases have even led well-known protestors to criticise the students.
But all that said, this latest unrest is not going to be something that goes away overnight, and by using soothing rational words. It is going to be a long hard road, but it is probably by and large the right road. Of course, selectively Parliament can soften some of the measures - far easier than imposing them at a later date - but the LibDems - too often "accused" of sitting on the fence in the past, are going to have to stick with it in the interests of a Great Britain - in its broadest sense.
http://www.economist.com/node/17902709
The least-bad way to deal with this contradiction is to restructure the debt of plainly insolvent countries now. Based on this newspaper’s calculations (see article), that group should start with Greece and probably also include Portugal and Ireland. Spain has deep problems, but even with a big bank bail-out it should be able to keep its public debt at a sustainable level (see article). Italy and Belgium have high debt levels but more ample private savings, and their underlying budgets are closer to surplus. There is, thus, a reasonable chance that, handled correctly, euro-zone sovereign defaults could be limited to three small, peripheral economies.
Posted by: jeremy | 18 January 2011 at 23:08
I remember William White's final report at BIS before he resigned as chief economist abt 2008.
White had been contradicting Greenspan and warning of housing bubbles and toxic waste since circa 2003. He was one of a few 'experts' who can claim to be vindicated by the global crisis.
In his final report, White hinted/suggested (what's that word for something more than a hint but less than a suggestion?) that some sort of co-ordinated debt forgiveness may be the most sensible option. (it's also been whispered by someone, not White, 'outright default if necessary')
I can't remember whether White was referring to forgiveness/default at the individual, firm or sovereign level...but let's examine the last. If Argentina, Russia and Indonesia can do it and bounce back to economic vibrancy after 5-8 years....why can't it apply to at least some of the worst affected countries today?
Runs against accepted wisdom? Improbable? Encourages moral hazard? Insensible?
Yes. Yes. Maybe. Maybe not.
ps. apologies for slightly going off-track
Posted by: jeremy | 13 December 2010 at 05:45