Macro economics - local dynamics
The subtlety of Christine Lagarde's critique regarding the UK's economic performance may perhaps have partly been informed by the fact that it was only a relatively short while ago that it was the lobbying of Chancellor that helped her secure that role, some suggesting at the time that Osborne would have anybody but the other mooted candidate, former Prime Minister Gordon Brown, in the job. Others may consider Lagarde's comments full of double-speak.
The IMF chief's view, it appears, is that the UK economy is performing weakly, compared to a range of other European economies; growth is too slow, unemployment is too high, especially youth unemployment, but, at least ironically, perhaps incomprehensively, the policies in place are the right ones. Go figure.
This 'things are terrible, aren't you doing well' speech was followed by the news that the economy has shrunk even more in the post-recession recession and is likely to shrink further in the next quarter, with Bank of England Governor, Mervyn King, now joining the 'everyone's to blame but us' brigade by warning that the Queen's Diamond Jubilee is likely to reduce output (although not for those producing anything with a Union Jack on it!)
Meanwhile, at the G8 summit tensions were never far from the surface between those, like David Cameron, who wanted only to talk about the need to maintain the extreme pressure to reduce spending everywhere, for Greece to 'live up to its side of the bargain' - however unpalatable that was to Greeks, and the new and increasingly voluble trend of presenting investing in growth as an opportunity to balance the fiscal books over the longer term, led, in part by the new President of France, up to now Germany's number one ally in imposing austerity on weaker economies in the European Union.
For many people, the distance between their experiences, their lives, and the decisions of politicians is remarkable. In the north east the fastest growing cohort in the labour market is 18 to 24 year olds who have been out of work for over six months, the second fastest increase is for those who have been long-term unemployed, out of work for over twelve months, and that has been rising pretty consistently for over a year. When those workers hear their political leaders suggest that what we need is more of the same they understandably conclude that it is not their interests in which the current government are making decisions. This is compounded when Employment Minister, Ed Davey, appears in Newcastle to suggest all is going well, impervious to the fact that this region is enduring unemployment rates consistently above eleven per cent.
This government needs to show people more than the macroeconomic wolf at the door, there is a disconnection between the high politics of international economics and the experiences and expectations of working people. Ignoring the case for growth first, cuts second will only disenfranchise people even more, economically and politically.
Briefing document (600 words) issued 29 May 2012
This page http://www.tuc.org.uk/economy/tuc-21073-f0.cfm
printed 24 May 2013 at 05:39 hrs by 220.127.116.11