Wednesday, 8 February 2012
Westward look, the land is bright
The most painful part of Europe's austerity crisis? The fact that it need not be this way.
Look across the Atlantic, to a US where the economic data is getting better every day. American job growth is accelerating. Unemployment is coming down. Companies are hiring, and expecting to hire.
Why are Americans beginning to enjoy the fruits of job growth, while parts of the European Union are being plunged into a new economic Ice Age? Er, because their government has gone on spending while others have been pulling in their horns. their government is gridlocked. No-one could agree what the cuts should be, or where they should fall, in 2011. They're coming anyway, but only in 2013 - when the recovery will (hopefully) be well entrenched. That gave the American economy a crucial bit of leeway. It's a breathing space that employers are using to get their hands on good workers while they're still plentiful. It's a virtuous circle that may see the US back on its feet far sooner than most had predicted.
Put all that together with last night's triple victory for the social and economic conservative Rick Santorum in the Republican primaries, and the sound of gleeful hand-rubbing in the White House grows ever louder. President Obama's poll ratings are still slowly improving; his lead over the still-presumed Republican candidate is yawning ever wider. Republicans are spooked. How, they ask themselves, can President Obama be re-elected when he was so unpopular in mid-term?
Who would have thought it? The answer is this: a Keynesian President and his stand-off with spending fundamentalists is teaching the ultra neo-liberal Europeans how to do things. It's happened before of course - under FDR's New Dea in the 1930s (above). But it's a shock to our expectations and prejudices nonetheless. Perhaps for just that reason alone, it's an entirely welcome breath of fresh air.
As Churchill put it: westward look, the land is bright.