Wednesday the UK statistical office announced that Britain was in recession. Wednesday’s economic data established that Britain’s gross domestic product fell 0.2 percent in the first quarter of 2012 on top of a 0.3 percent decline at the end of 2011. While the data can be revised and some conservative voices are questioning it, it still is not good to likely have a double dip in the face of promises of a quick recovery by the Tory-Libs government. This is official recognition of what the average citizen of Britain already knew. Sadly, it only reaffirms that the conservative ideology of starving the real economy and raining buckets of benefits on the rich is again not working!
It has hardly worked before and where tried, especially during the great depression, it has been a total disaster. It can’t really work now and has shown its perverse impact on the lives of people in Europe, given the region a sense of decline, and created a corrosive political environment (including the rise of extreme xenophobic parties).
The troubled nations of Europe are feeling its cold wind and it has caused a political upheaval recently in France and the Netherlands. Already resentment of forced and mindless austerity policies has created anger and despair for many EU countries. It has great relevance for America’s own economy and global leadership capabilities. The Republicans seem hell-bent along the same lines with the same approach that Cameron’s Tory Party has already shown to be unsuccessful with the same rate of unemployment as in America despite a still better social safety net thanks to the programs initiated by the Labour Party after WWII.
President Obama tried a larger stimulus package earlier and at least achieved some gains – America made very modest but real growth and employment gains generally greater than Britain and many countries in the EU. Frankly, we need another full stimulus to get us back into the steady 3-4%+ growth rate which would both lessen our debt levels as a percent of GDP and lower the unemployment levels.
Prime Minister Gordon Brown and President Obama had worked earlier at getting a global consensus towards not austerity but a trajectory of growth. This was stalled by Brown’s UK election defeat, opposition of Germany and other conservative governments, and not least by the Republicans’ effort to defeat Obama in a second term even at the cost of the well being of the US economy.
The question today is whether the British and American publics and perhaps finally the key EU countries, after trying the worst possible policies, will finally choose the right one. To paraphrase Winston Churchill, much of the capacity for good globally depends on the resurgence and reinvigoration of the Western economies – much of the rest of the world depends not only on their trade and aid but also on their leadership to deal with our critical global challenges and to assure global security and peace.
By Harry C. Blaney III.