Brown's Potemkin economy - the cracks widen in UK plc.

Since Keynes it has been understood that the normal condition of economies is under-performance due to inadequate attractiveness of investment.

Things are simply returning to normal after a surprisingly long period when inadquate investment was compensated for by other borrowing.

That is one (temporary) solution. The other - which Brown cannot arrange - is long periods of vigorous investment. These only occur when there are large-scale investment opportunities. That was the case between about 1950-1970 when new techology and catching up after the war combined to provide full employment and rapid growth.

Brown understands very well the above but has been able to fool the media and thus most of the public into imagining that he has a long-term solution. As he has said himself there are Chancellors who get out in time and those who do not....

Yeah, a tech-fix. The last tech-fix (The dot com boom) proved to be a false dawn. As were the previous pseudo tech-fixes (the various privatisation and deregulation bonanzas).

The point is since manufacturing has been outsourced to China, they will be the ones to benefit not us if and when another genuine tech-fix comes along.

DG

On 2 Oct 2005 11:52:58 -0700, "Crowley" mysteriously appeared thru the usenet mist to inform us thus...

It'll be worth watching in the coming months how the 'independent' BoE deal with rising inflation and falling growth, both of which have been partly caused by Gordon Brown-Stuff's economic mismanagement.

With inflation already over the Bank's target, at 2.4%, they should be raising IR, but with obvious consequences on growth.

I feel the BoE have been rather remiss in not putting interest rates up earlier to stop the UK economy burning itself out. Given that house prices or rather their rate of change has a greater effect in the UK than most other countries where home ownership is less prevalent.

On Mon, 3 Oct 2005 16:27:39 +0100, "Fred" mysteriously appeared thru the usenet mist to inform us thus...

Agreed;rising house prices seems to have been a key factor in economic activity in the past ~5 years, so Brown might have put some discreet pressure on the BoE to hold back on IRs to keep the spending going.

Now with high oil prices, stagnating house prices, slowing consumer spending, rising inflation; it looks like the perfect storm is gathering. No wonder Blair wants to keep Brown in place for a while

- it could wreck Brown's leadership bid forever!!

Yes indeed, how to get turkeys to vote for Christmas?

And of course the public sector is near proof against an economic downturn.

Exactly. Browns (undeserved) reputation for economic competence could be shattered within a year as we move into recession.

Frank Field MP revealed last week that that is what many Blairite ministers are now banking on even though they have come out publicly to back Brown as the next leader. Nu Labour-perfidious as ever.

On 3 Oct 2005 09:59:05 -0700, "Crowley" mysteriously appeared thru the usenet mist to inform us thus...

My heart will bleed for him. Not!

If it happens that way it adds new meaning to that old saying "every cloud has a silver lining"!! ;-)

Bust'em Brown gets another bad review:

On Tue, 6 Dec 2005 18:51:46 +0000 (UTC), M Holmes mysteriously appeared thru the usenet mist to inform us thus...