Friday, March 24, 2006

Brownian economics

Very properly rebuked for my lethargy and tardiness, it is now time to address the 10th consecutive Brownian budget. Despite the slaverings of Polly, and I advert you to a range of opinions on the reasons for this, ranging from Tim's free verse approach, to the Devil's Kitchen's rather more, er, direct approach, it is becoming ever more clear that, as an economist, Gordon Brown has been driving the British economy further down a potentially disastrous route.

Essentially, having inherited a strong economic platorm and cemented that by his one truly sensible policy, that of granting independence to the Bank of England, Brown has progressively increased the burden of taxation and regulation on the productive sector of the economy, while simultaneously cloaking the stultifying impact of these measures by bloating the public sector with great gouts of money, both tax-payers and borrowed. Whereas every previous new Labour admininistration (1924,1929,1945,1965 and 1974) inherited an economy that, if it was not actually in recession, was at least parlous, Brown was able to take over a functioning and relatively lightly managed economy.

This, and this alone, explains his reputation for economic competence. Whereas previous Labour chancellors, when they ratcheted up public spending and raised taxes and borrowing to compensate were promptly faced with economic collapse, Brown had a comfortably soft cushion of controlled finance to fall back on. That has now gone. In everything that Brown has done at the Treasury, the dead hand of socialist intervention can be seen. In matters economic he has been completely unable to let well alone - compulsively tampering with every aspect of the market, re-jigging the tax laws so often that Tolley's Tax Code has nearly doubled in length since his reign began.

Churchill's Conservatives ran in 1951 under the slogan 'Set the People Free.' It's looking ever more appropriate in todays climate.


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