April 11, 2014
The folks on the right don’t seem to think that they should have to be evaluated by the same standards as everyone else. Hence we find George Osborne, the U.K. finance minister, boasting in the WSJ about his country’s economic performance now that its economy is finally beginning to grow again.
For people who missed it, the conservative coalition in the U.K. thought it was smart to cut spending and raise taxes in 2010 even though its economy was very far from full employment. These measures had the effect that fans of economics everywhere predicted, they threw the economy back into recession.
After two and a half years of austerity, the government is reversing course and lo and behold the sun rose this morning the economy is growing again. (Yes, economies do generally grow.) In the wild and wacky world of right-wing economics, this somehow vindicates the conservative policies of the prior two and half years.
The piece makes many boasts that properly deserve ridicule, but I will just pick my favorite. Here’s Osborne on investment in the U.K.:
“Investment spending has grown by 8.8% over the past year, compared with 2.2% in the U.S. That bodes well for U.K. productivity.”
That’s impressive, in 2013 investment growth in the U.K. was far higher than in the U.S. But suppose we don’t look at one year in isolation but instead look at the whole period since the downturn began. Here’s the story.
Source: OECD.
The figure shows us that when investment was growing at a a near double digit pace in the United States in 2011 and 2012, it was just inching upward under Osborne’s austerity policies in the U.K. It picks up slightly in 2013, but even including the OECD’s growth forecast for 2014, investment in the U.K. is still projected to be below its pre-recession level. By contrast, it will be almost 10 percent above its pre-recession level in the United States.
The U.K. performance would not be the sort of thing that you would generally boast about, but given the affirmative action policies for conservatives at the WSJ and elsewhere in the media, apparently Osborne expects to get away with it.
Note — typos correctd, thanks to Robert Salzberg and CE.
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