STOCK MARKET WATCH -- Tuesday, 20 November 2012

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32. Cameron's 'growth first' strategy shows a government running on empty

http://www.guardian.co.uk/commentisfree/2012/nov/20/cameron-growth-first-government-empty

Several plausible reactions stalk David Cameron's pledge to put "growth first" and by implication, everything else, like people and the environment, second. Firstly, blaming regulation for holding back what would otherwise be a more dynamic economy, is a neat political distraction from the obstacle represented by the government itself. For example, clinging to George Osborne's loved but laughable strategy of "expansionary fiscal contraction" proved to be a failure.

In slashing spending within the public sphere he failed to understand the degree to which the private sector depended on it. Second, in spite of substantial public ownership of the banks, and even more substantial public financial support, the coalition has failed to make them redesign their lending strategies to support a productive economy.

By criticising the checks and balances that still apply to the market system the government pulls off a perfect political trick. It uses the strategy – employed more readily by economic conservatives since the collapse and public bailout of financial markets in 2008 – of using the very failure of those deregulated markets as an excuse to promote them more deeply into our lives. Evidence appears irrelevant to this case, as few in the private sector put planning problems anywhere near the top of the business snag list.

The second reaction to Cameron's comments is simply: "what's new". Even back in January 2011 the prime minister said: "It is a new year and this coalition government has one overriding resolution, and that is to help drive growth." We've heard the rhetoric of "growth first" for decades, in spite of plenty of evidence that in countries like the UK it long ago failed to deliver higher life satisfaction.