Frivolous Fred has a spending problem. He can't stop wasting the household budget on things they don't really need. His spending got so out of control that he went on a borrowing spree so he could be even more profligate. Thankfully his wife Wise Wendy is much more prudent. She decides to impose austerity cuts on Frivolous Fred in order to get their finances back under control.
In real life Frivolous
Fred is Labour under Gordon Brown and Wise Wendy is the current Conservatives,
who were shrewd enough to realise that the right balance of austerity cuts,
along with relying more heavily on the private sector, had a better chance of
turning round the economy than Labour's perpetual plan of high taxation, high
borrowing and high spending. Why isn't this simple piece of wisdom more widely
understood?
Here's a suggested reason.
The crazy thing about voters is that they easily have their attention swayed by
political cycles that bring about change, which means it is fairly inevitable
that if you've had a left-centre government for a while a right-centre one will
be voted in pretty soon, and so on as the cycle goes. After 13 years of New
Labour, the Tories got back in again, albeit in coalition with the not always
comfortable bedfellows the Liberal Democrats.
The last five years have
been quite good in terms of an economic recovery - not great, but not bad, and
certainly astronomically better than things would have been with a government
like Miliband's Labour that thought increased borrowing and increased spending
was the answer.
But after a fairly
successful Conservative/Lib Dem period in government, where the response to the
financial crisis was to look to the free market and private job creation as the
answer, what then happens is that the opposition party seems to be able to pull
the wool over much of the electorate's eyes by promising to redistribute much
of the wealth that has been created. Stephen Hawking's comment hints at this too when he says "The city needs a Labour government to get
the kind of investment we need again"
It's quite easy to see what is happening with this kind of thinking. When standards have improved, employment has risen and inflation has been fairly well managed, instead of voting for a party that is likely to continue with this growth, many people vote for the opposition party that promises to increase taxes, increase spending and have greater inference in the free market (through things like minimum wage increases and rent controls, and a cap on NHS profits).
And that's the crazy
pattern of voting cycles: very often an opposition left-centre party that
builds its pre-election promises on redistributing the wealth the right-centred
party helped create appeals to the average voter more than keeping power in the
hands of the right-centre party that helped create the wealth they want to
redistribute.
Then, after they get
elected and the promises soon turn out to inimical to increased growth, the
electorate loses its amnesia and remembers the party that helped the economy
grow. Consequently, instead of the kind of steady growth we'd see with the
continuation of a party that looks to the free market and private job creation
as the answer, we get a staccato rhythm, where periods of growth are punctuated
by periods of inertia – otherwise known as Tories in/Labour out, Labour
in/Tories out cycle. Now, sadly, it looks to be Labour's turn again.
