While the U.S. economy continues to make modest improvements but tens of millions of Americans still suffer from extremely grim employment figures, the situation in Britain shows no signs of any improvement whatsoever.
In fact, Brad DeLong writes, the British economy is now doing worse than it did in the Great Depression:
Yep. This many months after the start of the Great Depression, the British economy was rapidly converging back to its pre-depression level of production under Chancellor of the Exchequer Neville Chamberlain’s policy of using stimulative policies to restore the price level to its pre-Great Depression trajectory. [...]
In less than a year, if current forecasts come true, the Cameron-Osborne Depression will not be the worst depression in Britain since the Great Depression, but the worst depression in Britain … probably ever.
That is quite an accomplishment. [...]
Here’s a chart showing Britain’s gross domestic product performance in the Great Depression and three recessions prior to the current one. In case you’re afflicted by a bit of colorblindness, as I am, that line which flattens out at minus 4 percent on the far right of the chart is where the U.K. is now:
What went wrong? DeLong cites Guardian economics correspondent Philip Inman, who wrote earlier this week:
Much of the UK’s plan for recovery from the financial crisis was based on a full-throttle recovery in 2012. This was going to be the year that a return of consumer confidence, business investment and general spending would converge to send the economy on a trajectory of above-average growth. Maybe we would even get back some of the output we lost in the crash. [...]
Business investment has already slumped and confidence indexes show few consumers are ready to spend outside key periods such as Christmas. [...]
And the lack of investment will perplex ministers. They have done what the right-wing economists told them to do and moved out of the way — the theory being that public sector spending and investment was “crowding out” the private sector.
That’s the theory of right-wing economists and politicians in the United States, too. Kill as much government spending as possible and get out of the way so the private sector can “do its job.” We’ll be hearing a lot of that kind of talk in the coming months as the Republicans whittle down the bevy of candidates to the one who will meet Barack Obama come November.
Unfortunately, many Americans will buy their argument because of the economy’s weak performance, only 1.6 percent growth in gross domestic product for all of 2011, and forecasts of even less than that for the first quarter of 2012. Their call for lower taxes on the wealthy and fewer regulations on the the financial sector is exactly the wrong approach. Don’t believe it? Ask your working-class friends across the pond.
Blast from the Past. At Daily Kos on this date in 2006:
In a series of cases, many decided in the last few weeks, the federal courts have upheld the controversial “stop-loss” policy, which requires soldiers to remain in the military beyond their contracted term.
On Tuesday , a federal judge threw out a claim brought by two soldiers, David Qualls and Rafael Perez. Qualls’ case was dismissed as moot because he voluntarily re-enlisted after filing suit in 2004. Qualls said he re-enlisted to get the $ 15,000 to avoid bankruptcy and provide for his family and children. As for Perez’s claim, the judge ruled there was no evidence that his recruiter misled him, nor was their a contractual breach on the part of the government. There were initially eight soldiers in the lawsuit, but six dropped out after the judge refused to grant their request to stay anonymous.
Meanwhile, in Doe v. Rumsfeld (2006 WL 62337), the Ninth Circuit also upheld the military’s stop-loss policy, ruling that the policy is a “valid exercise of presidential power authorized by 10 U.S.C. § 12305(a).”