In 1992 James Carville, Bill Clinton's political strategist, famously placed a sign above Bill's desk in Little Rock which read "It's the economy, stupid!". The sign was placed there in order to answer the question "What is this campaign all about?". If, heaven forbid, I was Gordon Brown's political strategist, I would be very tempted to place a similar sign above his desk at 11 Downing Street. Only this time it would read "It's the stupid economy".There is no doubt that over the last ten years many Britons have felt more comfortable about the pound in their pocket. Rising asset prices (housing), low inflation and low levels of unemployment have worked miracles in helping the British electorate feel so secure and confident about themselves that their approach to this Labour Government's endless list of failures and incompetencies has been almost nonchalant.
As well as placing a sign above Gordon's desk, I would also like to ask him to take part in a game with me. Let's call it "Truth and Consequences". The truth is that the measure of inflation used by this Government does not truly reflect the real rate of inflation that we face. The truth is that the real rate of inflation is in fact far higher than we are led to believe.The truth is that interest rates have been artificially too low for too long.
The consequences are that interest rates will need to move swiftly upwards to compensate. The consequences are that a stronger pound will damage our exports. The consequences are that many homeowners, who are already strugglig with huge mortgages, will face repossession. The consequences are that the recent boom in personal borrowing will result in a large increase in the number of personal bankruptcies. The consequences are that businesses will be forced to cut jobs.
We could alternatively play a different game. Let's call it "Go For Broke". Only this time, I think Gordon may have won the game before we've even started.
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