Tuesday, 9 March 2010
The United Kingdom is Now Operated By Economic Forces Beyond Government's Control
The substantial devaluing of the Pound, and the dramtic fall in the purchasing power of the pound in our pockets was supposed to have the redeeming feature of containing imports, promoting exports; instead of which the the trade gap has widened both for EU and non-EU trade.
The narrowing of the UK production base, especially in manufacturing, prevents the devaluation from working. There will be pressure on the Pound for further devaluation without any expectation that this will have any better outcome. Further devaluation will bring about an increase in already rekindled inflation. Wage restraint, the common response to inflationary pressures, is unlikely to be achieved in a country like the UK where the trade unions are in government. The only containment of the trade deficit might come from deflation achieved by cutting government expenditure and raising taxes (doesn't matter which except for redistributive effects) but to cause deflation then it is the masses that must be taxed. There just aren't enough rich to matter in the implementation of a deflationary policy.
If we wanted a prosperous Britain we shouldn't be starting from here. The machinery of economic policy has been struck from the hands of any government. The very fact that we haven't got a Budget reveals that there is nothing being done. And we have a regime that does not even consider extricating us from global economic forces; it denies that its proper interests and loyalties are to the people of the United Kingdom, and its globalist commitment is a tragic misunderstanding of the relationship between domestic policy targets and domestic instruments.