Britain's Economic Problem

Not long ago one British pound could be exchanged for more than two dollar bills. Today I would be lucky to get a dollar and a half.

That's great for you guys. But lousy for us. And it proves that the economic crisis is not just an American problem, it's a worldwide malaise.

Here in Britain, on a single day this past week, we lost 5000 jobs. And yesterday, our main telecom provider let 10,000 people go. British companies are collapsing all round. The London stock market is a blood bath. The atmosphere of gloom is everywhere.

But gloom is a peculiar. It turns the population into cautious souls. Before the crisis few people trusted our Prime Minister Gordon Brown. Now he resembles a rock in the stormy seas. A safe pair of hands. While you wait for your charismatic President-elect to come up with a miracle, our politicians are falling over themselves to do the exact opposite of what they promised in order to play catch-up with Gordon Brown.

The whole thing is confusing and illogical. We have a Conservative party, which is a bit like the Republicans, who were - a couple of weeks ago - extremely suspicious of cutting taxes. Now they're saying - let's slash them. And we have a Liberal Democrat party -- sort of in the political centre -- which, until a short while ago, thought it was a super idea to tax people even more.

But today they're in total reverse because of Mr Brown. Our Prime Ministerial paragon of prudence has promised to reduce the tax burden, and so all the rival political parties are trotting after him like lemmings - promising to tax less and borrow more to beat the recession. It all sounds horribly familiar.

Twenty seven years ago, many of Britain's leading economists -- 364 of them, in fact -- that's almost one for every day of the year -- wrote a letter to the London Times pleading with Margaret Thatcher to boost the economy by cutting taxes. She ignored them and raised taxes. She preferred to tackle inflation and fix the budget deficit. She was proved right. They were proved wrong.

Today Margaret Thatcher is history, the British economy is worse off. But those same economists are now calling the shots. If cutting taxes and borrowing more is "change we can believe in", some of us won't believe it until we see it.
By Ed Boyle