It looks as if the world economy is grinding to a halt. Growth has slowed down dramatically in both America and Europe. Global share prices have been in free fall.
In Wales the impact of the crisis has been increased unemployment, a lack of consumer confidence resulting in a slump in the retail sector. It surely a sign that times are hard when even charity shops are closing down. It seems that the one retail outlet that is expanding is the pawnshop.
All the signs would indicate that the Welsh economy is slowing down. Some might go further and say it’s at a stop.
One doesn’t have to be an economic genius or have the gift of prophecy to predict that a double dip recession awaits us.
The response of politicians to all of this? In one word – inadequate.
Those of us who were at tied to our desks most of the summer saw an economic and financial problem developing into a crisis. Why? Because the politicians were slow, inadequate and far, far too late in their responses.
It seems that there is collective amnesia to the lessons of history and to the events of the 1930s. Then, as now, the politicians were too blinkered in their approach to stimulating the world economy. Result – mass unemployment, civil unrest, does it sound familiar? It took a world war to get the world’s economy moving again.
World trade is again slowing down and there seems to be a lack of co-ordination by politicians in finding a way to boost growth. The only policy that they have in common is that of fiscal austerity. They aim to cut their debts in short order. That’s it, the world’s economic policy in a nutshell.
Well, it’s simple in every sense of the word. It can be described as the cuts agenda. But in economic terms it makes no sense to slam on the brakes when the economy is showing so little signs of recovery.
Of course, public finances have to be brought under-control but like much in life, timing is everything. Politicians throughout the world need to change tack and that includes our own dear Chancellor.
Chancellor Osborne needs to look again and change course. Yes, a plan ‘B’ George.
Investment needs to be made in building up the nation so that it can grow it’s economy again. No I don’t mean the investment that my Saturday blogs encourage. But expenditure in capital projects that will stimulate growth.