British politics

The decline of manufacturing in Britain is a serious issue that has been encouraged by government intervention. To use another government intervention to reverse this development is trying to cure insanity with madness.

It must have been a seminal event judging by the coverage it received in British newspapers. The tabloid The Sun dedicated seven pages to it. The Daily Telegraph provided 16 pages of reports and commentary, The Guardian 23 pages and The Financial Times, not to be outdone, a full 26 pages. Few occasions would ever justify such journalistic lengths. So had Her Majesty abdicated? Were Martians about to invade Scotland? Had the English soccer team finally won a penalty shoot-out against Germany?

It is a very useful experience to travel to the scenes of political disaster. Because they hold lessons for us to learn. At least that’s my own experience travelling between Europe and Australia.

The rise of politicians talking about ‘happiness’ and ‘general well-being’ is a new European fad with similar initiatives also undertaken by Nicolas Sarkozy in France and Angela Merkel in Germany. But you don’t have to be a cynic to detect their ulterior motives. ‘Happiness’ is either used as a political repositioning tool for politicians wishing to appear as caring, or it is used in countries that have given up hope on future economic growth and seek different measures to feign success.

The problem with Keynesians like Krugman and Stiglitz is that they are theoretically committed to balanced budgets, but only in the long run. But as no other than Keynes taught us, in the long run we are all dead. In the meantime, his disciples will never tire to explain why the right time to cut spending is never.

In England bilden mitten in der Krise zwei junge, enthusiastische Politiker eine Regierung der Zuversicht. Das ist auch nötig, ist den Briten das Regieren mit Koalitionen nach jahrzehntelanger Abstinenz doch geradezu wesensfremd.

Even at the Policy Exchange event Nick Clegg looked at once fresher than Gordon Brown ever did and more authentic than Cameron ever tried to be. With the Liberal Democrats in government no longer a remote possibility, he is still no Messiah but it is time to take Clegg more seriously now.

The global financial crisis has shaken the foundation of Britain’s business model, namely the financial services sector. However, there is no other industry that could possibly compensate for the troubles surrounding the City of London. It’s certain that the era of ‘Cool Britannia’ with its ‘bullshit economy’ is over – at no great loss to mankind. But it’s far less clear what, if anything, could take its place.