Reply All | Yesterday, then, allows us to look at the real...

Yesterday, then, allows us to look at the real structural problems and opportunities that face Britain. We are a country that was not able to enact “expansionary fiscal contraction” - because we had kidded ourselves about our basic economic potential, and because imported inflation hammers consumption, and because our export markets are no longer growing. Like America, we have an impoverished middle class whose spending power cannot survive a slump in house prices, and which has no pricing power in the workplace to raise its wages relative to profits.

The alternatives to this? Raise your economic potential through investment: in machines, research and better skilled people; re-orientate to different export markets; and disincentivise the importation of low-skilled operations. I.e. become a high-skill, high productivity economy oriented to the world, not Europe.

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Paul Mason’s analysis is pretty good. IANAE but that last bit sounds somewhat Keynsian…