By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Are the Tories and Labour the Tweedledum and Tweedledee of UK politics? In most things, there’s not much to choose between the UK parties’ economic election pledges. Both want to cut the deficit gradually. Both want to splash out on the National Health Service. And both have a smattering of silly micro-policies. The big differences are that Labour would tax the rich more and the Tories might take Britain out of the European Union.
The response of the dismal scientists to their collective failure to anticipate the global financial crisis has been dispiriting. Economists have refused to set aside their abstruse models, even though these models failed to predict the economic catastrophe. During the boom years, almost all economists applauded Alan Greenspan’s easy money policy. After the bust, the same people continue to deny – in the face of common sense - that the low interest rates of Greenspan’s Federal Reserve were largely responsible for the debt bubble. In short, economics has failed to address its intellectual weaknesses.
A few hairy deals suggest a resurgence of animal spirits in the European boardroom. Royal Dutch Shell’s $70 billion-odd bid for BG and Nokia’s $17 billion move on rival Alcatel-Lucent are complex, if long-mooted, tie-ups finally coming to fruition. Last year’s $3.5 trillion merger boom was mostly an American affair. But if corporate bosses from London to Espoo to Turin are feeling this daring, Europe will soon account for its fair share.