It is the mark of science and perhaps rational thought more generally to operate with a falsifiable understanding of how the world operates. And so it is fair to ask of the economists a fundamental question: What could happen going forward that would cause you to substantially revise your views of how the economy operates and to acknowledge that the model you had been using was substantially flawed? As a vigorous advocate of fiscal expansion as an appropriate response to a major economic slump in an economy with zero or near-zero interest rates, I have for the last several years suggested that if the British economy – with its major attempts at fiscal consolidation – were to enjoy a rapid recovery, it would force me to substantially revise my views about fiscal policy and the workings of the macroeconomy more generally.
“Enjoy it!” That was the message from Peter Mandelson to Labour supporters this morning as he launched a vitriolic attack on the Conservatives during a speech in central London, clearly relishing every minute of it. Once nicknamed the “prince of darkness” for his ability to mastermind Labour’s strategy from behind the scenes, Mandelson has transformed into the party’s best public performer.
Prime Minister Gordon Brown set out his economic plans during a Newsmaker event at Thomson Reuters on Wednesday. Brown said he believed Britain would maintain its coveted AAA credit rating and announced a pay freeze for senior civil servants and military officers to help reduce a record deficit.
Leader of the Conservative Party David Cameron, Shadow Chancellor of the Exchequer George Osborne and Shadow Secretary of State for Business Ken Clarke will join us on Tuesday March 2 to give speeches and take part in a Q&A session on the economy.
So how was it for you?
Chancellor Alistair Darling threw the dice in his pre-budget report in an attempt to bolster Labour’s chances of winning the general election in 2010.