Gordon Brown’s trick is setting the parameters of debate, and fooling the opposition into accepting them. And in the next few weeks, he has a mission: to define the Obama bailout for the British media. He must teach them to see it as a Brown-style stimulus – thus allowing him to be quoted, without criticism, saying “this is almost exactly line by line what we are doing”. He wants to present himself as the master, and Obama as the young pupil.
It’s not true, of course. Obama is focusing far more on tax cuts than many sceptics (including myself) would have predicted – the scale of them is at least three times bigger than he indicated in his election campaign. He is now drawing fire from Paul Krugman – and that can only be a good thing. Whilst Larry Kudlow, a former Reagan adviser, admits there’s much in it for a supply-sider to applaud. Obama seems to be undertaking a fusion of tax cuts and spending splurges, hedging his bets. But his appointments indicate he thinks tax cuts will be more effective measure. He is standing apart from his party, and as a result drawing criticism from the right[3] and the left.
In my News of the World column today, I commend his honesty: he’s painting a bleak picture for Americans, telling them that Washington spending waste cannot go on, and rejecting the blithe, misleading ‘we will withstand the crunch’ language that Brown has adopted for short-term political gain. Crucially, Brown is borrowing to not to fund a stimulus. This is a great big Brownie. In 2009-10, his ‘stimulus’ is worth £16bn, out of the £113bn he intends to borrow. It’s about as stimulating as one of his speeches. He needs the borrowing to fund day-to-day government spending, not some Keynisnan rescue. It’s not a splurge – it’s a squirt.
And from what we know about Obama’s stimulus so far, it is (per capita) about four times the size of Brown’s – with tax cuts at least ten times the size of what the Tories have so far proposed. Of course, Obama is in a good position to be honest: unlike Brown he has no past record to lie about. And unlike the Tories, he’s powerful enough to define the debate on his terms. When Churchill took over from Chamberlain, he had no past mistakes to defend – he gave it to the pubic straight. Blood, sweat, toil and tears.
We at Coffee House will give a full analysis of the Obama stimulus when it comes out, and how it compares to what Labour and the Tories propose: in scale, philosophy and ambition. But, for now, Obama is being more honest than Labour or the Tories in his bleak assessment. (Sure, Cameron is bleak, but when he lambastes Brown’s projected trillion-pound national debt he should not pretend he’d spend significantly less than Brown. He wouldn’t).
I’m cautiously supportive of Obama, and will reserve judgment on his stimulus until all the detail comes out. But one thing is clear already: it looks nothing like what we’re getting in Britain.
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