Alex Massie

Dave, California and Greece

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So I had an op-ed in the Los Angeles Times yesterday in which, inter alia, I compared Britain's fiscal position with Greece's (but at least we have the Elgin Marbles...) and the lack of faith in the political process to California's own dysfunctional system. Matt Yglesias thinks this exaggerated and, well, "pretty flawed"

For one thing, while it may be true that the British public has a California-esque level of faith in the political process, the fact is that the British political process is very different from California’s. Realistically, the next UK government’s fate will hinge on its ability to deliver economic growth. And while the next UK government may be in hock to bad ideas and fail to deliver such growth, it will face few structural impediments to implementing its ideas about what needs to be done. This is very different from California (or, indeed, the US in general) where mere possession of a sound policy agenda doesn’t get you very far.

As for Britain and Greece, there’s really quite a bit of difference in the situations, including the fact that Greece seems to have engaged in a lot of accounting fraud and not just a cyclical deficit. But probably most importantly, the Bank of England tries to set monetary policy that will help the UK achieve growth and low inflation. The European Central Bank, by contrast, tries to set monetary policy that will help Germany achieve growth and low inflation. It’s a funny joke, and obviously the UK faces a not-so-fun fiscal challenge, but Greece is really in much worse shape and likely to be plagued by super-high unemployment for years to come.

To take these in turn, it's certainly true that there are certain structural problems that make it difficult to govern California effectively. But that's hardly the point I was making. That was a much simpler observation: the voters are just as hacked off in Britain as they are in California. Perhaps they have less reason to be so disgruntled but, encouraged by the media and so on, they certainly lack gruntledness.

I suspect Matt under-estimates both how much the parliamentary expenses scandal has corroded public confidence (none too firm anyway) in the entire political class here. For that matter although the country was split more or less down the middle by the Iraq War, the consequences of the WMD debacle has been that faith in politics and politicians of all sorts and flavour has been eroded. Parliament and the business of politics was tarnished by this failure and to great cost in terms of public confidence in the system.

So while it's true that the next government, even it only commands a small majority, faces fewer checks than would be the case in the US that doesn't mean it is in a good position, nor likely to command great respect from a public disinclined to give politicians the benefit of the doubt. That's partly why Dave doesn't inspire as many people as Tony did back in 1997 and Tony's failures have helped queer the pitch for all his successors. It may be the case that cynicism is a perfectly rational response to the election. People don't like the government and they don't think the opposition will make things markedly better. Hence there's much chuntering and grumbling and complaining but little faith or optimism that anything, anywhere, will really get better. That may not, strictly speaking, be a policy problem but it is a political one, not least because it significantly diminishes the amount of goodwill a Prime Minister Cameron will enjoy. If there's a honeymoon it will be a short one and his political capital, of uncertain value to begin with, cannot last for long.

Similarly, the public's aversion to restraining public spending and to tax increases means that deficit reduction is going to be pretty tricky in Britain too. We all, I think, expect strikes in the next 18 months or so. This month's British Airways dispute is just the beginning. But, yes, Matt's right to say that Britain isn't as badly off as Greece but that, frankly, doesn't offer much in the way of consolation. Not as Much of a Fiscal Basket Case as Greece isn't hugely encouraging. And, depending on the details of next week's budget, things could still get worse. Because there isn't any money left.

That said, it may be that keeping Britain out of the euro may have been Gordon Brown's single most significant achievement.

Written byAlex Massie

Alex Massie is Scotland Editor of The Spectator. He also writes a column for The Times and is a regular contributor to the Scottish Daily Mail, The Scotsman and other publications.

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