http://news.bbc.co.uk/1/hi/business/8099408.stm

The UK is in the best shape out of all the economies in Europe, according to a leading economist.

Paul Krugman, who won the 2008 Nobel prize for economics, said that the UK’s economic policies had been “pretty good” and called them “intelligent”.

“I think the UK economy looks the best in Europe at the moment.”

The government’s policies had managed to stabilise the banking system, he said.

But will it be enough to stop people/the press calling for Browns head?
I think not, he will continue to be blamed for everything and the next guy will pick up the credit when the economy begins to recover

I cannot help but atttribute the improved financial position in the UK to the fact that the media has had something else to report on for the last few weeks i.e. swine flu, expense scandals.

The fact that the media don’t focus on it 24 hours a day means it slips from the public psyche.

But will it be enough to stop people/the press calling for Browns head?
I think not, he will continue to be blamed for everything and the next guy will pick up the credit when the economy begins to recover

True… but Brown took credit for the booming global economy, which was a bit rich, so it’s all swings and roundabouts really 😉

And the fact that we ran up a big budget deficit during the time of plenty is clearly a “good thing” according to the Nobel winning economist?

BoardinBob, I agree that that is an important part of this recovery. Ultimately you don’t spend your cash unless you are confident that you will have a job in the medium term, and the fact that they have stopped reporting it every bloody day must have a positive impact

still doesn’t sort out the crap infrastructure, the housing bubble, the over centralisation of power, the unreformed house of Lords, Heathrows new runway, Electricity generation, the Devaluation of the pound, the selling of gold, etc, etc, etc.

and finally why believe a word an economist says, they never saw this coming.

finally why believe a word an economist says, they never saw this coming.

Everyone saw it coming. It’s just many chose to ignore it. You don’t need to have a degree in economics to figure out that if house prices keep increasing at a higher rate than incomes, then eventually the bubble will burst – whether it takes 2 years or 20 years, it’s still a certainty. Even I know that.

But why rock the boat when you’re making loads of money – just fill yer pockets and keep quiet.

BoardinBob, I agree that that is an important part of this recovery. Ultimately you don’t spend your cash unless you are confident that you will have a job in the medium term, and the fact that they have stopped reporting it every bloody day must have a positive impact

Exactly.

At the end of the day, the entire problem is psychological.

People are nervouse about lending/ spending/ buying. Relentless doom and gloom bombardment by the media does nothing to help and in fact makes the situation worse.

The media have found something new to fawn over.

There is still a possibility of inflation as we exit recession, especially with the huge fiscal boosts and low monetary policy. With the increase in price of imports, possible cost push inflation and quantative easing. It’s probably easy to overcook it.

A lot depends on consumer confidence and the ability to borrow money, which still seems to be a bit clogged up. It has turned out a lot better then it might have done so far.

Krugman saw it coming, wrote about it pretty extensively. Read “The Great Unraveling, 2003”. I read this by accident in 2004(hadn’t taken any reading on holiday and found it in a ski lodge in Mt Baker), and he had a fair bit of the current scenario mapped out, but couldn’t predict the timing. He was calling the property sector and it’s financing a “Giant Ponzi scheme”

If you look at the interview on the Observer webpage, it seems the BBC is being pretty selective in it’s quoting. It doesn’t seem anywhere near as positive in the original, but BBC news objectivity seems to have gone astray where politics is concerned.

Other quotes they didn’t use:

Britain actually may have stopped contracting – that’s the most positive thing one can say.

They really kind of lost their nerve on fiscal policy

Yes he did say a couple of nice things, but if you read the whole thing he seems to me to be saying that much of Europe is deeply screwed, and could follow the long depression in Japan and it’s the fact of having an independent currency which is, for now, holding the UK above the rest, but that a second fiscal stimulus package is more than likely, but the UK just hasn’t got the borrowing power right now to do that. Add to that the Prime Mandleson’s new policy to take us into the Euro and where are we going?

Only history will tell.

Personally, I prefer to step back from the hysteria and have a look at it in the cold light of day. I suspect that when thats possible, he may well be seen as a much maligned but correct in his actions and outlook, obvious party political dogma excepted.

And the fact that we ran up a big budget deficit during the time of plenty is clearly a “good thing” according to the Nobel winning economist?

I’m sure you know better based on reading newspapers. 😛

And the fact that we ran up a big budget deficit during the time of plenty is clearly a “good thing” according to the Nobel winning economist?

But the tory party say otherwise, which has a vested intrest?

The BBC, the press office for the Labour Party.

Perhaps they are just trying to make up for the ludicrously unbalanced reporting in most of the papers.

FWIW, I think that he and Darling probably did make the right decisions. But that doesn’t alter the fact that Brown is a terrible PM.

…..he will continue to be blamed for everything and the next guy will pick up the credit when the economy begins to recover……

He (and the rest of the Labour party) were happy to take the plaudits for measures put in place by the Major government which came to fruition during the late 90’s from which this country benefitted.

Leaving aside the beneficial financial groundwork the grey one and his government laid out how often do we hear the utter bilge that it was St Mo of Mowlam who single-handedly sorted out the Northern Ireland problem? Once again, important ground-work was laid on NI long before Mr Blair asked D-ream if he could use their song.

Economic juju is all well and good and as a science it’s up there with climate change theory, unfortunately when we are asked to repay loans, we have to do it using old fashioned arithmetic.

“Economic juju is all well and good and as a science it’s up there with climate change theory”

Eh, whats wrong with climate change theory other than people who dont understand science not understanding it?

I dont think that Brown, or any PM/Chancellor actualy has much influence on the economy. Afterall the economy is run by big global business who have access to global rescources and can pay for marketing hype and lobbyists. Plus the Bank of England sets the exchange rate.

The government dosent have the ability to change peoples confidence either.