Friday 17 May 2013

At The Risk Of Repeating Myself

“Little Local Difficulties” from June 2009.


We have been here before.  In January 1958 a beleaguered Government under a non-elected Prime Minister, Harold Macmillan, lost three senior ministers in a row over economic management and fiscal policy.  “Supermac” brushed the major policy disagreements and resignations aside by referring to it as a “Little local difficulty”. 

Despite the howling of the press, and adverse bye-election and council election results, Macmillan carried on with his high spend policies of public services expansion to create employment. 

He ignored calls for fiscal restraint and caution.  A host of learned economists were summoned to recommend that an annual rate of inflation of 3% compound would be entirely manageable.

It would lead to sustainable economic growth, maintain the value of the power, enable increased public spending, and last but not least keep the UK as a world economic and military power.  Well, we all know what happened in the next two decades don’t we? 

But do not forget, as I have not forgotten, that Macmillan won the election in the next year, 1959.  I recall too well at the count I attended the astonishment and despair of all those Gaitskellite Labour followers when the results were announced. 

It was clear even at our local level that against all the odds the Conservatives had survived, and Macmillan was clear for another give years.  Or everyone thought he was until the Profumo Affair and his prostate failed in 1963.

But it was Macmillan who when asked by the new President Kennedy of the USA (they were related by family marriages) what the main problems he faced were, answered, “Events, my dear boy, events.”

In the meantime, as Martin Wolf in the FT points out, we have a fiscal problem that is very serious, will not go away, and needs difficult decisions to be taken very soon, and not after the next General Election.


Try Youtube, Tennessee Ernie Ford with his 1956 hit “16 Tons”.

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