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This chart above is making the rounds today. As Brad DeLong explains, it shows recessions and recoveries in Britain over the past century, and you can see that the current recession, from 2008 to the present, is currently worse than at this point during the Great Depression. The British economy was on the rebound about 30 months out from the recession’s start, but around mid-2010 it started going sideways, and has remained in that position ever since. The new conserative Prime Minister of Britain, David Cameron, took office in May 2010 and immediately instituted his austerity regime. The chart above shows the result: an economy now in worse shape than it was during the Depression.
Brad writes:
In less than a year, if current forecasts come true, the Cameron-Osborne Depression will not be the worst depression in Britain since the Great Depression, but the worst depression in Britain… probably ever.
That is quite an accomplishment.
As Phillip Inman of the Guardian puts it:
“The UK’s plan for recovery from the financial crisis was based on a full-throttle recovery in 2012… consumer confidence, business investment and general spending would converge to send the economy on a trajectory of above-average growth… the lack of investment will perplex ministers. They have done what the right-wing economists told them to do and moved out of the way – the theory being that public sector spending and investment was ‘crowding out’ the private sector…”
The conservative theories about starving public spending as a way to jump-start private investment have been proven completely wrong by this test case. Austerity during a fragile recovery is destroying Britain. As Brad writes, if there’s any country where this myth of expansionary austerity should have worked, it was Britain. But it’s not working at all.
Interest rates in Britain are about as low as they are here. Britain can borrow at around 2% per year. They choose not to, with disastrous results from their citizenry.
DeLong writes that junior partner Nick Clegg of the Liberal Democrats should just resign the coalition and kickstart new elections before it’s too late. I doubt that will come to pass. Instead, Cameron and Clegg will carry a “stiff upper lip” and continue their plan to destroy the British economy in order to save it.
But the rest of the world should take note of this, and maybe set themselves on a different course.
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A similarly designed chart showing corp profits would be instructive.
Ditto CEO compensation.
We just haven’t bit the bullet hard enough. We need more austerity, not less.
Boxturtle (Mr. Koch, I await your check)
so why don’t we just admit it–this is not the Great Recession, it’s the Great Depression 2.0. and apparently the powers that be have not learned any lessons from the prior depression. they are repeating the same mistakes. keynes must be rotating in his grave.
Where I used to work, things like that were refered to as skunk charts. You put one on a conference room table, and everybody backs off like it’s a live skunk!
Boxturtle (Do they have skunks in Britan?)
Read my comment. The implication is that corp profits & CEO comp are likely doing MUCH better than in any of the prior cycles, certainly CEO comp. So it has nothing to do with not learning Keynes but everything to do with looting the economy.
In the ass-backwards reality rampant in the world, dogma trumps fact and evidence every time.
There is some sort of Cosmic Mind-Fuck afoot.
I think by now it is obvious that the .02% know what they are doing. This austerity to recovery is just a cover. They do not believe in a recovery of any kind and they don’t need to recover from a depression. Mitt was a servant (albeit well paid) of richer people who really don’t care about the welfare of the Human race.
They know absolutely that more and better austerity will crush the 99% around the world.
No, but they do have Thatchers.
I’ve seen other articles about austerity programs that are not working in Spain , Greece and Ireland. You would think someone in our government would pick up on this? Would Pres. Obama get the message and show the citizens of this country what’s happening and will happen here. Or are the special interests who are responsable for the economic mess here and in Europe, going to stifle any thing that would end their looting of our treasury?
What does the same chart look like for the US?
Obviously (I think) the dip was greater, but as I recall, so was the rebound. Maybe. Right now it’s flat as far as the eye can see. I’d be interested to see a comparison.
that’s because this is not just a recession, it is in fact a depression, when people are working longer and producing more yet making depressed wages, when people have to work till the day they die, abandon vacations, hobbies and cannot find work, this is a depression, when people have trouble putting healthy food on the table and most kids are more likely to work for bills rather then school, it’s a depression
the media is afraid calling it a depression because of the hysteria that might cause but a depression it is, not yet as bad as “the great” depression but that was the big one, there are levels before “the great” and we are at one of those levels
funny, I actually pointed this out to krugman when he was pimping one of his books on a salon here at the lake
he didn’t argue my point and later went on to print one of his best articles titled “the lesser depression”…he did not give me credit nor did I receive residuals
Holy Crap real world evidence that GOP economic ideas are going to cause England to have a worse collapse than the Great Depression was?
Given how America is doing the exact same thing this wins scariest post of the Month maybe the Year!
The Brits have always struck me as being a very pragmatic people. I think they will figure this out before too long and change course. If they can just get themselves unstuck from the hard right monetary manipulators that are trying to force these measures as a way to enrich themselves.
Sorry Paul stole your idea but hey it was worth stealing:) But now worse than the Great Depression is a possibility lesser depression fits for no but not much longer.
Can we really trust those numbers?
Imagine that. It’s almost unbelievable that austerity policies would have such a devastating effect on the majority of the populace while those in power don’t suffer. Except that’s exactly what Milton Friedman and his disciples have wrought by design.
Don’t be partisan in labeling these economic policies as GOP. They are corporate, plutocratic and practiced by both wings of the PTB party, “D” and “R”.
My grandfather always used to say, “You can always tell an Englishman, but you can’t tell him much.”
My buddy, who is a really big “conspiracy” fan, blames this all on the “International Banking Conspiracy”. Those people want to make as much money off the middle class as they can but they know they CAN’T “kill the goose that lays the golden egg.”
Soooo, he says, what happened was that they simply tried to “loot the planet” without destroying it but THEN mistakenly tried to put fifty people EACH in lifeboats that would only hold forty.
Obama has continued the policies that have created these problems. He is just another political puppet for the banksters.
The worldwide economic disaster originated in the USA with the banking cartel. They are the stealth force that generates economic warfare, while our military practices it’s form of destruction overtly.
That is how it’s been in the past.
This generation of bankers simply don’t care about the future.
I like that line. That’s certainly been true about the Brits that I’ve known. Oh, they’ll listen politly enough then do whatever they intended to do anyway. They are a funny people but I have always liked them.
I would be curious if the British society had New Deal type reforms prior to the 1930′s. If England instituted them during the 1930′s, then Cameron has truly fucked up the country since May 2010.
Regardless, the English need to clap their hands louder and maybe Peter Pan will save their economy.. . . Or better yet fire Cameron.
Look folks, austerity is unavoidable. you can do it now in a controlled fashion, or do it like Greece in a soon to be uncontrolled fashion. Trust me, after March 20 (assuming Greece defaults) you’ll get a better idea of which is preferable.
In both cases, it’s a result of Govt promising more than it can deliver.
so it’s not Great Depression 2.0 because ceo’s and corps are doing well?
“They are a funny people but I have always liked them.”
————–
The world would be less interesting without them.
I do hope that it is not your intent to dismiss the seriousness with which FDL writers express concern over the deadly consequences of Austerity Economics. We know from the European history of the depression years, that austerity economics led to high levels of unemployment, poverty and inability of governments to meet the most minimal needs of those without any money. The stigmatization of the poor (demanding that they report to unemployment agencies twice a day, leading to public pilloring in long lines of the jobless standing out in public shaming; demanding that their homes be open for agency inspections if they received benefits; demanding that they wear special red-coloured sweaters. denoting their receipt of public help and demanding that they where a sign on their clothes or on their bicycle denoting that they were exempt from the bike tax.)…the stigmatization of the poor, jobless, homeless and on-relief eventually led to the development of fascism. We don’t want to recreate that situation again in the U.S.. We don’t want to shame people no matter what their circumstances are. We don’t want to humiliate anyone with forcing them into poverty. So please start to question the eventual prospects of your austerity economics.
History you should read:
http://en.wikipedia.org/wiki/Great_Depression_in_the_Netherlands
” . . . it’s a result of Govt promising more than it can deliver.” Seems to me it’s more accurate to say “It’s a result of Govt doing less than it can deliver–on purpose.”
Absurd and patently bullshit. Greece’s problems are due in large part to austerity measures imposed on them by other countries, notably France and Germany. The basic problem stemmed from the financial crisis created in the U.S. and exported to the rest of the world, not Greek government largesse.
Interesting perspective, but America ain’t Germany.
What are you assuming will happen the Greeks when they default? At the least the Govt will have only tax collections to fund the welfare state.
Your faith in the abilities of government is laudable, but misplaced.
I have strong faith nowadays that those sitting in positions of power in government will do as little as possible to actually benefit those governed.
Oh, they will. Who knows? We just might see a leftist Oliver Cromwell show up, without the religious trappings, of course.