Double-dip recession: don't say we didn't warn you

We warned in 2009 that Osborne had no plan for growth.

While many are wise after the event, the New Statesman was warning of the danger of a double-dip recession as long ago as March 2010 (see our cover of 29 March 2010, above ). Our economics editor David Blanchflower rightly predicted that premature withdrawal of fiscal stimulus would strangle growth and raise unemployment, particularly among the young.

In the wake of George Osborne's "emergency Budget" in June 2010, he wrote:

I am now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession or worse

Before that, he warned in October 2009:

Lesson number one in a deep recession is you don't cut public spending until you are into the boom phase. John Maynard Keynes taught us that. The euro area appears to be heading back into recession and the austerity measures being introduced in certain eurozone countries, especially those in Germany, will inevitably lower UK growth, too. It is extremely unlikely, therefore, that net trade will leap to our rescue. taught us that. The consequence of cutting too soon is that you drive the economy into a depression, with the attendant threats of rapidly rising unemployment, social disorder, rising poverty, falling living standards and even soup kitchens.

At a time when Osborne was being hailed by much of the British press as the country's economic saviour, we warned that he had no plan for growth. In October 2009, an NS leader argued:

Mr Osborne is a skilful politician, with a flair for rhetoric and the easy headline - the latest example being his opportunistic statements on curtailing bankers' bonuses, something that could be achieved only through concerted international co-operation. The only economic plan he seems to have is for attempting to balance the books. He does not have a plan for growth. He has a plan for a lack of growth.

In August 2010, we warned that "in spite of Mr Osborne's doctrinaire "emergency" Budget, all the economic data suggests that the UK is facing a deadly combination of rising unemployment, falling house prices, diminished consumer confidence and low - if not negative - growth for the rest of the year and beyond."

But not everyone was so doubtful about Osborne's ability to stimulate growth. Here are some influential figures and institutions who may now regret their early optimism.

And ... some who got it wrong

"The UK economy is on the mend. Economic recovery is underway, unemployment has stabilized, and financial sector health has improved. The government's strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability."

IMF, 27 September 2010

"The Chancellor has achieved his twin objectives of setting out a credible plan for the public finances and producing a convincing growth strategy for the longer-term ... This Budget is the UK's first important step on the long journey back to economic health."

Richard Lambert, CBI Director-General, 25 June 2010

"George Osborne has faced up to the challenge. The economy needed faster and deeper deficit reduction and that's exactly what the Chancellor has delivered ... We do not believe the Budget will threaten economic recovery. Quite the contrary, it is likely to improve the economic outlook by showing the public finances are finally being brought under control."

Miles Templeman, Director General of the Institute of Directors, 22 June 2010

"The Budget announced today by the U.K. Chancellor of the Exchequer is a courageous move ... It provides the necessary degree of fiscal consolidation over the coming years to restore public finances to a sustainable path, while still supporting the recovery."

Angel Gurría, secretary general of the OECD, 22 June 2010

"We are relatively sanguine about the UK's ability to grow through the fiscal tightening. In an open economy, robust global growth - and that's what it's looking like at the moment - does quite a bit of the work."

Ben Broadbent, Goldman Sachs, 3 January 2011

"Now for one prediction: consumer spending will be squeezed by the regrettable (and avoidable) hike in Vat and from the (necessary) cuts in spending. But reduced debt-financed spending will go hand in hand with growth in private investment and exports, partly thanks to strong global demand, thus cushioning most of the impact. The years ahead will be very tough - but there will be no double dip recession made in Downing Street."

Allister Heath, City AM editor, 24 June 2010

"The UK economy will be the surprise success of Europe in 2011 ... The enterprise culture of SMEs, exports and the strong corporate sector will all help recovery, which will be in the Midlands as well as in the south-east."

Nick Bosanquet, Imperial College London and Reform, 3 January 2011

Our cover from 29 March 2010.

George Eaton is political editor of the New Statesman.

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Stephen Hawking's enthusiasm for colonising space makes him almost as bad as Trump

The physicist's inistence on mankind's expansion risks making him a handmaiden of inequality.

“Spreading out may be the only thing that saves us from ourselves,” Stephen Hawking has warned. And he’s not just talking about surviving the UK's recent run of record breaking heat. If humanity doesn’t start sending people to Mars soon, then in a few hundred years he says we can all expect to be kaput; there just isn’t enough space for us all.

The theoretical physicist gave his address to the glittering Starmus Festival of science and arts in Norway. According to the BBC, he argued that climate change and the depletion of natural resources help make space travel essential. With this in mind, he would like to see a mission to Mars by 2025 and a new lunar base within 30 years.

He even took a swipe at Donald Trump: “I am not denying the importance of fighting climate change and global warming, unlike Donald Trump, who may just have taken the most serious, and wrong, decision on climate change this world has seen.”

Yet there are striking similarities between Hawking's statement and the President's bombast. For one thing there was the context in which it was made - an address to a festival dripping with conspicuous consumption, where 18 carat gold OMEGA watches were dished out as prizes.

More importantly there's the inescapable reality that space colonisation is an inherently elitist affair: under Trump you may be able to pay your way out of earthly catastrophe, while for Elon Musk, brawn could be a deciding advantage, given he wants his early settlers on Mars to be able to dredge up buried ice.

Whichever way you divide it up, it is unlikely that everyone will be able to RightMove their way to a less crowded galaxy. Hell, most people can’t even make it to Starmus itself (€800  for a full price ticket), where the line-up of speakers is overwhelmingly white and male.

So while this obsession with space travel has a certain nobility, it also risks elevating earthly inequalities to an interplanetary scale.

And although Hawking is right to call out Trump on climate change, the concern that space travel diverts money from saving earth's ecosystems still stands. 

In a context where the American government is upping NASA’s budget for manned space flights at the same time as it cuts funds for critical work observing the changes on earth, it is imperative that the wider science community stands up against this worrying trend.

Hawking's enthusiasm for colonising the solar system risks playing into the hands of the those who share the President destructive views on the climate, at the expense of the planet underneath us.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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