state intervention isn't the only way forward.
But it's an option to try and inject cash and re-stimulate the economy, whilst slightly protecting some jobs.

there are possibly better ways. Direct and large-scale investment in infrastructure springs to mind. but that didn't work in the US at the height of the great depression.

It's pointless arguing it though. No-one - not the IMF, not the government, not all the best economists in the word - can have even a half-decent idea what will happen, because this exact situation hasn't occured before. The IMF predicting negative growth figures to one or two dp for various countries is at best pointless and at worst dangerous scaremongering. As if the press wasn't good enough at that in this country.
( the mighty badger Aphrodite, on a bar stool, by your side, Mon 23 Feb 2009, 17:47, 2 replies)

Oh, I agree
State intervention is, let's face it about the only tool most goverments have at the moment. It's just a bit annoying that the institutions that in times of economic growth bleat on and on about state intervention and such are not only reliant on it themselves, but also don't seem to have a lot to say regarding this sudden political turnaround. And yes, it is rather unprecidented. Economists in this case might as well start reading the entrails of sacraficial virgins to predict what's actualy going to happen
(Fredz A graveyard of hopes, a dump of ambition, Mon 23 Feb 2009, 17:53, closed)

The great depression
is actually the closest parallel to the current situation*. Which is insane, because predicting ecomonic growth based on what happened nearly a hundred years ago is about as much use as mudflaps on a tortoise. But that's what they are doing.

*with the caveat that America's refusal to abandon the gold standard at the time was a major contributor to the situation, if not going tits up, then staying tits up
( the mighty badger Aphrodite, on a bar stool, by your side, Mon 23 Feb 2009, 18:39, closed)

I'd disagree
To an extent - in that state funded infrastructure investment in the US DID work when it was properly and efficiently controlled.

Huey P Long is vilified now - possibly with justification as he was undoubtedly a corrupt and nepotistic demagogue - but he was able to use Federal funding to drag Louisiana from a pre - 1930 basket case to parity with the more developed Northern States.

The other Southern States followed his lead to varying degrees, Alabama in particular.

The difference was that the Northern States regarded Federal funding as a means by which to maintain the fairly feudalistic status quo.

To translate this into 2009 terms, if the multifaceted handouts gleefully (recklessly?) issued by HM Government were directed at those who wish to progress, rather than those who wish to buy bandages to contain the wounds inflicted upon them, we may build a solid base upon which to build an economic future.

As it is, all I see is the brave little boy sticking his finger in the hole in the dyke.
( The Disappointed Caravanner of the year, Mon 23 Feb 2009, 18:16, closed)

I'd not completely disagree with you
in that it's impossible to say what did and didn't work back then. Who knows what might have happened if the investment didn't happen?

It certainly didn't work quickly though, and it cost Hoover ultimately, which was a terrible shame.

The last part - we can't build a solid base without a banking system. We might not like it, but those wounds HAVE to be bandaged. How we progress after that is another matter.
( the mighty badger Aphrodite, on a bar stool, by your side, Mon 23 Feb 2009, 18:35, closed)

Might
I make a recommendation? Look up Joseph Stiglitz - he wrote some very interesting books both against and for globalization and free markets as well as the banks that support them. He used to work for Clinton but has some very interesting arguments on both sides. :)
( Jimbuktu See? Right here, Mon 23 Feb 2009, 19:04, closed)

So let's step back
And use our mighty powers of hindsight.

Tony Blair and George Bush were the Warren G. Hardings of our generation - placed in positions of power by those who trusted them to convey an appropriate message and, above all, protect their interests.

Granted the translation does'nt quite work because Coolidge was a relatively honest man and we don't have a contemporary Coolidge but by the time of his presidency the damage was done - despite the show trials of the Teapot Dome the senate was in the hands of the industrialists.

I half suspect that Calvin Coolidge understood that he was fighting a loosing battle and was happy to give way to Hoover - certainly the latter half of Coolidge's presidency was particularly lacklustre and saw the beginnings of what we now call McCarthyism - the assumption that leftist forces were insinuating their way into the US economy.

If you want early 20th century US politics I could go on all night - it's one of my passions - but the parallels are there to see.

I'm not a conspiracy theorist or similar but I have been regarding the Blair years in direct comparison to Harding for some time.
( The Disappointed Caravanner of the year, Mon 23 Feb 2009, 19:08, closed)