James Moore: The trouble with Romney recipe for growth is his friends get biggest slice

Outlook: The US is close to fulfilling its energy requirements, further boosting growth

Today's presidential election will principally be decided on the United States economy, and which of the two candidates the all-important independent voters who will decide the result feel will be the best steward of it.

Of course, when it comes to the economy the USA is doing rather well, certainly if you look at its GDP numbers and compare them with what we've been seeing in this country, not to mention the eurozone. Annual growth of between 1.5 and 2 per cent is pretty good, all things considered.

The Centre for Economics and Business Research today hands much of the credit to the monetary stimulus provided by the US Federal Reserve which, it argues, is working rather better than the Bank of England's equivalent.

This can be seen in the way bank lending, stalled on this side of the pond, is growing for business and households over there. Even mortgages have started to pick up.

The US is also benefiting from getting close to being able to fulfil its own energy requirements. As a result energy is relatively cheap, further boosting growth.

The fly in the ointment is the country's enormous budget deficit, which will have to be addressed after the election. A second-term President Barack Obama may rely on a mix of tax rises and spending cuts, if a deal can be reached with an extreme and resentful Republican House of Representatives.

Mitt Romney, by contrast, has at least said he will try something altogether more radical: savage cuts in Government spending together with tax cuts that will likely be of most benefit to the wealthiest. Oh, and he'll ask the Fed's chairman Ben Bernanke to quit, which could mean an end to the monetary stimulus many on the US right dislike.

Other than a short-term boost to the Dow (on account of Wall Street having one of its own in the White House) Douglas McWilliams, the CEBR's chief executive, argues that it will take time for these sort of measures to have an impact on America's economic performance.

But, he says "the option of low spending and low taxation applied in a major Western economy" would be "an exciting experiment".

That is the sort of thing you might expect an economist who won't be on the receiving end of the downside of such an experiment to say. The bonfire of America's already very limited social safety net will have a brutal impact on the country's oft-forgotten poor. As for the extra growth that may — may — be generated, who will benefit from it?

Those independent voters might very well find that it won't be them unless they are, along with Mr Romney, part of the 1 per cent at the top of American society. After all, during the Republican-dominated Noughties US GDP grew every year but one until 2008, sometimes by as much as 4 per cent. But median household incomes did not. By 2008, middle-income households were making less, adjusted for inflation, than they did in 1999. The same cannot be said for those at the top.

Even now the US economy is growing, ordinary Americans aren't really feeling it, which partly explains the battle President Obama has faced.

This is something that ought to be borne in mind on this side of the Atlantic, where there is much debate on how to boost GDP growth. Growth is only really worth having if it percolates throughout society and benefits everyone.

Just look at South Africa: what growth the country has enjoyed has not been widely shared. The consequences have been bloody, as the families of dead miners, striking as a result of being left out of it, can testify.

Governance rules no use if directors are weak

Britain's corporate governance code today celebrates its 20th anniversary and the Financial Reporting Council, which polices it, has published a series of essays to mark the occasion.

Not much of a pressie, you might think, but the consensus (as you might expect) is that the code's core principle of "comply or explain" has held up well and is a better way for things to be conducted than an inflexible rules-based approach.

In the code's favour, it has generally improved governance, and pointed the way for many similar arrangements overseas.

However, it is facing challenges like never before. For a start there are the natural resources companies that have come to London and thumbed their noses at the code while pouring investors' money down a deeper pit than many of their mines.

Some of that money has come from tracker funds, favoured by big pension schemes and small investors alike because they are cheap and easy to understand.

They have been forced to invest in these mining companies by dint of their inclusion in Britain's stock-market indices. This could be said to be a failing of the funds. But it could just as easily be a failing of London's regulatory set-up, the code included. Would these companies have come if the code demanded their compliance?

On the other hand, even had the code's provisions been made statutory it wouldn't have done anything to prevent some of the really nasty failures we have seen in recent years. Royal Bank of Scotland had an independent chairman and a majority of independent directors. They didn't do their jobs and allowed an over-mighty chief executive to drive the business off a cliff.

It's not much good complying with the letter of corporate governance best practice when the independent directors you appoint either can't or won't exercise their responsibilities. Time and again non-executive directors have failed when asked to step up to the plate, most recently in some of the absurd pay packages they have waved through in the teeth of resistance from their shareholders.

Perhaps they need a code to govern their conduct?

Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
art
News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
Travel
travel
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
News
i100This Instagram photo does not prove Russian army is in Ukraine
News
Morrissey pictured in 2013
people
Sport
sportVan Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Life and Style
Martha Stewart wrote an opinion column for Time magazine this week titled “Why I Love My Drone”
lifeLifestyle guru Martha Stewart reveals she has flying robot... to take photos of her farm
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
filmReview: Sometimes the immersive experience was so good it blurred the line between fiction and reality
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Environment
Tyred out: should fair weather cyclists have a separate slow lane?
environmentFormer Labour minister demands 'pootling lanes' for women cyclists
News
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices