We have, according to Gordon Brown yesterday, "got through this storm together" but "there will be bumps on the road". Aside from the clunkiness of the imagery and the mix of metaphors (we're apparently "at a crossroads", in "choppy waters" and on a bumpy road all at the same time), you can see the dilemma which the Government and the Opposition face when speaking of the economy before the election.
The Prime Minister wants to claim the credit for getting through the worst, but daren't sound too optimistic in case the next set of economic statistics show us falling back again. The opposition feel the equal need to point out just how much worse everything is than the government is admitting but don't, on the other hand, want to put off the voters by sounding too draconian in what they may do in response.
And so the public has been treated to this contorted pas de deux (with the regular entrance of the Liberal Democrats) in which each side tries to dance round the other and leave him pinioned in a position of complacency or brutality about the economy. The argument as such is by now well known. The "freshwater" economists of the Chicago school fear the inflationary and deficit problems of this degree of government spending while the "salt-water" economists of the US Eastern Seaboard are concerned about keeping the economy pumped up until the recovery is well and truly established.
Go on spending like this, says the Opposition, and you will find it impossible to fund the debt without higher interest rates that will stifle growth. Don't go on spending, says the Government, and growth will prove stillborn.
In reality, or at least in the particular reality that is an election period, the rhetorical differences are far greater than the real ones. Whichever party wins the election, there won't be much retrenchment in this financial year. If nothing else it's too late to do much to effect the economy without a slash-and-burn programme which neither wants to announce. The hard face of market sentiment is that the Government can no more embark on a new spending spree than the Opposition can act to rein it back except over the medium term.
The less the practical difference between parties in what they can or will do, however, the greater is the language of contradiction between them. For the sake of the markets, all parties must seem responsible in their approach to the deficit. It has to be reduced and the debt pulled down. For the sake of the electorate, however, they must seem expansionist and optimistic. No wonder Gordon Brown's speech yesterday was a long exemplar of the Janus face of recessionary politics.
That may be fine within Whitehall. It means a great deal less to the voters, who find the discussion both abstruse and artificial. This is not just because of the gap between the rhetoric of recovery and the reality of still rising unemployment, although you always get that in this stage of the economic cycle. It is because there is a fundamental divide between the way most people have experienced and view this recession and the way that politicians, and economists, talk about it.
To the Prime Minister the cataclysmic experience of the past two years has been the result of an outside disaster, the meltdown of the banking sector due to their wild and wicked ways. And the public undoubtedly share a degree of venom against bankers and their ilk which has only been made more extreme by the bank's speedy return to excessive reward and blithe disregard for everyone else, including their customers.
But there has also been a widespread sense amongst the public that the credit crunch has marked the end of an era of easy finance and consumer excess throughout society. The good days are done, what remains uncertain in the world of rapid technological change and rising Asian competition, is just what replaces them.
While the confidence in free markets to provide growth and jobs has been shattered by the train wreck of the financial system, there is little compensating belief that government can provide the answer to future sources of growth, even if they had the money. The trust in the public sector is as disabused as the faith in the markets.
Hence the willingness – in one of the peculiar features of this recession – of workers to go on short-time working and even take pay cuts and the readiness of employers to keep on their skilled workers by doing this. Hence also the efforts by companies and consumers to pay down debt and to spend only in manageable spurts. Hence also an abiding sense through businesses and individuals of holding fire and waiting on events.
To the economists this doesn't suit at all. The way out of recession is higher consumption and unbridled optimism. To politicians, too, doubtfulness and withdrawal are inimical to their desire to claim that the future is safe with them.
Almost all the measures taken to combat recession – the quantitative easing, the support for the banks, the subsidies for car purchases and home buyers – actually serve to prolong the very seductions of low interest rates and easy credit which people sense caused the problems in the first place. What people want is sober realism, and an acceptance of uncertainty, not claims to have the right answer for the future.
This should suit the opposition, eager to point out the pitfalls of imprudence, only the personalities of David Cameron and the Shadow Chancellor George Osborne are hopelessly unsuited to conveying empathy with the doubts and fears of the ordinary voter. Brown can't do much better because he won't accept responsibility for what people believe went wrong. Only Ken Clarke, who has been marginalised by the Tory leadership, and the Chancellor himself, who has put under the cosh of the Prime Minister, have the manner right for the time.
All of which should make for an interesting Budget. It can't do much economically. There isn't the room. So which of the Government's many tones will it strike – the Prime Minister's urge to fill it with "government initiatives" aimed at wrong footing the Opposition or Alistair Darling's preference for sober restraint? The answer will probably be both, and in doing so, neither.Reuse content