Sunday, 1 March 2009

How the downturn is playing politically in the US and UK

In Britain we are seeing the hunt for Fred Goodwin's pension, while the US is wondering what impact the Obama stimulus package will have on the economy.

The stimulus, regardless of whether it works, is being used to draw a clear line between the Democrats and the Republicans. For the former, this is urgent action to prevent social and economic disaster, for the latter a return to big government. At the American Conservative Union the talk is of limited government, low taxes and individual freedom. Will this reawakened narrative work and find its way into Republican party policy?

Right now it is hard for the Republicans to frame Obama as a return to big government. Bigger government maybe, but under George W. Bush the deficit grew and power was centralised in the hands of the executive.

The Labour government is equally interventionist, as the Goodwin pension saga illustrates, but the Conservatives have been relatively uncritical. To counter the charge by Gordon Brown that they would do nothing about the recession, they are making policy commitments. At the same time, they are making it clear they disagree with key components of the government's proposals.

If the Conservatives are returned to government in the next 15 months, May 2010 anyone, their options are likely to be severely restricted.

For now what we are seeing on both sides of the Atlantic are oppositions carefully working out how to define themselves against each other and what sort of policies they might be able to introduce if they return to power.
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