Sometimes people don’t vote for what they want – they vote against what they don’t want. In May this appears to be what happened in the local elections in the UK and in the national elections in France and Greece.
The common theme in all three of these countries is the dislike, by the public, of austerity measures imposed by their governments. These measure have all been in response to the economies of these nation states being overstretched; albeit that additional measures in Greece have been heavily imposed by Brussels.
It is natural for people to dislike any form of their lifestyle diminishing and it’s easy to blame those currently in charge. However, before criticising and ‘voting out’ those who are trying to rectify the situation, it is worth asking whether those same people created the mess or inherited it. If this question is not addressed there is a possibility of reinstating those responsible for creating the overstretch.
For example, in the UK, the Labour party did well in the local elections; possibly in protest against the coalition government’s austerity measures. I am not a supporter of any particular political party, yet I can see these have been put in place in response to the mess the coalition inherited. Remember the note “I’m afraid there is no money!” left for the new Chief Secretary to the Treasury, David Laws, by his predecessor, Liam Byrne?
You could as easily say that the mess we are in is all the fault of the banking industry, which may or may not be correct. Certainly Lehman Brothers,along with other banks, did act recklessly between 2006 and 2008, as portrayed in the compelling read by Larry McDonald, ‘a colossal failure of common sense’. What is accurate is that various nation states have also over-borrowed, in the vain hope that this would regenerate their economies. This is often the cause of difficulties in businesses and there are public cases of companies who have crashed after continually borrowing more money, to try and get them out of trouble.
I would not argue that borrowing money to grow a business (or businesses) makes sound sense, given the right reasons and a sound business plan as to how the money is going to be repaid. That is where politicians and business people differ, as politicians do not have to explain how they are going to repay these debts; instead they espouse their ‘policies’ to the electorate. As an example, look at how the shadow Chancellor, Ed Balls, continuously criticises the government for not borrowing to stimulate growth and encourage employment. Not once does he go on to say, “This is how much we would need to borrow, over this period of time, and this is how we would repay that loan.” As the owner or senior manager of your business, try going to your bank with a ‘policy’ rather than a business plan.
Austerity measures are not a ‘new fad’; they are a response to try and get the economy back into a manageable state and, whilst none of us like to be worse off, is it fair to vote for more borrowing knowing that the next generation – and the global economy – will be in a far worse position? My concern is people going after short term solutions, that make them better off now, rather than thinking about their future. Already it is being suggested that the re-election in Greece will be about whether to stay in the Euro or not. However, has anyone explained to the public in Greece the consequences of not staying in the Euro, so that they can make an informed choice?