Crisis: Brown in denial

I wrote before that Gordon Brown (I don't think anyone believes Alistair Darling has got anything to do with this) is trying to pile on more debt, concealing it like a pebble on a beach, a beach full of pebbles of his own debt, and of that of others, which he can explain away as being necessary to cope with the recession. Yesterday would have seemed a triumph in the concealer's art, had we not all now got so weary of him that our first assumption was that a lie was going to emerge from his ventriloquist's dummy's lips.

George Osborne, whose real name is Gideon, hampered with boyish looks and a with a voice like a bored child on a motorway journey, made a fairly good speech, I thought. He spotted at an early stage the fact that this is all electorally driven: Brown has to call an election by Spring 2010 so he is inflating the economy like Dennis Healey only more so, in the hope that he can warm it up in time. Darling said that the recession will be over by the end of 2009 and that thereafter there will be a surge in growth.

Actually I don't think Darling is far wrong in this, but wrong enough for it to be fatal. I have said from the beginning (now I'm sounding like a politician) that we will see the first signs of a levelling at the end of 2009 but that the whole of next year will be bad. Darling is two fiscal quarters early in his guess/hope and that will mean, in my view, that we won't have that warm sense of bien-etre in time to make us vote Labour.

Taking aside the question as to whether a fiscal stimulus is a good idea (and I am reluctantly with Gideon George on this that we simply can't afford it) we can also quibble at the method of delivery of the stimulus. The people who are most likely to spend money in a hurry are the poor. A major part of their budget is food and children's clothes, which don't attract VAT, so a VAT cut will help little. It would have been better to send each one a cheque, but it would have been for such a paltry amount (the cupboard is bare) that Brown would have been found out even by the electorate whose votes he needs. Again, politically, not economically driven.

Our best hope of emerging from recession is probably not consumer spending (still less government spending) but exports, which would grow on the boost of a weak pound. With so few chips to play with we should have thrown them all on this number. The problem is that there is a time lag before this works into the real economy and that will be too late for Brown. The man who grew famous on the back of a benign economic climate created by his predecessor might well find he is handing the recovery over to his opponents. Sweet irony.