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Don't Look Back: Financial Post Mortem Is Done, Now Let's Move On

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As our economy and society bump along just about avoiding the feared "double dip" amidst the spectre of societal meltdown we celebrate growth figures of 0.3% and trumpet new ideas with little evidence of actual progress against the constant backdrop of reminders about our current financial predicament.

We are left with the feeling that there is no ambition left in our society.

I'm sorry to say the blame rests with government. Every single policy decision appears to be preceded by a statement about the parlous financial state we have been left with, followed by a debate about whether the blame should lie with the Labour party, the bankers or just a global calamity.

Who cares whose fault it is? I sense that I'm with the majority when I feel a deep irritation that the people whom we rely on to get us on the road to recovery continually conduct a post mortem over what went wrong.

Our current financial state is used now as call to arms for inactivity and to compromising away the advances our society has made since the Second World War. The government appears to be hiding behind a barricade of debt and is in siege mode. We are reminded that this is the worst recession in living memory but that in itself is highly debatable.

Yes the balance sheet is creaking and the proportion of debt to GDP is much too high, but in terms of the threat this situation poses I disagree with the coalition's assessment. We don't have to look too far back to recall worse.

In terms of austerity 1945/1948 really sets the bar and in comparison with the prevailing conditions at that time we have got it relatively easy. Then our country was officially bankrupt we owed so much that everything we made had to go to export. There were massive luxury taxes and rationing to discourage home consumption and the debt owed to the Americans was only finally repaid a few short years ago. On top of this the government of the time was faced with the challenges of rebuilding entire cities and population centres, restoring a rail infrastructure after years of overuse, zero investment and destruction by bombing. If this was not enough there were the thousands of families devastated by the personal loss arising from years of total war who needed the nation's support.

In the end we and the rest of Europe were assisted by the United States in the shape of the Marshall Plan. Let us be clear that it was not an act of compassion or philanthropy; America's stated aim was to prevent the spread of communism but during its four years of operation it transformed the shattered economies of Western Europe to pre-war levels. The United Kingdom was one of the beneficiaries of billions of pounds worth of aid which was used to restore housing, infrastructure and industry.

So is vastly increased public spending the answer? No.

The Marshall Plan addressed each of the obstacles to post war recovery. It looked to the future, and did not focus on the destruction caused by the war. Much more important were efforts to modernise European industrial and business practices using high-efficiency American models; reducing artificial trade barriers and instilling a sense of hope and self-reliance. In short it transformed economies.

It is often said that businesses that survive a recession thrive during recovery and this is for a good reason. They seldom emerge from recession in the same shape that they went in. Businesses examine what they are doing and how they do it so they can adapt. They treat the destructive power of recession as a clearing of the decks and an admittedly unwelcome opportunity to rebuild and make the changes you always wish you had got around to.

Of course business does not ignore the economic situation; after all it has to survive long enough to implement the changes that will successfully carry it through a lean period. For SMEs like mine, that is what flexible mortgages and occasionally even pawn shops are for. However, to cave in to the recession by allowing it to restrict what you can do is business suicide. Businesses that prosper step out from the behind financial barricades and raise the bar.

It is no different with government. If Westminster wants to inspire us it should aspire to better things which cannot be achieved from a defensive position. Of course we want the government to manage our economy carefully and we understand the importance of keeping our Triple A credit rating. But if we want to embark on the road to recovery then this careful management of economy must lead us somewhere. The first rule in getting somewhere is to stop looking back.

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