David Cameron Lies About UK Economic History

Simon Wren-LewisAh, the good old days! That was when conservatives everywhere resorted speaking in only sentences that consisted of a noun, verb, and “Greece.” Every conservative policy under the sun had to be enacted or: “We’ll turn into Greece!” Well my friends, now United Kingdom Prime Minister David Cameron is back with a shocking bit of noun, verb, and “Greece” propaganda. While in Brussels to discuss matters related to the Ukraine, he took a moment to talk about domestic matters, because he’s afraid that the conservatives might not win the upcoming election. And so he lied in a very big way, claiming, “When I first came here as prime minister five years ago, Britain and Greece were virtually in the same boat, we had similar sized budget deficits. The reason we are in a different position is we took long-term difficult decisions and we had all of the hard work and effort of the British people. I am determined we do not go backwards.”

Translation: we screwed our people and claimed it was for their own good; those lazy Greeks didn’t do it and look at what a mess their country is today; and vote conservative because we are doing everything right! Except that isn’t at all the case. Luckily, Simon Wren-Lewis is around to strike back, Controlling the Past. But before I get to what he wrote, I want to talk about something he barely mentioned, because he’s a real economist writing for other real economists and so assumes everyone knows: currency.

The United Kingdom, like the United States, has its own currency. So it is much easier for it to bounce back after a crisis, because other currencies will simply rise relative to it. But for a country like Greece that shares the euro with most of its trading partners, there can be no currency devaluation. Thus there is far more disruption as wages have to go down. Basically, Greece is stuck with using Germany’s valuable currency. So this made it infinitely easier for the UK to weather the 2008 financial crisis. And it is the reason that Greece should never have been used as a scare tactic for the UK and the United States. What happened to Greece simply couldn’t happen to the UK and US.

But let’s get to the bulk of Wren-Lewis’ article. It focused on the claim that “Britain and Greece were virtually in the same boat.” Is that true? Not even close:

The real travesty however is in the implication that somehow Greece failed to take the “difficult decisions” that the UK took. “Difficult decisions” is code for austerity. A good measure of austerity is the underlying primary balance. According to the OECD, the UK underlying primary balance was -7% in 2009, and it fell to -3.5% in 2014: a fiscal contraction worth 3.5% of GDP. In Greece it was -12.1% in 2009, and was turned into a surplus of 7.6% by 2014: a fiscal contraction worth 19.7% of GDP! So Greece had far more austerity, which is of course why Greek GDP has fallen by 25% over the same period. A far more accurate statement would be that the UK started taking the same “difficult decisions” as Greece took, albeit in a much milder form, but realized the folly of this and stopped. Greece did not get that choice.

So in addition to not having its own currency, Greece enacted more than five times as much austerity as the United Kingdom did. But it is those noble pasty white Brits who did the hard work. This is very clearly meant to both stroke the ego of the British public and to make them feel that the very real pain they’ve been put through was for a reason (it wasn’t). The point of all this is to change the narrative of the past so that the current government looks good. And they want to push the idea that the same old conservative policies that they are always for are what we should thank for the better economic times. It’s ridiculous.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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