Sunday, 11 October 2009

Big Government

We tried to warn David Cameron against revealing too much about his specific policies. But he pretty much gave the game away in his speech to the Party Conference, blaming 'Big Government' for the financial mess we're in. Whilst this is a familiar rallying call to the Conservative faithful, to claim the recession is the fault of too much Government is just plain wrong. It was a lack of adequate regulation that caused it. Moreover, it was the Conservative Government policy of financial deregulation and neo-liberalist capitalism under Thatcher (and Reagan in the USA) that set the stage for the collapse of the financial markets - following the economic theories of Hayek and Friedman. Gordon Brown's mistake was to think that the easy money being generated by the financial sector would go on forever. But once the crisis hit, at least he could see that only Government is  'big' enough to do something about it.

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