While my ancestors came here from Germany, Ireland, Poland and Scotland, I have always had a soft spot for England. (It's the language.) I have English friends, I watch English sports, and I even speak English at home.
For England, the war in Iraq has been more like the Vietnam era was for us. It politically discredited the left, which was blamed for getting England in, and brought forth a Nixon-like figure to leadership in the form of David Cameron.
Cameron, like conservatives everywhere these days, whether on Wall Street or Main Street, believes in the magic Austerity Fairy. He's what I call a Mellon-ista. Liquidate everyone (except the bankers) and growth will return by magic.
There is no Austerity Fairy. Market failures like the one just passed make money disappear. What was lost by the longs is not fully gained by the shorts. There is less money around. Less value in homes, less value in stocks. Waiting for the Austerity Fairy while the clock ticks on loans is a recipe for poverty, not prosperity.
The game has to be re-started. America re-started its game by throwing money at the banks, trillions of dollars, and creating trillions more in new spending. This will result in inflation only if that punch bowl isn't taken away after organic growth returns. There are some signs this is happening here.
But it won't happen by itself in England, and it's indeed true that a “lost decade” is in the offing if leaders like Labour's Ed Miliband accept the Tory frame thhttp://www.guardian.co.uk/politics/2012/jan/08/ed-miliband-spending-gavin-kelly at cutting spending is the only way forward.
It's not. The real way forward lies in increasing demand and then supplying that demand in a way that gets England out of its current straitjacket. Which happens to be the same one America faces. Oil.
England also faces the same opposition to doing the right thing America does, especially on the energy front. One example from today's news – this piece of nonsense from a right-wing think tank claiming that wind energy actually increases carbon emissions. The paper is written by a global warming denialist, and as is often the case with such oily papers, it bases its claim on old versions of new technology, and a generous set of assumptions about interconnection.
Every barrel of oil you save in efficiency is money in the pocket. Every watt of wind or solar power you produce is money in the pocket. Money in the pocket creates growth in other areas, a virtuous cycle.
Austerity is not the answer to the problem of growth. Growth is the answer to the problem of growth. What opponents to Cameron need to provide is a way to grow the economy, instead of accepting the myth of the Austerity Fairy.