Let's hope not, as if it is, it's an abysmal failure. Sumner had a post yesterday "What's wrong with Britain?"
http://www.themoneyillusion.com/?p=12891#comments
The answer to that is plenty. Certainly to those of us who are Keynesians, it's clear that a big part of the problem is Cameron's fiscal austerity.
http://krugman.blogs.nytimes.com/2012/01/28/austerity-memories/
Now Sumners claims in an answer in the comments section to me from the link above, that
" I have no opinion on Cameron, and never did. Maybe he is a hawk. But I don’t see evidence of austerity, unless I’m missing something. I will concede that the deficit is smaller than in 2010"
Here he is confounding two questions-whether there was fiscal austerity and the existence of a budget deficit. A budget deficit does not prove there was not austerity. Indeed what we have learned from Greece is austerity can even worsen a deficit. The problem with austerity in the middle of a recession is it exacerbates a loss in demand-Sumner here admits the problem is a drop in AD.
He claims that he has no opinion about Cameron, never did, and that "maybe he is a hawk." For the record Sumner certainly cannot claim to having never had an opinion about Cameron,
"There is currently a fierce debate in the UK over the coalition government’s plans for fiscal austerity. Many argue it will lead to high unemployment. But if that’s the case, then the criticism of the BOE for being too easy is borderline schizophrenic. People can’t have it both ways. If the UK has an AD problem, then, ipso facto, high inflation is not a problem. Indeed it needs to be even higher. (Draw an AS/AD diagram if you don’t believe me. QED.) If they don’t have an AD problem, then there are no valid grounds for criticizing Cameron’s fiscal austerity. So which is it? And for those Brits who do worry about inflation, why aren’t you demanding even greater fiscal austerity? Why blame the BOE?"
Sumner published this January 13, 2011 http://www.themoneyillusion.com/?p=8332
He definitely knows here that Cameron had plans for fiscal austerity though he is now pleading agnosticism of whether or not he did, 'maybe he's a fiscal hawk.' Predictably Sumner is claiming that the reason for Britain's weakness is lack of monetary easing. Yet the Bank of England has been more activist than most central banks. In the same post, Sumner quoted this:
"Very subtly, Bank insiders, including members of the monetary policy committee, are beginning to complain that the criticism is overblown and the Bank should not be in the line of fire for specific price rises about which it can do little. Would it be better to bring down inflation quickly with a large immediate tightening of monetary policy and ignore the consequence on jobs and growth, some insiders ask in rhetorical asides. Others are open that the Bank is really targeting nominal gross domestic product growth of about 5 per cent a year regardless that this is not consistent with the Bank’s strict 2 per cent inflation target objective."
What Sumner had claimed was that Cameron's austerity will not be contractive if the BOE at the same time aggressively eases. As this is not the case he is left to his usual claim that monetary policy has even in Britain been too tight.
Cameron's admirers were legion prior to the recent numbers came out. Delong quotes the "centrist" David Brock gushing all over himself about Cameron last year,
" David Broder, who virtually embodied conventional wisdom, praised Mr. Cameron for his boldness, and in particular for “brushing aside the warnings of economists that the sudden, severe medicine could cut short Britain’s economic recovery and throw the nation back into recession.” He then called on President Obama to “do a Cameron” and pursue “a radical rollback of the welfare state now.”
http://delong.typepad.com/
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