“The economy, stupid”. It was the campaigning phrase that stuck back in 1992, during Bill Clinton’s successful bid for the White House. Focusing on the economy helped Clinton beat George H.W. Bush in the race for the US Presidency. A quarter of a century on, “the economy stupid” remains a popular political leitmotif, used the world over to stress the importance of living standards in any electoral contest. Donald Trump just brought that sentiment back home.
Amidst the pomp of his French visit and the latest installment of “Russia-gate”, last week saw the launch of MAGAnomomics – a new attempt to put the economy at the forefront of American Presidency. “MAGAnomics means sustained 3pc economic growth”, wrote Mick Mulvaney, Trump’s Office of Management and Budget Director, in the Wall Street Journal – combining “economics” with the President’s “Make America Great Again” catchphrase. So what are the prospects for the world’s biggest economy under Trump? Will the US perform well enough for Trump to be more than a one-term President?
The UK fishing fleet, around 6,000 vessels, lands some 708,000 tonnes of fish a year, worth almost £800m. The entire industry, including packing and processing, accounts for under 0.1pc of GDP. Fishing, though, was once a large employer. It is also, for many, hugely symbolic of our relationship with Europe.
The UK is withdrawing from the London Fishing Convention, Environment Secretary Michael Gove announced last week. This was welcome and important. When it comes to fishing, the gains from Brexit are clear, relatively immediate and should appeal to multiple interest groups.
Economists at big, powerful institutions generally think alike. From HM Treasury to the Bank of England, consensus views dominate. Whether it’s the Organization for Economic Cooperation and Development or the International Monetary Fund, dismal scientists tend to converge towards a single “house view”.
This is, perhaps, hardly surprising. You don’t generally make your career within a large, hierarchical organization if you like thinking “outside the box”. More fundamentally, these “top” institutions are essentially political and strategic in nature – with the strategy determined elsewhere. For all the scientific pretense, resident economists will overwhelmingly serve up what their political masters want to hear.
Economic Agenda has, for many years, banged on about the need to build more homes. This lack of focus on housing just cost the Conservatives their majority in the House of Commons. It was the misery felt by countless “priced-out” young adults of family-forming age, renting or still living with parents, that saw them vote Labour.
The Tories must now take immediate, bold and visible steps to ensure many more affordable homes are built, reining in the sky-high cost of housing. If not, a generation of natural Conservatives will increasingly back Jeremy Corbyn – and Britain will soon be run by a Marxist.
Ooohhh – events on the Bank of England’s Monetary Policy Committee are getting interesting. Earlier this month, the MPC kept rates on hold at an all-time record low of 0.25pc.
We learnt last Thursday, though, that the decision was strikingly close – 5 votes to 3, rather than the predicted 7 to 1. External members Ian McCafferty and Michael Saunders joined Kristin Forbes, who has been backing a rate rise for several months. They were right to do so – not least as the admirable Forbes is about to leave the MPC.
“If I lose just six seats, Jeremy Corbyn will be sitting down to negotiate with the presidents, prime ministers and chancellors of Europe”. So said Theresa May, just ahead of Thursday’s election, in a bid to encourage the Conservative faithful to turn and vote.
Well, May lost more than six seats and Corbyn could soon be running Britain. Whatever the outcome – be it a workable “confidence and supply” deal with the Democratic Unionists” or some Tory backroom blood-letting – there will surely be another election soon.
Journalists like to use certain words. A clumsy political mistake, in news-speak, is a “gaffe”. An eye-catching opinion poll is “rogue”. A currency that goes up and down a lot “whipsaws”. Well, sterling has certainly whipsawed lately, after successive gaffes and a series of rogue polls.
The pound remains more than 10pc down against the dollar since last June’s EU referendum. It’s up almost 5pc, though, since the start of 2017 – and rallied in mid-April, to a six-month high, after Theresa May called a snap election. Investors bought sterling on the hope an improvement on the Tories’ 17-seat Commons majority would strength the Prime Minister’s hand during the Brexit negotiations.