Rebirth of England.

Chapter 683 Short-term and long-term

“We need more comprehensive policies to reduce the impact of the post-crisis recession on the country, Mr Prime Minister.”

After the news of his divorce came out, Barron did not appear in public for a while - of course, this was actually no change from his previous life, because in the past two years, Barron has greatly reduced the time he spends in front of the camera, and only appears in front of the public during some charity events or more important events in British upper-class society, such as the annual social season.

Of course, this does not prevent him from meeting some friends, such as the Prime Minister.

Barron said to Brown in front of him:
"So far, including the United States and other European countries, have introduced a series of policies to promote economic recovery. In comparison, our response strategy in the UK is relatively monotonous."

"It is true that there are more ways under discussion now, but we will maintain a cautious attitude towards relevant policies, Your Highness."

It seems that Brown has also considered this. He said:

"Quantitative easing policies can indeed stimulate the economy that is currently in recession, but at the same time, it is also easy to cause inflation. We need to strictly control the intensity of relevant policies."

Currently, the policies of various countries in response to the economic recession following the subprime mortgage crisis are generally similar.

These measures can generally be divided into government investment, tax cuts and subsidies for vulnerable groups.

For example, in the initial stage of government investment, the government mainly injects funds into relevant banks and other financial institutions, nationalizes these institutions to save them, and thus avoid the collapse of the financial system.

After stabilizing the financial system, the government's investment began to expand into the field of public investment, such as increasing infrastructure projects and providing subsidies to some industries.

These can be divided into two strategic objectives: short-term and long-term. In addition to providing more jobs in the short term to avoid further economic downturn, it can also lay the foundation for future economic growth, such as investing in and subsidizing some science and technology, people's livelihood and other projects.

In addition to these government investments, there are also tax cuts and subsidies for vulnerable groups.

As Barron said, compared with the more types of rescue policies in the United States, Europe and other countries, the policies currently introduced by the UK are relatively monotonous. In addition to the government's previous large-scale investment in banks and other financial institutions, the current main measures are still based on tax cuts.

"In fact, I don't think some of these policies are necessary, sir, like the rescue of banks and some lending institutions. In fact, one of the main reasons for this crisis is that some financial companies need to be eliminated because they are 'harmful' to society. Many of our consumption patterns are not healthy. We pursue excessive consumption too much and ignore the role of savings. As a result, the risk resistance of the entire society is very fragile. After the negative factors accumulate to a certain extent, they will inevitably explode..."

Barron shrugged and said to Brown:

"As a businessman, I would welcome this habit of pre-consumption. After all, it is conducive to commodity consumption and the development of private credit. But for us in Britain, this is not a good thing... And this crisis itself is a process of eliminating those financial institutions that are operating too aggressively. However, because of the need to maintain social stability, the government has to rescue these institutions that should have been eliminated, which is equivalent to artificially delaying this process..."

Of course, it’s not that no one has noticed these things, but the problem is that the definition of “right approach” is completely different in different situations.

For example, rather than suffering short-term losses and achieving long-term healthy development, countries like Europe and the United States will inevitably choose to maintain stability in the short term and obtain impressive data. On the one hand, the Labour Party needs to face a general election - from Brown's perspective, there is less than a year before the general election, so they will inevitably consider short-term effects more when formulating economic policies. After all, even if they formulate policies based on long-term healthy development, if the economy is still at a low point next year, it will be meaningless for the Labour Party to see what happens after the Conservatives come to power.

It may even make it more difficult for the Conservative Party to regain power in the next general election, as it will benefit from their long-term economic policies during the Conservative Party's cycle.

In addition, these governments will also face capital pressure - from banks to financial institutions, they are all inextricably linked with the top capital of each country. When they need government funds for rescue, the final decision-making result can be imagined.

No way, no way, you don’t really think that the government elected by European and American voters truly represents the interests of the “people”.

Take President Obama, who took office at the beginning of this year, for example. During his campaign, he had expressed his intention to punish Wall Street and to pass legislation to strengthen supervision of the financial market - this is the common wish of ordinary Americans.

Since Ao Guanhai took office, he has been brewing a financial regulatory bill, but it has been obstructed by the Elephant Party and Wall Street capital, and there has been no result so far...

In the original time and space, the Democratic Party government made repeated compromises and the bill was passed by Congress in July 2010. However, the core content had been extracted and the issue of Wall Street's financial derivatives was basically not touched.

The bill is more concerned with how to detect and resolve crises rather than preventing them from happening in the first place.

The American economy is in recession, and the consequences of the financial crisis are still harming the American people every day, while people on Wall Street are still receiving high salaries and huge bonuses.

In addition, it was also under the pressure of Wall Street capital that Obama was forced to implement quantitative easing policy ahead of schedule, and its scale became larger and larger. This was actually contrary to his initial campaign promise, but there was no way, he knew who he could not afford to offend.

If this is the case in America, then things in Europe are certainly not much better.

The reason why Barron discussed this topic with Brown is not that Barron is really concerned about the country and the people... Of course, he would also like to see better development in Britain, but he certainly would not say that he would rather damage his own interests to achieve this goal.

Barron is not really that great. It's just that as the Duke of England, it's good for him that England can have more say in the world.

In addition, his current industry, even the financial industry, whether it is DS Group or Standard Chartered-Merrill Lynch, has nothing to do with those companies that "need to be eliminated" in the subprime mortgage crisis. On the contrary, he is happy to see some banks enter the elimination sequence...

Of course, Barron also knows that in the face of the Conservative Party's aggressive rise and the pressure of next year's general election, it is unlikely that Brown will really ignore short-term interests and focus more on the long-term development of Britain, thereby cleaning up the financial industry and supporting some high-end manufacturing and technology industries.

But being able to have some effect is better than doing nothing at all.

(End of this chapter)