The British pound is one of the most hated currencies in the world.
The UK was recently stripped of its AAA credit rating for the first time ever.
Current Prime Minister David Cameron came to power with an agenda of austerity. But now economists regard the UK as an experiment in what not to do when you’re in a huge slump.
All of this is unfortunate for the country, and it’s people who have to suffer through this.
But what’s interesting is that when David Cameron took power in 2010, he was widely praised for pursuing a brave austerity agenda.
Cameron was particularly popular among non-ideological “centrist” pundits, who liked his tough approach to getting ahead of a future debt crisis, and preserving UK’s creditworthiness.
Here are a few Examples.
1: The New York Times’ David Brooks, who published a column called “Britain Is Working” back in May 2011. Here’s a cut:
Prime Minister David Cameron is a skilled politician who dominates the scene. His agenda doesn’t merely touch his party’s hot buttons, but moves in many directions at once.
His austerity program includes tax increases as well as spending cuts. He’s vigorously protecting the foreign aid budget as he cuts almost everywhere else. He has aggressively reformed welfare and education while retreating on health service reform.
By balancing his agenda, by conveying a sense of momentum, by insisting on fiscal responsibility, he’s remained popular. His party did well in the recent local elections, even amid the fiscal pain.
To be fair, this was apparently the last time Brooks wrote in praise of Cameron.
The Economist’s “Bagehot” page explained its dream scenario in a Tory-led coalition just prior to the 2010 election results:
What would Britain look like after a few years of Tory government? It would be living through a necessary period of austerity, as (after a gentle start) Prime Minister Cameron and George Osborne, his chancellor of the exchequer, battled to slash the deficit.
With luck they would have met their pledge to protect Britain’s credit ratings and avert a steep rise in interest rates.
This aspect of the Tory platform is cherished and promoted by the state-shrinking wing of the high command.
Of course, the UK’s credit rating was not maintained.
Reuters’ BreakingViews founder Hugo Dixon also extolled the “sacrifices” Britain was about to make in November 2010 to get its fiscal house in order, etc. etc.:
During the boom, many ordinary people — whether in Ireland, Greece, Britain, Spain or the United States — did, too. World leaders, especially Mr. Obama, have failed to adequately indicate that sacrifices have to be made across the board.
In Europe, the strongest disciplinarians have been David Cameron of Britain and Angela Merkel of Germany. It is fashionable to criticise them. But the criticisms are largely misguided.
Mr. Cameron is said to have gone in too hard with his austerity. But his country has earned praise from the markets by doing so.
Finally, around the same time as Dixon, The Atlantic’s Clive Crook wrote this — though with a kick-save caveat:
The new coalition’s most pressing challenge was economic policy, and again Cameron was brave. Rather than waiting for financial markets to dictate the terms of the country’s needed fiscal correction, the coalition announced tax increases and spending cuts at the high end of what was feasible, kicking in faster than many economists think wise.
Bottom line. People extolled Cameron’s bravery, but today the credit rating is lower, the pound is cratering, the economy is weakening, and people believe that the only way out is to reverse austerity and spend more.
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