What’ll be the impact of saying Plan A was wrong?
As the Mail puts it:“…The prospect of what is known as ‘ quantitative easing’ – printing money – emerged as Mr Darling gave a clear sign that the recession this year will be worse than expected..It would also mean an end to the decade-old independence of the Bank of England as ministers took charge of what would be a politically-sensitive policy..And it would risk driving down the value of the pound, which is already under intense pressure in the money markets in the face of low interest rates and fears of soaring Government borrowing.”
After going through the bank bail-out plan in October and then the emergency measures in the PBR it was always going to be dangerous politically if the original measures were not enough – for everything is dependent on confidence.
And the notion of “printing money” sounds quite horrific – something that simply won’t be understood, surely, by 99% of the electorate and something that the Daily Mails of this world can attach the imagery of what goes on in Robert Mugabe’s Zimbabwe.
All this stems from a revision of the government’s claim that the recession would end by the middle of the year.
The main leader in the Times is damning: “There are two kinds of U-turn. The first is the U-turn that reflects well on those who do the turning. Changing one’s mind is hard, after all, and to be able to switch position can demonstrate a welcome flexibility. Then there is the other sort of U-turn. This is the shift that is primarily notable for the stupidity of the position originally adopted. The change is not brave, but merely an acceptance of reality that is long overdue.
The Government is currently engaged in a U-turn that definitely belongs in this second category. It is undertaking this manoeuvre gingerly, understanding exactly how it looks, but undertaking it the Government most certainly is. It is abandoning its forecast that the recession will be over in the middle of this year…”
Gordon Brown and his team did brilliantly in the final quarter of last year gaining political kudos for the way they were handling the crisis. It’s going to take very sophisticated news management for that to continue.