“The problem is policy is being run by two public school boys [Cameron and Osborne] who don’t know what it’s like to go to the supermarket and have to put things back on the shelves because they can’t afford it for their children’s lunchboxes,” says Nadine Dorries, another Conservative MP. “What’s worse, they don’t care either.”And he doesn't care because those poor people live in Northern cities which never voted tory anyway.
Unemployment in traditional Labour areas is currently much higher than in traditional Conservative areas. In north-east England it is 11.2%, in Yorkshire and the Humber it stands at 9.9%, in the north-west at 9.3% and in Wales at 9%. By sharp contrast, unemployment in the south-west is 6.1%, in the south-east it is 6.3% and in the east of England it is 7%.
Zooming into even more local figures reinforces this picture. The national rate of people claiming jobseekers' allowance is currently 5%. In Labour-held seats, the rate is an average 5.2%, while in Conservative-held seats it is considerably lower at 2.9%. In the 50 most marginal Conservative-held seats it is 3.6%, well below the national average and that of Labour-held seats.
History shows that it is perfectly possible for Conservative governments to oversee sluggish growth, rising unemployment and public spending cuts while winning re-election. As Stanley Baldwin in the 1930s and Margaret Thatcher in the 1980s proved, the crucial factor is that enough people are doing comparatively better to sustain an election-winning coalition.Part of me was quite relaxed when Labour lost the last election. They had been in power for over a decade, which is never healthy, and a break would probably do them some good. And the Conservatives probably wouldn't be that bad. Especially with the Lib Dems there to tone down their worst excesses. I was wrong.
Justin Wolfers and Betsey Stevenson make a good point about asymmetric risks;
Europe’s experience in the 1970s and 1980s demonstrated that persistently high unemployment can become entrenched, leading to further unemployment in the future -- a process economists call hysteresis. Skills atrophy, hope fades and people lose contact with the networks that can help them find work. If this occurs with the millions of U.S. workers who have been without jobs for more than a year, it will be costly and very difficult to undo.
In other words, the cost of too little growth far outweighs the cost of too much. If we readily bear the burden of carrying an umbrella when there’s a reasonable chance of getting wet, we should certainly be willing to stimulate the economy when there’s a reasonable risk that doing nothing could yield a jobless generation.Christina Romer suggests that
European policy makers just don’t get it.What is scarier is the notion that they do "get it", but just don't care.