Britain's Economic Mess

I liked Thomas Friedman's column in the New York Times this morning. You can read the whole thing on the link, but here's the key passage. "China is not going to rescue us or the world economy. We’re going to have to get out of this crisis the old-fashioned way: by digging inside ourselves and getting back to basics — improving U.S. productivity, saving more, studying harder and inventing more stuff to export. The days of phony prosperity — I borrow cheap money from China to build a house and then borrow on that house to buy cheap paintings from China to decorate my walls and everybody is a winner — are over." Spot on. But it applies even more forcefully to Britain than it does to the US. More borrowing, more state-aid, none of those are the answer. The UK economy needs to re-structure, which will involve some pain. It is extraordinary how few of the economic commentators in the UK are making this point.