Benignant Belgium?

September 7, 2011 at 2:26 am (By Randy)

Quarterly GDP data don’t, on the whole, tend to make the person studying them laugh out loud. The most recent set, however, are an exception, despite the fact that the general picture is of unrelieved and spreading economic gloom.   

Instead of the surge of rebounding growth which historically accompanies successful exit from a recession, we have the UK’s disappointing 0.2 per cent growth, the US’s anaemic 0.3 per cent and the glum eurozone average figure of 0.2 per cent. That number includes the surprising and alarming German 0.1 per cent, the desperately poor French 0 per cent and then, wait for it, the agreeably frisky Belgian 0.7 per cent.

Why is that, if you’ve been following the story, laugh-aloud funny?

Because Belgium doesn’t have a government.

Thanks to political stalemate in Brussels, it hasn’t had one for 15 months. No government means none of the stuff all the other governments are doing: no cuts and no ‘austerity’ packages. In the absence of anyone with a mandate to slash and burn, Belgian public sector spending is puttering along much as it always was; hence the continuing growth of their economy.

It turns out that from the economic point of view, in the current crisis, no government is better than any government – any existing government.

– John Lanchester: The Non-Scenic Route to the Place We’re Going Anyway

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6 Comments

  1. amba12 said,

    PROOF!

  2. Randy said,

    LOL! Perhaps, but I am a big believer the Law of Unintended Consequences reigning supreme at all times. Then again, their national finances/debt loads are said to be just fractionally less precarious than those of Spain, Italy, and Portugal

  3. mockturtle said,

    That’s hilarious! And, frankly, it doesn’t surprise me. The cost of government will bankrupt us, yet.

    In the doctor’s office waiting room yesterday, I picked up a copy of Time and read an article about the demise of the EU. The aforementioned data aside, it appears that the only reasonably solvent nations in the EU, Germany and France, would soon become insolvent bailing out the likes of Italy, Greece, Ireland and Belgium. And, because of the euro, a poor country, like Greece, cannot devalue its currency to increase trade and tourism. It’s a lose-lose situation that will continue to affect our own economy.

  4. Icepick said,

    Mervyn King, Bank of England Governor: “Dealing with a banking crisis was difficult enough, but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there’s no backstop.”

    That sums it up. The function of the governments of the world has been to make certain the financiers make money at the expense of everyone else.

    FTR – BOTA.

  5. Tom Strong said,

    I’m on vacation & unlikely to ever read the full article, but:

    No government means none of the stuff all the other governments are doing: no cuts and no ‘austerity’ packages.

    seems to me the very opposite of the claim being made here.

  6. wj said,

    It may be worth at least mentioning that Belgium’s biggest industry is . . . the EU. As the seat of most of it’s governing bodies, Belgium gets a huge influx of economic activity that is not subject to economic downturns, and that just keeps growing. The national government, by comparison, is a nit — and since the foregoing means that they don’t have an economic crisis to deal with, not having a national government in place doesn’t have that big an impact. But that’s nothing like what it would mean elsewhere.

    Actually, that’s not totally accurate either. Here in the US, the one place which had no economic downturn was . . . Washington, DC. And the fact that the local government (which is also the national government) was so disfunctional as to be effectively absent when it comes to DC, had no impact on the economy there. See, being the seat of government is the demonstrated road to economic security. How unfortunate that it is not readily transferrable to the rest of the country.

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