{"id":540,"date":"2026-07-19T23:09:54","date_gmt":"2026-07-19T23:09:54","guid":{"rendered":"https:\/\/cityflowjournal.com\/?p=540"},"modified":"2026-07-19T23:09:54","modified_gmt":"2026-07-19T23:09:54","slug":"wheres-the-economic-strategy-andy","status":"publish","type":"post","link":"https:\/\/cityflowjournal.com\/?p=540","title":{"rendered":"Where\u2019s the economic strategy, Andy?"},"content":{"rendered":"
\n

At the World Cup, a single misjudgment by the manager ended the England team\u2019s hopes of reaching the final. In politics, Keir Starmer never recovered from sending Peter Mandelson onto the pitch. Luck, too, played a role in the downfall of both the Three Lions and the outgoing prime minister. But when football teams or politicians keep on failing, it cannot be explained by fortune alone.<\/p>\n

Read more Inside Liz Truss\u2019s America-brained CPAC<\/a><\/p>\n

When Bill Clinton got elected in 1992, a newspaper dispatched me to Washington, where I followed his first two years in office. He had a lucky break during the election campaign, but did not owe his victory and political success to that. This was the new era of post-communist financial globalization. Many of the smart people at the time were on the center-left of politics, and Clinton was their man. He was a reactionary on law and justice, but his welfare-to-work policies were inspiring. The center-left of Clinton\u2019s generation saw welfare as an insurance policy, but also as a poverty trap. As a result, they pushed for people to get back into work. Clinton committed his own share of policy errors, like the deregulation of the financial industry. But he started off with an intelligent agenda.<\/p>\n

Clinton was also a politician with a keen interest in macroeconomics. He was not an economist, but shortly after he got elected, he assembled a group of experts to help him draft his program for his time in the White House. His strategic goal was to reform welfare and the health system while at the same time eliminating the fiscal deficit.<\/p>\n

Today, 34 years later, Andy Burnham will become Britain\u2019s latest prime minister. What do we know about him? It is true that he did not have a lot of time to prepare his agenda. The time between a US presidential election to the inauguration is a little over two months \u2014 with a Christmas and New Year\u2019s break in between. This is a little, but not much more, than the time between Burnham\u2019s victory in the Makerfield by-election and his arrival at No. 10. Certainly, it does not take years to formulate an economic strategy.<\/p>\n

It is the implementation that takes longer. Clinton did not have it all worked out, but he set goals and intermediate targets, and developed a clear idea of the political and real-world obstacles that would stand in the way. Burnham has expressed a lot of ideas about British society. He has policies \u2014 but I\u2019d struggle to identify an overarching strategic objective beyond the usual platitudes of social justice.<\/p>\n

Burnham inherits a problem that his predecessors failed to address. Productivity growth in the UK collapsed directly after the global financial crisis in 2008 and never recovered. Until then, the City of London was the gift that kept on giving. In Germany, it was the car industry. One European country after another lost its business model. What happened in all of these countries, including the UK, is that more and more people become dependent on welfare. It became normal. Germany renamed its welfare program a \u201ccitizen\u2019s income\u201d, as though it were a basic human right. But the shift from welfare as an insurance policy to a welfare as a personal choice has trapped European societies in a vicious circle. The greater their welfare dependency became, the more they fell behind in investment and innovation.<\/p>\n

Burnham has not given us any plan to fix this problem, let alone one I could disagree with. There are socialist ways of raising productivity growth, and libertarian ways. But let\u2019s not get hung up on ideology. The fall in productivity growth is not about who gets what. It\u2019s about investment, and most investment comes from the private sector. Companies invest to become more productive and innovative.<\/p>\n

What does Burnham think about private-sector investment? I haven\u2019t the foggiest, and nor does anyone else. I don\u2019t get a sense that this is a question that keeps him up at night.<\/p>\n

He has, however, thought a lot about public-sector investment. But the two are not the same. About 80% of all investment in the UK is from the private sector. So if Burnham pushes ahead with his public investment plans by raising taxes, what I\u2019d expect to see is a fall in private investment that exceeds the rise in public investment. It\u2019s basic math.<\/p>\n

Granted, we\u2019d all like to have better trains. But fixing the trains has nothing to do with productivity. The US is a country with a terrible railway network, and with high private-sector productivity. France has Europe\u2019s best railway system, but the trains have not stopped the French economy from becoming increasingly dysfunctional. Everybody needs to get to work, but the comfort and speed of the journey is at most marginally related to our productivity.<\/p>\n

The productivity problem can only be solved through strategic action \u2014 just like Clinton addressed structural fiscal deficits and welfare dependence. Emmanuel Macron, too, was a welfare reformer, but he had no fiscal strategy. This is what has rendered his presidency a failure. A recent estimate from the French High Commission for Strategy and Planning found that France\u2019s debt could rise from a current level of 118% of economic output to between 186% and 245% by 2050.<\/p>\n

Read more Burnham faces an insurgent Britain<\/a><\/p>\n

The center-left used to be good at strategy. Clinton was. So were Tony Blair and Gordon Brown. To be clear, I am not endorsing anyone here. This is not about whether we agree or disagree with their policies. My point is that these people had some strategy. But since Burnham has not told us what his strategy is, we can safely assume that he does not have one. Macron had one, but as I say it failed the fiscal test. This is a bit like going to war and being shocked that the enemy fights back, which is what happened when the US and Israel attacked Iran.<\/p>\n

As for Starmer, he clearly was not a reformer, but at least Rachel Reeves imposed fiscal rules that kept the show on the road. But, again, have no clear idea where Burnham really stands on those rules. He said he would follow them, but this is easier said than done unless you have a clear idea of what to do when the numbers no longer add up.<\/p>\n

So rather than leaking the names of Cabinet ministers, maybe Burnham should have told us about how he intends to fix the productivity problem while keeping the country solvent. At this point, we don\u2019t need details. We need direction.<\/p>\n

Burnham has lots of policies, for example on devolution. I am not against this. It is possible that local governments spend money more wisely than central government. The other way around is also possible. Either way, there is no link between the degree of decentralization and innovation. Silicon Valley is not where it is because of Californian politics. It is there because of Stanford University, and because some of its most brilliant entrepreneurs, like Steve Jobs, grew up there.<\/p>\n

Burnham knows local politics better than most politicians do: and maybe it is easier to fix some problems locally. But it borders on delusional to think that you can draw lessons from the governance of Manchester for the UK as a whole. Cities don\u2019t have bond markets, nor currencies that can devalue. And the mayor of Manchester does not have to put up with Donald Trump. The idea of a Northern No. 10 is a nice publicity stunt; but it is about appearances, not substance. I therefore make one specific and confident prediction: Burnham will not solve the UK\u2019s underlying economic issues.<\/p>\n

That said, he may still succeed politically. Elections, after all, are zero-sum games. Someone has to win. Starmer got his whopping majority not because he had a brilliant plan, but because people preferred his lack of a plan to the Tories\u2019 version of a lack of plan.<\/p>\n

Electoral success and problem-solving are not the same thing, of course. Margaret Thatcher would probably have lost the 1983 elections had it not been for the Falklands War. Angela Merkel managed to win four elections in a row and yet failed to address her country\u2019s economic problems.<\/p>\n

But the importance of problem-solving (or lack thereof) does not mean that you should keep ignoring the economy. The persistent failure of the previous generation to address the problems of a permanent decline in productivity has made European countries harder to govern. And the longer people are trapped in the welfare system, the harder it will be to get them out again. If you fail to solve a problem for long enough, eventually it catches up with you.<\/p>\n

The odds of a successful Burnham premiership are shortening precisely because previous prime ministers have prioritized short-term expediency over long-term strategic action \u2014 and because it looks like he will do exactly the same. But we are already living in the long-term. The fact that politicians like Cameron or Johnson succeeded politically without solving the country\u2019s deep-seated problems does not mean that the current generation of politicians will enjoy the same luxury.<\/p>\n

In politics, as in football, outsiders can win, and favorites can lose. But we should not fool ourselves about Burnham. He does not have a strategy to fix the British economy. Those who are hoping he will do it by chance will be disappointed.<\/p>\n

Read more What \u201cPride\u201d tells us about progressive prejudice<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

At the World Cup, a single misjudgment by the manager ended the England team\u2019s hopes of reaching the final. In politics, Keir Starmer never recovered from sending Peter Mandelson onto the pitch. Luck, too, played a role in the downfall of both the Three Lions and the outgoing prime minister. But when football teams or […]<\/p>\n","protected":false},"author":1,"featured_media":539,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[65],"tags":[],"class_list":["post-540","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"yoast_head":"\nWhere\u2019s the economic strategy, Andy? - \u0421ity Flow Journal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cityflowjournal.com\/?p=540\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Where\u2019s the economic strategy, Andy? - \u0421ity Flow Journal\" \/>\n<meta property=\"og:description\" content=\"At the World Cup, a single misjudgment by the manager ended the England team\u2019s hopes of reaching the final. 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