Outlook: The US vs. The UK

July 6, 2011Marketsby David Smith

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United:Cameron and Obama are struggling to get their derailed economies on track
The UK & The US: Same Problems, Different Results

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 So what will the future hold for these two nations, whose politics and economies are so inextricably linked? Whatever happens, the UK is certain to imitate much of what is pioneered in the US.

Related: UK Economic Forecast

Related: US Economic Forecast

“We are always very influenced by American stuff,” said Wilkinson. “I often think other countries are protected by not speaking English, so their ‘thinking ideologies’, from academic journals to soap operas on TV, are different. As academics, we read the same journals, and contribute to creating the same frames of reference. When American academics look at another country, it tends to be an English-speaking one.”

 Dorling finds another disturbing parallel between the political elite in the UK and in the US.

“We have a cabinet in the UK largely made up off privately educated millionaires. We think of class and privilege as British traits, but in the US, almost every senator is a millionaire. In fact, in electing millionaires, we are becoming more like the US. Even Obama went to the most expensive private school in Hawaii, just as David Cameron went to the most expensive private school in the UK. If we go back 30 or 40 years, MPs and senators were drawn from a wider spectrum. This is important because governments want to help, but what they know is constrained by their experiences.”

Despite his disillusionment with politicians, Dorling sees grounds for optimism.

“The real optimist in me thinks that a second, slightly less serious, financial crisis would grant the Conservatives and Liberals the power to do something about it by taxing the rich. We have some of the richest people in the world in the UK, so higher taxation is a good source of income, but it’s a lot harder for the Labour party to do it. For the Conservatives, it would be a remarkably easy thing to do and a huge vote winner. They could say they were taxing people with estates worth over £2 million for the good of the country and only lose a couple of votes for a few millionaires,” he said.

David Smith,

EconomyWatch.com