Monday, 8 December 2008

A global New Deal

It is striking in watching the Brown, Barroso, Sarkozy press conference today that a number of similarities are emerging with the new US Administration. It has the feel of a global New Deal that will not just help respond to the current economic downturn but build the infrastructure on which future growth will rely.

In his modern equivalent of Franklin D Roosevelt's fire-side chats, Barack Obama announced the shape of his economic stimulus package in his YouTube weekly address on Saturday. It includes investment to make public buildings more energy efficient, investment in roads and bridges, modernisation of schools, upgrading of the nation's digital infrastructure, and investment in IT for healthcare. The address can be seen below:

Then today, from Barroso, Sarkozy, and the Prime Minister we had a commitment to invest in digital technology, training and skills, and green industries. There are many similarities between the two approaches and it is a very positive response to both short and medium term challenges. It will create jobs, boost investment, and impact carbon emissions.

EU coordination (assuming Germany comes on board which may be an assumption too far....) and Obama's stimulus package mark a clear path to future growth. FDR and Keynes would afford themselves a wry and self-satisfied smile.

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