It is commonly quipped that those who fail to learn from history are doomed to repeat it. It's particularly discouraging when the history that is being repeated happened merely six years ago. Yet, that's the situation in which the United Kingdom, led by conservative Prime Minister David Cameron, finds itself.
The Conservative Party, which is in an ideologically awkward coalition government with the Liberal Democrats, is facing tough reelection prospects. The latest poll aggregate, calculated by UK Polling Report, shows the center-left Labour Party leading the Conservatives 39 to 31 percent. The Liberal Democrats are polling at 10 percent, and the euroskeptic UK Independence Party (UKIP), which favors withdrawal from the European Union, garners 11 percent of the vote. This is deeply troublesome for David Cameron, as UKIP supporters are most likely disgruntled conservatives.
In what appears to be a desperate attempt to change his fortune, Mr. Cameron has endorsed a dubious policy: A "Help to Buy" scheme that allows prospective home buyers to put down a mere 5 percent on a mortgage. The idea is that "regular folks" cannot afford to buy homes because they are too expensive, so Mr. Cameron wants banks to offer very small down payments. In exchange, the UK government is willing to provide loan guarantees of up to £12 billion. In other words, Mr. Cameron wants to subsidize homes for people who otherwise can't afford them.
Does this all sound awfully, crazily, creepily familiar? It should. In 2007-08, the world was plunged into recession following a subprime mortgage crisis which kicked off a financial crisis that we are still dealing with today.
European Journal, a television program produced by Deutsche Welle, had an excellent report on the subject. (See video at the 6:41 mark.) The reporter interviewed Sam Bowman of the conservative Adam Smith Institute, who said, "I don't think there's anybody really in government who really thinks this is a good idea. If they do, then we should be terrified that they're running the country."
For his part, Labour leader Ed Miliband wants to freeze energy prices for 20 months. Over the last three years, energy prices have increased by 30 percent, partially as a result of policies implemented by previous Labour governments. Even worse, The Economist believes that a price freeze would actually backfire:
By saying that he plans to freeze prices in 2015, Mr Miliband risks freezing investment now and triggering a longer and deeper energy crunch from 2014. And that, in turn, would ultimately lead to higher prices—precisely what the Labour leader says he wants to avoid.
Right-wing and left-wing populism rarely makes for good policies, but it appears that appealing to the masses is just too tempting for most politicians. It's as if many of them slept through 2007.
(AP Image)
