Today's news of a continuing douple-dip recession highlights the need for supply-side measures that will reverse the mistakes of the past 15 years.
An expanding private sector is the key to economic growth. The Labour Party seem to believe that fiscal stimulus is the key. However, with government borrowing close to record levels and showing no sign of reducing rapidly, that would be a huge mistake.
Indeed, the classic Keynesian problem of sticky real wages causing huge levels of unemployment and a prolonged slump does not seem to be occurring at all.
Real wages are falling and employment is rising pretty rapidly taking into account the restructuring of the public sector. Instead, we seem to have a serious growth problem related to falling productivity.
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