U.K. Chancellor Takes Swipe at Obama's Economic Policies

EU Parliament member Daniel Hannan on global economy, debt crisis


NEIL CAVUTO, HOST OF, “YOUR WORLD”: To the Obama slap from across the pond.

Take a look.


GEORGE OSBORNE, BRITISH CHANCELLOR OF THE EXCHEQUER: Surely we have learned now that growth cannot come from yet more debt and more government spending.

And, Mr. Speaker, those who spent the whole of the last year telling us to follow the American example with yet more fiscal stimulus need to answer this question: Why has the U.S. economy grown more slowly than the U.K. economy so far this year?


CAVUTO: All right, translation: thank God we didn’t make the same mistakes that President Obama did. That was British Chancellor George Osborne. He’s sort of the guy behind their exchequer, or treasury, if you will.

Something tells me this young man will agree. Daniel Hannan of course the first to put sort of insult to paper, but he was challenging a then sitting prime minister to his face, Daniel Hannan, a member of the E.U. Parliament.

Daniel, what did you think of that swipe?


The countries which decreed the biggest bailouts have been the ones which have had the most severe slowdowns. And you don’t have to be brilliant to see why that’s the case. Governments around the world reacted to the crisis by doling out more of the medicine that had made the patient ill in the first place. So we had a problem that interest rates had been too long for too long, and they were cut further.

We had had too much debt, and debt was put up further. We had creeping inflation, and now inflation is being deliberately stoked. The state was too large and now it’s larger still, and whereas we began by bailing out banks we’re now bailing out entire countries. And, you know, we’re wondering why none of this works.

CAVUTO: You know what I’m wondering about, Daniel? Your country’s sort of trying to cut a lot of this apron string that has been going on for many, many years. There’s an effort in Europe to do so here. It’s facing a great deal of resistance across the board.

But that’s the direction, at least. In our country, the United States, we’re in the opposite direction. What do you make of just that weirdness?

HANNAN: It is weird. And it’s very unusual.

If you had stopped at any time in the last 30 years and said the United States will be taking lessons from some pantywaist European Christian democrats on how to cut spending, you’d have been laughed at.


HANNAN: But, you know, I am talking to you here from Belgium. And Belgium actually is growing much faster than either the United Kingdom or the United States.

CAVUTO: That’s right.

HANNAN: And you know why? They have not had a government here for the last 14 months. And as a result of not having a government, they can’t have any more regulations, they can’t have any bailouts, they can’t be rewarding rent-seekers.

Simply by doing nothing, they’ve allowed the private sector to grow a little bit faster than the state sector. And that’s really all you have to do.

CAVUTO: That’s interesting, because we have a Congress that’s in an August recess here. I know these August holidays are not unusual in Europe, but there has been a push in our country, get these guys back to work and do something. Maybe they shouldn’t come back at all.

HANNAN: Yes, I love the states that have limits on how long the legislatures are allowed to meet. And they tend to be the states which have the lowest taxes and the fastest growth rates.

The idea that politicians are a solution to problems is one that we have surely by now tested to destruction.

CAVUTO: By the way, while I have you here, Daniel, we had Charlie Gasparino, one of our great reporters, saying, you know, Europe is still not out of the woods, a lot of bad problems to come. This volatile week proved it. We haven’t removed it.

What do you say?

HANNAN: I agree.

The real problem is to do with the determination of almost all the E.U. governments to preserve the monetary union, pretty much regardless of the cost to their citizens.

You were talking early in your program about the downgrade in France. It is not because of some new weakness in the French economy. It’s because the markets have realized that France and Germany are the assuming the liabilities for debts in Greece, and Portugal, and Italy and Spain.

And you can’t carry on assuming somebody else’s liabilities without your own creditworthiness coming into question.

CAVUTO: Daniel Hannan, always great having you on. Thank you, sir.

HANNAN: Thank you, Neil.

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