I Wouldn't Start From Here

To my eternal shame, I did once prefix some especially complex directions with the above comment. In my defence, the driver had just pulled up next to me and I needed time to think. We were also in Cambridge, and he wanted directions to the rail station which was on the other side of a rather horrible one-way system. So I do maintain that it was fair comment. His expression suggested that he disagreed, though.

It's a common situation, though, to realise that the reason why the choice facing you is so difficult is that you made a stupid decision earlier, and that you are now facing the consequences of your own stupidity. My RAF flying instructors long ago emphasised thatyou must always try to keep an alternative option open, in case your initial decision proves to have been wrong. For example, take a parachute with you, and stay high up enough to be able to use it.

The current economic situation feels like an example of this maxim. Those who know me, know that I can always find a driving analogy - so here it is. Imagine it is a winter morning, and you are driving along a clear open stretch of motorway under bright blue skies. All is well, so you put your foot down. You reach a long sweeping bend, which you effortlessly glide around. To see two things ahead of you in the bend.

First, a large area of shadow cast over the tarmac by the embankment, in which the night's icy frost has not yet thawed. Second, a large pile-up just beyond the ice.

Now, if the other cars weren't sitting there, in their mangled glory, you could just about make it around the rest of the bend to the clear straight tarmac beyond with perhaps only a minor dent in your ego and a little use of the lanes either side. Equally, if the ice were not there, you could draw the car to a halt in the remaining distance. But you can't do both.

In this situation, it is pointless to engage in a binary dispute of the "should I steer or should I brake?" variety. The simple fact is, you need to steer precisely AND you need to brake hard. But you can't, and the reason is that, fool that you are, you charged headlong around a bend on a cold and icy morning and left yourself with only one option - to drive along a clear and open road. That option has vanished, and you are left with no (palatable) alternative options.

We are, economically, in an analogous situation. We need to reduce the deficit; it is too high, by any measure. The interest on the existing borrowing is eye-watering, and we are testing the patience of the people who are lending us this money. We also need to maintain expenditure; this is feeding money into the economy and to remove it will only make things harder.

So we need to do both. But we can't. Just as our hypothetical driver wanted to reduce his speed, but couldn't because he also needed to steer, we want to reduce the deficit but can't - because the economy is on an icy patch and now is not the time to make sudden large movements.

This is going to a bold statement, a huge claim, but here goes nothing: I think that this is the largest single error made by Gordon in his 13 years at the economic helm of this country. We should have slid into this recession with borrowing at an all-time low, ready (if necessary) to increase the deficit to maintain spending to cushion the hurt and ease our way out.

But Gordon made the wrong call and left us with no leeway, no alternative option if his "end to boom and bust" proved to be wrong. And now we face the consequences.