When America Sneezes....

August is known in the media trade as the silly season, but there's nothing much to giggle about at the present financial "meltdown".

Arguably it's a bit more important than floods, foot and mouth and even a couple of lunatics trying to blow up a Jeep in Glasgow, since this touches all our lives in an economy that has been "re-tuned" over the past ten years to pay for the copper bottomed pensions of public employees. The pension funds that rely on stable and growing equity markets to fund private pensions are getting hammered, which means their customers are also getting hammered, although the value of a pension may seem a tad remote to those not within striking distance of retirement age.

However, the Tories are at last making Tory-like noises in terms of tax cutting; and the Labour Party responds as expected with tales of scares of cuts in public services. But by now a growing section of the public will be wondering just what benefit has actually accrued from the extra billions taken in taxes (especially those stolen from pension funds) by Gordon Brown have gone during his reign as Chancellor. But don't wonder to long and hard, because the short answer is that nearly all of it has been wasted.

One glib answer is that the cash nearly all has gone on employing many who could not find a productive job elsewhere in the economy, for the simple reasons that there are precious few productive jobs in the UK economy these days. Minding speed cameras, monitoring diversity quotients in local councils and weighing dustbins does not actually help us in global markets.

In fact, some aberrations like the pernicious Health and Safety culture that now prevails positively curtail our competitiveness in global markets, where many of the most productive economies would dismiss most of the absurdities the H&S Nazis impose on us all as the work of people with nothing better to do. Which of course, they don't.

Against this background of pointless work creation and given that public purse pays for some 30% of all UK employment, the idea that half of that cash can be saved without threatening the necessary public services doesn't seem quite so improbable. Let's hope Cameron hasn't damaged himself too much already so that a dose of policies built on inescapable economic realities that are denied by Labour will get the hearing they deserve.