Article It’s the economy, stupid Short-term pain for long-term gain 06 Oct 2020 — 2 min read The Team Stephen Newton The phrase, “it’s the economy, stupid”, was once used to great effect in Bill Clinton’s successful presidential campaign in 1992. Almost 30 years on, the UK Government would do well to consider it. The current UK Government policy is a mishmash of trying to balance their popularity, the welfare of the UK public and the health of the UK economy (in that order). But all of these aspects are being pondered through a short-term lens. In fact, such a short-term lens that it would be hard to claim there is any strategy here, simply tactics. This has led to confusion, rebellion and most worryingly, long-term structural damage to the economy and the future welfare of citizens. Critics would argue that Donald Trump contracting COVID-19 is a representation of how the country has managed the pandemic: badly. The US has experienced the greatest loss of life from COVID-19 to date. From NYC being the original epicentre, through to the wave of cases that erupted across the South. Critics would argue that Donald Trump contracting COVID-19 is a representation of how the country has managed the pandemic: badly. Yet, this is also short-term. Stepping back from the significant loss of life, the long-term prospects of the US, and those US citizens, are surely more prosperous that those in the UK. That is partly because the US has accepted short-term pain for longer-term gain. Compare the UK and US stock markets. The US stock market, represented by the S&P500 has far outstripped the performance of the UK FTSE. Compare the UK and US stock markets. The US stock market, represented by the S&P500 has far outstripped the performance of the UK FTSE. The FTSE started the year at around 7,600 and is now at 5,900. Whereas the S&P500 started the year at around 3,200 and is now at 3,300. This doesn’t just matter to the 1% at the top; it matters to every person who is relying on a pension to pay for their social and physical wellbeing in retirement. A large part of the S&P500 is made up of tech stocks which some would argue were immune, but that is only partly true. US workers got back to the office quicker than UK workers and US shoppers got back to the outlets, bars and leisure venues quicker than the UK. The UK Government has to accept that a strategy which provides longer-term welfare to the citizens of the UK will come with some short-term pain. If they don’t then they’ll find themselves waging a war based on tactics rather than strategy for the foreseeable future.