The venue was more prosaic than the rose garden of 10, Downing Street, and there were fewer smiles and other overt signs of cloying matiness. But David Cameron and Nick Clegg were united in claiming that the coalition's first priority is to get rid of the deficit and put the economy back on its feet. Quite right too, but the question is, and the difference should be, how do you do it? And which is the horse and which the cart?
The Tory policy is that the first prerequisite is to get rid of the deficit by cutting government expenditure and then the economy will revive. When government expenditure is no longer hogging the resources available for investment and "crowding out" the initiatives of innovative private enterprise, then go-getting entrepreneurs will move in to set up bright new industries, rebalance the economy and, hey presto, jobs are created, growth is restored and joy and prosperity abound.
Keynesians put it the other way round: revive the economy and then, as the tax take increases and welfare expenditure falls, the deficit will correct itself. Keynes also pointed out the obvious: that entrepreneurs will not invest unless they can be reasonably sure of a demand for their products. In a depression, therefore, the government can and should inject demand into the economy by public works (a massive house-building programme, infrastructure improvements, green energy technology - there is no shortage of projects). The income generated will have a multiplier effect as demand stimulates the private sector and, hey presto, jobs are created, growth is restored and joy and prosperity abound.
In spite of his greater coolness Clegg seems still wedded to the Tory view, at least on the surface. However, a "body language" expert observed, that "while (Clegg) gave Cameron lots of attention and nodded in all the right places, a look at his feet showed his weight was often on the foot furthest from the prime minister. Consciously he was being supportive , but his body was secretly trying to distance him from Cameron." (Peter Collett, Guradinan,09/05/12)
On such slender threads hang the hopes of a revival of the Liberal Democrats, and, more importantly Britain's economy.