http://www.guardian.co.uk/business/2011/feb/25/uk-economy-contracted-by-0-point-6-percent
What would be the Austrian take on this?
Cheers - ESF
The impact of weather on the economies of the developed nations is less than it has ever been. So the report is a lie, more the weather is a scapegoat for the real cause of economic decline: Inflation, that is the Rothbardian definition as an increase in the supply of money and credit. The UK and USA have had to bail out financial interests by creating hundreds of billions in the case of the UK and trillions in the case of the USA. Now the disasterous effects of that inflation are being felt.
The main effects of the inflation are the average ones experienced by people through out history: 1. Massive increases in the debt levels held by government. 2. Massive dislocations of labor in the economy. What is different now due to the diversity of the Western Economies and competition from globalization is that price rises get contained. But in the USA that is breaking down with the high commodity prices.
But the paper and most economists miss the core issue. That is the giant game of chicken going on between the UK and USA, and their debt holders. And fortunately for the UK, the government is slowly caving in and cutting spending and allowing interest rates to rise marginally. But the USA is still daring the debt holders to cash in. The issue is that when one cashes in the others will race before their loans become worthless.