Vindication!

Aha!  I have been vindicated.  Two themes I've been writing about here at NBfPB are 1) there is no such thing as "austerity" going on in Europe, and 2) even so, what little fiscal retrenching European nations are doing will be good for their economies but yet be skewered in the press as disastrous, driven by all manner of delusion and/or fealty to nutty Keynesian notions of the economy.

Well, the WSJ carries an analysis piece today highlighting the confounding reality that the UK economy is doing well despite all manner of predictions to the contrary, all based on "theory." 

Here is the headline:

For five years, the British economy has persistently failed to behave as predicted by theory—and continues to do so with increasing evidence it is growing faster than almost any other major Western economy.

Some choices tidbits:

Yet this growth spurt has taken economists almost entirely by surprise. It is hard to identify a single leading forecaster predicting such a strong recovery at the start of the year, or even at the end of the first quarter.

As recently as July, the International Monetary Fund was so gloomy about the U.K. that it was advising the government to loosen its deficit-reduction strategy. This month, it raised its 2013 growth forecast by half, to 1.4%.

Gee, globalist government econo-bureaucrats were advocating more unaffordable government spending?  No kidding.

The answer to the first question is becoming clear: More policy makers and economists now accept that the most plausible explanation for the U.K.'s postcrisis underperformance and its recent outperformance lies in the workings of the financial system—something that barely features in standard macroeconomic models.

 Gee, f**k with the banking system and things go awry.  Where have I heard that before?

Previous attempts to blame the U.K.'s weak performance on the government's fiscal policies have been undermined by the recovery and by the fact that U.K. austerity hasn't actually been very austere.

 +1 for DB.

While economists argued over Keynesian demand-side remedies, the main problem was one of supply—specifically the supply of finance.

Stuck on demand-side thinking.  I think that was even the title of one of my posts!

If you want more background as to how supply-side economic analysis has been pasting demand-side (Keynesian) analysis these last few years, check out here and here.