The end of the 'confidence fairy'

The US were doing better but there are signs of contraction there again

Very good Guardian article. The journalist is right that the victory of Hollande and teh Greek people's rejection of austerity is a significant change. People no longer trust their elitist, out of touch politicians who tell them that austerity is necessary for the people, while they bail out teh bankers who still receive their bonuses.

The new breed of politicians is actually listening to the people and not the bankers and is rejecting austerity. And frankly that is the right thing to do. So if it means that left wing parties defeat right wing parties then that is how it should be because listening to the people and carrying out the right policies for the people is what is important, not left or right.

Cuts are not the way out. Spain and Greece have been cutting and cutting and the rating agencies still downgrade their credit. Cuts don't bring growth, it is spending that brings growth. But not wasteful spending; spending on productive things that provide employment and infrastructure etc.

Instead of loaning billions and trillions to banks, invest millions in people and companies, and the economy will begin to turn around.

What is the answer then? I can't see how spend spend spend can make things better. So if the Greeks vote against austerity and carry on spending who is going to pay for it. Don't know who will win the next election but I think the Lib Dems are finished.

breadandbutterfly asked the question "when are we going to get a British Hollande"?

That is a question that everyone will soon be asking and that Miliband will soon be answering.

Hollande's victory is a gamechanger. They talk about a game of two halves. The first half was about austerity, but the second half will be about growth. Can the present team adapt, stop scoring own goals and give the public something to cheer about?

I used to think that the Tories would win the next election, but now I have changed my mind. The gamechanger is Hollande. I think he will succeed in partially reversing austerity and creating growth. He will act as a beacon of hope for everyone who wants growth and the way things are going, Cameron will still be talking about the need for austerity. People will contrast the two, and if Hollande is successful, which I think he will be, and also in changing Merkel's mind, then Cameron will lose out.

Before Hollande, I thought that however unpopular Cameron is now, that he would still win. But now that Hollande is here, people have an alternative to look to and listen to, and Cameron may end up charging at the windmill of austerity with Sancho Osborne by his side.

I don't have as many personalities as you do; I only have the one.

I am still a Tory, but that doesn't mean that I think they are right on everything, just on more things than New Labour.

I have never backed austerity. I believe that it was done deliberately to impose cuts on pensions, increase working age and cut living standards in a bid to slow the growth of the people, in order to benefit the elite. I don't think the Tories were responsible for it, they just took over after New Labour left the note saying "sorry there's no money left".

By populist, if you mean that I read the Daily Mail and am with the people, then I make no apologies for that.

I still support the Tories and hope they change and listen to the calls for growth. I think that some of teh leadership is unfortunately out of touch and tehy need MPs like Nadine Dorries in the Cabinet. She understands the people and comes from a working class council house background.

The more I think about it, the worse it looks for the Tories. I think they will be forced to change their policies because Hollande and eventually Merkel will do so. But if they leave it too late, then they will look even more out of touch and as if they got it wrong. The public will not see them as leaders, but as followers of a wrong policy. Once the public lose faith, it will be curtains and we will see the return of New Labour.

I'm also confused by claig's apparent loss of faith in the Tory love, but maybe I'm misunderstanding something.
Really interesting article. I've been fascinated by how much the "socialist" Hollande and Obama seem to agree with each other - do the Republicans realise?

So do you no longer support the sociopathic Tory scum, now, claig?

What the hell claig? Exactly how many personalities do you have?

One second you're a rabid Tory, backing austerity measures to the hilt, agreeing with "niceguy's" bullshit about 'we lived beyond our means' blah blah and now you want the government to invest in public infrastructure and spur on growth?

What the hell?! Is it because you're just so damn populist that you go wherever the wind takes your sails?

You're utterly confusing. A bit funny, but utterly confusing.

When the public mood changes, it changes fast. When the public looks across the Channel and watches Hollande, and when they hear that if the Euro collapses, that we will be the country worst affected in the whole world, then the public mood change will be like a tidal wave, and unless changes are made and growth becomes a priority, then the Tories risk being swept out of power.

I think we may be seeing the beginning of the end of austerity. The French people have had their say and Hollande is the start of a voice that says the emperor has no clothes. The austerian is on the back foot, saying that austerity is growth. The tide has turned, the mood has changed and the austerian will struggle to put Jack back in the box.

Ed Balls, you say? Go away!

And where is today's Keynes when we need him?
Cometh the hour, cometh the man. I can't see him, maybe you can.

And when the public, just like Oliver Twist once before, goes up and asks for more, the austerian turns and says what do you take me for? there is no more, don't you know the score? the bailout took everything you had and more.

Instead of investing in the economy and growing food and planting seeds, the austerian's only answer is to cut and leave the economy like a bed of weeds.

Krugman says it is the end of a fairy tale. He is right.

It is the end of a financial fairy tale of folly. The banking system was exposed, the emperor had no clothes, and as ever, the public was hosed.

'The conflict is between cutting the size of state spending down to a size where the state income can cover it'

But they didn't cut the spending to the banks, they bailed them out with billions, said it was quantitative easing, to stop the banks from seizing. But what about the people in the rest of the economy, those who don't earn banker bonuses, who are now having to pay?

They bailed out banks, they bailed out Ireland, they spend billions on aid, maybe they could spend some on the people too.