This morning comes the news that France has slid into recession. Schadenfreude is not a French word, but when the principal architect of the Eurozone finds its economy at last being ravaged by the consequences of its own policy, onlookers are entitled to smile somewhat. And all the more so since the Torygraph reports that in the face of a slew of encouraging economic data from the UK, the Bank of England is likely to upgrade its domestic growth forecasts.
I'm pleased our economy seems to be doing a bit better at last, not the least because it's funny to see the George Osborne's critics gasping and flapping at the news that there hasn't been a triple-dip recession and there probably wasn't a double-dip either. And yet I have some sympathy with Allister Heath, who, in a sceptical piece in the Torygraph today, writes that "Directing subsidised credit towards the housing market, as the Help to Buy and Funding for Lending Schemes are doing, is an absurd, reckless policy which suggests Osborne has learnt nothing from the sub-prime crash . . . it is a gamble that will end in tears".
I don't think that all the marginal uptick in growth we now seem to be seeing can be entirely due to Osborne's schemes. Some of it will be the natural recovery in animal spirits that happens when people just get tired of feeling down. But Osborne's efforts will have had something to do with it, and I think Heath is right.
In the years before 2008 there was a massive misallocation of funds into property, leaving housebuyers overextended and banks sitting on zombie assets. Given that the ideal solution - allowing the banks to fail - is impossible because of their structural importance, the second best would have been to allow time and a little gentle wage-inflation to do their subtle work.
Yet instead of waiting while air gently leaks out of the balloon, Osborne has chosen to pump it up still further. Has he never heard of Fannie Mae and Freddie Mac? These were state mortgage guarantee schemes which had to be bailed out when US banks, divested of the consequences of irresponsible lending, lent irresponsibly.
Perhaps after all this is Plan B - do more of what got us into trouble in the first place.
