If Labour has one overriding advantage in the current British election, it is the economy. Almost all the economic indicators steady growth, low inflation and low unemployment are strongly favourable.
On present trends in both countries, Britain is poised to overtake Germany as the largest single economy in Europe within a decade.
It has already done so in terms of per capita income. As a result Labour now has a healthy lead over the Tories as the party most trusted to deliver good economic management.
If Blair wins, that record will be the reason. Some people cannot quite grasp how bad that is for the Tories; economic competence had been their main advantage over Labour since 1931.
These headline statistics, however, obscure three underlying truths about the recent performance of the British economy:
1. As The Economist points out in its excellent election briefing, the recovery for which Blair and company now claim credit began not in 1997 when they were first elected, but in 1992 when the Tories still had more than four years to run.
All the favourable economic trends began in that year; they were kick-started by Britain's departure from the ERM (exchange realignment mechanism) in that year; and they had their roots in a series of economic policy decisions taken either in the 1980s under Margaret Thatcher or during the chancellorship of Norman Lamont.
The one policy change contributing to Britain's current success that Labour brought in was Finance Minister Gordon Brown's decision to give the Bank of England independent control over monetary policy.
This change, as The Economist notes, was "the culmination of a process that started" under Lamont.
2. The Tories lost their reputation for economic competence as a result of, first, joining and, then, falling out of the ERM.
ERM membership had inflicted a much more severe recession on the British economy from 1990 to 1992 than would otherwise have occurred.
And the Tories made a virtue of this severity. Prime Minister John Major at the time saying: "If it isn't hurting, it isn't working."
When Britain was forced out of the ERM, however, the economy began the strong recovery that now benefits Labour. Inevitably the blame for this needless hurt fell on the Major government which was in office at the time.
In reality, support for joining and staying inside the ERM had been strong across the political spectrum, including moderate Tories, the Labour party and Gordon Brown.
Flourishing economy
3. While Brown has presided over a flourishing economy, he has also been quietly weakening it by piling a large regulatory burden on businesses, shifting resources from the public to the private sector, increasing the costs of pensions, and imposing a range of "stealth taxes".
According to the British Chamber of Commerce, for instance, the regulatory burden between 1998 and 2005 was equal to approximately $75 billion (Dh276 billion).
Business profits are low for this stage of the business cycle. Productivity is static too. So the financial pages of the newspapers are making three predictions: there are likely to be tax hikes, a pensions crisis and a fall in house prices early in the next government.
Neither Brown nor Labour has been much worried by these likelihoods. Newspaper articles and Tory attacks could be easily brushed off.
Indeed, in the first economic skirmishes of the campaign, Brown and Blair had great sport denouncing the Tories for promising to spend too much and cut too much simultaneously.
Today, however, an economic concussion grenade, landed in the middle of the Labour campaign, is disorienting everyone.
A report from the International Monetary Fund predicted that the economy would expand by a slow 2.6 per cent compared to Brown's targeted figure of 3.4 per cent. Public finances were thus, it argued, spiralling dangerously out of control.
The chancellor would have either to slash spending or to raise taxes. The economic and budgetary assessment was bad enough. What made it worse was that it came from the IMF.
Again, no American can really appreciate the tribal memories that an IMF intervention stirs up in Britain.
It was in the 1970s, under the Old Labour Government of Jim Callaghan, that the IMF briefly took over the management of the British economy from the Treasury and insisted on public sector cuts in return for a substantial loan.
The news that the IMF was calling for such cuts again briefly reminded everyone of those years when the British economy was rent by strikes and stagflation, when rubbish piled up in the streets and the dead went unburied.
Was it all happening again? Almost certainly not. We live today in a post-socialist world. The labour unions no longer have their old powers.
Brown and Blair moved swiftly to reassure the markets that all was well. For a moment, however, doubt about the economy's future under Labour had been ignited.
Reality about Britain's shaky public finances had intruded into the manifesto dream. And once reality intrudes, then the picture of Labour's economic superiority is bound to be seriously amended.
John O'Sullivan, former advisor to Lady Thatcher, is editor-at-large of the National Review and a member of Benador Associates.
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