The most tragic thing about the world’s economic leadership is its inability to discern the abject failure of the system.
As the global mess requires one rescue after another, each attempt is greeted with new joy, new rises in stock markets, and new talk of ‘risk-on’ being OK again. More and more, as time goes on, the architects, builders and occupiers of this crazy system from which we all suffer forget that they are supposed to be free-marketeers: Friedmanites who believe that the wishes of the market are sacrosanct, and must be obeyed. If the whole thing wasn’t so tragically disastrous for much of humanity, it truly would be very funny indeed.
So let me, just for a few paragraphs, speak plainly about it.
It is not ‘a wonderful thing’ that the world’s central banks have today announced they are pumping money into a banking system because the banks themselves don’t trust each other enough to do so. It is no better for anyone than the news two days ago that Jean-Claude Trichet of the EU Central Bank had thrown half a trillion dollars at the debt maintenance of three ClubMed countries because those same banks didn’t trust the Sovereign borrowers to pay up on time and over time. These are signs of desperation – of a mad global construct throwing the ship’s shelter from the elements into the engines, in a last, wild attempt to make shore.
Since 2004, everything in the world economy has been artificial…and about as efficient as a wooden leg. Earnings based on derivative sales produced notional money, not real wealth. Cheap commercial money kept stock markets unfeasibly high, and gave ordinary people a sense of wealth that was entirely false. 86% of the British economy was a confection, based on the foolish idea that we could go on and on selling more and more credit to more and more people who had less and less money to pay it back. UK employment was kept above realistic levels by swelling the ranks of the public sector, and inventing entire new professions based on health, safety, race or gender equality, and a litigious approach to existence. At the EU level, booms were manufactured with recklessly cheap ECB money and taxpayer subsidies. Recessions were postponed by showering the banking systems with money. Interest rates have been centrally slashed and maintained – although all the evidence shows it has not produced a recovery of any kind. Bank collapses have been avoided by the taxpayer buying toxic junk. Huge multinational profits have been declared thanks to hoarded money, despite falling sales. And now – ironic and ridiculous as it may seem – recessions are being turned into depressions with equally unnatural (and unattainable) programmes of pointless austerity….before any economic reconstruction has been even attempted.
There is nothing natural at all in any element of globalist mercantilism and globally connected banking. Not only is there no real need for it, it is based on an obvious philosophical flaw: that a random collection of nations at a hundred different stages of economic development can somehow magically slot together into a perfect jigsaw. Not only that, but those same countries five years from now will equally mysteriously produce a totally different jigsaw picture with an equally perfect fit.
In order to keep this fiction credible as some kind of irrefutable fact, in turn every indicator of economic health and malady has to be constantly fiddled, manipulated and adjusted in ways that have nothing whatsoever to do with markets, decisive or otherwise.
Today, there is hardly a currency in the world anywhere that truly reflects its issuer’s success or failure. The Yuan is far too low, the euro is far too high, and the US Dollar’s ‘value’ shifts purely on the basis of how much QE or T-Bill debt demand there is at any given time. The Dow’s level bears no relation at all to the economic ill-health of America: rather, it is where it is because interest rates have been elbowed down by the Fed, and QE has produced lots of cheap money for big profits to grow share prices. The price of gold is where it is because few people trust any investment that much any more, not because it is a useful metal with a natural growing demand. The price of oil has far more to do with Arab nations milking a cash cow than any real demand for it.
For two years now I have sat at this desk in front of this screen and seen endless debates about something that is impossible: the Double Dip Recession. It doesn’t exist because what we have in reality is a depression turning into a slump; the idea that there was natural recovery period between the two two doesn’t bear even the simplest interrogation.
Now many will say at this point in the argument, “Hang on – this is what Governments and central banks are supposed to be there for”. But that’s just it: to that minute percentage cleaning up from this rotten system, Governments, regulators, and lawmakers are scum standing in the way of a progression towards perfection that only they understand. The only role for Government in their eyes is to butt out and let them avoid tax as much as possible…but stump up taxpayers’ money each time there is ‘an adjustment’….so that things can continue on an ever upward trend.
The warped stupidity of globalist business interests and investment bankers, like their shameless greed, knows no bounds. All this has been said before, but what I’m trying to add here is one simple fact: on whatever criterion you choose to apply – broad social contentment, artistic vitality, life balance, family solidity, community strength, freedom from anxiety, honest trading, product quality, media objectivity and fair competition – it fails. And this failure is obscenely compounded by the fact that, not only is every part of its process unnatural, it requires human beings to behave in unnatural ways just to keep it going.
It cannot continue without credit that bankrupts families. It cannot continue without abuse of employees. It cannot continue without starvation of social weal administration. And it cannot employ enough of the population to maintain the State’s stability. Laughably, the percentage of the People it enriches is so tiny, it cannot even sustain a spending-led recovery without panic-stricken resort to the Governments it despises.
Almost nobody among the world’s elites discerns (or admits to discerning) the totality of this model’s hopeless failure. The time is now overripe for both their cognition of, and honesty about, this reality. Our electorates have little enough respect for them as it is. Without serious focus and attention now, before too long they will start to turn to others who seem to have more ability – but have even fewer scruples.
The Slog 