Bubblehammerblog

Mandelson, at the weekend: "Internationally people say to me, Your Prime Minister has been transformed. His standing has soared. People really do look to him like some Moses figure who is going to lead them away from this economic mess to the promised land."

I present the above quote to indicate the level of delusion now gripping some sections of our governing classes, & the stark contrast between their perceptions & those of the reality-bound general public, or what used to be called the masses.

Anyone who has much of a memory, & has paid the least attention to recent events in the world, can conceive an outline of what's happened - we've been been gobbling up credit, the banks are sitting on worthless piles of paper, nartural resources suddenly look finite...

And Moses proclaims, Give banks money to get credit circulating, stimulate more growth, spend more on stuff, like you did when you thought it was free.

We don't demand enough of our Prophets.

I live in a large Post Industrial city in the North of England. When I was a kid the city was predominantly black or dark brown, as were the rivers that ran through it. In the city centre the sandstone civic buildings were bible black. Whole swathes of the city were nothing but long roads of huge factories, rust & black corrugated iron, with big peeling green 'vacancies' boards at the gates. Flames from furnace doors licked the night sky, the earth shook with the thud of forge hammers. People coughed & steamed on packed buses, sang in pubs on Thursday nights.

In thirty years the city has been transformed. It can now be viewed in colour. The civic buildings have been scrubbed, tubs of exotic foliage surround them. The gleaming city centre shops are ringed by broad roads jammed with shiny new cars. Cranes sweep the sky. The factories have gone. Singing is not encouraged on licensed premises.

Something always troubled me about this metamorphosis. I've studied economics at an English redbrick university, though the course lectures & tutorials had, by sheer bad luck, been scheduled to conflict with my drink & drugs intake, so I was denied the chance to develop a proper grasp of the subject. But I did manage to gain the insight that the creation wealth is related in some fundamental way to the production of goods.

I've witnessed this profound change, from a city manufacturing metal stuff that was hauled out on lorries & trains, to a richer, more modern one that appears to make nothing. How would I explain this to an enquiring ten year old?

Which brings me to my introduction. I usually refuse to click on the Google sponsored ad you see on stacked at the sides of webpages. The other day I found myself looking at a website I'd clicked on before I could stop myself. Oddly, it didn't seem to want flog me anything, saying at the bottom of the page: If you are formulating a strategy for a business or are an individual trying to safeguard the future for your family we can help you to understand the underlying trends and to anticipate what the future holds.

After half an hour of reading I had the impression that here was as clearly presented & plausible an explantion of the current economic crisis as I've come across. Read it here at How it Ends.

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