I’ve lost count of how much money the Fed, the ECB, the Bank of England and the other central banks are pumping into the world wide economy to stimulate growth. The amount is so large I doubt there’d be enough room on one line of text for all the noughts involved. How much is a trillion anyway?
I’m no economist. I accept I have no qualification to question the actions of important central bankers; I can’t help wondering though, have any of the eminent treasury experts who are making these decisions stopped to think about the consequences of what they’re doing?
Presumably all this money that’s being pumped into Western economies is being borrowed from somewhere. Anyone stopped to question how we’re going to pay it all back? As I understand it manufacturing in the West has pretty much disappeared. Obvious question is; if we don’t make anything anymore, what are we going to sell? And if we’ve nothing to sell, how are we going to generate money to pay back those massive loans? Hopefully I’ve missed something obvious; but if I haven’t, what’s the fall back plan?
It’s prudent, before big decisions are put into practice, to ask why? Why are we doing this? What’s the point; what are we trying to achieve? It’s also appropriate to take at least a cursory look at the risk involved; or to put it another way around, is the objective attainable?
Therein lies the problem; for precedent would suggest the plan is flawed. Seemingly the Japanese tried it a few years ago, and it failed; but we’re all conveniently forgetting that. No-one seems concerned about this Japanese accident of history. Maybe they should be; for according to Karl Marx, history repeats itself, first as tragedy, then as a farce.
But let’s not be unduly pessimistic; 40,000 Frenchmen can’t be wrong. All the experts seem to be agreed that re-flating the economies of the world is the only way out of the current crisis. Surely they must know what they’re doing, mustn’t they? Hang on a sec, aren’t they the same guys that told us house prices were ok, or at worst were set for a soft landing. Some soft landing eh?
Based on their track record shouldn’t we ask, do they know what they’re doing?
Their approach to the current crisis seems to be trying to turn the clock back; to get the economy back to where it was before the crash. The thinking seems to be if we can get back to where we started from, then everything will be ok again; but will it?
By releasing all these trillions into the world economy the central bankers hope to rebuild economic activity and get us all back to work again. Sounds great doesn’t it, but hang on a sec; shouldn’t we at least spend some time trying to find out what went wrong last time around? If not, are we not in danger of re-building another fiasco? Are we not just reconstructing another house of cards? Since it all failed so spectacularly last time, what makes the central bankers and economists think it won’t just fall apart again?
Ordinary people in the street knew the boom of the last ten years couldn’t possibly last. Every single one of us knew it was only a matter of time. And when the collapse came, were we surprised? Not at all; sure we all knew it couldn’t last. So why are our Governments trying so hard to get us back to where we were?
Wouldn’t it be better if we tried to adjust to the new reality, rather than pretend it will somehow go away? Shouldn’t we make the necessary adjustments, cut our cloth accordingly? Wouldn’t it be prudent now to accept, that it is change, not more of the same, that’s needed?
But change needs leadership. It means making harsh decisions. It means people’s living standards are going to have to drop. It means all of us accepting less than we’ve been used to. It means sacrifice; who’s going to have the guts to tell us that?
Bad news, and that’s what the truth often is, doesn’t make for good electioneering does it? Vote for me and see your standard of living decline; far better to promise the sun, the moon and the stars; then let some other fella try to sort out the resultant mess in the future.
But it’s change we need; and we need it now if we’re going to stave off future disaster. But politicians don’t like looking too far ahead; they prefer dealing with yesterday. They prefer blaming each other for what’s gone wrong, rather than trying to sort it out. Leading from behind is so much easier than leading from the front. I told you so is a very low risk strategy; sure nothing can wrong if you don’t do anything.
For change to work it has to be equitable, fair, honest, open and just. It necessitates compromise. It needs all of us abandoning our selfish attitudes.
Rather than cling to some ill thought out hope that we can get back what we’ve lost; wouldn’t we better off to acknowledge that things will never be the same again? Wouldn’t we be better off adjusting to the inevitable while we can; and before we make it infinitely worse by saddling ourselves with massive debts that future generations may never be able to pay back?
Our leaders are pursuing a high risk strategy. It’s also a very short-sighted one. Politicians have a bad habit of not looking very far ahead. Rather than admit we’re living above our means; they’re adding to the problem by borrowing what we can’t repay. Instead of accepting that the house of cards is falling down, they’re trying to fix it with a very, very expensive coat of paint. They’re shoring up the sham by pawning the future. It’s not good enough. We should demand better from them.
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