Friday, 25 January 2013

wallpapering over the dips

triple dip
They're all saying we may be about to go into a triple dip recession if things don't pick up in the next three months.

It's clever to make a major financial catastrophe sound like a new kind of ice cream.

I took a quick peek at the Office of National Statistics graphs and I reckon it's really a prolonged double slump, temporarily saved by the Olympics in the latter part of last year. A moot point nonetheless.

Mr Osborne seems to be attempting to cut our way to greatness, by continuing to prune everything as part of the great austerity programme to reduce the fiscal deficit.

The thing I wonder about is that each time we cut something else, we have less people working and less people paying taxes. I know it's a bit classicist to think like this (Say's Law and all) but sitting on dead goods, empty High Streets, increased low/non-earners and stagnant money surely can't be helping too much?

Our multi-millionaire second Lord of the Treasury Gideon George must have put his Bullingdon mind to this in some way, but I can't understand the preoccupation with reducing a deficit by quietly printing wallpaper quantities of money (because that's what quantitive easing is code for).

That's a passive and slightly sly way to make the numbers look better, but it doesn't kick-start anything. More government bonds/IOUs against an uncertain future. We just increase the quantity of apparent money and theoretically make ourselves more competitive overseas (notwithstanding the EU rhetoric).

The global financial analysts won't be fooled and will end up de-rating the UK from AAA, just like the Chinese have already done.

Instead of Cameron's children's godfather dithering over decisions about hot pasties and sitting in the wrong part of trains, we need someone to drive a leadership position on what is required. I suggest Osborne's yellow card was last July. The red one ought to be in Cameron's pocket.

The trick, Mr Osborne or your successor, is surely to make the money in the system do something useful?

How about making it circulate against new projects, jobs and goods to properly drive some growth?

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