How will it turn out? The Economy

Over the last few days I have been blogging on what life might look like in 2019. The bottom line, of course, is that nobody knows. For sure, there will be wild-cards in the next ten years that nobody could have predicted. Even so, it’s interesting to speculate about how the events and trends of today will play out over the coming decade. Today it’s the turn of the dismal sciences. 

The Great Recession

The world has never seen anything quite like it. During the last six months of 2008, every country in the world caught an economic ‘flu precipitated by years of care-free lending across the globe. Stock markets crashed and some of the biggest names in banking were forced into government ownership. Unemployment soared. Breadlines and tent cities have began to appear. The USA was caught out very badly, and it’s likely that its standing in the world may never again be the same in the face of growing competition from China and India. As I write we are still unsure how deep this recession will cut or how long its effects will be. The Economist, in a recent article, declared that the recovery is going to be prolonged and painful, with double-digit unemployment rates and horrendous levels of public debt. Such crises have massive after-effects: history has shown us that revolutions and wars are common outcomes. Will this time be any different?

The European Union

In 2004, the European Union grew in size to 25 states: a new political entity at the heart of Europe based on the free movement of people and capital, the promotion of democratic values, and a pooling of resources when it comes to foreign relations, humanitarian aid, financial policies, agriculture and lots of other areas that impinge on everyday life. That said, the political structures required to govern such a large and diverse group of nations are not quite up to it. Two attempts have been made so far to resolve this problem, but the first foray failed outright and the second attempt – the Lisbon Treaty – has been driven into the mud primarily as a result of an unsuccessful referendum in Ireland. What is clear is that the EU is comparatively toothless if it doesn’t resolve these issues quickly. Its long term future is far from certain, despite evidence that it has lead to a greatly improved quality of life for many people within its borders. There are several groups within the EU who desire to see it fall under it’s own weight and while a legislative vacuum remains, these groups have been gaining in confidence. No-one knows what a post-EU Europe might look like, but my guess is that it would not be pretty. Nationalism, once you get beyond the flag waving and the late-night singing, is often an ugly spectacle to behold. So where will it be in ten years time? Dead? Broken? Stagnant? Or, perhaps, reinvigorated? Thriving? We can hope.

Last installment tomorrow: The 9/11 Wars.

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The Downturn that dare not speak its name..

Most people will agree that we are now going through a period of time that will be remembered for a long time, like World War II, 9/11 or The Great Depression. It’s probably the first time in world history when the entire globe has been caught in the grip of a sudden and calamitous economic crisis. No country has been untouched. Governments,  businesses and households worldwide are desperately fighting to shore up their reserves while avoiding financial meltdown. The problem is far from over and recovery will take many years.

Last month, Dominique Strauss Kahn of the IMF gave the current economic crisis the rather unimaginative appellation “The Great Recession“. Given that we still don’t know how long this crisis will last, or how deep it will be, events might yet consign this name to history.

Doing a quick trawl of the web, I have discovered a few potential alternatives.

• The Great Deception (*)
• The Bush Kaboom (*)
• Depression 2.0 (*)
• The Flump (*)
• The Clump (*)
• The Not So Great Depression (*)
• The Repression (*)
• The Econopocalypse (*)
• World Crash I 
• The De-Hummerization (*)
• The Great Uh-Oh (*)
• The Boomer Bust (*) 
• Econorrhea (*)

And what would you call the young people who will be shaped by these events? Generation OMG.

Ireland: How to turn a Crisis into a Disaster

It’s not such big news considering the global situation, but Ireland’s fabled “Celtic Tiger” got shot a few months ago. Shot, gutted, skinned, skewered and then roasted. Like an express train travelling at 200kph towards a half-finished bridge, everyone saw it coming, but few dared to scream halt. The whole country was complicit in an unprecedented property scam. Ireland, for a while, became the land of the golden SUV. People were taking four holidays a year. You were measured by the size of your kitchen extension.

And all this time, the government was rolling it in. Larging it up. The cash was there from increased taxes and almost full-employment, so why not give this nation of habitual complainers the services they always wanted? Every spare penny was spent on cushioning: padding out the public services, propping up the salaries, silencing discontent with cash. Nobody complained. How could they? Nobody, after all, likes a party pooper. 

But then, in 2007, the property market crashed. Crash. Bang. Wallop. Thud. Every month since then, less and less money has flowed in as waves of construction workers and their dependents find themselves out of a job. The Irish Government, with no money stored away for a rainy day, is now broke. Officially, indisputably, skint.

And yet, the public expectation is that the Celtic Tiger services stay exactly the same. That’s the public for you and who can blame it? You fight hard to get your privileges, and damned if you are not going to put up a fight if someone tries to take them away. 

You would think, in a situation such as we find ourselves in today, that the political classes might get together to figure out what needs to be done. All the parties – government, opposition, everyone. Get the best administrators, the most capable leaders, the most innovative thinkers, and put together a plan that hurts like hell, but eventually gets the country out of the mess it now finds itself in. 

Instead, what we find is political point-scoring on a massive scale. The entire opposition has decided that siding with the populace is the way to go. That sympathising with Mr and Mrs Murphy on Leitrim St is going to solve the countries problems. That blame is better than solution finding. That it is better to seize the opportunity now to get elected than to be constructive and engaged in solving this overwhelmingly bad situation. 

Well, oppositiony politiciany folks – we need your rampant opportunism now like a chasm in the head. Unless you start telling us how you are going to solve the political crisis by making deep, painful cuts in public expenditure or increasing taxes, could I ask you to fuck off and leave the professionals to it?

There. Rant over.

The Global Pool of Money

 

This is a mindblowing podcast from NPR’s “This American Life”. It’s about the Credit Crunch, explained so that even a thicko like me can understand it, but done in a way that is, well, mindblowing.

I’ve been like an evangelist over the last few days, telling my real-life friends to listen to it. 

So now I’m telling you.