The International Writers Magazine - Our Tenth Year: Comment - The Financial Crisis 2009

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Crisis? What Crisis? • Joe Swain As the world continues to reel from the after-effects of macro economics' version of Hurricane Ha-Ha, Joe Swain sifts through the wreckage for survivors, lessons, scapegoats, loose change, anything really... I’m no expert, but when it comes to analysis of the current global economy, I can’t help but be reminded of the words of Woody Allen: "More than any time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose correctly."

I’m sure he wasn’t thinking about global economics at the time, the rights and wrongs of marrying your own stepdaughter more likely, but his words do seem strangely appropriate.Not that being an economics expert is that impressive a claim these days, with so many of them wearing enough egg on their faces to suggest that omelets have suddenly become a ‘de rigeur’ fashion accessory. And while some of these n’er-do-wells have had the decency to take their own lives, or at the very least return to their previous occupations as village idiots, a stubborn few are still refusing to admit they were wrong. Such as UK Prime Minister Gordon Brown, who is now ironically considered the man best equipped to lead his country out of recession. Probably because, as Boomtime Blair’s main dance partner, he’s the only one left who knows where they planted all those ‘free market’ financial time bombs in the first place. Which is a bit like McAfee or Norton employing the spottiest little loft-troll, computer geeks they can get their hands on to pump the internet full of nasty Trojans, just so they can flog us expensive antidotes. A wholly inappropriate thought obviously. Or worse still, like London’s new mayor, Boris Johnson, giving the post of Commissioner of the Metropolitan Police to the Yorkshire Ripper. Again, a wholly inappropriate thought, but this time for reasons of taste rather than legality.

Of course we all knew the good times would have to end some day, but didn’t they promise us a ‘soft landing’?
"Go on, jump," they urged. "You’ll be alright, you’ve got a parachute. Made out of a jam sandwich I’ll grant you, but beautifully crafted don’t you think?" And like the spoiled little consumer brats we’d all become, we believed them. "Spend, borrow, spend, borrow. Enjoy today, bollocks to tomorrow," we sang in unison as we signed up for mortgages 27 times the size of our salaries. As a friend of mine so aptly put it recently, "To say I was living beyond my means would be a serious understatement - we were virtually in different countries."

However, knowing we’re in a bit of a pickle is one thing, understanding how we got there is another. As Slade’s lead-singer Noddy Holder put it during an episode of ‘Have I Got News For You’ recently: "What I don’t understand is where all the money the banks have lost has gone. It must be somewhere mustn’t it?" A question which Private Eye’s editor Ian Hislop tried to answer, rather glibly as it turned out, by saying, "Well that’s the problem Noddy, the money doesn’t really exist, it never did." To which Holder retorted with faultless clarity, "Well I don’t know what we’re all worrying about then."

But there’s no ignoring the facts. Like an over-sized, gas guzzling, 8-litre Ford Mustang, the world’s economy has, over the last 18 months, gradually ground to a halt. Complete with all the clunks, screeches and groans one might reasonably expect to hear when such a ravenous beast is deprived, not of its major working parts or its fuel, but its lubrication.A demise with lexicology to suit. When the sub-prime mortgage problem first surfaced in America, they gave it the surprisingly jocular title of ‘credit squeeze’, as if a naughty little schoolboy had goosed the Federal Reserve’s bottom before scampering off to scrump a few low-hanging apples from Fannie Mae’s orchard. By the time the ripple had reached Europe and Northern Rock had gone blubbing to Uncle Gordon, the term had darkened a shade to ‘credit crunch’, a little more serious perhaps, but still more reminiscent of a Ben and Jerry ice cream than an economic calamity.Then, as the skies really began to bruise towards the end of last year and investment bankers and stockbrokers were flopping out of upper story windows in CBDs the world over, the media began trotting out ever more ominous words like ‘slump’, ‘drought’, ‘catastrophe’ and ‘crisis’. Each metamorphossi quicker than the last, as the newspapers and TV commentators vied for the title of ‘Only Smartarse Economist Who Actually Saw It Coming’.

As we currently stand, ‘recession’ has been sent home without so much as a screen test, and ‘depression’, ‘apocalypse’ and ‘Armageddon’ are clearing their throats in the wings waiting for the casting director’s cue. A combination of nobody wanting to be seen as the weatherman who didn’t predict the Hurricane, and an underlying feeling that the sooner we reach absolute rock bottom, the sooner we can all jump on the next freedom bus to Recovery City and get back to the party.

And therein lies one of the ultimate ironies. For while we seem to have a plethora of words for bad economic times, how many can you think of for the good times? That don’t start with ‘b’ and end with ‘oom’? How, for example, would you describe two consecutive quarters of positive growth (the technical definition I believe for the complete opposite of a recession)? A hint of boom? Quite boomyish? A sustained period of underlying boomyness? With such an unimaginative armoury of words with which to counteract the well-marshaled troops of the dark side, is it any wonder confidence is so low? And at the end of the day, whatever the politicians might say about the size of their rescue packages, confidence is the only thing that’s ever really going to get us on that bus. A view which I apparently share with the chief economist/village idiot at the Washington Post, who last week concluded that our only feasible solution is to carry on doing exactly what it was we were doing that got us into trouble in the first place. In other words, we must all completely ignore our newly-discovered penny-pinching instincts and reinvigorate instead our ‘spend, spend, spend’ mindset of before.

This alone will turn the tide of ominous statistics just enough to allow a life-saving trickle of lubricating credit back into the world’s otherwise perfectly functional economic engine. A ‘hair of the dog’ logic, I can’t help but admire. So here’s my plan: two weeks next Tuesday, wherever you are in the world, you must go out and spend 50 pounds more than you otherwise would have done. Preferably on something pointlessly expensive like caviar or champagne. I might not be an expert, but that tiny little blip on the global radar, which will eventually be known by economic historians as ‘That tiny little blip on the global radar', might just be the camel that ate the straw that made the dung that was turned into the brick that became the cornerstone of the foundation of a brand new world economy.On the other hand, I hear the village of Walton-on-the-Naze is beautiful this time of year.

© Joe Swain 2009
joeswain at hotmail.com>
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‘Ou est Baudelaire?’
Joe Swain
At about the age of 14, I decided to become French.

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