Delusion On A Grand Scale

10/08/2009 by Steve Tierney.

Delusion On A Grand Scale
News from America was “good” this week.  Apparently, the increase in their unemployment rate has slowed.  249,000 lost their jobs in the U.S.A. in the last quarter which was much “better” than expected, being a lower amount of new unemployed than recent quarters. 

Pundits and experts <cough> were rolled out to hail that the American economy was “past the worst” and had “turned a corner”.  Well that’s okay then.  Time to go out and get a few more credit cards and a personal loan, I suppose. 
   
You have to wonder if the 249,000 American new unemployed are excited about the recovery they are experiencing? 
   
The idea that a massive fall in the amount of people paying taxes (and an increase in folk on welfare) is somehow good news because its not as massive as last month is whistling in the dark of the worst kind.  By that same logic if you reached zero employed that would be good news, because every month thereafter there could be no “new unemployed” at all and that would surely mean the depression recession was over.

Only in the special moon-pie and fairy-lights land of Quantitive Easing, Trillion Dollar trade imbalances and being in hock for everything you own including the shirt on your back to growing Eastern giants does a quarter of a million new unemployed equal anything other than more absolutely horrible news.
  
Meanwhile, here in the UK, all is apparently well.  The papers continue to find new “green shoots” every week, regaling us with stories of how we’ve “past the worst”, “reached a plateau” and are looking at excellent prospects of returning to “growth” in the last quarter of 2009.
  
The evidence for this bout of good news?  Some banks made some money.  The pound gained a little ground.  Houses prices didn’t fall again.  A couple of sectors showed some slightly higher figures than expected.  The FTSE has risen somewhat.
  
Funny so few choose to mention some other useful facts:-

1. UK Production levels are below the levels of 1998.
2. Unemployment continues to rise - frighteningly fast.
3. Tax receipts have fallen off a cliff - requiring ever greater government borrowing.
4. The highest levels of government debt ever recorded by this country.
5. Trade balance of goods and services remains negative.  We are still consuming more than we produce.
6. GDP remains negative.

Anybody in the manufacturing industry (you know the people who actually make things to generate wealth for the country) will tell you just how “green” the shoots look.  A moldy dark green.  Like you find under an old fridge in a squat.

Any sort of brief ‘upturn’ there might be right now is the result of the government inventing money from thin air and using it to fund its activities.  All those billions had to trickle into the economy eventually.  If this seems like a good idea now, wait until the effect of the initial £125Billion and last week’s new £50Billion fully settle.  This undermining of sterling is a stealth tax of the worst kind and it will be coupled with a need to repay the interest (and capital, we can only hope) of a debt mountain unlike any we have ever experienced before.  And don’t get me started on the coming inflation…

Meanwhile, some estimate the country already owes £1Trillion Pounds.  Add in the personal debt of the citizens and we might have another £1.5Trillion on top of that.  The figures are so large they lose their meaning to many of us.  But their meaning will become all too clear in due course. 

The Labour Party have presided over a SNAFU so large that the seventies look almost tame.  Gordon Brown is always telling us this is a global crisis.  It feels pretty damn local to the people who have lost their jobs, watched their savings crumble or tried to keep their struggling businesses afloat. 

(Hat-tip Cynicus Economicus)

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