The Daily Moaner

Watching Newsnight today,  I was struck by the battle between a Danish (?) politican and a hedge fund manager.  They were discussing the economic situation, both in Greece and elsewhere in Europe.  As ever, the politician seized on the hedgie and his ilk, claiming they were to blame for everything. This is what politicians do , of course.  They themselves are never to blame for anything.

Gordon (right) with Alistair

The whole subject of economics (you must trust your editor, he knows.) is analagous to the weather.  Both are chaotic dynamical systems, in the real meaning of the phrase. Both are closed but global systems. Both have thousands of variables constantly altering the state of the system, both locally and globally.  And neither is predictable. Anyone who claims to know the future is a witch-doctor.

Interfere with it in one place, something alters somewhere else.  Release pressure here… increase pressure there.  Trouble is, its not as simple as that because the changes ripple onwards, spreading out until they’re damped out.

If you could suppress all those hurricanes that blow up on the east coast of America, how many people would they kill somewhere else? You couldn’t make them fizzle out. All you could do is move them on.

So when we bailed out the banks, their little storm quieted down. But the pressure moved down the line.  Our currency has lost value.  Yet our exports haven’t gained as a result.  Our credit rating is coming perilously close to losing its AAA status.  Our trade gap has widened to £8 billion. There has been little recovery in property prices.  Unemployment is still high, with many people in part-time jobs who need full-time work. And there are alarming indications that so-called Quantitative Easing (printing funny money) may begin again.

Gordon and Alistair — meet the Witch Doctors.