Yet more on why austerity isn't working

Today we can add to the roll call of Damascus-road conversions (following S&P's last week). This time it is none other than Christine Lagarde of the IMF - obviously helped by her welter of  economists. When she was French economics minister, she championed austerity policies, arguing that only by driving down deficits would room be made for growth to return. Such Hayekian mumbo-jumbo seems to have been cut down by the - dare I say it - Keynsian good sense of the IMF.

At the heart of the warning issued by the IMF, World Trade Organisation, World Bank, World Health Organisation and the Organisation For Economic Cooperation and Development plus a cluster of development banks from across the continents, is a simple assertion: austerity by itself doesn't work.

Faced with decelerating growth across the globe, these representatives of the nearest thing we have to an economic establishment, argue that governments need to manage deficit reduction only in a way that promotes growth and employment. They further argue that policy responses to the mounting crisis have to focus on reducing inequality through labour market reforms and the use of the tax system to encourage job creation.

Even more surprising is that they agree with the International Labour Organisation in its assertion that governments need to invest in skills training, education of young people and social safety nets to cushion labour market transitions. The elimination of inequality is essential for generating stable growth in the world's economies.

Well, let's do that then. Messers Cameron and Osbourne are always banging on about how the OECD, IMF, WTO et al are key audiences for their policies. Well, they are listening and seem to find the UK policy path somewhat wanting.

I must say that I find it gratifying that the great Keynsian institutions - IMF and World Bank - are bringing their thinking more into line with their founder. But I am much more gratified to hear the biblical echoes in all this.

There is a strong strand in scripture that talks about equality being a goal of social and economic policy (if use of that language is not too anachronistic). We see it not only Paul's argument in 2 Corinthians 8:1-15, but the whole concept of the Jubilee, which stood at the heart of Old Testament economic thinking, Jesus' announcement in Nazareth and the early church's focus on economic sharing so that no one within the community was in need.

It is interesting that Steve Keen, an Australian economics academic, has called for a jubilee as a key tool in stabilising the world's economy. You only have to look at figures out this week showing that UK debt is currently running at 400% of GDP - that is, we owe four times the nation's total output. Most of this financial sector debt; another chunk is corporate debt; quite a bit is personal debt (mortgages, credit cards and the like); and a vanishingly small proportion is government debt.Who ever owes it, the maths indicates that we will never pay it off unless we have at least another decade of austerity, zero growth, rising unemployment and plummeting living standards.

Is there any other out of this mess than considering what a debt write-off would mean, how it would work and what shape it would leave the world's financial system in? Keen acknowledges that this is not straight-forward but since every other suggestion seems to be steering us closer to the economic rocks, someone should be crunching the numbers.

Of course, the question of living standards and perpetual growth is a question the Bible has a good deal to say about as well. But that's for another day.

Advent and the coming of the Kingdom

We had a great time on Wednesday. All our girls - daughters and grand-daughters - were with us and we went off into London to visit two sites - the Occupy  London Stock Exchange camp at St Paul's and the Christmas market on the South Bank.

I was hugely impressed with the Occupy LSX site. It's well organised, clean and very friendly. We spent some time at the tent university, chatting about the revised general assembly's economics working statement with a couple of the people who hold things together there.

I was invited to come and do a session on New Testament economics, something I hope to do in the New Year. There was an openness to fresh thinking and debate about ideas that was really refreshing. Here is a group of people looking for a new world. I was reminded of the context into which Jesus came - a world of injustice, dominated by a powerful one per cent, a world at war, a world where the poor are disenfranchised and struggle to make ends meet (sound familiar?).

It seems to me that during Advent we should be asking questions about where our world is going and how it is going to be renewed. Some have pitted the Occupy LSX group with the church on whose doorstep it is camped. But this is a huge mistake.

As I chatted with occupiers, I was reminded of the encounter Jesus had with a teacher of the Law about what really mattered (which is the greatest commandment). The encounter ends with Jesus saying to the man that he's not far from the Kingdom of God (Mark 12:28-34).

What strikes me about this conversation is the sense of the Kingdom's porous borders, of the fact that the Kingdom is looking to sweep into its embrace all who are looking for a new world. I am also struck by the fact that Jesus is open to insights from those who are apparently his enemies or at least those who are challenging his right to interpret the way things are. The teacher of the Law says that love of neighbour is more important than religious rectitude and Jesus says 'you're not far from the Kingdom.' I suspect he would say the same thing to the mixed and energetic group camped around the steps of St Paul's.

At advent we listen for the voice of the Kingdom - wherever it comes from.

Showing there is an alternative - while we work out what it is

The great John Gray weighed into the debate over the future of our current form of capitalism in yesterday's guardian. The former LSE professor and author of False Dawn, among a slew of other prescient works, suggests that the protesters outside St Paul's Cathedral - and camped in other cities across the globe - are engaging with reality somewhat more effectively than our political leaders who remain in thrall to 'a defunct market utopia'.

It's hard to disagree. He points out that the calamity facing the Eurozone - with French bond yields now twice those of Germany and edging closer to the danger zone - is mainly because political leaders have no idea what to do. Unlike previous global crises of the same magnitude - and there haven't been that many - there is no global institution with sufficient cash and clout to sort out the mess - by knocking heads together if necessary.

Some people suggest, of course, that the markets over which governments have no control, are the ultimate expression of democracy, millions of individual investors exercising their choices through buy and sell orders. This is self-serving rot trotted out by brokers and politicians in thrall to their every whim.I might have a pension with a provider who bundles lots of pensions together and buys and sells on world financial markets, but I have no effective say in those buying and selling decisions. All I can do is vote for governments whose sovereignty is severely compromised by the operation of the markets. Every time I hear the Chancellor say that our economic policies are keeping the markets happy, I know that the UK's austerity workout is dictated by people I am not offered a chance to elect.

Gray argues that Europe's elites 'have yet to face the fact that radical change is unavoidable'. This is because they remain in thrall to a busted market utopia. The question is what kind of radical change is needed? And I come back to what I talked about last week - that at root this is a moral not an economic crisis. Gordon Gecko said greed is good in the film Wall Street but Paul points out that greed is idolatry and idolatry always brings calamity on its practitioners. So the radical change needed? Groups of Jesus followers taking him at his word and showing by their actions that it is possible to live in a way where our actions are not driven by greed but by generosity, not by hubris but humility. If as followers of Jesus we can learn to be content and live out of that contentment, we might show our neighbours that there is an alternative.

Gallows humour and searching questions

Economist Paul Krugman shows the lighter side of the dull science in his ditty:
This is the way the euro ends.
This is the way the euro ends.
This is the way the euro ends.
Not with a bang but with bunga-bunga.

Gallows humour is essential in a time of crisis. The Nobel Price winning economist puts his finger (maybe unwittingly) on something important - that in the midst of all the necessary focus on numbers, there is a serious moral dimension to this crisis.

There is a tiny group of people around the world who have seen their wealth rise exponentially during the last decade - even while economies have been crashing and burning. In some ways Italian PM Silvio Berlusconi, media mogul, billionaire, playboy, party-thrower, is a symbol and symptom of a moral failure at the heart of the financial catastrophe.

When I read about him, I think about the prophet Micah describing the glitterati of his day in these words - brought vividly to life in the Message translation (6:10-16):

"Do you expect me to overlook obscene wealth
   you've piled up by cheating and fraud?
Do you think I'll tolerate shady deals
   and shifty scheming?
I'm tired of the violent rich
   bullying their way with bluffs and lies.
I'm fed up. Beginning now, you're finished.
   You'll pay for your sins down to your last cent.
No matter how much you get, it will never be enough—
   hollow stomachs, empty hearts.
No matter how hard you work, you'll have nothing to show for it—
   bankrupt lives, wasted souls.
You'll plant grass
   but never get a lawn.
You'll make jelly
   but never spread it on your bread.
You'll press apples
   but never drink the cider.
You have lived by the standards of your king, Omri,
   the decadent lifestyle of the family of Ahab.
Because you've slavishly followed their fashions,
   I'm forcing you into bankruptcy.
Your way of life will be laughed at, a tasteless joke.
   Your lives will be derided as futile and fake."

Berlusconi is a joke and yet he's the epitome of the lifestyle our culture lauds and apes. And we will all pay the price of his folly and the folly of the one per cent of the world who live like him. But the joke could also be on us who have lived by the mantra 'there by the grace of the market, it could have been me...'

But Micah tells us how we should live:

[God's] already made it plain how to live, what to do,
   what God is looking for in men and women.
It's quite simple: Do what is fair and just to your neighbour,
   be compassionate and loyal in your love,
And don't take yourself too seriously—
   take God seriously.

And he goes on to remind us 'Attention! God calls out to the city! If you know what's good for you, you'll listen. So listen, all of you! This is serious business.'

I think the market makers know how serious this is - with bond yields for Italy above a crisis level 7% and stock markets falling. But I wonder if we do. Do we believe there is a technical fix that means we can return to business as usual? Or do we need to  ask more searching questions about the kind of economy, the kind of politics we need to ensure justice and equity for all the world's citizens?

For all its incoherence, the Occupy movement suggests that there are growing numbers of ordinary people from all walks of life who are beginning to ask for a better way. Where are the leaders rising to this challenge, harnessing this energy, articulating this cry for change?

A kinder, gentler capitalism?

I bought the Financial Times today to read Rowan Williams' article and found beneath it an excellent piece by John Kay which you can read on the veteran economist's own website here.

I especially warmed to his sentiment that many people agree with the protest at St Paul's but few with what the protesters actually say. The reason for this is that we all think something's wrong but can't quite put our finger on what it is. He suggests the following:

'The incoherence results from a political void. Europe’s political left lacks any convincing narrative in the post-socialist world. The right tells a story in which greed is the dominant human motivation, government an incubus on the spirit of free enterprise. News “from the markets” is not of new products and services, but of the fluctuations of the FTSE. This rhetoric views doctors and teachers as parasites, not producers, and has provided cover for an unhealthy expansion of the influence of established large corporations.'

I think he might be on to something here. I was reading this as I listened to the World at One discuss the latest manoeuvres in the public sector pension wrangle. I found myself wondering why we are caught up in a race to the bottom; why the task seems to be to leave everyone without a pension. A number of experts were saying that the public sector workers need to realise that their private sector counterparts have virtually no guaranteed pension, so they should accept the same fate. The upshot of this, of course, is that the state picks up all our bills for retirement.

So how about changing company law to say that instead of maximising share holder value and ensuring that board directors retain their gold-plated pensions, companies have a legal obligation to invest in the retirements of all the people who have contributed to them making profits. If people are enriched by the labour of others, they should contribute to those people's well-being by paying them a salary and contributing to a pension for when they retire.

Further, all pensions should be set at what is needed for a person to live on when most of their major costs have been met (ie housing, school fees, two cars, etc). No one needs a pension of £750,000 a year and no one should be expected to make do with one of £7,500 a year.

And how about companies being legally obliged to maximise innovation and invention, quality in manufacturing, sustainability in investment and the use of resources? Then the news from the FTSE would not be about share prices and PE ratios but about new products and services that were genuinely adding value to society as well as company balance sheets.

John Kay argues that no one wants an end to capitalism; they just want a capitalism that is not about greed and gambling. I think we can all say 'amen' to that. As Rowan Williams points out, it is not just protesters who think the Robin Hood Tax is a good idea; Bill Gates and George Soros are supporters - neither men noted for their left-leaning sympathies.

What is becoming clear is that there is a growing chorus of voices saying that the false choice between austerity and bankruptcy needs to be replaced by a sensible conversation about how we can order our society, including the important financial sector, in such a way that everyone benefits and not just a few ridiculously rich people at the top of the pile.

It all sounds like motherhood and apple pie, I know. But of course mums are essential to the good ordering of society and apple pie fuels many a good conversation and fills a belly in a most agreeable way. So what exactly is wrong with that?

Nailing the issue

This is a great quote for a Lutheran pastor Tom Gaulke from Chicago who has been spending time with those occupying Chicago in the way that people are occupying London (around St Paul's).


"The more the corporations focus on the wealthy, the more they worship the god of wealth, the more they're sacrificing the 99 percent, The crisis isn't just economic or political. Really, it's a spiritual crisis. For Christians, it's a matter of idolatry," he says.

That seems to nail it. We look for political and economic solutions to the mess we're in and that's right and proper because it is part of our mandate as stewards of creation. But in order to solve a problem we have to identify it properly. And Gaulke has put his finger succinctly on the issue - idolatry.

And idolatry is a spiritual problem requiring a spiritual solution. Whatever politics and economics we conjure to extract ourselves from this mess, without repentance and humility, they are sticking plasters placed over an arterial burst.

You can read the rest of piece where Gaulke's quoted here.

Voting for Robin Hood

The day after 50 economists call for a cut in the 50p tax rate, 1,000 economists are urging the G20 to adopt the Robin Hood Tax, a 0.05% levy on every financial transaction.

Also known as the Tobin tax, it's estimated that it would raise 20bn a year in the UK alone. such money could be used to create jobs, invest in the health service and youth work across the nation.

It's good to see that there are some economists committed to the public good. A recent poll carried out by Oxfam suggests that 51% of the UK population think this is a good idea. And the even the IMF, which has reservations about it, has published a report suggesting that it could raise significant sums without unduly affecting the health of the financial services sector.

Let's vote for Robin Hood, I say....

A thought on when it's a good time to take a holiday

The world's stock markets are going south and so, apparently, have our leaders. As economy's tank all over the world and the prospects of recession loom ever larger, the prime minister, deputy prime minister and chancellor have all gone on holiday, leaving the hapless chief secretary to the treasury to defend the UK's totally irrelevant deficit reduction plan, as if our protestations of austerity will save us from the financial tsunami brewing off-shore.

The current crisis is a political one born of our inability to reform financial markets in the wake of the credit crunch. So it is not a time for our politicians to take their eyes of the ball and head for the beach. A massive restructuring of the way money of all kinds is managed around the globe is urgently required so that the poor stop bailing out the rich every time there's a market panic.

We need a more creative approach to getting out of the mess we're in than the slash and burn policies of the IMF, EU and our own governments, cheered on by the nutters in he US tea party movement which merely lead to rising unemployment, falling output and a squeeze on the incomes of those least able to cope in the hope that the system will magically correct itself.

Now is maybe not the best time for our leaders to be on the beach.

The choppy waters coming from Greece

The ever prescient Jon Snow has some sobering words on the Greek crisis over on his Channel 4 News blog. You can read it here.

It might be at the alarmist end of the spectrum but it does highlight a salient point in all this: the city of London is still at the centre of the spider's web of international finance. In particular, we are the hub of the world's insurance and reinsurance business and there'll be a hefty bill when the Greek's go belly up. But that bill will be dwarfed by the one coming our way when Ireland and Portugal hit the buffers.

Instead of tinkering at the edges of serious banking reform, perhaps the EU leaders gathering in Brussels today might sink their teeth into the issue of how we can make the sector more accountable and transparent so that we can see the scale of the waves heading our way before they break over us.

I wondered about the consequences about Greek default yesterday. I still think it's inevitable; whether it's desirable is in the hands of our leaders: it could just be the wake up call we all need and failed to heed when Lehman's and Iceland went down.

I am pondering the parable of the rich fool from Luke 12. It's not an exact parallel to our situation but I am always chastened by the fact that Jesus introduced the sobering tale with the words: 'watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions' (v15).

We're good at applying this verse and the parable that follows to us as individuals (well, to other individuals), but it clearly also applies to us as a culture. We live in a system that says 'greed is good' and rewards that greed with all the stuff that we think is essential for the good life. Unfortunately, as in the parable, such a way of life is not sustainable; eventually God comes calling.

Sadly, unlike in the parable, it is not the paragons of greed who suffer when the wheels come off but the ordinary people, struggling to grab a bit of the action for themselves, who get a kicking; and the poor of the planet who see the little they have swept away in the flood.

So let's pray for the people of Greece, the ordinary people who, like us, have tried to grab the most they can, often in the least sustainable way, and who now face ruin. And let's pray for the leaders gathered in Brussels that they will own responsibility for the mess we're in and actually do something to sort it out in the interests of the poorest rather than the richest.

And let's pray that we all realise that 'life does not consist in an abundance of possessions'

Giving credit where credit is due

Excellent to see Amartya Sen taking a pop at the rating agencies in today's Guardian. He argues that despite their abysmal track record on rating financial instruments, they are calling the shots over the fate of nations that is genuinely harmful for the future of democracy.

Sen points out that UK policy makers feel themselves beholden to the credit agencies and so have taken decisions on deficit reduction and austerity to placate them. But, he points out, at least in the UK we can debate the wisdom of the policy and the government can claim that part at least of its programme was put to the people in an election.

This is not the case in Greece. Economic policy and the fate of the government is in the hands of the IMF and credit ratings agencies, not the Greek people. Now we could say that the Greeks have had their chance and blown it. But if the generals return as a result of this crisis, part of the blame should be laid at the door of the international, unelected, undemocratic financial institutions.

It's really sad that Congress backed off from suing the ratings agencies over the collapse of Lehman's and the financial meltdown that occurred in its wake. After all, these organisations had given triple A ratings to all the dodgy financial instruments - including the bundles of sub-prime mortgages at the heart of the system's toxicity - being traded around the globe before the crash, instruments that had precipitated the mega-crisis in confidence that led to collapsing banks and bloating deficits across the western world.

I wonder where we'd end up if Greece called the credit ratings agencies' bluff, gave the IMF a couple of suggestions about what it could do with its austerity package and carried on as before. If nothing else it would wipe the Cheshire cat grins off the faces of the men in suits no one voted for. Maybe it would be the first step in a genuine reform of the world's financial system in favour of one that gave a damn about the people at the bottom of the pile.

At the end of  the day, Bruce Cockburn had the IMF well and truly summed up in his song Call it Democracy - you can check it out here and see what I mean...

So, who speaks up for the poor?

When I was a financial journalist, Budget week was a time of frenetic activity and excitement. I and my colleagues would pore over the red book and talk to city analysts and economists about what the measures announced in an invariably dull speech actually amounted to.

Budgets are always full of bogus statistics, massaged numbers and big claims. This one was is no different. The specious Office for Budget Responsibility, run by one of Mrs T's favourite economists, hardly offers a fig leaf for George Osborne's voodoo numbers.

It's a bad week for the poor. Even on the government's own figures the poorest 10% of the country are the second hardest hit group after the richest 10%. As John Humphries asked Nick Clegg this morning 'why should this group be paying anything?'

We're in a global recession that has been caused by two things. One was a failure of international financial regulatory systems - the IMF, G20, and national governments (including the one that left office here in May). The major cause was free-wheeling banks creating ways of making money for their shareholders on the backs of the world's poor. The rich - for they are still making huge profits and paying enormous bonuses - plunged us into a recession that the poor are now being asked to pay to get us all out of.

The banks were in receipt of getting on for £140bn of direct support plus some £800bn+ of indirect support in the financial markets to keep them from going under - and still they are not lending to small and medium-sized business in anything like the way needed to get us out of the mess we're in.

The cost to them is a paltry £2bn levy announced in this budget. A Robin Hood Tax would have raised £20bn a year, something like a fair contribution from the banking sector for the deficit it's caused.

With VAT rises, a freeze on child benefit, the linking of other benefits to the consistently lower inflation measure, caps on housing benefit (coupled with the disappearance of any target for building affordable homes) and swingeing cuts coming in the public services that the prosperous never have to rely, this was a bad budget day for the poor.

The financial markets are all Greek to me...

Greece is in crisis. I grew up with such headlines being a relatively regular occurrence as the regime of the colonels lurched from crisis to crisis through the 60s and 70s until democracy was restored. The causes of the current troubles are complex and beyond the comprehension of most mortals (certainly this one).

But at the heart of Greece's current problems are the bond markets. The way the media talks about these exchanges where cash is swapped for Government debt, you'd think they were operated by god-like powers who were above being questioned for their actions. I thought the credit crunch, if it's achieved nothing else, has at least dethroned the masters of the universe.

But no, these impersonal forces are still very much in control of events. Take this quote 'The market is now looking at every country with a lot of curiosity.' It was said this morning by Gilles Moec, senior European economist at Deutsche Bank, in response to questions about why the stock markets across Europe are falling.

In a sense he's right. Markets, those collections of individual decision makers with certain amounts of money to spend seeking products at a price they're prepared to pay, are looking for profits across Europe. But in a more profound sense, his comments illustrate the levels of denial at the heart of our current crisis - not just in Greece but across the globe.

The markets are moved by people like Moec and hundreds of others who make decisions based on their political views, religious outlook, knowledge of economies and how they work, the fact that they got to work with indigestion following a dodgy breakfast on the go and congestion on the metro. It's people who decided what to buy and sell and how much they're prepared to pay. The fact that the deals are in billions of dollars does make them impersonal; it just means that the sums involved are eye-wateringly huge.

But each of the deals is made by a trader pushing the button on his mouse or shouting into a phone. And perhaps we need to start calling these people - a highly paid, enormously powerful minority across the globe - to account for their actions.

This is why it's good that the US Senate is giving Goldman Sachs a hard time for developing products that appear to have been designed to benefit from the failure of other financial instruments.

This morning's election press conferences were all about party leaders trying to show how they will cut the deficit to ensure the market will continue to fund to Britain's national debt. The trouble is that such cuts fall disproportionately on the poor, the unemployed, the long-term sick and disabled; they risk creating new pockets of intractable, generation-after-generation deprivation in parts of the UK. And all to satisfy the markets, all to ensure our credit rating doesn't go from triple A to junk as Greece's has.

As the crisis deepens isn't it time for a different way of organising our financial affairs? Shouldn't those who want  to lead us being saying something about this?

Good stories in the wash up

This might have passed you by, but in the wash up - that wonderfully named time when the government haggles to get as much of its programme on the statute book before Parliament dissolves altogether - the vulture bill was passed.

Vulture funds - many UK based - are investment houses that buy up the debts of the most heavily-indebted poor countries, often for a few pennies, and then sue those countries for the payment of the full amount owed. This is capitalism red and tooth and claw, a montrous injsutice backed by UK courts, and it is wonderful that our Parliament has voted to protect the poor from the rapacious rich.

The law restricts the ability of these funds to sue poor nations in the UK courts and so we should no longer witness the spectacle of a fund succeeding in getting a British court to uphold its claim for $20m immediate payment from Liberia, one of the world's poorest countries, on a debt outsanding since the 1970s. Hopefully, it renders their 'investments' worthless.

The bill gets Royal Assent today and so becomes law. There is a sunset clause built in, meaning that it will have to renewed in a year's time. So we need to remain vigilant.

But it's a good day for the world's poorest people.

Keeping the rich to their promises

Well, as some of us feared, the credit crunch is beginning to affect how the rich world is acting towards the poor world. At meetings this week at the UN, France and Canada are wobbling on commitments they've made to helping fund the millennium development goals because of economic wobbles.

You can read about it here, sign the petition and sign up to receive alerts from this intriguing sounding organisation called Avaatz, a campaign and advocacy web portal seeking to empower ordinary people to act together to have their voices heard. It looks good.

It was deeply disheartening to hear Breakfast TV's 'typical' British family responding to Gordon Brown's conference speech by saying that they didn't care what happened in other countries, they just want help to cut their fuel and food bills. They didn't speak for me. I hope they don't speak for many. But it serves as a warning that a little economic gloom can make us inward-looking and more selfish than we normally are.

It's true that I spend more at Sainsbury's now than I did last year. But I've got a full fridge and an over-full stomach. The huge hikes in the cost of basics like rice and wheat, combined with the severe weather affecting many parts of the poor world, means that more people are dying for lack of food.

Now doesn't seem a good time to be turning our backs on those in need.

Play games and feed the world

Thanks to Janice who at our harvest service yesterday recommended a website called free rice (you can find it here) where you can play all kinds of games to improve your mental agility and for every answer you get right, twenty grains of rice are given to the world food programme to help eradicate hunger.

So this morning before breakfast I was playing a definitions game and donated 600 grains - not much, but imagine if we all did it!

Market meltdown and the millennium development goals

Have others seen the irony in Barclays acquiring Lehman Brothers US operations for $1bn today but walking away from the opportunity to rescue the group on Saturday despite the chairman of Barclays trumpeting today that it was a great deal at any price?

I was a financial journalist in the early 1980s when Mrs Thatcher was presiding over a financial meltdown that caused similar headlines to the ones we're seeing now. Unemployment hit three million plus, interest rates were in double digits as was inflation. Manufacturers were queuing up to go to the wall. Whole towns were left wasted and broken. In those days, furrowed brows combed the public sector borrowing requirement numbers for evidence of who knows what... There was much chin rubbing and mutterings of 'the markets will correct'.

Now as we face a yet another serious correction in the financial markets and jitters like we've not known for a good while, we are nightly treated to ever younger reporters overdosing on hyperbole as they seek to tell us that things are even worse than they were yesterday. I find myself sounding like the classic grumpy old man, shouting at the TV screen 'how many recessions have you seen, sunny boy?' Of course, when I was pontificating on the state of the economy, I was a mature 25 year old! 'Twas ever thus...

I wonder how much of this might have been avoided by cooler, wiser heads suggesting no one panic, no one buy or sell anything, no one create yet another fictitious financial instrument to make it look as if our asset-base is bigger than it actually is and we are all richer than we really are. I remember an FT ad in the 80s that asked where the money goes in our crazy 24 hour, global securities trading system, asked 'does it even exist?' I wonder...

Soon, it seems, we'll all be banking at the single global financial services conglomerate left after the current meltdown. Funny how unfettered markets and rapacious competition reduces the number of players and the choice left to hapless and baffled consumers.

Nothing like a good rant.... It makes me feel better about my bank being taken over by the bank I left because I wasn't happy with its service. But it also leaves me with a broader question.

When the dust settles, what will have happened to the Millennium Development Goals? How much of the money that was earmarked for achieving those - you know the ones, free primary education for all children by 2015, rising levels of healthcare, access to clean water, action on HIV, TB and malaria - has been diverted into propping up the financial institutions that fuel the global economy that has kept the developing world on its knees for too long?

Bruce Cockburn got it right back in the 1980s when the seeds for this mess were being sown in the privatising policies of the Thatcher/Reagan governments and the IMF started intoning its free-market mantra. He sang: 'spend a buck to make a buck, you don't give a flying f... about the people in poverty.' Now that's high quality economic analysis and commentary from a seasoned hand!