Monday, 28 January 2013

The world according to Snafu - The triple dip

The media love sound bites and the latest one is a ‘triple dip recession’. As someone pointed out, if it were a triple dip ice cream it would be great, but for someone on a fixed income, it is not such good news. It is obvious from past recessions, that no one knows what to do about one when we have one and although politicians whose party has been in power during good times will claim it was their doing and parties in power during bad times get blamed for the recession, it is quite obvious to even the least politically aware that there is nothing whatsoever that the people in charge can do to make it better. Economic forces are like the weather, unpredictable and uncontrollable. They are the product of so many factors that no two economists can agree about any part of them.

They can of course make it worse. Mistakes like de-regulating the banks and so allowing huge unsupportable loans to be exchanged within the financial world being a good example. They also seemed to believe for years that covering a loan by taking out a bigger one was sound economics. Surprisingly this does actually work after a fashion, if you have sustained growth but it does not take much of a dip to turn this into an unending spiral of debt. The one thing that I find difficult to understand is why all these floundering people believe that it is possible for it to get better. They all talk of growth and how it is expected to rise/fall and so on as if growth is some magical force that must always become positive. In the past many civilisations have risen, become powerful economic forces and then sunk into oblivion, sometimes by force of arms but quite often just by losing trade to another part of the known world.
There is no guarantee that growth will continue to rise or indeed that it can. Growth anyway is not something that is infinitely sustainable, nothing in nature ever grows forever, it cannot. Everything has a finite limit on growth. If anything can keep on growing, it will eventually find a point where there is nothing left to sustain it, it has absorbed everything available.
Sharks have no limits on what size they can reach, but the bigger they become the more they need to eat and eventually they reach the point where they are so big they cannot catch enough food and they starve to death. So there are no super-sharks around.
In any closed system you need inputs and outputs, you cannot grow continuously or perpetual motion would be possible and it is not. So politicians and economists are all chasing something which is totally beyond their control and completely impossible to sustain forever.
It is well within historical precedent that our civilisation will not recover, but sink more and more into a depression that it will never recover from. I hope this is not the case, but there is nothing in history to say it won’t happen and there is no one in charge seemingly able to do anything useful, so welcome to the second Dark Age.
And remember,  no matter who  you vote for, the Government will always get in :)

1 comment:

  1. I think the key for the average person, is to live well within one's means and be satisfied...not always trying to live up to the Jones's (no offense to my sister!). The government isn't the only one who thinks the best way to get out of debt is to go deeper into debt. We have grown so used to immediately satisfying our wants that we seldom have enough for our needs....we are simply greedy, and we can't blame the gov't for that!

    So, I'll have the triple dip: chocolate, vanilla and strawberry, please...