Gordon Brown Delivers Us Unto Depression
We have it on the authority of Britain’s Prime Minister: there will be a global depression. There will be long-term unemployment and many families will lose their homes. But wasn’t Mr. Brown the man who promised to “save the world”?
Depression, he says, “will not happen on my watch”. Remember his 10-year refrain when he was Chancellor of the Exchequer? “No more boom/busts.” This is evidence, as if we needed any, of how much reliance we can place on his promises.
Britain has had the biggest housing bubble in its history, and is now enduring the consequences – a sustained downturn into a bust that would have happened even if the US mortgage lenders had been as prudent as Mother Theresa.
Re-writing History
The Prime Minister lives in a virtual world in which he re-writes the rules of the economic landscape when it suits his political agenda. He has abandoned his 10-year prognosis – that the economy always goes into recession after a sustained bout of property speculation. Now, we live in a new economy of his imagination.
Apparently we are living in a “new global age” – in fact, Britain led the world into a globalised economy in the 19th century. This was interrupted early in the 20th century for the same reason that global trade has been interrupted in the 21st century –you guessed it – land-led property boom/busts.
The magnitude of the current crisis, which actually began in the real estate sector in countries around the world, is magnified because all these property cycles were synchronised by the first global business cycle.
Not on My Watch
But the economics of today’s boom/bust is no more than a mundane repetition of the postwar boom/bust on which Brown claims to be an authority. The result, warns Brown in his speech on January 12, will be “rises in unemployment becoming permanent…whole communities written off…lasting damage in our economy and a bigger bill to pay in the future”.
All of which he claims “will not happen on my watch”. Just like there wasn’t going to be a property boom/bust on his watch at the Treasury.
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