This Strange, late Summer World

The economic crisis in which we are now enmeshed is, according to people who have been wrong for decades, 'easing'. I even saw a headline on one of the London freesheets the other day that the recession 'would be over in forty days'. Do cultures have muscles? Was that the last, atrophied spasm of a number dotted through the bible?

Oh, who knows. I went off to Brunel to give another talk the other day, though, and, on the surprisingly pleasant Metropolitan line out there, I flicked through John Kenneth Galbraith's great history of the 1929 crash and the aftermath. People always fight the last war. My one demented reader will know that I wasn't a fan of bank bail-outs in the form they took, and that I think that the present crisis will, as I and others have been saying since 2007, take years to work out. So much is hidden--so much hidden unemployment, so much re-valuation of prices as ordinary goods rise in price and average incomes decline in ways only cumulatively or anecdotally recorded.

Yet journalists, now themselves under pressure to impress bosses commissioning work rather than paying for it as a privilege of contract, continue to delude and to mislead, with some exceptions. They remind me of Upton Sinclair's point, that it is very difficult to convince a man to change his mind when his income depends on not listening and thinking what everyone who pays him thinks. (On reflection, it may have been H.L.Mencken who said that--what is it about Baltimore that could produce two such opposed and brilliant men?)

On re-reading the text, I found myself surprised--again--at a sympathy with Herbert Hoover which has been growing for years in me. Maybe it's the idea of the engineer past his time wandering down a railway track with the bankers out to get him; certainly I can feel more sympathy with that man at the minute than many others, though I'll escape. It also comforts me to remember that Hoover spent the years of his subsequent internal exile after 1933 slumming it in the Waldorf-Astoria before Eisenhower brought him back to report on organising the presidential bureaucracy.

In the course of my musings,somewhere past Acton, I found the following quote. I would encourage others to read it in the main text along with the rest of Galbraith's sparkling arguments. They seem oddly relevant.
The Harvard Economic Society, it will be recalled, came up to the summer of the crash with a valuable reputation for pessimism. This position it abandoned during the summer, when the stock market kept on rising and business seemed strong...On 2 November, after the crash, [it reported that] 'the present recession, both for stocks and business, is not the precursor of business depression'. On 10 November, it made its notable estimate that 'a serious depression like that of 1920-1 is outside the range of possibility'. It repeated this judgment on 23 November and on 21 December....'we expect recovery next Spring, with a further improvement in the fall'. On 18 January, the Society said that there were indications that the severest phase of the recession is over'; on 31 march that 'manufacturing on the road to recovery'; on 22 March that 'the outlook continues favourable'; on 19 April that 'by May or June recovery should be apparent'; on 17 May that 'business will turn for the better this month or next'...on 24 May that conditions 'continued to justify optimism'; on 21 June that, despite irregularities, there would 'soon be improvement'...on 30 August that 'the depression had spent its force'. Thereafter, the Society became less hopeful.

Google these; British and American zombie banks; German credit crisis; world over capacity; oil volatility and peak oil; government debt; future dollar inflation; rich people buying gold and safe rural getaways; Ben Bernanke reappointed early; hidden unemployment; personal debt crises.

Then read how the recession is over. You know my recommendation; there is nothing like a French 75 to help one see clearly. As a society, we are facing tremendous pain. Some people, god help them, are already in it. It is no good just saying, 'oh its the banks fault for not lending'; would you lend into this picture, especially when you don't know if the other banks are healthy or not?

Silly me, I forgot. You and I are, via extortionate taxes, charges, hidden inflation, and banking subsidies. Meanwhile, pointless raging wars carve out holes in the earth and in young men and women, as power and money shift inexorably to Asia.

Perhaps it's time for a Manhattan. Here's The Last Rose of Summer, the version below being wordless but still beautiful.


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