On The Edge of Acknowledging that I was Wrong Again

The picture is by Jerzy Duda Gracz. I have been into Polish art ever since the symbolist exhibition that I went to last year, and thought that I would put it up. Some critics point to Duda Gracz's ability to be shameful and uplifting at the same time as a major part of his appeal, and I agree.

This blog--and I think the discipline of putting things in the public domain, even if I have only one demented reader--is a very good thing for me, as is teaching. Looking back on it reminds me of where I was wrong as well as where I was right. I got the recession and the collapse of the derivatives market right, for instance, but that wasn't hard because I was a disinterested observer and anyone who didn't have a dog in the fight could have seen it coming. I also got the 2008 American elections right, and I think on a comment over on the David Lindsay Blog was one of the first to identify Sarah Palin as a possible Vice-presidential candidate (though I believed Joe Biden when he appeared to rule himself out, having been at the top of my list).

I got the scale and timing of peak oil wrong; I originally bought the global warming stuff until I opened my eyes and looked at the evidence; and I got Tony Blair, as I had got the Iraq war, wrong. I was also right and wrong about Gordon Brown, a man whom I once had a passing chance to work for and whom I admired. I think that, on balance, he was right to prefer a shares-for subsidy model for the banks, plus negative real interest rates, over nationalisation, especially when I contemplate what nationalising bad debt is doing to the Irish republic. Ireland can take it. There is enough of a residue of common feeling, even given the dissolving acid that the Celtic Tiger sprayed around social institutions to cope. I am not so sure that Britain's hollowed out, selfish society would.

I have also been wrong so far about sterling crises, and right about Putin, Korea and Iran. I write 'so far' because I wonder if we won't see a sterling crisis fairly soon.

So its quite a happy thing for me, on this contemplative Holy Saturday, to be thinking of something else that I may have got wrong in large part. The Euro has not, as I suggested it should, yet fallen apart; Britain's manufacturing industry is on the up and most people are repaying debt; America is creating jobs and increasing productivity; and the Obama administration has not yet been paralysed by dollar decline.

Indeed, the crash has not yet happened. Vast global imbalances of trade, capital, and debt still exist, but it seems to me that they are not translating into the stagflation--yet--that one might have expected by now. Rather oddly, they are translating into an African renaissance that fifty years of western 'aid' was never able to deliver. China is actually being constrained by its dollar holding and is building up commodities, Russia is playing a very serious and sensible game and South America is actually saving and taking care of business. Even the American states appear to be coping.

This may all be ephemeral. The appeal of the stimulus and sundry forms of credit expansion, and the temporary drop in oil, was always that they bought time. What if we aren't in some postponed pre-crash moment? What if the depletion of African resources is actually translated into renewal and infrastructure growth, in a framework of law and contract?

I'm not willing yet to say that I was wrong because the British are still obsessed with stoking an housing asset bubble, and the American, British and European debts are not going down significantly. Indeed, hobbled by carbon-credit nonsense and currency arbitrage, the present calm may well still be a quiet moment before a bigger storm.

This suspicion is boosted by the numbers of people withdrawing themselves from the labour market on both sides of the Atlantic, which is giving a false picture of consumption, and unemployment, and by the fact that banks are washing stimulus money that is about to run out through to people with no major debts but still not lending to those who have them (rightly). We may be in the midst of a 'sucker rally' or some sort of arbitrage for which there is as yet no name, as big financial institutions wash away their holdings and transfer as much nominal money and things that store value to themselves as it is possible to combine, before a bigger crash. May be. There is precious little definition in the moment.

I'd be very happy if slow, deliberate growth and re-orientation of economies towards regional, rather than global jobs (because of transport costs) accompanied by energy diversification was the order of the day. However, I still can't help feeling that oil may well rise again, significantly, that the dollar is still overvalued, that deficits are still west-killers, and that depression is just around the corner. There is patently still too much spare capacity, and it is patently still too early to say whether or not European or American states can cope with the inevitable loss of productivity and inflation that present policies will bring.

We judge according to what we know. Our present politics may come to resemble those of the first half of the nineteenth century more than we think. Vast movements of people, the effects of the integration of European and Asian markets on prices, falls in food supply, anticatholicism, conspiracism, and populist, anti-bank cults of personality, and periodic recession in the face of global cold, punctuated by the rise of new 'terrorist' movements and government by an unrepresentative elite are not new.

Maybe modernity is going out as it came in. Let's wait and see what happens.

Comments

Anonymous said…
Happy Easter, Martin.

Of course you know that I love to read your thoughts on everything. Everybody is wrong sometimes but most people don't have the courage to occasionally look stupid. Personally, I think you're great, if a little moody. Today should be a good day so get on and whack out a happy post. Enjoy your post-Lenten drink.

Cheers and beers from Australia. All this anti-Catholic stuff is not really in evidence here. There's too many of us and we're too powerful. The British press have gone so overboard on all this abuse stuff that it's easy to think that the whole world has gone mad. Not here.

I walked down to the local church (RC) this morning. The people were standing outside...this is a very big church. Sometimes a bit of adverse publicity unites .

Have a good day my friend,
Mary

I've got to be anonymous because my computer is out of action and I'm in S's room.
Martin Meenagh said…
Happy Easter to you to my friend.
As for me looking silly--well, why argue with nature. You reminded me of one of my favourite stories about Harold Macmillan and his moodiness, though. He was prone to self-indulgent melancholy. An ambassador once took him from a meeting in Rome in the embassy car. He asked to be driven around the eternal city (Macmillan thought that communists or catholics would inherit Europe) and at each monument, to the point of tedium, he would stop, look soulful, and say 'I shall never see that again'. By the time they completed their odyssey, the ambassador was climbing the leather clad walls with annoyance. Macmillan, noting this, (I like to imagine with a twinkle) then turned around and said, 'that was nice, lets do it one more time'.

I shall never post about the decline and fall of everything again....
Martin Meenagh said…
He was famous amongst dons I knew in Oxford, by the way, for turning up in the evening, drinking and dispensing bon mots, then keeping everyone up all night with gloom and a pretentious Edwardian act whilst making the occasional reference to menstrual cycles and God (a once-good joke about historians not having periods once they got older). Most people talked of Supermac through gritted teeth.

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